New York State Court of Claims

New York State Court of Claims
TF v. THE STATE OF NEW YORK, # 2019-059-029, Claim No. 121718, Motion No. M-94352

Case information

UID: 2019-059-029
Claimant(s): T-------F----- an Infant by his Mother and Natural Guardian BOLA LAWAL,
Claimant short name: TF
Footnote (claimant name) :
Footnote (defendant name) :
Third-party claimant(s):
Third-party defendant(s):
Claim number(s): 121718
Motion number(s): M-94352
Cross-motion number(s):
Claimant's attorney: The Law Office of John M. Daly
By: John M. Daly, Esq.
Defendant's attorney: No Appearance
NYC Human Resources Administration
By: Robert J. Luttrell, Esq.
Third-party defendant's attorney:
Signature date: November 13, 2019
City: Central Islip
Official citation:
Appellate results:
See also (multicaptioned case)


Text of the decision:

This is a motion by the mother and natural guardian ("Claimant") of an infant ("TF") who is the beneficiary of the T.F. Supplemental Needs Trust ("TFSNT"), for an order allowing partial withdrawal of funds so that the TFSNT may purchase land and construct a home and pay other ancillary expenses. The TFSNT was created in August, 2017 pursuant to an infant compromise order ("ICO") which settled a medical malpractice action brought by Claimant on behalf of TF. The malpractice action alleged that TF suffered birth related neurological injuries caused by the natal and postnatal care received by TF at University Hospital of Brooklyn, an agency of the defendant State of New York ("Defendant"). TF was born in 2010 and was nine years old at the time of the instant application.

The malpractice case settled for $3,510,055.90. In accordance with the New York State Medical Indemnity Fund ("MIF") (Pub Health Law 2999-h, et seq.), the total cash payout was $2,000,000. After attorneys' fees, disbursements and the payment of liens, the sum of $882,384.32 was paid to fund the TFSNT and the remaining $500,000 funded a future benefits annuity. The annuity pays $750.00 monthly into the TFSNT and will pay $1901.75 per month into the TFSNT beginning in January 2028. The trustee of the TFSNT is Orange Bank & Trust Company.

After some Court approved withdrawals, at the time of this application the TFSNT was valued at $829,610.(1) The principal is invested in equities and bonds and the annual income reported as of June, 2019 was $18,685. The annual trust expenses including trustee commissions, accounting and tax preparation are estimated to be $14,000, but no application approving any fees has been made. If the total withdrawal requested in the instant application were to be approved, the cash remaining in the TFSNT would be $548,000.

An earlier application for similar relief allowing withdrawals from the TFSNT to purchase a different house in the same development was denied by decision and order dated November 28, 2018 (Scuccimarra, J., Motion No. M-92753) ("2018 Order"). The complete factual recitations as well as the legal precedents cited in 2018 Order are incorporated herein and, in the interest of brevity, are not repeated in their entirety.

The earlier application requested $303,070 for the purchase of land, construction of a new two-story house in the Waters Edge development, Westfield, Indiana to be owned by the TFSNT, and other ancillary expenses. The 2018 Order noted several reasons for denial which Claimant addresses in the instant application as discussed below. The 2018 Order did recognize that the family's current one bedroom apartment was too small for TF, his mother and sister and that a larger home in a safe neighborhood in a well regarded school district with good special education services would be to TF's benefit. The Court also recognized that TF's family is of very limited means and cannot afford the purchase price of a suitable home.

Bola Lawal is a single mother, who is employed as a part-time as a hair stylist. Ms. Lawal earns $180.00 per week or $720.00 per month. The family receives $350.00 per month in public assistance and $500.00 per month in food stamps. T.F. receives $750.00 per month in Supplemental Security Income. Ms. Lawal does not receive child support from either of her children's fathers. The family's total monthly income is $2,320.00.

The family's monthly expenses are as follows:

Rent $600.00

Electric $100.00

Gas for Apt. $30.00

Cable and Internet $75.00

Cell Phone $60.00

Gas for TFSNT Vehicle $80.00

Toiletries $100.00

Pull-ups for TF $70.00

Food $1,200.00

Total: $2,315.00

2018 ORDER

The 2018 Order provided several reasons for denying Claimant's prior application. First, it noted that the two-story home applied for in which all the bedrooms, including TF's, were on the second floor, was not appropriate for TF who, although not confined to a wheelchair, has difficulty ambulating because he has braces on one of his legs and on one arm. There was no indication that the proposed new home would have any handicapped accommodations.

The first application did not indicate the estimated amounts that would be due for real estate taxes, homeowners' insurance and homeowners' association ("HOA") fees and did not discuss the prices of comparable homes in the area.

The prior application did not indicate that the home would be in reasonable proximity to TF's medical providers and contained no medical information updated since the approval of the ICO and TFSNT in 2017. The 2018 Order noted that the application did not explain whether TF's mother had applied for child support from his or his sister's father and if not, the reasons why.

