J-A18011-19

NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37

IN RE: TRUST UNDER DEED OF

TRUST OF SARAH MELLON SCAIFE,

SETTLOR, DECEMBER 30, 1935

APPEAL OF: H. YALE GUTNICK,

ESQUIRE, AND NON-PARTY

STRASSBURGER MCKENNA GUTNIK

& GEFSKY

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IN THE SUPERIOR COURT OF

PENNSYLVANIA

No. 1415 WDA 2018

Appeal from the Order Dated September 17, 2018

In the Court of Common Pleas of Allegheny County Orphans' Court at

No(s): No. 6469 of 2014

BEFORE: BOWES, J., NICHOLS, J., and MUSMANNO, J.

MEMORANDUM BY BOWES, J.: FILED DECEMBER 31, 2019

H. Yale Gutnick, Esquire, (“Gutnick”) and non-party Strassburger

McKenna Gutnick & Gefsky (“Law Firm”) appeal from the September 17, 2018

order directing them to produce documents identified in a privilege log as

subject to the attorney-client privilege and work product doctrine. We have

jurisdiction to entertain this appeal pursuant to the collateral order doctrine.

Pa.R.A.P. 313.1 For the reasons that follow, we vacate the order and remand

for in camera review.

____________________________________________

1 A non-final discovery order can be subject to appellate review under the

collateral order doctrine if a colorable claim of the attorney-client privilege is

raised. See Custom Designs & Mfg. Co. v. Sherwin-Williams Co., 39

A.3d 372, 376 (Pa.Super. 2012). In opining that the instant appeal should be

quashed, the orphans’ court relied upon our decision in Estate of McAleer, 194 A.3d 587, 595 (Pa.Super. 2018), appeal granted, 201 A.3d 724 (Pa.

2019), in which the issue in controversy was the reasonableness of trustee
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The following facts are relevant to our review. In 1935, Sarah Mellon

Scaife settled a trust she designated as the “Richard Mellon Scaife Trust” (the

“Trust”) “for the benefit of my son, RICHARD MELLON SCAIFE.” Deed of Trust,

at 4 ¶2. The Trust document conferred upon the Trustees the power and

authority:

whenever and as often as they shall deem that the best interests

of my said son shall require or make advisable further or additional

provision to be made for him,

. . . . (c) To distribute to my said son, as his absolute property, all or

such portion of the corpus of the Trust Estate as the Trustees shall

deem to be for his best interests, and if, as and when the entire

corpus of the Trust Estate may be so distributed to my said son,

this trust shall terminate notwithstanding that the time of

termination specified in Article 3 may not yet have arrived. Id. at 9 ¶8.

The Trust instrument expressly defined the discretion of the Trustees as

follows:

That power given to the Trustees regarding distribution of income

and/or corpus of the Trust Estate, shall be exercisable by them in

their absolute and uncontrolled discretion, and I expressly direct ____________________________________________ and attorney fees. After concluding that trust beneficiaries had a right to such

information, and that the trustee had not objected to the discovery on the

basis of privilege, nor provided any facts in support of his attempt to invoke

the attorney-client and work product privileges, we found no colorable claim

of privilege that would render the non-final discovery order appealable as a

collateral order. In contrast herein, Gutnick and the Law Firm objected on the

basis of privilege, supplied detailed privilege logs, and thus raised a colorable

claim of privilege that supports appellate review of the instant non-final

discovery order under the collateral order doctrine.
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that the Trustees shall be the sole judges as to the necessity,

advisability, propriety and amount of any such distribution . . .

final and conclusive . . . binding upon all parties having any

interest in the corpus of income of the Trust Estate, and shall not

be open or subject to question in any manner or for any reason

whatsoever.

Id. at 16 ¶11. From 1996 through 2014, Mr. Scaife made requests for distributions

from the Trust until the $400 million principal was fully distributed. Trustees

Gutnick, PNC Bank, N.A. (“PNC”), and James M. Walton sought legal advice

over the years from three attorneys regarding their discretion to make

distribution of the Trust principal.

