J-A18026-22

2022 PA Super 154

IN RE: TRUST B UNDER 

AGREEMENT OF RICHARD H. WELLS 

DATED SEPTEMBER 28, 1956

APPEAL OF: V.M.I. FOUNDATION, 

INC.

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 IN THE SUPERIOR COURT OF

 PENNSYLVANIA

 No. 1269 WDA 2021

Appeal from the Order Entered October 5, 2021

In the Court of Common Pleas of Venango County

Orphans’ Court at 2005-00235

BEFORE: STABILE, J., MURRAY, J., and McLAUGHLIN, J.

OPINION BY MURRAY, J.: FILED: SEPTEMBER 7, 2022

In this case of first impression, V.M.I. Foundation, Inc. (Appellant), 

appeals from the order which denied Appellant’s motion for summary 

judgment; granted summary judgment in favor of Appellees, PNC Bank, N.A. 

(PNC) and the Commonwealth of Pennsylvania; and denied Appellant’s 

petition to show cause why the Trust of Richard H. Wells (Trust) should not 

be terminated.

1

 After careful consideration, we affirm.

FACTS

____________________________________________

1 Appellant emphasizes this case is one “of first impression applying the 

Charitable Trust Termination Statute.” Appellant’s Brief at 9 (referencing 20 

Pa.C.S.A. § 7740.3(e)); see also Appellant’s Reply Brief at 21. The 

Pennsylvania Attorney General, on behalf of the Commonwealth and 

participating as parens patriae, stated “there is no law on ... Section 

7740.3[(e)], which is the statute at issue[;] there is no case law.” N.T., 

8/30/21, at 25.
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Appellant is the sole beneficiary of the Trust, and a charitable 

organization pursuant to Section 501(c)(3) of the United States Internal 

Revenue Code. See 26 U.S.C.A. § 501(c)(3). Appellant “holds and oversees 

Virginia Military Institute’s (hereinafter referred to as “VMI”) endowment

assets.” Petition to Show Cause, 5/6/19, at 6. VMI is a public university in 

Lexington, Virginia. PNC is the Trustee.2

The orphans’ court described the evolution of the Trust as follows:

Richard H. Wells (“Wells”) for much of his life was a resident 

of Oil City, Venango County, Pennsylvania. Wells was a 1924 

graduate of Virginia Military Institute (“VMI”). In 1952, Wells 

became president of and was appointed to the Board of Directors 

of the Oil City Trust Company. Wells aggressively led his bank to 

expand and acquired additional banks and in 1954, the Oil City 

Trust Company changed its name to First Seneca Bank and Trust 

Company following the purchase of two other local banks. Mr. 

Wells continued the expansion of the bank by merger with two 

other banks and was continually reelected as president of the bank 

until his retirement on December 31, 1963. It was stated in his 

obituary that during the 12 years for which he served as president, 

the bank “quintupled in size.” See (Brief of Trustee, p.3). In 

1956, Wells created the Richard H. Wells Revocable Trust 

Agreement dated September 28, 1956. The agreement 

established First Seneca Bank and Trust Company of Oil City, 

Pennsylvania as the Trustee. Mr. Wells died on March 30, 1968, 

whereupon the trust agreement became irrevocable. During his 

lifetime, Wells amended the trust agreement four times, in 1960, 

in 1961, in 1963, and in 1965. Originally the trust agreement 

provided that Wells’ wife or his children would receive the net 

income of the trust for life, with the power to invade principal in

the trustee’s discretion for the benefit of his wife or children. Upon 

the death of his wife, the trust would be divided into new trusts

____________________________________________

2 PNC succeeded the original Trustee, First Seneca Bank and Trust, on 

November 11, 2009, “after a series of mergers and acquisitions, both during 

Mr. Wells’ life and after[.]” PNC’s Brief at 13-14.
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for each of his children and then upon their death it would be 

distributed under the terms of their wills or to their issue free of 

the trust. If there was no issue then the assets of the trust would 

be distributed to various individuals with the residue, if any, to 

VMI to be added to its general endowment fund and identified as 

a memorial to Richard H. Wells and the class of 1924. The 

amendment in 1960 changed the terms of the agreement so that 

VMI was to receive “favorable consideration” in the allocation of 

trust income, instead of a gift of the residue to VMI to be added 

to its general endowment fund. In 1961 and in 1963, the gift to 

VMI continued to be “favorable consideration” for the distribution

of the trust income of a contingent charitable remainder. Then in 

1965, Wells amended the trust for the final time. In this 

amendment he removed all references to his son and 

provided that upon his wife’s death, two other individuals 

would receive lump sum payments instead of money in 

trust, and then the remaining principal would form a 

perpetual charitable trust. VMI as the sole remainder 

beneficiary was to receive the income at least annually,

which would be credited to the class of 1924.

