Court Opinion

ID: 9755061
Source: CourtListenerOpinion
Date Created: 2023-08-28 20:23:13.624883+00
Date Added: 2024-06-11T07:28:02.245391
License: Public Domain

DISSENTING OPINION BY
Judge PELLEGRINI.
I respectfully dissent from the majority’s opinion because I disagree that the Attorney General has authority to become fully involved under a parens patriae theory to protect the “public” regarding the proposed sale by the Milton Hershey School Deed of Trust (Deed of Trust) of trust assets that constitute a controlling interest in the Hershey Foods Corporation prior to the Trustees making any decision under the trust laws of Pennsylvania to actually sell trust assets. If that were the case, then the Attorney General could become fully involved in the decision-making process of every charitable trust or, for that matter, in every charity in Pennsylvania.
This case involves the Milton Hershey School (School) Deed of Trust which was created in 1909 by Milton and Catherine Hershey. The Deed of Trust provided that its purpose was “founding and endowing in perpetuity an institution to be known as ‘Milton Hershey School.’ ” It also stated that the Trust Company (Trust), with the approval of the School, had sole and exclusive authority over investment management. Currently, over 58% of the Trust’s asset allocation is in Hershey Foods Corporation and it has attempted over the years to diversify its holdings. Because the Trust holds 77% of the voting power of all outstanding shares of Hershey Foods Corporation, it has a controlling interest in the company. Re*336cently, the Trust and the School authorized their Investment Committees to explore alternatives regarding the sale of the Hershey Foods stock held by the Trust, including a sale of Hershey Foods Corporation, to diversify their portfolio. Determining that the sale of its stock in the Hershey Foods Corporation was prudent, the sale process began in mid-2002.
On August 12, 2002, the Attorney General filed a Petition for Citation for Rule to Show Cause why a proposed sale of Trust assets constituting the controlling interest in Hershey Foods Corporation should not be conditioned on court approval. The citation was issued by the Orphans’ Court Division of the Court of Common Pleas of Dauphin County (trial court) on August 19, 2002. On August 23, 2002, the Attorney General filed a Motion for Special ex parte Injunctive Relief based on the petition, seeking to enjoin the Trust and the School from disposing of them holdings in Hershey Foods Corporation without court approval. The trial court held a hearing after which it granted the Attorney General’s motion and preliminarily enjoined the Trust from entering into an agreement to dispose of its shares of Hershey Foods Corporation. Specifically, the order provided the following:
AND NOW, this 4th day of September, 2002, the petition for special injunc-tive relief filed by D. Michael Fisher, Attorney General of the Commonwealth of Pennsylvania, is GRANTED.
We hereby Order and Direct that pending disposition of the citation issued by the Court on August 19, 2002, and/or further order of this Court, the Board of Managers of the Milton Hershey School and the Hershey Trust Company as Trustee of the Milton S. and Catherine S. Hershey Trust, respondents, shall not enter into any agreement or other understanding that would or could commit the respondents to a sale or other disposition of any or all of the shares of Hershey Foods Corporation held as corpus of the Trust. (Emphasis added.)
By precluding even an “understanding,” not only did the trial court preclude an agreement that could be brought to court for approval, but it also precluded any discussion leading to an agreement to bring an agreement to court. The Trust appealed, and the trial court denied a request for a stay pending appeal. The Trust now seeks a stay from this court as well as expedited consideration of the merits of its appeal.
The majority affirms the trial court’s order, dismisses the Trust’s application for a stay and directs the trial court to rule on the merits of the controversy. It does so disregarding the Trust’s argument that the Attorney General has no authority to participate in the decision-making process of the Trust under the guise of protecting the public. Instead, it states that while this is an important issue, it is not the focus of review because all that must be determined is whether the trial court had “apparently reasonable grounds” to support its decision to grant the preliminary injunction.1 Adopting the reasoning of the trial court and stating that in the interest of mitigating any harm to the Trust or the public interest, the majority determines *337that because it cannot conclude that no reasonable grounds exist to support the trial court’s order, it must affirm the trial court’s grant of the preliminary injunction.
The basis for the majority’s holding is that based on our narrow scope of review, we must uphold the trial court’s grant of a preliminary injunction if it had “apparently reasonable grounds.” Our scope of review over a trial court’s grant of a preliminary injunction, however, is not only to determine whether the trial court’s decision was reasonable, but also to determine whether the trial court has committed an error of law. Temple University of the Com. System of Higher Education v. Allegheny Health Education and Research Foundation, 456 Pa.Super. 314, 690 A.2d 712 (1997). While I do not disagree with the majority that the trial court decision is reasonable, before we can sustain a preliminary injunction, not only do we have to find that the decree was reasonable, but we must also determine that the grant of the injunction was in accordance with the law; in this case, the Probate, Estate and Fiduciaries Code (PEFC).2
The decree is not accordance with law because nowhere in the PEFC is there any authority for the Attorney General to essentially act as co-trustee or co-manager of the Trust and be part of the process leading up to a decision by the Trustees to take a certain action. Nonetheless, the trial court determined that the Attorney General had standing to proceed and authority to inquire as to whether the Trust’s exercise of its power was inimical to the public interest because “responsibility for the public supervision of charitable trusts traditionally has been delegated to the Attorney General to be performed as an exercise of his parens patriae powers.”3 *338(Trial court opinion at 6.) However, for the Attorney General to properly exercise par-ens patriae powers, his concern must be on behalf of the public and tied to the express desires of the Trust settlor. See Commonwealth v. Barnes Foundation, 398 Pa. 458, 464, 159 A.2d 500, 503 (1960) (in case involving art collection held by charitable foundation, “essential element of public charity is the right of public visitation for correction of abuses and enforcement of founders’ will”). The Deed of Trust specifically gives the Trust Company, with approval by the School, sole and exclusive authority over the management of investments, including the sale of stock. Paragraph 5 of the Trust provides:
The funds of the principal in the trust estate and the unexpended income of the property held in trust, not immediately needed for the purposes of the School, shall be vested, and the Trustee at all times by and with the authority and approval of the Managers shall have full power and authority to invest all or any part thereof in any securities which the Trustee and the Managers together may consider safe...
Absent a showing that the Trustee’s actions are against the terms of the Trust or that the Trust provisions themselves are against public interest, the parens patriae powers of the Attorney General do not apply.
Additionally, Section 7141 of the PEFC, 20 Pa.C.S. § 7141,4 gives the Trust the power to sell any property of the Trust, and Section 3355 of the PEFC, 20 Pa.C.S. § 3355, expressly limits the authority of a court to restrain a sale of a trust asset that is authorized under the governing Deed of Trust. That section provides:
The court, on its own motion or upon application of any party in interest, in its discretion, may restrain a personal representative from making any sale under an authority not given by the governing instrument or from carrying out any contract of sale made by him under an authority not so given. (Emphasis added.)
Under this provision, the only power the court is given is to restrain a sale, not to foreclose the Trustees from reaching an agreement to be approved, let alone what the trial court did here by foreclosing any meaningful negotiation that will lead to an understanding that can be brought to the court for approval. Moreover, there is no basis in the law, either statutory or case, giving the Attorney General a right to become “fully involved” in the decision-making of the Trust; he is neither a co-manager nor co-Trustee of the Trust. Once the Trustees exercise the discretion given to them and reach an agreement, only then can the Attorney General take action to challenge the agreement by arguing it violates the terms of the Trust. See Orphans’ Court Rule 5.5 (The Attorney *339General shall be given notice at least 15 days in advance of every proceeding in Orphans’ Court involving or affecting a charitable interest). Until an agreement is negotiated, terms made final, and covenants known, it is impossible to know what or if there would be negative effects from any sale. If that is not the law, then the Attorney General, under his understanding of his parens patriae powers, can become fully involved in the decision-making of any charitable institution in this Commonwealth.
Accordingly, for the foregoing reasons, I dissent and would reverse the trial court’s grant of a preliminary injunction.

