The opinion
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NON-PRECEDENTIAL DECISION – SEE SUPERIOR COURT I.O.P. 65.37
IN RE: EVA G. SELLERS : IN THE SUPERIOR COURT OF
: PENNSYLVANIA
:
APPEAL OF: ELIZABETH S. FISCHER : No. 306 EDA 2017
Appeal from the Order Entered December 7, 2016,
in the Court of Common Pleas of Montgomery County
Orphans’ Court Division at No. 2015-X-3184 (Principal)
IN RE: EVA G. SELLERS : IN THE SUPERIOR COURT OF
: PENNSYLVANIA
:
APPEAL OF: ELIZABETH S. FISCHER : No. 329 EDA 2017
Appeal from the Order Entered December 7, 2016,
in the Court of Common Pleas of Montgomery County
Orphans’ Court Division at No. 2016-X-2320
BEFORE: LAZARUS, J., MOULTON, J., AND FORD ELLIOTT, P.J.E.
MEMORANDUM BY FORD ELLIOTT, P.J.E.: FILED SEPTEMBER 19, 2017
Elizabeth S. Fischer (“Fischer”) appeals the orders of the Court of
Common Pleas of Montgomery County that denied her motion for partial
summary judgment at No. 2015-X-3184 and granted the motion for partial
summary judgment filed by Cristy Sellers (“C. Sellers”), administratrix of the
estate of Eric S. Sellers at No. 2016-X-2320 and stated that Fischer had no
authority to create an irrevocable Medicaid Income-Only Trust and had no
authority to transfer property to a trust not in existence on the date the
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power of attorney was signed. As a result, the trial court deemed the trust
invalid and void and ordered and decreed that the transfer to the trust of the
house located at 570 King Road, Limerick, Pennsylvania (“Property”), was
invalid. The trial court further ordered that the Property must be included as
an asset on any amended account filed by Fischer as agent under the power
of attorney of Eva Geiger Sellers (“Mother”). After careful review, we affirm
in part and quash in part.
I. Factual Background.
The record reflects that Mother had three children: Fischer,
Steven Sellers, and Eric Sellers (“Sellers”), the deceased husband of
C. Sellers. Mother named Fischer as the agent under a Durable Power of
Attorney dated November 4, 2009. Under the power of attorney with
respect to real property, Fischer was given the power to manage, sell, or
transfer any real property that Mother owned at the time or would later
acquire. Fischer also had the power to execute deeds, mortgages, releases,
satisfactions, and other instruments relating to real property and interests in
real property that she owned or would later acquire.
As Mother’s health worsened, she moved to a nursing home/assisted
living facility on June 28, 2010. Fischer, in agreement with her brothers,
consulted an elder law attorney who recommended the creation of an
Irrevocable Medicaid Trust (“Trust”). Fischer, as agent and attorney-in-fact
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of Mother, created the Trust on July 12, 2010 and acted as trustee. The
Property was placed in the Trust and valued at $254,250.
On December 20, 2010, the Trust sold the Property to Fischer’s
daughter, Devon Ann Hepburn (“Hepburn”), under an installment land
contract. The contract was structured to include an $80,000 deposit,
96 payments of $931.82, and the balance due after Hepburn turned
30 years old. The Property was the only asset in the Trust.
Mother died on November 28, 2011. Sellers died on February 20,
2012. His widow, C. Sellers, was named the administratrix of Sellers’s
estate.
II. Power of Attorney.
On September 15, 2015, C. Sellers filed a petition to show cause why
an account should not be filed with respect to Fischer’s administration as
agent under the durable power of attorney from November 4, 2009 through
the date of Mother’s death on November 28, 2011. On September 18, 2015,
the trial court awarded a citation returnable on October 19, 2015 for Fischer
and successor Steven Sellers to show cause why they should not file an
account.
On December 18, 2015, following a telephone conference, Fischer was
ordered to file an account of the administration of her agency from
November 4, 2009, through November 28, 2011, by December 30, 2015.
The accounting stated an opening balance of $93.52, income of
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$203,453.26, expenses of $202,695.39, and a closing balance of $1,251.39.
The biggest source of income was $101,000 from the Trust as payments
received from Hepburn. The two biggest expenses were payments of
$82,760.17 to Wells Fargo Mortgage and $81,142.15 for payments to
long-term care facilities.
