Court Opinion

ID: 4121420
Source: CourtListenerOpinion
Date Created: 2017-01-31 20:12:49.565907+00
Date Added: 2024-06-11T14:32:35.686493
License: Public Domain

J. A32012/16

NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37

ESTATE OF WILLIAM P. O’BRIEN,              :     IN THE SUPERIOR COURT OF
DECEASED                                   :          PENNSYLVANIA
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APPEAL OF: DONNA WELLINGTON                :     No. 1796 EDA 2016

                   Appeal from the Order Entered May 5, 2016
              In the Court of Common Pleas of Montgomery County
                       Orphans’ Court at No.: 2014-X3488

BEFORE: DUBOW, RANSOM, AND PLATT, JJ.*

MEMORANDUM BY DUBOW, J.:                          FILED JANUARY 31, 2017

        The Estate of William P. O’Brien, through its executrix Donna

Wellington (“Appellant”), appeals from the Order entered in the Court of

Common Pleas of Montgomery County Orphans’ Court on May 5, 2016,

which granted Terry Terzuolo’s objection to the first and final accounting of

the Estate. After careful review, we affirm.

        We adopt the facts as set forth by the trial court’s May 5, 2016

Opinion.    See Trial Court Opinion, filed 5/5/16, at 1-4.   In summary, the

decedent, William P. O’Brien, operated a business partnership with Terry

Terzuolo starting in 1997.       The partners maintained separate income

*
    Retired Senior Judge Assigned to the Superior Court.
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accounts   and   capital   accounts.1      Terzuolo   primarily   maintained   the

partnership’s financial records, and an accountant, John Paciello, would

prepare the annual tax returns based on this information.

      Beginning in 2013, O’Brien and Terzuolo took steps to dissolve the

partnership, including selling the partnership’s sole asset, a parcel of real

estate in Spring City, Pennsylvania.       On February 28, 2014, the partners

disbursed the proceeds of the property sale equally at $80,000 each.

      O’Brien died testate on September 6, 2014.         Appellant filed the first

and final accounting of the Estate on September 25, 2015.               Terzuolo,

through counsel,    filed one    objection petitioning     for    payment   of an

outstanding debt of $64,905.31.         Terzuolo claimed that the distribution of

$80,000 to each partner in February 2014 was made in error because the

partners failed to account for unequal capital accounts prior to distributing

the cash proceeds from the property sale.

      At a hearing, Terzuolo and the partnership’s accountant testified. The

court admitted the Partnership Agreement and other documents by

stipulation. On May 5, 2016, the trial court sustained Terzuolo’s objection

1
  Each partner initially contributed equally to their respective capital account.
See Partnership Agreement, Plaintiff’s Exhibit 1, at 1-2. Per the Agreement,
upon dissolution of the partnership, once all debts were paid and assets
converted to cash, each partner would receive a final disbursement of the
amount in their respective capital account to bring the balance to zero.
N.T., 3/3/16, at 34. There could be a disparity in the capital accounts based
on a partner’s capital contributions or profits and losses, and there may be a
disparity in the amount each partner receives in this final disbursement of
cash. Id. at 33-34.

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and directed Appellant to pay $64,143 from the Estate to Terzuolo.

Appellant filed a timely Notice of Appeal.

      Appellant complied with Pa.R.A.P. 1925; the trial court did not prepare

a Pa.R.A.P. 1925(a) Opinion responsive to Appellant’s Concise Statement of

Errors Complained of on Appeal.

      Appellant presents two issues for our review:

      1. Must a claim against an estate be established by clear, direct,
      precise and convincing evidence?

      2. May the Dead Man’s Act be contravened by presentation of
      the incompetent evidence through a third-party “expert[?”]

Appellant’s Brief at 5.

      Our standard and scope of review are as follows:

         When reviewing a decree entered by the Orphans’ Court,
         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 Orphans’ Court 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. The Orphans’
         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.

         This Court’s standard of review of questions of law is de
         novo, and the scope of review is plenary, as we may
         review the entire record in making our determination.
         When we review questions of law, our standard of review
         is limited to determining whether the trial court committed
         an error of law.

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In re Fiedler, 132 A.3d 1010, 1018 (Pa. Super. 2016) (citations and

quotation marks omitted).