. In order to grant a preliminary injunction, it must be proven 1) that the injunction is necessary to prevent immediate and irreparable harm that could not be compensated by damages; 2) that greater injury would result by refusing the injunction than by granting it; 3) that the injunction restores the parties to the status quo that existed immediately before the alleged wrong; 4) that the wrong is manifest and the injunction is reasonably suited to abate it; and 5) that the applicant’s right to relief is clear. City of Philadelphia v. District Council 33, 528 Pa. 355, 598 A.2d 256 (1991).

. 20 Pa.C.S. §§ 101-8815.

. The sole legal basis for the trial court's holding is Coleman's Estate, 456 Pa. 163, 317 A.2d 631 (1974), Estate of Pruner, 390 Pa. 529, 136 A.2d 107 (1957), and McKee Estate, 378 Pa. 607, 108 A.2d 214 (1954). It found that the Attorney General is authorized under his parens patiiae powers to inquire whether an exercise of a trustee’s power, even if authorized under the trust instrument, is inimical to the public interest. Those cases, however, do not stand for the proposition that the Attorney General, in exercising his parens pat-riae powers, can take action to see that some non-trust goal is accomplished.
In Coleman Estate, the issue was whether a settlor could impose upon the courts the task of monitoring his wish that no person serve as an individual trustee of an irrevocable inter vivos charitable trust that was married to a non-Protestant. Noting that the settlor's partiality for the religious persuasion of the trustee’s spouses was unrelated to his dispositive scheme, the Supreme Court held that the litigation regarding the settlor’s preference bore no relationship to the proper administration of the trust and burdened the judicial process. This case has no application to the facts before us now.
In Estate of Pmner, the Supreme Court held that the heirs of a reversionary devisee for termination of a charitable trust had failed to comply with requisite procedures by including the public, an indispensable party, in its action to terminate the trust. In that case, Pruner devised real estate in trust to establish a home for orphans but specified that the property was to revert to his niece if the provisions of the will could not be carried out. The heirs instituted an action to terminate the trust because no children had been cared for in the home during the past seven years. The Supreme Court held that the trust could only be terminated if shown that there were no children from the area who could qualify for the home, and because the public was the object of the settlors’ benefactions and the public had not been given notice, the matter could not be decided. This case only supports a finding that the Attorney General may act within his parens patriae powers on matters that affect the individuals who are to have benefited from the trust, in this case, the School, not the public at large.
Finally, in McKee Estate, the Court was asked to review a trust that was unable to be carried out. John McKee indicated in his will that after the deaths of all of his children and grandchildren who were living at the time of *338his death, his residuary estate should be used to establish and maintain a naval school to be known as the Colonel John McKee's College. When the last grandchild had died, it was determined that there were insufficient funds to establish the college but the amicus curiae recommended that the money be used for scholarship purposes. The surviving descendents attacked the validity of the will regarding the college, arguing that the will was void if the purpose of the trust could not be carried out. The Court disagreed and concluded that the scholarship plan was fair and reasonable. All this case stands for is the proposition that the Commonwealth/Attorney General may enforce the terms of a charitable trust, not that it has rights to protect the public at large.

. 20 Pa.C.S. § 7141 provides in relevant part:
Except as otherwise provided by the trust instrument, the trustee, for any purpose of administration or distribution, may sell, at public or private sale, any real or personal property of the trust.