On January 28, 2016, the estate of Eric S. Sellers, as represented by
C. Sellers, objected to the accounting on the basis that Fischer did not have
authority to create the Trust or transfer the Property to it. C. Sellers also
objected to the lack of personal property listed, the lack of itemized amounts
and payment dates for income and expenses, the accuracy of the long-term
care expenditures, and to the Property-related expenses as some expenses
would be post-transfer of the Property. C. Sellers also objected to the
payment of $3,000 to Joseph Masiuk, an elder care attorney, as she believed
that the payment was for the preparation of the Trust which she did not
believe was authorized by the power of attorney. She also objected to the
inclusion of home sale preparation expenses as Fischer did not sell the
Property as agent but transferred it to the Trust. C. Sellers also objected in
general with Fischer’s agency and alleged that she commingled funds
between her duties as agent under the power of attorney and as trustee
under the Trust. She also alleged that Mother lacked capacity to execute the
power of attorney.
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By order dated May 5, 2016, the trial court ordered Fischer to file an
amended account of her administration of agency on or before June 1, 2016
with specific itemization of each receipt and expense. The trial court also
ordered Fischer to file an account in her capacity as trustee of the trust
during the agency period to which real estate of the principal was
transferred to the trust. The trial court later extended the due date for the
accounts.
On June 28, 2016, Fischer filed the amended accounting for her
agency under the power of attorney. The opening balance was $3,392.59,
income was $220,602.82. Expenses totaled $221,752.93. The final balance
at time of Mother’s death was $1,251.39.
On July 29, 2016, C. Sellers as representative of Eric S. Sellers’s
estate objected to the amended power of attorney account. C. Sellers
reiterated her objections concerning the Property and the personal property
and objected to the bundling of some income and expense items. She also
objected to transactions paid after the death of Mother and to the accuracy
of the accounting. She again objected to expenses for the Property and the
validity of the power of attorney itself.
On August 16, 2016, Fischer filed an amended power of attorney
accounting. The totals were the same, though some categories were broken
down in more detail. On that same date, Fischer filed a petition for
adjudication/statement of proposed distribution.
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On October 28, 2016, Fischer answered C. Sellers’s objections and
sought dismissal of all of the objections. Fischer asserted the affirmative
defenses of the statute of limitations and the doctrine of equitable estoppel.
On October 31, 2016, Fischer moved for partial summary judgment
and the dismissal of C. Sellers’s objections. Fischer alleged that C. Sellers
knew of the transfer of the Property to Hepburn and the formation of the
Trust as early as October 27, 2010, such that the objections were not raised
in a timely fashion and were barred by the statute of limitations and the
doctrine of laches. Similarly, C. Sellers demonstrated that she knew of the
Trust in 2012, which Fischer believed was another reason why the objections
were time-barred. She also asserted that the objections were impermissible
under the doctrine of equitable estoppel because the Trust distributed
significant funds beginning in 2013 and Hepburn made significant
improvements to the Property with the knowledge of and without objection
by C. Sellers. On October 31, 2016, Fischer submitted an affidavit in which
she averred that her brothers agreed to the creation of the Trust, and that
she was advised by counsel that the power of attorney authorized the
creation of the Trust. She further averred that her attorney advised her to
sell the Property under a land installment contract. She also averred that
after Sellers’s death, she visited his widow, C. Sellers, and informed her in
February 2012 of the Trust and the sale of the Property under the Land
Installment Agreement.
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C. Sellers replied and denied the material allegations. In new matter,
she asserted that she did not know of the existence of a power of attorney
until November 9, 2014, when she found a copy of it on the Montgomery
County Recorder of Deeds website. C. Sellers asserted that Fischer’s failure
to raise any affirmative defenses in a timely answer to the petition for
account should result in waiver of those defenses.
On December 7, 2016, the trial court denied Fischer’s motion for
summary judgment. On December 19, 2016, Fischer moved for
reconsideration. On December 21, 2016, the trial court denied the motion
for reconsideration.
III. Trust Accounting.
On June 29, 2016, Fischer filed a trust accounting for the Trust which
set forth the value of the Property at $254,250. Distributions to Mother of
$93,045.48 were made before her death. A distribution of $12,345.45 was
made to Mother’s estate. Fischer, Steven Sellers, and Eric Sellers’s children
each received $12,136.17. The Trust received payments from September
2010 to June 2016 of $153,386.46 from Hepburn.
