Court Opinion

ID: 4409151
Source: CourtListenerOpinion
Date Created: 2019-06-21 15:51:36.836694+00
Date Added: 2024-06-11T14:52:50.267019
License: Public Domain

J-S22001-19

NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37

 IN RE: CECELIA KLINE, AN                :   IN THE SUPERIOR COURT OF
 INCAPACITATED PERSON                    :        PENNSYLVANIA
                                         :
                                         :
 APPEAL OF: ANGELA BIROS                 :
                                         :
                                         :
                                         :
                                         :   No. 1276 MDA 2018

                Appeal from the Order Entered June 28, 2018
               In the Court of Common Pleas of Berks County
                      Orphans’ Court at No(s): 83221

BEFORE:    SHOGAN, J., DUBOW, J., and PELLEGRINI*, J.

MEMORANDUM BY SHOGAN, J.:                            FILED JUNE 21, 2019

     Appellant, Angela Biros, appeals from an order entered on June 28,

2018, in the Berks County Court of Common Pleas. The underlying matter

involves the guardianship and estate of Ms. Cecelia Kline (“Kline” or

“Ms. Kline”), an incapacitated person, the removal of Appellant as guardian,

and the imposition of a surcharge. The June 28, 2018 order denied Appellant’s

exceptions to a Master’s Report and Recommendation and imposed a

surcharge upon Appellant in the amount of $14,825. We affirm.

     A prior panel of this Court provided the following factual and procedural

background:

           [Appellant] is the great-niece of Kline. This matter arose
     when Kline’s great-niece, Pamela Rokoskie [(“Rokoskie”)], who is
     [Appellant’s] sister, petitioned the court to declare Kline an
     incapacitated person and appoint a plenary guardian.           The
     orphans’ court’s opinion sets forth the background of this case, as
     follows:
____________________________________
* Retired Senior Judge assigned to the Superior Court.
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          This guardianship matter began its tortuous path on
          July 9, 2013, when [Ms.] Kline’s great-niece,
          [Rokoskie], filed a Petition for Adjudication of
          Incapacity and Appointment of Plenary Guardian for
          Ms. Kline. A hearing was scheduled for August 21,
          2013. Apparently an off-the-record indication was
          made to the Court that the matter would be contested
          in some fashion because on July 26, 2013, the Court
          appointed counsel for Ms. Kline.

          On August 21, 2013, [Appellant], another great-niece,
          filed Response/Objections to the Petition indicating
          that she is the agent under Ms. Kline’s power of
          attorney, that Ms. Kline is not incapacitated, and that
          even if Ms. Kline is incapacitated there is no need for
          a guardian because her needs are met. After some
          off-the-record discussion, the hearing was continued
          to September 27, 2013.

          On September 27, 2013, the parties took some time
          to reach an agreement regarding Ms. Kline’s
          incapacity and who should serve as her guardian. The
          parties stipulated to the expert report, which
          concluded Ms. Kline was incapacitated and in need of
          a guardian. The parties agreed that [Appellant] would
          be appointed guardian of Ms. Kline’s person and
          estate. The parties also agreed to terms regarding
          family visits with Ms. Kline. The Court directed that
          [Appellant] file an inventory and accounting within
          four months, and provided for the payment of fees to
          the doctor and Ms. Kline’s court-appointed counsel.
          Although the Court ordered the appointment of
          [Appellant] as guardian for Ms. Kline and directed the
          submission of a written order to that effect, counsel
          did not submit a written order.

          On March 25, 2014, Rokoskie’s attorney requested the
          transcript of the September 27, 2013 hearing. On
          April 23, 2014, Rokoskie filed a Petition for Special
          Relief to Memorialize Settlement Agreement to an
          Order of Court and Contempt of Court Order.
          Rokoskie alleged that she, through counsel, made
          several attempts to memorialize the parties’
          agreement into a stipulated order, but [Appellant]

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          refused to sign. Rokoskie also averred a failure by
          [Appellant] to file an inventory and accounting, to pay
          Ms. Kline’s attorney, Mr. Grenko, and to allow visits
          with Ms. Kline as agreed. Rokoskie requested an
          order to enforce [Appellant’s] compliance with the
          September 27, 2013 agreement or to remove
          [Appellant] as guardian. A hearing on the Petition for
          Special Relief was scheduled for June 12, 2014.

