Court Opinion

ID: 9395259
Source: CourtListenerOpinion
Date Created: 2023-05-17 16:09:32.954525+00
Date Added: 2024-06-11T17:19:06.664581
License: Public Domain

J-A02018-23

NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37

    SHARLEEN M. RELLICK-SMITH                  :   IN THE SUPERIOR COURT OF
                                               :        PENNSYLVANIA
                       Appellant               :
                                               :
                                               :
                v.                             :
                                               :
                                               :
    BETTY J. RELLICK AND KIMBERLY V.           :   No. 630 WDA 2022
    VASIL                                      :

                Appeal from the Order Entered April 22, 2022
      In the Court of Common Pleas of Indiana County Orphans’ Court at
                            No(s): 31-14-0490

BEFORE:      BOWES, J., MURRAY, J., and PELLEGRINI, J.*

MEMORANDUM BY BOWES, J.:                                 FILED: May 17, 2023

       Sharleen M. Rellick-Smith appeals from the order that dismissed for lack

of standing her claims of breach of fiduciary duty brought against Betty J.

Rellick and Kimberly V. Vasil (collectively “Defendants”), challenging actions

they undertook as attorneys-in-fact for Rose Rellick (“Decedent”). We reverse

and remand for further proceedings.

       We begin with a summary of this case’s protracted history. Rellick is

the sister of Decedent, while Vasil and Rellick-Smith are the daughters of

another of Decedent’s siblings. In March 2006, Decedent granted power of

attorney (“POA”) to Rellick and Vasil. In August 2006, Decedent created two

certificate-of-deposit accounts (“CDs”) at First Commonwealth Bank. Each CD

____________________________________________

*   Retired Senior Judge assigned to the Superior Court.
J-A02018-23

had an initial value of approximately $150,000 and was issued to Decedent

“or” Rellick “or” Vasil “or” Rellick-Smith. In 2009, Rellick and Vasil used the

POA to remove Rellick-Smith’s name from the CDs. Decedent died at the end

of 2012, and Rellick and Vasil thereafter withdrew the money from the CDs,

then totaling more than $350,000.

      In October 2014, Rellick-Smith filed a complaint against Rellick and Vasil

asserting that Defendants abused their POA and thwarted Decedent’s intent

that Rellick-Smith receive one-third of the value of the CDs upon her death.

Defendants promptly filed an answer to the complaint raising no affirmative

defenses.   In February 2015, Defendants moved to dismiss the action

alternatively because Rellick-Smith lacked standing to challenge Defendants’

performance as Decedent’s POA or that the statute of limitations barred the

claims. The orphans’ court concluded that Defendants had waived the statute

of limitations defense by not including it in their responsive pleading, but

agreed that Rellick-Smith lacked standing, and therefore dismissed the action.

      On appeal, this Court treated Defendants’ motion as preliminary

objections. Accordingly, we deemed the factual allegations of Rellick-Smith’s

complaint to be true and applied the standard of review for preliminary

objections, which requires us to affirm only if it was clear and free from doubt

that Rellick-Smith would be unable to establish a right to relief. See Rellick-

Smith v. Rellick (“Rellick-Smith I”), 147 A.3d 897, 901 (Pa.Super. 2016).

Referencing the allegations of Rellick-Smith’s complaint and the exhibits

                                     -2-
J-A02018-23

thereto, this Court indicated that “the funds in the CDs were held ‘in trust for’

Rellick-Smith.” Id. at n.5. This Court concluded that Rellick-Smith, as a trust

account beneficiary, had standing to challenge her removal from the CDs. In

particular, the Rellick-Smith I Court was persuaded that the beneficiary of a

Totten trust account has “a sufficient interest during the life of the depositor

to entitle him to recover the money after the death of the depositor where the

trust was not revoked by the depositor” and a third party wrongfully removed

money from the account “before the death of the depositor and without his

consent.” Id. at 903 (quoting Scott, TRUSTS (4th Ed. 1987) § 58.4, p. 224).