Orphans’ Court Opinion and Order, 10/5/21, at 1-2 (emphasis added).

Mr. Wells died on March 30, 1968. His wife died on August 14, 2004. 

Mr. Wells’ fourth and final amendment to the Trust, in Paragraph B.5., states

that upon Mrs. Wells’ death,

the Trustee shall add any accumulated and undistributed income 

in the trust to the principal thereof, and shall hold the thus 

augmented principal in trust, in perpetuity, and the Trustee shall 

pay and distribute the net income of the Trust, in perpetuity, at 

least annually, to [Appellant], Virginia Military Institute, of 

Lexington, Virginia, which distributions shall by [Appellant], 

Virginia Military Institute, be credited to the Class of 1924, and 

which distributions shall be unrestricted, to be applied for such 

purposes as the governing board of [Appellant] may from time to 

time determine. 

Amendment to Revocable Trust Agreement, 7/7/65, at 4.
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Presently, Appellant asserts “the approximate annual income is $67,000 

per year (a 3.35% return), and with fees of approximately $18,500 per year, 

the Trustee’s fees represent approximately twenty-eight percent (28%) of the 

income of the Trust in 2017, which is out of proportion to the intended benefits 

of the Trust to its beneficiary.” Petition to Show Cause, 5/6/19, at 7, ¶ 38.

PROCEDURAL HISTORY

On May 6, 2019, Appellant filed a petition to show cause why the trust 

should not be terminated, or, alternatively, why PNC should not be removed 

and BNY Mellon be appointed as successor trustee.3 Appellant sought 

termination of the Trust pursuant to the Charitable Trust Termination Statute, 

20 Pa.C.S.A. § 7740.3(e) (Judicial termination of charitable trusts).

4

Appellant averred,

19. Currently, the Trust has assets of approximately $2,000,000 

and generates income of approximately $67,000 per year (a 

3.35% return) while incurring fees of approximately $18,500 per 

year and other expenses of $750 for tax return preparation (or

approximately 0.96% of the trust corpus), which excludes any 

fees which the Trustee or its holding company may have realized 

from the mutual or commingled investments funds sponsored by 

PNC Bank and not rebated back to the Trust.

20. The Trustee’s fees represent approximately twenty-eight 

percent (28%) of the income of the Trust in 2017, leaving 

[Appellant] approximately $47,750. 

____________________________________________

3 Appellant subsequently withdrew the request to remove PNC as Trustee.

4 Appellant stated it would “provide Notice of the within Petition to the

Pennsylvania Office of the Attorney General,” as required by 20 Pa.C.S.A. 

§ 7740.3(e). Petition to Show Cause, 5/6/19, at 8.
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Petition to Show Cause, 5/6/19, at 4.

Appellant argued “the Trust should be terminated, as the administrative 

expenses and other burdens are unreasonably out of proportion to the

charitable benefits and [Appellant] will properly use and administer the assets 

in accordance with [Mr. Wells’] intentions.” Id. at 5. Appellant averred:

33. [Appellant] also incurs additional management and audit 

expense in accounting for the Trust in the preparation of its 

audited financial statements, which likewise reduces its net aid to 

VMI.

34. Terminating the Trust will also eliminate the costs of the tax 

and reporting expense incurred by the Trust and realize the 

economies of scale in the investment of its assets.

35. [Appellant] is a charitable institution under Section 501(c)(3) 

of the Internal Revenue Code and is subject to the oversight of 

the Attorney General of Virginia under Va. Code § 2.2-507.1.

36. Pursuant to Virginia [state law], [Appellant] manages its 

endowments in a manner similar to 15 Pa.C.S.A. § 5548(c) 

[“Investment of trust funds”,] and 20 Pa.C.S.A. § 8113

[“Charitable trusts”].

