L. H. v. Easter Seals

COURT OF APPEALS
DECISION NOTICE
DATED AND FILED This opinion is subject to further editing. If
published, the official version will appear in
the bound volume of the Official Reports.
October 18, 2022
A party may file with the Supreme Court a
Sheila T. Reiff petition to review an adverse decision by the
Clerk of Court of Appeals Court of Appeals. See WIS. STAT. § 808.10 and
RULE 809.62.

Appeal No. 2021AP909 Cir. Ct. No. 2015GN448

STATE OF WISCONSIN IN COURT OF APPEALS
DISTRICT I

IN THE MATTER OF THE GUARDIANSHIP OF L.H.:

L.H. AND CORD WILLIAMS KLEIN, PERSONAL REPRESENTATIVE OF THE
ESTATE OF L.H.,

PETITIONERS-APPELLANTS,

V.

EASTER SEALS,

RESPONDENT.

APPEAL from orders of the circuit court for Milwaukee County:
HANNAH C. DUGAN, Judge. Reversed and cause remanded with directions.

Before Brash, C.J., Donald, P.J., and White, J.

Per curiam opinions may not be cited in any court of this state as precedent

or authority, except for the limited purposes specified in WIS. STAT. RULE 809.23(3).
No. 2021AP909

¶1 PER CURIAM. L.H. and Cord Williams Klein, as the personal
representative for the Estate of L.H. (collectively, “the Estate”), appeal an order of
the trial court terminating the guardianship of L.H. by Easter Seals upon L.H.’s
death. The Estate also appeals an order denying substitution of Klein as the personal
representative for the Estate in the guardianship matter, in order to pursue causes of
action against Easter Seals regarding its conduct as L.H.’s guardian.

¶2 Upon review, we reverse those orders and remand this matter to the
trial court with instructions to allow for the substitution of Klein as the personal
representative for the Estate, and to continue proceedings for the review of Easter
Seals’ conduct in its capacity as L.H.’s guardian, consistent with this opinion.

BACKGROUND

¶3 L.H. was a veteran who was diagnosed with numerous disabilities,
including a degenerative brain disorder, which rendered him unable to make
informed decisions relating to his health or finances. L.H. was determined to be
incompetent, and Easter Seals was appointed his guardian in October 2015.

¶4 Easter Seals was granted guardianship of the person of L.H., which
provided it with the authority to make all medical decisions and exercise other
personal rights on behalf of L.H. No guardian of the estate was appointed; instead,
because L.H. had a “small estate” of $10,000 or less, his assets were transferred to
Easter Seals pursuant to WIS. STAT. § 54.12(1) (2015-16)1 to be used for his care.
Additionally, L.H. received monthly income from his social security and veterans’
benefits, from which Easter Seals’ guardianship fees were to be paid. The monthly

1
All references to the Wisconsin Statutes are to the 2019-20 version unless otherwise
noted.

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guardianship fee was dependent on the amount of services provided to L.H. by
Easter Seals, up to a maximum amount of $300/month; any amount over that was
subject to approval by the trial court.

¶5 In November 2016, L.H. received veteran-related disability backpay
in a lump sum amount of approximately $45,000. Klein, who at the time was acting
as appointed adversary counsel for L.H., filed a petition in November 2017 for
Easter Seals to be granted a temporary guardianship of the estate for the purpose of
establishing and funding a WisPACT Trust, pursuant to WIS. STAT. § 54.20(2)(c)
(2017-18). A WisPACT Trust is a special needs trust for disabled individuals,
where the funds in the trust are not counted as available assets for purposes of
determining eligibility for Medicaid. The petition was granted.

¶6 In April 2018, Easter Seals filed a petition with the trial court
requesting an allowance for an overage of L.H.’s maximum guardianship fees for
2017 in the amount of $5,280. Furthermore, Easter Seals requested that this overage
be paid from L.H.’s WisPACT Trust, as opposed to from his monthly income. The
court commissioner found that the overage request was “just and reasonable,” and
allowed it to be paid from the WisPACT Trust.

¶7 In May 2019, Klein—still acting as adversary counsel for L.H.—filed
a motion to vacate that order. Klein asserted that the $5,280 overage included the
preapproved monthly guardianship fees, which totaled $3,525 for 2017. Thus, Klein
argued that the overage due to Easter Seals was only $1,755. Additionally, in a
motion filed in June 2019, Klein also challenged the overage amounts Easter Seals
claimed for 2016—$4,020 and $1,095—arguing that Easter Seals had not provided
the amount of preapproved guardianship fees it had already collected for L.H. in its
overage fee request.

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¶8 After several adjournments, the trial court in September 2020
approved Klein’s continued representation of L.H. as adversary counsel for
purposes of reviewing the conduct of Easter Seals in its capacity of guardian of L.H.
After a pretrial conference held in November 2020, the trial court issued an order
directing the parties to complete negotiations by January 31, 2021, and if a
resolution was not reached, “any amended motions and petition for review of the
conduct of the guardian” were to be filed by February 8, 2021.