Richard Scaife died on July 4, 2014. Gutnick and Walton were appointed

co-executors of Mr. Scaife’s estate. Mr. Scaife’s two children, Jennie2 and

David (collectively “Petitioners”), were contingent remainder beneficiaries

under the Trust. They each filed Petitions for Citation to Show Cause Why an

Account Should Not be Filed. Thereafter, they filed Objections to the Trustees’

Account, incorporating their prior petitions, averring that distributions from

the Trust to Mr. Scaife were improper. They alleged that the Trustees wasted

Trust assets, that funding Tribune Total Media’s losses was not in Mr. Scaife’s

best interests, and that Mr. Scaife’s requested distributions were intended to

effectuate his estate plan to disinherit his children, Petitioners herein.

Advanced Text of Brief of Appellee David Zywiec, at 3. The Trustees

responded that they acted in good faith and in accordance with the law, ____________________________________________

2 Jennie Scaife died on November 29, 2018. Her personal representative,

David Zywiec, has been substituted for her in these proceedings.
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pursuant to the Settlor’s directives as set forth in the Deed of Trust, and in

reliance upon the opinion of several counsel.

Discovery proceeded. Petitioners served a request for production upon

Gutnick seeking all documents that referred to administration of the Trust,

communications with attorneys or accountants with regard to the Trust, and

Gutnick’s entire file on the Trust. Gutnick agreed to provide non-privileged

documents in his custody and control responsive to the request.3

Shortly thereafter, Petitioners subpoenaed the Law Firm to produce

documents not only related to the Trust, but to other family trusts, and Mr.

Scaife’s estate plan as well. The Law Firm objected to the subpoena, but

agreed to produce documents that were not privileged pursuant to the

attorney-client privilege, the work product doctrine, or any other privilege or

immunity. Over 39,000 pages of documents were produced in response to

the subpoena. On November 2, 2016, Gutnick and Law Firm submitted the

Law Firm Privilege Log, accounting for documents responsive to the requests

but which were being withheld on the basis of privilege.

____________________________________________

3 According to co-trustee PNC, prior to the production of any documents, the

parties entered a consent order, approved by the court, that provided that

Trustees would include documents “reflecting requests for legal advice and

opinions of counsel paid for by the 1935 Trust or the Family Trusts.” Consent

Order, 9/15/15, at 1 ¶2. PNC states that the Trustees complied with the

consent order and did not produce any documents related to legal advice and

work product that was not paid for by the Trust and that were not shared

among the Trustees. See Advanced Text of Brief of Appellee PNC Bank, NA,

at 7.
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In December 2017, Petitioners filed a motion seeking to compel the

production of attorney-client and work product privileged documents

regarding Mr. Scaife’s estate planning file, or alternatively, seeking that the

documents be subjected to in camera review.4 The Law Firm and Gutnick

provided a supplemental privilege log, and consented to in camera review. They also stated they were amenable to appointment of a special discovery

master for purposes of resolving the issues attendant to the requested

documents. The orphans’ court heard oral argument on the motion to compel

on January 12, 2018, but reserved decision pending this Court’s decision in

Estate of McAleer, 194 A.3d 587, 595 (Pa.Super. 2018), appeal granted, 201 A.3d 724 (Pa. 2019). Six weeks after our decision, in September 2018,

the orphans’ court granted Petitioners’ motion to compel and ordered

production of all of the documents subject to claims of privilege without

conducting in camera review. In doing so, the court relied upon Judge R.

Stanton Wettick’s decision in Follansbee v. Gerlach, 56 Pa. D & C 4th 483

(Alleg. Co. 2002), holding that legal advice given to the trustee relating to the

____________________________________________

4 Gutnick and the Law Firm maintained throughout that Mr. Scaife’s estate

planning had no bearing on the question whether they breached a fiduciary

duty in their administration and management of the Trust. Moreover, Gutnick

and the Law Firm argued that there was no reason to delve into Mr. Scaife’s

estate planning documents to prove, as Petitioners contended, that Gutnick

knew Mr. Scaife intended to disinherit his children. As Gutnick aptly notes, he

admitted that Mr. Scaife had several motives for requesting principal

distributions, among them, that his children had sufficient wealth that they

did not need any more money from the Trust. Answer and New Matter of

Respondent, H. Yale Gutnick, to Jennie Scaife’s Petition for Citation to Compel

Recording of Trust Agreement and Filing of an Account, 12/12/14, at ¶32.
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trust must be shared with trust beneficiaries, and cannot be withheld by

invoking attorney-client privilege.