On July 29, 2016, C. Sellers, in her capacity as representative of the
estate of Eric Sellers, objected to the accounting for the Trust. C. Sellers
objected to the validity of the Trust itself as she believed that Fischer did not
have authority under the power of attorney to create it. Among C. Sellers’
other objections were that the Trust was contrary to Mother’s estate
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planning wishes and distributions to Mother during her lifetime constituted
both income and principal while Mother was only entitled to income.
C. Sellers also objected to the accuracy of the accounting and objected to
Fischer’s failure to conform to the duties of a trustee. C. Sellers asked the
trial court to uphold her objections and to surcharge Fischer for C. Sellers’s
fees and costs caused by Fischer’s breaches of her fiduciary duties.
On August 16, 2016, Fischer filed a petition for adjudication/statement
of proposed distribution of the Trust.
On October 29, 2016, the estate of Eric S. Sellers moved for partial
summary judgment and alleged the following:
8. The POA [power of attorney] did not authorize
the Agent to create a trust. POA Section III,
Powers of Attorney-In-Fact on POA page 3
enumerates specific authority given to the
agent. In that section, page 5 ESTATE AND
TRUST TRANSACTIONS, the Agent is only
empowered “To act for me in all matters that
affect a trust, probate estate, guardianship,
conservatorship, escrow, custodianship or
other fund for which I am now, claim to be or
later become entitled, as a beneficiary, to a
share or payment,” or “Transfer any of my
property to a living trust that I created as a
grantor before this Power of attorney was
signed.”
9. The Trust is invalid as its creation was not
authorized by the POA.
10. POA Section III, REAL ESTATE
TRANSACTIONS, on page 3, granted the Agent
power to transfer real estate on behalf of the
Principal, but as per overall terms of the POA,
only for the benefit of the Principal and not for
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the benefit of third parties or furtherance of
any estate planning goals of the Principal or
beneficiaries.
11. POA Paragraph 6, No Personal Benefit, on
page 7, states “Except as specifically provided
for in this document, my attorney-in-fact is
prohibited from personally benefitting from any
transaction engaged in or on my behalf. . . .”
12. On December 20, 2010 the Trustee sold the
House to her daughter under a Land
Installment Contract, which gave her daughter
eight years to pay the full purchase price.
13. Subsequent to the sale, the Trustee, in
violation of Trust terms, distributed both
income and principal received under the Land
Installment Contract to Principal, the total
amount of which was $93,045.48 from
September 2010 to November 2011, the
month of Principal’s death. This total is stated
in an account filed by the Trustee with this
Honorable Court on June 29, 2016 . . . . The
total appears on page 4, “Distributions to
Eva Sellers prior to her death.”
14. At the time of her death, $212,879.43 was still
owing on the Land Installment Contract, the
majority of which was principal due the Trust.
This total is calculated by deducting the
$93,045.48 from the “Total Payments to Trust
under Installment Contract” stated by the
Trustee on account page 5 as $305,924.91.
15. The Principal did not empower the Agent to sell
her house and give the equity to a trust, or
otherwise in any way encumber the equity
therein or use that equity for the benefit of
anyone other than the Principal.
16. The Principal during her lifetime may have
desired to live in the House, or the full House
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equity could have been needed to provide for
her needs.
17. The Agent’s transfer of the House to an
Irrevocable Trust was a breach of her fiduciary
duty to the Principal, as the House transfer
was done solely to spend down the Principal’s
assets for estate planning purposes, and only
yielded a benefit to the Principal’s
beneficiaries, not to the Principal.
18. Per paragraph 6 of the POA, the transfer of the
House violated the terms of the POA as it was
done to yield a benefit to the Agent, and such
benefits are expressly prohibited.
19. The unauthorized payment by the Trustee of
some of the Trust corpus to the Principal did
not relieve the agent of her duty to use the
entire asset value of the House for the benefit
of the Principal, and to keep it within her
control during her lifetime.
[20.1]The transfer of House to the Trust was
therefore invalid, as there was never a validly
created Trust to receive the House. It was also
invalid in that the POA did not empower the
Agent to perform any actions not for the
benefit of the Principal, and the transfer of
House to an irrevocable trust where only a
partial distribution of the House equity value
was distributed to the Principal for her benefit
constituted a breach of the agent’s fiduciary
duty to the Principal.
Estate of Eric S. Sellers’s motion for partial summary judgment, 10/29/16 at
2-4, ¶¶ 8-19.
1
The motion lists two number “19” paragraphs in the motion rather than 19
and 20.
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C. Sellers, on behalf of the estate of Eric S. Sellers, sought an order
that declared the Trust invalid, the transfer of the Property invalid, and listed
the Property as an asset on any amended accounts filed by Fischer under
the Power of Attorney. Fischer denied the material allegations in the motion.