37. Given the clear intent of [Mr. Wells] to benefit VMI in 

perpetuity, even small annual savings in these fees and expenses 

can become substantial over time and can be more properly used 

for the benefit of VMI.

38. As set forth above, the approximate annual income is $67,000 

per year (a 3.35% return) and with fees of approximately $18,500 

per year, the Trustee’s fees represent approximately twenty-eight 

percent (28%) of the income of the Trust in 2017, which is out of 

proportion to the intended benefits of the Trust to [Appellant].

39. [Appellant] has been in existence since 1936 and VMI since 

1839. There is no reason to believe that they will not continue to 

provide educational benefits for the foreseeable future.
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40. Additionally, [Appellant] has a long track record of managing 

sizeable assets with professional managers and Virginia’s 

oversight of charitable institutions further assures satisfaction of 

[Mr. Wells’] intent.

Petition to Show Cause, 5/6/19, at 7-8.

PNC filed an answer in opposition, averring that PNC “serves in a 

fiduciary capacity and is bound by the terms of the Trust.” Answer to Petition 

to Show Cause, 6/14/19, at 4. PNC argued “termination of the Trust would 

violate not only [Mr. Wells’] intent, but also the explicit terms of the Trust[.]”

On August 23, 2019, the Commonwealth of Pennsylvania, through the 

Office of the Attorney General and acting as parens patriae, intervened.5

Following discovery, Appellant filed a motion for summary judgment. 

Appellant requested the orphans’ court enter summary judgment in its favor 

and against PNC, and order PNC “to transfer the assets of the Wells Trust to 

[Appellant] to be held in perpetuity as a permanently endowed fund (the 

“Wells Fund”) with the annual distributions therefrom in accordance with Mr. 

____________________________________________

5 “The responsibility for public supervision [of charitable trusts] traditionally 

has been delegated to the attorney general to be performed as an exercise of 

his parens patriae powers.” In re Tr. Established Under Agreement of

Sarah Mellon Scaife, Deceased Dated May 9, 1963, 276 A.3d 776, 787

n.9 (Pa. Super. 2022) (citation omitted). Thus, charitable trusts are 

continuously subject to the parens patriae power of the Commonwealth 

through its Attorney General and the supervisory jurisdiction of the courts. In

re Shoemaker, 115 A.3d 347, 350 n.3 (Pa. Super. 2015) (citations omitted). 

The Attorney General participates “as an indispensable party in every 

proceeding which affects a charitable trust, whether the proceeding be one of 

invalidation, termination, administration or enforcement of such trust.” In re 

Voegtly’s Est., 151 A.2d 593, 594 (Pa. 1959).
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Wells’ specific instructions[.]” Motion for Summary Judgment, 1/12/21, at 1. 

Appellant claimed there were “no issues of material fact.” Id. at 2.

Both PNC and the Commonwealth filed responses in opposition. In 

addition, PNC filed a counter motion for summary judgment, seeking summary 

judgment in favor of PNC, dismissal of Appellant’s petition for rule to show 

cause, and reimbursement from the Trust for fees and costs (including 

attorneys’ fees). See generally, Counter Motion for Summary Judgment, 

1/29/21. Likewise, the Commonwealth sought summary judgment and 

dismissal of Appellant’s petition to show cause. See Commonwealth’s Cross 

Motion for Summary Judgment, 2/5/21. On February 16, 2021, PNC filed its

joinder to the Commonwealth’s cross motion for summary judgment. 

Appellant, PNC, and the Commonwealth submitted briefs. The orphans’ court 

scheduled oral argument for August 30, 2021.

After hearing the parties’ arguments, the orphans’ court issued the 

following order, stating:

The Motion for Summary Judgment of [Appellant] is denied;

The Counter Motion for Summary Judgment of PNC Bank, National 

Association, Trustee is granted. The Petition of [Appellant] TO 

SHOW CAUSE WHY THE TRUST SHOULD NOT BE TERMINATED OR, 

ALTERNATIVELY, WHY PNC BANK SHOULD NOT BE REMOVED AND

BNY MELLON BE APPOINTED AS SUCCESSOR TRUSTEE, is denied,

The Cross Motion of the Commonwealth of Pennsylvania for 

Summary Judgment in opposition to the Petition of [Appellant] is 

granted. The Petition of [Appellant] TO SHOW CAUSE WHY THE 

TRUST SHOULD NOT BE TERMINATED OR, ALTERNATIVELY, WHY 

PNC BANK SHOULD NOT BE REMOVED AND BNY MELLON BE 

APPOINTED AS SUCCESSOR TRUSTEE, is denied.
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Order, 10/5/21.

