The opinion
J-A13004-20
NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37
IN RE: TRUSTS UNDER WILL OF : IN THE SUPERIOR COURT OF
ROBERT L. MONTGOMERY, JR. : PENNSYLVANIA
DECEASED FOR THE BENEFIT OF :
H.BEATTY CHADWICK (TRUST NO. 6) :
AND MARITAL TRUST UNDER WILL :
OF ROBERT L. MONTGOMERY, JR., :
DECEASED, FOR THE BENEFIT OF :
ELIZABETH B. MONTGOMERY AS :
APPOINTED BY THE WILL OF : No. 3007 EDA 2019
ELIZABETH B. MONTGOMERY, :
DECEASED FOR THE BENEFIT OF H. :
BEATTY CHADWICK (TRUST NO. 7) :
:
:
APPEAL OF: H. BEATTY CHADWICK :
Appeal from the Order Entered September 30, 2019
In the Court of Common Pleas of Montgomery County Orphans’ Court
Division at No(s): No. 1977-X0448
BEFORE: BENDER, P.J.E., LAZARUS, J., and DUBOW, J.
MEMORANDUM BY BENDER, P.J.E.: Filed: August 13, 2020
H. Beatty Chadwick (Appellant) appeals pro se from the orphans’ court’s
adjudication of the 2018 accounts of two trusts created under the will of
Robert L. Montgomery, Jr., (Decedent), and the will of Elizabeth B.
Montgomery, the deceased wife of Decedent. Pursuant to the court’s
adjudication, Appellant’s objections were dismissed and the payment of
attorney’s fees to PNC Bank, N.A. (Trustee/Appellee) was approved. We
affirm.
As noted in a prior decision by this Court, responding to an earlier appeal
filed by Appellant, this matter has a “long, torturous, and infamous” history.
J-A13004-20
See In re Trusts Under the Will of Montgomery, 161 A.3d 392 (Pa. Super.
2017) (unpublished memorandum). The terms of the trusts provided that
Appellant was to be the lifetime beneficiary of the trusts and that after
Appellant’s death, the principal of each trust was to be distributed to various
charities. Specifically, with regard to the amount of the payment due
Appellant, he was to receive a percentage of the lesser of the net income of
the trust or a stated percentage of the fair market value of the principal of the
trust.
The present appeal arises from the filing of the fifth accounting of trust
#6 and the third accounting of trust #7. As part of the petitions for
adjudication of the accounts, Appellee requested the payment of attorney’s
fees in the amount of $447,635.40 to cover the costs incurred by it, which
were expended to defend itself against Appellant’s claims, both past and
present. Following the filing of these petitions, Appellant filed objections
alleging Appellee breached its fiduciary duties relating to the investment of
the trusts’ assets and asserting that its request for attorney’s fees should be
denied.
A hearing was held on February 26, 2019, at which the court heard
testimony and received evidence. On September 30, 2019, the court issued
its adjudications, dismissing Appellant’s objections and approving the
payment of the attorney’s fees. The orphans’ court also denied Appellant’s
motion for reconsideration. Thereafter, Appellant filed a timely appeal.
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J-A13004-20
We begin by setting forth our standard of review.
Our standard of review of the findings of an Orphans’ Court 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, 678-79 (Pa. Super.
2000), appeal denied, 563 Pa. 646, 758 A.2d 1200 (2000)
(internal citations and quotation marks omitted). “The Orphans’
Court 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, 577 Pa. 722, 847 A.2d 1287
(2003).
In re Fiedler, 132 A.3d 1010, 1018 (Pa. Super. 2016) (quoting In re Estate
of Whitley, 50 A.3d 203, 206-07 (Pa. Super. 2012)).
Appellant raises the following two issues for our review:
1. Where the trustee of trusts with a beneficiary entitled only to
receive trust income invests for total return principally by
capital appreciation and the trusts achieve substantial capital
appreciation, did the court below err in dismissing objections
to [a]ccounts that the trustee violated fiduciary duties by
refusing to exercise its statutory power to adjust the total
return of the trusts to produce income which will accomplish
the purposes of the trusts as set forth in the terms thereof?
