Court Opinion

ID: 4392785
Source: CourtListenerOpinion
Date Created: 2019-05-01 17:40:35.009739+00
Date Added: 2024-06-11T14:51:57.062632
License: Public Domain

J-A30009-18

NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37

 IN RE: WILLIAM G. KAMMERER       :   IN THE SUPERIOR COURT OF
 T/U/W FBO JEANNE KAMMERER        :        PENNSYLVANIA
 STEFL CONSOLIDATED WITH SUSAN    :
 J. KAMMERER, MELINDA J.          :
 MCGUIGAN, AND HARRY S.           :
 KAMMERER, EACH INDIVIDUALLY      :
 AND AS A SHAREHOLDER OF          :
 CHARTIERS LAND COMPANY AND ON    :
 BEHALF OF CHARTIERS LAND         :   No. 433 WDA 2018
 COMPANY                          :
                                  :
                                  :
            v.                    :
                                  :
                                  :
 WILLIAM J. KAMMERER, JR.,        :
 INDIVIDUALLY AND IN HIS OFFICIAL :
 CAPACITY AS AN OFFICER AND       :
 DIRECTOR OF CHARTIERS LAND       :
 COMPANY; AND CHARTIERS LAND      :
 COMPANY, A PENNSYLVANIA          :
 CORPORATION, AND ROBIN           :
 KAMMERER; WILLIAM G. KAMMERER, :
 III; ADRIAN J. KAMMERER; LINDSAY :
 J. MOORE; SAM COSTANZO; DENNIS :
 E. KAUFMAN, PERSONAL             :
 REPRESENTATIVE OF THE ESTATE OF :
 ARLENE R. KAUFMAN; PNC BANK,     :
 N.A., AS TRUSTEE OF THE MCKINLEY :
 TRUST PURSUANT TO PARAGRAPH      :
 SECOND OF THE LAST WILL AND      :
 TESTAMENT OF ROBERT B.           :
 MCKINLEY; DAVID R. BAYSEK; MARY :
 ANN HEID; EDWARD L. BAYSEK, JR;  :
 MELLON BANK, N.A., TRUSTEE FOR   :
 THE FUND B DAVID R. BAYSEK       :
 TRUST CREATED UNDER PARAGRAPH :
 FOURTH OF THE LAST WILL AND      :
 TESTAMENT OF EDWARD L. BAYSEK; :
 MELLON BANK, N.A. TRUSTEE FOR    :
 THE FUND B MARY ANN HEID TRUST :
 CREATED UNDER PARAGRAPH          :
J-A30009-18

 FOURTH OF THE LAST WILL AND           :
 TESTAMENT OF EDWARD L. BAYSEK;        :
 MELLON BANK, N.A. TRUSTEE FOR         :
 THE FUND B EDWARD L. BAYSEK JR.,      :
 TRUST CREATED UNDER PARAGRAPH         :
 FOURTH OF THE LAST WILL AND           :
 TESTAMENT OF EDWARD L. BAYSEK;        :
 RICCI A. MINELLA, EXECUTOR OF         :
 THE ESTATE OF VICTORIA T.             :
 MINELLA; MARY KAY SCHMIDT;            :
 GEORGE LAUER, AS SUCCESSOR IN         :
 INTEREST, AND ANY OTHER               :
 SUCCESSOR IN INTEREST TO THE          :
 ESTATE OF C.A. LAUER, AND             :
 CARROLL STEVENS ADAMS, AS             :
 SUCCESSOR IN INTEREST TO              :
 GEORGE STEVENS                        :
                                       :
                                       :
 APPEAL OF: SUSAN J. KAMMERER,         :
 MELINDA J. MCGUIGAN, AND HARRY        :
 S. KAMMERER, EACH INDIVIDUALLY        :
 AND AS A SHAREHOLDER OF               :
 CHARTIERS LAND COMPANY AND ON         :
 BEHALF OF CHARTIERS LAND              :
 COMPANY                               :