For these reasons, the 2018 Order concluded that the application did not meet the standards for invasion of principal of a SNT for the purchase of a home set forth in 22 NYCRR 202.67 (f) and (g) and cited, inter alia, Alteon v State of New York (UID No. 2000-001-081 [Ct Cl, Read, P.J., Dec. 5, 2000]); Joyner-Packer v State of New York (45 Misc 3d 734 [Ct Cl, 2014]); Matter of Pineda ["Marmol"] 168 Misc 2d 845 [Sup Ct, New York County 1996]; Gilchrist v Brookdale Hosp. Med. Ctr. (28 Misc3d 1230[A] [Sup Ct, Kings County 2010]), for its determination denying the application.


Claimant now seeks an order allowing the TFSNT to purchase land and construct a one-story, three bedroom ranch-style house in the same Waters Edge development and in the same highly regarded school district. The cost now is $280,845 or approximately $22,000 less than the two-story, four bedroom house proposed in the earlier application. Claimant also is seeking to withdraw $15,000 in closing costs, the annual cost of real estate taxes, homeowners' insurance and HOA fees which documents estimate would total $6,650 the first year, as well as $6692 for window coverings and furniture. Finally, Claimant seeks $6,087.50 in attorneys' fees to be paid by the TFSNT.

The instant motion is not opposed by the NYC Department of Social Services ("NYC") or Defendant. The Court held a conference with counsel for the Claimant, NYC, and the trustee, on October 28, 2019.


"[W]ithdrawals from an infant's settlement fund . . . must be strictly policed; their use 'for necessities and education' may be allowed, but 'only to the extent [they] cannot otherwise be provided' " (Joyner-Pack, 45 Misc 3d at 739, quoting Matter of Dagani, 226 AD2d 197, 199 [1st Dept 1996]). "Expenses allowed pursuant to that exception must be based on a showing of financial inability, premised on detailed information demonstrating that each particular expense is not within the parent's means" (id., citing Marmol, 168 Misc 2d at 848-850; Gaffney v Constantine, 87 NYS2d 131 [Sup Ct, Queens County 1949]).

Barring unusual circumstances, withdrawal of funds from an infant's settlement is forbidden "where the parents are financially able to support the infant and to provide for the infant's necessaries, treatment and education" (22 NYCRR 202.67 [g]). Conversely, withdrawals for infant support are permitted "only upon clear proof that such is justified by the financial circumstances of the family" (Marmol, 168 Misc 2d at 850).

The Court of Claims has looked to the seven factors set forth in Marmol to determine whether use of infant settlement funds is appropriate (see e.g. Joyner-Pack v State of New York, supra, Alteon v State of New York, supra, n3 [Ct Cl, Read, P. J., Dec. 5, 2000]). Specifically, Marmol instructs as follows:

"[T]he use of infants' funds for the purchase of a family home will be judicially authorized provided 1) by clear proof the parents show they cannot afford the purchase price or a portion thereof; 2) the house has features beneficial to the child and accommodates his physical limitations; 3) the purchase price is fair; 4) title is vested in the child at least to the proportionate degree of his investment in the house; 5) necessary measures are taken, where needed, to safeguard the investment against the profligacy of the parent; 6) parents offer a quid pro quo; and 7) the funds remaining after the outlay are sufficient to meet the future needs of the infant and where the child is expected to remain incompetent, for the anticipated duration of his life"

(168 Misc 2d at 853-54). The fact that other family members also will benefit from the new home does not warrant disapproval (id. at 851).

Here, as acknowledged in the 2018 Order, it is clear that the family cannot afford the home or a portion of the purchase price. Regarding the other Marmol issues highlighted in the 2018 Order, the house in the instant application appears to accommodate TF's needs since it has an open floor plan on one floor. In addition, the bathroom will have a walk-in shower with grab bars and Claimantt has indicated that any additional accommodations which may be needed will be paid for through the New York State Medical Indemnity Fund. Claimant has now demonstrated that TF's physicians will be within a reasonable proximity to TF's new home and that Claimant now has a vehicle (purchased with TFSNT funds) to transport TF. After the conference counsel for Claimant provided the affirmation of Douglas B. Savino, M.D. which updated TF's medical condition. TF continues to suffer from seizures disorders and is developmentally delayed. TF has been diagnosed with the right hemiparesis and severe mixed aphasia due to the perinatal cerebrovascular incident at birth. He requires assistance with all activities of daily living.

The estimated costs for real estate taxes, homeowners' insurance and HOA fees are documented. Comparable house costs in the development are noted and the home applied for is the least expensive. The trustee also has indicated that a new home purchase with this builder afforded the time to seek court approval, which the seller of an occupied house could not be expected to accommodate. Title to the property will vest in the TFSNT.

In addition, since the expenditures for the house Claimant requests are limited by specific dollar amounts, the approved expenses will not allow for profligacy. The Court of Claims has found that the quid pro quo factor is satisfied by a provision in an order providing that the funds would be returned to a supplemental needs trust in the event the sale of the house did not close (see Joyner-Pack v State of New York, supra). The MIF will continue to be available for TF's medical expenses and $548,000 will remain in the TFSNT. The annual income of the TFSNT is estimated to be $10,000 and $9,000 a year will be added to the TFSNT from the annuity until January 2028 when $22,281 per year will be added each year.