Gutnick and the Law Firm clarified that the documents that the court

had ordered them to produce involved estate planning, not trust management, and were not governed by Follansbee. In response, the orphans’ court added

an additional basis for compelling production: that Gutnick and the Law Firm

waived their privilege claims by failing to assert them in their response to the

motion to compel. It also relied upon In re Estate of McAleer, supra, for

the proposition that its order was not appealable.

Gutnick and the Law Firm filed the within appeal, basing appellate

jurisdiction to review the interlocutory order on the collateral order doctrine.

They present three issues for our review:

I. Whether the lower court erred in holding that Appellants

waived their attorney-client and work product objections to

producing Richard Scaife’s estate planning file?

II. Whether the lower court erred in holding that the

Follansbee decision, which involved trust administration

documents, even applied to the production of estate

planning documents?

III. Whether the lower court erred in ordering the production of

Mr. Scaife’s entire estate planning filed without conducting

an in camera review as to which Appellants raised claims of

privilege?

Appellants’ brief at 8 (unnecessary capitalization omitted).

Before we address the issues raised by Gutnick and Law Firm, we must

first address David’s argument that the instant appeal should be quashed for
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lack of jurisdiction.5 While David concedes that discovery orders compelling

the disclosure of allegedly privileged communications may be appealable as

collateral orders pursuant to Pa.R.A.P. 313, he claims that Gutnick and the

Law Firm are not aggrieved parties, i.e., parties who are adversely affected

by the ruling, with standing to appeal from the order. He contends that

Gutnick and the Law Firm are not aggrieved by an order compelling them to

produce estate planning, tax, and corporate documents containing advice

given by a non-party, Attorney Allan Finegold, for the benefit of Mr. Scaife.

Gutnick and the Law Firm counter that David’s argument improperly

conflates standing to appeal an adverse order, and standing to invoke a

privilege, which were held by this Court to be distinct inquiries in Knopick v.

Boyle, 189 A.3d 432, 437 (Pa.Super. 2018) (holding that appellant who had

asserted privilege as to an email had standing to seek review of the court’s

order compelling him to disclose the email). We find no merit in David’s argument. As Knopick demonstrates, a

party is aggrieved within the meaning of Pa.R.A.P. 501, when an order

requires him to produce and disclose allegedly privileged materials. The order

directing Gutnick and the Law Firm to produce documents claimed to be

____________________________________________

5 David and Jennie are separately represented and they filed separate briefs.

When an argument is advanced only by one of the Petitioners, we will note

which Petitioner. Where the argument is advanced by both Petitioners, we

will simply ascribe the argument to Petitioners.
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privileged rendered them aggrieved for purposes of contesting the order on

appeal, and quashal on this ground is unwarranted.

David offers a second basis for quashal of the appeal. He contends that

the privilege belongs to Mr. Scaife’s executors to assert. Although Gutnick is

a co-executor, David maintains that Gutnick did not appeal in his capacity as

executor, and further, that he could not appeal unilaterally without co- executor James Walton. He cites no authority in support of his position.

David’s argument lacks merit for several reasons. As Gutnick and the

Law Firm point out, David did not challenge below the standing of these parties

to assert the attorney-client and work product privileges. Thus, that issue is

not before us.6 Furthermore, for the reasons stated supra, standing to invoke

a privilege and standing to appeal are distinct, and lack of standing to assert

a privilege does not mandate quashal of an appeal from an order compelling

disclosure of allegedly privileged documents.7

____________________________________________

6 Even if the issue were preserved, the courts of this Commonwealth have

been willing to overlook the capacity in which a party purports to proceed

where he has standing to do so in some other capacity. See e.g., In re

Estate of Hain, 346 A.2d 774 (Pa. 1975) (holding that a party who

erroneously challenged an order as executor, but could have proceeded in

some other capacity, was entitled to the benefit of having appealed in the

proper capacity); In re Estate of Blumenthal, 812 A.2d 1279 n.1

(Pa.Super. 2002) (holding that while co-executors did not have standing to

file exceptions in that capacity, the error was not fatal as they had standing

to take such action in their individual capacities as beneficiaries).

