January 16, 2019

In the Matter of a Mail Dispute Between  

GENE A. GIORGETTI and CYNTHIA KROUT

P.S. Docket No. MD 18-310

APPEARANCE FOR GENE A. GIORGETTI:
Gene A. Giorgetti

APPEARANCE FOR CYNTHIA KROUT:
Cynthia Krout

INITIAL DECISION

This mail dispute involves a disagreement over an elderly family member’s mail.  Gene A. Giorgetti and Cynthia Krout claim the right to direct the delivery of mail addressed to their mother, Alice Giorgetti, at 542 Highland Avenue, Penngrove, CA 94951.  The resulting mail dispute was forwarded to the Judicial Officer Department by the Penngrove Postmaster and docketed pursuant to Postal Operations Manual (POM) § 616.21 (November 30, 2018) under the procedures established at 39 C.F.R. Part 965 (2018).  The Judicial Officer issued an order directing the Penngrove Postmaster to hold all mail addressed to Ms. Giorgetti until this mail dispute is resolved.  By this Initial Decision, I recommend that the Judicial Officer issue an order directing the Penngrove Postmaster to deliver all mail being held and hereafter received addressed to Alice Giorgetti to Ms. Krout or as otherwise directed by Ms. Krout.

FINDINGS OF FACT

1. This mail dispute has three primary players:  (1) Ms. Giorgetti is 93 years old and has experienced deteriorating health; (2) Ms. Giorgetti’s son, Gene A. Giorgetti; and, (3) Ms. Giorgetti’s daughter, Cynthia Krout. ¹  (Krout Aff.; Krout Exh. F; 2018 Trust Agreement).
2. The record does not include any statement or directive from Ms. Giorgetti addressing delivery of her mail.
3. On April 20, 2007, Ms. Giorgetti signed a Trust Agreement naming Ms. Giorgetti and Ms. Krout as Co-Trustees.  The trust was established to benefit Ms. Giorgetti.  (Krout Aff. ¶ 1).
4. The 2007 Trust Agreement provided that the Trustee, Ms. Krout, had the following powers on behalf of Ms. Giorgetti:
   • to sell, convey and exchange property;
   • to borrow money and encumber the trust property with a deed of trust or mortgage; and
   • to invest in all types of assets. 
   (Krout Exh. A, Certificate of Trustee). ²
5. On April 9, 2008, Ms. Giorgetti signed, and had notarized, a Durable Power of Attorney for Asset Management nominating Ms. Krout as her agent.  If Cynthia Krout were ever unable to perform as the Agent, then Andrea Krout (Ms. Krout’s daughter and Ms. Giorgetti’s granddaughter) was nominated as the alternate Agent.  (Krout Exh. B).
6. The 2008 Durable Power of Attorney provided the Agent the powers “to be exercised for [Ms. Giorgetti’s] benefit and on [Ms. Giorgetti’s] behalf . . . .”  These powers included the authority to manage assets, buy and sell personal property, buy and sell real property, manage taxes, enter into contracts and legal proceedings, compromise and settle disputes, manage business affairs, and manage bank accounts.  (Krout Exh. B).
7. The 2008 Durable Power of Attorney also provided that “I [Ms. Giorgetti] hereby give my agent [Ms. Krout] full power and authority to do, execute and perform every act necessary or proper to be done in and about the premises as fully as I might or could do were I personally present, with full power of substitution and revocation, hereby ratifying and confirming all that my agent shall lawfully do or cause to be done by virtue of this instrument.”  (Krout Exh. B).
8. On May 13, 2010, Ms. Giorgetti amended the 2007 Trust Agreement.  Ms. Krout remained the Trustee.  (Krout Aff. ¶ 1).
9. On May 3, 2017, Ms. Giorgetti amended the Trust Agreement in consultation with her longtime counsel of approximately 30 years.  Ms. Giorgetti withdrew as a Co-Trustee.  Ms. Krout remained as the sole trustee.  (Krout Aff. ¶ 3; Krout Exh. C).  This notarized amendment was recorded at the office of the Sonoma County, California Recorder on June 9, 2017 (Krout Exh. E).
10. Also on May 3, 2017, Ms. Giorgetti in consultation with her longtime legal counsel executed a Health Care Power of Attorney With Advance Directive in which Ms. Giorgetti designated Ms. Krout to make decisions on her behalf in the event of her incapacity or inability to do so.  In the alternative, Ms. Giorgetti again identified Andrea Krout to make such decisions.  (Krout Exh. D).
11. The Health Care Power of Attorney provides that Ms. Krout was authorized to make health care decisions for Ms. Giorgetti, gain access to Ms. Giorgetti’s medical records and other personal information, and execute documents such as contracts for Ms. Giorgetti.  (Krout Exh. D).