          On June 10, 2014, [Appellant] filed an Answer to the
          Petition for Special Relief, an Inventory, and a First
          Account for the period of September 27, 2013 to
          January 31, 2014. After argument/hearing, the Court
          directed counsel to submit an order appointing
          [Appellant] as Ms. Kline’s guardian, directing
          [Appellant] to file an account for the time period of
          April 22, 2013 through the present, and otherwise
          memorializing the terms of the September 27, 2013
          agreement, including payment of Mr. Grenko. That
          Order was signed on June 24, 2014.

          On July 7, 2014, [Appellant] filed a Motion for
          Reconsideration      alleging   the     existence   of
          discrepancies in the written order as compared to the
          Court’s oral instructions. On July 11, 2014, the Court
          issued an Order slightly modifying certain terms
          contained in the June 24, 2014 Order.

          On July 21, 2014, [Appellant] filed Objections to
          Mr. Grenko’s itemized bill.   On July 28, 2014,
          Mr. Grenko filed an Answer to the objections and
          attached his invoice. On July 31, 2014, the Court
          ordered [Appellant] to pay Mr. Grenko a slightly
          discounted sum from Ms. Kline’s estate within ten
          days or face surcharge.

          On August 27, 2014, [Appellant] filed a First Amended
          Account for the period of April 22, 2013 to August 22,
          2014. On November 10, 2014, Rokoskie filed a
          Petition for Special Relief and Contempt of Court
          Order. Rokoskie averred a list [of] 30 payments or
          withdrawals from Ms. Kline’s funds that did not appear
          in the August 27, 2014 account. Rokoskie averred
          that [Appellant] made payments to herself and to her

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          daughter and liquidated certificates of deposit without
          accounting for the liquidated sums, which exceeded
          $123,000. Rokoskie also averred [that Appellant
          moved] Ms. Kline from her home to [an] undisclosed
          facility. Rokoskie requested that [Appellant] be
          removed as guardian and agent under power of
          attorney and be ordered to return certain sums to
          Ms. Kline and comply with Rokoskie’s Request for
          Production of Documents that was issued in July 2014.

          On November 20, 2014, a rule was issued upon
          [Appellant] to show cause why she should not be held
          in contempt of court, be removed as guardian and
          agent, and be ordered to return assets and produce
          discovery. The rule was returnable December 12,
          2014, and a status conference was set for
          December 17, 2014. After the conference, the Court
          entered an order directing [Appellant] to produce
          requested discovery, capping payment of monthly
          expenses not directly related to Ms. Kline’s care, and
          prohibiting [Appellant] from receiving any payments
          for her services as guardian. Counsel were given time
          to attempt an amicable resolution.

          On February 11, 2015, the Court scheduled a hearing
          on the Petition for Special Relief and Contempt of
          Court Order for March 18, 2015. On request of
          [Appellant’s] counsel, the hearing was continued to
          March 25, 2015. The Court also froze Ms. Kline’s
          accounts.

     Orphans’ Court Opinion, 6/11/2015, at 1–4.

           The hearing in this matter took place on March 25, 2015.
     On the same day, the orphans’ court removed [Appellant] as
     guardian for Kline and appointed a third-party, Mark R. Sprow,
     Esquire, as Kline’s guardian. The court also found that because of
     [Appellant’s] waste and mismanagement of the estate, a
     surcharge was appropriate. The court ordered the surcharge
     amount would be determined by the parties or, failing that, a
     master. See Order, March 25, 2015. This appeal followed.