      In her first issue, Appellant avers that, in sustaining Terzuolo’s

objection, the trial court “ignored the requirement of proof that is clear,

direct, precise and convincing” because “[t]here is no mention of this

standard of proof” in the trial court’s May 5, 2016 Opinion. Appellant’s Brief

at 11-12. Before addressing the merits of Appellant’s first issue raised on

appeal, we must determine whether this issue was properly preserved and

developed for review.

      Our Pennsylvania Rules of Appellate Procedure and our case law lay

out the well-established requirements for preserving a claim for appellate

review.   This Court will address only those issues properly presented and

developed in an appellant’s brief as required by our rules of appellate

procedure.   See Pa.R.A.P. 2101-2119.     “Appellate arguments which fail to

adhere to these rules may be considered waived, and arguments which are

not appropriately developed are waived.” Karn v. Quick & Reilly Inc, 912

A.2d 329, 336 (Pa. Super. 2006) (citation and quotation marks omitted).

Thus, issues raised in a Brief’s Statement of Questions Involved but not

developed in the Brief’s argument section will be deemed waived. Harkins

v. Calumet Realty Co., 614 A.2d 699, 703 (Pa. Super. 1992).

      To properly develop an issue for our review, Appellant bears the

burden of ensuring that his argument section includes citations to pertinent

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authorities as well as discussion and analysis of the authorities.        See

Pa.R.A.P. 2119(a); Commonwealth v. Hardy, 918 A.2d 766, 771 (Pa.

Super. 2007) (“[I]t is an appellant’s duty to present arguments that are

sufficiently developed for our review. The brief must support the claims with

pertinent discussion, with references to the record[,] and with citations to

legal authorities.” (citation omitted)).

      As this Court has made clear, we “will not act as counsel and will not

develop arguments on behalf of an appellant.”         Hardy, supra at 771.

Where defects in a brief “impede our ability to conduct meaningful appellate

review, we may dismiss the appeal entirely or find certain issues to be

waived.” Id.

      In the instant case, Appellant seemingly attempts to draw several

unsupported inferences from the trial court’s May 5, 2016 Opinion. Although

Appellant contends that the trial court ignored the applicable standard of

proof, she fails to point to any evidence to which the trial court applied a

different (inapplicable) standard of proof. Appellant also makes a vague and

confusing reference to her second argument regarding the Dead Man’s Act

that appears to challenge the competency and weight given to the evidence.

Appellant provides only a single case citation, four sentences of purported

“argument,” and a large block quotation of the trial court’s Opinion.

Appellant has simply failed to construct and develop a coherent first issue for

appellate review.

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        Appellant’s failure to adhere to the rules of appellate procedure and to

develop this issue prevents this Court from conducting a meaningful

appellate review. Therefore, we conclude Appellant has waived this issue.2

        In her second issue, Appellant avers that the trial court erroneously

applied the Dead Man’s Act3 by permitting the partnership’s accountant,

John Paciello, to rely on financial documents during his testimony that

Terzuolo prepared. Appellant’s Brief at 12, 18.

        “It is well settled that the admissibility of evidence is a determination

left to the sound discretion of the trial court, and it will not be overturned

absent an abuse of discretion or misapplication of law.”         In re Fiedler,

supra at 1025. “For a ruling on the admissibility of evidence to constitute

reversible error, it must have been harmful or prejudicial to the complaining

party.” Id.

        The Dead Man’s Act provides, in pertinent part:

        § 5930. Surviving party as witness, in case of death,
        mental incapacity, etc.

        [I]n any civil action or proceeding, where any party to a thing or
        contract in action is dead, . . . and his right thereto or therein
        has passed, either by his own act or by the act of the law, to a
        party on the record who represents his interest in the subject in
        controversy, neither any surviving or remaining party to such

2
  Even if we did not find waiver, Appellant’s claim would merit no relief. Our
review of the certified record demonstrates that the trial court carefully,
thoughtfully, and adequately explained the resolution of Terzuolo’s claim in
the May 5, 2016 Opinion and applied the proper burden of proof.
3
    42 Pa.C.S. § 5930.

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      thing or contract, nor any other person whose interest shall be
      adverse to the said right of such deceased . . . party, shall be a
      competent witness to any matter occurring before the death of
      said party. . . .