7

In support of their contention that they have standing to assert the

privileges, Gutnick and the Law Firm maintain that they are duty-bound to
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We turn now to the merits. We are reviewing an order from the orphan’s

court.

The findings of a judge of the orphans’ court division, sitting

without a jury, must be accorded the same weight and effect as

the verdict of a jury, and will not be reversed by an appellate court

in the absence of an abuse of discretion or a lack of evidentiary

support. This rule is particularly applicable to findings of fact

which are predicated upon the credibility of the witnesses, whom

the judge has had the opportunity to hear and observe, and upon

the weight given to their testimony. In reviewing the Orphans’

Court’s findings, our task is to ensure that the record is free from

legal error and to determine if the Orphans’ Court’s findings are

supported by competent and adequate evidence and are not

predicated upon capricious disbelief of competent and credible

evidence.

When the trial court has come to a conclusion through the exercise

of its discretion, the party complaining on appeal has a heavy

burden. It is not sufficient to persuade the appellate court that it

might have reached a different conclusion if, in the first place,

charged with the duty imposed on the court below; it is necessary

to go further and show an abuse of the discretionary power. An

abuse of discretion is not merely an error of judgment, but if in

reaching a conclusion the law is overridden or misapplied, or the

judgment exercised is manifestly unreasonable, or the result of

partiality, prejudice, bias or ill-will, as shown by the evidence of

record, discretion is abused. A conclusion or judgment constitutes

an abuse of discretion if it is so lacking in support as to be clearly

erroneous. . . . If the lack of evidentiary support is apparent,

reviewing tribunals have the power to draw their own inferences

and make their own deductions from facts and conclusions of law.

Nevertheless, we will not lightly find reversible error and will

reverse an orphans’ court decree only if the orphans’ court applied

an incorrect rule of law or reached its decision on the basis of

factual conclusions unsupported by the record.

____________________________________________ assert privileges on behalf of their clients. Furthermore, with regard to some

of the withheld estate planning communications between Attorney Finegold

and the Law Firm, the Law Firm maintains that it was the client entitled to

assert the privilege.
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In re Estate of Warden, 2 A.3d 565, 571 (Pa.Super. 2010) (internal citation

omitted).

At issue herein is whether there has been a breach of fiduciary duty by

the Trustees to the Trust. “A trust is a fiduciary relationship with respect to

property, subjecting the person by whom the title to the property is held to

equitable duties to deal with the property for the benefit of another person[.]”

Id. at 573. Generally, “[t]he trustee is under a duty to the beneficiary to

administer the trust solely in the interest of the beneficiary.” Id. The trustee

is prohibited from dealing with trust property for the benefit of himself or third

parties, or placing himself in a position inconsistent with the interests of the

trust. In re Paxson Trust, 893 A.2d 99, 119 (Pa.Super. 2006); see also

Duties of the Trustee, Restatement (Second) of Trusts (1959), §§ 169-185.

With the foregoing principles in mind, we turn to Gutnick and the Law

Firm’s first issue: that the orphans’ court erred in holding that they waived

their attorney-client and work product objections to producing Richard Scaife’s

estate planning file by failing to assert the privileges in response to Petitioners’

motion to compel. Petitioners candidly concede, and the record confirms, that

Gutnick and the Law Firm did in fact invoke the attorney-client and work

product privileges in their response to the motion to compel. Thus, this basis

relied upon by the orphans’ court for compelling production of the documents

subject to assertion of privilege is infirm, and Gutnick and the Law Firm’s first

issue is meritorious.
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Similarly, Gutnick and the Law Firm’s second issue provides a basis for

relief. The parties do not disagree that the orphans’ court erroneously relied

upon Follansbee in ordering disclosure of estate planning documents,

although that decision involved trust documents only, and does not speak to

the discovery of or duty to disclose estate planning documents. We agree that

Follansbee, while germane with regard to the Trust management documents,

is not controlling with regard to estate planning documents, and was

incorrectly relied upon by the orphans’ court in compelling production herein.