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In re Kline, 136 A.3d 1028, 772 MDA 2015 (Pa. Super. filed January 8, 2016)

(unpublished memorandum at 3-6) (internal footnotes omitted). In that prior

appeal, this Court concluded that there was no basis upon which to disturb

the orphans’ court’s order removing Appellant as guardian or its conclusion

concerning a surcharge. Id. at 19. However, the task of determining the

amount of a surcharge was “left open.” Id. at 2, n.3.

     Following this Court’s January 8, 2016 decision, the matter returned to

the orphans’ court for a resolution of the surcharge issue. The orphans’ court

explained:

           [Appellant] served as guardian of the person and estate of
     [Ms. Kline]. Pursuant to a Petition for Special Relief and Contempt
     of Court filed by Ms. Kline’s niece, Pamela Rokoskie, the Honorable
     Peter Schmehl found “that a surcharge against [Appellant] is
     appropriate for waste and apparent mismanagement of Ms. Kline’s
     estate. Within the next thirty days, counsel for the parties shall
     review the financial records of this matter and negotiate an
     appropriate surcharge amount for consideration and approval by
     the [c]ourt. Failing the ability to reach an amicable surcharge
     amount, the [c]ourt will appoint a master to make findings and a
     recommendation to the [c]ourt regarding surcharge.”

           The parties were unable to reach an agreement and a
     hearing was held before Hearing Master Mark Morolla, Esq. on
     October 13, 2017. The Master, after considering all of the
     evidence and documents presented, determined that a surcharge
     in the amount of [$14,825.00] was appropriate. On January 8,
     2018, [Appellant], through her attorney, filed exceptions to the
     Master’s Report. This [c]ourt conducted a hearing on June 28,
     2018 and after argument denied [Appellant’s] exceptions finding
     that she was liable to the Estate of Cecelia Kline for a surcharge
     in the amount of Fourteen Thousand Eight Hundred Twenty Five
     Dollars ($14,825.00). The instant appeal ensued.

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Orphans’ Court Opinion, 9/21/18, at 2-3.          Both the orphans’ court and

Appellant complied with Pa.R.A.P. 1925.

      In the instant appeal, Appellant raises the following issue for this Court’s

consideration:

      A. Whether the [orphans’] court committed an error of law, or
      abused its discretion, when it denied [Appellant’s] exceptions to
      the report of the Master, entered judgment against [Appellant] in
      the amount of $14,825.00 and concluded that said report was
      compliant with the scope and purpose as ordered by the
      Honorable Peter W. Schmehl, on April 21, 2017, “being that the
      Master was to determine an appropriate amount of surcharge due
      the estate” because said findings were not supported by
      substantial evidence of record?

Appellant’s Brief at 4 (full capitalization and internal ellipses omitted).

      The standard we apply when reviewing an order from the orphans’ court

is as follows:

      We accord the findings of an Orphans’ Court, sitting without a jury,
      the same weight and effect as the verdict of a jury. Thus, we will
      not disturb those findings absent manifest error. We shall modify
      an Orphans’ Court order only if the findings upon which the order
      rests are not supported by competent or adequate evidence or if
      the court engaged in an error of law, an abuse of discretion, or
      capricious disbelief of competent evidence.

In re Marsh, 175 A.3d 993, 996 (Pa. Super. 2017) (citation omitted).

      The orphans’ court thoroughly addressed Appellant’s claim of error as

follows:

            [Appellant] complains on appeal that this Court committed
      an error of law and/or abused its discretion, when it concluded
      that the Master’s Report was compliant with the Honorable Peter
      W. Schmehl’s order of April 21, 2017. In that order the Judge
      directed that Master Merolla “shall communicate with the Guardian
      and counsel for the parties to determine an appropriate surcharge

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     amount due the incapacitated person’s estate from her former
     Guardian, [Appellant], and shall communicate his findings and
     recommendation to this Court.” Master Merolla did precisely what
     the Court directed him to do. He conducted a full hearing, took
     testimony, and reviewed exhibits. He questioned [Appellant]
     about her mismanagement of Ms. Kline’s estate and reviewed
     specific accounts and purchases with counsel present. Master
     Merolla’s findings, and subsequently, this Court’s affirmation of his
     report are supported by the record.