42 Pa.C.S. § 5930.     The Dead Man’s Act prohibits “surviving parties who

have an interest which is adverse to decedent’s estate [] from testifying as

to any transaction or event which occurred before [the] decedent’s death.”

Zigmantanis v. Zigmantanis, 797 A.2d 990, 995 (Pa. Super. 2002).

      This court has held that “[t]he rationale behind the Dead Man’s Act is

that the law should not permit the surviving party to testify since he could lie

and attempt to testify favorably to himself and adversely to the deceased

party, knowing the other party is incapable of contradicting the fallacious

testimony.”    Id. (citation and quotation omitted).      “The theory is that

because the decedent’s representative is unable to present evidence

regarding the transaction, the other party to the transaction should be

similarly restricted.” Visscher v. O’Brien, 418 A.2d 454, 458 (Pa. Super.

1980). “The rule is inapplicable, however, 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.” Id.

      The disqualification of testimony under the Dead Man’s Act only applies

to two classes of witnesses: surviving parties to a transaction, and any other

person whose interest is adverse to the estate.         In re Hendrickson’s

Estate, 130 A.2d 143, 146 (Pa. 1957). If a witness is not a surviving party

and has no adverse interest, he or she is competent to testify. See, e.g.,

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Visscher, supra (finding that a real estate broker and appraiser were both

competent to testify regarding an oral contract for broker’s commission

allegedly made between a surviving party and decedent on the sale of a

parcel of decedent’s land); Estate of Grossman, 406 A.2d 726 (Pa. 1979)

(Dead Man’s Act did not prohibit the testimony of decedent’s daughter’s

husband regarding an alleged oral contract the daughter had with the

decedent to leave her one-half of his estate).

      Moreover, this court has previously concluded that the Dead Man’s Act

only applies to witness testimony and does not apply to documentary

evidence, including checks and receipts.     See Larkin v. Metz, 580 A.2d

1150, 1153 (Pa. Super. 1990) (holding that “the trial court erred when it

precluded the receipts and canceled checks offered [] to prove the existence

of a contract for the sale of the property between themselves and the

decedent.”).

      In the instant case, the trial court properly applied the Dead Man’s Act.

See Trial Court Opinion at 4-5.      The court allowed Terzuolo to proffer

checks, the partnership agreement, and other documentary evidence in

accordance with Larkin, supra.      See N.T. Hearing, 3/3/16, at 8-30.      In

addition, the accountant, John Paciello, a person with no interest in the

outcome of the proceedings, also testified about the tax records and other

documentary evidence.       See id. at 31-62.        Contrary to Appellant’s

contention, the Dead Man’s Act does not preclude the admission of

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documentary evidence pertaining to the partnership and does not preclude

Paciello’s testimony.

      After a careful review of the certified record and the parties’

arguments, we discern no abuse of discretion or misapplication of law and

affirm the trial court’s May 5, 2016 Order.

      Order affirmed.

Judgment Entered.

Joseph D. Seletyn, Esq.
Prothonotary

Date: 1/31/2017

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                                                                                                         Circulated 12/27/2016 12:38 PM

IN   THE COURT OF COMMON PLEAS OF MONTGOMERY COUNTY, PENNSYLVANIA
                       ORPHANS' COURT DIVISION

                                               NO. 2014-X3488

                                                   ******
                          ESTATE OF WILLIAM P. O'BRIEN, DECEASED
                                (Lale of Conshohocken Borough)

                                                   ******
        The First and Final Account of Donna Wellington, Executrix of the Estate of William P.

O'Brien, Deceased, was called for audit by this court on November 2, 2015. Objections were

filed by Terry Terzuolo on October 20, 2015.1 A hearing on these Objections was held on March

3, 2016 at which time the Court decided the issue of whether the decedent's estate owes the

objectant the amount of $64,905.31 for an erroneous partnership distribution made to the

decedent during his lifetime.2 This matter is now ripe for adjudication.

                                            COUNSEL APPEARED AS FOLLOWS:

                                            VANGROSSI AND RECCHUITI
                                            By: Francis Recchuiti, Esquire
                                            For the Accountant

                                            KRAUT HARRIS, P.C.
                                            By: David Kraut, Esquire
                                            For Objectant, Terry Terzuolo.

