Justia Trusts & Estates Opinion Summaries

Articles Posted in Supreme Court of Pennsylvania
by
The Pennsylvania Supreme Court granted review to determine whether the attorney-client privilege and the work product doctrine could be invoked by a trustee to prevent the disclosure to a beneficiary of communications between the trustee and counsel pertaining to attorney fees expended from a trust corpus. To reach that issue, the Court had to first address the question of whether the Superior Court erred in disclaiming jurisdiction on the basis that the trial court’s order rejecting the privilege claim was not a collateral order, and immediately reviewable as such. The Supreme Court held unanimously that the Superior Court had immediate appellate jurisdiction to review the privilege question on the merits, and therefore erred in concluding otherwise. As to the privilege issue itself, the Superior Court indicated that, notwithstanding its perceived lack of jurisdiction, there was no evidence by which to substantiate a claim of privilege on the merits, nor any argument presented to the trial court in support thereof. For those reasons, the court was left to conclude that the privilege was unavailable under the circumstances and that the communications at issue were subject to disclosure. The Supreme Court did not reach a consensus on whether the privilege may be invoked in the trust context. Because disclosure would nevertheless result from the competing positions set forth by a majority of Justices, the lower court’s alternative ruling was affirmed by operation of law. View "In Re: Estate of McAleer" on Justia Law

by
The underlying controversy entailed will-, estate-, and insurance-contest litigation commenced in 2008 by Appellee Jeffrey Stover in his capacity as the attorney for Appellant, David Clark, who was the testator’s brother. In 2010, Appellee Stover also lodged a second complaint on behalf of Monica Clark, the testator’s mother, now deceased. After the claims in both actions failed, Appellant and Mrs. Clark filed this legal malpractice action in 2015, advancing claims of professional negligence and breach of contract against Appellee Stover and his law firm. Upon Appellees’ motion, the common pleas court awarded summary judgment in their favor, finding, as relevant here, that Appellant and Mrs. Clark were aware of the alleged negligence and the asserted breach more than four years before they lodged the malpractice action. Since the applicable statutes of limitations provided for commencement of a negligence action within two years after accrual, and a contractual action within four years after breach, the county court found the claims to be untimely. The Superior Court affirmed on the "occurrence rule." The Pennsylvania Supreme Court granted discretionary review to address the "continuous representation rule," under which the applicable statutes of limitations would not run until the date on which Appellees' representation was terminated. Appellant maintains that this rule should be adopted in Pennsylvania to permit statutes of limitations for causes of action sounding in legal malpractice to be “tolled until the attorney’s ongoing representation is complete.” While the Supreme Court recognized "there are mixed policy considerations involved, as relating to statutes of limitations relegated to the legislative province, we conclude that the appropriate balance should be determined by the General Assembly." The Superior Court judgment was affirmed. View "Clark (Est of M. Clark) v. Stover, et al" on Justia Law

by
In this discretionary appeal, the Pennsylvania Supreme Court was asked to determine the burden of proof for a settlor of an irrevocable trust in order to void the trust on grounds of fraudulent inducement in the creation of the trust. The corpus of the Trust at issue here consisted of numerous assets totaling approximately $13 million, including two real estate property companies called Japen Holdings, LLC, and Japen Properties, LLP (collectively “Japen”). Although acquired during the marriage, Japen was owned 100% by Husband. Unbeknownst to Wife, among Japen’s assets were two residential properties in Florida. When presented with the Trust inventory of assets, Wife did not question its contents, which included Japen, but not a listing of its specific holdings, e.g., the Florida Properties. Approximately four months after the creation of the Trust, Wife discovered that Husband had been having an affair and that his paramour was living in one of the Florida Properties. Wife promptly filed for divorce. A month after that, she filed an emergency petition for special relief to prevent dissipation of the marital assets, including assets in the Trust. Wife argued that Husband’s motive in creating the Trust was to gain control over the marital assets and avoid equitable distribution. A family court judge accepted Wife’s argument by freezing certain accounts included in the Trust and directing Husband to collect rent from his paramour. The Supreme Court held that a settlor averring fraud in the inducement of an irrevocable trust had to prove by clear and convincing evidence the elements of common-law fraud. In doing so, the Court rejected the analysis set forth in In re Estate of Glover, 669 A.2d 1011 (Pa. Super. 1996), because it represented an inaccurate statement of the elements required to establish fraud in the inducement. The Court affirmed the Superior Court’s ruling that the complaining settlor did not prove fraud in the inducement. View "In Re: Passarelli Family Trust" on Justia Law