On December 7, 2016, the trial court granted the motion and
determined that Fischer had no authority to create the Trust and no
authority to transfer the Property to a trust not in existence on the date the
power of attorney was signed. The trial court further ordered that the
Property must be included as an asset in any amended account filed by
Fischer as agent under the power of attorney. The trial court deemed the
order final pursuant to Pa.R.A.P. 342(2).
On December 19, 2016, Fischer moved for reconsideration. The trial
court denied the motion on December 21, 2016. By this point, the two
separate proceedings were consolidated. On January 5, 2017, Fischer filed a
notice of appeal to this court.
IV. Appeal.
On appeal, Fischer raises the following issues for this court’s review:
“Did the [t]rial [c]ourt err when it granted [C. Sellers’s] Motion for Summary
Judgment on the scope of the power of attorney? Did the [t]rial [c]ourt err
when it denied [Fischer’s] Motion for Summary Judgment on [sic] based on
the statute of limitations, doctrine of laches, and estoppel?” (Fischer’s brief
at 2.)
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A. C. Sellers’s Motion for Summary Judgment.
Initially, Fischer contends that the evidence established a genuine
issue of material fact with respect to the scope of the power of attorney such
that the trial court erred when it granted C. Sellers’s motion for summary
judgment.
This court’s review of a decision of an Orphans’ Court is as follows:
Our standard of review of the findings of
an [O]rphans’ [C]ourt is deferential.
When reviewing a decree
entered by the Orphans’
Court, this Court must
determine whether the
record is free from legal error
and the court’s factual
findings are supported by the
evidence. Because the
Orphans’ Court sits as the
fact-finder, it determines the
credibility of the witnesses
and, on review, we will not
reverse its credibility
determinations absent an
abuse of that discretion.
However, we are not constrained to give
the same deference to any resulting legal
conclusions.
In re Estate of Harrison, 745 A.2d 676, 678-679,
appeal denied, 758 A.2d 1200 (Pa. 2000).
(internal citations and quotation marks omitted).
“[T]he Orphans’ [C]ourt decision will not be reversed
unless there has been an abuse of discretion or a
fundamental error in applying the correct principles
of law.” In re Estate of Luongo, 823 A.2d 942,
951 (Pa.Super. 2003), appeal denied, 847 A.2d
1287 (Pa. 2003).
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In re Estate of Whitley, 50 A.3d 203, 206-207 (Pa.Super. 2012) (internal
citations and quotation marks omitted).
This court reviews a grant of summary judgment under the following
well-settled standards:
Pennsylvania law provides that summary
judgment may be granted only in those
cases in which the record clearly shows
that no genuine issues of material fact
exist and that the moving party is
entitled to judgment as a matter of law.
The moving party has the burden of
proving that no genuine issues of
material fact exist. In determining
whether to grant summary judgment,
the trial court must view the record in
the light most favorable to the non-
moving party and must resolve all doubts
as to the existence of a genuine issue of
material fact against the moving party.
Thus, summary judgment is proper only
when the uncontroverted allegations in
the pleadings, depositions, answers to
interrogatories, admissions of record,
and submitted affidavits demonstrate
that no genuine issue of material fact
exists, and that the moving party is
entitled to judgment as a matter of law.
In sum, only when the facts are so clear
that reasonable minds cannot differ, may
a trial court properly enter summary
judgment.
[O]n appeal from a grant of summary
judgment, we must examine the record
in a light most favorable to the
non-moving party. With regard to
questions of law, an appellate court’s
scope of review is plenary. The Superior
Court will reverse a grant of summary
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judgment only if the trial court has
committed an error of law or abused its
discretion. Judicial discretion requires
action in conformity with law based on
the facts and circumstances before the
trial court after hearing and
consideration.
Gutteridge v. A.P. Green Services, Inc., 804 A.2d
650, 651 (Pa.Super. 2002).
Wright v. Allied Signal, Inc., 963 A.2d 511, 514 (Pa.Super. 2008)
(citation omitted).
Specifically, Fischer argues that the terms of the power of attorney
were ambiguous and the trial court ignored the facts that she and her two
brothers were in agreement that it was proper to create the Trust and that
they acted on the advice of an elder care attorney that supported their
authority to create the Trust. Fischer argues that this court should not defer
to the trial court’s determination that the plain language in the power of
attorney did not permit the creation of the Trust.
