Court Opinion

ID: 4017928
Source: CourtListenerOpinion
Date Created: 2016-07-21 17:10:35.48643+00
Date Added: 2024-06-11T12:49:28.579059
License: Public Domain

J-A11019-16

NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37

TRUST UNDER WILL OF MINNIE F.                     IN THE SUPERIOR COURT OF
CASSATT AS APPOINTED BY ALEXANDER                       PENNSYLVANIA
J. CASSATT

APPEAL OF: WELLS FARGO BANK, N.A.

                                                      No. 1587 EDA 2015

                  Appeal from the Order Entered April 24, 2015
              In the Court of Common Pleas of Montgomery County
                      Orphans' Court at No(s): 1994-X1352

BEFORE: SHOGAN, J., MUNDY, J., and FITZGERALD, J.*

MEMORANDUM BY MUNDY, J.:                                FILED JULY 21, 2016

        Appellant, Wells Fargo Bank, N.A. (Wells Fargo), appeals from the April

24, 2015 order granting summary judgment in favor of Appellees, Sheila

Cassatt Issenberg and Lydia Cassatt Osgood, in their petition for declaratory

judgment.      This ruling confirmed Appellees’ ability, as beneficiaries, to

remove Wells Fargo as the corporate trustee of the trust under will of Minnie

F. Cassatt (Trust) as appointed by Alexander J. Cassatt and to appoint The

Northern Trust Company (Northern Trust) as the successor corporate

trustee. Further, the orphan’s court sua sponte transferred the situs of the

trust to Delaware County. After careful review, we reverse.

____________________________________________

*
    Former Justice specially assigned to the Superior Court.
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      The orphan’s court summarized the facts and procedural history of this

case as follows.

                   Minnie Cassatt died May 30, 1954 a resident of
            Delaware County, Pennsylvania and her will and
            codicil were admitted to probate by the Register of
            Wills of Delaware County.         The Pennsylvania
            Company for Banking and Trusts and Minnie
            Cassatt’s two sons, Alexander J. Cassatt and
            Anthony D. Cassatt, qualified as Executors under her
            will.

                  Minnie Cassatt left her residuary estate in
            separate trusts for the benefit of her two sons,
            Alexander J. Cassatt and Anthony D. Cassatt. Under
            ITEM FIFTH (A) of Minnie Cassatt’s will, as modified
            by her codicil, each son was given the power to
            appoint the income and principal of his trust to and
            among his issue as he may designate by his will.
            Under ITEM THIRTEENTH of Minnie Cassatt’s will, a
            majority of the adult beneficiaries who are entitled to
            receive income from any trust created under her will
            may, at any time and from time to time, in their
            discretion, and without assigning any cause
            therefore, remove the corporate trustee by a written
            instrument delivered to the corporate trustee.

                  Alexander J. Cassatt (“Alexander”) died April
            19, 1985, a resident of Charlestown, South Carolina.
            Alexander’s will dated August 29, 1978 and codicils
            thereto dated August 29, 1978, May 11, 1984, and
            March 30, 1985 were admitted to probate by the
            Probate Court of Charlestown County, South
            Carolina. Under ITEM FIRST of Alexander’s will, he
            exercised the power of appointment that he had over
            the separate residuary trust for his benefit under the
            will of his mother, Minnie Cassatt, directing that,
            after the payment of certain specific bequests, the
            balance of the principal of that trust would continue
            to be held in trust for his grandchildren and their
            issue, by the surviving trustee under Minnie
            Cassatt’s will, together with the trustees appointed in
            his will for a period to expire twenty (20) years

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          following the death of his last surviving child who
          was living at the time of Minnie Cassatt’s death. In
          his exercise of his power of appointment, Alexander
          further directed that the continuing trust for the
          benefit of his grandchildren, shall be “subject to all of
          the provisions of ITEMS SEVENTH and NINTH [of
          Alexander’s will] and with all the powers thereby
          conferred.”     ITEM SEVENTH of Alexander’s will
          contains a spendthrift provision and ITEM NINTH
          recites the powers granted to the fiduciaries
          appointed under his will.         Alexander did not
          specifically refer to ITEM THIRTEENTH of Minnie
          Cassatt’s will nor did he refer to the power of
          beneficiaries under Minnie Cassatt’s will to remove
          and replace a corporate trustee, nor did he expressly
          provide in his will that the beneficiaries of any trust
          created or appointed would have the power to
          remove and replace a corporate trustee.

