Court Opinion

ID: 3159425
Source: CourtListenerOpinion
Date Created: 2015-12-02 19:09:19.688857+00
Date Added: 2024-06-11T12:01:06.758507
License: Public Domain

J-A28039-15

NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37

ROBERT E. SWEIGART AS                          IN THE SUPERIOR COURT OF
SHAREHOLDER OF WILLIAM SWEIGART                      PENNSYLVANIA
& SONS SANITATION SERVICE INC.,
ROBERT E. SWEIGART AND SUSAN
DESIMONE, COEXECUTORS OF THE
ESTATE OF WILLIAM SWEIGART,

                            Appellants

                       v.

VIOLET F. SWEIGART, A/K/A VIOLET
RUTH SWEIGART, A/K/A VIOLET
SWEIGART, WILLIAM K. SWEIGART,
WILLIAM SWEIGART & SONS
SANITATION SERVICE, INC., AND BILL
SWEIGART WASTE WATER INC.,

                            Appellees              No. 2371 EDA 2014

               Appeal from the Judgment Entered March 24, 2014
               In the Court of Common Pleas of Delaware County
                         Civil Division at No(s): 07-981

BEFORE: GANTMAN, P.J., PANELLA, and SHOGAN, JJ.

MEMORANDUM BY SHOGAN, J.:                      FILED DECEMBER 02, 2015

       This is an appeal from a judgment in favor of Appellants entered on

March 24, 2014. We affirm.1

____________________________________________

1
   This case originally came before a different panel of this Court that
remanded to the trial court for preparation of a supplemental opinion
addressing “the remaining three issues Appellants have raised in their brief
on appeal.”     Sweigart v. Sweigart, 2371 EDA 2014 (unpublished
memorandum) (“Sweigart I”), 5/14/15, at 7. The original trial court
opinion had found all issues waived due to the eleven-page “rambling
(Footnote Continued Next Page)
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      This equity action sought imposition of a constructive trust for breach

of a confidential relationship. The following facts underlie the action:

      William Sweigart (“Decedent”) began a septic system pumping service

in 1950.    N.T., 3/3/11, at 63.           Decedent had five children: Defendant-

Appellee William K. Sweigart (“Bill”), Plaintiff-Appellant Robert E. Sweigart

(“Bob”), Plaintiff-Appellant Susan Sweigart DeSimone (“Susan”), and two

other daughters, Linda Moran and Dayle Francesco.2 N.T., 3/2/11, at 7–8,

20, 35; N.T., 3/3/11, at 62–63.            Appellants Bob and Susan, brother and

sister, are co-executors of Decedent’s estate.              N.T., 3/3/11, at 63.

Decedent’s first wife, the mother of the five children, died in 1975. Id. at

65.   Decedent remarried a third time on July 26, 1979, to Defendant-

Appellee Violet Sweigart (“Violet”). Id. at 42, 72. Decedent added Violet’s

name to the deed of his home in Delaware County (“family home”) and to a

residence Decedent purchased in Sandpoint, Idaho.3 Id. at 11.

                       _______________________
(Footnote Continued)

repetitive and overly lengthy” Pa.R.A.P. 1925 opinion. Trial Court Amended
Opinion, 1/20/15, at 2. The trial court filed a Supplemental Opinion on July
16, 2015, and the matter was assigned to the present panel, as discussed
infra.
2
  Linda Moran and Dayle Francesco were beneficiaries of Decedent’s estate
but were not named parties in the action. N.T., 3/2/11, at 35.
3
  Violet owns the family home as tenants in common with Bill and is the sole
owner of the Idaho residence pursuant to the survivorship provision of the
deed. N.T., 3/2/11, at 69.

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     Decedent’s business became known as William Sweigart & Sons

Sanitation Service, Inc. (“Sweigart & Sons Sanitation”) when it incorporated

on March 7, 1980. N.T., 3/2/11, at 42, 62, 65. Decedent was the president,

Bill was vice president, and Violet was secretary-treasurer; although all

three were equal shareholders of the corporation from its inception,

Decedent “had no participation in the day-to-day operations of the

corporation from its outset.” Id. at 27, 28, 44–45. Bob was an employee of

the corporation from its inception; for twenty years he worked full time at

Westinghouse on second shift and full time for Decedent during daylight

hours. N.T., 3/3/11, 153–154, 156–157. On November 7, 1980, Decedent

issued a power of attorney (“POA”) to Violet, appointing her as his attorney

in fact. N.T., 3/2/11, at 63. Decedent resigned as president in 1982 and Bill

became president. Violet remained secretary-treasurer. Id. at 27–28. In

December, 1987, Bob was laid off from Sweigart & Sons Sanitation. Id. at

66. On June 12, 1992, Decedent revoked Violet’s POA. Id. at 66.

     On January 30, 1995, Violet transferred an $88,000 certificate of

deposit that was titled in Decedent’s and her name and deposited it in trust

for Decedent and Bill. N.T., 3/2/11, at 87. Eventually, Violet invested the

funds solely in her name and subsequently in a transfer-on-death (“TOD”)