                   Appeal from the Order March 19, 2018
   In the Court of Common Pleas of Allegheny County Orphans' Court at
                            No(s): 02-80-3777

 IN RE: WILLIAM G. KAMMERER            :   IN THE SUPERIOR COURT OF
 T/U/W FBO JEANNE KAMMERER             :        PENNSYLVANIA
 STEFL CONSOLIDATED WITH SUSAN         :
 J. KAMMERER, MELINDA J.               :
 MCGUIGAN, AND HARRY S.                :
 KAMMERER, EACH INDIVIDUALLY           :
 AND AS A SHAREHOLDER OF               :
 CHARTIERS LAND COMPANY AND ON         :
 BEHALF OF CHARTIERS LAND              :   No. 462 WDA 2018
 COMPANY                               :
                                       :
                                       :

                                 -2-
J-A30009-18

                v.                               :
                                                 :
    WILLIAM G. KAMMERER, JR.,                    :
    INDIVIDUALLY AND IN HIS OFFICIAL             :
    CAPACITY AS AN OFFICER AND                   :
    DIRECTOR OF CHARTIERS LAND                   :
    COMPANY; AND CHARTIERS LAND                  :
    COMPANY, A PENNSYLVANIA                      :
    CORPORATION.                                 :
                                                 :
                                                 :
                v.                               :
                                                 :
                                                 :
    ROBIN KAMMERER; WILLIAM                      :
    G.KAMMERER, III; ADRIAN J.                   :
    KAMMERER; LINDSAY J. MOORE;                  :
    SAM COSTANZO, ARLENE R.                      :
    KAUFMAN; THE ESTATE OF ROBERT                :
    B. MCKINLEY, VICTORIA MINELLA,               :
    MARY KAY SCHMIDT, THE ESTATE                 :
    OF C.A. LAUER, THE ESTATE OF                 :
    GEORGE STEVENS, AND THE ESTATE               :
    OF EDWARD L. BAYSEK                          :
                                                 :
                                                 :
    APPEAL OF: ROBIN KAMMERER,                   :
    WILLIAM G. KAMMERER, III, ADRIAN             :
    J. KAMMERER AND LINDSAY J.                   :
    MOORE                                        :

                Appeal from the Order Entered March 19, 2018
      In the Court of Common Pleas of Allegheny County Civil Division at
                           No(s): No. 02-80-3777

BEFORE:      SHOGAN, J., KUNSELMAN, J., and STRASSBURGER*, J.

____________________________________________

*   Retired Senior Judge assigned to the Superior Court.

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MEMORANDUM BY SHOGAN, J.:                                   FILED MAY 01, 2019

      In   these    consolidated      actions,   siblings     Harry   Kammerer,

Melinda McGuigan,    Susan Kammerer         (collectively “Shareholders”), and

William Kammerer (“William”), individually and as an officer and director of

the privately held corporation known as Chartiers Land Company (“CLC”),

cross-appeal the judgment entered by the Court of Common Pleas of

Allegheny County Orphans’ Court on March 19, 2018.              Upon review, we

reverse in part and affirm in part.

      This appeal stems from Shareholders filing two actions, one in the

Allegheny County Court of Common Pleas Civil Division on January 16, 2016,

at docket number 15-23266 (“declaratory judgment action”), and one in the

Allegheny County Court of Common Pleas Orphans’ Court Division on June 16,

2016, at docket number 02-80-3777. The civil complaint set forth a count for

declaratory judgment and a count for breach of fiduciary duty, naming CLC

and William, individually and as an officer and director of CLC.        In their

orphans’ court complaint, Shareholders challenged the first and final account

(“the Account”) submitted on behalf of a trust (“Trust B”) established by

William G. Kammerer, Sr., the sibling parties’ father, for the benefit of his

wife, Jeanne Kammerer Stefl, the mother of Shareholders and William

(“Mother”). William was a co-trustee of Trust B. By agreement, the cases

were consolidated on the orphans’ court docket. The orphans’ court allowed

additional discovery to identify and join parties deemed to be indispensable to

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the declaratory judgment action. The indispensable parties included William’s

wife and his three adult children.