            [Appellant] further argues that [t]his Court committed an
     error of law and abused its discretion when it concluded that
     [Appellant] was liable to Ms. Kline for a surcharge in the amount
     of $14,825.00 and further when it concluded that the Master’s
     findings of waste and mismanagement as well as the resulting
     amount of surcharge were support[ed] by substantial evidence of
     record. This issue has been argued and addressed ad nauseum.
     In fact, the learned Superior Court, while not ruling specifically on
     this issue, did note in its decision filed January 8, 2016 in this
     same matter that:

           ...the evidence showed that during the guardianship
           period [Appellant] paid herself from Kline’s funds
           multiple times, including a number of flat $1,000.00
           payments for assistance to Kline. [Appellant] testified,
           [Ms. Kline] requested these checks to be written to
           me and it was for cumulative things, of taking care of
           her, taking care of the property, doing everything for
           her. She made the decision of what the amount is.
           N.T., 3/2/15 at 20. However, there is no evidence that
           [Appellant] sought or was granted court approval for
           these payments as required under the PEF Code ...[.]
           In addition, although [Ms.] Kline had not lived in her
           home for over one-and-one-half years and her
           residential care was $10,500.00 monthly at the time
           of the hearing, the residence remained vacant and
           property related expenses continued to be paid. The
           residence was not rented to anyone, and [Appellant]
           had the power to lease [Ms.] Kline’s residence.

     [In re Kline, 136 A.3d 1028, (unpublished memorandum at 7)
     (internal quotation marks omitted)].

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           Further, in that same opinion, the Superior Court recounted
     a partial excerpt from the Honorable Peter Schmehl’s trial court
     opinion. Stating:

                 At the hearing on March 25, 2015[, Rokoskie]
          called [Appellant] as the first witness as on cross
          examination. Much of the examination concerned
          entries in a check register. [Appellant] explained
          certain entries as describing expenses incurred for
          toiletries, groceries, and lawn maintenance. Some of
          the purchases were made by Ms. Kline with a credit
          card, even after she was adjudicated incapacitated.
          Other purchases were paid by [Appellant] at
          Ms. Kline’s direction.

                [Appellant] let Ms. Kline do her own
          banking...[.] In July and/or August 2014, [Appellant],
          who had acted as agent under the power of attorney
          prior to her appointment as guardian of [Ms.] Kline,
          had at least one of Ms. Kline’s bank accounts re-titled
          as a joint account with [Appellant] and/or had
          [Appellant] added as a [Payable on Death Account
          (“POD”)] beneficiary as Ms. Kline allegedly wished.

                 [Appellant] stated that monies that she paid to
          herself and her daughter were paid at Ms. Kline’s
          direction upon terms set by Ms. Kline. For example, in
          deciding to pay herself for yard work performed,
          [Appellant] asked Ms. Kline, the adjudicated
          incapacitated person, what she would pay for the
          services in order to set her pay scale. [Appellant] also
          accepted money from Ms. Kline on account of
          [Appellant] caring for her. [Appellant] acknowledged
          several $1,000 payments to herself for services
          rendered, but she never obtained a court order
          authorizing payments to herself.            [Appellant]
          repeatedly testified that the checks written to herself
          were written at Ms. Kline’s request and that Ms. Kline
          decided the amounts.

                [Appellant] acknowledged that Ms. Kline is no
          longer occupying her residence. [Appellant] testified
          that she continued to maintain the residence at
          Ms. Kline’s direction rather than sell the wasting

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           asset. [Appellant] had no plans or intentions to sell
           the real estate.

                ...On cross-examination, it was revealed that
           [Appellant] was convicted of welfare fraud
           approximately 11 years ago.