by
The issue this matter presented for the Pennsylvania Supreme Court's review involved the alleged forfeiture of a parent’s share in his child’s estate where his child died without a will. Specifically, the question was whether an adult decedent, who became disabled after reaching the age of majority, was a dependent child for purposes of the forfeiture statute. Generally, where an intestate decedent dies without a spouse or issue but with living parents, his or her parents were entitled to inherit the individual’s estate as tenants by the entirety. Notably, the Code did not define the phrase “dependent child.” Decedent was 18 years old when he sustained gunshot wounds, rendering him a paraplegic. At age 37, he died intestate without a spouse or issue, and Appellant (“Mother”) was granted letters of administration. Decedent’s estate subsequently recovered a $90,000 wrongful-death award, which became the estate’s sole asset. Mother filed a petition for forfeiture of estate, asserting that Appellee (“Father”) forfeited his share of the estate by allegedly failing to perform his duty of support. After Father’s motion for judgment on the pleadings was denied, the orphans' court held a hearing. The Supreme Court held that the concepts of a dependent child and the parental duty of care, as they were referenced in Section 2106(b) of the Probate, Estates and Fiduciaries Code, contemplated a legally-imposed parental duty stemming from a state of dependency arising under the established law of the Commonwealth. The Court also agreed with the orphans’ court that in this matter, Mother failed to demonstrate Decedent was a dependent child – and concomitantly, that Father had a duty of care – as required to obtain relief under that provision. View "In Re: Estate of Small" on Justia Law

by
In a matter of first impression, a Pennsylvania superior court held that anti-alienation provisions governing municipal pensions found in various statutes protected assets from attachment and other legal process (including a contract claim) only while those assets remained in the possession of the pension fund administrator. Specifically, the court determined that a spouse’s promise to waive her right to her husband’s pension benefits, including agreeing to transfer such benefits after receiving them from the administrator, was legally enforceable. The Pennsylvania Supreme Court determined that because the superior court’s interpretation was consistent with the plain language of the statutes, the context in which the provisions appear, and Pennsylvania precedent interpreting similar statutory language, the Supreme Court affirmed the decision of the superior court. View "Estate of M&J Benyo v. Breidenbach" on Justia Law

by
In this discretionary appeal, the Pennsylvania Supreme Court considered whether a requested change of beneficiary designation and plan option for benefits payable under the State Employees’ Retirement System (SERS) was effective upon mailing or upon receipt by SERS, where SERS did not receive the required change documentation until after the SERS member’s death. The Court held the change was not effective until receipt by SERS, the common law mailbox rule did not apply, and the Commonwealth Court erred in holding to the contrary. View "Estate of L. Wilson v. State Employees' Retirement Bd." on Justia Law

by
Decedent Sophia Krasinski died testate in 2006. The primary assets of her estate included three parcels of real estate. The Executor was one of the Decedent’s four children, who also included Eleanor Krasinski, James Krasinski, and Patricia Krasinski-Dunzik. Decedent’s will directed that each of her four children were equal beneficiaries of the residue of the estate. In 2010, the Executor filed a petition to permit the private sale of real estate to heirs. The orphans’ court granted the Executor’s petition to permit the sale. Dunzik and her husband sued the estate based upon an alleged oral contract with the Decedent regarding the property. After a nonjury trial, the trial court ruled that there was no enforceable oral contract between Dunzik and Decedent and dismissed the case. This trial court order also lifted a stay on the orphans’ court’s prior order approving the private sale of the Decedent’s lands. Dunzik did not appeal the trial court’s rulings. The sale proceeded; the Executor, James and his wife, and Dunzik attended, at which time Dunzik stated that she would not be bidding because she believed that she already owned the properties. Dunzik again challenged the completed sales. This discretionary appeal presented the Pennsylvania Supreme Court with an opportunity to clarify the proper scope of Rule 342(a)(6) of the Pennsylvania Rules of Appellate Procedure, which provided for an appeal as of right from an order of the Orphans’ Court Division that “determin[es] an interest in real or personal property.” The statute further provided that the failure of a party to immediately appeal an order appealable under, inter alia, Rule 342(a)(6), constitutes a waiver of all objections to the order. The Supreme Court concluded Dunzik waived all objections to the orphans’ court’s order approving the private sale. View "In Re: Estate of Krasinski" on Justia Law