The Court therefore held as follows:

         [W]e conclude that Rellick-Smith, as a beneficiary of the CDs
         named by the decedent/principal during her life, had standing to
         challenge the propriety of the Defendants’ unilateral action, as
         agents under the POA agreement, in changing the decedent’s
         beneficiary designation, to the Defendants’ benefit. To not afford
         named beneficiaries of a Totten trust standing to sue in
         circumstances such as those presented in the instant case could
         lead to an absurd and unjust result. Moreover, Rellick-Smith has
         met the [generally applicable requirements for standing]; she is
         certainly an aggrieved party as she has a substantial, direct and
         immediate interest in the outcome of this litigation.

Id. at 904 (cleaned up). This Court did not consider the alternative argument

that the statute of limitations barred Rellick-Smith’s claim, noting that neither

party addressed that issue on appeal. Id. at 901 n.12.

         On remand, the case was reassigned to a different judge of the orphans’

court.     Defendants, through new counsel, filed a motion to amend their

answer, seeking, inter alia, to raise the statute of limitations as an affirmative

                                       -3-
J-A02018-23

defense. The orphans’ court granted the motion, and the case proceeded to

trial. In that proceeding, Rellick-Smith presented, inter alia, the testimony of

Decedent’s tax preparer, Ann Marcoaldi, who indicated that she advised

Decedent to combine various accounts into the CDs as a testamentary device

that Decedent would own during her lifetime and Rellick, Vasil, and Rellick-

Smith would share equally upon Decedent’s death, minimizing the inheritance

tax. Id. at 20, 30, 40-41. Ms. Marcoaldi further indicated that she and Rellick-

Smith learned in 2009 that Rellick had exercised the POA to remove Rellick-

Smith from the CDs and undertook an investigation to learn why. Id. at 56-

57, 77.    Rellick-Smith testified that she brought this action to enforce

Decedent’s right to have her testamentary wishes honored by her POA agents.

Id. at 149-50.

      Defendants, for their part, sought to establish that Rellick-Smith lacked

standing pursuant to the Rellick-Smith I exception to the general rule that

only a personal representative may pursue the claims of a decedent. In that

vein, they presented testimony from several witnesses to establish that the

CDs were not Totten trust accounts, but rather joint accounts. Id. at 201-07,

220-25.   Defendants also defended the substantive claim that they had

breached their fiduciary duties to Decedent by introducing evidence that

Rellick-Smith had been in dire financial straits before Decedent’s death, that

she had in 2009 cashed out a different CD on which her name appeared along

with Decedent’s name, and that in 2012 she had attempted to secure a

                                     -4-
J-A02018-23

$135,000 mortgage on Decedent’s interest in real property. Id. at 129-30,

161-74. Defendants took the position that removing Rellick-Smith’s name

from the CDs at issue was, under these circumstances, a proper exercise of

their duty to protect Decedent’s assets. Id. at 250-54.

      Ultimately, the orphans’ court credited Ms. Marcoaldi’s testimony that

Rellick-Smith learned in September 2009 that Defendants had removed her

name from the CDs, and thus ruled that her 2014 claim for breach of fiduciary

duty was barred by the two-year statute of limitations codified at 42 Pa.C.S.

§ 5524(7). This Court affirmed, holding that permitting Defendants to plead

the statute of limitations as a defense after the prior judge had deemed it

waived did not violate the law of the case doctrine, and that the finding that

the claim was barred was supported by the record. See Rellick-Smith v.

Rellick (“Rellick-Smith II”), 229 A.3d 390 (Pa.Super. 2020) (non-

precedential decision at 6-10). However, our Supreme Court reversed this

Court, concluding instead that the inconsistent rulings about Defendant’s

ability to belatedly raise a statute-of-limitations defense violated the

coordinate jurisdiction component of the law-of-the-case doctrine.       See

Rellick-Smith v. Rellick (“Rellick-Smith III”), 261 A.3d 506, 518-19 (Pa.

