The opinion
J-A04015-20
NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37
IN RE: ESTATE OF GERTRUDE FOX, : IN THE SUPERIOR COURT OF
DECEASED : PENNSYLVANIA
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APPEAL OF: BARBARA FOX :
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:
: No. 1974 EDA 2019
Appeal from the Order Entered June 6, 2019
In the Court of Common Pleas of Montgomery County
Orphans' Court at No(s): 2007-X0589
BEFORE: PANELLA, P.J., STRASSBURGER, J.*, and COLINS, J.*
MEMORANDUM BY PANELLA, P.J.: FILED APRIL 03, 2020
Barbara Fox (“Barbara”) appeals from the June 6, 2019 order1 of the
Orphans’ Court of the Court of Common Pleas of Montgomery County that
sustained the preliminary objections of Bruce Fox and Jonathan Fox
(“Trustees”) and held that Barbara is not a beneficiary or creditor of the trust
(“the Trust”) established under the will of Gertrude Fox (“Decedent”).2 In the
same order, the court dismissed Barbara’s objections to the petition for
adjudication of the accounting of the Trust. Barbara now claims the orphans’
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* Retired Senior Judge assigned to the Superior Court.
1 The order, dated June 5th, was entered the following day.
2 Barbara Fox is the second wife of Decedent’s husband, Norman Fox
(“Norman”).
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court erred in finding that she lacked standing to challenge the accounting.
Based on the following, we affirm.
The orphans’ court set forth the underlying facts and procedural history
as follows:
The decedent, Gertrude Fox, died on February 6, 2007. Her
will dated November 13, 1995, and the codicil thereto dated
October 3, 2006, were admitted to probate by the Montgomery
County Register of Wills on February 20, 2007, and letters
testamentary were issued to her surviving spouse, Norman Fox.
Article 5 of the will sets forth the provisions of the residuary trust
here at issue (“the Gertrude Testamentary Trust”) as follows: 1)
the entire net income shall be accumulated and added to principal;
2) the trustees shall pay a regular unitrust distribution to Norman
in each calendar year and also shall pay a tax distribution if any
of the unitrust distribution carries out taxable income to Norman;
3) the trustees may make discretionary distributions to Norman,
provided that, while Norman is the trustee, such discretionary
distributions to Norman shall be limited to amounts necessary to
support him in his accustomed manner of living, and while he is
serving as trustee, Norman may also make distributions to
Gertrude’s issue of such sums as Norman deems advisable; 4) in
addition, in any calendar year, Norman may withdraw $5,000 or
5% of principal; and 5) Norman has a special power of
appointment which he may exercise only in a valid will executed
after Gertrude’s death.
Article 8 of the will provides that the trustee may withhold
any payment of income or principal which would otherwise be
made to Norman if he is a disabled individual and the trustees, in
their sole and absolute discretion shall expend or apply the
withheld payment for the benefit of Norman as they deem
advisable. The definition of a disabled individual in Article 10 of
the will includes one who has been adjudicated an “incompetent.”
The will named Norman as the trustee and the two sons of
Gertrude and Norman, Bruce and Jonathan, as successors should
Norman no longer be able or willing to serve. Norman resigned as
trustee on or about November of 2015 when his sons began to
serve. On November 23, 2016, Bruce and Jonathan filed a petition
to have Norman declared an incapacitated person. On December
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21, 2016, Norman and John Severson, the agent under his power
of attorney, filed a petition to compel an account from the
successor trustees. On October 16, 2017, a final decree was
entered finding Norman to be totally incapacitated and appointing
Intervention Associates, Inc., as guardian of his person and
Pennsylvania Trust Company as guardian of his estate.
Bruce and Jonathan were directed to file an account and
they did so on April 3, 2019. Pennsylvania Trust Company and
Barbara Fox, Norman’s second wife whom he married on
November 22, 2008, filed objections to the account. Bruce and
Jonathan filed preliminary objections to Barbara’s objections,
raising the issue of standing. By order dated June 6, 2019, the
undersigned sustained the preliminary objections and dismissed
Barbara’s objections to the trustees’ account.
