In a comprehensive, published opinion, the New Jersey Appellate Division provided guidance regarding the appointment and functions of a guardian ad litem, this time in the context of a personal injury litigation.
While exiting the defendant’s business premises, plaintiff was struck on the head by a falling object and sustained severe injuries. She filed a personal injury lawsuit against various entities. Those entities filed a joint offer of judgment, which gave plaintiff until ten days before trial to accept the offer, or they would seek fees and costs.
During the litigation, plaintiff’s counsel filed a motion seeking to appoint a guardian ad litem (“GAL”) for the plaintiff. The motion was granted, a GAL was appointed, and the trial was stayed to give the GAL the opportunity to review the case. The GAL issued his report and, based on his findings, the court ordered that the GAL was empowered with all decisions regarding disposition of the case by trial or settlement.
Thereafter, plaintiff’s trial counsel, the GAL, and the defendants arrived at a settlement, which the court approved. Plaintiff then appealed, arguing that the settlement was improperly approved on her behalf by the GAL.
The Appellate Division began its analysis by reviewing the appropriate court rule governing the appointment of a GAL. It found that plaintiff’s counsel had erroneously sought the appointment of a GAL under Court Rule 4:26-2(b)(3), which only applies after a default, or in a summary action.
The appeals court found that the applicable court rule was R.P.C. 1.14, which addresses “[w]hen a client’s capacity to make adequately considered decisions in connection with the representation is diminished, whether because of minority, mental impairment or for some other reason.” The rule provides:
When the lawyer reasonably believes that the client has diminished capacity, is at risk of substantial physical, financial or other harm unless action is taken and cannot adequately act in the client’s own interest, the lawyer may take reasonably necessary protective action, including consulting with individuals or entities that have the ability to take action to protect the client and, in appropriate cases, seeking the appointment of a guardian ad litem, conservator, or guardian.
The lower court had initially appointed the GAL without specifying the rule it had relied upon, and its subsequent order giving the GAL the authority to settle the case had been made under Rule 4:26-2(b)(4), which gives a court authority to appoint a GAL for an alleged incapacitated person on its own motion. Therefore, the appellate court reviewed the propriety of lower court’s action under that rule.
The appeals court addressed plaintiff’s contention that the general guardianship procedures set forth in Rule 4:86 had to be followed in order to find her in need of a GAL. The court disagreed, noting that there are differences between the appointment of a GAL and a general guardian of the person or property, and that those different appointments are governed by different court rules.
The appointment of a general guardian of the person or property under Rule 4:86 gives the guardian authority over “all the rights and powers of the incapacitated person,” and deprives the incapacitated person of liberty and control of his or her property and personal affairs. Therefore, it requires the filing of a complaint alleging incapacity, as well as supporting medical certifications opining that the person is unfit and unable to govern him/herself and manage his/her affairs. In order for a general guardian to be appointed, the court must determine incapacity by clear and convincing evidence.
These procedures are not required for the appointment of a GAL, because the GAL appointment has “far fewer consequences and can result in the grant of authority only over the litigation in which the guardian ad litem is appointed.” Unlike a general guardian, a GAL does not have a general power over person or property. Instead, “the function of a GAL is merely to insure the protection of the rights and interests of a litigant who is apparently incompetent to prosecute or defend the lawsuit.” Because of the limited powers of a GAL, the stringent procedures required under the general guardianship rule do not apply. In particular, the adjudication of incapacity is not required for the appointment of a GAL.
Next, the appeals court examined the court rule utilized by the trial court. It found that a court may appoint a GAL for an allegedly mentally incapable adult under Rule 4:26-2(b)4 for “good cause.” The Appellate Division then examined what constitutes “good cause” for appointing a GAL under this rule. It began by recognizing that a GAL can assist in a litigation in two ways: first, to investigate, evaluate, and report to the court regarding the individual’s mental capacity, and what is in the best interest of the individual. Second, if the court reviews the GAL report and agrees that the individual cannot make necessary decisions in a litigation, the court may give the GAL the power to do so. The appeals court noted that these two roles of a GAL affect different rights: investigating a person’s mental capacity does not deprive that person of self-determination, but giving the GAL decision-making power does. Thus, these two roles should be governed by different standards. The first role is governed by the “good cause” standard, but the second should reflect the mental capacity needed to make the specific decision(s) being delegated to the GAL, and must be based on a “clear and convincing” standard.
In this case, the court issued two separate orders: the first appointed the GAL to investigate and report, and the second empowered him to make decisions regarding settlement. The first order was based on the judge’s discretion, and the appeals court would review that order only for abuse of discretion. However, the order enabling the GAL to make settlement decisions is based on a “clear and convincing” standard, and the judge’s factual findings must be supported by “adequate, substantial and credible evidence.” If the appeals court is convinced that the judge’s factual findings and legal conclusions regarding the second order were “so manifestly unsupported by or inconsistent with the competent, relevant and reasonably credible evidence as to offend the interests of justice,” the ruling would be reversed.
Here, as to the first order, the trial court had appointed a GAL based on plaintiff’s counsel’s application, which was supported by a certification and reports from plaintiff’s doctors. Because good cause existed for the trial court’s decision, that order was not disturbed on appeal. As to the second order, the appeals court found that the GAL’s comprehensive investigation “provided clear and convincing evidence that plaintiff was mentally incapable of deciding whether to try or settle the case.” Consequently, the trial court properly concluded that the plaintiff lacked the mental capacity to make a settlement decision, and the second order was also affirmed.
Nevertheless, the plaintiff also contested the settlement agreement itself, arguing that a settlement must be between the parties, and an attorney cannot force a party to settle. The Appellate Division noted that this is generally the case if the party is competent to make settlement decisions. However,
because the trial court found plaintiff was not mentally capable of deciding whether to try or settle the case, and appointed the GAL to make that decision, the GAL must of necessity have the sole right to accept or reject a settlement offer.
The court noted that, once a GAL is appointed to make a settlement decisions for a party, the GAL “steps into the shoes” of the party. Such settlement decisions receive enhanced scrutiny because, under R. 4:44 of the New Jersey Court Rules, a settlement entered into by a GAL is not binding unless the court approves it. Although the plaintiff contended that R. 4:44 did not apply because it only applies to minors or “mentally incapacitated persons,” the appeals court noted that, for the purpose of settlement, the plaintiff qualified as a “mentally incapacitated person.”
As to the terms of the settlement itself, the appeals court found ample evidence to support the lower court’s decision to approve the terms. The lower court’s ruling approving the settlement was affirmed.
A copy of S.T. v. 1515 Broad Street can be found here – S.T. v. 1515 Broad Street, LLC, 455 N.J. Super. 538
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