                 A majority of the current income beneficiaries
          of the trust as appointed by Alexander take the
          position that they have the authority under ITEM
          THIRTEENTH of Minnie Cassatt’s will, to remove and
          replace the corporate trustee. In April of 2013, a
          majority of the current income beneficiaries executed
          a document removing Wells Fargo [] which was then
          serving as the corporate trustee as a successor in
          interest to the Pennsylvania Company for Banking
          and Trusts. A majority of the income beneficiaries
          then appointed [] Northern Trust [] as a successor
          corporate co-trustee.       Wells Fargo has not
          recognized its removal and the appointment of []
          Northern Trust [] as its successor, asserting that the
          provisions of ITEMS THIRTEENTH of Minnie Cassatt’s
          will do not apply to the trust as appointed by
          Alexander.

                 [Appellees,] [t]wo of the current income
          beneficiaries of the trust[,] filed a Petition for
          Declaratory Judgment in the Court of Common Pleas
          of Delaware County[.]       …    Wells Fargo filed
          Preliminary Objections to the Delaware County
          Petition contending that the Court of Common Pleas
          of Montgomery County, Pennsylvania had already

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              exercised jurisdiction over the trust as appointed.
              [Appellees] then withdrew the Delaware County
              petition and filed the instant Petition for Declaratory
              Judgement with [the Montgomery County] Orphan’s
              Court Division[.] [Appellees] thereafter filed this
              Motion for Summary Judgment. Wells Fargo filed a
              Cross-Motion for Summary Judgment.

Orphan’s Court Opinion, 4/24/15, at 1-3.

       On April 24, 2015, the orphan’s court entered an order granting

Appellees’ motion for summary judgment and transferring the situs of the

trust to Delaware County for all future proceedings. On May 21, 2015, Wells

Fargo filed a timely notice of appeal.1

       On appeal, Wells Fargo presents the following issues for our review.

              1.a. Is Wells Fargo [], entitled to judgment because
              the provision of Minnie Cassatt’s [w]ill permitting
              beneficiaries to remove a trustee does not apply to
              the trust created by Alexander Cassatt when he
              validly and effectively exercised a power of
              appointment given to him under Minnie Cassatt’s
              [w]ill?

              1.b. Are [Appellees] required to comply with the
              Uniform Trust Act, 20 Pa.C.S. § 7766, to remove
              Wells Fargo [], as a corporate co-trustee?

              2. Did the [o]rphans’ [c]ourt improperly transfer the
              situs of trust?

Wells Fargo’s Brief at 2.
____________________________________________

1
  The orphan’s court did not direct Wells Fargo to file a concise statement of
errors complained of on appeal in accordance with Pennsylvania Rule of
Appellate Procedure 1925(b), and it did not issue a Rule 1925(a) opinion.
The orphan’s court filed an opinion accompanying its April 24, 2015 order
granting summary judgment.

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     When reviewing an orphan’s court decree, we defer to the court’s

factual findings that the record supports, but we will reverse if the court’s

legal conclusions are erroneous. In re Estate of Hooper, 80 A.3d 815, 818

(Pa. Super. 2013), appeal denied, 94 A.3d 1009 (Pa. 2014), quoting Estate

of Pendergrass, 26 A.3d 1151, 1153 (Pa. Super. 2011). Further, we apply

the following principles in our review of the entry of summary judgment.

           Our standard of review of a grant of summary
           judgment requires us to determine whether the trial
           court abused its discretion or committed an error of
           law. Mee v. Safeco Ins. Co. of America, 908 A.2d
344 (Pa. Super. 2006). Our scope of review is
           plenary. Pappas v. Asbel, 768 A.2d 1089, 1095
           (Pa. 2001), cert. denied, 536 U.S. 938 (2002). In
           reviewing a court’s grant of summary judgment:

                 [W]e apply the same standard as the trial
                 court, reviewing all the evidence of record to
                 determine whether there exists a genuine issue
                 of material fact. We view the record in the
                 light most favorable to the non-moving party,
                 and all doubts as to the existence of a genuine
                 issue of material fact must be resolved against
                 the moving party. Only where there is no
                 genuine issue as to any material fact and it is
                 clear that the moving party is entitled to a
                 judgment as a matter of law will summary
                 judgment be entered. All doubts as to the
                 existence of a genuine issue of a material fact
                 must be resolved against the moving party.

           Chenot v. A.P. Green Services, Inc., 895 A.2d 55,
           61 (Pa. Super. 2006) (internal citations and
           quotation marks omitted).