Orphans’ Court Opinion, 8/29/2019, at 1-3 (footnotes omitted). Specifically,
the orphans’ court found Barbara had no standing to question the
administration of the Gertrude Testamentary Trust because she is neither a
beneficiary nor a creditor. This timely appeal followed.3
In her sole argument on appeal, Barbara contends she has standing to
object to the Trustees’ administration of the Trust, and therefore, the orphans’
court erred in granting the Trustees’ preliminary objections.
We are guided by the following:
[O]ur standard of review of an order of the trial court overruling
or granting preliminary objections is to determine whether the
trial court committed an error of law. When considering the
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3 On July 11, 2019, the orphans’ court ordered Barbara to file a concise
statement of errors complained of on appeal pursuant to Pa.R.A.P. 1925(b).
Barbara filed a concise statement on July 29, 2019. The court issued an
opinion pursuant to Pa.R.A.P. 1925(a) on August 29, 2019.
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appropriateness of a ruling on preliminary objections, the
appellate court must apply the same standard as the trial court.
Shafer Elec. & Constr. v. Mantia, 67 A.3d 8, 10 (Pa. Super. 2013). When
we review an order sustaining preliminary objections, we treat as true all well
pled material facts and reasonable inferences contained in the opposing
party’s pleading. See In re Nadzam, 203 A.3d 215, 220 (Pa. Super. 2019).
By way of background,
Barbara’s claim to have standing to object to the [T]rustees’
actions in this matter centers on the terms of the antenuptial
agreement she and Norman entered into on November 10, 2008.
That agreement provides, in pertinent part, that Barbara has the
right to occupy certain real property in Palm Beach Gardens,
Florida, that the property cannot be sold without her consent and,
if it is sold, the proceeds must be used to provide a unitrust for
Barbara’s benefit, or at her request, be reinvested into a new
residence. The agreement also provides for the Gertrude
Testamentary Trust to own the Florida property which appears to
be borne out by the copy of the deed attached to Barbara’s motion
for reconsideration of the order dismissing her objections.
Nevertheless, the [T]rustees contend the property is owned by an
inter vivos trust (the “Appointed Trust”) that Norman established
in 1995 for the benefit of [Decedent] and into which [Decedent]
appointed assets in her will. Bruce and Jonathan, who are also the
trustees of the Appointed Trust, have filed an account of their
administration of that trust and have included the Florida property
as one of its assets. Further complicating these matters is the fact
that Norman executed an irrevocable trust (“the Family Trust”) on
November 11, 2008, the day after the antenuptial agreement with
Barbara was signed. Barbara argue[d]4 Norman clearly intended
the Family Trust, not the Gertrude Testamentary Trust, and not
the Appointed Trust to hold the Florida property.
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4Barbara has initiated an action in Florida in an attempt to
have the property titled in the name of the Family Trust.
Barbara has also filed a complaint against Norman in the
Civil Division of this Court at docket no. 2018-07263 seeking
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to enforce her rights under the couple’s antenuptial
agreement.
Id., at 3 (citation and footnote omitted).
“Threshold issues of standing are questions of law; thus, our standard
of review is de novo and our scope of review is plenary.” Rellick-Smith v.
Rellick, 147 A.3d 897, 901 (Pa. Super. 2016) (citation omitted). In
Pennsylvania, standing is a principle designed to ensure only those who have
a direct interest in a matter may litigate it. See Nadzam, 203 A.3d at 220.
Central to standing is the ideal that only those who have a substantial, direct
and immediate interest in the outcome of litigation have standing to
participate. See id.
