Court Opinion

ID: 3152151
Source: CourtListenerOpinion
Date Created: 2015-11-04 21:07:18.779372+00
Date Added: 2024-06-11T11:55:37.032532
License: Public Domain

J-S44037-15

NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37

IN RE: ESTATE OF ROSEMARY MEHALL                IN THE SUPERIOR COURT OF
                                                      PENNSYLVANIA

APPEAL OF: MARLENE R.
WESOLOWSKY, FORMER EXECUTRIX
AND HEIR IN THE ABOVE-NAMED
ESTATE
                                                     No. 266 WDA 2015

                  Appeal from the Order January 26, 2015
              In the Court of Common Pleas of Fayette County
                   Orphans’ Court at No(s): 137 OF 2004

BEFORE: LAZARUS, J., STABILE, J., and JENKINS, J.

MEMORANDUM BY LAZARUS, J.:                       FILED NOVEMBER 4, 2015

      Marlene R. Wesolowsky, former Executrix of the Will of Rosemary

Mehall, Deceased (“Wesolowsky”), appeals from the order of the Court of

Common Pleas of Fayette County that, inter alia, approves the amended

petition for distribution and imposes various surcharges upon Wesolowsky

for various actions taken by her during her tenure as executrix.         Upon

careful review, we affirm in part and reverse in part.

      The Orphans’ Court set forth the factual and procedural history of this

matter as follows:

      This matter has a long, convoluted, and very contentious
      history[.] Letters Testamentary were granted to [Wesolowksy],
      a daughter and heir of the Decedent, on February 24, 2004, and
      Decedent’s Last Will and Testament were admitted to probate on
      that same date. Ms. Wesolowsky filed the Estate Inventory
      more than four years later on April 3, 2008, listing a 1995 Ford
      Taurus automobile, a 2002 Ford Windstar minivan, coins, bills
J-S44037-15

       and stamps in a safety deposit box. Decedent’s remaining
       children and heirs filed objections dated July 23, 2008, to Ms.
       Wesolowsky’s Inventory[, account,] and proposed schedule of
       distribution, claiming that many of Decedent’s assets had
       disappeared, and Ms. Wesolowsky had distributed other assets
       to herself in a self-serving manner.

       Following several days of testimony, [the Orphans’ Court]
       referred several issues to the District Attorney of Fayette County
       for investigation and, if appropriate, prosecution. Those issues
       involved non-probate assets. Ms. Wesolowsky was eventually
       charged with, and convicted on April 10, 2014 of, the crime of
       Failure to Make Required Disposition of Funds in an amount
       greater than $2000.00[.] Ms. Wesolowsky was sentenced . . .
       on May 8, 2014 to nine to twenty-three months of confinement.
       On June 23, 2013, [the Orphans’ Court] removed Ms.
       Wesolowsky as Executrix and appointed Attorney Vincent
       Roskovensky as Administrator D.B.N.C.T.A. of the Estate. [The]
       Court directed the Administrator D.B.N.C.T.A. to file an Amended
       Inventory and Schedule of Distribution so as to resolve the
       remaining objections of the heirs.

Orphans’ Court Opinion, filed 1/27/15, at 1-2.

       The Orphans’ Court also directed Attorney Roskovensky to perform an

investigation into the actions taken by Wesolowsky as executrix, as well as

the status of various assets, and to submit a report detailing his findings.1

____________________________________________

1
  We note with concern the fact that Attorney Roskovensky, in his capacity
as Administrator D.B.N.C.T.A., was represented by Jason F. Adams, Esquire,
who had also served as counsel to Wesolowsky during the time she was
vigorously defending herself against the Appellees’ objections to her account
and inventory. Given the acrimonious nature of these proceedings, which
actually resulted in a criminal conviction against Wesolowsky, it would seem
to have presented a clear conflict of interest for Attorney Adams to represent
the supposedly impartial Administrator D.B.N.C.T.A., whose tasks included
investigating the actions of Attorney Adams’ former client. This untenable
situation should have raised red flags for both the court and Attorney
Adams, both of whom we would caution to exercise greater care in avoiding
(Footnote Continued Next Page)

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Attorney Roskovensky submitted his report on March 8, 2013, and Appellees

filed eighty objections to his findings. After a hearing held on May 20, 2014,

the court issued an opinion and decree nisi on January 26, 2015.

Wesolowsky filed a timely notice of appeal on February 11, 2015, followed

by a court-ordered statement of errors complained of on appeal pursuant to

Pa.R.A.P. 1925(b).

