In Re: Estate of Ford, L. Appeal of: Miller, A. ( 2018 )

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NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37
IN RE: ESTATE OF LEONA E. FORD, : IN THE SUPERIOR COURT OF
DECEASED : PENNSYLVANIA
:
:
APPEAL OF: ALVIN MILLER, P.O.A./ :
EXECUTOR :
:
:
: No. 1060 WDA 2017
Appeal from the Order Entered June 23, 2017
In the Court of Common Pleas of Allegheny County Orphans' Court at
No(s): 3933 of 2015 (P.O.A.)
BEFORE: BOWES, J., OLSON, J., and KUNSELMAN, J.
MEMORANDUM BY BOWES, J.: FILED SEPTEMBER 25, 2018
Alvin Miller appeals pro se from the order removing him as the
executor of the Estate of Leona E. Ford (“the Estate”), and sustaining the
objections filed by petitioners Diane Miller Gustavson and Elizabeth Mowry1
to Appellant’s Amended First and Final Accounts.2 We affirm.
In April 2012, Ms. Ford (hereinafter “Decedent”) executed a power of
attorney (“POA”) naming her grandson, Appellant, as her agent. Decedent
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1 Decedent’s daughter, Joyce Ford, joined in the petitions. However, she
withdrew her participation from these proceedings.
2 The order in question is appealable as of right. See Pa.R.A.P. 342(a)(5)
(“An appeal may be taken as of right from the following orders of the
[o]rphans’ [c]ourt Division: . . . [a]n order determining the status of
fiduciaries . . . in an estate [.]”); see also In re Estate of Andrews, 92
A.3d 1226, 1228 n.1 (Pa.Super. 2014).
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was thereafter placed in a nursing home. At that time, Decedent owned two
properties: her main residence in Allegheny County, appraised at $75,700,
and a vacation home in Somerset County, appraised at $65,200. In April
2015, Appellant, acting under the POA, agreed to sell both properties to
Gerald Yurkov, whom he knew because of their common business in the
plumbing industry. Appellant sold Yurkov the Allegheny County property for
$21,000 and the Somerset County property for $24,000. The sale prices for
the properties were determined based upon what Yurkov could afford.
Yurkov paid no closing costs for either purchase.
Decedent died on May 3, 2015, and the property transfers occurred
shortly after her death. Appellant did not tell the beneficiaries of the Estate
that the sales of the properties were pending at the time of Decedent’s
death. On May 26, 2015, Decedent’s will was probated, naming Appellant as
executor. Decedent’s daughters, Ms. Gustavson and Joyce Ford, along with
Decedent’s granddaughter, Ms. Mowry, filed petitions seeking to set aside
the sales of the properties, and requesting an accounting from Appellant.
Ultimately, Ms. Gustavson and Ms. Mowry were able to purchase the
properties back from Yurkov for the amounts he paid, plus attorney’s fees.
The Allegheny County property was then sold to an arms-length purchaser
for $43,000.
The parties conducted discovery. At his February 2015 deposition,
Appellant indicated that he was not charging a fee for his services as
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Decedent’s agent acting under the POA. Orphans’ Court Order, 6/23/17, at
2. However, following a trial, the orphan’s court determined that, “by check
[No. 198] dated April 25, 2012, [Appellant] paid himself $15,000 for
services as Agent for [Decedent],” and that he “comingled [Decedent’s]
funds with his own money when he deposited the $15,000 check into his
own funds.” Id. Appellant filed a First Accounting, as well as Amended First
and Final Accounts of his handling of the Estate. The orphan’s court found
that the accounts “show[ed] payments already made to [Appellant] in the
amount of $4,444.25 . . .”3 Id. The orphan’s court further found that “[t]he
[I]nheritance [T]ax [R]eturn filed by [Appellant] shows a commission of
$20,160 to [Appellant].” Id. The orphan’s court additionally determined
that “[Appellant] now also claims payment of fees as [POA] for [Decedent] in
the amount of $19, 679.43. Id. The orphans’ court concluded that
Appellant’s claimed “fees and commissions total in excess of $44,000.” Id.
On June 23, 2017, the orphans’ court entered an order removing
Appellant as executor and sustaining the objections to his Amended First and
Final Accounts based on his handling of the Estate. The court concluded that
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3 Although the orphan’s court opinion is somewhat unclear, as will be
explained more fully infra, Appellant concedes that, acting under the POA,
he wrote check No. 198 in the amount of $15,000 to himself, and deposited
the check into his own personal account. Appellant’s brief at 15. He claims
that, from this account, he thereafter paid himself $4,444.25 for his POA
services, and used the remainder of the funds to pay for Decedent’s
furnishings at the nursing home. Id. at 13
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Appellant had comingled Decedent’s funds and overcharged the Estate for
his services as Decedent’s agent, and that the interests of the Estate were
likely to be jeopardized by his continuance in office. This timely appeal
followed.4
Appellant raises the following issues for our review:
1. Whether the [orphans’] court erred in determining
[Appellant’s] removal as executor was warranted due to
his handling of the real estate.
2. Whether the [orphans’] court erred in determining that
[Appellant] comingled funds when acting as Agent under
[the POA].
3. Whether the [orphans’] court erred in calculating
[Appellant’s] fees and commissions.
4. Whether the [orphans’] court erred in removing
[Appellant] as executor of the estate of [Decedent].
Appellant’s brief at 5 (issues reordered for ease of disposition).
Our standard of review of an orphans’ court’s decision is deferential.
