Court Opinion

ID: 4354083
Source: CourtListenerOpinion
Date Created: 2018-12-24 17:31:41.853669+00
Date Added: 2024-06-11T14:19:20.894801
License: Public Domain

J-A25003-18

NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37

 IN RE: VIRGINIA A. FINKEN                :    IN THE SUPERIOR COURT OF
 REVOCABLE TRUST                          :         PENNSYLVANIA
                                          :
                                          :
 APPEAL OF: MELISSA FINKEN                :
                                          :
                                          :
                                          :
                                          :    No. 1507 EDA 2018

                    Appeal from the Order April 11, 2018
  In the Court of Common Pleas of Northampton County Orphans' Court at
                             No(s): 2005-0327

BEFORE: PANELLA, J., DUBOW, J., and KUNSELMAN, J.

MEMORANDUM BY DUBOW, J.:                         FILED DECEMBER 24, 2018

      Appellant, Melissa Finken, appeals from the April 11, 2018 Order, which,

inter alia, denied her Motion for Distribution of trust assets.    After careful

review, we affirm.

      The facts and procedural history, as gleaned from the record, are as

follows. On February 26, 1999, Virginia A. Finken (“Settlor” or “Decedent”),

established a revocable living trust (the “Trust”). As Settlor of the Trust, she

appointed herself trustee, and appointed her six children—Appellant, Mildred

M. Beahn, Jeanne Finken, LeRoy A. Finken, Jane Mellert, and Erwin C. Finken,

III—as successor trustees (the “Co-Trustees”). Trust, 2/26/99, at Art. V, § C.

Decedent died on October 10, 2004.            At the time of her death, the

approximately 125-acre Finken Family Farm (“the Farm”) was the primary
J-A25003-18

asset of the Trust.1 Pursuant to Article I, Section H of the Trust document,

upon Decedent’s death, the Trust became irrevocable and “shall be subject to

amendment or change.” See Art. I, § H.

       Relevant to the instant appeal, the Trust provides that upon Settlor’s

death, in addition to becoming Co-Trustees, each of her children shall receive

a one-sixth share of the Trust estate as beneficiaries. Trust at Art. IV, § A.

See also Art. VI, § A(1). The Trust authorizes the Co-Trustees to exercise

their powers, including the powers to distribute the Trust assets and terminate

the Trust, if a majority of the Co-Trustees vote to take such actions. Trust at

Art. VI, § C(8).2

       In 2006, the Co-Trustees entered into an agreement with the County of

Northampton as part of the County’s Farmland Preservation Program.3 On
____________________________________________

1  The Farm property includes “farmed” land and two houses surrounded by
approximately two acres of land. Appellant lives in one house; her sister Jean
lives in the other.

2 The Trust also provides that the distribution of the Trust assets is subject to
limitations that: (1) permit Leroy A. Finken to continue to farm the property
until he turns 65 years old; and (2) grant life estates in the houses occupied
on the Farm to Appellant and her sister. Trust at Art. IV, §§ B, C. Leroy A.
Finken is currently older than 65 years old and Appellant and Jean L. Finken
continue to occupy their respective homes on the Farm.

3 Pursuant to the Farmland Preservation Program, in exchange for cash and a
reduced tax assessment, the owner of farmland grants an easement
restricting the use of the land, in whole or in part, to farming and equine
operations. The easement runs with the land, thereby binding the original
and future owners.          Appellant’s Brief at 6 n.3.          See also
www.northamptoncounty.org/CTYADMN/FARMPRES.

                                           -2-
J-A25003-18

October 11, 2006, the Northampton County Court of Common Pleas entered

an Order approving the decision of a majority of the Co-Trustees to sell an

approximately      53-acre      conservation     easement4   to   the   County   of

Northampton.5, 6 The County of Northampton purchased the easement from

the Trust for $720,457.80.         The Co-Trustees made partial distributions to

themselves, as beneficiaries of the Trust, and used some of the funds to pay

the Farm’s expenses and maintain the houses on the Farm.7

       On October 6, 2015, Appellant filed a Petition to Compel Accounting and

Distribution and to Terminate Trust.8 Relevant to the instant appeal, Appellant

asserted that the plain meaning of the Trust language permitted the

immediate distribution of the Trust assets to all six Co-Trustees, as Trust

____________________________________________

4 The parties and the trial court also refer to this conservation easement as
the sale of “development rights.”

5Co-Trustees Appellant and Erwin C. Finken, III did not consent to the sale;
however, neither appealed from the court’s Order.

6The approximately 2 acres upon which Appellant’s and her sister’s homes sit
were excluded from the easement.