      Wesolowsky raises the following issues for our review:

      Did the Honorable Court in its Decree Nisi, dated January 26,
      2015, commit an abuse of discretion and errors of fact/law in
      surcharging [Wesolowsky] an amount of $327,630.54 in each
      and every of the following particulars:

             a. The amount of $24,457.60 . . . for expenses
             incurred with the Decedent’s home.

             b. The amount of $271,622 . . . for the Stocks of
             Anheuser Busch, CMS Energy Corp, Del Monte Foods,
             Goodyear Tire & Rubber, Host Marriot Corporation,
             Lucent Technologies and Teletech Holdings.

             c. The amount of $31,550.96 . . . for the 1st Federal
             Certificate of Deposit.

             d. The amount of $10,695.00 . . . for her Executrix
             Commission.

Brief of Appellant, at 4.

      We begin by noting our standard of review:

      The findings of a judge of the [O]rphans’ [C]ourt [D]ivision,
      sitting without a jury, must be accorded the same weight and
                       _______________________
(Footnote Continued)

future conflicts of interest such as that which appears to have been glaringly
present in this matter.

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     effect as the verdict of a jury, and will not be reversed by an
     appellate court in the absence of an abuse of discretion or a lack
     of evidentiary support. This rule is particularly applicable to
     findings of fact which are predicated upon the credibility of the
     witnesses, whom the judge has had the opportunity to hear and
     observe, and upon the weight given to their testimony. In
     reviewing the Orphans’ Court’s findings, our task is to ensure
     that the record is free from legal error and to determine if the
     Orphans’ Court’s findings are supported by competent and
     adequate evidence and are not predicated upon capricious
     disbelief of competent and credible evidence.

In re Estate of Bechtel, 92 A.3d 833, 837 (Pa. Super. 2014).

     In this case, each of Wesolowsky’s appellate claims involve the

Orphans’ Court’s imposition of a surcharge against her.

     In general, one who seeks to surcharge a fiduciary bears the
     burden of proving that the fiduciary breached an applicable
     fiduciary duty. However, when a beneficiary has succeeded in
     proving that the fiduciary has committed a breach of duty and
     that a related loss has occurred, we believe that the burden of
     persuasion ought to shift to the fiduciary to prove, as a matter of
     defense, that the loss would have occurred in the absence of a
     breach of duty. We believe that, as between innocent
     beneficiaries and a defaulting fiduciary, the latter should bear
     the risk of uncertainty as to the consequences of its breach of
     duty.

In re Estate of Aiello, 993 A.2d 283, 289 (Pa. Super. 2010).

     With respect to the fiduciary responsibilities of an executor, this Court

has previously noted that

     [a]n executor’s duty is to take custody of the estate and to
     administer it so as to preserve and protect the property for
     distribution to the proper persons within a reasonable time. In
     the discharge of this duty, an executor is regarded as a fiduciary
     and is held to the highest degree of good faith.

                                    -4-
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In re Estate of Campbell, 692 A.2d 1098, 1101-02 (Pa. Super. 1997)

(citations and quotation marks omitted).

      Wesolowsky first claims that the Orphans’ Court erred in surcharging

her for expenses incurred in connection with the upkeep of the Decedent’s

home in the time between her death in 2004 and the ultimate sale of the

property in 2008.    Wesolowsky asserts that the court lacked sufficient

evidence to conclude that, “had the property been listed with a real estate

agent, the sale would have been completed by the end of September 2004.”

Brief of Appellant, at 8, citing Orphans’ Court Opinion, filed 1/27/15, at 3.

Wesolowsky argues that attempts to purchase the property by two family

members, as well as an unrelated third-party, delayed the listing of the

property with a realtor and that the delay did not violate her fiduciary

obligations.

      Appellees acknowledge that there were multiple inquiries regarding the

purchase of the property, but that Wesolowsky failed to take any actions to

follow up on those inquiries.     Thus, the mere fact of the inquiries is

immaterial to a determination as to a reasonable time frame for disposition

of the property.

      In its opinion, the Orphans’ Court noted that Attorney Roskovensky,

the Administrator D.B.N.C.T.A., determined that “161 days (5-6 months)

would have been a reasonable time period” in which to sell the residence,

assuming it had been listed with a realtor. Id. at 3. The court concluded

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that Wesolowsky’s attempts to sell the house privately resulted in a

“protracted delay” in its sale. Accordingly, the court surcharged her in the

amount of $24,457.60, the amount of all utility, maintenance, insurance and

tax bills incurred after October 1, 2004. Upon review of the record, we are

constrained to conclude that the Orphans’ Court’s surcharge is not supported

by evidence of record.

      When seeking to impose a surcharge against an executor for the

mismanagement of an estate, those who seek the surcharge bear the

burden of proving the executor’s wrongdoing.      Estate of Geniviva, 675

A.2d 306, 311 (Pa. Super. 1996).          Nevertheless, where a significant

discrepancy appears on the face of the record, the burden shifts to the

executor to present exculpatory evidence and thereby avoid the surcharge.