2021) (Opinion Announcing the Judgment of the Court). Accordingly, our High

Court remanded the matter to the orphans’ court for further proceedings.

      Following a post-remand status conference, the orphans’ court

requested and received supplemental post-trial briefs from the parties. Based

                                    -5-
J-A02018-23

upon its review of the evidence offered at the 2018 trial, the orphans’ court

concluded that the CDs were joint accounts, not trust accounts, pursuant to

20 Pa.C.S. § 6303 (discussed fully infra).       Therefore, the orphans’ court

concluded that Rellick-Smith lacked “standing to challenge the actions of Betty

Rellick and/or Kimberly Vasil acting in the capacity of [Decedent’s] agent

pursuant to the [POA] executed by [Decedent.]”        Orphans’ Court Opinion,

4/22/22, at 22.      Accordingly, the orphans’ court dismissed Rellick-Smith’s

claim.

       Rellick-Smith filed a timely notice of appeal, and both she and the

orphans’ court complied with Pa.R.A.P. 1925.1       Rellick-Smith presents the

following questions for our examination:

       I.    Whether the [orphans’] court erred by determining that the
       Appellant did not have standing.

       II.   Whether the [orphans’] court erred by failing to reach a
       decision on the merits of the action, and thus failed to grant
       Appellant appropriate relief.

Rellick-Smith’s brief at 7 (cleaned up).

       We begin with a review of the applicable legal principles. First, we note

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.

____________________________________________

1 The orphans’ court adopted its April 22, 2022 opinion as its Rule 1925(a)
opinion. See Order, 6/16/22.

                                           -6-
J-A02018-23

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

In re Estate of Schwartz, 275 A.3d 1032, 1033–34 (Pa.Super. 2022)

(cleaned up).

      The trial court disposed of Rellick-Smith’s claim by ruling that she lacked

standing to pursue a claim that Defendants breached their fiduciary duties

owed to Decedent. “Threshold issues of standing are questions of law; thus,

our standard of review is de novo and our scope of review is plenary.” Rellick-

Smith I, supra at 901 (cleaned up).

      We have summarized the generally-applicable rules of standing as

follows:

      In Pennsylvania, the doctrine of standing is a prudential,
      judicially-created principle designed to winnow out litigants who
      have no direct interest in a judicial matter. For standing to exist,
      the underlying controversy must be real and concrete, such that
      the party initiating the legal action has, in fact, been “aggrieved.”
      The core concept of standing is that a person who is not adversely
      affected in any way by the matter he seeks to challenge is not
      “aggrieved” thereby and has no standing to obtain a judicial
      resolution to his challenge. A party is aggrieved for purposes of
      establishing standing when the party has a substantial, direct and
      immediate interest in the outcome of litigation. A party’s interest
      is substantial when it surpasses the interest of all citizens in
      procuring obedience to the law; it is direct when the asserted
      violation shares a causal connection with the alleged harm; finally,
      a party’s interest is immediate when the causal connection with
      the alleged harm is neither remote nor speculative.

                                      -7-
J-A02018-23

In re Nadzam, 203 A.3d 215, 220-21 (Pa.Super. 2019) (cleaned up).

      We thus begin by examining the nature of the underlying controversy

and Rellick-Smith’s connection to it. Although the pleadings were not a model

of clarity, Rellick-Smith sought to litigate Decedent’s claim that Defendants

breached their fiduciary duties to Decedent.       By statute, any action or

proceeding to enforce a right of a decedent “may be brought by or against his

personal representative alone or with other parties as though the decedent

were alive.” 20 Pa.C.S. § 3373. Our Supreme Court has long held that “only

the personal representative of a deceased party in interest stands in the shoes

of such decedent.” In re Kilpatrick’s Estate, 84 A.2d 339, 341 (Pa. 1951)

(cleaned up, emphasis added).      “Legatees, spouses or next of kin of that

decedent really have no such interest[.]” Id.

