Court Opinion

ID: 2904483
Source: CourtListenerOpinion
Date Created: 2015-09-09 22:10:34.216821+00
Date Added: 2024-06-11T15:20:48.714842
License: Public Domain

J-A17027-15

                                  2015 Pa. Super. 190

ESTATE OF: CARL K. ZUCKER,                        IN THE SUPERIOR COURT OF
DECEASED                                                PENNSYLVANIA

APPEAL OF: WENDY P. GLAVIN
                                                      No. 2727 EDA 2014

                Appeal from the Order Entered August 15, 2014
             In the Court of Common Pleas of Montgomery County
                   Orphans' Court at No(s): 46-2002-X2139

BEFORE: GANTMAN, P.J., BENDER, P.J.E., and OTT, J.

OPINION BY BENDER, P.J.E.:                       FILED SEPTEMBER 09, 2015

       Wendy P. Glavin (Wendy), one of three children of Carl K. Zucker

(Decedent) and Syma H. Zucker (Syma), appeals from the order entered on

August 15, 2014, that granted a motion for judgment on the pleadings in

favor of Scott R. Zucker (Scott) and Karyn I. Greco (Karyn), Wendy’s

siblings, to the exclusion of Wendy.1 After review, we affirm.

       We begin by quoting the orphans’ court’s rendition of the facts and

procedural history of this matter:

             The [D]ecedent, Carl Zucker, died on June 23, 2002,
       survived by his wife, Syma H. Zucker, a son [,] Scott R. Zucker,
       and two daughters, Karyn I. Greco and Wendy P. Glavin. In
       Item SECOND A (3) of his will dated November 22, 1996, the
       [D]ecedent created a marital trust for Syma’s benefit and
       provided, at her death:
____________________________________________

1
  The August 15, 2014 order incorrectly identified the motion at issue as
involving a request for summary judgment. By order dated November 18,
2014, the orphans’ court issued a correction to its August 15 th order,
deleting the phrase “motion for summary judgment” and inserting the
phrase “motion for judgment on the pleadings.” See Order, 11/18/14.
J-A17027-15

           (a) Unless my wife otherwise directs by specific
           reference in her Will to this section, my Trustees
           shall pay to her estate from principal included in her
           taxable estate an amount equal to any increase in
           Federal or state death taxes, including interest and
           penalties thereon, caused by inclusion of such
           principal in her taxable estate.

           (b) By specific reference to this power in her Will, my
           wife may appoint all or any part of the principal not
           needed for the payment above, outright or in trust,
           to or for any one or more of my issue and also
           may appoint income from all or part of such principal
           to the spouse of any child of mine for life or any
           shorter period.

           (c) Trustees shall distribute all remaining principal
           under the Paragraph immediately below.

     ([E]mphasis added.) The paragraph referenced in Item SECOND
     A (3)(c) provided for equal treatment for the [D]ecedent's three
     children. Syma died on September 6, 2013. She left a will
     dated July 24, 2003, and a codicil dated August 3, 2005. In
     Item THIRD of the codicil, Syma exercised the special
     testamentary power granted her by the [D]ecedent and
     appointed all of the principal in the marital trust to two separate
     and equal trusts, one for the benefit of Karyn and her issue, and
     the other for Scott and his issue.

            On October 22, 2013, Scott, trustee of the marital trust
     under the [D]ecedent's will, filed a petition for declaratory
     judgment, seeking a determination that the remaining principal
     in the trust should be awarded to Scott and Karyn and to the
     exclusion of Wendy, in accordance with Syma’s directives. On
     March 31, 2014, Wendy filed an answer with new matter to the
     petition for declaratory judgment. In the new matter, Wendy
     alleged that Syma’s appointment was not a proper exercise of
     the power as it was done “in bad faith, based on hate and malice
     toward Wendy, contrary to [the Decedent’s] intent to benefit his
     issue equally (absent a good faith reason to the contrary) and
     the duty imposed on Syma to act in good faith when exercising a
     testamentary power imposed by Pennsylvania law.” (Answer to
     Pet. for Decl. Judgment ¶46.)

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              On March 31, 2014, Scott and Karyn filed a motion for
       judgment on the pleadings, denying that the holder of a power is
       required to exercise it in good faith. On April 30, 2014, Wendy
       filed a cross-motion for judgment on the pleading, contending
       that the power applied only to a limited portion of the principal.
       Counsel briefed the issues extensively and the Court heard
       argument on July 22, 2014. After careful consideration, we
       grant the motion filed by Scott and Karyn, and deny the cross
       motion filed by Wendy.

Orphans’ Court Opinion (OCO), 8/15/14, at 1-2.