2. Whether the court below abused its discretion in allowing a
trustee to collect from trusts additional counsel fees and
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expenses of $477,635.40 for an [a]ccounting proceeding where
$516,733.78 already had been allowed for such purposes,
1,874 hours were billed by counsel to represent the trustee in
such proceeding where the evidentiary hearing was less than
one day, and total fees and expenses allowed were 88% of the
combined assets of the trusts?
Appellant’s brief at 37.
We have reviewed the certified record, the briefs of the parties, the
applicable law, and the thorough 17-page opinion of the Honorable Lois E.
Murphy of the Court of Common Pleas of Montgomery County, dated
September 30, 2019. We conclude that Judge Murphy’s opinion properly
disposes of the issues and accompanying arguments presented by Appellant.
Accordingly, we adopt her opinion as our own and affirm the order dismissing
Appellant’s objections.
Order affirmed.
Judge Dubow joins this memorandum.
Judge Lazarus files a concurring statement in which President Judge
Emeritus Bender and Judge Dubow join.
Judgment Entered.
Joseph D. Seletyn, Esq.
Prothonotary
Date: 8/13/20
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IN TiiE COURT OF COMMON PLEAS OF MONTGOMERY COUNTY, PENNSYLVANIA
ORPHANS' COURT DIVISION
No. 1977·X0448
• • • • •
ESTATE OF ROBERT L. MONTOOMERY, JR., DECEASED
Sur Trust for Herbert B. Chadwick (Trust No. 6)
• • • • •
The fifth account of PNC Bank, N.A.1, trustee of the testamentary trust created und<:r
Item FOURTH(AX4) (hereinafter refered to as "trust No. 6") of the will of Robert L.
Montgomery, Jr., Deceased, was called for audit on June 4, 2018. The objections filed therete by
H. Beatty Chadwick (hereinafter ''the objectant") were heard on February 26, 2019, and the
matter is now ripe for adjudication
COUNSEL APPEARED AS FOLLOWS:
DUANE MO'RRIS LLP
By: Lewis R. Olshin, Esquire
for the Accountant
COMMONWEALTH OF PENNSYLVANIA
OFFJCE OF THE ATTORNEY GENERAL
By: David Dembe, Esquire, Deputy Attorney General
as par�n: patriae, for charitable interests
I. PNC Bank, N.A. succeeded Provident National Biink \Ylllch was named as a trustee in Item 'f6NTH of Robert
Moncgon.,ery', Win.
THIS DOCUMENT WAS DOCKETED AND SENT ON 09l30/2019
1977-X0448.105.3 Adjudication, Page�
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�g H. Beatty Chadwick, objectant
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�� The account shows a balance of principal and income in the amount of $468,139.89
J! composed of stocks, bonds, cash, and cash equivalents as set forth on pages 18, 19 and 40.
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1t is stated that all parties in interest, including representatives of those not suijuris and
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i� The relevant terms of the trust are as follows: Subparagraph B.(2)(c) of Item FOURTH
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of the WilJ as reformed by a 1976 decree of this Court directs the trustees to hold one-sixth (1/6)
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§{ of the residue of the decedent's estate in trust (Trust No. 6) and, following the death of the
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his life, in each taxable year of the trust, a unitrust amount equal to the lesser of (i) the net
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ci '6 income of the trust for such taxable year and (ii) six percent (6%) of the fair market value of the
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trust assets, valued annually on the first business day of the taxable year of the trust. The taxable
year of the trust shall end on December 31. If the net income of the trust for any taxable year
exceeds six percent (6%) of the net fair market value of the trust assets, the uni trust amount
payable to the objectant shall include such excess net income to the extent that the aggregate of
the amounts paid in prior years is less than six percent (6%) of the aggregate fair market value of
the trust assets for such years. Any income not distributed shall be added to principal.
Elizabeth B. Montgomery died on September 13, 1980, and the trust continues for the
benefit of the objectant, Upon his death, the remaining principal and income is distributable to
the charitable organizations listed in subparagraph B.(2)(e) ofltem FOURTH of the will as
reformed by the 1 976 decree.