A person’s interest is substantial if it is more than just the general
interest of all citizens that the law be obeyed. See id. The interest is direct if
the claimed violation is causally connected to the asserted harm. See id. The
interest is immediate when the causal connection is neither remote nor
speculative. See id., at 220-221.
Relying on In re Francis Edward McGillick Foundation, 642 A.2d
467 (Pa. 1994), and In re Milton Hershey School, 911 A.2d 1258 (Pa.
2006), Barbara argues:
It is irrelevant that [Barbara] is not a named beneficiary or
creditor of the Trust, as she has a substantial, direct, and
immediate interest in the Trust’s administration … because
Norman is obligated under the Agreement to (i) contribute to the
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Living Fund[4] and (ii) provide certain rights to occupy the Florida
property during her lifetime. The amount of Norman’s
contributions to the Living Fund are based on his income, which
includes the distributions Norman receives from the Trust. The
Trustees seek to amend the Will to remove the required unitrust
distribution in favor of a lesser net rental income distribution to
Norman. Further, the Trustees, by their own admission have failed
to distribute the required unitrust amount to Norman to date and,
instead, have distributed only the Trust’s nominal net rental
income to Norman. This unilateral decision by the Trustees in
contravention of the Will’s unambiguous terms significantly
decreases Norman’s contributions to the Living Fund, causing
direct harm to [Barbara].
Appellant’s Brief, at 13-14.
Barbara further asserts that she has a direct interest in the outcome the
Trust’s accounting because: (1) if it is determined that the Trust owns the
Florida Property, then her right to occupy the residence will be adversely
affected by the Trustees’ continued attempts to sell the property without her
consent; and (2) with any determination as to the required unitrust amount,
the Florida Property’s owner and/or the ability to sell the Florida Property could
cause Barbara to immediately lose income derived from the Living Fund in
addition to her right to occupy the property. See id., at 14.
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4 The first amendment to Norman’s and Barbara’s antenuptial agreement
provided that Norman and Barbara would maintain a joint checking account,
referred to as a “Living Fund.” See Preliminary Objections of Bruce Fox and
Jonathan Fox to the Objections of Barbara Fox to the Petition of Bruce Fox and
Jonathan Fox for Adjudication and Statement of Proposed Distribution,
5/31/2019, at Exhibit B (First Amendment to Antenuptial Agreement dated
November 10, 2008).
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Barbara alleges her interest is immediate as she has already suffered
from the decreased value of the Living Fund because the Trustees admitted
they were not making the required unitrust distributions to Norman. See id.
Moreover, she argues her interest is not speculative:
[T]here is no evidence to suggest that the Florida Property is
owned by the Appointed Trust and not the Trust, as the Trustees
claim. If it is determined that the Florida Property is not owned by
the Fox Family Trust, there is more than a remote chance that the
Florida Property could be owned by the Trust.
Id.
Barbara suggests that because the orphans’ court did not summarily
dismiss her response to the Trustees’ preliminary objections, it believed that
she, “at a minimum, has standing with respect to any trust that holds the
Florida Property.” Id., at 15. Furthermore, Barbara points to her numerous
objections to the Trustees’ First and Partial Account that were not asserted by
the guardian of Norman’s estate, including issues of self-dealing and
mismanagement by Trustees. See id. She states, “To the extent the Trustees
may have endeavored to address the issues raised by [Barbara] with the
Guardian as part of their ‘amended informal account,’ such corrections only
evidence the utility of [Barbara]’s involvement in this matter and, thus, her
right to standing with respect to the Trust’s administration.” Id.
