Court Opinion

ID: 2743562
Source: CourtListenerOpinion
Date Created: 2014-10-17 22:05:22.067607+00
Date Added: 2024-06-11T09:53:24.429666
License: Public Domain

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                             2014 PA Super 235

THE VINCENT J. FUMO IRREVOCABLE                 IN THE SUPERIOR COURT OF
CHILDREN’S TRUST FOR THE BENEFIT                      PENNSYLVANIA
OF ALLISON FUMO

APPEAL OF: VINCENT J. FUMO

                                                     No. 2459 EDA 2013

                   Appeal from the Decree August 1, 2013
            In the Court of Common Pleas of Philadelphia County
                 Orphans’ Court at No(s): 1557(IV) of 2012

BEFORE: PANELLA, J. LAZARUS, J. and JENKINS, JJ.

DISSENTING OPINION BY PANELLA, J.                 FILED OCTOBER 17, 2014

      I respectfully dissent from my esteemed colleagues in the Majority. I

would reverse the decree entered by the orphans’ court on August 1, 2013,

as it relates to the declaration of the Vincent J. Fumo’s (Settlor) appointment

of successor trustee, Anthony Repici, D.O., as null and void.

      Our courts have long recognized a trust as a “fiduciary relationship

with respect to property, subjecting the person by whom the title to the

property is held to equitable duties to deal with the property for the benefit

of another person.” In re Estate of Warden, 2 A.3d 565, 572 (Pa. Super.

2010) (citations omitted). “The touchstone in construing a trust is the

settlor’s intent; the language of the trust deed itself is the best and

controlling evidence of such intent.” In re Estate of Devine, 910 A.2d 699,

703 (Pa. Super. 2006) (citation omitted). We are compelled to ascertain
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Settlor’s intent at the time of the Trust’s creation as it is paramount to our

interpretation of the trust, particularly the provisions related to the

appointment of successor trustees.

      The Trust contains definitive provisions regarding its trustees. See The

Vincent J. Fumo Irrevocable Children’s Trust Agreement (“Trust”), 6/23/06,

at FOURTEENTH. The Trust appointed Rosanne Pauciello as the original

trustee and names Mitchell Rubin as successor trustee. See id., at

FOURTEENTH ¶ B. The language is clear:

      [I]f neither ROSEANNE PAUCIELLO nor MITCHELL RUBIN shall be
      able and willing to serve as Trustee of any Trust hereunder at
      any time, he or she shall be succeeded by such one or more
      individuals, or such series of one or more individuals, to serve as
      Trustees in consecutive order, as the last of them to serve shall
      designate in his or her Will or other written instrument delivered
      to the Settlor, if he is then living, or if he is not, to the adult
      beneficiary or beneficiaries of the Trusts hereunder.

Id.

      The Trust further defines Settlor’s intent should a trustee fail to

designate a successor trustee:

      If such Trustee fails so to designate a successor for a period of
      sixty (60) days following their inability or unwillingness to serve,
      or if all of their designees die, resign or are unable to serve, the
      vacancy may be filled by such individual or individuals as may be
      designated by the Settlor, if he is then living…

Id. (emphasis added).

      The Majority, relying on the orphans’ court findings based solely upon

Settlor’s Son’s, Vincent E. Fumo, testimony, states that “in an e-mail dated

September 8, 2011, Pauciello notified Cosanzo, then president of the FFLP,

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that she was resigning as trustee.” Majority Opinion at 10. That e-mail

stated that Pauciello tendered her resignation, “effective immediately.”

Petitioner’s Exhibit AF-4. Under the terms of the Trust, Mitchell Rubin then

became the successor trustee by default on that same date. Mitchell Rubin

was unwilling to serve, but did not renounce his appointment until October

14, 2011. See Renunciation by Successor Trustee, 10/14/11, Petitioner’s

Exhibit AF-8. Under the Trust provisions previously cited, Rubin had sixty

days to exercise his power to appoint a new trustee. He did not exercise this

power and sixty days elapsed thereby transferring to Settlor, the ability to

fill the vacancy with a successor of his choice. Thus, it is evident that

Roseanne Pauciello acted beyond the scope of her authority in appointing a

successor trustee, namely Samuel Bennett, on December 28, 2012. On this

basis alone, I would agree with the orphans’ court and the Majority that

Samuel Bennett’s appointment is a nullity. As a corollary thereto, I would

find Samuel Bennett’s appointment of Anthony Repici, D.O., as successor

trustee a nullity.