The objectant filed fifteen objections to the account2 all of which were heard3 on
February 26, 20 I 9. The first five objections to the account raise essentially the same claim --
that the trustee's management of the trust is not generating enough income for the objectant, At
the hearing, the objectant first called Francis J. O'Grady as on cross. Mr. O'Grady is the PNC
officer in charge of investments for this trust and the companion trust (trust no. 7) of which the
objectant is also the income beneficiary. Mr. O'Grady stated 1.hat the assets of both trusts are
2 The objectant's filing lists eight objections to the account and seven to the trustee's petition for additional counsel
fees. That petition was filed on November 13, 2017, and dismissed without prejudice by the Court on November 15,
2017. The requests for additional fees and costs are set forth as questions for adjudication in the trustee's petition
for adjudication now before us.
3 The
objections to a companion trust under the Robert Montgomery will for the benefit of this objectant (trust no.
7) were heard at the same time as those to this trust. The No. 7 trust is being adjudicated contemporaneously
herewith, and for that reason, there are multiple references to "accounts" and "trusts" (plural) herein.
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1977-X0448.105.3 Adjudication, Page'
allocated 65% in equities and 35% in fixed income. He explained the goal of this allocation is:
to manage the trusts in a balanced and impartial way so that we can meet the needs of the
income beneficiary as well as grow the principal relative to inflation and hopefully in
excess of inflation for the reminder interest.
(N.T. 13.) The witness confirmed that the investment objective for this trust during the
accounting period has been capita) appreciation with current income as a secondary objective.
(N. T. 23.) He agreed the trustee does not seek to achieve any particular amount of income.
(N.T. 24.) When asked why the bank's strategy, in 1994, was to achieve a 5 percent income
return, the witness explained that interest rates were much higher at that lime, and the return
from bonds was then close to 5 percent -- much higher than their return in the last five years.
(N.T. 26.) The witness explained that investing the entire trust in bonds could maximize income,
however, doing so would not be the balanced and impartial approach needed to treat all the
beneficiaries fairly. The witness stated that increasing the bond content of the portfolio at
present would increase the income by onJy a small amount. (N.T. 37.) In response to questions
about investing the assets entirely in bonds, he stated:
If we invest the portfolio 100 percent in fixed income, the income will flow completely to
the income beneficiary, and we wilJ not be ... positioning the portfolio for potential
long-term growth that can offset inflation and the negative impact of inflation, as well as
grow the portfolio above the rate of inflation for the future charitable interests.
(N.T. 44-45.) He further explained the portfolio would not grow at all if the entire res was
invested in bonds. Thus, over time, the balanced portfolio approach would assure growth in the
trust assets that would benefit not only the remainder beneficiaries, but also the income
beneficiary, as a higher net income would be generated in future years from a higher principal
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1977-X0448.105.3 Adjudication, Page�
balance than would be generated from an eroded principal balance. He denied the objectant's
suggestion that the balance mix represents a judgment call to benefit the remainder patties at the
expense of the income beneficiary. (N.T. 48.) He also added that the income beneficiary
benefits from the growth of principal on the equities side because the equities throw off
dividends that are paid to the income beneficiary. (N.T. 50.)
In response to questions by counsel for the trustee, Mr. O'Grady stated he has a master's
degree in business and has been employed at PNC for thirty-plus years. Regarding the bank's
process for establishing investment policies, he explained: "We have an investment review
committee, and we have an investment strategy committee that set strategy for the asset
allocations and sub-allocations in each asset category." (N.T. 54.) He stated the employees on
the review committee do their due diligence regarding the various types of investments. The
witness stated the asset allocation is of primary importance and the 65/35 allocation is ideal for
the long-term objective of this trust. (N.T. 59.) He also noted that: "in the [present) low-yield
environment, the dividend yield from equities is competitive with the current yield from bonds."
(N.T. 60.)
Jeffrey Mills then testified as an expert for the trustee. He is employed as the co-chief
investment strategist for all of the asset management businesses at PNC Financial Services
Group. He stated he manages the overall investment direction of the firm from asset allocation
to execution. His duties include researching, writing investment publications, meeting with
clients, and interacting with the media. He described PNC's approach to developing investment
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1977-X0448.105.3 Adjudication, Page c
strategies as follows:
It's a combination of a number of groups that work within our asset management group,
my group, investment strategy as well as portfolio construction. They're responsible
really for the implementation of the asset allocation, and then there is our investment
adviser research group that does the due diligence for the menu of products we have to
choose from to make those implementations ... Our investment policy committee ..
would be the committee that governs the actual assets allocation. We develop a number
of different strategic allocations. So they would be long-term asset allocation profiles
[for] different client types, from institutional clients, endowments, foundation, et cetera.,
to wealth management clients ... So all of those are brought to that committee and voted
upon by a fairly diverse group that represents not only our group in strategy but other
groups throughout asset management in the multiple businesses.
