Court Opinion

ID: 4168766
Source: CourtListenerOpinion
Date Created: 2017-05-16 19:25:02.341234+00
Date Added: 2024-06-11T14:38:41.446212
License: Public Domain

J-A05004-17

                                  2017 Pa. Super. 145

    IN RE: TRUST OF MARILYN                    :   IN THE SUPERIOR COURT OF
    MIHORDIN, DECEASED                         :         PENNSYLVANIA
                                               :
                                               :
    APPEAL OF: VICKI MIHORDIN                  :      No. 1084 WDA 2016

                  Appeal from the Order Entered June 24, 2016
                 In the Court of Common Pleas of Mercer County
                     Orphans’ Court at No(s): No. 2014-660

BEFORE: GANTMAN, P.J., BENDER, P.J.E., and MOULTON, J.

DISSENTING OPINION BY BENDER, P.J.E.:                     FILED MAY 16, 2017

        I respectfully disagree with the Majority’s decision to reverse the order

granting the reformation of the 1998 deed and its conclusion that the

evidence is legally insufficient to prove a scrivener’s error or mistake to

overcome the merger doctrine.

        As the Majority indicates, the Pozzutos executed a real estate sales

agreement (“1995 sales agreement”) with the Mihordins, which expressly

stated that the Mihordins would receive a deed to the subject property upon

payment in full of the purchase price and that the property would revert

back to the Pozzutos upon the death of the Mihordins. 1 In 1998, after the
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1
    The 1995 sales agreement states, in its entirety, as follows:

                                      AGREEMENT

           THIS AGREEMENT, made this 28th day of March, 1995, by
        and between Mike Pozzuto and Lynda Pozzuto, his wife
        (hereinafter referred to as Sellers).
(Footnote Continued Next Page)
J-A05004-17

Mihordins completed the payments to the Pozzutos pursuant to the sales

                       _______________________
(Footnote Continued)

                                            AND

         Richard L. Mihordin and Marilyn R. Mihordin, his wife
      (hereinafter referred to as Buyers);

          WHEREAS, the Sellers are in the process of purchasing
      certain property in Kittanning, Pennsylvania; and

         WHEREAS, the Buyers wish to purchase some of the
      aforesaid property from the Sellers;

        NOW THEREFORE, THE PARTIES INTENDING TO BE LEGALLY
      BOUND, AGREE AS FOLLOWS:

      1. Sellers will sell and Buyers will purchase a parcel of land of
         Buyers choice fronting on 100 feet of river for the sum of
         $20,000.00 payable at $5,000.00 on day of closing and
         $5,000.00 a year, each and every year for the succeeding
         three (3) years.

      2. If Buyers decide to sell the aforesaid parcel, they give the
         Sellers the option to purchase the property for $20,000.00.
         Said option to be exercised within 90 days after written notice
         received by Sellers from Buyers.

      3. If Sellers would default on the purchase of the said property,
         they must refund the Buyers all hand monies paid by Buyers
         to Sellers.

      4. Upon Buyers payment of the full purchase price to Sellers,
         they will receive a deed subject to any encumbrances then
         existing on the property.

      5. Upon the death of Buyers, the land is to revert back to
         Sellers.

      6. If Sellers sell the complete parcel of land, they will deed over
         the property of Buyers to Buyers.

         IN WITNESS WHEREOF, the parties hereto have set their
      hands and seals the day and year first above written.

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J-A05004-17

agreement, the Pozzutos contacted Attorney Panella to request that he

prepare the deed.      Attorney Panella did not refer to the 1995 sales

agreement in preparing the deed and, thus, he failed to include any

reversionary interest in the deed. Instead, the 1998 deed executed by the

Pozzutos transferred the property to the Mihordins in fee simple.