       The orphans’ court held an evidentiary hearing on August 29 and 30,

2017, and thereafter accepted proposed findings of fact and conclusions of

law. On October 6, 2018, the orphans’ court entered a decree, finding, inter

alia,1 that William had breached his fiduciary duty and that an award of “costs

of record and reasonable counsel fees” was appropriate.       Following a fee-

petition procedure,2 the orphans’ court awarded Susan and Melinda

reasonable counsel fees, expenses, and costs (collectively “counsel fees”)

based on amounts set forth in the parties’ fee stipulation;3 however, it denied

CLC counsel fees for the defense of William, his wife, and his adult children.

Order, 3/19/18, at ¶¶ 2, 3. Additionally, the orphans’ court entered judgment

against William for the counsel fees. Id. at ¶ 4. Shareholders appealed on

____________________________________________

1 On the individual claims, the orphans’ court found in favor of Susan and
Melinda, but it ruled that Harry’s claims were time-barred. Orphans’ Court
Opinion, 1/11/18, at 10, 14.

2 Susan and Melinda filed a fee petition regarding their counsel fees, costs,
and expenses on October 25, 2017, and by leave of court, they filed a
supplemental fee petition regarding CLC’s counsel fees, costs, and expenses.
Order, 1/19/18.

3  Shareholders incurred $205,993.57 in legal fees, $16,456.02 in expenses,
and $165.83 in costs of record. Fee Petition Stipulation, 2/5/18, at 3–5. CLC
incurred $200,183.50 in legal fees, $4,204.32 in expenses, and $235.50 in
costs. Id. at 6–8.

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CLC’s behalf.   William cross-appealed.     All parties and the orphans’ court

complied with Pa.R.A.P. 1925.

      On appeal, Shareholders and William challenge the award of counsel

fees. Initially, we address Shareholders’ argument that William waived any

claim that the orphans’ court lacked legal authority to award counsel fees.

Shareholders’ Second Brief at 5. According to Shareholders, although William

filed a timely appeal from the October 6, 2017 decision in the declaratory

judgment action, William did not “raise the issue of the [orphans’ court’s] legal

authority to award counsel fees in either of the [b]riefs that he filed in that

separate appeal. As such, William has waived the issue.” Id.

      In response, William argues that the October 6, 2017 order did not

award counsel fees; rather, it “explicitly provided that the [orphans’] court

intended to award fees . . . at some time in the future.” William’s Second

Brief at 5 (emphasis in original). Thus, William argues, the October 6, 2017

order was not final as to the award of counsel fees.       Id. at 6–7. William

explains that he did not address the issue of counsel fees on appeal from the

October 6, 2017 order because that issue was “not ripe” for review by this

Court. Id. at 8.

      We conclude that the October 6, 2017 order was not a final order. A

final order is one that disposes of all claims and all parties.        Pa.R.A.P.

341(b)(1). The October 6, 2017 order did not dispose of the counsel-fees

issue. Nevertheless, William’s appeal from the October 6, 2017 order was

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permissible under Pa.R.A.P. 311(a)(8) and Pa.R.A.P. 342(a)(6).4              Rule

311(a)(8) allows an interlocutory appeal as of right from “[a]n order that is

made final or appealable by statute or general rule, even though the order

does not dispose of all claims and all parties.”          Rule 342(a)(6) makes

appealable as of right an orphans’ court “order determining an interest in real

or personal property.”        The October 6, 2017 order determined William’s

interest in shares of CLC stock that he acquired in violation of the corporate

bylaws. Consequently, our review of the appeal from the October 6, 2017

order was limited to the orphans’ court’s determinations regarding William’s

unauthorized purchase of CLC stock and breach of fiduciary duty. Because

the orphans’ court still had to determine an amount of counsel fees and enter

judgment thereon, the issue of counsel fees was not ripe for our review as of

the cross-appeals from the October 6, 2017 order. That issue became ripe

upon the filing of cross-appeals from the March 19, 2018 order awarding

counsel fees to Susan and Melinda, denying counsel fees to CLC, and entering

judgment against William. Thus, William did not waive the issue of counsel

fees.