12. The Health Care Power of Attorney became effective “only upon the incapacity of the principal [Ms. Giorgetti], as determined and evidenced by a written certificate or statement of the principal’s treating physician, stating that the principal lacks substantial capacity to make informed health care decisions on the principal’s own behalf.”  (Krout Exh. D).
13. On May 7, 2018, Ms. Giorgetti’s primary care physician of eleven years executed a letter stating that Ms. Giorgetti “does not have the mental capacity to do her own estate planning.”  (Krout Exh. F).
14. On July 16, 2018, the same primary care physician conducted an examination of Ms. Giorgetti to evaluate her for placement in a residential care facility.  Upon completing the examination, the physician completed a Physician’s Report which indicated that Ms. Giorgetti was confused and disoriented.  The physician also indicated that Ms. Giorgetti demonstrated inappropriate, aggressive, and sundowning behavior. ^{3  (Krout Aff. ¶ 7).}
15. On July 25, 2018, the same primary care physician executed a second letter stating: I have been the primary care physician for Ms. Alice Giorgetti for the last 11 years.  She has now developed a diagnosed mental condition which causes her to be unable to make financial decisions in her own best interests.  Her DPOA [durable power of attorney], daughter Cynthia Krout, should make financial decisions for her.
    (Krout Exh. G).
16. On September 10, 2018, the same primary care physician executed a third letter stating:  “Unfortunately, [Ms. Giorgetti] has developed a mental condition that prevents her from making decisions to direct her own health care or to make decisions in her own best interests.”  (Krout Exh. H).
17. On September 13, 2018, Mr. Giorgetti took Ms. Giorgetti, not to her attorney of 30 years, but to a new attorney who drafted a new Trust Agreement (hereafter referred to as the 2018 Trust Agreement).  Ms. Giorgetti executed the new Trust Agreement which purportedly revoked all prior trust agreements and named Mr. Giorgetti as the Trustee.  The terms of the 2018 Trust Agreement purportedly placed Mr. Giorgetti in charge of Ms. Giorgetti’s financial affairs.  (Krout Aff. ¶ 9; 2018 Trust Agreement).  The 2018 Trust Agreement literally allows Mr. Giorgetti to self-deal (for example, the clause specifically allows Mr. Giorgetti to personally purchase and sell property to and from the trust, and borrow money from the trust).  (2018 Trust Agreement, ¶ 7.12).
18. On the 2018 Trust Agreement, Ms. Giorgetti’s signature is notarized.  The notarization provides:  “A Notary Public or other officer completing this certificate verifies only the identity of the individual who signed the document which this certificate is attached, and not the truthfulness, accuracy, or validity of that document.”  The notarization only confirms Ms. Giorgetti’s identity as the signator.  (2018 Trust Agreement).
19. After the 2018 Trust Agreement was executed, Mr. Giorgetti and Ms. Krout claimed the right to direct the delivery of Ms. Giorgetti’s mail.  Mr. Giorgetti presented the Penngrove Postmaster with the following:  (1) an October 4, 2018 Durable Power of Attorney without a signature page signed by Ms. Giorgetti; (2) an October 4, 2018 Revocation of Power of Attorney signed by Ms. Giorgetti; and, (3) a letter from Rod Moore, Esq., addressed to Ms. Krout recommending mediation.  Ms. Krout presented the Penngrove Postmaster with the following:  (1) a September 28, 2018 Certification of Trustee (signed by Ms. Krout); (2) three letters from Ms. Giorgetti’s doctor (summarized above); (3) a September 24, 2018 letter from the County of Sonoma Human Services Department recommending mediation; and, (4) the 2018 Trust Agreement naming Mr. Giorgetti as the Trustee. 
20. The October 4, 2018 Durable Power of Attorney does not have a signature page with Ms. Giorgetti’s signature.  The document also lacks acknowledgement by a notary public.
21. The October 4, 2018 Revocation of Power Attorney is a separate document which provides:  “I ALICE D. GIORGETTI hereby revoke any and all Powers of Attorney executed except for the Durable Power of Attorney, executed this day, which names my son, GENE A. GIORGETTI[,] as my agent.”  This document is not notarized or witnessed by two individuals.
22. The Penngrove Postmaster, through regional Postal Service counsel, forwarded the dispute to the Judicial Officer for adjudication.

