Court Opinion

ID: 4118518
Source: CourtListenerOpinion
Date Created: 2017-01-25 20:14:39.545899+00
Date Added: 2024-06-11T14:42:36.205172
License: Public Domain

J. A25004/16

NON-PRECEDENTIAL DECISION – SEE SUPERIOR COURT I.O.P. 65.37

E. PAUL PALOSKEY,                       :     IN THE SUPERIOR COURT OF
                                        :           PENNSYLVANIA
                        Appellant       :
                                        :
                   v.                   :          No. 732 MDA 2016
                                        :
JENNIFER A. HAGERMAN                    :

                Appeal from the Order Entered April 21, 2016,
               in the Court of Common Pleas of Clinton County
                  Orphans’ Court Division at No. 2014-00099

BEFORE: FORD ELLIOTT, P.J.E., SHOGAN, J., AND STEVENS, P.J.E.*

MEMORANDUM BY FORD ELLIOTT, P.J.E.:              FILED JANUARY 25, 2017

      E. Paul Paloskey appeals the order of the Court of Common Pleas of

Clinton County that vacated the appointment of Justin K. Houser, Esq., as

counsel for Jennifer A. Hagerman (“appellee”), surcharged appellee in the

amount of $1,214.43 payable to appellant in his capacity as attorney-in-fact

for Edward P. Paloskey, and ordered appellee to reimburse Clinton County in

the amount of $3,688.58 for attorney’s fees paid by Clinton County on

behalf of appellee less a credit of $2,071.17 for reimbursement monies

already paid to Clinton County by appellee.

      The background and relevant findings of fact as found and recounted

by the trial court are as follows:

* Former Justice specially assigned to the Superior Court.
J. A25004/16

                Edward P. Paloskey and Donna C. Paloskey
          each executed a general power of attorney naming
          each other, as well as their daughter, Carol A.
          Folkenroth, and their granddaughter, [appellee] as
          attorneys-in-fact.

               The power of attorney executed on June 9,
          2011, was revoked on July 30, 2012.

                 On May 20, 2014, [appellant], son of
          Edward P. Paloskey and Donna C. Paloskey, filed a
          petition to obtain an accounting from [appellee].

                 On October 6, 2014, [appellee] filed a
          collection of documents which [appellee] deemed to
          be a response to the Court’s Order to file a formal
          accounting.

                On January 16, 2015, the Court appointed
          Justin K. Houser, Esquire to represent [appellee] and
          to assist in the preparation of a formal accounting
          with the Court reserving the right to assess
          [appellee] for reimbursement to Clinton County.

                In response to the Order of this Court and with
          the assistance of court-appointed counsel, Justin K.
          Houser, Esquire, [appellee] filed her second
          accounting on February 27, 2015.

               On March 20, 2015, exceptions to the
          accounting of [appellee] were filed by [appellant].

                 On October 20, 2015, a hearing was held on
          the exceptions where the Court received testimony
          from [appellant], [appellee], Isaac Hagerman,
          Clair Folkenroth, Beula Hauman, Robert Huxta, and
          Mary George Rhone.

          ....

                         FINDINGS OF FACT

          ....

                                  -2-
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          3.     [Appellant] is the uncle of [appellee].

          ....

          6.     The power of attorney executed June 9,
                 2011 by Edward P. Paloskey and Donna C.
                 Paloskey included an “acknowledgement of
                 Power of Attorney” whereby [appellee]
                 acknowledged that she had the following
                 obligations:

                 (1)   I shall exercise the powers for
                       the benefit of the principal.

                 (2)   I shall keep the assets of the
                       principal separate from my
                       assets.

                 (3)   I shall exercise reasonable
                       caution and prudence.

                 (4)   (4) I shall keep a full and
                       accurate record of all actions,
                       receipts, and disbursements
                       on behalf of the principal.

          ....

          8.     [Appellee]   did   not    read    the
                 Acknowledgement of Power of Attorney
                 and did not follow the clearly stated
                 obligations.