        Turning to the merits, Shareholders argue that the orphans’ court erred

in denying CLC counsel fees.            Shareholders’ Brief at 32.   According to

____________________________________________

4  Shareholders’ cross-appeal from the October 6, 2017 order was authorized
under Pa.R.A.P. 903(b): “[I]f a timely notice of appeal is filed by a party, any
other party may file a notice of appeal within 14 days of the date on which the
first notice of appeal was served….”

                                           -7-
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Shareholders, CLC should be reimbursed for defending William and his family

because the orphans’ court found that William, “as an officer and director of

[CLC] breached his fiduciary duty to plaintiff shareholders.” Id. at 33 (quoting

Order, 10/6/17, at ¶ 2).       Shareholders contend that “it is inequitable for

William and his family members to obtain a free legal defense at the expense

of CLC and, by extension, its shareholders.” Id. at 35.

         William argues that the orphans’ court erred in awarding Susan and

Melinda counsel fees. William’s Brief at 6. According to William, the orphans’

court lacked authority to award fees because “[t]he record is devoid of any

statute under which [Shareholders] sought fees, any agreement between the

parties, any ‘common fund’, or any other justification for the award of counsel

fees.”     Id.   Additionally, William claims that he had a valid defense to

Shareholders’ claims—the statute of limitations; there was no finding that

William acted in an arbitrary and vexatious manner; and the Pennsylvania

Judicial Code precludes an award of fees in this case. Id. at 7, 8–9 (citing 42

Pa.C.S. § 2503).

         Our standard of review from a final order of the orphans’ court is

deferential:

                We accord the findings of the Orphans’ Court, sitting without
         a jury, the same weight and effect as the verdict of a jury; we will
         not disturb those findings absent manifest error; as an appellate
         court we can modify an Orphans’ Court decree only if the findings
         upon which the decree rests are not supported by competent or
         adequate evidence or if there has been an error of law, an abuse
         of discretion, or a capricious disbelief of competent evidence.

                                        -8-
J-A30009-18

             Moreover, we will not reverse the Orphans’ Court’s
       credibility determinations absent an abuse of the court’s discretion
       as factfinder. On the other hand, we are not required to give the
       same deference to the Orphans’ Court’s legal conclusions. Where
       the rules of law on which the Orphans’ Court relied are palpably
       wrong or clearly inapplicable, we will reverse the court’s decree.

Estate of Edward Winslow Taylor Inter Vivos Tr., 169 A.3d 658, 663 (Pa.

Super. 2017) (quoting In re Trust of Hirt, 832 A.2d 438, 447 (Pa. Super.

2003) (citations, quotation marks, and some brackets omitted)). This Court

will not disturb a ruling on a request for an award of counsel fees absent an

abuse of discretion, which occurs if the trial court has failed to follow proper

legal procedures or misapplied the law. Werner v. Werner, 149 A.3d 338,

346 (Pa. Super. 2016) (citation omitted).

       “The applicant for counsel fees has the burden of proving his/her

entitlement thereto.” Petow v. Warehime, 996 A.2d 1083, 1087 (Pa. Super.

2010) (quoting Gall v. Crawford, 982 A.2d 541, 549 (Pa. Super. 2009)).