       Wendy now appeals to this Court, and raises the following question for

our review: “Did the Orphans’ Court err in holding there is no duty of good

faith when a person exercises a testamentary power of appointment despite

Pennsylvania Supreme Court precedent that such a person acts as a trustee

when exercising such power?” Wendy’s brief at 3.2

       Before addressing Wendy’s arguments, we note that the following

guides our review:

       A motion for judgment on the pleadings should be granted only
       where the pleadings demonstrate that no genuine issue of fact
       exists, and the moving party is entitled to judgment as a matter
       of law. Thus, in reviewing a trial court's decision to grant
       judgment on the pleadings, the scope of review of the appellate
       court is plenary; the reviewing court must determine if the
       action of the trial court is based on a clear error of law or
       whether there were facts disclosed by the pleadings which
       should properly go to the jury. An appellate court must accept
       as true all well-pleaded facts of the party against whom the
____________________________________________

2
  As in other estate cases, Decedent, the individual that gave the power of
appointment over the trust to Syma, is identified as the “donor” and Syma,
the individual who is given the power, is identified as the “donee.” Those
individuals, here Scott and Karyn, in whose favor the power is exercised, are
identified as “appointees.”

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     motion is made, while considering against him only those facts
     which he specifically admits. Neither party can be deemed to
     have admitted either conclusions of law or unjustified inferences.
     Moreover, in conducting its inquiry, the court should confine
     itself to the pleadings themselves and any documents or exhibits
     properly attached to them. It may not consider inadmissible
     evidence in determining a motion for judgment on the pleadings.
     Only where the moving party’s case is clear and free from doubt
     such that a trial would prove fruitless will an appellate court
     affirm a motion for judgment on the pleadings.

Insurance Co. of Evanston v. Bowers, 758 A.2d 213, 215 (Pa. Super.

2000) (quoting Consulting Eng'rs, Inc. v. Insurance Co. of N. America,

710 A.2d 82, 83-84 (Pa. Super. 1998) (citations and internal quotation

marks omitted)).

     Essentially, Wendy argues that a “donee of a testamentary power is a

trustee,” and “must owe the same duties imposed by law on trustees.”

Wendy’s brief at 9. Wendy then claims that “trustees, such as donees of a

power of testamentary appointment, must act in good faith.”         Id.   To

support this proposition, she relies on Roger’s Estate, 67 A. 762 (Pa.

1907), which she quotes as follows:

     The donee of a [testamentary] power is simply a trustee for the
     donor to carry into effect the authority conferred by the power.
     In exercising the power, he must observe strictly its provisions
     and limitations. The estate appointed is that of the donor and
     not of the donee, and in making the appointment the intention of
     the donor and not that of the donee must prevail.

Wendy’s brief at 9 (quoting Roger’s Estate, 67 A. at 762) (emphasis

omitted). Wendy then identifies subsequently decided cases that utilize the

same language found in Roger’s Estate, and based on that language again

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contends that it is logical that a donee of a testamentary power of

appointment owes the same duty as a trustee, i.e., they must act in good

faith.3 Wendy further identifies case law that recognizes an implicit duty of

good faith such as between franchisor/franchisee, insurer/insured, and

parties to a contract.4      Additionally, Wendy discusses case law from other

jurisdictions that recognize “a duty of good faith imposed on the donee of a

testamentary power.” Wendy’s brief at 10.5

       Wendy also quotes language from Noonan Estate, 63 A.2d 80, 83

(Pa. 1949), where the court held that “[a]n executor is a fiduciary no less

than is a trustee … and, as such, primarily owes a duty of loyalty to a

beneficiary of his trust….” Wendy’s brief at 11. Wendy again reiterates that

a donee is a trustee and, therefore, owes a duty of good faith to all the

appointees and should not act with “selfish personal hatred and malice.” Id.

at 15.    She also contends that the orphans’ court’s reliance on Lewis’s

Estate, 112 A. 454 (Pa. 1921), and Estate of Kohler, 344 A.2d 469 (Pa.
____________________________________________

3
 See Estate of DuPont, 376 A.2d 570, 571 (Pa. 1977); Schede Estate,
231 A.2d 135, 137 (Pa. 1967); Sinnott’s Estate, 165 A. 244, 246 (Pa.
1933).
4
  See Atlantic Richfield Co. v. Razumic, 390 A.2d 736 (Pa. 1978);
Gedeon v. State Farm Mut. Auto. Ins. Co., 188 A.2d 320 (Pa. 1963);
Dep’t. of Gen Servs. v. Pittsburgh Bldg. Co., 920 A.2d 973 (Pa. Cmwlth
2007).
5
  We do not list these cases, noting that this Court is not bound by the
decisions from other jurisdictions.   See Tagouma v. Investigative
Consultant Servs., 4 A.3d 170, 175 n.3 (Pa. Super. 2010).