(N.T. 71-72.) He stated that the investment strategy group members have regular contacts in
person and by phone with the investment advisors. He explained that the investment adviser
research group is responsible for the due diligence as to individual investments, i.e., interviewing
fund managers, checking their backgrounds, going on-site to the operations centers, etc. (N.T.
74.) He echoed Mr. O'Grady's testimony that a 65/35 asset allocation is an appropriate balance
when there are both a current income beneficiary and charitable remaindermen. He added that
approximately 40 percent of the equity portion of the portfolio is invested in the S &P 500 index
fund and generates above-average dividends, and almost 9 percent is invested in iShares Select
Dividend ETF (DVY) which is dividend-focused. (N.T. 77.)
The witness also reviewed a chart that ranked the major asset classes and their returns
during each year from 2008 through 2018. (Exh. A-4.) He noted:
In hindsight, it would be very easy to say, well, we should have picked this asset class or
that asset class. As you see, as you go year by year, it's almost a completely random
smattering of what is the best and what is the worst and in between. We need to build
portfolios with the realization .that we can't predict the future with perfect foresight. And
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1977-X0448.105.3 Adjudication, Page;
understanding the historical behavior of asset classes. We know that we need prudent
exposure to many, if not all, of these in order to build a portfolio that manages risk and
tries to maximize the amount of utility, whether it's income or return, for the given
amount of risk taken.
(N.T. 87-88.) He reviewed a chart comparing the annual returns from 2014 through 2018 for the
Russell 3000 and the S & P 500 (representative indices for the U.S. stock market) to the returns
for the Barclays Aggregate Bond Index (a representative index for the U.S. bond market) and to
those of mixed portfolios. (Exh. A-5.) He explained that the chart demonstrated that an
investment in bonds only would result in a dramatic decrease in principal and very little gain in
the way of income. (N.T. 89-90.) On the subject of converting to all bonds, he noted that, if
gains were realized from seJJing off equities to purchase bonds, there would be capital gains
taxes lo pay. (N.T. 92.) Mr. Mi11s opined within a reasonable degree of professional certainty
that the trustee was prudent and followed an appropriate investment strategy for this trust. (N .T.
95.)
In response to the objectant's questions, Mr. Mills rejected the suggestion that he would
advise the 65/35 mix to all clients if he were an investment manager. (N.T. 106.) He also
rejected the objectant's suggestion that income should be emphasized if the income beneficiary
is 82 years old (as is the objectant.) Mr. Mills stated:
The trusts have always been and will always continue to be invested with the interest of
both the current income beneficiary was well as the remaindermen in mind. Therefore,
the 65/35 we feel like takes into account both current income and provides stable income,
but we also need to be in a position where we're continuing to grow the principal for as
long as that trust is around. So for us, regardless of age, we feel like this is the
appropriate allocation.
(N.T. 107-08.) He reiterated that maximizing the income of the portfolio is not the objective.
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1977-X0448.105.3 Adjudication, Page ·
In response to a question from the Senior Deputy Attorney General, Mr. Mills stated the
current allocation of the assets being held by the trust is the same as it was during the last
accounting period, (N.T.112.)
The objectant then questioned William Cotter, a vice president at PNC who has been trust
administrator of this trust and the companion trust since 2017 (and is also an attorney). Mr.
Cotter demurred to the objectant's postulation that providing income to the income beneficiary
was "really the only purpose of setting up the trust." (N .T. 121.) He disputed the objectant' s
proposition that the trustee's primary directive should be to achieve the unitrust percent (6% as
per the amendment to the instant trust) and stated:
TI1e way I read [the trust] is that the trustee should invest the trusts reasonably. Then if
there is 6 percent ... of income, [it] should be given out to you. If there is more than
that, it should be capped at 6 percent and held and converted to principal and then left for
the remainder beneficiaries. So it seems that you are qualifying it as a target whereas it
seems to me to be more of a cap.
