Court Opinion

ID: 4204505
Source: CourtListenerOpinion
Date Created: 2017-09-19 18:14:15.890594+00
Date Added: 2024-06-11T14:41:12.599804
License: Public Domain

J. S47033/17

NON-PRECEDENTIAL DECISION – SEE SUPERIOR COURT I.O.P. 65.37

IN RE: EVA G. SELLERS                   :     IN THE SUPERIOR COURT OF
                                        :           PENNSYLVANIA
                                        :
APPEAL OF: ELIZABETH S. FISCHER         :          No. 306 EDA 2017

              Appeal from the Order Entered December 7, 2016,
            in the Court of Common Pleas of Montgomery County
           Orphans’ Court Division at No. 2015-X-3184 (Principal)

IN RE: EVA G. SELLERS                   :     IN THE SUPERIOR COURT OF
                                        :           PENNSYLVANIA
                                        :
APPEAL OF: ELIZABETH S. FISCHER         :          No. 329 EDA 2017

              Appeal from the Order Entered December 7, 2016,
            in the Court of Common Pleas of Montgomery County
                 Orphans’ Court Division at No. 2016-X-2320

BEFORE: LAZARUS, J., MOULTON, J., AND FORD ELLIOTT, P.J.E.

MEMORANDUM BY FORD ELLIOTT, P.J.E.:           FILED SEPTEMBER 19, 2017

      Elizabeth S. Fischer (“Fischer”) appeals the orders of the Court of

Common Pleas of Montgomery County that denied her motion for partial

summary judgment at No. 2015-X-3184 and granted the motion for partial

summary judgment filed by Cristy Sellers (“C. Sellers”), administratrix of the

estate of Eric S. Sellers at No. 2016-X-2320 and stated that Fischer had no

authority to create an irrevocable Medicaid Income-Only Trust and had no

authority to transfer property to a trust not in existence on the date the
J. S47033/17

power of attorney was signed. As a result, the trial court deemed the trust

invalid and void and ordered and decreed that the transfer to the trust of the

house located at 570 King Road, Limerick, Pennsylvania (“Property”), was

invalid. The trial court further ordered that the Property must be included as

an asset on any amended account filed by Fischer as agent under the power

of attorney of Eva Geiger Sellers (“Mother”). After careful review, we affirm

in part and quash in part.

                             I. Factual Background.

      The record reflects that Mother had three children:              Fischer,

Steven Sellers, and Eric Sellers (“Sellers”), the deceased husband of

C. Sellers.   Mother named Fischer as the agent under a Durable Power of

Attorney dated November 4, 2009.          Under the power of attorney with

respect to real property, Fischer was given the power to manage, sell, or

transfer any real property that Mother owned at the time or would later

acquire. Fischer also had the power to execute deeds, mortgages, releases,

satisfactions, and other instruments relating to real property and interests in

real property that she owned or would later acquire.

      As Mother’s health worsened, she moved to a nursing home/assisted

living facility on June 28, 2010.    Fischer, in agreement with her brothers,

consulted an elder law attorney who recommended the creation of an

Irrevocable Medicaid Trust (“Trust”). Fischer, as agent and attorney-in-fact

                                      -2-
J. S47033/17

of Mother, created the Trust on July 12, 2010 and acted as trustee.             The

Property was placed in the Trust and valued at $254,250.

        On December 20, 2010, the Trust sold the Property to Fischer’s

daughter, Devon Ann Hepburn (“Hepburn”), under an installment land

contract.     The contract was structured to include an $80,000 deposit,

96 payments of $931.82, and the balance due after Hepburn turned

30 years old. The Property was the only asset in the Trust.

        Mother died on November 28, 2011.         Sellers died on February 20,

2012.      His widow, C. Sellers, was named the administratrix of Sellers’s

estate.