DECISION

Ms. Giorgetti has not provided direction as to her mail delivery and I conclude, based on the record, that she is unable to do so.  I am then left to consider whether Ms. Krout or Mr. Giorgetti should direct the delivery of her mail.
Our Rules of Practice in Mail Dispute proceedings require both parties to submit sworn statements explaining the facts supporting their positions, along with relevant documents.  39 C.F.R. § 965.5.  A party may then file a rebuttal argument and additional relevant documents.  39 C.F.R. § 965.6.  A party that fails to comply with § 965.5 may be held in default, and the presiding officer may issue an initial decision that mail be delivered to the other party.  39 C.F.R. § 965.7.
Here, Ms. Krout complied with § 965.5 by submitting a sworn affidavit and supporting documents.  Mr. Giorgetti filed nothing. ⁴Mr. Giorgetti therefore is in default.
While it is possible to rule based on the default, I still look to the relative authority of Ms. Krout and Mr. Giorgetti to direct delivery of their mother’s mail based on the record.
Ms. Krout’s Documents
Ms. Krout relies on three documents for her authority to direct Ms. Giorgetti’s mail:  (1) the 2007 Trust Agreement as amended in 2010 and 2017; (2) the 2008 Durable Power of Attorney; and, (3) the 2017 Health Care Power of Attorney.
Ms. Krout argues in the September 28, 2018 Certification of Trustee, that the 2007 Trust Agreement became irrevocable under California law when Ms. Giorgetti’s physician determined on May 7, 2018, that she lacked the mental capacity to do her own estate planning.  See Cal. Prob. Code. § 18100.5.
Ms. Krout also argues that the 2017 Healthcare Power of Attorney became effective when a doctor determined that Ms. Giorgetti became incapacitated.  The record also includes evidence of such incapacity (Findings 13-16).
These three documents provide Ms. Krout sufficient authority to direct the delivery of Ms. Giorgetti’s mail.  See, e.g., Hollinger-Garwood and Ballard, MD 04-150, 2004 WL 7329884 (I.D. December 21, 2004)(a power of attorney executed in accordance with state law may be used in determining how disputed mail should be delivered).
Mr. Giorgetti’s Documents
Mr. Giorgetti relies on three documents:  (1) the September 13, 2018 Trust Agreement; (2) the October 4, 2018 Revocation of Power of Attorney; and, (3) the October 4, 2018 Durable Power of Attorney.
Normally, the most recent version of a trust agreement or power of attorney will supersede the prior versions and serve as a guide to a settlor’s interests.  See Fuess and Temple, MD 18-238, 2018 WL 4913889 (I.D. September 26, 2018)(citing Farmer, Sr. and Gloer, MD 04-184, 2005 WL 8152947 (I.D. February 16, 2005) and Tutt and Ramsey, MD 00-234, 2000 WL 36731155 (I.D. August 4, 2000)).  By this rule, Mr. Giorgetti would have the authority to direct the delivery of Ms. Giorgetti’s mail based on the September 13, 2018 Trust Agreement, the October 4, 2018 Revocation of Power of Attorney, and the October 4, 2018 Durable Power of Attorney.  See Fuess, MD 18-238, 2018 WL 4913889.  However, Mr. Giorgetti’s reliance on these three documents is problematic.
Ms. Giorgetti’s primary care physician of eleven years issued three separate opinions spanning a four-month period stating that she lacked the capacity to make her own medical and financial decisions.  On September 10, 2018, Ms. Giorgetti’s physician opined “Unfortunately, [Ms. Giorgetti] has developed a mental condition that prevents her from making decisions to direct her own health care or to make decisions in her own best interests.”  Just three days later, Ms. Giorgetti executed the new trust agreement.  The closeness in timing between her physician’s determination that she lacked mental capacity and her executing the new trust agreement and new durable power of attorney raises the obvious question of whether Ms. Giorgetti had the capacity to do so.  See Cal. Prob. Code, Part 17, Legal Mental Capacity, §§ 811, Deficits in Mental functions, 812 Capacity to make decisions; see also §§ 1556, 4120, and 6100.5 Persons not mentally competent to make a will; specified circumstances.
