Routine Services, Routine Fees: The Second Department’s Clarification on Compensation for Court-Appointed Accountants in Article 81 Guardianships

Introduction

Matter of Silda E.H. (Henderson), 238 A.D.3d 871 (2d Dep’t 2025), began as a fairly typical Mental Hygiene Law (“MHL”) article 81 guardianship. Michael and Patrice Henderson were appointed co-guardians of their mother, Silda E.H. (“the IP”). Years later, fee disputes arose over payments awarded to (1) Leonard Spector, the successor court examiner, and (2) Marc Freedman, a court-appointed accountant retained to prepare back-logged annual accountings. The Supreme Court (Kings County) had originally awarded Spector $4,050 for “extraordinary services” and Freedman $16,500 in the aggregate ($3,300 for each of five accountings). Michael Henderson moved to vacate or reduce those awards; the Supreme Court denied the motion. The Appellate Division, Second Department, has now modified that denial, sharply cutting the accountant’s fee to $423 per accounting—a total of $2,115—while leaving the court-examiner’s extraordinary-services fee intact.

Summary of the Judgment

The Second Department held:

The Supreme Court properly exercised discretion in awarding Spector $4,050 for extraordinary services because his efforts went well beyond routine review—he investigated the reconciliation of real-property sale proceeds with the guardianship estate.
The Supreme Court abused its discretion in awarding Freedman $3,300 per accounting. Freedman’s submissions showed his work was “the vast majority … routine data entry,” warranting only the Guidelines rate of $423 per accounting.
Total accountant fees were therefore reduced from $16,500 to $2,115, payable from the guardianship estate. All other relief was denied, and costs were awarded to Michael Henderson.

Analysis

1. Precedents Cited and Their Influence

Matter of Vincent V. (Isler), 187 A.D.3d 764 (2020) – reaffirmed that compensation must be “commensurate with the services actually rendered,” serving as the foundational proportionality principle the Court relies upon.
Matter of Ruth S. (Stein), 181 A.D.3d 943 (2020) – cited for the same proportionality principle and for the notion that departures from the fee schedule require sufficient evidentiary support.
Matter of Albert K. (D’Angelo), 96 A.D.3d 750 (2012) – provides factors for assessing “extraordinary services.” The Court used Albert K. to justify Spector’s enhanced fee, finding his investigation substantive and necessary.
Matter of Arnold O., 279 A.D.2d 774 (2001) – echoes Albert K. on extraordinary services; used to bolster the award to Spector.
Matter of Rhodanna C.B., 36 A.D.3d 106 (2006) – referenced for the guardians’ statutory duty to file annual accountings, setting the factual predicate for why accountants may be needed in the first place.

These precedents collectively illustrate two tracks: (1) strict adherence to fee schedules when services are routine, and (2) willingness to depart when true complexity or extraordinary effort is documented.

2. Legal Reasoning

The Court began by identifying the statutory gap: MHL § 81.32(f) only states that examination expenses are payable by the IP’s estate; it does not prescribe amounts. To fill that gap, the Second Department has periodically issued a fee schedule (“Guidelines”)—codified most recently in the Administrative Order dated May 29, 2019.

Applying the Guidelines, the Court undertook a two-step inquiry:

Are the services “extraordinary”? Using the Albert K. factors—time, labor, complexity, customary rates, and necessity—the Court found Spector’s investigative work met the threshold. Reconciling real-property proceeds required forensic examination beyond clerical review.
If not extraordinary, what is the scheduled fee? For Freedman, the Court saw no evidence of complexity: no novel accounting issues, no litigation assistance, no forensic tracing—merely “routine data entry.” Therefore, only the baseline fee of $423 per accounting (based on estate size and year) was permissible.

3. Impact on Future Practice

Heightened Documentation Requirements: Accountants and examiners must provide detailed affidavits showing time records, tasks, and complexity to justify departures from the schedule.
Uniformity and Predictability: Trial courts are on notice that the Second Department will police adherence to its fee Guidelines. Unexplained enhancements risk reversal.
Estate Conservation: The decision protects incapacitated persons’ assets by curbing overcompensation and encouraging guardians to monitor professional invoices.
Administrative Orders Reinforced: The judgment elevates the status of the 2019 Administrative Order and 2022 Guidelines, treating them as quasi-normative despite being extra-statutory.

Complex Concepts Simplified

Mental Hygiene Law (“MHL”) article 81: New York’s framework for appointing a guardian to manage the personal and/or financial affairs of an “incapacitated person” (IP).
Guardian: Individual appointed by the court to act on behalf of the IP.
Court Examiner: A lawyer or CPA designated by the Appellate Division to audit annual reports filed by guardians, ensuring propriety of expenditures.
Court-Appointed Accountant: A professional engaged—usually at the guardian’s request—to prepare accountings when guardians cannot do so unaided.
Extraordinary Services: Work going beyond routine statutory duties—e.g., forensic tracing of assets, complex tax analysis, litigation support.
Guidelines Fee Schedule: A sliding-scale chart—published by the Second Department—pegging allowable fees to the size of the estate; e.g., $423 for estates under a specified threshold.

Conclusion

Matter of Silda E.H. (Henderson) crystallizes a straightforward but powerful rule: “Routine services warrant routine fees.” While courts retain discretion to reward extraordinary effort, that discretion must rest on clear, documented evidence. By slashing the accountant’s fee from $16,500 to $2,115 yet preserving the examiner’s justified enhancement, the Second Department balanced professional remuneration with fiduciary frugality. Guardianship practitioners should view the decision as a definitive signal that the Appellate Division will enforce its fee Guidelines and scrutinize any claimed departures. The broader lesson extends beyond Article 81: courts will increasingly demand proportionality between work performed and compensation sought, especially where vulnerable individuals’ assets are at stake.