In re Estate of Moskowitz, 115 A.3d 372, 385 (Pa. Super. 2015) (parallel

citations omitted), appeal denied, 130 A.3d 1291 (Pa. 2015).

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       In its first issue, Wells Fargo contends that the orphans’ court erred in

granting summary judgment because the thirteenth provision in Minnie’s2

will, permitting the majority of adult beneficiaries to remove the corporate

trustee   without    cause     and    without    court   approval,   did   not   survive

Alexander’s exercise of the power of appointment that Minnie granted him.

Wells Fargo’s Brief at 17.           Instead, Wells Fargo asserts that Alexander

created a new trust through the exercise of the power of appointment with

only the terms specified in Alexander’s will and that the new trust did not

have a condition for the removal of the corporate trustee without cause or

without court approval. Wells Fargo’s Brief at 21.

       The following principles guide our interpretation of a will or a trust.

              It is now hornbook law (1) that the testator’s intent
              is the polestar and must prevail; and (2) that his [or
              her] intent must be gathered from a consideration of
              (a) all the language contained in the four corners of
              his [or her] will and (b) his [or her] scheme of
              distribution and (c) the circumstances surrounding
              him [or her] at the time he [or she] made his [or
              her] will and (d) the existing facts; and (3) that
              technical rules or canons of construction should be
              resorted to only if the language of the will is
              ambiguous or conflicting, or the testator’s intent is
              for any reason uncertain[.]

____________________________________________

2
  Because the parties share a surname, we refer to them by their first
names.

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Estate of Culig v. Appeal of Culig, 134 A.3d 463, 469 (Pa. Super. 2016)

(citation and quotation marks omitted).        Accordingly, we set forth the

relevant provisions of Minnie’s will and Alexander’s will.

      Minnie’s will, as amended by the first codicil, bequeathed her residuary

estate   to   three    trustees—Alexander,   Anthony,   and   the   Pennsylvania

Company for Banking and Trusts—to divide equally into two trusts for the

benefit of Alexander and Anthony. Minnie Cassatt’s First Codicil, 4/15/53, at

1. Minnie’s will directed that Alexander receive the income from one of the

trusts for life, and Anthony receive the income from the other for life. Id.

The thirteenth provision of Minnie’s will provided that the majority of “the

adult beneficiaries then entitled to receive income from any trust hereby

created” could remove the corporate trustee without cause and without court

approval and appoint a successor corporate trustee. Minnie Cassatt’s Will,

4/8/53, at 9.         Further, she gave Alexander and Anthony a power of

appointment, as follows in relevant part.

                    (a) … with power in each of my said sons
              (whether dying before or after me) to appoint by will
              the income from and/or the principal of his trust as
              follows:

              … (ii) if one or more descendants of such son shall
              be living at his death, he may so appoint only to or
              among his descendants (whether then living or
              thereafter born), in such shares and for such estates
              and upon such trusts as he may designate, except
              that he may appoint any part of the income from
              such trust to his spouse or to any spouse or spouses
              of a deceased descendant or descendants of his, for

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              the life of such spouse or spouses or for any shorter
              period.

Minnie Cassatt’s First Codicil, 4/15/53, at 1.

       Alexander, in the first provision of his will, exercised his power of

appointment over the principal of the trust Minnie’s will created, as follows.

Alexander Cassatt’s Will, 8/29/78, at 1.3

              Whereas, by the terms of the Will of my mother,
              Minnie F. Cassatt, I am given a special or limited
              power of appointment over a portion of her residuary
              estate, I hereby exercise said power as follows: I
              give and bequeath out of the principal subject to said
              power the sum of Five Thousand Dollars ($5,000) to
              each of my daughter, CASSANDRA C. CAREY, and
              my sons, ROBERT K. CASSATT, 2nd and ALEXANDER
              J. CASSATT, JR., who survive me; and the balance of
              said principal shall continue to be held by the
              surviving Trustee under said Will and the Trustees
              herein appointed in Paragraph 6 of this Item FIRST,
              in Trust, subject to all the provisions of Items
              SEVENTH and NINTH hereof and with all the powers
              thereby conferred, until the expiration of a period of
              twenty (20) years after the death of that one of my
              children who shall have been living at the time of my
              mother’s death and who shall outlive the others; and

                     1.   The Trustees shall … pay the net income
              equally to my grandchildren who may be living from
              time to time to take and receive the same and in the
              event of the death of any grandchild prior to the
              termination of this Trust his or her share of income
              shall be paid to his or her issue, per stirpes.