      It was on that basis that the orphans’ court initially ruled that Rellick-

Smith lacked standing to proceed in this action. See Orphans’ Court Opinion,

6/22/15, at 4-5. However, this Court in Rellick I vacated that ruling and

decided, as a matter of first impression, that a beneficiary of a tentative, or

“Totten,” trust account has standing to sue Defendants directly for a breach

of duty owed to Decedent that caused injury to her tentative interest in the

account. See Rellick-Smith I, supra at 903-04.

      The orphans’ court ultimately held that the CDs were not Totten trusts,

but instead    joint accounts as created and titled, as viewed by First

Commonwealth Bank, and as defined by the Multiple-Party Account Act

                                     -8-
J-A02018-23

(“MPAA”).   See Orphans’ Court Opinion, 4/22/22, at 17.         It discerned no

evidence that Decedent had instead meant to fund the CDs in trust for Rellick,

Vasil, and Rellick-Smith such that she intended to create Totten trust

accounts. Id. Since the beneficiary standing recognized in Rellick-Smith I

therefore did not pertain, the orphans’ court concluded that Rellick-Smith

lacked standing to challenge the actions of Decedent’s POAs because the

principal’s right to enforce that fiduciary obligation passed exclusively to her

personal representative. Id. at 21-22.

      Rellick-Smith maintains that, regardless of the form of account, “all

individuals named on the accounts or involved in their creation knew the clear

intention of [Decedent] for the purpose of the account” was for the funds to

be to shared equally among the three beneficiaries upon Decedent’s death.

See Rellick-Smith’s brief at 17. Rellick-Smith insists that, since she presented

clear and convincing evidence that Decedent’s intent was “to have the money

put in the CDs to be divided evenly between the parties” upon her death,

Rellick-Smith “meets the standing burden established by the courts.” Id. at

21, 23.

      Rellick and Vasil argue that, although she does not explicitly state it,

Rellick-Smith’s position is “that despite the CDs being titled as joint accounts,

there was clear and convincing evidence that [Decedent] intended the CDs to

be Totten trust[s], and pursuant to 20 Pa.C.S. § 6303(a) the [orphans’] court

should have found the CDs to be Totten trusts.”         Defendants’ brief at 7

                                      -9-
J-A02018-23

(cleaned up).    Defendants assert that Rellick-Smith’s arguments as to

Decedent’s intent are based upon viewing the evidence in a light most

favorable to her position, while this Court must instead consider whether the

certified record contains sufficient evidence to support the factual findings of

the orphans’ court. Id. at 8-11. Defendants maintain that Rellick-Smith failed

to meet her burden of proving that Decedent “intended the joint accounts to

be anything other than joint accounts,” and, consequently, she lacked

standing based upon In re Kilpatrick’s Estate and its progeny. Id. at 11,

15-17.

      Although she does not present the most straightforward argument,

Rellick-Smith’s position appears to be that, in deciding the issue of standing,

the orphans’ court and Defendants attach unwarranted importance on the type

of multi-party accounts Decedent created. Instead, Rellick-Smith asserts that

the issue is whether the Decedent’s intent to utilize the CDs as testamentary

devices to pass assets to Rellick-Smith imbued Rellick-Smith with a

substantial, direct, and immediate interest in the outcome of litigation such

that she is an aggrieved party with standing to sue.

      The MPAA was “designed to reduce certain questions concerning many

forms of joint accounts and the so-called Totten trust account.” 20 Pa.C.S.

§ 6301 Comment. Pursuant to the MPAA, with exceptions not relevant here,

any account with multiple parties is “either a joint account or a trust account.”

20 Pa.C.S. § 6301. Those two types of accounts are defined as follows:

                                     - 10 -
J-A02018-23

      “Joint account” means an account payable on request to one or
      more of two or more parties whether or not mention is made of
      any right of survivorship.

            ....

      “Trust account” means an account in the name of one or more
      parties as trustee for one or more beneficiaries where the
      relationship is established by the form of the account and the
      deposit agreement with the financial institution and there is no
      subject of the trust other than the sum on deposit in the account;
      it is not essential that payment to the beneficiary be mentioned in
      the deposit agreement. A trust account does not include a regular
      trust account under a testamentary trust or a trust agreement
      which has significance apart from the account, or a fiduciary
      account arising from a fiduciary relation such as attorney-client.