(N.T. 135.) The witness testified that, in response to the objectant's request in April of2018
that the trustee exercise its power of adjustment to create more income, the objectant was told
that PNC did not recognize any duty to adjust between the income and principal to produce the
income equal to the uni trust amount. (N. T. 145.) He added that, in his experience, the power of
adjustment is not exercised by PNC in trusts with charitable remaindermen, When asked if he
saw any appropriate way to produce more income for the income beneficiary, Mr. Cotter said no,
"other than perhaps manipulating investments into different vehicles which might lead to a
minimal increase." (N. T. 149.)
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1977-X0448.105.3 Adjudication, Page i
The objectant's questions to the witness then focused on the fees paid to the trustee's
counsel and whether the trust had paid duplicate bills. Mr. Cotter stated he authorized payment
of $106,344.50 from this trust through August of 2017 in accordance with the Court's 2016
adjudication4 of the prior accounts". (N.T. 156.) Mr. Cotter gave his opinion that the legal fee of
$91,000 incurred by the trustee for work in connection with the objectant's appeal? to the
Superior Court from the 2016 adjudications was reasonable and necessary. (N.T. 162.)
Jn response to questions from PNC's counsel, Mr. Cotter explained the various
adjustments, disbursements (including counsel fees) and distributions made by the trustee in
accordance with this Court's February 24, 2016 adjudication and May 4, 2016 order sur
exceptions. A chart was introduced into evidence to demonstrate the actions taken by the trustee
in the period between July 31, 2017 and September 1, 20J7. (Exh, A-12.) The witness
explained that the firm of Duane Morris LLP was paid $95,933.51 from the principal of this
trust.
The objectant's next witness was Thomas Davidson who has been head of the HSBC
Trust Company in Delaware since 2018. He stated he has worked as a trust administrator and
fiduciary adviser at various institutions since 1997. Regarding the trust sub Judice, Mr. Davidson
4 In the order sur exceptions, the Court en bane denied all 12 of the objectant's complaints and sustained the
trustees' exception regarding the source of payment of counsel fees and expenses.
:i The 20 I 6 adjudication of the administration of trust no. 6 covered both the trustee's third and fourth accounts.
6 The
Superior Court affirmed the adjudication issued by this Court at 161 A.3d 392 (Table) (2017).
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1977-X0448.105.3 Adjudication, Page 11
stated it is what is commonly known as a NIMCRUT (net income makeup charitable remainder
uni trust) and described the origin of this type of trust as follows:
You had this problem with the regular uni trust of depleting principal. The idea of the net
income trust was to try to preserve the principal so you had that available for the
remaindermen -- in these particular cases, charities -- but you were still providing
income. And the net income makeup allowed you, basically -- in those years where you
[ eamed) over the percentage you could pay out in addition to that percentage.
(N.T. 187.) When asked ways to generate additional income. Mr. Davidson suggested the trust
language could be modified to define post-contribution capital gains as income. (N.T. 190.)
When asked about changing the allocation of assets to benefit an income beneficiary, Mr.
Davidson testified:
[W]hether you are 65/35, whether you're 60/40, 70/30-- l mean pick your range -- within
that range you' re still balanced, per se, and you' re not changing the income generation
versus the growth that much. But sometimes just a small tweak, even though you might
free up only a couple hundred dollars, sometimes that makes a difference to an income
beneficiary. So you can do those tweakings. It doesn't get you a whole lot of difference
normally on the smaller trusts ... My understanding is that we're looking at trusts that
collectively are between a million and $1. l million. And so you are looking at a little
over a half a million apiece, which doesn't give you a lot of room to play.
(N.T. 192-93). He commented that the present allocation of assets in this trust is in "a safe zone"
and added: .. 1 think you will find that most trust companies will consider that to be a good total
allocation for total return." (N.T. 194.)
During cross examination by counsel for the trustee, Mr. Davidson suggested a trustee
might change a 65/3 5 allocation to 70/30 "to ease some of the pressure that the trustee is under
because of the income beneficiary." (N.T. 197.) Mr. Davidson acknowledged that he reviewed
neither this Court's adjudications of the prior accounts filed for this trust nor the Superior
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change to the trust to allow for principal invasions for the income beneficiary. (N.T. 202.)