Id. Preliminarily, we find that there does exist on the face of the record a

“significant discrepancy” with regard to Wesolowsky’s handling of the sale of

the Decedent’s real estate.    The court concluded, and we agree, that a

period of almost four years was excessive, absent a reasonable explanation.

Accordingly, the burden of proof shifted to Wesolowsky to provide such an

explanation as to why she should not be surcharged for the expenses

incurred as a result of the delay.      In this regard, the court was not

persuaded by Wesolowsky’s reliance on her alleged attempts to sell the

home privately, and we find no abuse of discretion in that finding, and in the

propriety of a surcharge for unnecessary expenses.

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        We disagree, however, that the amount of the surcharge imposed by

the court was supported by competent evidence of record.          In levying its

surcharge, the court relied on the determination of the Administrator

D.B.N.C.T.A. contained in his petition for final distribution filed on August 26,

2013.     In that petition, Attorney Roskovensky stated that he “has been

informed, based upon his investigation, that the average time for marketing

would have been approximately 161 days[.]”2          Petition, 8/26/13, at ¶ 4.

However, the Administrator provided no information as to how he concluded

this span of time to be a reasonable one.        The Administrator provided no

expert report or evidence as to the length of time comparable properties

remained on the market before being sold.             The court adopted this

seemingly arbitrary time-frame, providing no explanation as to its rationale

in doing so. Although it appears clear that the property remained unsold for

longer than necessary, there is no record support for the court’s conclusion

that 161 days was a reasonable time within which to complete the sale of

the Decedent’s home. Accordingly, we are constrained to conclude that the

court committed an abuse of discretion with regard to the imposition of the

related $24,457.60 surcharge.

____________________________________________

2
   The Administrator ultimately concluded that, because of the attempts
made to purchase the property privately and the issues surrounding the
sewage system, Wesolowsky should be given credit for expenses paid
through the year 2005.

                                           -7-
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      Wesolowsky next claims that the court erred in surcharging her in the

amount of $271,622.58, representing the purported value of certain stock

owned by the Decedent. Wesolowsky asserts that the court erred in placing

“great reliance” upon Exhibit N to the Appellees’ objections to the

Administrator’s report, which consists of three documents provided by

Edward Jones Investments detailing the securities owned by the Decedent

and held by Edward Jones at the time of her death. Wesolowsky claims that

the documents were neither authenticated nor properly made part of the

record and, thus, the conclusion drawn by the court in reliance thereon was

in error.   Wesolowsky also claims that the stock in question was, in fact,

contained in the two brokerage accounts listed on Schedule G to the

Inheritance Tax Return filed by the estate and that the accounts were non-

probate assets payable on death to the Decedent’s children.

      The Appellees argue that only two of three Edward Jones investment

accounts owned by the Decedent were included in the inventory or the

inheritance tax return. Appellees assert that the third, unreported account

(“Third Account”) contains 3000 shares of Anheuser Busch stock; two shares

each of CMS energy Corp., Lucent Technologies and Teletech Holdings; three

shares each of Del Monte Foods and Host Marriott Corp; and one share of

Goodyear Tire and Rubber. Appellees note that the stocks in question were,

however, reported on the Decedent’s 2004 U.S. income tax return and, thus,

should have been included in the estate. See Objections to Administrator’s

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Report, 10/21/13, at Exhibit F (Schedule D, Capital Gains and Losses).

Appellees further claim that the total value of the stocks is $325,947.09,

based upon “Exhibit O attached to the Objections,” which contains printouts

of web pages purporting to show the value of those stocks as of August

2014.

        The trial court accepted the Appellees’ valuation of the missing stock

and imposed a surcharge upon Wesolowsky in the amount of $271,622.58,

representing the 2014 value of the stocks, minus her distributive share.

        We begin by noting that Wesolowsky did not raise any objection in the

lower court to the Appellees’ reliance on Exhibit N, nor does she actually

dispute the accuracy of the information contained in the documents.

Moreover, the same information contained in Exhibit N is also reflected in

the Decedent’s 2004 tax return, which Wesolowsky has not objected to.

Accordingly, we find that the Orphans’ Court did not abuse its discretion in

relying on the documents presented in Exhibit N to the Appellees’ objections.

        Our review of the record indicates that the Appellees are correct in

their assertion that the Third Account did, in fact, exist and was not reported

on the inheritance tax return, the inventory or the account. However, the

record also demonstrates that the stock contained in the Third Account was

sold on March 9, 2004 and garnered proceeds totaling $2,966.94. This sale

is reflected in Schedule D of the Decedent’s 2004 federal income tax return,

see Objections to Administrator’s Report, 10/21/13, at Exhibit F, as well as

                                     -9-
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in Exhibit “N” attached to Appellees’ Brief in Support of Objections to the

Administrator’s Report and Petition, filed on August 14, 2014. We note that

the values attributed to the stock in both the Edward Jones statement and

the tax return appear to be perplexingly low.3         However, as an error-

correcting appellate court, we are limited to considering only the materials in

the certified record when resolving an issue.       See Commonwealth v.