Id. The ownership of multi-party accounts while all implicated individuals are

alive is governed by § 6303, which provides as follows:

      (a) Joint account.--A joint account belongs, during the lifetime
      of all parties, to the parties in proportion to the net contributions
      by each to the sum on deposit, unless there is clear and convincing
      evidence of a different intent.

      (b) Trust account.--Unless a contrary intent is manifested by
      the terms of the account or the deposit agreement or there is
      other clear and convincing evidence of an irrevocable trust, a trust
      account belongs beneficially to the trustee during his lifetime, and
      if two or more parties are named as trustees of the account during
      their lifetimes beneficial rights as between them are governed by
      subsection (a). If there is an irrevocable trust, the account
      belongs beneficially to the beneficiary.

20 Pa.C.S. § 6303. Concerning the right of survivorship, the MPAA states:

      (a) Joint account.--Any sum remaining on deposit at the death
      of a party to a joint account belongs to the surviving party or
      parties as against the estate of the decedent unless there is clear
      and convincing evidence of a different intent at the time the
      account is created. If there are two or more surviving parties,
      their respective ownerships during lifetime shall be in proportion
      to their previous ownership interests under section 6303 (relating

                                     - 11 -
J-A02018-23

      to ownership during lifetime) augmented by an equal per capita
      share for each survivor of any interest the decedent may have
      owned in the account immediately before his death; and the right
      of survivorship continues between the surviving parties.

      (b) Trust account.--At the death of the trustee or the survivor
      of two or more trustees, any sum remaining on deposit belongs to
      the person or persons named as beneficiaries, if surviving, or to
      the survivor or survivors of them if one or more die before the
      trustee or last surviving trustee, unless there is clear and
      convincing evidence of a contrary intent; if two or more
      beneficiaries survive, there is no right of survivorship in event of
      death of any beneficiary thereafter unless the terms of the account
      or deposit agreement expressly provide for survivorship between
      them.

20 Pa.C.S. § 6304.

      In the instant case, it is uncontroverted that Decedent created and

funded the CDs as testamentary devices. Since she sought to minimize the

inheritance taxes, Decedent opted to use joint “or” accounts, instead of trust

accounts.   See N.T. Trial, 12/3-4/18, at 40-41, 224-25. Plainly, the CDs,

payable to Decedent or Rellick or Vasil or Rellick-Smith, were facially joint

accounts as defined by the MPAA. See 20 Pa.C.S. § 6301. In that respect,

the Rellick-Smith I Court’s acceptance, for purposes of deciding preliminary

objections, that the CDs were trust accounts was ultimately incorrect.

      However, the distinctions between joint accounts and trust accounts do

not warrant a different standing analysis.    As indicated above, the Rellick-

Smith I Court was persuaded by the following reasoning:

      Where a third person wrongfully withdraws money from the
      account before the death of the depositor and without his consent,
      the beneficiary can, after the death of the depositor maintain a
      suit against him for the money so withdrawn. The beneficiary had

                                     - 12 -
J-A02018-23

     a sufficient interest during the life of the depositor to entitle him
     to recover the money after the death of the depositor where the
     trust was not revoked by the depositor.

Rellick-Smith I, supra at 903 (quoting Scott, TRUSTS (4th Ed. 1987) § 58.4,

p. 224).

     This Court offered the following description of a trust account:

     One who deposits money in a savings account in her own name in
     trust for another establishes a Totten trust. The name is derived
     from In re Totten, the New York Court of Appeals decision widely
     credited with first conceiving the notion of a tentative trust. A
     Totten trust allows the depositor to retain complete control of the
     fund during his life and yet secure to the beneficiary any balance
     standing in the account at the death of the depositor. Totten
     trusts are essentially a poor man’s will, a judicial creation that,
     strictly speaking, is neither a will nor a trust but are fairly
     obviously testamentary transfers.