      I believe that this is a clear case of scrivener’s error which overcomes

the merger doctrine, as further explained herein, and that reformation of the

deed is the proper outcome in this case. This Court has long held that a trial

court has the power to reform a deed to correct a scrivener’s error.       See

DiMaio v. Musso, 762 A.2d 363, 366 (Pa. Super. 2000) (concluding trial

court erred in failing to reform deed to correct scrivener’s error that depicted

wrong parcel of land); Armstrong County Bldg. & Loan Ass’n of Ford

City v. Guffey, 200 A. 160 (Pa. Super. 1938) (upholding a decree directing

the reformation of a deed to correct a scrivener’s error).

      As noted in the lower court’s opinion, the Pennsylvania Supreme Court

has outlined the     following, well-defined principles to     consider    when

determining whether reformation of a written instrument, such as a deed, is

appropriate:

      (1)   [T]he mistake of a scrivener in preparing a deed, will[,] or
            other writing may be established by parol evidence and the
            instrument reformed accordingly[.]

      (2)   [W]hile generally, the mistake must be mutual, the rule is
            otherwise where, as herein, the [s]ettlor receives no
            consideration for the creation of a trust. In such a case a
            unilateral mistake on the part of the settlor is sufficient,

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            and it is immaterial that the beneficiary did not induce the
            mistake, or know of it or share in it.

      (3)   [W]hether the mistake be unilateral or bilateral, the quality
            of proof required to establish the existence of the mistake
            is the same; that proof of the mistake must be established
            by evidence that is clear, precise, convincing and of the
            most satisfactory character….

      (4)   [W]hile it is true that where the auditing judge sees and
            hears the witnesses, determines their credibility and the
            weight to be given their testimony, his findings, like those
            of a jury, will not be disturbed except for clear error; it is
            also the law that where a trial judge passes upon the
            question of whether the evidence introduced to reform a
            written instrument meets the standard of being clear,
            precise and convincing his ruling is open to review here.

In re Duncan’s Estate, 232 A.2d 717, 720 (Pa. 1967) (internal citations

and quotation marks omitted).

      Applying these principles to the present case, the lower court noted

that “in the case of a scrivener’s error and mutual mistake, the remedy

available is reformation of the deed,” and it concluded that the Pozzutos

satisfied their burden of providing clear, precise and convincing evidence of

a scrivener’s error through the testimony of Attorney Panella.      Trial Court

Opinion (“TCO”), 6/24/16, at 5.    “[W]here an auditing judge sees and hears

the witnesses, it is for him to determine their credibility and the weight to be

given to their testimony because of their character, intelligence and

knowledge of the subject, and his findings, like those of a jury, will not be

disturbed except for clear error.” In re La Rocca’s Trust Estate, 192 A.2d
409, 412 (Pa. 1963). Based on my review of the record, I discern no clear

error on the part of the lower court.

                                        -4-
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       Attorney Panella testified that the intent of the 1995 sales agreement

was to create a life estate in the Mihordins with the property reverting back

to the Pozzutos upon their death. N.T. Hearing, 2/23/16, at 23. He further

stated that the reason why the reversionary interest was not reflected in the

deed is that he never referred to the 1995 sales agreement when drafting

the document.       Id. at 27-28.      Lynda Pozzuto also testified at the hearing

regarding her intent for the documents to include a reversionary interest.2

She claimed that she did not become aware of the fact that the deed failed

to include a reversionary clause until after her parents’ death, and that if she

would have known at the time the deed was executed, she would not have

signed it. Id. at 37-38.

       I deem the foregoing testimony sufficient to support the lower court’s

conclusion that:

       Attorney Panella’s actions of writing the deed without referring to
       the [1995] Sales Agreement resulted in the scrivener’s error.
       Furthermore, he presented to this [c]ourt clear and convincing
       evidence that the parties to the deed were operating under a
       mutual mistake, that being the absence of the life estate in the
       deed. Had they referred to the [1995] [s]ales [a]greement, they
       would have included the life estate with reversionary clause in
       the deed.

TCO at 5.

____________________________________________

2
  When asked what her understanding was regarding the 1995 Sales
Agreement, Lynda Pozzuto responded: “When my parents passed away, the
property would go back to myself and my husband, Michael Pozzuto.” N.T.
Hearing at 36.