Nonetheless, Petitioners assert a plethora of alternative bases on which

to affirm the order of the orphans’ court, and urge this Court to avail itself of

the right-for-any-reason doctrine. See Commonwealth v. Shaffer, 209

A.3d 957, 980-81 (Pa. 2019) (concurring and dissenting opinion, Wecht, J.)

(quoting In re A.J.R.-H., 188 A.3d 1157, 1175-76 (Pa. 2018) (“The ‘rightfor-any-reason’ doctrine permits an appellate court to affirm the trial court’s

decision on any basis that is supported by the record.”). Gutnick and the Law

Firm caution that the doctrine can only be employed “where the correct basis

for the ruling, order, decision, judgment or decree is clear upon the record.”

Reply Brief for Appellants at 8 (quoting Bearoff v. Bearoff Bros., Inc., 327

A.2d 72, 76 (Pa. 1974)). It cannot, they argue, “be used to affirm a decision

when the appellate court must weigh evidence and engage in fact finding or

make credibility determinations to reach a legal conclusion.” Id. (quoting In

re A.J.R.-H, supra at 1176). Gutnick and the Law Firm maintain that
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Petitioners are asking this Court to engage in impermissible fact finding with

regard to documents that are not in the record. Id. In his concurring and dissenting opinion in Shaffer, supra, Justice

Wecht explained that the rationale for the right-for-any-reason doctrine is that

we review the judgment or order of the trial court, rather than any the

particular rationale offered by that court. Id. at 980 (citing Ario v. Ingram

Micro, Inc., 965 A.2d 1194, 1200 (Pa. 2009)). Accordingly, our courts have

acknowledged that it would be a waste of judicial resources to remand a case

to the trial court merely to reinstate a decision it had already made, but on a

different basis within the power of an appellate court to effectuate. However,

the doctrine cannot be used to affirm “a decision when the appellate court

must weigh evidence and engage in fact finding or make credibility

determinations to reach a legal conclusion.” Id. at 981 (quoting In re A.J.R.- H., supra at 1176). Moreover, appellate courts are not bound to utilize the

doctrine as it is “discretionary and prudential.” Id. We observe the following. Although this action involves the

administration of the Trust, the subpoenaed documents pertain not to the

Trust, but to Mr. Scaife’s estate planning, and involve allegedly privileged

communications related thereto. Nonetheless, Petitioners advance numerous

arguments as to why this Court should affirm the court’s order compelling

disclosure of allegedly privileged estate planning documents, none of which

was fully explored below. They argue that Gutnick and the Law Firm waived
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any claims of privilege as to any documents, even estate planning documents,

by relying on the advice of counsel defense with regard to their administration

of the Trust. Alternatively, they allege that Gutnick and the Law Firm waived

any claim of privilege by asserting it selectively. Furthermore, Petitioners

assert that since Gutnick represented both the Trust and Scaife, individually,

and worked with the Law Firm and Attorney Finegold on estate planning,

Gutnick cannot assert attorney-client privilege with respect to estate planning

documents. Finally, Petitioners allege that Gutnick and the Law Firm never

asked for in camera review, and that the failure to do so constitutes waiver of

such relief.

Gutnick and the Law Firm counter that they only relied upon the advice

of counsel defense with regard to their distributions of the Trust principal, and

did not rely upon the estate planning advice of Attorney Finegold in that

regard. Consistent with that position, they produced documents related to

legal advice they received in conjunction with the Trust. For example, Gutnick

and Law Firm produced notes of a meeting with Attorney Finegold and Gutnick

in April 2005, at which they discussed the consequences of terminating the

Trust, and for which PNC was billed for legal work related to the Trust. The

second document in controversy, an exit memorandum from Attorney Avalli

to Gutnick, dated February 27, 1997, when he resigned from the Law Firm,

also addressed the Trust. According to Gutnick and the Law Firm, production

of discoverable attorney-client communications involving the Trust was
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properly discoverable under the rationale espoused in Follansbee, supra, and did not constitute a blanket waiver of attorney-client privilege.

Whether the disclosure of the aforementioned documents constituted

the selective assertion of attorney-client privilege is a fact-intensive inquiry.

