Cristal M. McBean, a mentally and physically disabled 21-year-old with her father Glenford McBean at their Lauderhill home.
Cristal M. McBean, a mentally and physically disabled 21-year-old with her father Glenford McBean at their Lauderhill home. (Melanie Bell)

The Northern Trust Co., a Chicago-based financial services giant, is fighting a $5 million lawsuit alleging it failed to properly manage the assets of a brain-damaged Broward County woman.

Cristal Marie McBean, now 21, of Lauderhill suffered a catastrophic accident shortly after birth in 1992 that caused oxygen deprivation to her brain. In 1995, her attorney secured a settlement with her health-care providers.

She was to receive $1 million in cash through a guardianship estate, plus payments through an annuity of more than $13,000 per month.

McBean is a quadriplegic with very little cognitive ability, her attorney said. She does not speak and cannot function on her own. Her father, with assistance from nurses, is her full-time caregiver.

In February 1996, Northern Trust was appointed her plenary guardian. Northern Trust, an investment management and fund administrator listed on the Nasdaq exchange, has been around for 124 years and has more than $846 billion in assets under management.

Northern Trust hardly seems like a firm that would botch the trust of a disabled client, but her attorneys claim that’s what happened.

Civil litigator Gary Fox of Stewart Tilghman Fox Bianchi & Cain in Miami became the latest of several attorneys to take her case. Elder law attorney Stephen A. Taylor of Biscayne Park was approached by McBean’s trial attorney, Gary M. Cohen of Grossman Roth in Boca Raton to look into how her guardian was spending money.

Taylor said McBean’s father, Glenford McBean, “felt the guardianship was being grossly mismanaged and that his thoughts and opinions were not being heard. He feared the monies in the guardianship would soon be completely gone and he was concerned about the future care for his daughter.”

Taylor was stunned to learn a special needs trust was never established by Northern Trust as her guardian. Taylor educated McBean on the need for a trust, got the trust established in March 2011 and removed Northern Trust as guardian in August 2012. MonarchCare Inc., the petitioner in the current action, was named the new guardian in October 2012.

Fox was brought in to litigate a petition to surcharge Northern Trust, and a second amended petition was filed last October.

“Consistent with its fiduciary duty and in accordance with a court order approving a 1995 medical malpractice settlement, Northern Trust properly administered the guardianship,” company spokesman Doug Holt said in an email received after deadline. “Northern Trust intends to vigorously defend its actions in relation to this litigation.”

Bad News

Fox explained McBean was entitled to Medicaid, Social Security and other benefits because of her condition. But these are means-tested programs that go away if the subject’s income exceeds the government programs’ benchmarks. A special needs trust must be established to reinstate those benefits.

“Taylor got the trust set up. The bad news is that by that time 15 years had passed and $4.8 million had been paid out of the guardianship account. Had a special needs trust been set up initially, Medicaid would’ve picked up $4.6 million of it,” Fox said.

Northern Trust’s answer filed on Christmas Eve by Miami attorney John O’Sullivan at Hogan Lovells blamed everyone but the fund manager. The answer filed with Circuit Judge Charles Green said annual accountings were provided to the court, and her parents never objected to them.

“Cristal’s natural guardians were aware that Cristal may have been eligible for public benefits and were aware of the possibility of structuring the guardianship estate as a special needs trust but opposed both,” O’Sullivan said in Northern Trust’s defense.

Any alleged loss, he continued, were caused by “Cristal’s parents, counsel for Cristal’s parents in the underlying personal injury action and the guardian ad litem appointed to represent Cristal in the settlement.”

Fox represented Terri and Michael Schiavo in the medical malpractice trial that arose from the events that caused her coma. In McBean’s case, he said Northern Trust’s primary duty was to fashion the trust that best served her interests.

Fox found it galling that Northern Trust tried to shift blame to a financially unsophisticated parent or to Cohen, the attorney who handled McBean’s malpractice case.

“Cohen’s job was to secure the settlement, maximize the recovery and be sure that got into the hands of a professional, experienced money manager,” Fox said. “He had every right to believe Northern Trust was capable of handling this type of account.”

Standard of Care

In the court petition, Fox maintained the standard of care for a financial guardian is to requalify the ward “for any and all government benefits the ward may be entitled to by reason of her age, disability or other factors.”

MonarchCare alleges breaches of fiduciary duty by Northern Trust.

“Rather than fulfilling its fiduciary duty … Northern Trust negligently forsook all future Social Security income and Medicaid benefits and began paying for all of Cristal’s medical needs out of her property,” the lawsuit said.

Since deposing Northern Trust employees who managed McBean’s account, Fox has concluded they didn’t know what they were doing.

“They should’ve either developed the expertise or simply told the folks, ‘Most of our clients are not physically disabled. We deal with rich people. You ought to go to somebody that knows about that,’ ” Fox said.

On Jan. 15, Northern Trust deposed Maria Consuegra, a Miami probate and guardianship attorney who several years ago worked for Comprehensive Rehabilitation Consultants, which provided medical management services to the McBeans.

“My role was to see what of the services that she needed could be paid by a governmental entity,” Consuegra testified.

When asked if she was surprised that government services were not already in place, Consuegra said, “I was appalled more than surprised, because I could not believe that private funds were being used to pay for benefits that could be paid by governmental entities, and that a special needs trust had not been set up.”