Rellick-Smith I, supra at 899 n.5 (cleaned up, emphasis added).              Our

Supreme Court also described a joint account as “a poor man’s will.”

Deutsch, Larrimore & Farnish, P.C. v. Johnson, 848 A.2d 137, 142 (Pa.

2004). In Deutsch, the High Court explained:

     One who knowledgeably creates a joint account with another
     arguably does so with the present intent to employ the account’s
     survivorship characteristic in substitution for a testamentary
     device. Furthermore, accounts with right of survivorship
     provisions are often set up to allow caretakers to assist senior
     citizens with the management of their finances. Their well-
     planned financial protection can best be honored by adhering to
     the statutory presumption created by [§] 6303. Like other
     testamentary devices, creation of a joint account, without more,
     accomplishes no present transfer of title to property. If, as in this
     case, one person deposits all sums in the joint account, this
     arrangement contemplates transfer of title to those funds to the
     other person or persons named on the account upon the death of
     the depositor. Moreover, the creator of a joint account, like the
     maker of a will and unlike the giver of a gift, may change his or

                                    - 13 -
J-A02018-23

      her mind prior to death. These considerations suggest that joint
      accounts share more in the character of testamentary devices
      than they do in the character of present transfers of property, or
      gifts.

Id. at 143-44 (cleaned up).

      Hence, the two types of MPAA accounts are both testamentary in nature,

with the depositor retaining ownership of the account funds during her lifetime

while identifying beneficiaries who will take ownership of the assets upon the

depositor’s death outside the probate process. The difference between the

two is whether the depositor wishes to be the only person with access to the

account during her lifetime, or whether the death beneficiaries will also have

access to the funds while they are still owned by the depositor. We fail to see

how this difference gives the tentative beneficiary of a joint account any less

of “a substantial, direct and immediate interest” in litigating the depositor’s

claim for breach of fiduciary duty against her POA agents than the tentative

beneficiary of a trust account. Rellick-Smith I, supra at 904. Both types of

beneficiaries have the same “sufficient interest during the life of the depositor

to entitle him to recover the money after the death of the depositor where the

[account] was not revoked by the depositor.”        Id. at 903 (quoting Scott,

TRUSTS (4th Ed. 1987) § 58.4, p. 224).

      We therefore conclude that Rellick-Smith I’s ultimate holding still

controls despite the well-founded conclusion of the orphans’ court that the

CDs were joint accounts rather than trust accounts. Specifically, we re-phrase

that holding as follows: Rellick-Smith, by virtue of having been granted a right

                                     - 14 -
J-A02018-23

of survivorship in the CDs by Decedent during Decedent’s life, had standing

to challenge the propriety of the Defendants’ unilateral action, as agents under

the POA, in terminating Rellick-Smith’s survivorship interest to benefit

themselves rather than Decedent. Compare with Rellick-Smith I, supra

at 904 (“Rellick-Smith, as a beneficiary of the CDs named by the

decedent/principal during her life, had standing to challenge the propriety of

the Defendants’ unilateral action, as agents under the POA agreement, in

changing the decedent’s beneficiary designation, to the Defendants’ benefit.”).

      Accordingly, we are constrained to remand this case to the orphans’

court yet again for further proceedings. Specifically, the orphans’ court must

decide the merits of Rellick-Smith’s claim that Defendants violated their

fiduciary duties to Decedent by removing Rellick-Smith as a party to the CD

accounts. We leave it to the sound discretion of the orphans’ court whether

it needs to receive additional evidence or briefing on the matter or whether it

can make a determination based upon the record already created.

      Order reversed. Case remanded for further proceedings. Jurisdiction

relinquished.

      Judge Pellegrini joins this Memorandum.

      Judge Murray concurs in the result.

                                     - 15 -
J-A02018-23

Judgment Entered.

Joseph D. Seletyn, Esq.
Prothonotary

Date: 5/17/2023

                          - 16 -