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1975), are inapposite in that neither case dealt with allegations that the

respective donee did not act in good faith. However, she overlooks the fact

that the cases she relies on also do not deal with the issue of good faith in

relation to a donee’s duty to the potential appointees.

      Scott and Karyn begin their response with reliance on Estate of

DuPont, 379 A.2d 570, 571 (Pa. 1977), which directs that a donee must

“exercise that power within the limits of her authority.” They then quote the

following language from Lewis’s Estate:

      In determining whether a power of appointment is validly
      exercised, consideration must first be directed to the intention of
      the donor, as found in the instrument creating the power. The
      applicability of the rules of law, relating to the exercise of the
      power of appointment, is not to be measured solely by the
      particular class in which the power may be conveniently placed
      or wherein it may operate, but from a consideration of the intent
      and purpose for which the power was created, and whether its
      exercise expressly or impliedly violates the conditions laid down
      by the donor.

Id. at 454.

      Scott and Karyn then discuss whether the language in Decedent’s will

created an exclusionary or non-exclusionary power in the donee. They and

Wendy agree that the        language    in Decedent’s will gave Syma an

exclusionary power of appointment.           See Scott/Karyn’s brief at 11-12;

Wendy’s brief at 16. The parties also agree that under the authority given to

Syma, she could exclude Wendy.         Id.    Scott and Karyn next discuss the

limits on Syma’s power of appointment, i.e., that she must reference it in

her will and “appoint the principal to or for any one or more of [Decedent’s]

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issue.”   Id. at 12.    They claim that Syma complied and counter Wendy’s

argument, asserting that neither Pennsylvania statutes nor case law in any

way suggest that a donee of a power of appointment owes any duty to the

potential appointees.

      Scott and Karyn cite the Probate, Estates and Fiduciaries (PEF) Code,

20 Pa.C.S. §§ 101-8815, and Pennsylvania’s Uniform Trust Act (UTA), 20

Pa.C.S. §§ 7701-7799.3, providing definitions of pertinent words, such as

fiduciary, personal representative, trustee and beneficiary. Specifically, they

cite the definition of “beneficiary” in the UTA, which states as follows:

      A person that:

      (1) has a present or future beneficial interest in a trust, vested
      or contingent; or

      (2) in a capacity other than that of trustee or protector, holds a
      power of appointment over trust property.

20 Pa.C.S. § 7703. Based upon this language, Scott and Karyn assert that

“the holder of a power of appointment [is] a beneficiary of a trust, and not a

trustee or other fiduciary.” Scott/Karyn’s brief at 15. We agree.

      Relating to the facts presently before us, Syma is the beneficiary and

was given the power of appointment over the marital trust, i.e., she was not

a trustee of that trust.    We also note that Wendy’s quote from Roger’s

Estate, that we set forth above, omits the following language: “In case of a

restricted power, the donee’s discretion in exercising the power is defined by

the will, and the limit there placed upon it must be observed.”         Roger’s

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Estate, 67 A. at 762. Thus, we interpret the Supreme Court’s decision in

Roger’s Estate as signifying that Syma, as the donee, was required to

comply with Decedent’s directives. She owed a duty to Decedent, not to any

of the potential appointees.

      Our review of Roger’s Estate, and the cases that rely on that

decision, does not in any way direct that Syma, the donee of the power of

appointment, should be considered a trustee, owing fiduciary obligations,

such as a duty of good faith, to Scott, Karyn or Wendy. Rather, Syma was

required to exercise her power “within the limits of her authority[]” as

directed by Decedent. DuPont, 379 A.2d at 571.

      We have reviewed the language contained in Decedent’s will and in the

codicil to Syma’s will in which she directed that the principal contained in the

marital trust be divided into two trusts for the benefit of Scott and Karyn and

their issue. We have also reviewed the case law provided by the parties and

the orphans’ court. We conclude that none of the cases, in which challenges

to the exercise of the power of appointment were raised, direct that the

appointments must be made in good faith.        Rather, we state again that a

donee’s duty is to the donor and the donee must exercise that power within

the donor’s established conditions.    Moreover, the donee has the right to

select some of the potential appointees to the exclusion of others.        See

Estate of Kohler, 344 A.2d at 472.          No duty of good faith has been

established. Therefore, we conclude that the orphans’ court’s grant of Scott

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and Karyn’s motion for judgment on the pleadings was proper. The orphans’

court did not commit an error of law.

     Order affirmed.

Judgment Entered.

Joseph D. Seletyn, Esq.
Prothonotary

Date: 9/9/2015

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