          9.     [Appellee]    filed   an    accounting on
                 October 6, 2014 which failed to include
                 any receipts for disbursements made on
                 the part of the principals.

          ....

          20.    When [appellee] relocated to live with her
                 grandparents, she was accompanied by
                 her husband, her step-daughter and her
                 daughter.

                                    -3-
J. A25004/16

          21.    [Appellee],   her      family   and      her
                 grandparents     jointly    occupied     her
                 grandparent’s [sic] residence.

          22.    [Appellee’s] grandparents        were   both
                 undergoing dialysis.

          23.    [Appellee’s]     grandmother was unable to
                 operate an       automobile and [appellee’s]
                 grandfather     had not exercised his driving
                 privileges in   some time.

          24.    [Appellee] assumed the responsibility of
                 running errands, buying groceries and
                 other household items as well as
                 transporting her grandparents.

          ....

          26.    While residing with her grandparents,
                 [appellee] cooked, cleaned, did laundry
                 and did errand running.

          ....

          28.    On     various      occasions,   [appellee]
                 transported her grandparents to either the
                 Loyalsock     Dialysis    Clinic  or    the
                 Williamsport facility.

          29.    Occasionally, [appellee] transported her
                 grandfather to York, Pennsylvania, to a
                 pain clinic to address pain associated with
                 his spinal stenosis.

          30.    [Appellee] primarily used her own mini-
                 van to transport her grandparents.

          31.    [Appellee’s] grandmother gave [appellee]
                 her bank card to use for the purchase of
                 groceries and other household needs.

                                      -4-
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          32.    Health      permitting,      [appellee’s]
                 grandmother    accompanied     [appellee]
                 when [appellee] was making purchases for
                 the household.

          33.    Following the purchase of items and use of
                 the bank card, [appellee] would return the
                 receipt to her grandmother.

          34.    [Appellee’s]    grandmother   authorized
                 [appellee] to use the grandmother’s bank
                 card on occasion as [appellee] and her
                 family were living on her husband’s
                 disability income.

          ....

          37.    During the time [appellee] resided with
                 her    grandparents,    her  grandparents
                 continued to spend their own money and
                 write out some of their own checks.

          38.    [Appellee’s]   mother,    Carol  Paloskey
                 Folkenroth, also participated in spending
                 her parents’ monies and writing out
                 checks.

          ....

          40.    Following     an     altercation    between
                 [appellee’s] husband and [appellant],
                 [appellee] and her family relocated a few
                 days    later   from    the    grandparents’
                 residence.

          41.    [Appellee’s]  grandmother,     Donna     C.
                 Paloskey, passed on April 26, 2012.

          42.    Following [appellee] and her family’s
                 relocation from [appellee’s] grandparents’
                 home, [appellant] accused [appellee] of
                 stealing various items including the lawn
                 mower.

                                   -5-
J. A25004/16

          ....

          53.    During the time [appellee] resided with
                 her grandparents, [appellee] incurred
                 $596.62 in veterinarian bills for her pets
                 that were paid from her grandparents’
                 account.

          54.    [Appellee] wrote checks out on her
                 grandparents’ account, signing the checks
                 as “POA.”

          ....

          56.    On occasion, [appellee] would purchase
                 prescriptions for herself, her husband and
                 her children through Mountain View
                 Pharmacy     on    the    same   bills her
                 grandparents were receiving and paying.

          57.    [Appellee]    placed  charges   on   the
                 Principals’ account for a “Realty Tract”
                 subscription at the rate of $49.95 per
                 month.

          58.    [Appellee] place [sic] charges for her nails
                 on the Principals’ credit card.

          59.    On the date of her grandmother’s death,
                 April 23, 2012, [appellee] made purchases
                 on the Principals’ credit card in the amount
                 of $182.74 at K-Mart; $49.59 at Dremel’s;
                 $27.23 at Big Louie’s Pizza; $25.00 for a
                 line of credit payment; and $11.45 at
                 Mountain View Pharmacy.