account for Decedent.   Id. at 87.   On April 30, 2003, Violet took into her

possession an account in the name of Sweigart & Sons Sanitation containing

$63,000, placed it into a corporate checking account, “and wrote out a check

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in the same amount to a Morgan Stanley account in her own name.” Id. at

88.   Also in April of 2003, Violet took possession of a $30,000 corporate

checking account and placed it into a money market account solely in her

name. Id. at 88. There were multiple admissions of other such transfers at

trial. Id. at 89–93.

      On November 4, 2004, Violet and Bill voted to dissolve Sweigart &

Sons Sanitation. N.T., 3/2/11, at 83. On January 7, 2005, the successor

corporation, Bill Sweigart Waste Water, Inc. (“Sweigart Waste Water”) was

incorporated and began operations in the same manner as Sweigart & Sons

Sanitation out of the family home. Id. at 84–85. Bill and Violet were the

only directors of Sweigart Waste Water; Bill was president and Violet was

secretary-treasurer. Id. at 84. Decedent died on January 26, 2005, while

undergoing heart catheterization in preparation for bladder-cancer surgery.

Id. at 65–66, 70.

      In    the    complaint,     Appellants    alleged   abuse    of     a    confidential

relationship      between    Decedent    and    Appellees   and    that       Violet   acted

nefariously and fraudulently in order to obtain former jointly-owned assets in

her own name.        Appellants maintain that as of January 31, 2011, Violet

possessed      holdings     in   her   name    alone   amounting    to        $822,848.41.

Appellants’ Brief at 7.

      After a four-day bench trial and a court-appointed Accounting, the trial

court found for Appellants and against Appellees in the amount of

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$149,777.00 plus costs. Broken down, the verdict was in favor of Appellants

on their claim that Decedent was owed $89,812.00 for his ownership share

of Sweigart & Sons Sanitation; the verdict was against Violet individually in

the amount of $9,759.00, and against Bill individually in the amount of

$50,206.00 for additional shareholder distributions from 2001 through 2004.

The trial court further determined that Appellants failed to meet their burden

of proof on all other claims.

      We previously summarized the initial procedural history as follows:

      [T]he parties proceeded to a four-day bench trial, which
      culminated in a bench verdict on March 24, 2014. On April 2,
      2014, Appellees filed a timely post-trial motion. On April 3,
      2014, Appellants filed a timely post-trial motion. On April 23,
      2014, Appellants filed a notice of appeal to this Court, which was
      docketed at 1310 EDA 2014. The trial court denied Appellees’
      post-trial motion without prejudice for want of subject matter
      jurisdiction on April 29, 2014, without disposing of Appellant’s
      post-trial motion. On May 21, 2014, Appellants filed a concise
      statement of errors complained of on appeal, pursuant to
      Pennsylvania Rule of Appellate Procedure 1925(b), after the trial
      court ordered them to do so. On May 29, 2014, this Court
      entered an order quashing Appellant’s appeal as premature.
      Superior Court Order, 1310 EDA 2014, 5/29/14, at 1. On
      August 11, 2014, Appellants entered a praecipe for judgment in
      the trial court, as Appellants’ post-trial motion was denied by
      operation of law. See generally Pa.R.C.P. 227.1(1)(b).

            On August 12, 2014, Appellants filed a timely notice of
      appeal. The trial court did not order Appellants to file a Rule
      1925(b) statement. On January 20, 2015, the trial court filed an
      opinion, finding that Appellants had waived all their issues on
      appeal due to a non-compliant Rule 1925(b) statement. Trial
      Court Opinion, 1/20/15, at 2.

Sweigart I, 5/14/15, at 2–3.