       However, on June 19, 2013, Settlor, as ratified by the express terms

of the Trust, designated Anthony Repici to serve as trustee of the Trust,

effective immediately. See Settlor’s Contingent Designation of Successor

Trustee for the Trust Established For the Benefit of Allison Fumo pursuant to

The Vincent J. Fumo Irrevocable Children’s Trust Agreement.

      NOW THEREFORE, should a challenge be raised as to Mr.
      Bennett’s authority to designate a successor Trustee, or should
      the Court otherwise determine that Mr. Bennett was not

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      authorized to designate a successor Trustee, or should Mr.
      Bennett’s designation of Dr. Repici fail for any other reason,
      pursuant to the powers granted to me as Settlor under the Trust
      Agreement, on this 19th day of June, 2013, I do hereby
      designate Dr. Anthony Repici as Trustee of the Trust, effective
      immediately.

Id. Accordingly, Dr. Repici was properly appointed by Settlor, as successor

trustee of the Trust effective June 19, 2013.

      At the time the orphans’ court entered its decree, there were only two

petitions before it: Daughter’s Petition for Termination of Trust, or in the

Alternative, Appointment of a Successor Trustee, filed on October 26, 2012

and an amended Petition filed on October 31, 2012. Both petitions were filed

during the period of time the Trust was without an appointed trustee.

Daughter never filed an amended petition seeking to invalidate Samuel

Bennett’s appointment as trustee, nor did she petition the orphans’ court for

the removal of Dr. Repici.

      The orphans’ court has the authority to govern the administration of

trusts. Under this authority, the orphans’ court may remove a trustee. The

removal of a trustee, however, is a drastic action, and should not be

undertaken at the mere whim of a beneficiary. See In re White, 506 Pa.

218, 223, 484 A.2d 763, 765 (1984); In re Barnes Estate, 339 Pa. 88, 95,

14 A.2d 274, 277 (1970). Rather, “because of the discretion normally

granted to a trustee, the settlor’s confidence in the judgment of the

particular person whom the settlor selected to act as trustee is entitled to

considerable weight.” In re McKinney, 67 A.3d 824, 835 (Pa. Super. 2013)

(citation omitted). Our courts have long required that some substantial

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reason must be shown before that special confidence is usurped and a

fiduciary is replaced. See In re Barnes Estate, 339 Pa., at 94, 14 A.2d at

277.

       In support of its decision to take drastic action in removing Dr. Repici,

the orphans’ court relies upon the no-fault provision for removal prescribed

in the Uniform Trust Code, 20 PA.CONS.STAT.ANN. § 7766(b)(4). While I agree

that under § 7766(a) a “trustee may be removed by the court on its own

initiative,” that section sets forth precise requirements which must be met

by clear and convincing evidence. In re McKinney, 67 A.3d at 830. Under

the express provisions of the statute, Daughter must present clear and

convincing evidence for the orphans’ court to find that (1) removal of the

trustee best serves the interests of the beneficiaries of the trust; (2)

removal is not inconsistent with the material purpose of the trust; (3) a

suitable co-trustee or successor trustee is available; and (4) there has been

a substantial change of circumstances. See 20 PA.CONS.STAT.ANN. §

7766(b)(4). Daughter unquestionably failed to meet these requirements.

       The language of the Uniform Law Comment to § 7766 is telling of our

legislature’s intent in crafting the requirement that, prior to removal,

Daughter must establish that removal best serves the interests of the

beneficiaries of the trust. The Comment defines “the term ‘interests of the

beneficiaries’” as “mean[ing] the beneficial interests as provided in the terms

of the trust not as defined by the beneficiaries.” 20 PA.CONS.STAT.ANN. §

7766(b), Comment. While Daughter maintains that her beneficial interests of

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the   Trust    are   being   compromised     due   to   bad   investments   and

mismanagement of the funds of the Trust, she has not shown any actions on

the part of Dr. Repici, in his capacity as trustee, exercised in contravention

of the beneficial interests of the Trust.