As Gutnick and the Law Firm correctly note, such waiver is issue-specific, and

its scope can only be determined with reference to the documents claimed to

be privileged. See Gregury v. Greguras, 196 A.3d 619, 629 (Pa.Super.

2018) (en banc) (holding that claims of selective waiver, “if valid, may result

in waiver of the privilege with respect to other evidence regarding the same

subject matter”). The focus is on prejudice to the opposing party. Herein,

the relevant documents are not contained in the certified record, and the

record is not sufficiently developed for us to make such a determination.

Petitioners assert, without support, that no colorable claim of privilege

can be maintained because Gutnick and the Law Firm concurrently

represented Mr. Scaife in estate planning and with regard to the Trust, which

was a conflict of interest. Gutnick and the Law Firm contend that the roles

were different and not conflicting or inconsistent. Reply brief of Appellants at

16. Furthermore, they rely upon Gocial v. Independence Blue Cross, 827

A.2d 1216, 1222 (Pa.Super. 2003), for the proposition that even a

demonstrated conflict of interest does not result in a blanket waiver of

privilege. We find the record insufficient to make any such determination.
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Next, Petitioners claim that Gutnick and the Law Firm bore the burden

of proving the applicability of the privileges. They argue that the attorney- client privilege does not extend to communications that were not intended to

be confidential, and will not protect communications between the attorney and

the client if the communication took place in the presence of a third party, if

the attorney represents both parties to the transaction or dispute, or if the

attorney is defending his former client’s attacks on his professional

competence. See Definitive Brief of Appellee David Zywiec, at 13 (citing

Upjohn Co. v. United States, 449 U.S. 383, 369-97 (1981) (recognizing

that scope of attorney-client privilege is fact-sensitive). Similarly, work

product protection can be waived either by agreement, prior disclosure, or

where such communications are relevant to a claim or defense, such as the

advice of counsel defense. Id. Although Petitioners correctly point out some of the limitations on the

attorney-client and work product privileges, whether there are circumstances

that negate the claim of privilege in this case is a fact-intensive inquiry. That

is precisely why courts often require parties asserting privilege to prepare a

privilege log identifying the documents at issue and proffering why they are

privileged. At that point, the burden shifts to the party seeking disclosure to

demonstrate that the privilege has been waived or is subject to an exception.

See Yocabet v. UPMC Presbyterian, 119 A.3d 1012, 1019 (Pa.Super. 2015)

(finding that since board meeting may have been called to seek legal advice
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from the lawyers present, it was improper to reject outright the privilege

without examination of the factual basis for application of the privilege). In

camera review is a valuable tool for determining the validity of privilege

claims, and in many instances, it is difficult to make an informed decision

regarding privilege without such an inspection. See Berg v. Nationwide

Mutual Ins. Co., 44 A.3d 1164, 1179 (Pa.Super. 2012). The legal bases urged by Petitioners for affirming the order of the

orphans’ court lack the factual underpinnings to permit this Court to make

decisions regarding the validity of the attorney-client and work product

privilege claims. Furthermore, the documents subject to the claims of

privilege are not contained in the certified record. Moreover, it is not the role

of this Court to conduct in camera examinations of hundreds or thousands of

documents in the first instance.

Finally, we reject Petitioners’ claim that Gutnick and the Law Firm

waived the right to seek in camera review. The record establishes that

Petitioners suggested in camera review, and Gutnick and the Law Firm agreed.

In fact, Gutnick and the Law Firm stated they were amenable to the

appointment of a special discovery master to conduct such review, an option

that remains available to the orphans’ court upon remand.

For all of the foregoing reasons, we conclude that the orphans’ court

erred in ordering Gutnick and the Law Firm to provide to Petitioners all of the

documents alleged to be privileged without first conducting in camera review
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to determine the validity of the privilege claims. Since in camera review of

the documents is warranted, we vacate the order of the orphans’ court

compelling Gutnick and the Law Firm to produce all documents claimed to be

privileged, and remand to the orphans’ court for such an examination.

Order vacated. Case remanded. Jurisdiction relinquished.

Judgment Entered.

Joseph D. Seletyn, Esq.

Prothonotary

Date: 12/31/2019