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     After rejecting Appellees’ claim that the instant appeal was subject to

quashal as premature, the initial panel addressed Appellees’ and the trial

court’s contention that all issues were waived due to the non-concise Rule

1925(b) statement. The prior panel noted that the Rule 1925(b) statement

characterized by the trial court as “rambling and repetitive” had been filed

pursuant to the appeal at 1310 EDA 2014, which this Court quashed on

May 29, 2014. When Appellants filed the instant notice of appeal, they were

not ordered to file a new Rule 1925(b) statement, and did not file one. This

Court held that “[a]s the triggering event for a second Rule 1925(b)

statement was the second notice of appeal, Appellants cannot be penalized

for not filing a compliant Rule 1925(b) statement when they were not

ordered to file a statement at all.” Sweigart I, 5/14/15, at 6. Thus, the

prior panel concluded that Appellants could not be subject to waiver based

on the Rule 1925(b) statement filed in connection with an appeal that had

been quashed as premature.       Since the trial court could have ordered

Appellants to file a new Rule 1925(b) statement but did not do so, we

concluded that Appellants’ issues were not subject to waiver. Id.

     As noted, the prior panel remanded the record to the trial court for the

preparation of a supplemental opinion, which has been filed.    This case is

now ready for disposition.

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       Appellants raise the following three issues4 for our review:

        I.    Did the learned Judge err in not finding that [Appellants]
              proved [a] confidential relationship as a matter of law and
              the opportunity for [Appellees] to take advantage of that
              relationship as to all claims made by William Sweigart with
              credible evidence sufficient to shift the burden of proof to
              [Appellees] where the evidence supporting the claim is
              uncontested, non-testimonial and conclusively established.

       II.    Did the learned Judge err in not finding that [Appellees],
              by electing to rest their case after [Appellants’] case in
              chief, and not offering any testimony or exhibits, failed to
              meet their burden of proving by clear and satisfactory
              evidence, that all dealings involving the parties were
              indeed fair, conscientious, beyond the reach of suspicion
              and that [Appellees] used scrupulous fairness and good
              faith in dealing with [Appellants’] Decedent, William
              Sweigart[,] and refrained from using their position to
              William Sweigart’s detriment and to their own advantage.

      III.    Did the learned Judge err in not imposing a constructive
              trust on those certain investment accounts in the name of
              Violet Sweigart at Wells Fargo Bank and wherever else the
              subject funds may be traced if necessary, where
              [Appellants] substantially identified the assets sought to be
              reconveyed, [Appellees] would be unjustly enriched if
              permitted to retain the subject property and where the
              supporting evidence is uncontested, non-testimonial and
              conclusively established.

Appellants’ Brief at 4–5 (full capitalization omitted).

       Appellants first argue that the trial court erred in failing to find the

existence of a confidential relationship between Appellees and Decedent.

Appellants suggest that because Violet and Bill were equal shareholders with

____________________________________________

4
   Appellants’ fourth issue addressed the trial court’s finding of waiver, and
that issue was reversed in Sweigart I, as discussed supra.

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Decedent, there was a fiduciary relationship and a concomitant confidential

relationship between them. Appellants’ Brief at 14. Appellants also assert

that a confidential relationship existed because Decedent granted Violet a

POA, and she had the responsibility of managing Decedent’s business. Id.

at 16.

         “In reviewing a decision of a court after a non-jury trial, we will

reverse the trial court only if its findings are predicated on an error of law or

are unsupported by competent evidence in the record.”            Deutsche Bank

Nat. Trust Co. v. Gardner, ___ A.3d ___, ___, 2015 Pa. Super. 219, *2 (Pa.

Super. filed October 14, 2015) (citing Boehm v. Riversource Life Ins.

Co., 117 A.3d 308, 321 (Pa. Super. 2015)). “We may interfere with the trial

court’s conclusions only if they are unreasonable in light of the trial court's

findings.”    Zappile v. Amex Assur. Co., 928 A.2d 251, 254 (Pa. Super.

2007).

         [I]t has long been the standard in Pennsylvania that whether a
         confidential relationship has arisen poses a question of fact:

              “The general test for determining the existence of a
              confidential relationship is whether it is clear that the
              parties did not deal on equal terms.” Frowen v.
              Blank, 493 Pa. 137, 425 A.2d 412, 416 (Pa. 1981).
              A confidential relationship was defined in Brooks v.
              Conston, 356 Pa. 69, 51 A.2d 684 (Pa. 1947), as
              follows:

                    Confidential relation is any relation
                    existing between parties to a transaction
                    wherein one of the parties is bound to
                    act with the utmost good faith for the
                    benefit of the other party and can take

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                no advantage to himself from his acts
                relating to the interest of the other party.
                This    Court     has    recently   defined
                confidential relationship in Drob v.
                Jaffe, 351 Pa. 297, 41 A.2d 407 (Pa.
                1945). Mr. Justice Horace Stern said,
                “[A] confidential relationship is not
                limited to any particular association of
                parties but exists wherever one occupies
                toward another such a position of advisor
                or counsellor as reasonably to inspire
                confidence that he will act in good faith
                for the other’s interest.”