7 See Trust at Art. VI, § A(4) (pertaining to distributable income); Art. VI, §
B(9) (pertaining to division of assets for distribution).       Approximately
$250,000 of the County’s payment remains in the Trust. See Trust at Art. VI,
§ B(1) (providing for retention of assets).
8 It is unclear from the record whether Appellant ever requested that the Co-
Trustees vote on her demand for distribution of Trust assets and termination
of the Trust. We assume that if Appellant had made such a request a majority
of the Co-Trustees would have voted not to take such action.

                                           -3-
J-A25003-18

beneficiaries.9 See Petition, 10/6/15, at ¶ 9. Appellant further alleged that

the “majority” of the Co-Trustees had failed to account for the assets in the

Trust. Id. at 7. She, therefore, sought an accounting of the Trust, as well as

a distribution of its assets, and termination of the Trust. Id. at 9.

       On November 18, 2015, the Co-Trustees filed an Answer to the Petition.

Following a September 11, 2017 non-jury trial, the orphans’ court denied

Appellant’s Petition on January 24, 2018. See Order, 1/24/18.

       On January 30, 2018, Appellant filed a Post-Trial Motion. On February

2, 2018, the orphans’ court entered an Order scheduling argument on

Appellant’s Motion. Both Appellant and Appellees filed Briefs in support of

their respective positions.10

____________________________________________

9  Appellant sought distribution of the assets with a carve-out for the sisters’
life estates and Leroy’s right to farm. See Petition, 10/6/15, at ¶ 9. Appellant
noted that Leroy’s right to farm had expired and terminated upon his attaining
age 65. Id. at 6. Appellant did not, however, acknowledge that the life
estates in the residences continue to exist.

10 Pennsylvania Orphans’ Court Rule 8.1 prohibits a party from filing a post-
trial motion to any order or decree of court. Pa.O.C.R. 8.1. Moreover, if a
party files a motion for reconsideration of an orphan’s court order, the court
must expressly grant the motion within 30 days of the order from which the
party seeks reconsideration, or it will be deemed denied. Pa.O.C.R. 8.2. Here,
Appellant erroneously filed a Post-Trial Motion pursuant to Pa.R.C.P. No.
227.1, when she should have filed a Motion for Reconsideration. However,
this Court’s review indicates that the orphans’ court overlooked this error and
treated her Post-Trial Motion as a Motion for Reconsideration. Moreover, by
scheduling a hearing on Appellant’s Motion and permitting briefing, we
conclude that the orphans’ court indicated its intention to reconsider its
January 24, 2018 Order.

                                           -4-
J-A25003-18

       On March 20, 2018, the orphans’ court held a hearing on Appellant’s

Motion. On April 11, 2018, the orphans’ court granted in part and denied in

part Appellant’s Post-Trial Motion. In particular, the court granted Appellant’s

request for an Accounting,11 but continued to deny her request for an

immediate distribution of all assets of the Trust. In so doing, the court ignored

the provisions of the Trust that permit the distribution of the assets and

termination of the trust only upon a majority vote of the Co-Trustees.

       Rather, the court interpreted the language of the Trust and found that

it plainly required distribution of the Trust assets.    Orphans’ Court Order,

4/11/18, at 3. It concluded, however, that Decedent’s intent in establishing

the Trust was to preserve the Farm and that preventing distribution of the

assets prior to the expiration of the life estates of Jeanne L. Finken and

Appellant furthered that intent. Id. at 4. Thus, the court purported to modify

the Trust to prevent distribution of the Trust assets. Id. This timely appeal

followed.

       Appellant raises the following issue on appeal:

       Does the unambiguous language of [Decedent’s Trust] require the
       Controlling Trustees to account for and distribute to the
       beneficiaries all of the remaining assets in the Trust now?

Appellant’s Brief at 3.

____________________________________________

11 The court specifically granted Appellant’s “motion for accounting subject to
sanctions for delay and mismanagement and to adjustments for prior unequal
payments[.]” Orphans’ Court Order at 5. See Trust at Art. VI, § C (pertaining
to accounting).

                                           -5-
J-A25003-18

      We grant great deference to the findings of the orphans’ court.

      When reviewing a decree entered by the [o]rphans’ [c]ourt, this
      Court must determine whether the record is free from legal error
      and the court’s factual findings are supported by the evidence.
      Because the [o]rphans’ [c]ourt sits as the fact-finder, it
      determines the credibility of the witnesses and, on review, we will
      not reverse its credibility determinations absent an abuse of that
      discretion. However, we are not constrained to give the same
      deference to any resulting legal conclusions.