by
Michael Easterday (“Decedent”) and Colleen Easterday (“Easterday”) married in 2004. Prior to marriage, Decedent worked for Federal Express and became a participant in a pension plan established by this former employer. He also purchased a $250,000 life insurance policy. Decedent designated Easterday the beneficiary of both during their marriage. The parties separated in 2013, and ultimately filed for divorce under section 3301(c) of the Pennsylvania Divorce Code, which provided for a divorce by mutual consent of the parties. She and Decedent subsequently settled their economic claims in a property settlement agreement (“PSA”) executed December, 2013. Pertinent here, the PSA provided that the parties would each retain "100% of their respective stocks, pensions, retirement benefits, profit sharing plans, deferred compensation plans, etc. and shall execute whatever documents necessary to effectuate this agreement." The issue this case presented was one of first impression for the Pennsylvania Supreme Court, namely, the interplay between provisions of the Divorce Code, the Probate, Estates and Fiduciaries Code, and the Rules of Civil Procedure. An ancillary issue centered on whether ERISA preempted a state law claim to enforce a contractual waiver to receive pension benefits by a named beneficiary. It was determined Decedent’s affidavit of consent was executed more than thirty days prior to the date it was submitted for filing (and rejected). The Superior Court ruled that because the local Prothonotary rejected the filing of Decedent’s affidavit of consent due to a lack of compliance with Rule 1920.42(b)(2)’s thirty-day validity requirement, grounds for divorce had not been established in accordance with section 3323(g)(2) of the Divorce Code at the time of Decedent’s death. Because the Decedent’s affidavit of consent was not filed, section 6111.2 of the PEF Code did not invalidate Easterday’s designation as the beneficiary of Decedent’s life insurance policy. Furthermore, the Superior Court determined ERISA did not preempt the state law breach of contract claim to recover funds paid pursuant to an ERISA-qualified employee benefit plan. The Pennsylvania Supreme Court affirmed the Superior Court's judgment. View "In Re: Estate of Easterday" on Justia Law

by
This appeal addressed the meaning and effect of section 5513 of Pennsylvania’s Probate Estates and Fiduciaries Code, which related to the appointment of emergency guardians. The Superior Court held that an emergency order for a guardianship of an estate automatically expired after thirty days. The parties did not challenge the vitality of the emergency guardianship in the trial court. Nor did either party raise any claim before the Superior Court regarding the termination of the guardianship order or the appropriate interpretation of the Termination Provisions. In addressing an issue actually raised on appeal, the Superior Court further held that an individual subject to emergency guardianship is not incapacitated and is not precluded from making decisions about his property even when his guardian has been ordered by the court to do so on his behalf. The Pennsylvania Supreme Court determined it was error for the Superior Court to consider and opine on the validity of the order at issue in the underlying case on the basis of the Termination Provisions. Moreover, the Court held that an individual under the protection of an emergency guardianship order has been determined to lack sufficient capacity to make certain decisions and that the extent of his decision-making capacity depends on the specific “powers, duties and liabilities” afforded to the guardian by court order. The Supreme Court therefore vacated the Superior Court’s decision and remanded the matter to that court for further proceedings. View "Gavin v. Loeffelbein" on Justia Law

by
The Pennsylvania Supreme Court granted review to determine rightful title to a parcel of real property claimed by competing grantees, each of whom invoked a real or purported conveyance from the property’s owner. An additional issue under consideration was the application of res judicata and collateral estoppel during estate administration proceedings with regard to an earlier order of the Orphans’ Court determining the validity of a will. Relying upon a presumption that valid delivery of a deed occurs on the date of its execution and acknowledgment, the Superior Court held that title to the real estate vested in the grantee of the earlier, unrecorded instrument. The Superior Court further held that, where the Orphans’ Court determined that a will was valid and permitted a photocopy of that will to be probated, a participating party’s subsequent claim that the will was revoked was barred by the doctrines of res judicata and collateral estoppel. The Supreme Court determined the Orphans’ Court’s decision was supported by competent evidence, the court applied the correct principles of law in evaluating the question of delivery, and the court did not abuse its discretion in determining who possessed superior title to the property at issue by virtue of the 2006 Deeds. In reversing the Orphans’ Court’s decision on that issue, the Superior Court erred. When the parties litigated the alleged dissipation of estate assets, they did so within the context of those same estate administration proceedings. The Supreme Court concluded that a party’s challenge to the Orphan’s Court’s order did not arise within the context of subsequent litigation following a “final order,” but, rather, was advanced within the same proceedings as the challenged order; neither res judicata nor collateral estoppel served to preclude her claim. In this regard as well, the order of the Superior Court was reversed. View "In Re: Estate of Plance; Appeal of: Plance" on Justia Law