                              II. Power of Attorney.

        On September 15, 2015, C. Sellers filed a petition to show cause why

an account should not be filed with respect to Fischer’s administration as

agent under the durable power of attorney from November 4, 2009 through

the date of Mother’s death on November 28, 2011. On September 18, 2015,

the trial court awarded a citation returnable on October 19, 2015 for Fischer

and successor Steven Sellers to show cause why they should not file an

account.

        On December 18, 2015, following a telephone conference, Fischer was

ordered to file an account of the administration of her agency from

November 4, 2009, through November 28, 2011, by December 30, 2015.

The     accounting   stated    an   opening   balance   of   $93.52,   income    of

                                       -3-
J. S47033/17

$203,453.26, expenses of $202,695.39, and a closing balance of $1,251.39.

The biggest source of income was $101,000 from the Trust as payments

received from Hepburn.       The two biggest expenses were payments of

$82,760.17 to Wells Fargo Mortgage and $81,142.15 for payments to

long-term care facilities.

      On January 28, 2016, the estate of Eric S. Sellers, as represented by

C. Sellers, objected to the accounting on the basis that Fischer did not have

authority to create the Trust or transfer the Property to it. C. Sellers also

objected to the lack of personal property listed, the lack of itemized amounts

and payment dates for income and expenses, the accuracy of the long-term

care expenditures, and to the Property-related expenses as some expenses

would be post-transfer of the Property.      C. Sellers also objected to the

payment of $3,000 to Joseph Masiuk, an elder care attorney, as she believed

that the payment was for the preparation of the Trust which she did not

believe was authorized by the power of attorney. She also objected to the

inclusion of home sale preparation expenses as Fischer did not sell the

Property as agent but transferred it to the Trust. C. Sellers also objected in

general with Fischer’s agency and alleged that she commingled funds

between her duties as agent under the power of attorney and as trustee

under the Trust. She also alleged that Mother lacked capacity to execute the

power of attorney.

                                    -4-
J. S47033/17

      By order dated May 5, 2016, the trial court ordered Fischer to file an

amended account of her administration of agency on or before June 1, 2016

with specific itemization of each receipt and expense.   The trial court also

ordered Fischer to file an account in her capacity as trustee of the trust

during the agency period to which real estate of the principal was

transferred to the trust. The trial court later extended the due date for the

accounts.

      On June 28, 2016, Fischer filed the amended accounting for her

agency under the power of attorney. The opening balance was $3,392.59,

income was $220,602.82. Expenses totaled $221,752.93. The final balance

at time of Mother’s death was $1,251.39.

      On July 29, 2016, C. Sellers as representative of Eric S. Sellers’s

estate objected to the amended power of attorney account.          C. Sellers

reiterated her objections concerning the Property and the personal property

and objected to the bundling of some income and expense items. She also

objected to transactions paid after the death of Mother and to the accuracy

of the accounting. She again objected to expenses for the Property and the

validity of the power of attorney itself.

      On August 16, 2016, Fischer filed an amended power of attorney

accounting. The totals were the same, though some categories were broken

down in more detail.       On that same date, Fischer filed a petition for

adjudication/statement of proposed distribution.

                                      -5-
J. S47033/17

      On October 28, 2016, Fischer answered C. Sellers’s objections and

sought dismissal of all of the objections.     Fischer asserted the affirmative

defenses of the statute of limitations and the doctrine of equitable estoppel.

      On October 31, 2016, Fischer moved for partial summary judgment

and the dismissal of C. Sellers’s objections. Fischer alleged that C. Sellers

knew of the transfer of the Property to Hepburn and the formation of the

Trust as early as October 27, 2010, such that the objections were not raised

in a timely fashion and were barred by the statute of limitations and the

doctrine of laches. Similarly, C. Sellers demonstrated that she knew of the

Trust in 2012, which Fischer believed was another reason why the objections

were time-barred. She also asserted that the objections were impermissible

under the doctrine of equitable estoppel because the Trust distributed

significant   funds   beginning   in   2013   and   Hepburn   made   significant

improvements to the Property with the knowledge of and without objection

by C. Sellers. On October 31, 2016, Fischer submitted an affidavit in which

she averred that her brothers agreed to the creation of the Trust, and that

she was advised by counsel that the power of attorney authorized the

creation of the Trust. She further averred that her attorney advised her to

sell the Property under a land installment contract. She also averred that

after Sellers’s death, she visited his widow, C. Sellers, and informed her in

February 2012 of the Trust and the sale of the Property under the Land

Installment Agreement.