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firm of Duane Morris. He testified that he served as co-trustee of this trust through the
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8 .5; adjudication of the last accounts, at which point his resignation became effective. Mr. Cass
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�j tallied the surcharges that the objectant had sought in connection with the prior accounts of this
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5- $897,408.93. He identified three Duane Morris invoices showing the fees incurred by and
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7ii (Exh. A-14.) He stated that the amount being sought has been reduced to $447,635.40. He
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explained the extensive filings and proceedings that were required in the surcharge litigation.
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(N.T. 224-226.) He explained that the firm performed the services in the most cost-effective way
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o 'o possible based on the experience and billing rate of the lawyers involved. (N.T. 227-29.)
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about the additional fees of $212,689 that were approved in the 2016 adjudications and paid
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justifying fees. (N.T. 237.) As for the compensation Mr. Cass himself received, he explained, "I
received a commission for my services as a trustee, and I received legal fees for my work as an
attorney. But I did not receive legal fees for my work as a trustee." (N.T. 239.)
Mr. Cass was asked on cross why time was spent preparing for the hearing on objections
to the prior account before both the initially scheduled date and the date the proceeding actually
took place. He explained that counsel had to review the issues and witnesses had to refresh their
recollections. (N.T. 263.)
After careful consideration of the testimony and evidence and the parties' post-hearing
memoranda, we must dismiss all of the objections (nos. I through 5) that relate to the objectant's
pursuit of additional income. The testimony of the trustee's witnesses established that the
allocation of assets is prudent, appropriate, and fair to both the income beneficiary and the
charities. The objectant's own witness, Mr. Davidson, said as much. Mr. Davidson testified
that, while it might be reasonable to increase the investment in bonds slightly, the increase in
income would be minimal. His testimony that the trustee could -- not is obligated to -- seek to
reform the trust so principal could be paid to the income beneficiary is problematic. Reformation
would require Court approval and such a petition would surely be resisted by the Attorney
General and the charities. The litigation would result in additional legal fees and would further
deplete the trust. Furthermore, we note that the present allocation of assets is the same as during
the previous accounting period) and the Superior Court affirmed our decision in the 2016
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1977·X0448.105.3 Adjudication, Page 13
adjudications that the trustee did not violate its fiduciary duty by pursuing this investment
strategy.
In objections nos. 6, 7 and 8, it is contended that trust counsel has been paid to date more
than this Court previously authorized. In the 2016 adjudication of the fourth account, this Court
approved fees of $110,563 .83 from principal as shown in the account on page 16 and fees of
$43,874.00 from income as shown on page 34, for a total of $154,437.83. In the 2016
adjudication, the Court also approved the payment of additional fees and costs of $106,344.50, as
requested in part D of the rider to question 13 of the petition for adjudication. Mr. Cass testified
that these additional fees and costs were paid from the trust in three installments ($364.99 on
June 24, 201 S, $9,986.00 on December 31, 2015, and $95,993.51 on August 9, 2017). He
demonstrated clearly and methodically that the firm was paid the proper amounts. The
objections alleging overpayment are therefore dismissed.
The remaining objections can be summarized as follows. Objections nos. 9 and 11
contend the additional fees and expenses now being sought are not fair and reasonable in relation
to the work that was needed. No. 10 claims that these fees were covered at the hearing on the
objections to the prior account. Nos. 12 and 13 suggest the law firm seeks to be paid foes for its
time pursuing fees and filed the account solely for the purpose of obtaining additional fees. No.
14 objects to counsel fees attributed to Neil Cass who was a witness at the prior heating,
contending his role was that of trustee, not of counsel. No. 15 asks the Court to exercise its
13
1977-X0448.105.3 Adjudication. Page 1
equitable power and deny any additional compensation because the trustee has not acted with
"clean hands."