          Id. at 688, 808 A.2d 572 [some internal citations
          omitted]. A confidential relationship “is not confined
          to any specific association of the parties; it is one
          wherein a party is bound to act for the benefit of
          another, and can take no advantage to himself. It
          appears when the circumstances make it certain the
          parties do not deal on equal terms, but, on the one
          side there is an overmastering influence, or, on the
          other, weakness, dependence or trust, justifiably
          reposed.” Leedom [v. Palmer, 117 A. 410, 411
          (Pa. 1922)]. In some cases, as between trustee and
          cestui que trust, guardian and ward, attorney and
          client, and principal and agent, the existence of a
          confidential relationship is a matter of law.       In
          others, as between parent and child or brother and
          sister,   the    existence     of   a    confidential
          relationship is an issue of fact to be established
          by the evidence. Although the mere existence
          of kinship does not, of itself, give rise to a
          confidential relation, it is a factor to be
          considered.

     [S]ee also Biddle v. Johnsonbaugh, 444 Pa.Super. 450, 664
A.2d 159, 162 (Pa.Super. 1995) (“The existence of a confidential
     relationship is a question of fact to be established by the
     evidence.”). Thus, the existence of a confidential relationship
     requires a fact-sensitive inquiry not to be disposed rigidly as a
     matter of law.

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Yenchi v. Ameriprise Fin., Inc., ___ A.3d ___, ___, 2015 Pa. Super. 195,

*4–5 (Pa. Super. filed September 15, 2015) (some internal citations

omitted) (emphasis added).

      A fiduciary duty arises from a confidential relationship, which has been

described as follows:

             The Supreme Court has determined that a confidential
      relationship and the resulting fiduciary duty may attach
      wherever one occupies toward another such a position of advisor
      or counsellor as reasonably to inspire confidence that he will act
      in good faith for the other’s interest.            In some cases,
      as between . . . guardian and ward, attorney and client, and
      principal and agent, the existence of a confidential relationship is
      a matter of law. In other cases, where these relationships do
      not exist, confidential relations may still arise based on the facts
      and circumstances apparent on the record.

Basile v. H&R Block, Inc., 777 A.2d 95, 101-102 (Pa. Super. 2001)

(internal citations and quotation marks omitted).

      In refusing to find a confidential relationship, the trial court stated that

the mere presence of a POA is but one factor to consider, and it is not

conclusive. Trial Court Supplemental Opinion, 7/16/15, at 4. The trial court

determined that the burden would shift to Appellees to show the absence of

undue influence if the following three elements are met: 1) a confidential

relationship, 2) a weakened mental intellect, and 3) a substantial benefit.

Id. The trial court stated:

      Although [Appellants] may have adduced sufficient facts to show
      that, at one point, Defendant Violet Sweigart had a [POA] over
      [D]ecedent . . . this Court found that the [POA] was not used to
      the detriment of [D]ecedent and therefore was insufficient as a

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      matter of law to support the existence of a confidential
      relationship between the parties.

Trial Court Supplemental Opinion, 7/16/15, at 4–5.       The trial court also

concluded that Appellants failed to dispute evidence introduced by Appellees

that the POA was revoked in 1992.        Finally, the court determined that

Appellants failed to prove that Violet received a substantial benefit from the

POA when it was in place. Thus, the trial court held that the burden did not

shift to Appellees to prove by clear and convincing evidence the absence of

undue influence. We agree.

      The trial court found that Appellants failed to meet the elements

required to establish that a confidential relationship existed between

Decedent and Appellees, rejecting Appellants’ complete focus on the

existence of a POA.    The mere existence of a POA does not establish a

confidential relationship as a matter of law. Estate of Ziel, 359 A.2d 728,

734 (Pa. 1976). The trial court based its decision on the testimony of the

parties, the relationship Appellees had with Decedent prior to his death, and

the trial court’s conclusion that despite Decedent’s physical impediment, he

was fully aware and cognizant of his transactions.     As our review of the

complete record compels the conclusion that the trial court’s findings are

supported by competent evidence in the record, there is no basis upon which

to reverse. Deutsche Bank, 2015 Pa. Super. 219 at *2.