Pursuant to the American Rule, “a litigant cannot recover counsel fees from

an adverse party unless there is express statutory authorization, a clear

agreement of the parties, or some other established exception.”5 Id. (quoting
____________________________________________

5  For examples of established exceptions, see Harcar v. Harcar, 982 A.2d
1230, 1234 (Pa. Super. 2009) (“Attorney fees may be assessed as a sanction
for the contemnor’s refusal to comply with a court [o]rder, causing the
innocent party to incur fees in an effort to obtain what was rightfully his.”)
(citation omitted); McCoy v. McCoy, 888 A.2d 906 (Pa. Super. 2005) (“The
purpose of an award of counsel fees [in context of equitable distribution] is to
promote fair administration of justice….”). Cf. Mosaica Academy Charter
School v. Com. Dept. of Educ., 813 A.2d 813 (Pa. 2002) (“As the
Declaratory Judgments Act does not expressly authorize the award of counsel
fees and because the award of counsel fees was not implemented as

                                           -9-
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Gall, 982 A.2d at 549); Trizechahn Gateway LLC v. Titus, 976 A.2d 474,

482–483 (Pa. 2009). “In Pennsylvania, the American Rule is embodied in 42

Pa.C.S. § 1726(a)(1), which provides that attorneys’ fees are not an item of

taxable costs except as permitted by 42 Pa.C.S. § 2503 (relating to right of

participants to receive counsel fees)….” Mosaica Academy Charter School

v. Com. Dept. of Educ., 813 A.2d 813 (Pa. 2002).

       Pursuant to 42 Pa.C.S. § 2503, the following participants are entitled to

a reasonable counsel fee as part of the taxable costs of the matter:

       (1) The holder of bonds of a private corporation who successfully
       recovers due and unpaid interest, the liability for the payment of
       which was denied by the corporation.

       (2) A garnishee who enters an appearance in a matter which is
       discontinued prior to answer filed.

       (3) A garnishee who is found to have in his possession or control
       no indebtedness due to or other property of the debtor except
       such, if any, as has been admitted by answer filed.

       (4) A possessor of property claimed by two or more other persons,
       if the possessor interpleads the rival claimants, disclaims all
       interest in the property and disposes of the property as the court
       may direct.

       (5) The prevailing party in an interpleader proceeding in
       connection with execution upon a judgment.

       (6) Any participant who is awarded counsel fees as a sanction
       against another participant for violation of any general rule which
       expressly prescribes the award of counsel fees as a sanction for
       dilatory, obdurate or vexatious conduct during the pendency of
       any matter.
____________________________________________

supplemental relief to effectuate the declaratory judgment pursuant to [42
Pa.C.S. §] 7538, the grant of attorneys’ fees was improper.”).

                                          - 10 -
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      (7) Any participant who is awarded counsel fees as a sanction
      against another participant for dilatory, obdurate or vexatious
      conduct during the pendency of a matter.

      (8) Any participant who is awarded counsel fees out of a fund
      within the jurisdiction of the court pursuant to any general rule
      relating to an award of counsel fees from a fund within the
      jurisdiction of the court.

      (9) Any participant who is awarded counsel fees because the
      conduct of another party in commencing the matter or otherwise
      was arbitrary, vexatious or in bad faith.

      (10) Any other participant in such circumstances as may be
      specified by statute heretofore or hereafter enacted.

42 Pa.C.S. § 2503.

      We first consider William’s arguments, which the orphans’ court rejected

with the following rationale:

      In this case, an investigation and subsequent suit were proper and
      necessary and pursued for the benefit of all beneficiaries, having
      been prompted by an inexplicable valuation by the estate of
      shares of stock. Notwithstanding, therefore, that [Shareholders]
      have not asserted any specific statutory or contractual authority
      in support of the claim for costs and attorney fees, [they] have
      demonstrated that equity compels that outcome.              Absent
      [Shareholders’] pursuit of the inquiry regarding the evaluations
      assigned by the estate to the shares of stock, beneficiaries would
      have been deprived of the proper distribution and valuation of
      shares of stock that were part of the estate.

                                    * * *

      The record developed at trial demonstrated [the defenses of
      laches and the statute of limitations] to be largely unavailable in
      view of William’s pattern of furtive stock acquisitions and his
      election not to enter those acquisitions seasonably onto the
      corporate record.