          60.    [Appellee], or her family members,
                 purchase [sic] three (3) pornographic
                 movies on the Principals’ account which
                 totaled $41.97 in charges.

          61.    [Appellee] purchased a shamrock light on
                 the Principals’ account in the amount of
                 $17.97.

                                   -6-
J. A25004/16

           62.    [Appellee] purchased items on the
                  Principals’ account from A.C. Moore which
                  were for the personal benefit and use of
                  [appellee] in the amount of $227.43.

           63.    [Appellee]    placed   charges   on  the
                  Principals’ account for her own vehicle’s
                  inspection in the amount of $26.45.

           64.    [Appellee] has not reimbursed the
                  Principals for any inappropriate charges
                  she made to their credit card account or
                  monies drawn from their checking
                  account.

Trial court opinion, 4/15/16, Findings of Fact Nos. 3-6, 8-9, 20-24, 26,

28-34, 37-38, 40-42, 53-54, 56-64 at 1-8.

     The trial court determined that appellee breached her fiduciary duty to

the principals by failing to keep her assets separate from the principals’

assets, by failing to keep full and complete records of all actions, and by

failing to use her powers exclusively for the benefit of the principals. The

trial court overruled appellant’s exceptions to the accounting in part and

sustained them in part. The trial court overruled objections concerning the

sale of a lawnmower, the removal of a roto tiller from the principals’

residence, the alleged removal of a World War II German officer’s dagger

from the possession of Edward Paloskey, the alleged removal of two fly rods

from the possession of the principals, and an objection regarding appellee’s

failure to pay the living expenses of her family when they stayed with her

grandparents.    The trial court also overruled a general objection as to

                                   -7-
J. A25004/16

inaccuracies in the accounting and overruled an objection as moot regarding

subpoenas.     The trial court sustained an objection regarding appellee

charging pornographic movies to the grandparents’ account and sustained

the objections to the personal property purchased by appellee which was

charged to the account of her grandparents which were not related to their

needs. The trial court surcharged appellee in the amount of $1,214.43 and

ordered appellee to reimburse Clinton County for attorney’s fees paid on

behalf of appellee.   In an amended order, the trial court credited appellee

with the amount of attorney’s fees for which appellee had already

reimbursed Clinton County.

     On April 15, 2016, appellant moved for reconsideration which the trial

court denied that same day.

     On appeal, appellant raises the following issue for this court’s review:

“Whether the lower court committed an abuse of discretion or error of law in

failing to enter judgment for [appellant] for all undocumented expenditures

made by [a]ppellee during her tenure as attorney-in-fact for her maternal

grandparents?” (Appellant’s brief at 8.)

     We begin our analysis with our standard of review:

             When an appellant challenges a decree entered by
             the Orphans’ Court, our standard of review “requires
             that we be deferential to the findings of the Orphans’
             Court.” In re Estate of Miller, 18 A.3d 1163, 1169
             (Pa.Super.2011) (en banc).

                   [We] must determine whether the record
                   is free from legal error and the court’s

                                     -8-
J. A25004/16

                       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.
                       Where the rules of law on which the
                       court relied are palpably wrong or clearly
                       inapplicable, we will reverse the court’s
                       decree.

                  Id. (alterations and citation omitted). Evaluating the
                  reasonableness of the amount of a surcharge is
                  within the province of a trial court. In re Wade’s
                  Estate, 343 Pa. 520, 23 A.2d 493, 495 (1942).
                  Absent an abuse of discretion, we will not disturb a
                  trial court’s finding. Id.

In re Estate of Brown, 30 A.3d 1200, 1206 (Pa.Super. 2011).

