By Correy E. Stephenson
A professional guardian of an incapacitated individual must execute a power of attorney that complies with MCL 700.5103 to lawfully delegate to employees the authority to make any final decision to exercise a guardianship “power” that is explicitly listed in the statute, or to delegate any other final decision that would alter or impair an incapacitated individual’s rights, duties, liabilities or legal relations, a unanimous Michigan Supreme Court has held.
“We hold that a professional guardian cannot, without complying with MCL 700.5103, lawfully delegate to employees their final decision-making authority over a guardianship ‘power’ that is explicitly listed in MCL 700.5314 or over any guardianship task that alters or impairs an incapacitated individual’s rights, duties, liabilities, or legal relations,” Justice Megan K. Cavanagh wrote. “However, a professional guardian may lawfully have employees assist in exercising a guardianship power and may have employees perform any other guardianship task on behalf of the professional guardian.”
The decision is In re Guardianship of Malloy (MiLW 06-108049, 31 pages).
Jordan Ahlers of the Speaker Law Firm in Lansing, who represented the guardian, said it is important for lawyers who are serving as guardians to ensure their billing statements are detailed.
“What the decision really comes down to is that a guardian can delegate anything that is not explicitly listed as a power so long as the guardian is the one making the final decision,” she told Michigan Lawyers Weekly. “For those working as a professional guardian and using support staff to help them, they need to make sure that it is accurately reflected in the billing statement that the guardian is the one making the final decision.”
Auto-Owners Insurance Company was represented by Southfield attorney Erin J. Rodenhouse of Collins Einhorn Farrell; the insurer did not respond to a request for comment on the decision.
Billing for guardianship services
In 2019, Darren Findling, an attorney and professional guardian, was appointed to serve as the guardian for Dana Jenkins and as co-guardian for Mary Ann Malloy, both of whom suffered serious injuries in automobile crashes that rendered them legally incapacitated.
Both Jenkins and Malloy receive no-fault benefits from Auto-Owners Insurance Company.
During 2019 and 2020, Findling, along with employees of his law firm, provided various guardianship services to Malloy and Jenkins, including guardian visits and meetings with physicians, case managers, the Social Security Administration and their banks.
Findling sought reimbursement from Auto-Owners for these and other services under MCL 500.3107(1)(a) .
Auto-Owners declined to reimburse for the services that were performed by the employees of Findling’s law firm.
In response, Findling filed two lawsuits against the insurer in his guardianship capacity, seeking reimbursement for the unpaid services.
On cross motions for summary disposition, Auto-Owners argued that it was not required to reimburse for the services at issue because Findling had not complied with the Estates and Protected Individuals Code, or EPIC, specifically MCL 700.5103 , which restricts the delegation of guardianship “powers” to fewer than 180 days and requires a valid power of attorney and notice to the court.
Findling countered that he only delegated his guardianship duties not his powers to employees of his law firm, and therefore he was not required to comply with MCL 700.5103.
The Oakland County Probate Court sided with Findling. The Court of Appeals affirmed in part and reversed in part.
Auto-Owners appealed to the state’s highest court.
No bright line between powers, duties
To answer the question of whether a professional guardian may lawfully delegate guardianship tasks to employees without complying with MCL 700.5103, the justices examined how common-law agency principles apply to guardianships in light of the relevant EPIC provisions.
The high court also noted that the legislature has recognized unique concerns in the guardianship context that justify limiting a guardian’s ability to enlist an agent to perform guardianship tasks on the guardian’s behalf.
MCL 700.5103 prohibits all guardians including professional guardians from delegating their guardianship “powers” for more than 180 days, and requires a guardian who wants to make such a delegation to execute a power of attorney and notify the court of the delegation within seven days.
As Findling did not comply with MCL 700.5103, the dispositive question was whether the tasks his employees performed fell within the scope of the statutory provision.
“Like the Court of Appeals, we find it significant that MCL 700.5103 only addresses delegation of a guardian’s ‘powers,’ which suggests that MCL 700.5103 does not apply to the delegation of guardianship tasks that are not ‘powers,’” Cavanagh wrote. “We further agree with the Court of Appeals that the Legislature’s use of ‘power’ in other EPIC provisions governing guardianships helps illuminate the meaning of ‘power’ in MCL 700.5103.”
MCL 700.5314 provides a list of possible “powers” and “duties” a guardian might have, the court noted, and anything explicitly identified as a “power” by the statute fell within the scope of the limitations on delegation.
But what about other tasks that do not appear on that nonexhaustive list?
Cavanagh said the term “power” does not refer broadly to a guardian’s authority to take actions on behalf of or in lieu of the incapacitated individual. Rather, the proper definition to be applied is “an act that alters or impairs the rights, duties, liabilities, or legal relations of the incapacitated individual.”
The justice was clear that no bright-line dichotomy exists between a guardian’s powers and duties, as many guardianship duties implicitly require a grant of power in the broadest sense the legal authority to act, for example and the grant of guardianship powers necessarily results in certain statutory and fiduciary duties.
Importantly, MCL 700.5103 only limits common-law agency principles with regard to a guardian’s final decision-making authority to exercise a power listed in MCL 700.5314 or to approve any other alteration or impairment of the ward’s rights, duties, liability or legal relations, the court clarified.
“MCL 700.5103 does not apply to a professional guardian’s use of employees to assist in making such a decision, nor does it apply to the use of employees to execute such a decision,” Cavanagh explained. “[A] professional guardian cannot shirk their responsibility for ensuring that a ward receives proper care by using employees; the ultimate responsibility for the ward’s custody and care lies with the court-appointed guardian.”
For example, one of a guardian’s “powers” is to establish the ward’s place of residence. A professional guardian must personally make the final decision regarding where to establish a ward’s residence, unless the guardian complies with MCL 700.5103 to formally delegate that power. But delegation is not required for a professional guardian to hire someone knowledgeable about residential options to advise the guardian regarding possible housing for their wards.
Cavanagh also cautioned that professional guardians should “be careful when entrusting others to perform guardianship tasks on their behalf and should anticipate being held legally responsible if an employee fails to adequately perform guardianship tasks or otherwise abuses the authority entrusted to them.”
Applying this understanding of the statute, Cavanagh remanded both cases to the Oakland County Probate Court for further proceedings.
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