                                    * * *

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      The record does not at all indicate a significant number of hours
      dedicated exclusively to the representation of Harry. … For that
      reason, [William’s] contention that, because Harry was ultimately
      excluded from any recovery in this matter, any fees associated
      with Harry must be wholly excised from [Shareholders’]
      calculation of costs and damages is unconvincing.

Orphans’ Court Opinion, 6/19/18, at 6, 7, 8.

      Upon review, we conclude that the orphans’ court misapplied the law in

awarding counsel fees to Susan and Melinda. Werner, 149 A.3d at 346. As

petitioners for counsel fees, Shareholders bore the burden of proving their

entitlement thereto. Petow, 996 A.2d at 1087; Gall, 982 A.2d at 549. In

their fee petition, Susan and Melinda focused on the reasonableness of the

counsel fees they incurred in the underlying actions. Fee Petition, 10/25/17,

at 2–5. However, Susan and Melinda have not cited any express statutory

authorization, a clear agreement of the parties, or other established exception,

which would entitle them to counsel fees.

      Moreover, the orphans’ court entered no findings of fact or conclusions

of law that would qualify Susan and Melinda as participants entitled to

reasonable counsel fees pursuant to Section 2503 of the Judiciary Code—nor

could it have done so on the record at hand. Susan and Melinda do not qualify

as bondholders, garnishees, possessors of property, or the prevailing parties

in an interpleader action, as described in the Judiciary Code.      23 Pa.C.S.

§ 2503(1)–(5). Although the orphans’ court found that William breached his

fiduciary duty, it did not award counsel fees to Susan and Melinda as a

sanction against William for “dilatory, obdurate or vexatious conduct,” out of

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a fund within the jurisdiction of the court, or because the conduct of another

party “was arbitrary, vexatious or in bad faith.” Id. at (6)–(9). Accord Gall,

982 A.2d at 550 (“While we agree that a trial court can impose as taxable

costs reasonable attorney fees if it finds that an adverse party engaged in

dilatory, obdurate or vexatious conduct during the pendency of a matter, we

note that the trial court here made no such finding. In the absence of such a

finding, we cannot conclude the court abused its discretion in denying counsel

fees.”) (internal citations and quotation marks omitted). Finally, Susan and

Melinda are not “other participants in such circumstances ... specified by

statute....” Id. at (10).

      While acknowledging that Susan and Melinda “have not asserted any

specific statutory or contractual authority in support of the claim for costs and

attorney fees,” the orphans’ court opined that Shareholders demonstrated

“equity compels” its award.     Orphans’ Court Opinion, 6/19/18, at 6.        In

support, the orphans’ court cited In re Kennedy’s Estate, 21 A. 671 (Pa.

1891), which is factually distinguishable from the case sub judice. Therein, a

trust beneficiary’s request for information from the actuary of the estate “was

met with a flat refusal[,]” thereby causing litigation. Id. Upon reviewing the

beneficiary’s exceptions to the estate’s account, the trial court awarded the

beneficiary counsel fees and costs. “Under the peculiar circumstances of the

case,” the Pennsylvania Supreme Court affirmed, holding that the litigation

“was the only means by which the information could have been obtained as

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to the condition of the estate.” Id. Notably, the Supreme Court instructed

that its decision:

      must not be drawn into precedent for the broad doctrine that,
      where exceptions are filed to the account of an executor,
      administrator, or trustee, in the orphans’ court, the exceptant is
      entitled to an allowance for counsel fees out of the fund. The rule
      in such cases is that the exceptant must pay his own counsel.

Id.

      Here, in contrast, Susan and Melinda did not file a request for

information that was met with a flat refusal, resulting in litigation. Rather,

William’s disclosure of his activities as an officer of CLC that negatively

affected Trust B prompted the underlying proceedings. Therefore, we reaffirm

that, where exceptions are filed to an account, “the exceptant must pay his

own counsel.” Kennedy’s Estate, 21 A. 671.