        The Decedent, William P. O'Brien, died on September 6, 2014, leaving a Will dated

September 9, 2010, which was duly probated by the Register of Wills of Montgomery County on

I
  Prior to filing Objections, Terry Terzuolo filed a claim against the Estate of William P. O'Brien on December 3,
2014.
2
  The parties submitted Memoranda of Law to the Honorable Stanley R. Ott regarding the applicability of the Dead
Man's Rule. By Order dated January 7, 2016 Judge Ott determined that "the Dead Man's Rule does not bar either
documentary evidence or testimony from third parties, including that of Mr. Paciello. Issues of hearsay and
privilege are reserved for the time of trial."

                    THIS DOCUMENT WAS DockETED AND SENT ON 05/05/2016
October 7, 2014, at which time the Register granted Letters Testamentary to the Accountant

herein.

           The Decedent left no surviving spouse. No person qualified for the Family Exemption.

           The First and Final Account for this Estate is stated to September 25, 2015. Therein, the

Accountant reports receipts of $449,678.06,            since decreased     by disbursements of $95,591.07 and

distributions of$157,350.00 leaving $196,736.99 on hand.

           Written notice of the filing of the Account and Audit was given to all persons to whom

written notice is required to be given by law and Rules of Court, on September 25, 2015.

           All parties having any interest in this Estate are said to be living, of age, and sui juris.

            The Accountant has raised one issue for adjudication, which relates to the objection of

Terry Terzuolo (hereinafter "Ms. Terzuolo" or "Objectant"), namely whether the claim by Ms.

Terzuolo, in the amount of $64,905.31 is a valid claim against the Estate. The Accountant

maintains it is not. This Court disagrees. A hearing was held March 3, 2016 regarding this issue,

particularly whether a partnership distribution resulting from the partnership dissolution in 2013-

14 and made to the decedent a few months prior to his death, was improper.                      This Court heard

testimony from two witnesses; the Objectant3 and John A. Paciello, CPA.

           Ms. Terzuolo was a police officer with Upper Merion Township for just under twenty-

nine years, having retired in October 2000. NT, 3/3/16, p. 8. Ms. Terzuolo formed a

partnership with the decedent, William O'Brien, on January 6, 1997 for the purposes of buying,

developing and selling property, real and personal. See, Exhibit P-1, Partnership Agreement

The partnership was named Bri-Ter Developments. John A. Paciello, CPA has been the

accountant for this company since its inception.

3   The testimony of Terry Terzuolo was limited to the introduction of documents in order to avoid a violation of the
Dean Man's Rule.

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           On December 30, 2013, the partnership liquefied its last asset, a property in Spring                City,

    Pennsylvania. See, Exhibit P-2, HUD-1 Settlement Statement; NT, 3/3/16, p. 10-11. The

proceeds of $170,858.92 from the sale of this property were deposited into the partnership's

checking account. See, Exhibit P-2 and P-3; NT, 3/3/16, p. 12. Ms. Terzuolo testified that she

maintained the partnership's financial records by hand and did not use a computer. NT, 3/3/16,

p. 13, 27. The independent testimony of Mr. Paciello confirmed that Ms. Terzuolo primarily
handled the financial operations of the partnership. NT, 3/3/16, p. 31-33. These detailed records

would be given to the accountant for the partnership, Mr. PacielJo, in order to generate the tax

returns. NT, 3/3/16, p. 14-16.

          On February 28, 2014, Terry Terzuolo issued two checks from the partnership checking

account. each in the amount of $80,000, to herself and the decedent, dividing the proceeds from

the sale of the property evenly. See, Exhibit Pw4 and P-5; NT, 3/3/16, p. 17. The remaining

balance in the partnership checking account as of March 3, 2014 was $7,524.30. This

distribution of $80,000 to herself and Mr. O'Brien however was in error as the distribution

should have been made in accordance with the capital accounts of the two partners and not on a

50/50 basis as was done. Once the capital accounts were reconciled, any remaining profit would

be split 50/50. See, NT, 3/3/16, p. 42.