      When a party seeks to recover assets misused by a fiduciary, it is

seeking      to    surcharge    the   fiduciary.   “[I]t   is   well   settled   in   this

Commonwealth that a fiduciary who had negligently caused a loss to an

estate may properly be surcharged for the amount of such loss.” Estate of

Lohm, 269 A.2d 451, 454 (Pa. 1970). A surcharge is the penalty imposed

for the failure to exercise common prudence, common skill, and common

caution in the performance of a fiduciary duty and is imposed in order to

compensate beneficiaries for a loss caused by a fiduciary’s lack of due care.

In re Estate of Schultheis, 747 A.2d 918, 927 (Pa.Super. 2000).                       The

objecting party bears the burden of proving wrongdoing on the part of the

fiduciary.        Once the objecting party establishes evidence of wrongful

                                           -9-
J. A25004/16

conduct, the burden shifts to the fiduciary to prove due care. Id. “Where a

fiduciary claims credit for disbursements made by him, the burden rests

upon the fiduciary to justify them. Proper vouchers or equivalent proof must

be produced in support of such credits. Accountant’s unsupported testimony

is generally insufficient.” Strickler Estate, 47 A.2d 134, 135 (Pa. 1946).

      Appellant contends that he established a prima facie showing that

appellee engaged in wrongful conduct which shifted the burden to appellee

to justify the expenditures. For example, appellant refers to the trial court’s

Finding of Fact No. 56 in which the trial court found that appellee

occasionally purchased prescriptions for her immediate family through

Mountain View Pharmacy on the same bills that her grandparents were

receiving and paying, but the trial court only surcharged one item for

$11.45.   Similarly, the trial court found in Finding of Fact No. 64 that

appellee had not reimbursed the Principals for any inappropriate charges

which she made on their credit card account or on monies drawn from their

checking account. Besides those examples, appellant essentially argues that

for all expenditures for which appellee could not provide receipts, appellee

should be surcharged.       According to appellant, the total amount of

expenditures by appellee during the period in question was $60,522.32, and

the documented expenditures were $7,348.52 which left a balance of

$53,173.80 for which appellee should be surcharged.

                                    - 10 -
J. A25004/16

      In its opinion pursuant to Pa.R.A.P. 1925(a) opinion, the trial court

explained:

                   The Court’s Opinion is based specifically on the
             Findings of Fact contained in the Opinion. It does
             not appear that the Appellant disputes the Court’s
             recitation of the applicable law but disputes the
             Court’s Findings and application of those Findings to
             the law.    The Appellant’s objections were poorly
             drafted and the Court provided the Appellant
             numerous opportunities to amend the same.

                   The Court heard detailed testimony from the
             Appellee and was satisfied that the Appellee was able
             to explain and support the disbursements with either
             documentation or other evidence. As discussed in
             the Court’s Opinion, there were multiple hands in the
             pot for the matters at issue. Those hands included
             the Principals, the Co-Power of Attorney, and the
             Appellee. The Court surcharged the Appellee for
             each item that the evidence permitted. The Court
             made a determination regarding the credibility of the
             evidence, noting that it [did] not have the
             opportunity to receive testimony from either of the
             Principals.

Trial court opinion, 5/19/16 at 1-2.

      Appellant argues that the only expenditures for which appellee should

not be surcharged are those for which checks were written by either of his

two parents, his sister who also had power of attorney, and one check

written to his attorney for the preparation of deeds. Appellant ignores the

fact that the trial court, as fact-finder, found appellee credible with respect

to expenditures other than those for which he surcharged appellee when it

evaluated the evidence pursuant to Strickler. Appellant does not attack the

trial court’s evaluation of the evidence but just sets forth the broad position

                                       - 11 -
J. A25004/16

that appellee should be surcharged in the amount of $53,173.80. Appellant

has failed to establish that the trial court abused its discretion when it made

its credibility determinations or that the trial court committed an error of law

in making its legal conclusions.

      Order affirmed.

Judgment Entered.

Joseph D. Seletyn, Esq.
Prothonotary

Date: 1/25/2017

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