To place the mental capacity issue in context, Mr. Giorgetti has not explained that even though Ms. Giorgetti’s primary care physician determined that she did not have the mental capacity between May 7 through September 10, 2018, to make medical and business decisions, she regained the necessary mental capacity by September 13, 2018, had such capacity on October 4, 2018, to execute documents, and then lost the capacity to direct delivery of her own mail by the end of October 2018.  The closeness in time makes the documents’ validity suspect.
Moreover, the 2018 Trust Agreement also purports to completely amend (in essence revoking) the 2007 Trust Agreement which Ms. Krout argues became irrevocable on May 7, 2018.  Mr. Giorgetti does not address Ms. Krout’s argument.
The 2018 Trust Agreement permitted self-dealing by Mr. Giorgetti.  Self-dealing is allowed under California law, but creates a rebuttable presumption of a breach of the trustee’s fiduciary duties.  Cal. Prob. Code § 16004, Conflicts of interest; see also McDonald v. Hewlett, 102 Cal. App. 2d 680 (1951)(a self-dealing transaction with a settlor who is “old and feeble” creates a presumption of fraud which may be rebutted).  The inclusion of this clause in the 2018 Trust Agreement along with the timing of its execution make the document suspect.
Next, I address the October 4, 2018 Durable Power of Attorney.  A copy signed by Ms. Giorgetti with her signature notarized was not produced by Mr. Giorgetti for inclusion in the record.  Cal. Prob. Code § 4121, Legal sufficiency, condition (“A power of attorney is legally sufficient if . . . [t]he power of attorney is either (1) acknowledged before a notary public or (2) signed by at least two witnesses . . . .”); see also § 4122.  Thus, the document in the record is suspect.  In contrast, the 2008 Durable Power of Attorney is signed by Ms. Giorgetti, with her signature notarized, thus complying with the law.
With regard to the October 4, 2018 Revocation of Power of Attorney, it is neither acknowledged by a notary public nor signed by two witnesses.  Cal. Prob. Code §§ 4121 Legal sufficiency conditions, 4150 Modifications, notice (“A principal may modify a power of attorney . . . [b]y an instrument executed in the same manner as a power of attorney . . . .”).  Because the 2018 Revocation of Power of Attorney was neither notarized nor witnessed, it is legally suspect.
I am now left with a situation in which Ms. Krout has provided three documents providing her with authority to direct Ms. Giorgetti’s mail.  The documents supporting Mr. Giorgetti’s position are suspect.  Because Mr. Giorgetti is in default and has not resolved the issues raised by Ms. Krout, I am unable to rule in his favor.
This Initial Decision is in favor of Ms. Krout because of Mr. Giorgetti’s default. This decision is limited to the issue of directing delivery of the mail.  I am not deciding whether Ms. Giorgetti had the mental capacity to sign the September 13 and October 4, 2018 documents or the validity of those documents.
This case might have come out differently if Mr. Giorgetti had responded.  Accord Weaver and Weaver, MD 10-29, 2010 WL 11570341 (I.D April 1, 2010)(son’s authority to direct delivery of mother’s mail based on power of attorney is upheld because two witnesses to the power of attorney signing attested to a mother’s soundness of mind at the time of signing).  Because he filed nothing, Ms. Krout’s evidence is unrebutted.

RECOMMENDATION

Mr. Giorgetti is in default under the Rules of Practice and Ms. Krout has shown her legal authority to direct Ms. Giorgetti’s mail. Therefore, I recommend that the Judicial Officer issue an order directing the Penngrove Postmaster to deliver all held mail and mail addressed to Alice Giorgetti, at 542 Highland Avenue, Penngrove, CA 94951 to Cynthia Krout or as otherwise directed by Cynthia Krout.
This Initial Decision only addresses how the disputed mail should be delivered by the Penngrove Postmaster.  It does not resolve any other legal disputes between the parties.  Further, it does not decide who owns the contents of the disputed mail.  Finally, if a future court order directs that a different party is entitled to direct delivery of the mail, Postal Service regulations provide that the mail will be delivered according to that Order.  See POM § 616.3.

Peter F. Pontzer
Administrative Judge