The withdrawal of funds to enable the TFSNT to purchase the home and land for $280,845 appears reasonable in view of the foregoing and since Claimant has addressed substantially all of the Court's earlier concerns. Closing costs of $15,000 seem excessive, especially since the estimate provided by the builder/contract vendor includes mortgage fees and mortgage title insurance and the purchase will not be financed. However, any surplus will remain in the TFSNT. Real estate taxes, homeowners' insurance and HOA fees are necessary for the TFSNT's ownership of the house and land and approval of the house purchase and, therefore, will be approved for the first year. Thereafter, approval will be on an annual basis and based upon a showing that a search has been made for the most affordable, adequate homeowners' insurance.

The Court will not approve the disbursements for window treatments and furniture. While the Court is sympathetic to the family's financial circumstances, there is no explanation as to how this expense will benefit TF and, therefore, is not in accord with the standards set forth in the applicable law (see Packer-Joyner, supra).

No billing statement has been provided in support of the request for attorneys' fees. There is no breakdown between partner and associate hours worked. In addition, the Court notes that the attorneys' fees paid at the time of the settlement was $600,559.05. As a result, the Court will approve $3300 for attorneys' fees.


Although approximately $550,000 will remain in the TFSNT, TF is only nine years old. The funds need to last his lifetime. Every effort must be made to preserve and enhance the remaining funds.

Regarding the issue of child support, Claimant now has attested in her affidavit that TF's father lives outside the US. While that fact may make recovering child support difficult, if not impossible, Claimant has not explained what efforts, if any, have been or could be made by her or by her local department of social services to obtain child support payments owed by either TF's or his sister's father in order to enhance the family's income.

In addition, the Court notes that TF is in school (fourth grade) for full days and that he has the benefit of a medicaid funded home health aide twenty hours per week. On the other hand, Claimant indicates that she works part-time and earns $180 a week, but has not indicated how many hours per week she works. While caring for a seriously handicapped child is burdensome, efforts to increase the monthly earned income should be explored so that some of the family's expenses can be paid by his mother, perhaps in the form of rent paid to the TFSNT.

In addition, the TFSNT, at Article VI (b) (9), requires an annual accounting to be filed each May with NYC and the Court. Although the TFSNT was created in October 2017, no accounting was prepared until the Court requested it in October, 2019. Notably, the ICO and settlement approved a withdrawal of up to $50,000 for the purchase of an automobile. The accounting indicates that Claimant purchased a Lincoln MKX for $49,736 with no indication that it was specially equipped for TF's needs. While in compliance with the letter of the court approval, this expense was not the most prudent of choices.

Once the family moves into the new home, the current monthly $600 rental expense will be eliminated. This will provide extra monthly income for utilities, maintenance of the home and other items. However, it is unclear to the Court whether the elimination of rental expenses will reduce the monthly public assistance payment to the family and thereby reduce the monthly income.

Of additional concern is preservation of the remaining liquid assets of the TFSNT, as compared with the estimated trust expenses. Annual trust income, exclusive of the deposit of the annuity payments, was $18,685, but is expected to drop to $10,000 once the cash principal is reduced by 34% by virtue of the house purchase. While the application provides a $14,000 estimate for annual expenses, including trust administration fees, tax preparation and accounting fees, no breakdown has been provided. In any event, the TFSNT document requires Court approval of accountant fees (Art. VI [b] [3]) and that the statutory compensation of the trustee may be reduced by the Court (Art. V1 [b] [4]). Thus, a further application must to be made to the Court for approval of trust expenses accrued thus far.

The parties are advised that the Court will make itself available by telephone or otherwise at mutually convenient times to review with the parties issues which may arise.

In accordance with the foregoing, it is

ORDERED that the following may be withdrawn from the TFSNT:

(1) an amount not exceeding $280,845, inclusive of the $4,000 downpayment already tendered, for purchase of land and the construction of a home, the title of which shall be in the TFSNT, on Lot #1051, Waters Edge Community, 1554 Timber Bluff Road, Westfield, Indiana 46074;

(2) an amount not exceeding $15,000 for closing costs for the purchase set forth in paragraph (1) above;

(3) an amount not exceeding $6,500 for payment of one year of real estate taxes, homeowners' insurance premiums and HOA fees;

(4) $3300 for attorneys' fees; and it is further

ORDERED, that an accounting in compliance with the provisions of the TFSNT shall be filed in May, 2020 which may be subject to review in accordance with 9 of the TFSNT; and it is further

ORDERED, that a telephone conference initiated by counsel for the Claimant at (631)339-7214 will be held among the Court, the trustee, counsel for the Claimant, NYC and should it deem it appropriate, the Office of the Attorney General, on May 20, 2020 at 11:00 a.m. or such adjourned date as the Court shall determine; and it is further

ORDERED, that the trustee shall submit an application for approval of trust expenses.


1. Exhibit 6 indicates $829,610 but the Attorney's affirmation

15 states $829,210.