With the order, the orphans’ court issued an opinion explaining its denial 

of Appellant’s request to terminate the Trust. The court determined Mr. Wells 

“wanted a charitable trust to go on in perpetuity rather than an outright gift.” 

See Orphans’ Court Opinion, 10/5/21, at 7 (stating, “Since the language and 

circumstances surrounding the establishment of the [T]rust leave no doubt as 

to [Mr. Wells’] intent, there is nothing further to analyze.”). Accordingly, the 

orphans’ court denied Appellant’s motion for summary judgment, granted 

summary judgment in favor of PNC and the Commonwealth, and denied 

Appellant’s petition to show cause.

Appellant timely appealed. Both Appellant and the orphans’ court have 

complied with Pa.R.A.P. 1925. In response to Appellant’s Rule 1925(b) 

concise statement of matters complained of on appeal, the orphans’ court 

issued a two-page supplemental opinion “to be considered” with its prior 

opinion. See Supplemental Opinion, 12/28/21.

ISSUES

Appellant presents two issues for our review:

1. Whether as a matter of law [Appellant] is entitled to the 

remedy sought by its Motion for Summary Judgment, 

specifically the termination of the Wells Trust with an award of 

the trust’s assets to [Appellant] to be held on the conditions 

set forth in said motion?

2. Whether the Trial Court erred in granting PNC’s Cross Motion 

for Summary Judgment thereby barring [Appellant] from 

raising any objection to the attorney’s fees incurred by PNC in 

this case?
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Appellant’s Brief at 5.

ANALYSIS

In reviewing the orphans’ court’s order, we defer to the court’s factual 

findings if supported by the record, but will reverse if the court’s legal 

conclusions are erroneous. In re Estate of Hooper, 80 A.3d 815, 818 (Pa. 

Super. 2013).

With regard to summary judgment,

“[O]ur standard of review of an order granting summary judgment 

requires us to determine whether the trial court abused its 

discretion or committed an error of law[,] and our scope of review 

is plenary.” Petrina v. Allied Glove Corp., 46 A.3d 795, 797–

798 (Pa. Super. 2012) (citations omitted). “We view the record 

in the light most favorable to the nonmoving party, and all doubts 

as to the existence of a genuine issue of material fact must be 

resolved against the moving party.” Barnes v. Keller, 62 A.3d 

382, 385 (Pa. Super. 2012), citing Erie Ins. Exch. v.

Larrimore, 987 A.2d 732, 736 (Pa. Super. 2009) (citation 

omitted). “Only where there is no genuine issue as to any material 

fact and it is clear that the moving party is entitled to a judgment 

as a matter of law will summary judgment be entered.” Id. The

rule governing summary judgment has been codified at 

Pennsylvania Rule of Civil Procedure 1035.2, which states as 

follows.

Rule 1035.2. Motion

After the relevant pleadings are closed, but within such 

time as not to unreasonably delay trial, any party may 

move for summary judgment in whole or in part as a 

matter of law

(1) whenever there is no genuine issue of any material 

fact as to a necessary element of the cause of action 

or defense which could be established by additional 

discovery or expert report, or
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(2) if, after the completion of discovery relevant to the 

motion, including the production of expert reports, 

an adverse party who will bear the burden of proof 

at trial has failed to produce evidence of facts 

essential to the cause of action or defense which in 

a jury trial would require the issues to be submitted 

to a jury.

Pa.R.C.P. 1035.2.

“Where the non-moving party bears the burden of proof on an 

issue, he may not merely rely on his pleadings or answers in order 

to survive summary judgment.” Babb v. Ctr. Cmty. Hosp., 47 

A.3d 1214, 1223 (Pa. Super. 2012) (citations omitted), appeal

denied, 65 A.3d 412 (Pa. 2013). Further, “failure of a nonmoving party to adduce sufficient evidence on an issue essential 

to his case and on which he bears the burden of proof establishes 

the entitlement of the moving party to judgment as a matter of 

law.” Id.

Thus, our responsibility as an appellate court is to 

determine whether the record either establishes that the 

material facts are undisputed or contains insufficient 

evidence of facts to make out a prima facie cause of action, 

such that there is no issue to be decided by the fact-finder. 