                                               …
____________________________________________

3
  Alexander executed three codicils to his will, but they did not change or
revoke the exercise of the power of appointment and have no bearing on the
issues in this appeal.

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                 3.    Upon the termination of this Trust at the
           time hereinabove provided, the Trustees shall divide
           the principal into as many equal shares as there shall
           be grandchildren of mine then living plus
           grandchildren of mine then deceased leaving issue
           then living; and the Trustees shall distribute one of
           such shares to each of my then living grandchildren
           and shall distribute one of such shares, per stirpes,
           to the then living issue of each then deceased
           grandchild of mine.

                                     …

                 5.     In the event that my descendants should
           all become extinct prior to the time hereinabove
           fixed for the termination of the Trust, I do not
           further exercise said power of appointment, and I
           direct that the Will of my mother shall be interpreted
           as though I had died intestate, unmarried and
           without issue.

                 6.    I appoint FRANCIS J. CAREY and ROBERT
           L. RAST to be co-Trustees to act hereunder with
           FIRST PENNSYLVANIA BANK N.A., surviving Trustee
           under the Trust under Will of Minnie F. Cassatt, but if
           either is unable or unwilling for any reason to serve
           or to continue to serve as such, or in the event that
           there should at any time be no individual co-Trustee
           serving thereunder, I appoint to be designated in
           writing by the law firm of REED SMITH TOWNSEND &
           MUNSON or any successor organization thereto.

Id. at 1-2. The seventh and ninth provisions of Alexander’s will specify a

number of powers that the trustees can exercise “in addition to the general

powers vested in them by law[.]” Id. at 3-6. Alexander’s will did not refer

to the thirteenth provision of Minnie’s will, and its seventh and ninth

provisions did not provide that his beneficiaries could remove the corporate

trustee without cause at any time. See generally id. at 1-7.

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       “A power of appointment is a power that enables the donee of the

power to designate recipients of beneficial ownership interests in or powers

of appointment over the appointive property.”          RESTATEMENT (THIRD)   OF

PROPERTY (Wills & Donative Transfers) § 17.1 (2011); accord 20 Pa.C.S.A.

§ 7703, cmt. Moreover, the donee of a power of appointment must exercise

it by complying with the limits imposed by the donor.         In re Estate of

Zucker, 122 A.3d 1112, 1116-1117 (Pa. Super. 2015). In her will, Minnie

created a trust for Alexander for life with a power of appointment for the

remainder of the trust.        Minnie, as donor, gave Alexander, as donee, the

power to appoint in his will the income or principal of the trust to his

descendants, his spouse, or a spouse of a deceased descendant, either

outright or in trust.4

       In his will, Alexander appointed a portion of the trust principal to his

three children outright and appointed the balance of the trust principal to

three trustees to hold in trust for the benefit of his grandchildren and their

descendants, subject to the seventh and ninth provisions of his will.

Because this appointment complied with the directives that Minnie’s will set

____________________________________________

4
  This power of appointment was special, or non-general, because Alexander
could exercise the appointment in favor of only certain specified appointees.
See RESTATEMENT (THIRD) OF PROPERTY (Wills & Donative Transfers) § 19.14
(2011). Further, it was a testamentary power of appointment as Alexander
could exercise the appointment only by his will. See id. § 17.4(b).

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forth, it was a valid exercise of Alexander’s power of appointment.        See

Zucker, supra.

      Having determined that the exercise of the power of appointment was

proper, we now turn to Well Fargo’s first issue, whether the trust under

Alexander’s will contained the same terms as the trust under Minnie’s will.

The orphan’s court concluded that the power to remove trustees without

cause and without court approval should be read into Alexander’s will

because “the trust remained a trust initially created by Minnie [], not a trust

created by Alexander.” Orphan’s Court Opinion, 4/24/15, at 7. As such, the

trial court reasoned that “the terms of the appointment by Alexander … are

‘read back’ into Minnie[’s] will as though originally appearing there.” Id. at

6. For the reasons discussed below, this legal conclusion was erroneous.

      Section 7731 of the Pennsylvania Uniform Trust Act, 20 Pa.C.S.A.

§§ 7701-7790.3, provides that “[a] trust may be created by … written

exercise of a power of appointment in favor of a trustee.”       20 Pa.C.S.A.