On the subject of determining the reasonableness of fees, as we stated in our 2016
adjudication of the prior account for this trust:
The well-established factors set forth in Lakocca Estate, guide the court in its
determination of what is "just and reasonable" compensation given the specific
circumstances. Lakocca Estate, 431 Pa. 542, 246 A.2d 337 (1968). The LaRocca factors
include: (1) the amount of work performed; (2) the character of the services
rendered; (3) the difficulty of the problems involved; (4) the importance of the litigation;
(5) the amount of money or value of the property in question; (6) the degree of
responsibility incurred; (7) whether the fund involved was created by an attorney; (8) the
professional skil I and standing of the attorney in his profession; (9) the results he was
able to obtain; (10) the ability of the client to pay a reasonable fee for the services
rendered, and (10) very importantly, the amount of money or value of the property in
question. LaRocca Estate, 431 Pa. at 547, 246 A.2d at 339. See also, Wanamaker Trust,
30 Fiduc. Rep. 240 (O.C. Montg. 1980). In Thompson Estate, 426 Pa. 270, pages 281-
282, 232 A.2d 625, page 631, supra, the Court pertinently said: 'It is a 'well-entrenched
rule of Jaw in this State that the responsibility for determining the amount of counsel fees
rests primarily with the auditing judge. An executor or a trustee is an officer of the
orphans' court and accountable to such court for all his actions of commission and
omission in the performance of his fiduciary duties; such duty to account embraces all
payments made from estate or trust funds by way of compensation to himself or his
counsel. Thompson Estate, at 276, 678.
(Slip opinion, pp. 11-12.) The evidence produced at the hearing established the extraordinary
amount of work by counsel that was needed after the prior account was filed, which included
defending the account against the objections, filing exceptions to the Court's adjudication, and
litigating the objectant's appeal before the Superior Court. The trustee's counsel accomplished
the tasks at hand at all stages, having fended off an $800,000+ surcharge request, having
obtained a successful result on the exceptions before the Court en bane, and having prevailed
14
1977-X0448.105.3 Adjudication, Page 15
before the appellate court. These services were clearly necessary and were rendered by counsel
from a highly-regarded law firm. The objectant, due to his training as an attorney," had the
option of litigating without incurring any counsel fees. A corporate trustee cannot appear in
propria persona and PNC was obligated to retain counsel who could defend it competently
Accordingly, objections nos. 9 and 1 l are dismissed.
The trustee established that the additional counsel fees now being sought are not
duplicative of amounts previously considered by the Court and objection no. l O is dismissed. In
addition. counsel for the trustee took pains to establish that the additional compensation being
sought related only to legal work performed in connection with the litigation relating to the prior
accounts up through the appeal process, not to time expended to substantiate the fees.
Objections nos. 12 and 13 are also dismissed.
Regarding objection no. 14, Mr. Cass testified he received commissions for his work as a
trustee and charged for his time as an attorney when he was serving trust counsel. The objectant
offered no evidence to the contrary and this objection is dismissed.
Finally, the objectant suggests no additional fees and costs should be allowed on
equitable grounds. No grounds for disapproving any of the trustees actions having been
established, we find this objection no. 15 to be wholly without merit and it is dismissed.
7 The objectant was admitted to the practice of law in Pennsylvania in 1961, but his license has been suspended
since 2005.
15
1977-X0448.105.3 Adjudication, Page 1 E
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�O 8 approval of the fees and costs discussed at length above. Having determined the amounts were
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[ 16 reasonable and necessary. we approve the payment of $232,925.61 from principal to Duane
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5 ;g adjudication and for the presentation of the account at audit. This request is also approved.
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Upon confirmation of the fifth account, PNC Bank, N.A.1 trustee, is hereby discharged
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�a§ and released from all liability with respect to the trust herein and the beneficiaries thereunder for
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L. 5- its administration of the trust from April 7, 2014 to February 15, 2018, in accordance with this
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c:: la Subject to the views expressed herein and to distributions heretofore properly made, the
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AND NOW, this '2. 1.� day of September, 2019, the fifth account is confirmed .
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A motion for reconsideration of this adjudication may be filed within twenty (20) days
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�i from the entry hereof. An appeal from this adjudication may be taken to the appropriate
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l'. iii appellate court within thirty (30) days from the entry of the adjudication. See, Pa.O.C. Rule 8.2
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1977-X0448.105.3 Adjudication, Page 1 ·
and Montgomery County Local Rule 8.2A, and Pa. R.A.P. 902 and 903.
BY THE COURT:
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This adjudication efiled '1';./c,/J 9
Lewis R. Olshin, Esquire
David Dembe, Sr. Deputy Attorney General
Herbert B. Chadwick, prose
17