If there is evidence that would allow a fact-finder to render

a verdict in favor of the non-moving party, then 

summary judgment should be denied.

Id., citing Reeser v. NGK N. Am., Inc., 14 A.3d 896, 898 (Pa.

Super. 2011), quoting Jones v. Levin, 940 A.2d 451, 452–454 

(Pa. Super. 2007) (internal citations omitted).

Cadena v. Latch, 78 A.3d 636, 638–39 (Pa. Super. 2013).

Appellant first argues the orphans’ court erred in denying Appellant’s 

request to terminate the Trust, as “all of the elements of the Charitable Trust 

Termination Statute [were] met.” Appellant’s Brief at 24. According to 

Appellant, the orphans’ court made “an erroneous determination that Mr. 

Wells clearly intended a perpetual trust and that intent totally controls.” Id.
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at 26. Appellant claims the orphans’ court’s “holding clearly misreads the 

Charitable Trust Termination Statute.” Id. Appellant thus asks that this Court 

enter “final judgment” in Appellant’s favor,

and remand to the Trial Court for a determination of the only 

issues remaining – those relating to the appropriateness of the 

Wells Trust having incurred the yet to be determined legal 

expenses in its objection as requested by [Appellant]. Further, all 

attorney fees must be evaluated for reasonableness, although, in 

this case, that information has never been submitted to the Court 

by PNC.

Id. at 48-49.

Appellant’s argument is based on subsection (e) of the Charitable Trust 

Termination Statute, which states:

(e) Judicial termination of charitable trusts.--If the separate 

existence of a trust, whenever created, solely for charitable 

purposes results or will result in administrative expense or other 

burdens unreasonably out of proportion to the charitable benefits, 

the court may, upon application of the trustee or any interested 

person and after notice to the Attorney General, terminate the 

trust, either at its inception or at any time thereafter, and award 

the assets outright, free of the trust, to the charitable 

organizations, if any, designated in the trust instrument or, if 

none, to charitable organizations selected by the court, in either 

case for the purposes and on the terms that the court may direct 

to fulfill as nearly as possible the settlor’s intentions other than 

any intent to continue the trust, if the court is satisfied that the 

charitable organizations will properly use or administer the assets.

20 Pa.C.S.A. § 7740.3(e).

“It is well-settled that the object of all interpretation and construction of 

statutes is to ascertain and effectuate the intention of the General Assembly,

and the plain language of the statute is generally the best indicator of 
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such intent.” Commonwealth v. Zortman, 23 A.3d 519, 525 (Pa. 2011)

(emphasis added, citation omitted).

With respect to trust interpretation,

the intent of the settlor is paramount, and if that intent is not 

contrary to law, it must prevail. Shoemaker, 115 A.3d at 355 

(quoting Estate of Nesbitt, 438 Pa. Super. 365, 652 A.2d 855, 

857 (1995)). In order to ascertain the intent of the settlor, the 

court must examine: “(a) all the language contained in the four 

corners of the instrument[;] (b) the distribution scheme[;] (c) the 

circumstances surrounding the testator or settlor at the time the 

will was made or the trust was created[;] and (d) the existing 

facts.” In re Scheidmantel, 868 A.2d 464, 488 (Pa. Super. 

2005) (internal punctuation and citations omitted).

In re Cohen, 188 A.3d 1208, 1214 (Pa. Super. 2018).

Our research confirms a scarcity of case law, in Pennsylvania as well as 

other jurisdictions, addressing judicial termination of charitable trusts. We 

have found no factually analogous cases. There is one similar case, from the 

Lancaster County Court of Common Pleas, applying § 7740.3(e).

6

In In re Schlegel, No. 36-1990-0184, 2003 WL 26100147 (Pa.Com.Pl. 