In re Estate of Harrison, 745 A.2d 676, 678 (Pa. Super. 2000) (internal

citations and quotation marks omitted). “[T]he [o]rphans’ court decision will

not be reversed unless there has been an abuse of discretion or a fundamental

error in applying the correct principles of law.” In re Estate of Luongo, 823
A.2d 942, 951 (Pa. Super. 2003).

      Appellant challenges the orphans’ court’s interpretation of the Trust.

“[T]he interpretation of a trust or a will presents a question of law. As such,

our standard of review is de novo, and our scope of review is plenary.” In re

Estate of McFadden, 100 A.3d 645, 650 (Pa. Super. 2014) (en banc)

(citation omitted). “Our analysis therefore is not confined by the decision of

the orphans’ court.” Id. (citation omitted).

      Certain principles guide trust interpretation. The testator’s intent
      is the cornerstone of such an endeavor. As we articulated in
      Estate of Pew, 440 Pa. Super. 195, 655 A.2d 521, 533 (1994),
      it is “hornbook law that the pole star in every trust . . . is the
      settlor’s . . . intent and that intent must prevail.” See also Estate
      of McFadden, supra. We are not permitted to construe a
      provision in a trust so as “to destroy or effectually nullify what has
      always been considered the inherent basic fundamental right of
      every owner of property to dispose of his own property as he
      desires, so long as it is not unlawful.” Estate of Pew, supra at
      533. Critically, the settlor’s intent must be ascertained from the

                                      -6-
J-A25003-18

      language of the trust, and we give effect, to the extent possible,
      to all words and clauses in the trust document. See In re Estate
      of McFadden, supra; accord Farmers Trust Co. v. Bashore,
      498 Pa. 146, 445 A.2d 492, 494 (1982) (“A settlor’s intent is to
      be determined from all the language within the four corners of the
      trust instrument, the scheme of distribution and the
      circumstances surrounding the execution of the instrument.”).
      Only when the language of the trust is ambiguous or conflicting or
      when the settlor’s intent cannot be garnered from the trust
      language do the tenets of trust construction become applicable.
      Farmers Trust, supra at 494 (“Only if a settlor’s intent cannot
      be ascertained with reasonable certainty will a court apply canons
      of construction, to attribute a reasonable intention to the settlor
      in the circumstances.”)[.]

In re Estate of Loucks, 148 A.3d 780, 782 (Pa. Super. 2016); see also

McFadden, 100 A.3d at 649-50 (in interpreting a trust, court may rely upon

extrinsic evidence of a settlor’s intent only if the trust is ambiguous and only

to the extent that the extrinsic evidence informs the ambiguous language in

question; such evidence may not be considered in some relatively unbounded

effort to glean a settlor’s broader intent).

      Appellant argues that, pursuant to Article IV, Section A and Article VI,

Section A(1), the Trust unambiguously indicates Decedent’s intent that the

Co-Trustees distribute the Trust assets upon Decedent’s death. She asserts

that the encumbering provisions in the Trust do not prohibit enforcement of

the Trust’s distribution provision.    Appellant’s Brief at 8-9, 11-12.     She

contends that the orphans’ court erred when it “deviat[ed] from [] Decedent’s

unambiguous language” by requiring that the assets remain in Trust and that

this directive does not further Decedent’s intent. Id. at 12. In fact, Appellant

                                      -7-
J-A25003-18

claims, the court’s Order violates Decedent’s objective that the Trust assets

be distributed upon her death. Id.12

       Here, the orphans’ court concluded that the plain language of the Trust

required distribution of its assets in accordance with Appellant’s request.

However, rather than grant Appellant relief, the court proceeded to consider

the Decedent’s intent in establishing the Trust—which it determined was the

preservation of the Farm for the benefit of her children. The court, therefore,

concluded that, to give effect to Decedent’s intent, it must modify the trust to

prevent the distribution of its assets until the termination of the life estates.

       While we agree with both Appellant and the orphans’ court that that

language of the Trust is unambiguous, we disagree with their interpretations

of it. The Trust language unambiguously indicates Decedent’s clear intent to

vest the Co-Trustees with the authority to, by a majority vote, control the

distribution of Trust assets. See Trust at Art. VI, § C(8) (stating that the

powers of the Co-Trustees “shall be exercisable by a majority vote[.]”). By

its terms, the Trust conferred upon the Co-Trustees the authority and

discretion to, inter alia, distribute the assets and to terminate the Trust. See

Trust at Art. VI, § A(4) (pertaining to distributable income); Art. VI, § B(9)
____________________________________________

12Appellant also contends that, contrary to Article I, Section H of the Trust
and the court’s findings, the Trust is revocable and, thus, not subject to the
modification provision set forth in 20 Pa.C.S. § 7740.2(a), which the orphans’
court invoked as a basis for its disposition. For the reasons discussed infra,
the trial court’s ultimate disposition was correct, but not as the result of a
modification. Accordingly, Section 7740.2(a) is inapplicable. See Connor v.
Crozer Keystone Health System, 832 A.2d 1112, 1117 n.5 (explaining that
the Superior Court may affirm a trial court’s decision on any grounds).