In addressing the standing issue, the orphans’ court first found that a
determination as to ownership of the Florida property was not relevant to the
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substantive claim. See Orphans’ Court Opinion, 8/29/2019, at 3-4. Moreover,
the court opined:
As noted in our order of June 5, 2019, Barbara has no standing to
question the administration of the Gertrude Trust because she is
neither a beneficiary nor a creditor. She is a potential creditor of
Norman individually, not this trust, under the antenuptial
agreement and a beneficiary of the Family Trust. Even if she had
a liquidated claim against Norman at this time, she would have no
standing to complain about the trustees[] not making payments
to him from the Gertrude Testamentary Trust because of the
spendthrift clause in Article Eight, paragraph 8.04.[5]
Barbara cites In re: Francis Edward McGillick Foundation,
537 Pa. 194, 642 A.2d 467 (Pa. 1994) and In re: Milton Hershey
School, 590 Pa. 35, 911 A.2d 1258 (Pa. 2006) for the propositions
that one need not be a beneficiary or creditor to have standing to
object to the actions of a trustee and one merely need show he is
aggrieved by showing he or she has a substantial, direct and
immediate interest in the outcome of the litigation. These cases
involved the standing of parties other than the Attorney General,
as parens patriae for charities, to participate in the affairs of
charitable entities, and these analyses by the Supreme Court have
little relevance to this matter. Much more instructive to us is the
situation in In re: Rosemary C. Ford Inter Vivos QTIP Trust,
176 A.3d 992 (Pa. Super. 2017). There, during the parties’
marriage, Rosemary created an irrevocable [Qualified Terminable
Interest Property (“QTIP”)] Trust of which her husband, George,
was trustee and primary beneficiary and Rosemary was the
contingent beneficiary. The trust had a spendthrift clause to
prevent a creditor of a beneficiary from accessing the income and
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5 Paragraph 8.04 provides:
8.04. Protective Provisions. No payment of income or principal
hereunder shall be pledged, assigned, transferred, or sold, in any
manner whatsoever, nor be in any manner liable in the hands of
the trustees for the debts or liabilities of my husband.
Preliminary Objections of Bruce Fox and Jonathan Fox to the Objections of
Barbara Fox to the Petition of Bruce Fox and Jonathan Fox for Adjudication
and Statement of Proposed Distribution, 5/31/2019, at Exhibit A, 12.
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principal. The trust held certain commercial real estate which was
leased to a family business. The couple divorced and the parties
reached an agreement which was memorialized in an arbitration
award that equitably distributed the parties’ assets. The
agreement provided that [Rosemary] would share in the income
generated by the trust’s commercial properties. Eventually,
[Rosemary] stopped receiving any rental income and she obtained
a Court order compelling the filing of a trust account. After the
account was filed and [Rosemary] filed objections, George filed
preliminary objections raising lack of standing that were
sustained. In dismissing [Rosemary]’s appeal, the Superior Court
quoted the opinion of the Hon. Lois E. Murphy of this Court in
support of her grant of the preliminary objections as follows:
Rosemary Ford has a contingent beneficial interest in the
event that she survives her husband, at which time she
would become entitled to the income and discretionary
distributions of principal. However, she is not a current
beneficiary of either the income or principal.... [D]uring
George’s lifetime, only he is entitled to the distributions of
income, and Rosemary has no standing to raise the
questions posed by her objections. Rosemary Ford’s counsel
insist that she has been added as a current income
beneficiary of the [T]rust by virtue of the agreement in
principle. This is not correct. The agreement resolved the
parties’ marital issues and did not change the beneficiaries
of the [T]rust or add Rosemary as a new beneficiary.
Id., at 998. The Superior Court approved of the Orphans’ Court’s
finding that the arbitration award was an equitable distribution
award, not a support order that would have imbued [Rosemary]
with the status of a creditor with standing to bypass the
spendthrift clause under 20 Pa. C.S.A. 7743(b)(2).5 The Superior
Court also noted the trust gave the husband alone the right to
compel the trustee to make the properties productive and stated
that:
Because the terms of the trust deprive Rosemary of any
right to require the ... properties to be made productive
during George’s lifetime, we agree with the orphans’ court
that Rosemary lacked standing as a trust beneficiary to
pursue this remedy through her objections to George’s
accounting.
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Id., at 999-1000.