      Appellants’ second issue presents a list of presumed voided and

voidable transactions pursuant to the precept that where a confidential

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relationship is established, “the presumption is that the transaction is void,

and the party seeking to benefit has the burden of proving affirmatively a

compliance    with   equitable   requisites     and   thereby   overcome   the

presumption.” Appellants’ Brief at 23 (citing Moyer’s Estate, 19 A.2d 467

(Pa. 1941)). Because we previously affirmed the trial court’s conclusion that

a confidential relationship did not exist, there was no shift of the burden to

Appellees to overcome a presumption that any of the transactions were void

or voidable. This issue lacks merit.

      Appellants’ final issue asserts that the trial court erred in failing to

impose a constructive trust on certain investment accounts in Violet’s name

at Wells Fargo Bank and “wherever else the subject funds may be traced.”

Appellants’ Brief at 38. Appellants’ argument on this issue consists of three

pages of general citations regarding constructive trusts. Appellants’ Brief at

38–41. Their claim is that Violet failed to explain why she moved assets that

were jointly held with Decedent “into the name of Violet in trust for

[Decedent] or in trust for [Decedent] and [Bill]” and thereafter “into her

name alone.” Id. at 41. In sum, Appellants’ averment is that a constructive

trust should have been imposed because of the alleged wrongful taking by

Violet and Bill of profits and cash from Sweigart & Sons Sanitation, which

rightfully belonged to Decedent, and therefore now belongs in Decedent’s

estate.

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      Appellees respond that Appellants failed to produce any evidence to

suggest that Appellees wrongfully removed any profits or cash from Sweigart

& Sons Sanitation that rightfully belonged to Decedent. Appellees’ Brief at

21.   They also maintain that Appellants failed to offer a witness “with the

required expertise to establish these claims.” Appellees’ Brief at 23.

      A constructive trust arises:

      when a person holding title to property is subject to an equitable
      duty to convey it to another on the ground he would be unjustly
      enriched if he were permitted to retain it. The necessity for such
      a trust may arise from circumstances evidencing fraud, duress,
      undue influence or mistake.          The controlling factor in
      determining whether a constructive trust should be imposed is
      whether it is necessary to prevent unjust enrichment.

Nagle v. Nagle, 799 A.2d 812, 819 (Pa. Super. 2002) (internal citations

omitted). The trial court stated:

            Because this [c]ourt did not find a confidential relationship
      existed between the parties in this case, either as a matter of
      law or as a matter of fact, imposing a constructive trust over
      [Appellees’] assets would be inappropriate in this case. Instead,
      to address the issue of whether [Decedent] was owed money by
      [Appellees] for his ownership shares in Sweigart & Sons, this
      [c]ourt ordered an Independent Accounting of the business by a
      court appointed Master, Donald J. Weiss, Esq.

            The    court-ordered Independent      Accounting  valued
      Sweigart & Sons to be worth $396,912 when the business closed
      its doors at the end of the 2004 tax season. Moreover, the
      Independent Accounting found that [Decedent] held a 33.33
      percent minority share in the company, for which he was not
      compensated by [Appellees] at the dissolution of the business.
      Based on the findings of the Independent Accounting, this court
      found [Decedent’s] share in the business to be worth $89,812,
      and granted relief in favor of [Appellants] in that amount. In
      addition, the Independent Accounting found that [Decedent] was
      owed shareholder distributions from the business for the years

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      2001 through 2004. The Independent Accounting valued these
      distributions at $59,695.     This Court also granted relief to
      [Appellants] in this amount plus court costs.

Trial Court Supplemental Opinion, 7/16/15, at 7.

      The credibility of witnesses is for the factfinder, and we will not disturb

its credibility determinations absent an abuse of discretion. In re Estate of

Aiello, 993 A.2d 283 (Pa. Super. 2010); In re Estate of Dembiec, 468
A.2d 1107, 1110 (Pa. Super. 1983).       We have no hesitation in concluding

that the trial court’s findings were based upon legally competent and

sufficient evidence, and there was no error of law or abuse of discretion by

the trial court.   In re Bosley, 26 A.3d 1104, 1107 (Pa. Super. 2011);

Estate of Reichel, 400 A.2d 1268, 1269–1270 (Pa. 1979).

      Judgment affirmed.

Judgment Entered.

Joseph D. Seletyn, Esq.
Prothonotary

Date: 12/2/2015

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