¶9 L.H. passed away on January 4, 2021. Easter Seals filed a petition for
termination of the guardianship on January 26, 2021, due to L.H.’s death. Klein
immediately filed an objection on January 28, 2021. He informed the trial court that
L.H. had three adult children, which he asserted meant that L.H.’s causes of action
regarding Easter Seals’ conduct as L.H.’s guardian survived. However, as Klein
explained, in order for those claims to remain viable the guardianship matter could
not be terminated, otherwise the court would not retain its jurisdiction. Klein thus
requested a stay in the matter until a personal representative for L.H.’s estate could
be appointed, under the assumption that the personal representative would then file
a motion for the substitution of L.H.’s heirs as parties.

¶10 At a hearing on February 15, 2021 regarding the petition for
termination, the trial court asked about the deadline for filing a petition for review
of the guardian’s conduct. Klein explained that he was unable to proceed as
adversary counsel after L.H.’s death, because any filings made after his death would
be “annulled.” However, Klein stated that L.H.’s heirs wished to pursue causes of
action against Easter Seals with regard to its conduct as guardian, and wanted Klein
appointed as the personal representative of the Estate. Klein further stated that the
“customary” manner for proceeding under these circumstances would be for a stay
to be granted in the guardianship matter, such that a probate action could be opened

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to create the estate and appoint a personal representative. Once that was
accomplished, a substitution of parties could then be filed for Klein as the personal
representative for the Estate, and the causes of action against Easter Seals could be
pursued.

¶11 However, the trial court granted Easter Seals’ petition to terminate the
guardianship. The court found that regardless of the circumstances surrounding the
case—including the court’s knowledge that negotiations had been ongoing between
the parties relating to the issue of Easter Seals’ conduct as guardian, as raised by
Klein in September 2020—there had been no “actual” petition filed seeking review
of Easter Seals’ conduct as guardian, and thus there was no claim. The court
therefore rejected Klein’s objection and issued an order terminating the
guardianship.

¶12 Klein nevertheless filed a motion in April 2021 for a substitution of
party in his capacity as personal representative for L.H.’s estate. However, the trial
court declined the motion, stating that the matter was “closed.” This appeal follows.

DISCUSSION

¶13 On appeal, the Estate argues that the guardianship of L.H. was
improperly terminated while there were pending causes of action against Easter
Seals regarding its conduct as L.H.’s guardian, since those claims could survive
through L.H.’s heirs. We review the trial court’s decisions regarding guardianship
and protective placement using a mixed standard of review. We will not overturn
the trial court’s factual findings unless they are clearly erroneous. Coston v.
Joseph P., 222 Wis. 2d 1, 22, 586 N.W.2d 52 (Ct. App. 1998); see also WIS. STAT.
§ 805.17(2). However, whether the evidence satisfies the legal standards set forth

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in the relevant statutes is a question of law, which we review de novo. See Coston,
222 Wis. 2d at 23.

¶14 For that review of the relevant statutes at issue here, we engage the
legal tenets of statutory interpretation. “[T]he purpose of statutory interpretation is
to determine what the statute means so that it may be given its full, proper, and
intended effect.” State ex rel. Kalal v. Circuit Ct. for Dane Cnty., 2004 WI 58, ¶44,
271 Wis. 2d 633, 681 N.W.2d 110. “Statutory interpretation and applying a statute
to a set of facts are both questions of law which this court reviews de novo.” State v.
Bodoh, 226 Wis. 2d 718, 724, 595 N.W.2d 330 (1999).

¶15 “A statute’s purpose or scope may be readily apparent from its plain
language or its relationship to surrounding or closely-related statutes—that is, from
its context or the structure of the statute as a coherent whole.” Kalal, 271 Wis. 2d
633, ¶49. We start with WIS. STAT. § 54.68(2), which permits causes of action
against a guardian for various reasons, including “[c]ommitting fraud, waste, or
mismanagement”; “[e]ngaging in self-dealing”; and “[f]ailing to act in the best
interests of the ward.” Sec. 54.68(2)(b),(d), and (g). The filing of a petition for the
review of the conduct of the guardian triggers a deadline for a hearing before the
trial court. Sec. 54.68(3). Additionally, a ward filing a petition for such an action
“may retain legal counsel, the selection of whom is subject to court approval[.]”
Sec. 54.68(6)(b). The remedies available in such an action include issuing an order
for the guardian to file an inventory or other report or accounting; imposing a
forfeiture on the guardian or denying the guardian compensation; or requiring the
guardian to “reimburse the ward or, if deceased, the ward’s estate for losses incurred
as the result of the guardian’s breach of a duty to the ward.” Sec. 54.68(4).