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5 This section provides that a spendthrift provision is
unenforceable against any other person who has a judgment
or court order against the beneficiary for support or
maintenance, to the extent of the beneficiary’s interest in
the trust’s income.
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Comparing the Ford matter to the instant matter, [Rosemary]
was found to have no standing to pursue an action against the
trustee even though she was a contingent beneficiary of the trust.
Barbara is not a contingent beneficiary. [Rosemary] had a
colorable argument that her arbitration award permitted her to
bypass the spendthrift clause. Barbara does not allege she has a
support order. Barbara is, at present, as was [Rosemary], a
creditor of her husband with no present avenue of redress against
the trustees of the Gertrude Testamentary Trust.
Orphans’ Court Opinion, 8/29/2019, at 3-6.
We agree with sound legal reasoning of the orphans’ court, and conclude
its August 29, 2019 opinion properly disposes of the issue in this case.
Pursuant to Uniform Trust Act (“UTA”),6 the terms of a trust instrument
generally prevail over any contrary provisions of the UTA. See 20 Pa.C.S.A. §
7705(a). Here, based on the unambiguous provisions of the Trust, Barbara is
neither a named beneficiary nor a creditor. Additionally, unlike Rosemary in
In re: Rosemary C. Ford Inter Vivos QTIP Trust (“Ford”), one cannot
even consider Barbara a contingent beneficiary under the language of the
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6 20 Pa.C.S.A. §§ 7701 - 7790.3.
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Gertrude Testamentary Trust. See 20 Pa.C.S.A. § 7703 (“beneficiary” under
the Uniform Trust Act includes contingent beneficiary).
Furthermore, Barbara’s reliance on In re Francis Edward McGillick
Foundation and In re Milton Hershey School for the proposition that she
does not have to be a beneficiary or creditor to have standing so long as she
demonstrates that she has a substantial, direct, and immediate interest in the
outcome of the litigation is misplaced. Both of those cases concern trusts
created for the benefit of charitable organizations whereas here, the trust was
created for the benefit of a spouse. See McGillick Foundation, 642 A.2d at
469-70; Hershey School, 911 A.2d at 1262
As the orphans’ court points out, Ford is more applicable here, as this
matter concerns a trust created for the benefit of a spouse. While Barbara is
a purported creditor of Norman, she does not argue that a support or
maintenance order is in place. In accordance with Ford, 176 A.3d at 1000,
such an order would have bestowed upon Barbara the status of a creditor with
standing to bypass the spendthrift clause in Paragraph 8.04 of the Gertrude
Testamentary Trust pursuant to 20 Pa.C.S.A. § 7743(b)(2) (“A spendthrift
provision is unenforceable against … any other person who has a judgment or
court order against the beneficiary for support or maintenance, to the extent
of the beneficiary’s interest in the trust’s income”). See also In re Rosemary
C. Ford Inter Vivos QTIP Tr., 176 A.3d at 1000. Therefore, we find Barbara’s
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assertions unpersuasive, and agree that she presently has no rights to object
to an accounting of the Trust.
In addition, if we were to apply the substantial, immediate, and direct
analysis test as set forth in Nadzam, Barbara would receive no relief. While
Barbara’s interest may be considered both substantial as it is more than just
the general interest of all citizens and immediate because it is neither remote
nor speculative, her interest is not direct as the alleged harm is not causally
connected to the Trust. See id. Pursuant to the antenuptial agreement, she
receives her funds from Norman, individually, and not from the Trust. In other
words, there is no direct payment from the Trust to her. Therefore, Barbara
does not have a direct interest that would afford her proper standing to
challenge the accounting of the Trust.
Accordingly, we affirm on the basis of the court’s August 29, 2019
opinion, and conclude the court did not err in granting the Trustees’
preliminary objections.
Order affirmed.
Judgment Entered.
Joseph D. Seletyn, Esq.
Prothonotary
Date: 4/3/20
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