The trial court determined that the Power of Attorney contained the
following pertinent provisions which did not allow Fischer to create the Trust:
To act for me in all matters that affect a trust,
probate estate, guardianship, conservatorship,
escrow, custodianship or other fund from which
I am now, claim to be or later become entitled,
as a beneficiary, to a share or payment.
Transfer any of my property to [a] living trust
that I created as a grantor before this Power of
Attorney was signed.
Trial court opinion, 1/26/17 at 2 (emphasis supplied by the trial court).
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The trial court further reasoned that Fischer did not have authority to
create the Trust for the benefit of Mother. The trial court added:
The appellant’s averments -- that the trust was
created “with the agreement of her brothers” and
with the advice of an elder law attorney -- cannot be
considered facts not in dispute at this stage of the
proceedings. Furthermore, even if shown to be true,
these allegations could not override the specific
provisions of the power of attorney and are not
material to the question of the interpretation of the
authority of the agent under the power of attorney.
In this case, the Court determined the provisions of
the power of attorney are explicit, clear and not
ambiguous. Consequently, [Fischer] did not have
the authority under the power of attorney to create a
trust and did not have the authority to transfer her
mother’s home into the trust.
Id. at 2-3.
A review of the Power of Attorney confirms the determination of the
trial court. Under the power of attorney, Fischer did not have the authority
to create the Trust and place the Property into it.
Fischer next contends that her actions were authorized under the
current statutes and case law of the Commonwealth because in Pennsylvania
an agent acting under a general power of attorney has considerably broad
authority under 20 Pa.C.S.A. § 5601. However, Fischer admits that while
agents acting pursuant to a valid power of attorney are permitted to exercise
the broad powers granted to them under the statute, the specific power of
attorney document limits this authority. Here, the power of attorney did not
give Fischer the authority to create the Trust.
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B. Fischer’s Motion for Summary Judgment.
With respect to the denial of her motion for summary judgment,
Fischer asserts that C. Sellers did not object to the sale of the Property to
Hepburn, the creation of the Trust, the improvements to the Property made
by Hepburn, or the receipt of payments from the Trust.
Before addressing the merits of Fischer’s argument, this court must
address C. Sellers’s contention that the order that Fischer appeals is not
appealable because it is not a final order.
Rule 342 of the Pennsylvania Rules of Appellate Procedure, entitled
Appealable Orphans’ Court Orders, provides in pertinent part:
(a) General rule. An appeal may be taken as of
right from the following orders of the Orphans’
Court Division:
(1) An order confirming an account, or
authorizing or directing a
distribution from an estate or trust;
(2) An order determining the validity
of a will or trust;
(3) An order interpreting a will or a
document that forms the basis of a
claim against an estate or trust;
(4) An order interpreting, modifying,
reforming or terminating a trust;
(5) An order determining the status of
fiduciaries, beneficiaries, or
creditors in an estate, trust, or
guardianship;
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(6) An order determining an interest in
real or personal property;
(7) An order issued after an
inheritance tax appeal has been
taken to the Orphans’ Court
pursuant to either 72 Pa.C.S.
§ 9186(a)(3) or 72 Pa.C.S. § 9188,
or after the Orphans’ Court has
made a determination of the issue
protested after the record has been
removed from the Department of
Revenue pursuant to 72 Pa.C.S.
§ 9188(a); or
(8) An order otherwise appealable as
provided by Chapter 3 of these
rules.
Pa.R.A.P. 342(a).
C. Sellers argues that none of these provisions applies to the matter at
hand. To clarify, Fischer is appealing the denial of her motion for partial
summary judgment after C. Sellers filed objections to the accounting for
Fischer’s actions under the power of attorney. Fischer argues that
Pa.R.A.P. 342(a)(3-4) apply here. However, the denial of Fischer’s motion
for partial summary judgment is not an order interpreting a will or a
document that forms the basis of a claim against an estate or trust. While
the order declaring the Trust invalid and granting the motion for summary
judgment of C. Sellers may have qualified, this order does not. Similarly,
this order denying Fischer’s motion for partial summary judgment does not
interpret, modify, reform, or terminate a trust. At this point in the
proceedings, this order is unappealable.
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Affirmed in part; quashed in part. Affirm the order that granted
C. Sellers’s motion for partial summary judgment, and quash Fischer’s
appeal of the denial of her motion for partial summary judgment.
Judgment Entered.
Joseph D. Seletyn, Esq.
Prothonotary
Date: 9/19/2017
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