                                       -6-
J. S47033/17

      C. Sellers replied and denied the material allegations. In new matter,

she asserted that she did not know of the existence of a power of attorney

until November 9, 2014, when she found a copy of it on the Montgomery

County Recorder of Deeds website. C. Sellers asserted that Fischer’s failure

to raise any affirmative defenses in a timely answer to the petition for

account should result in waiver of those defenses.

      On December 7, 2016, the trial court denied Fischer’s motion for

summary     judgment.      On    December    19,   2016,   Fischer   moved    for

reconsideration. On December 21, 2016, the trial court denied the motion

for reconsideration.

                           III. Trust Accounting.

      On June 29, 2016, Fischer filed a trust accounting for the Trust which

set forth the value of the Property at $254,250. Distributions to Mother of

$93,045.48 were made before her death. A distribution of $12,345.45 was

made to Mother’s estate. Fischer, Steven Sellers, and Eric Sellers’s children

each received $12,136.17.       The Trust received payments from September

2010 to June 2016 of $153,386.46 from Hepburn.

      On July 29, 2016, C. Sellers, in her capacity as representative of the

estate of Eric Sellers, objected to the accounting for the Trust.      C. Sellers

objected to the validity of the Trust itself as she believed that Fischer did not

have authority under the power of attorney to create it. Among C. Sellers’

other objections were that the Trust was contrary to Mother’s estate

                                      -7-
J. S47033/17

planning wishes and distributions to Mother during her lifetime constituted

both income and principal while Mother was only entitled to income.

C. Sellers also objected to the accuracy of the accounting and objected to

Fischer’s failure to conform to the duties of a trustee. C. Sellers asked the

trial court to uphold her objections and to surcharge Fischer for C. Sellers’s

fees and costs caused by Fischer’s breaches of her fiduciary duties.

      On August 16, 2016, Fischer filed a petition for adjudication/statement

of proposed distribution of the Trust.

      On October 29, 2016, the estate of Eric S. Sellers moved for partial

summary judgment and alleged the following:

            8.    The POA [power of attorney] did not authorize
                  the Agent to create a trust. POA Section III,
                  Powers of Attorney-In-Fact on POA page 3
                  enumerates specific authority given to the
                  agent. In that section, page 5 ESTATE AND
                  TRUST TRANSACTIONS, the Agent is only
                  empowered “To act for me in all matters that
                  affect a trust, probate estate, guardianship,
                  conservatorship, escrow, custodianship or
                  other fund for which I am now, claim to be or
                  later become entitled, as a beneficiary, to a
                  share or payment,” or “Transfer any of my
                  property to a living trust that I created as a
                  grantor before this Power of attorney was
                  signed.”

            9.    The Trust is invalid as its creation was not
                  authorized by the POA.

            10.   POA       Section     III,     REAL      ESTATE
                  TRANSACTIONS, on page 3, granted the Agent
                  power to transfer real estate on behalf of the
                  Principal, but as per overall terms of the POA,
                  only for the benefit of the Principal and not for

                                     -8-
J. S47033/17

                the benefit of third parties or furtherance of
                any estate planning goals of the Principal or
                beneficiaries.

          11.   POA Paragraph 6, No Personal Benefit, on
                page 7, states “Except as specifically provided
                for in this document, my attorney-in-fact is
                prohibited from personally benefitting from any
                transaction engaged in or on my behalf. . . .”

          12.   On December 20, 2010 the Trustee sold the
                House to her daughter under a Land
                Installment Contract, which gave her daughter
                eight years to pay the full purchase price.