      The orphans’ court also relied on In re Grollman’ Estate , 117 A. 351

(Pa. 1922), which also is factually distinguishable. Therein, we approved the

orphans’ court’s imposition of a surcharge on an accountant whose

“misconduct [in conducting an audit of the estate] . . . warranted an order

that he be directed to save harmless the estate from expenditures made

necessary by reason thereof.” Id. at 352. The case at hand does not involve

a surcharge based on an errant accountant’s derelictions in auditing an estate,

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but a request of counsel fees based on a corporate officer’s breach of fiduciary

duty, which negatively affected Trust B.6

       In sum, neither Susan and Melinda nor the orphans’ court cites any

relevant authority for the proposition that a court’s equitable power is a

recognized exception to the American Rule—nor could they. Accord Gall,

982 A.2d at 550 (“[Petitioners] have not cited, and our independent

investigation has not revealed, any Pennsylvania case supporting their specific

proposition that courts sitting in equity are permitted to award counsel fees.”);

Sheriff v. Sheriff, 802 A.2d 644 (Pa. Super. 2002) (“One can see just how

easily [sic] it could be to slip down the proverbial ‘slippery slope’ to award

attorney fees when a party responds to the actions of another by either

seeking legal advice or by taking steps to actually litigate the matter. It is a

path that has been resisted before and, we believe, should be resisted now.”).

       Because Susan and Melinda failed to carry their burden of proof, the

orphans’ court erred as a matter of law in awarding them counsel fees.

Therefore, we reverse that part of the March 19, 2018 order.

       Regarding its denial of counsel fees to CLC, the orphans’ court rejected

Shareholders’ arguments with the following analysis:

       Although [Shareholders] have demonstrated a violation by William
       of the fiduciary duty owed to shareholders, the services provided
       by William as well as the personal guarantee proffered by him to
____________________________________________

6 The orphans’ court’s reference to In re LaRocca’s Trust Estate, 192 A.2d
409 (Pa. 1963), is misplaced, as that case involved reformation of a written
trust document based on unilateral mistake.

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       assist in securing a loan to the corporation have been argued to
       have been essential to the continued existence of the corporation.
       William improperly exploited circumstances when he acted to
       assure his personal enrichment to the obvious material detriment
       of other shareholders and did so in contradiction to the terms and
       designs of Article XI. Nonetheless, [Shareholders] have not
       identified any bylaw or legislation that compels a reimbursement
       of counsel fees expended on behalf of a corporate officer should
       the officer be found to have breached his fiduciary duties as an
       officer. Nor have [Shareholders] demonstrated that any demand
       has been made by the corporate board for William to reimburse
       the costs of litigation borne by the corporation. The corporation
       may well have determined that funding William’s defense was an
       essential expense.[7]

             The record in this case did not compel a finding that William
       should be required to reimburse [CLC] for the costs of his defense.

Orphans’ Court Opinion, 6/19/18, at 8–9.

       Upon review, we conclude that the orphans’ court properly denied CLC

counsel fees, albeit on a narrower basis. See Staub v. Staub, 960 A.2d 848

(Pa. Super. 2008) (“[N]otwithstanding the trial court’s stated grounds, if its

result is correct, this Court can affirm the trial court on any basis.”) (citation

omitted). In the supplemental fee petition, Shareholders again focused on

the reasonableness of the counsel fees, without citing any statutory

authorization, clear agreement of the parties, or other established exception

to the American Rule, which would permit an award of counsel fees to CLC.

Supplemental Fee Petition, 1/22/18, at 6–8. Given this failure of proof, the

____________________________________________

7  Under Pennsylvania law, the authority of a corporation to indemnify a
representative of the corporation is derived from 15 Pa.C.S. § 1742.

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orphans’ court did not err in denying CLC counsel fees. Therefore, we affirm

that part of the March 19, 2018 order.

     In sum, we reverse the award of counsel fees to Susan and Melinda.

We affirm the denial of counsel fees to CLC.

     Order reversed in part and affirmed in part. Jurisdiction relinquished.

Judgment Entered.

Joseph D. Seletyn, Esq.
Prothonotary

Date: 5/1/2019

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