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¶16 Here, the step of retaining counsel was completed: L.H. filed a
request to retain Klein to “negotiate, prepare, file, and litigate on [L.H.]’s behalf a
petition for review of the conduct of his corporate guardian, [Easter Seals], pursuant
to [WIS. STAT. §] 54.68(2)(b), (d), and (g) … and to petition the [c]ourt for any and
all of the remedies of the [c]ourt that are set forth in § 54.68(4)[.]” Furthermore, as
explained in an affidavit accompanying his motion, this request was based on the
earlier motions Klein had filed to vacate the orders approving the guardian fees for
2016 and 2017; hearings on those motions had been adjourned several times,
primarily to continue with discovery, and there is no indication in the record that
they were ever litigated and decided. The record does indicate, however, that there
was regular correspondence by Klein to the court regarding the ongoing discovery
discussions between the parties relating to the issues he raised in those motions.

¶17 As explained above, the request for Klein to be retained as L.H.’s
adversary counsel was for the explicit purpose of pursuing claims regarding Easter
Seals’ conduct as guardian, and this request was approved by the trial court on
September 2, 2020. Furthermore, at a pretrial conference held on November 23,
2020, the trial court ordered that negotiations between the parties were to be
completed by January 31, 2021; if there was no resolution, then “any amended
motions and petition for review of the conduct of the guardian” were to be filed by
February 8, 2021.

¶18 After Easter Seals filed its petition to terminate the guardianship on
January 26, 2021, Klein immediately filed an objection on January 28, 2021. He
explained that the claims against Easter Seals survived pursuant to WIS. STAT.
§ 895.01(1)(am), which enumerates the types of action that survive the death of a
claimant. Specifically, Klein asserted that § 895.01(1)(am)2. and
§ 895.01(1)(am)8., which allow causes of action for conversion and damages to

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property rights or interests to survive, are applicable here, and therefore the
substitution of a proper party upon the death of the claimant is permitted under WIS.
STAT. § 803.10(1)(a).

¶19 Yet, the trial court granted Easter Seals’ petition for termination of
guardianship on February 18, 2021, and considered the matter closed. The court
based its reasoning on the fact that an “actual” petition for review regarding Easter
Seals’ conduct as guardian had not yet been filed, as set forth in WIS. STAT.
§ 54.68(3). However, according to the language of that statute, the filing of the
petition is to trigger a deadline for a hearing. See id. Klein indicated to the court
that he had not yet filed a petition because the discovery process with Easter Seals
was still ongoing at the time that L.H. passed away. In fact, the order of the trial
court issued after the November 2020 pretrial conference anticipated that a petition
would only be filed if, upon completion of the discovery process, negotiations
between the parties were unsuccessful.

¶20 Furthermore, the statutory remedies available upon a finding of
improper conduct by a guardian include reimbursing the ward “or, if deceased, the
ward’s estate” for any losses that were incurred as a result of a breach by the
guardian. See WIS. STAT. § 54.68(4)(b). This plain language of that statute clearly
indicates that such causes of action can survive even if a ward dies while they are
pending. See Kalal, 271 Wis. 2d 633, ¶49.

¶21 However, in order to proceed with the review of a guardian conduct
claim, the guardianship must remain open such that the trial court retains its
jurisdiction over the guardian. See WIS. STAT. § 54.68(1). Klein therefore sought
a stay of this matter until a personal representative could be appointed and
substituted for L.H. to continue the claims on behalf of the Estate. We conclude

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that, pursuant to the relevant statutes as discussed above, this is the proper
procedure.

¶22 Easter Seals argues that the Estate’s claims are moot because as a
small estate, there is no requirement for a final accounting from the guardian at the
death of a ward, pursuant to WIS. STAT. § 54.66(2). However, the Estate’s claims
relate to the conduct of the guardian, which may be reviewed pursuant to WIS. STAT.
§ 54.68(2), as discussed above. These provisions for reviewing guardian conduct,
and the remedies available at § 54.68(4) which could potentially include an
accounting, are separate and distinct from the statutory requirements regarding final
accountings contemplated in § 54.66. We therefore reject this argument.

¶23 Easter Seals further argues that L.H.’s heirs have no interest in his
Estate because, due to L.H.’s assets being placed in a WisPACT trust, the State of
Wisconsin has estate recovery rights pursuant to WIS. STAT. § 49.849(2). However,
nothing in that provision prohibits the personal representative of a decedent’s estate
from pursuing claims on behalf of the decedent. In fact, such an interpretation
would lead to the absurd result of disallowing the review of guardian conduct
permitted under WIS. STAT. § 54.68(2), which in turn would allow such improper
conduct to go unchecked. See Kalal, 271 Wis. 2d 633, ¶46 (statutes should be
interpreted to “avoid absurd or unreasonable results”).

¶24 Accordingly, we reverse the trial court’s orders terminating the
guardianship of L.H. and denying the motion for substitution of party, and remand
this matter with instructions to substitute Klein, in his capacity as personal
representative for the Estate, as the party pursuing these claims, and to continue
proceedings to resolve this matter, consistent with this opinion.

By the Court.—Orders reversed and cause remanded with directions.

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This opinion will not be published. See WIS. STAT.
RULE 809.23(1)(b)5.

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