          13.   Subsequent to the sale, the Trustee, in
                violation of Trust terms, distributed both
                income and principal received under the Land
                Installment Contract to Principal, the total
                amount of which was $93,045.48 from
                September 2010 to November 2011, the
                month of Principal’s death. This total is stated
                in an account filed by the Trustee with this
                Honorable Court on June 29, 2016 . . . . The
                total appears on page 4, “Distributions to
                Eva Sellers prior to her death.”

          14.   At the time of her death, $212,879.43 was still
                owing on the Land Installment Contract, the
                majority of which was principal due the Trust.
                This total is calculated by deducting the
                $93,045.48 from the “Total Payments to Trust
                under Installment Contract” stated by the
                Trustee on account page 5 as $305,924.91.

          15.   The Principal did not empower the Agent to sell
                her house and give the equity to a trust, or
                otherwise in any way encumber the equity
                therein or use that equity for the benefit of
                anyone other than the Principal.

          16.   The Principal during her lifetime may have
                desired to live in the House, or the full House

                                  -9-
J. S47033/17

                 equity could have been needed to provide for
                 her needs.

           17.   The Agent’s transfer of the House to an
                 Irrevocable Trust was a breach of her fiduciary
                 duty to the Principal, as the House transfer
                 was done solely to spend down the Principal’s
                 assets for estate planning purposes, and only
                 yielded    a    benefit    to    the Principal’s
                 beneficiaries, not to the Principal.

           18.   Per paragraph 6 of the POA, the transfer of the
                 House violated the terms of the POA as it was
                 done to yield a benefit to the Agent, and such
                 benefits are expressly prohibited.

           19.   The unauthorized payment by the Trustee of
                 some of the Trust corpus to the Principal did
                 not relieve the agent of her duty to use the
                 entire asset value of the House for the benefit
                 of the Principal, and to keep it within her
                 control during her lifetime.

           [20.1]The transfer of House to the Trust was
                 therefore invalid, as there was never a validly
                 created Trust to receive the House. It was also
                 invalid in that the POA did not empower the
                 Agent to perform any actions not for the
                 benefit of the Principal, and the transfer of
                 House to an irrevocable trust where only a
                 partial distribution of the House equity value
                 was distributed to the Principal for her benefit
                 constituted a breach of the agent’s fiduciary
                 duty to the Principal.

Estate of Eric S. Sellers’s motion for partial summary judgment, 10/29/16 at

2-4, ¶¶ 8-19.

1
 The motion lists two number “19” paragraphs in the motion rather than 19
and 20.

                                   - 10 -
J. S47033/17

         C. Sellers, on behalf of the estate of Eric S. Sellers, sought an order

that declared the Trust invalid, the transfer of the Property invalid, and listed

the Property as an asset on any amended accounts filed by Fischer under

the Power of Attorney. Fischer denied the material allegations in the motion.

         On December 7, 2016, the trial court granted the motion and

determined that Fischer had no authority to create the Trust and no

authority to transfer the Property to a trust not in existence on the date the

power of attorney was signed.         The trial court further ordered that the

Property must be included as an asset in any amended account filed by

Fischer as agent under the power of attorney. The trial court deemed the

order final pursuant to Pa.R.A.P. 342(2).

         On December 19, 2016, Fischer moved for reconsideration. The trial

court denied the motion on December 21, 2016.           By this point, the two

separate proceedings were consolidated. On January 5, 2017, Fischer filed a

notice of appeal to this court.

                                   IV. Appeal.

         On appeal, Fischer raises the following issues for this court’s review:

“Did the [t]rial [c]ourt err when it granted [C. Sellers’s] Motion for Summary

Judgment on the scope of the power of attorney? Did the [t]rial [c]ourt err

when it denied [Fischer’s] Motion for Summary Judgment on [sic] based on

the statute of limitations, doctrine of laches, and estoppel?” (Fischer’s brief

at 2.)

                                      - 11 -
J. S47033/17

             A. C. Sellers’s Motion for Summary Judgment.

      Initially, Fischer contends that the evidence established a genuine

issue of material fact with respect to the scope of the power of attorney such

that the trial court erred when it granted C. Sellers’s motion for summary

judgment.