§ 7731.   The broad scope of the power of appointment in Minnie’s will

permitted, but did not require, Alexander to set up a new trust for his

descendants. Alternatively, he could have ended the trust by appointing the

entire principal outright to his descendants, or appointed the income from

the trust created by Minnie to his descendants. If he appointed the income

from Minnie’s testamentary trust to his descendants, this would not create a

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different trust, and the terms of Minnie’s will and trust would still apply with

the same trustees and trustee removal provision.

      In this case, Alexander exercised the power of appointment both to

bequeath outright a portion of the trust principal to his children and to

create a new trust with the remaining principal for the benefit of his

grandchildren and their descendants. In creating a new trust, he named two

attorneys to serve as trustees along with the corporate trustee from the

trust Minnie created for him. As a settlor of a new trust, Alexander was free

to choose a different or no corporate trustee.     The fact that he chose the

same corporation then acting as trustee on Minnie’s trust does not

incorporate the terms of Minnie’s testamentary trust into the new trust he

created. The authority to remove trustees from the testamentary trust that

Alexander created, through the exercise of his power of appointment, could

have been governed by terms Alexander specified in his will.          However,

Alexander’s will does not contain a provision for the removal of trustees.

Therefore, the default rule in Section 7766 of the Uniform Trust Act applies.

See 20 Pa.C.S.A. § 7766 (providing four grounds upon which a beneficiary

may petition the court to remove a trustee).

      Accordingly, we conclude that the orphan’s court erred in granting

summary judgment because there was no term in Alexander’s will permitting

Appellees without cause and without court approval to remove Wells Fargo

as trustee.   Further, Appellees did not petition the orphan’s court for the

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removal of Wells Fargo under Section 7766. Thus, Wells Fargo shall remain

as the corporate trustee.     However, our decision is without prejudice to

Appellees’ right to petition for the removal of Wells Fargo as trustee, if

appropriate, under Section 7766 after remand.

      In its second issue, Wells Fargo contends that the orphan’s court erred

in transferring the situs of the trust sua sponte because the statute

governing situs changes does not authorize the court to act sua sponte.

Wells Fargo’s Brief at 46. In their brief, “Appellees take no position on this

issue.” Appellees’ Brief at 1. “A challenge to the court’s interpretation and

application of a statute raises a question of law. As with all questions of law,

the appellate standard of review is de novo and the appellate scope of

review is plenary.”     In re A.B., 987 A.2d 769, 773 (Pa. Super. 2009)

(citations and internal quotation marks omitted), appeal denied, 12 A.3d 369

(Pa. 2010).

      Subsection 7708(g) provides the following rule for a change in situs.

              (g) Court-directed change in situs.--A court
              having jurisdiction of a testamentary or inter vivos
              trust, on application of a trustee or any party in
              interest, after notice as the court shall direct and
              aided if necessary by the report of a master and
              after accounting as the court shall require, may
              direct, notwithstanding any other provision of this
              chapter, that the situs of the trust shall be changed
              to any other place within or without this
              Commonwealth if the court shall find the change
              necessary or desirable for the proper administration
              of the trust.

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20 Pa.C.S.A. § 7708(g). Thus, subsection 7708(g) states that an orphan’s

court may change the situs “on application of a trustee or any party in

interest,” after notice to the parties. Id. Here, the orphan’s court was not

presented with an application to change situs. Instead, the orphan’s court

directed the transfer of situs on its own motion in its order granting

summary judgment.           Subsection 7708(g) does not authorize such sua

sponte transfer of situs without notice to the parties and an express finding

that the change is “necessary or desirable.” Id. Accordingly, we conclude

the trial court erred in sua sponte directing the change of situs and reverse

that portion of the trial court’s April 24, 2015 order.5

       Based on the foregoing, the orphan’s court erred as a matter of law in

granting summary judgment to Appellees based on their contention that the

terms of Minnie’s testamentary trust carried over to the trust Alexander

created through his power of appointment.          See Estate of Culig, supra.

Accordingly, we reverse the orphan’s court’s April 24, 2015 order granting

summary judgment and transferring the situs of the trust to Delaware

County. Moreover, the orphan’s court did not dispose of Wells Fargo’s cross-

motion for summary judgment, so we remand for further proceedings in

accordance with this memorandum.

____________________________________________

5
  Our decision is without prejudice to the ability of the trustees or Appellees
to petition the orphan’s court for a change in situs in accordance with
Subsection 7708(g).

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     Order reversed. Case remanded. Jurisdiction relinquished.

Judgment Entered.

Joseph D. Seletyn, Esq.
Prothonotary

Date: 7/21/2016

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