      The provisions of the Trust clearly outline the expansive “Powers of

Trustees” in exercising their fiduciary duties. See Trust, at SIXTH. Of

particular relevance are the following provisions:

      SIXTH: Trustees shall have the following powers…

      A. [t]o make investments (including without limitation,
         investments in the common trust funds maintained by any
         corporate fiduciary acting hereunder)…

      B. To sell, pledge, mortgage, lease without limit of time, or
         exchange any assets, to themselves or to others, on such
         terms and conditions as they made decide.

      C. To purchase, grant, sell or exchange options for the
         acquisition or transfer of any assets, including securities for
         such periods of time and on such other terms and conditions
         as they may decide.

      D. In dealing with any proprietorship, partnership interest, stock
         of any closely held corporation, or any other business or
         professional interest which may be held hereunder….

              (6)    Borrow money from the banking department of any
                     corporate fiduciary that may serve hereunder….

              (7)    Make additional investments in or advances to the
                     business if they consider such action to be in the
                     best interests of any trust hereunder and the
                     beneficiaries of any trust hereunder…

                                        …

      G.      To borrow money, from themselves or from others, for any
              purpose which they consider to be for the benefit of the

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            trusts, and to mortgage or pledge assets held thereunder
            to secure the repayment thereof.

Trust, at SIXTH, ¶¶ A, B, C, D, G (emphasis added).

      Again, while Daughter may disagree with how the Trust is being

funded and managed, the language of the Trust clearly empowers the acting

trustee to manage the funds in any way he or she may deem fit as long as

the beneficial interests of the trust are not being compromised. The record is

is uncontradicted that Dr. Repici is more than just a physician. Additionally,

the record does not support the finding that he is an “alter ego” for Settlor

as the orphans’ court and Majority characterize him. Majority Opinion at 22.

Settlor, as father of the beneficiaries, entrusted his long-time family friend

to carry out the beneficial interests of the Trust. Dr. Repici has a background

in business studies, in addition to the practice of medicine. More importantly,

Dr. Repici has personal knowledge of the Trust and the beneficiary’s financial

situation. Without any evidence that Dr. Repici, in his capacity as trustee,

acted outside his scope of authority, removal is simply not warranted due to

the weight to be given to the settlor’s intent.

      Likewise, Daughter has failed to establish that removal of Dr. Repici is

inconsistent with the material purpose of the Trust. The patently expressed

purpose of the Trust is defined in Section THIRD, Paragraph A (1) as follows:

      (1)   Trustees shall distribute to the Beneficiary so much of the
            net income and principal as the Trustees deem necessary
            for the Beneficiary’s health, maintenance, support and
            education, or for the education of the Beneficiary’s Issue,
            after first taking into account any other income and
            resources of the Beneficiary. Any income not so expended
            shall be accumulated and added to the principal.

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Trust, at THIRD, ¶ A. (1).

      Settlor’s intent is clear. The Trust was created to provide for the

“health, maintenance, support and education” of Daughter prior to the

attainment of the age of forty. Id., at ¶ A. (2). After attaining the age of

forty, Daughter may withdraw the entire balance of undistributed income

and principal at any time upon written request. See id. Daughter has not

attained the age of forty thus requiring a trustee to administer the Trust.

Daughter’s   health,   maintenance,   support   and   educational   needs   are

evidently being suitably met by the Trust. To seek Dr. Repici’s removal as

trustee without illustrating any actions on his part inconsistent with the

material purpose of the Trust constitutes a disregard for the Settlor’s intent

in favor of the whims of the beneficiary.

      While I would agree that Sylvia DiBona may be a suitable successor

trustee based upon her professional background and experience, removal of

Dr. Repici is not warranted here even if the orphans’ court determined there

to be a “substantial change in circumstances” under § 7766(b)(4).

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