In the Matter of the Application of, Maria Verdugo and MARIA ROCIA AUQUI for the Appointment of a Guardian for JOSE VERDUGO, An alleged incapacitated Person, and Maria Rocio Auqui, Property Guardian of Jose Verdugo, Petitioner,
Peachtree Funding Northeast, LLC, Respondent.
Counsel for Petitioner, Maria Rocio Auqui, in her capacity as Property Guardian of Jose Verdugo Sabrina E. Morrissey Morrissey & Morrissey, LLP.
Counsel for Respondent, Peachtree Funding Northeast Kathy S. Marks Yankwitt & McGuire.
LOTTIE E. WILKINS, J.
The property guardian of Jose Verdugo, Maria Rocio Auqui, commenced this action to set aside four Assignment, Sale, Springing Assignment and Equitable Lien Agreements ("Agreements") pursuant to Mental Hygiene Law Section 81.29(d), on the ground that Jose Verdugo lacked capacity to enter into such Agreements with Respondent Peachtree Funding Northeast, LLC ("Peachtree"). Having held a trial on May 8, May 11, and June 14, 2012, and having reviewed the parties' post-trial memoranda of law, the Court issues the following conclusions of law and findings of fact, as required by CPLR 4213(b). For the reasons set forth below, the Court finds that insufficient evidence was adduced at trial to support a conclusion that Mr. Verdugo lacked capacity to contract when the Agreements were executed.
Findings of Fact
On December 23, 2003 Mr. Verdugo sustained a wide laceration to his scalp, profuse external bleeding and bleeding inside his brain when he was struck by a piece of plywood which fell from a building. (Transcript 6/14/12 p. 6). A battery of neurocognitive tests evidenced significant deficits in different regions of Mr. Verdugo's brain, supporting a finding that his brain function was negatively impacted by the accident. (Id.). In 2004 Mr. Verdugo and his wife retained the law firm of Smiley and Smiley, LLP, to represent them in a personal injury action alleging grievous injury for the damages sustained from the accident. (Id.) That action, entitled Verdugo v Seven Thirty One Ltd. Partnership, et al., Index Number 100232/04, is currently still pending in New York Supreme Court, New York County. 
Traumatic Brain Injury
The Court credits the testimony of Respondent's witness, Dr. Daniel Kuhn, as well as petitioner's witnesses Susan Gelb, Occupational Therapist, and Court Evaluator Lisa D'Urso, who collectively furnished relatively consistent testimony of Mr. Verdugo's mental condition during 2006 through 2009. A discussion of each witness' testimony is set forth seriatim below.
Approximately six months after the accident Mr. Verdugo came under the care and treatment of Dr. Kuhn, a Diplomate of the American Board of Neurology and Psychiatry. (Transcript 6/14/12 p.5). Dr. Kuhn initially saw Mr. Verdugo once a week from June 2004 until the beginning of 2005, and then thereafter every two weeks until the end of 2006, and now currently treats him once a month since the end of 2006. (Transcript 6/14/12 p. 7-8). Mr. Verdugo's treatment primarily involves psychotherapy and psychotropic medications. (Transcript 6/14/12 p. 20-21). Dr. Kuhn testified that he used a translator during therapy sessions with Mr. Verdugo, who speaks limited English. (Transcript 6/14/12 p. 16).
Dr. Kuhn diagnosed Mr. Verdugo as having a traumatic brain injury and a myriad of significant cognitive deficits known collectively as post concussion syndrome. (Transcript 6/14/12 p.6, 22). In 2007 and 2008 Dr. Kuhn found Mr. Verdugo to have impaired executive function, which he defined as "the ability of the person to apply what he knows, to give solutions to situations" (Transcript 6/14/12 p. 21-23). Dr. Khun opined that Mr. Verdugo also exhibited signs of unclear and fragmented communication, short term memory loss, mental slowing, difficulty with abstract thinking and problem solving and lack of concentration. (Id., at 23).
Dr. Kuhn testified that he saw Mr. Verdugo on February 2, March 2 and March 30 of 2007, and January 2008. (Transcript 6/14/12 p. 12-17). During those sessions Mr. Verdugo was oriented to where he was and with whom he was speaking, and was able to converse with Dr. Kuhn in Spanish (Transcript 6/14/12 p. 14-17). Mr. Verdugo reported that although his depression was abated by taking English classes and he had some improvement in his cognition and mental state while taking medication, he continued to be impulsive and dysfunctional, to experience dizzy spells, and to have difficulty with attention, cognition and shorter memory. (Transcript 6/14/12 p.15-17). Dr. Kuhn stated that Mr. Verdugo shared with him during their sessions that he would get lost at times, would forget to turn off the stove, has been burned once, and that he is constantly attended by someone. (Id., at 23).
Dr. Kuhn testified that in August 2006 he wrote two letters to Mr. Michael Flomenhaft, who was the trial attorney for Mr. Verdugo's personal injury action that is currently still pending. In the first letter Dr. Kuhn opined that Mr. Verdugo was permanently and totally disabled, from a worker's compensation board standard, as a result of his chronic depression and attention and cognitive deficits. (Transcript 6/14/12 p. 28). Dr. Kuhn further stated in this letter that Mr. Verdugo will need to undergo psychotherapy and take psychothropic medications indefinitely as he may have reached a plateau in his improvement. (Id., at 28-29)
Two weeks later Dr. Kuhn wrote a second letter to Mr. Flomenhaft, stating that he did not think Mr. Verdugo was so incompetent as to need a guardian. (Transcript 6/14/12 at 28-29). Dr. Kuhn explained that from a neuropsychiatric perspective, when he sees signs of progress in a patient, he does not rush to "assign a guardian." (Id., at 10). Dr. Kuhn opined that even with Mr. Verdugo's cognitive deficits he did not require a guardian in 2006 because "he could understand the issues ...