      This court’s review of a decision of an Orphans’ Court is as follows:

                  Our standard of review of the findings of
                  an [O]rphans’ [C]ourt is deferential.

                        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.

            In re Estate of Harrison, 745 A.2d 676, 678-679,
            appeal denied, 758 A.2d 1200 (Pa. 2000).
            (internal citations and quotation marks omitted).
            “[T]he Orphans’ [C]ourt 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), appeal denied, 847 A.2d
1287 (Pa. 2003).

                                      - 12 -
J. S47033/17

In re Estate of Whitley, 50 A.3d 203, 206-207 (Pa.Super. 2012) (internal

citations and quotation marks omitted).

     This court reviews a grant of summary judgment under the following

well-settled standards:

                 Pennsylvania law provides that summary
                 judgment may be granted only in those
                 cases in which the record clearly shows
                 that no genuine issues of material fact
                 exist and that the moving party is
                 entitled to judgment as a matter of law.
                 The moving party has the burden of
                 proving that no genuine issues of
                 material fact exist.     In determining
                 whether to grant summary judgment,
                 the trial court must view the record in
                 the light most favorable to the non-
                 moving party and must resolve all doubts
                 as to the existence of a genuine issue of
                 material fact against the moving party.
                 Thus, summary judgment is proper only
                 when the uncontroverted allegations in
                 the pleadings, depositions, answers to
                 interrogatories, admissions of record,
                 and submitted affidavits demonstrate
                 that no genuine issue of material fact
                 exists, and that the moving party is
                 entitled to judgment as a matter of law.
                 In sum, only when the facts are so clear
                 that reasonable minds cannot differ, may
                 a trial court properly enter summary
                 judgment.

                 [O]n appeal from a grant of summary
                 judgment, we must examine the record
                 in a light most favorable to the
                 non-moving party.       With regard to
                 questions of law, an appellate court’s
                 scope of review is plenary. The Superior
                 Court will reverse a grant of summary

                                   - 13 -
J. S47033/17

                   judgment only if the trial court has
                   committed an error of law or abused its
                   discretion.    Judicial discretion requires
                   action in conformity with law based on
                   the facts and circumstances before the
                   trial    court     after    hearing    and
                   consideration.

            Gutteridge v. A.P. Green Services, Inc., 804 A.2d
650, 651 (Pa.Super. 2002).

Wright v. Allied Signal, Inc., 963 A.2d 511, 514 (Pa.Super. 2008)

(citation omitted).

      Specifically, Fischer argues that the terms of the power of attorney

were ambiguous and the trial court ignored the facts that she and her two

brothers were in agreement that it was proper to create the Trust and that

they acted on the advice of an elder care attorney that supported their

authority to create the Trust. Fischer argues that this court should not defer

to the trial court’s determination that the plain language in the power of

attorney did not permit the creation of the Trust.

      The trial court determined that the Power of Attorney contained the

following pertinent provisions which did not allow Fischer to create the Trust:

                  To act for me in all matters that affect a trust,
                   probate estate, guardianship, conservatorship,
                   escrow, custodianship or other fund from which
                   I am now, claim to be or later become entitled,
                   as a beneficiary, to a share or payment.

                  Transfer any of my property to [a] living trust
                   that I created as a grantor before this Power of
                   Attorney was signed.

Trial court opinion, 1/26/17 at 2 (emphasis supplied by the trial court).

                                     - 14 -
J. S47033/17

      The trial court further reasoned that Fischer did not have authority to

create the Trust for the benefit of Mother. The trial court added:

              The appellant’s averments -- that the trust was
              created “with the agreement of her brothers” and
              with the advice of an elder law attorney -- cannot be
              considered facts not in dispute at this stage of the
              proceedings. Furthermore, even if shown to be true,
              these allegations could not override the specific
              provisions of the power of attorney and are not
              material to the question of the interpretation of the
              authority of the agent under the power of attorney.
              In this case, the Court determined the provisions of
              the power of attorney are explicit, clear and not
              ambiguous. Consequently, [Fischer] did not have
              the authority under the power of attorney to create a
              trust and did not have the authority to transfer her
              mother’s home into the trust.