                  ...The Incapacitated person should not be the
           decision-maker, or the banker, or the bill-payer...[.]
           The guardian also cannot be self-dealing with the
           incapacitated person’s funds.     If [Appellant] had
           legitimate reason to be paying herself anything, she
           should have obtained court approval first. [Appellant]
           had a duty to safeguard Ms. Kline’s estate for
           Ms. Kline, not for [Appellant].

     [In re Kline, 136 A.3d 1028, (unpublished memorandum at 3-
     4)], citing Orphan’s Court Opinion, 6/11/2015, at 4-5 [(internal
     quotation marks omitted)].

           While the above is a lengthy recitation of the prior history
     of the case, it bears reiteration because even now, almost three
     (3) years after that opinion was penned, [Appellant] still
     inexplicably argues that a surcharge in the amount of fourteen
     thousand eight hundred and twenty five dollars ($14,825.00) was
     not appropriate and further that no surcharge at all was
     warranted. This defies logic.

            In the performance of his fiduciary duties, the fiduciary must
     exercise the “judgment, skill, care and diligence that a reasonable
     or prudent person would ordinarily exercise in the management of
     his or her own affairs.” In re Estate of Campbell, 692 A.2d 1098,
     1101-02 (Pa. Super. 1997). A surcharge is the penalty imposed
     by the court for the failure of a fiduciary to meet his duty of care
     owed his estate. As noted in Miller’s Estate, 345 Pa. 91, 95, 26
     A.2d 320, 321 (1942), “Surcharge is the penalty for failure to
     exercise common prudence, common skill and common caution in
     the performance of the fiduciary’s duty and is imposed to
     compensate beneficiaries for loss caused by the fiduciary’s want
     of due care.” Estate of Stephenson, supra, 469 Pa. at 138, 364
     A.2d at 1306. A fiduciary is permitted “reasonable and just”
     compensation for services rendered. In Re Ischy Trust, 490 Pa.
     71, 82, 415 A.2d 37, 42 (1980); Williamson Estate, 368 Pa. 343
     349, 82 A.2d 49 (1951); See, 20 Pa.C.S.A. § 7185(a). However,

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     the fiduciary’s claim to recompense should be based on actual
     services, not an arbitrary formula. In Re Estate of Breyer, 475
     Pa. 108, 379 A.2d 1305, 1311 (1977); In Re Ischy Trust, 415 A.2d
     at 42; In Re Reed, 467 Pa. 371, 357 A.2d 138, 142 (1976); In re
     Estate of Sonovick, 373 Pa. Super. 396, 399 (Pa. Super. Ct.
     1988). Under Pennsylvania law, the determination of whether the
     compensation claimed by the fiduciary is “reasonable and just” is
     left to the sound discretion of the trial court. In Re Estate of
     Breyer, 379 A.2d at 1311; In Re Ischy Trust, 415 A.2d at 42-43;
     In Re Etate of Loutsion, 344 Pa.Super. 477, 496 A.2d 1205, 1206
     (1985).

           Master Merolla painstakingly combed through the bank
     records of Ms. Kline and the purchases of [Appellant] to determine
     which of those purchases were not appropriate. He separates his
     report into three tables. “Table A” included the transactions
     completed by checks or included within the first amended account,
     for the months when bank statements were not available from
     October 2013 to May 2014.          “Table B” included electronic
     transactions included within the bank record and “Table C”
     included balances of Ms. Kline’s certificates of deposit. Within
     those tables, the items highlighted in bold were to be included
     within the surcharge. The majority of the emboldened checks are
     to [Appellant] for one thousand dollars ($1,000) for “supplies”,
     though some are smaller amounts.            There is a “gift” to
     [Appellant’s] daughter in the aggregate amount of one thousand
     one hundred and thirty one dollars and ninety one cents
     ($1,131.91).     There are also multitudes of small charges
     including, but not limited to, Walmart purchases, Spa Nails, China
     Max, Friendly’s, A.C. Moore, Jumbo China Buffet, Joann Stores and
     Hair Cuttery, just to name a few.