McBride, 957 A.2d 752, 757 (Pa. Super. 2008). The only record evidence

of the value of the stock contained in the Third Account shows a total value

of $2,966.94.

       Because the stock was sold less than two months after the Decedent’s

death, the Orphans’ Court abused its discretion in surcharging Wesolowsky

for the 2014 value of the stock in question.4 Rather, the court should only

have surcharged her for the amount of the actual sale proceeds, $2,966.94,

which were not included in the inventory or account.

____________________________________________

3
  For example, our own research indicates that the closing value of one
share of Anheuser Busch stock on March 9, 2004, the date Wesolowsky sold
the    stock,   was   $43.35.      Yahoo      Finance,    Historical  Prices,
http://finance.yahoo.com/q/hp?s=YHOO&a=02&b=9&c=2004&d=02&e=10&
f=2004&g=d (visited 10/8/15).     The Edward Jones summary and the
Decedent’s income tax return show a total sales price of $2,890.05 for 3,000
shares of that same stock.
4
  We note that the Appellees did not raise the issue of the imposition of a
constructive trust on the sale proceeds of the stock, nor is there any
evidence of record as to the ultimate disposition of the proceeds of said sale.

                                          - 10 -
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     Next, Wesolowsky challenges the court’s imposition of a surcharge in

the amount of $31,550.96, representing the value of certificate of deposit

no. 446699 from First Federal Bank. Wesolowsky claims that she was a joint

owner of the certificate and, thus, the proceeds of the account were not the

property of the estate and not required to be included in the inventory,

account or inheritance tax return.    In support of her claim, she cites the

report of the Administrator D.B.N.C.T.A., in which he indicated that he

reviewed the account’s signature card and determined that Wesolowsky was

added as a joint owner on January 22, 1999.

     The    Appellees   acknowledge     that   a   signature   card   containing

Wesolowsky’s name exists, but that the signature cards for Decedent’s

accounts “contain multiple errors including an incorrect social security

number for one objector, dates written over, information scratched out and

illegible entries.” Objections and Response to Administrator’s Report to the

Court, 6/26/13, at 112.    Appellees also assert that they “were told that

signature cards back then ‘were allowed to leave the bank’ and several

people who made entries on the cards are now deceased so the information

could not be confirmed as factual.” Id. at 112-13.

     Our review of the record reveals a copy of the original First Federal

certificate of deposit no. 446699, titled in the names of Frank R. Mehall, Sr.

or Rosemary Mehall.     See Hearing, June 15, 2012, at Petitioner’s Ex. 55.

The record also contains a letter from First Federal employee Jennifer

                                     - 11 -
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George indicating that certificate no. 446699 was issued in the names of

Frank R. Mehall, Sr. or Rosemary Mehall and was closed on July 19, 2004 by

Wesolowsky, with the proceeds transferred to an account titled in the names

of “Marlene Wesolowsky or Thomas Wesolowsky.”             Brief in Support of

Objections, 8/14/14, at Exhibit Q. However, the certified record contains no

documentary evidence provided by Wesolowsky to support her contention

that she was a co-owner of the certificate at the time of Decedent’s death;

nor is the Administrator’s statement to that effect supported by any

evidence.   Thus, we can discern no abuse of discretion on the part of the

Orphans’ Court in concluding that the certificate in question was an asset of

the Decedent’s estate and surcharging Wesolowky accordingly.

      Finally, Wesolowsky challenges the Orphans’ Court’s surcharge in the

amount of $10,695, representing her executrix’s commission. Wesolowsky

claims she has already fully repaid her commission to the estate.

      The Orphans’ Court, in its opinion, stated the following:

      It is the [c]ourt’s understanding that the entire amount of
      $10,695.00 previously disbursed to [Wesolowsky] was her
      Executrix commission has already been returned to the Estate
      accounts by Ms. Wesolowsky, but if the [c]ourt’s understanding
      on this issue is mistaken, Ms. Wesolowsky should be surcharged
      for any amount that has not yet been repaid[.]

Orphans’ Court Opinion, filed 1/27/15, at 11.     Appellees, in their brief, do

not dispute that Wesolowsky has, indeed, repaid her full commission to the

estate. Accordingly, this claim is moot.

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     Order affirmed in part and reversed in part.   Case remanded to

Orphans’ Court for proceedings consistent with the dictates of this

memorandum. Jurisdiction relinquished.

Judgment Entered.

Joseph D. Seletyn, Esq.
Prothonotary

Date: 11/4/2015

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