Feb. 04, 2003), the settlor, Clara M. Schlegel, created a charitable trust

known as the Arthur O. and Clara M. Schlegel Memorial Fund for Deformed 

Children of Berks County. The trust was established in 1984, and provided 

that upon Ms. Schlegel’s death, the trustee was to

hold, manage, invest and reinvest and apply the net income 

therefrom each year, together with an additional sum when 

____________________________________________

6 While a decision of the Court of Common Pleas is not binding precedent, it 

may be considered for “persuasive authority.” Darrow v. PPL Elec. Utilities

Corp., 266 A.3d 1105, 1112 n.6 (Pa. Super. 2021) (citation omitted).
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needed, not to exceed five percent (5%) of the principal of said 

Trust in any one year (which sum shall not cumulate from year to 

year), to assist in defraying the medical and hospital costs of 

treating and correcting physical deformities in children residing in 

Berks County who are either without parents or whose parents are 

unable financially to meet such expenses. In administering this 

Trust, the Trustee shall establish and utilize the recommendation 

of a duly constituted panel of representatives from local social 

service agencies in Berks County whose activities place such 

agencies in direct personal contact with persons in need of such 

services, in selecting (in the sole and uncontrolled discretion of 

Trustee) the persons who are to be the recipients of such 

assistance.

Id. (quoting Trust Agreement, 6/4/84, at ¶ 9.(Q)).

Ms. Schlegel died in 1988. The trustee, Susquehanna Trust & 

Investment Company, thereafter presented to the orphans’ court a petition 

for adjudication which contained “averments appropriate to a petition for relief 

under Section 6110(c),” which was the judicial termination statute in effect at 

the time, and the predecessor to § 7740.3(e). See id. The trustee asked the 

orphans’ court to terminate the trust and award the assets to the Berks County 

Community Foundation. Like Appellant, the trustee averred that termination 

of the trust and transfer of the assets,

would accomplish significant tax savings. At the present time the 

trust is recognized as a private foundation by the Internal Revenue 

Service. This status subjects the trust to an annual excise tax, 

detailed reporting requirements and limits on its operations. As a 

part of the Foundation the trust would have the status of a public 

charity and be relieved of these burdens.

Id.

However, the trustee also averred it had
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experienced some difficulty in organizing an advisory board of 

Berks County residents and promoting community awareness of 

the availability of the fund within the geographical limits provided 

by the settlor. In August of 2000, the advisory board included the 

president of the Berks County Community Foundation as a 

member. Thereafter a successful collaboration between the 

trustee and the Foundation developed. An increase in the level of 

success enjoyed by the trustee in making funds available to 

appropriate recipients coincided with the involvement of the 

Foundation. The Foundation, which did not exist at the time of 

the death of Clara M. Schlegel, apparently was established in 

1994. It now administers funds in excess of $25,000,000.00. The 

members of the board of the Foundation are prominent members 

of the Berks County community. Their familiarity with that 

community should facilitate the use of the Memorial Fund as 

intended by the settlor.

Id.

The orphans’ court, noting the Attorney General had “expressed no 

objection to the granting of the relief requested in the petition,” granted the 

trustee’s request. Id. The court “directed the distribution of the balance 

herein to the Berks County Community Foundation for administration for the 

identical purposes contained in the trust agreement.” Id. The orphans’ court 

stated it considered “all [of] the circumstances” in concluding “the pursuit of 

the settlor’s goals and objectives by the present trustee results in expenses 

and burdens which are unreasonably disproportionate to the charitable 

benefits.” Id.

Instantly, the orphans’ court concluded termination of the Trust was not 

warranted. The court explained:

We have studied the trust documents. We have studied the 

amendments to the trust. The documents are clear and easily 

understood. There are no issues of contradictory language. As to 
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whether Wells wanted a charitable trust to go on in perpetuity 

rather than an outright gift to VMI, we have the answer. In the 

first version of the Trust in 1956, Wells provided that the residue,

after specific gifts, would go to VMI, to be added to its general 

endowment funds and identified as a memorial to the class of 

1924. In every subsequent version of the Trust he shied away 

from the outright gift and in each version made a provision for a 

charitable trust. This was a man who clearly knew what he was 

doing. He was the President of a Bank and Trust Company. Wells 

wanted to make a gift in trust to his alma mater and he did. There 

is really nothing else to be considered. Since the language and 

circumstances surrounding the establishment of the trust leave no 

doubt as to his intent there is nothing further to analyze.

Orphans’ Court Opinion, 10/5/21, at 7.