                                           -8-
J-A25003-18

(pertaining to division of assets for distribution); Art. VI, § A(3) (pertaining to

discretionary termination of the Trust). Accordingly, pursuant to the Trust’s

unambiguous language, the distribution and termination sought by Appellant

may occur only with the approval of a majority of the Co-Trustees. Since a

majority of the Co-Trustees did not approve the distribution of the Trust assets

or the termination of the Trust, the Trust document does not permit such

distribution or termination at this time.

      The Trust does not, as Appellant claims, contain a provision requiring

distribution of the Trust assets upon the death of Settlor.           Rather, the

provisions upon which Appellant relies—Article IV, Section A and Article VI,

Section A(1)—establish only the manner of apportionment in which the assets

are to be distributed to the beneficiaries when distributions occur, i.e., a one-

sixth share to each of Settlor’s children. In fact, by its plain language, the

only provision in the Trust that mandates distribution by a date certain is

Article 8, Section C(5). Section C(5) provides that, in accordance with the

Rule Against Perpetuities, if the Co-Trustees have not already terminated the

Trust, the Trust must be terminated “[21] years after the death of the last

surviving descendent of the Settlor who is living on the date appearing at the

beginning of this declaration.” See Art. 8, § C(5).

      In sum, our de novo review of the plain language of the Trust indicates

that it was the Decedent’s primary intent that the distribution of the Trust’s

assets and the termination of the Trust should only be by a majority vote of

                                       -9-
J-A25003-18

the Co-Trustees. It is also clear that Decedent intended that any distributions

be apportioned evenly between the six beneficiaries.

       Giving effect to all words and clauses in the Trust document, we

conclude that, absent a request for modification of the Trust and

circumstances compelling modification, only a majority vote of the Co-

Trustees could grant Appellant the relief she sought in her Petition.13

       Appellant also claims that the orphans’ court erred when it granted her

request for an accounting but “did not address the issues of the [Co-]Trustees’

delay and the need to adjust distributions for unequal payments made over

the last dozen years,” or surcharge the Trust to reimburse her for her legal

fees. Appellant’s Brief at 14. We disagree.

       In its Opinion, the orphans’ court explained that it found that Appellant

had “failed to present evidence in support of her allegations that the [majority

of the [Co-Trustees] has made certain decisions or taken certain actions with

the intention of benefitting specific beneficiaries.” Opinion, 4/21/18, at 5. The

court further found that Appellant “failed to provide sufficient support for her

claim that certain beneficiaries have received unequal payments and that an

annuity has been created for purposes of benefitting two of the beneficiaries.”

Id. Nonetheless, the orphans’ court concluded that, as a Trust beneficiary,

____________________________________________

13 It bears reiterating that Appellant did not seek modification of the Trust,
and that the orphans’ court unnecessarily modified the Trust after erroneously
concluding that the plain language of the Trust required the immediate
distribution of its assets.

                                          - 10 -
J-A25003-18

Appellant is entitled to an accounting and, thus, granted Appellant’s motion

“for accounting subject to sanctions for delay and mismanagement and to

adjustments for prior unequal payments.” Id. at 1.14

       Our review of the record supports the orphans’ court’s factual findings,

and we conclude that the court did not abuse its discretion in granting

Appellant’s motion for an accounting. Moreover, given that the orphans’ court

properly granted Appellant’s request for an accounting, we fail to see how this

portion of the court’s order aggrieves Appellant. See Pa.R.A.P. 501; In re

J.G., 984 A.2d 541, 546 (Pa. Super. 2009) (en banc) (interpreting Pa.R.A.P.

501 and observing that “[a]lthough a prevailing party may disagree with the

trial court's legal reasoning or findings of fact, the prevailing party's interest

is not adversely affected by the trial court's ultimate order because the

prevailing party was meritorious in the proceedings below.” (citation

omitted)).

       Accordingly, Appellant’s issue merits no relief.

       Order affirmed.

____________________________________________

14Notably, the court did not set a deadline by which the accounting must take
place.

                                          - 11 -
J-A25003-18

Judgment Entered.

Joseph D. Seletyn, Esq.
Prothonotary

Date: 12/24/18

                          - 12 -