          At the time the partnership was created, the partnership consisted of $30,000 in capital

contributions. Each partner had contributed $8,000, and each were required to contribute an

additional $7,000. See, Exhibit P-1, paragraph 4. The partnership agreement also required each

partner to maintain their own capital account," Id. at paragraph 5. Exhibit P-6 is a compilation

4
  Accountant John Paciello explained what a capital account is: "Capital accounts begin with the partners' initial
contribution offunds in their partnership, and that capital account changes on an ongoing basis. It can increase it the
partner contributes additional capital. It can increase if the partnership shows a profit and the partner would be
credited with the appropriate percentage of profits, or it could decrease if the partnership shows a loss and the

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of the partnership's    tax returns from 1997 through 2013. A review of these returns details the

capital accounts for Terry Terzuolo and William O'Brien for each year. The accountant testified

that when a partnership is dissolving and the assets have been liquidated so that the only

remaining asset    is cash,   the disbursement of cash would be equal to the capital accounts, thereby

bringing all capital accounts to zero. NT, 3/3/16, p. 34-35.

         The evidence established that the 2013 partnership tax return showed a zero balance                  in

both Terry Terzuolo and William O'Brien's capital accounts.                See, Exhibit P-6, 2013 Return;

NT, 3/3/16, p. 37-39. These documents also show that given the disparity between Terzuolo's

capital account and O'Brien's capital account, Terzuolo should have received a disbursement                        of

$153,192.00 and O'Brien should have received a disbursement of$15,857.00 as opposed to the

$80,000 disbursed to each partner. Id. It appears evident to this Court, based on a review of the

tax returns of the partnership and the testimony of Mr. Paciello that Mr. O'Brien received a

larger disbursement than he was entitled to and he was over paid by the amount of $64,143.00.

NT, 3/3/16, p.42; Exhibit P-6.

         Mr. O'Brien died on September 6, 2014. Counsel for the Executrix argues that this

disbursement discrepancy was discovered in March of 2014, yet repayment was not sought from

Mr. O'Brien until after his death sometime in October of 2014. We note the oddity of the timing

of this, but a review of Mr. Paciello's independent testimony, which this Court found quite

credible, coupled with the tax documents that speak for themselves, quell any concern this Court

may have of duplicity on the part of Ms. Terzuolo.            Further this Court notes that Ms. Terzuolo

was precluded from testifying in Court as to the reasoning behind this delay or with regard to her

partner would receive a charge for their share of the loss, decrease in capital. So every year when the tax returns
were prepared, we had a beginning balance which would be the ending balance of the prior year for each capital
account, and to that was added any capital contributionsduring the year, and added or subtracted whether there was
a profit or a loss during the year. And also could decrease if there was any distributions to the parties during the
year. NT, 3/3/16, p. 33-34.

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discussions with the decedent about this issue as it would have violated the Dead Man's Rule.

Accordingly, this Court SUSTAINS the objections of Terry Terzuolo and directs the Executrix

of the Estate of William O'Brien to repay the sum of $64,143.00 to the claimant/objectant, Terry

Terzuolo,

        The Accountant has requested approval of a reserve in the amount of $80,000.00 for

litigation expenses and potential liability with regard to the claim of Terry Terzuolo. Due notice

of this request was given to all interested persons and no one appeared to object. Accordingly,

by this Adjudication, a reserve in the amount of $64,143.00 is granted with regard to Terry

Terzuolo's claim and the remaining $15,857.00 is approved as a reserve for litigation expenses

related to the hearing on March 3, 2016, as needed. Any unexpended portion of this reserve is to

be distributed to the beneficiaries in accordance with the terms of decedent's Will, without the

necessity of further accounting.

        There are no remaining questions before this Court requiring adjudication.
        Subject to the views expressed in this Adjudication, to distributions heretofore properly

made, and to any Pennsylvania inheritance transfer tax that may properly be due, the net

ascertained balances of principal and income are awarded as set forth in the last paragraph of the

Petition for Adjudication.

        AND NOW, this          day of May, 2016, the First and Final Account is confirmed subject

to the findings of this Court in this Adjudication and it is hereby ORDERED and DECREED that

the Executrix forthwith pay the distributions herein awarded.

        Exceptions to this Adjudication may be filed within twenty (20) days from the entry of

the Adjudication. An appeal from this Adjudication may be taken to the appropriate appellate

court within thirty (30) days from the entry of the Adjudication. See, Pa. 0.C. Rule 7.1, as

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         amended, and Pa , R ..A P. 902 and 903 .

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