We discern no error. There are important differences between this case 

and In re Schlegel, where the parties — notably the trustee and 

Commonwealth — were proponents of termination, and the trustee made the 

request. In In re Schlegel, the trustee advanced an argument regarding 

beneficial tax treatment if the trust assets were converted from their status 

as a private foundation to part of a public charity. However, the trustee also

averred it faced challenges fulfilling the settlor’s charitable intent, having 

“experienced some difficulty in organizing an advisory board ... and promoting 

community awareness of the availability of the fund within the geographical 

limits provided by the settlor.” In re Schlegel, supra. Further, the trustee 

had developed “a successful collaboration ... with the Foundation,” which 

resulted in an “increase in the level of success enjoyed by the trustee in 

making funds available to appropriate recipients.” Id. The orphans’ court 

considered “all the circumstances” in concluding “pursuit of the settlor’s goals 
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and objectives by the present trustee results in expenses and burdens which 

are unreasonably disproportionate to the charitable benefits.” Id.

Accordingly, the court granted the trustee’s request to terminate the trust and 

transfer assets to the Foundation.

The orphans’ court’s decision in In re Schlegel is consistent with the 

language of the judicial termination statute. The statute in effect at the time, 

as well as the current version, effective November 6, 2006, are nearly 

identical. See 20 Pa.C.S.A. § 6110(c) (“If the ... trust ... results or will result 

in administrative expense or other burdens unreasonably out of proportion to 

the charitable benefits, the court may ... terminate the trust ... and award the 

assets outright ... to the charitable organizations ... designated in the 

conveyance, or if none, to charitable organizations selected by the court”); 

compare with 20 Pa.C.S.A. § 7740.3(e) (“If the ... trust ... results or will 

result in administrative expense or other burdens unreasonably out of 

proportion to the charitable benefits, the court may ... terminate the trust ... 

and award the assets outright ... to the charitable organizations ... designated 

in the trust instrument or, if none, to charitable organizations selected by the 

court”).

Here, unlike Schlegel, the trustee (PNC) and the Commonwealth 

oppose termination of the Trust. Appellant claims termination is statutorily 

warranted because the Trust’s “administrative expenses and other burdens 

are unreasonably out of proportion to the charitable benefits.” See Petition 
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to Show Cause, 5/6/19, at 5, ¶ 25. Appellant bases this claim on the Trust’s 

“expenses and investment inflexibility,” which “would be completely avoided 

by a transfer of the Well’s Trust’s assets to [Appellant], which is not a Private 

Foundation.” Appellant’s Brief at 25. Appellant asserts that PNC “has refused 

to terminate the Trust only because it is putting its own financial interests (i.e.

fees earned as Trustee) ahead of the best interests of the beneficiary of the 

Trust.” Petition to Show Cause, 5/6/19, at 5, ¶ 23. In support, Appellant 

details its wealth management prowess. See, e.g., id. at 6-7 (averring 

Appellant “holds and oversees ... endowment assets, which are approximately 

$500,000,000, constituting one of the largest per student endowments of any 

public university”; the “endowment’s investment performance has ranked in 

the second quartile of similar colleges and universities at its level”; Appellant 

“uses a spending factor of approximately 4.75% of the endowment’s 12-

quarter average ... allow[ing the] endowment to focus on its total return ... in

determining how much of the endowment can be properly appropriated”; 

Appellant “pays approximately 0.29% of the value of the endowment ... for []

investment management and custodial fees, which is significantly less than 

the .96% currently paid by the Trust”).

In practical terms — and according to Appellant — termination of the 

Trust and transfer of the assets to Appellant, 

[o]n a $2,000,000 endowment paying these fees would result in 

approximately $13,450 more in aid to VMI in a year, which would 

pay for approximately fifty-percent (50%) of the current fees and 
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charges for an in-state cadet at VMI and 25% for an out-of-state 

cadet.

Petition to Show Cause, 5/6/19, at 7, ¶ 32.

At oral argument, Appellant conceded the tax benefit from termination 

and transfer of the Trust would be “small,” but in “the context of a TwentyNine Thousand Dollar ($29,000.00) bill for tuition and fees if we were using 

scholarship money, that means something in our family of having those funds 

available and not deflected [sic] or directed away. Remember, it’s each year 

and every year these trusts are in perpetuity.” N.T., 8/30/21, at 15.

PNC described Appellant’s argument as suggesting “if any trust fee or 

expense may be reduced, then the statute allows termination of the charitable 

trust.” PNC’s Reply Brief in Support of Counter Motion for Summary Judgment

at 3. At argument, PNC’s counsel stated:

There seems to be this argument that we can have a cost benefit 

analysis, right? We can save a little money here by getting rid of 

the trust.