                                           -5-
J-A05004-17

        As stated supra, “[t]he general rule, in the absence of fraud or

mistake, and of an intent to the contrary, is that an antecedent contract for

the purchase of land is merged in the deed…[.]         [U]pon the delivery and

acceptance of the deed, there exists a prima facie presumption of merger.”

Dobkin v. Landsberg, 116 A. 814, 817 (Pa. 1922) (internal citation and

quotation marks omitted; emphasis added).              “[T]o   rebut    the   legal

presumption [of merger], the intention to the contrary must be clear and

manifest.” Id. at 818. Here, the Majority opines that the merger doctrine

should prevail due to a lack of manifest intent in the record.         However, I

believe that the lower court was correct in finding that the doctrine of

merger does not apply to the present case, as it is clear that the deed does

not accurately reflect the intention of the parties.    See Carsek Corp. v.

Stephen Schifter, Inc., 246 A.2d 365, 370 (Pa. 1968) (acknowledging the

merger doctrine does not apply where the expressed intention of the parties

is to the contrary).3

____________________________________________

3
    As the trial court explains:

        The Pennsylvania Supreme Court has held that “merger depends
        on the intention of the parties, as evidenced by the attending
        circumstances of each transaction.” [Dobkin], 116 A. at 817.
        The intention of the parties “may be shown by their declarations,
        acts, or conduct at the time of execution of the agreement in
        question or from the terms of the writing itself.” Dick v.
        McWilliams, 139 A. 745, 746 (Pa. 1927) (citing Carrow v.
        Headley, 25 A. 889 (Pa. 1893); Moats v. Thompson, 129 A.
105 (Pa. 1925)). Yet, “[i]n some instances it may be shown by
(Footnote Continued Next Page)

                                           -6-
J-A05004-17

      The lower court determined that the 1995 sales agreement “serves as

parol[] evidence reflecting the intent of the parties to have a life estate with

reversionary interest in the deed.” TCO at 7. There is no evidence in the

record to suggest otherwise. Clause 5 of the agreement expressly states:

“Upon the death of Buyers, the land is to revert back to Sellers.” See 1995

Sales Agreement (attached as Exhibit “A” to the Pozzutos’ Rule to Show

Cause); see also footnote 1. The agreement further provides that a deed

would be issued to the Mihordins upon payment of the full purchase price to

the Pozzutos.     See id.        The 1998 deed failed to include a reversionary

interest in accordance with Clause 5 of the sales agreement but, rather,

transferred the property to the Mihordins in fee simple. This was clearly not

the intent of the parties.

      The Majority argues that the Pozzutos were negligent in failing to

discover the discrepancy in the documents and, therefore, they do not

deserve protection by means of reformation at this late date. However, this

Court has previously determined that where “the elements required for

reformation are present, the failure of the plaintiffs to discover the variance

                       _______________________
(Footnote Continued)

      parol that an effect, which usually is given to a written
      instrument, was, as a matter of fact, not intended by the parties
      concerned.” [Dobkin], 116 A. at 818.

TCO at 6.

                                            -7-
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… even if negligent, is not fatal to their right to have the deed reformed.”

Schwartz v. Gingerich, 14 A.2d 623, 625 (Pa. Super. 1940) (citing Broida

v. Travelers’ Ins. Co., 175 A. 492, 494 (Pa. 1934)).

     Finally, I agree with the lower court’s finding that Attorney Panella’s

testimony regarding his preparation of the deed is not barred by the Dead

Man’s Act, as the Act is inapplicable “when the witness does not have an

interest in the outcome of the proceeding, for in that case the witness would

have no reason to misrepresent his dealing with the decedent.” Visscher v.

O’Brien, 418 A.2d 454, 458 (Pa. Super. 1980). See also TCO at 8.

     Accordingly, I would affirm the June 24, 2016 order granting the

Pozzutos’ petition for reformation of the 1998 Deed.

                                    -8-