           What Master Merolla’s Report and this Court’s own review of
     the entire record before it makes very clear is that [Appellant]
     was comfortably living on Ms. Kline’s bill, making
     purchases and handsomely paying herself in monthly
     installments, without Court approval. She failed to meet
     the duty of care she owed to Ms. Kline’s estate.
     [Appellant’s] explanation that the purchases and gifts
     were at the behest of Ms. Kline is simply not credible. This
     Court is constrained to believe that almost weekly hair
     appointments, frequent visits to Chinese restaurants, large
     lump sum payments to [Appellant] and [Appellant’s]
     daughter are indicative of the judgment, skill, care and

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      diligence that [Appellant] would exercise in the
      management of her own affairs. This record is devoid of
      ambiguity. [Appellant] owes the amount of fourteen thousand
      eight hundred and twenty five dollars ($14,825.00) to Ms. Kline’s
      estate.

Orphans’ Court Opinion, 9/21/18, at 4-8 (emphasis added).

      As noted above, in disposing of Appellant’s prior appeal, this Court

stated that the orphans’ court “left the surcharge issue open.” In re Kline,

136 A.3d 1028, (unpublished memorandum at 2, n.3) (citing the Orphans’

Court’s Order, 3/25/15). In the orphans’ court order, it directed as follows:

      Within the next thirty days, counsel for the parties shall review
      the financial records of this matter and negotiate an appropriate
      surcharge amount for consideration and approval by the Court.
      Failing the ability to reach an amicable surcharge amount, the
      Court will appoint a master to make the findings and a
      recommendation to the Court regarding surcharge.

Order, 3/25/15. In this appeal, Appellant avers that the surcharge was not

mandatory, the Master was to determine what amount, if any, should be

surcharged, and the evidence was insufficient to support a surcharge of

$14,825. Appellant’s Brief at 9. Appellant’s position is meritless.

      It is undisputed that the parties failed to reach a stipulated surcharge.

Thus, it was necessary to involve the Master. Order, 3/25/15. The Master

discharged his duty as directed by the orphans’ court, made credibility

determinations, reviewed the financial evidence, and determined an amount

for a surcharge. Master’s Report, 12/18/17.

      Appellant asserts that the Master failed to consider the possibility that a

surcharge was unwarranted.       Appellant’s Brief at 9.     This bald claim is

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unsupported and specious. There is nothing in the record that prohibited the

Master from concluding no surcharge was warranted or awarding a symbolic

surcharge of $1.00.     However, the Master found that a surcharge in the

amount of $14,825 was appropriate. Although Appellant may not be pleased

with the Master’s determination or the amount of the surcharge, there is

substantial evidence supporting the Master’s conclusion that a surcharge of

$14,825 was appropriate. See Master’s Report, 12/18/17 (making credibility

determinations and examining Appellant’s disbursements of Ms. Kiline’s

funds). Appellant’s expenditures for “supplies,” direct payments to herself,

gifts to her daughter of more than $1,000, and weekly, if not, daily trips to

Walmart, restaurants, and hair and nail salons, illustrate the waste and

mismanagement of Ms. Kline’s assets. Master’s Report, 12/18/17, Tables A

and B.   The orphans’ court credited the Master’s findings and conclusion.

Orphans’ Court Opinion, 9/21/18, at 7.

      After review, we discern no basis upon which to disturb the orphans’

court’s order.    The evidence established that Appellant mismanaged

Ms. Kline’s finances, and Appellant’s waste warranted a surcharge of $14,825.

Appellant’s argument to the contrary is meritless and unsupported by the

record. Accordingly, Appellant is due no relief, and we affirm the orphans’

court’s order.

      Order affirmed.

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Judgment Entered.

Joseph D. Seletyn, Esq.
Prothonotary

Date: 06/21/2019

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