N.T., 8/30/21, at 21.

As stated above, a settlor’s intent “is paramount, and if that intent is 

not contrary to law, it must prevail.” Estate of Nesbitt, 652 A.2d at 857.

The facts of this case are not disputed. Appellant “has been in existence since 

1936.” Petition for Rule to Show Cause, 5/6/19, at 8, ¶ 39. Mr. Wells was 

aware of Appellant’s existence when he created and amended the Trust 

between 1956 and 1965. Mr. Wells expressly identified Appellant in Paragraph 

B.5. of the final amendment, when he directed
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the Trustee shall pay and distribute the net income of the Trust, 

in perpetuity, at least annually, to the VMI Foundation, ... which 

distributions shall by the VMI Foundation, Virginia Military 

Institute, be credited to the Class of 1924, and which distributions 

shall ... be applied for such purposes as the governing board of 

the VMI Foundation may from time to time determine. 

Amendment to Revocable Trust Agreement, 7/7/65, at 4 (emphasis added).

Upon review, we agree that judicial termination of the Trust was not 

warranted. Appellant seeks termination of the Trust because it would be more 

cost effective. However, Appellant has not proven the existence of 

“administrative expense or other burdens unreasonably out of proportion to 

the charitable benefits,” as required by 20 Pa.C.S.A. § 7740.3(e). At 

argument, Appellant’s counsel stated, “We accept that the quid quo pro, the 

payment of those fees for [PNC’s] services rendered, are reasonable. They’re 

market.” N.T., 8/30/21, at 34. As there are no genuine issues of material 

fact, the orphans’ court did not err in granting summary judgment in favor of 

PNC and the Commonwealth, and against Appellant.

Finally, we discern no error with respect to Appellant’s second issue 

involving PNC’s attorneys’ fees. Appellant repeats the argument from its reply 

to PNC’s motion for summary judgment, asserting that PNC’s request for fees 

and costs was “premature,” and the orphans’ court must “determine if the 

trustee’s attorneys’ fees should be paid from the trust and if so, the 

appropriate amount.” Appellant’s Brief at 45-46; see also Reply to 

Respondents’ Opposition to Petitioner’s Motion for Summary Judgment, 

3/2/21, at 10-12.
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PNC maintains it properly requested reimbursement for fees and costs 

in its motion for summary judgment. PNC cites 20 Pa.C.S.A. § 7780.1 (stating 

a trustee “shall take reasonable steps . . . to defend claims against the trust.”), 

and 20 Pa.C.S.A. § 7780.5 (a trustee may exercise its powers without court 

approval). PNC’s Brief at 54. PNC further highlights that “the Trust terms 

explicitly authorize the Trustee ‘[t]o employ . . . counsel as it may deem 

necessary or proper in and about the exercise of the trust and to pay all 

expenses incident to the administration of the trust out of the trust estate.’” 

Id. (citing Trust, “ARTICLE III. POWERS OF TRUSTEE.” at 6). PNC cites In 

re McKinney, 67 A.3d 824, 829 n.5 (Pa. Super. 2013), for the proposition 

that a trustee’s attorneys’ fees may be paid from a trust when the trustee 

“successfully defends itself against removal.” PNC’s Brief at 55.

The orphans’ court states there is “no authority” for Appellant’s 

argument that it erred in finding the Trust responsible for PNC’s attorneys’ 

fees. Supplemental Opinion and Order, 12/28/21, at 2. The court added that 

“the question of attorneys’ fees as being unreasonable is not before the 

[c]ourt.” Id. Appellant concedes the submission of “facts related to the fees 

. . . has not yet occurred.” Appellant’s Brief at 48. On this record, we conclude 

the orphans’ court did not err in determining the Trust would reimburse PNC

for attorneys’ fees incurred in defending Appellant’s action seeking 

termination of the Trust.
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For the above reasons, we affirm the order denying Appellant’s request 

to terminate the Trust under 20 Pa.C.S.A. § 7740.3(e), and entering summary 

judgment against Appellant and in favor of PNC and the Commonwealth.

Order affirmed.

Judge McLaughlin joins the opinion.

Judge Stabile concurs in the result.

Judgment Entered.

Joseph D. Seletyn, Esq.

Prothonotary

Date: 9/7/2022