Id. at 2-3.

      A review of the Power of Attorney confirms the determination of the

trial court. Under the power of attorney, Fischer did not have the authority

to create the Trust and place the Property into it.

      Fischer next contends that her actions were authorized under the

current statutes and case law of the Commonwealth because in Pennsylvania

an agent acting under a general power of attorney has considerably broad

authority under 20 Pa.C.S.A. § 5601.      However, Fischer admits that while

agents acting pursuant to a valid power of attorney are permitted to exercise

the broad powers granted to them under the statute, the specific power of

attorney document limits this authority. Here, the power of attorney did not

give Fischer the authority to create the Trust.

                                     - 15 -
J. S47033/17

               B. Fischer’s Motion for Summary Judgment.

      With respect to the denial of her motion for summary judgment,

Fischer asserts that C. Sellers did not object to the sale of the Property to

Hepburn, the creation of the Trust, the improvements to the Property made

by Hepburn, or the receipt of payments from the Trust.

      Before addressing the merits of Fischer’s argument, this court must

address C. Sellers’s contention that the order that Fischer appeals is not

appealable because it is not a final order.

      Rule 342 of the Pennsylvania Rules of Appellate Procedure, entitled

Appealable Orphans’ Court Orders, provides in pertinent part:

            (a)   General rule. An appeal may be taken as of
                  right from the following orders of the Orphans’
                  Court Division:

                  (1)   An order confirming an account, or
                        authorizing     or    directing     a
                        distribution from an estate or trust;

                  (2)   An order determining the validity
                        of a will or trust;

                  (3)   An order interpreting a will or a
                        document that forms the basis of a
                        claim against an estate or trust;

                  (4)   An order interpreting, modifying,
                        reforming or terminating a trust;

                  (5)   An order determining the status of
                        fiduciaries,  beneficiaries,    or
                        creditors in an estate, trust, or
                        guardianship;

                                     - 16 -
J. S47033/17

                    (6)   An order determining an interest in
                          real or personal property;

                    (7)   An     order   issued    after   an
                          inheritance tax appeal has been
                          taken to the Orphans’ Court
                          pursuant to either 72 Pa.C.S.
                          § 9186(a)(3) or 72 Pa.C.S. § 9188,
                          or after the Orphans’ Court has
                          made a determination of the issue
                          protested after the record has been
                          removed from the Department of
                          Revenue pursuant to 72 Pa.C.S.
                          § 9188(a); or

                    (8)   An order otherwise appealable as
                          provided by Chapter 3 of these
                          rules.

Pa.R.A.P. 342(a).

        C. Sellers argues that none of these provisions applies to the matter at

hand.    To clarify, Fischer is appealing the denial of her motion for partial

summary judgment after C. Sellers filed objections to the accounting for

Fischer’s actions under the power of attorney.            Fischer argues that

Pa.R.A.P. 342(a)(3-4) apply here. However, the denial of Fischer’s motion

for partial summary judgment is not an order interpreting a will or a

document that forms the basis of a claim against an estate or trust. While

the order declaring the Trust invalid and granting the motion for summary

judgment of C. Sellers may have qualified, this order does not.       Similarly,

this order denying Fischer’s motion for partial summary judgment does not

interpret, modify, reform, or terminate a trust.         At this point in the

proceedings, this order is unappealable.

                                      - 17 -
J. S47033/17

     Affirmed in part; quashed in part.     Affirm the order that granted

C. Sellers’s motion for partial summary judgment, and quash Fischer’s

appeal of the denial of her motion for partial summary judgment.

Judgment Entered.

Joseph D. Seletyn, Esq.
Prothonotary

Date: 9/19/2017

                                   - 18 -