When reviewing a decree entered by the [o]rphans’
[c]ourt, this [c]ourt must determine whether the record is free
from legal error and the court’s factual findings are supported by
the evidence. Because the [o]rphans’ [c]ourt 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
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4 The orphans’ court did not order Appellant to file a Pa.R.A.P. 1925(b)
concise statement of errors complained of on appeal.
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law on which the court relied are palpably wrong or clearly
inapplicable, we will reverse the court’s decree.
In re Estate of Strahsmeier, 54 A.3d 359, 362-63 (Pa.Super. 2012). An
abuse of discretion is not merely an error of judgment. Id. at 363. Rather,
discretion is abused if, in reaching a conclusion, the court overrides or
misapplies the law, or the judgment exercised is shown by the record to be
manifestly unreasonable or the product of partiality, prejudice, bias or ill will.
Id.
Additionally, section 3182 of the Probate, Estates and Fiduciaries Code
governs the removal of personal representatives, and provides, in relevant
part, as follows:
§ 3182. Grounds for removal.
The court shall have exclusive power to remove a personal
representative when he:
(1) is wasting or mismanaging the estate, is or is likely to
become insolvent, or has failed to perform any duty imposed by
law; or
....
(5) when, for any other reason, the interests of the estate are
likely to be jeopardized by his continuance in office.
20 Pa.C.S. § 3182(1), (5).
“The court . . . on the petition of any party in interest alleging
adequate grounds for removal shall, order the personal representative to
appear and show cause why he should not be removed, or, when necessary
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to protect the rights of creditors or parties in interest, may summarily
remove him.” 20 Pa.C.S. § 3183.
In his first issue, Appellant contends the orphans’ court erred in
determining that his removal as executor was warranted due to his handling
of the real estate. According to Appellant, “[M]s. Gustavson and [M]s.
Mowry attempt to substantiate their breach of fiduciary claim by alleging
that they orally offered to purchase the Somerset real estate for $40,000 or
$50,000 prior to [Decedent’s] death.” Appellant’s brief at 16. Appellant
claims that offers to purchase are generally inadmissible due to their
uncertainty and speculative nature. Id. at 16-17. Appellant argues that
there were no written offers for the property submitted by Ms. Gustavson
and Ms. Mowry, and that the only written agreements were those between
Appellant and Yurkov. Id. at 17.
Appellant fails to appreciate the nature of his role as fiduciary to
Decedent and the Estate. As agent and executor, Appellant was under a
duty to administer Decedent’s assets in such a way as to preserve and
protect them for distribution to the proper persons. See In re Kurkowski’s
Estate, 409 A.2d 357, 360-61 (Pa. 1979). In the discharge of this duty, an
executor “is regarded as a fiduciary and is held to the highest degree of
good faith.” Id. at 361. He will be required to exercise the same degree of
judgment, skill, care, and diligence that a reasonable or prudent person
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would ordinarily exercise in the management of his own affairs. See In re
Estate of Campbell, 692 A.2d 1098, 1101-02 (Pa.Super. 1997).
The orphans’ court specifically found the following facts. The
Allegheny County property was appraised at $75,700, and the Somerset
County property was appraised at $65,200. Orphans’ Court Order, 6/23/17,
at 1. Appellant sold Yurkov the Allegheny County property for $21,000, and
the Somerset County property for $24,000, and that the sale prices for the
properties were based upon what Yurkov could afford rather than their fair
market value. Id. In addition, Yurkov paid no closing costs for either
purchase. Id. The orphan’s court concluded that Appellant’s removal as
executor is warranted based on his handling of Decedent’s real estate. Id.
at 2.
The record supports the orphans’ court’s findings that Appellant, in
derogation of his duties as executor of the Estate, sold two parcels of real
property owned by the Estate for less than half of their appraised values. As
removal of an executor is appropriate under section 3182(1) when he “is
wasting or mismanaging the estate,” the orphans’ court’s decision to remove
Appellant “due to his handling of the real estate in this matter” is amply
supported by the record. Accordingly, Appellant’s first issue warrants no
relief.
In his second issue, Appellant contends the orphans’ court erred in
determining that he comingled funds when acting as agent under the POA.
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According to Appellant, in 2012, upon the advice of his counsel, he wrote
check No. 198 in the amount of $15,000 to himself and deposited it in a
“newly[-]established account in his own name.” Appellant’s brief at 15. He
claims that the money was to be used to fund Decedent’s funeral expenses
in the event that she did not survive an upcoming hip surgery. Id.
According to Appellant, “he later came to realize that he should have opened
the account in the name of Decedent.” Id. He argues that he used those
funds “to pay for Decedent’s needs” and “to reimburse himself for funds
expended acting as [a]gent under POA.” Id.
As Executor, Appellant had a duty to see that his purely private
interests were not advanced at the expense of the Estate. See In re
Pitone’s Estate, 413 A.2d 1012, 1015 (Pa. 1980). The orphans’ court
determined that Appellant comingled Decedent’s funds with his own money
when he deposited the $15,000 check into his own personal account.
Orphans’ Court Opinion, 6/23/17, at 2. Appellant concedes that he
deposited Decedent’s funds into his own personal account, and that he
should not have done so. Appellant’s brief at 15. As the orphans’ court’s
determination that Appellant improperly comingled Decedent’s funds with his
own is supported by the record, his second claim warrants no relief.
In his third issue, Appellant contends that the orphans’ court
incorrectly calculated the amount of money he dispersed to himself. He
claims that, although he wrote check No. 198 in the amount of $15,000 to
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himself and deposited it in his own personal account, those funds were used
to pay himself for POA services rendered and for Decedent’s necessities.
Appellant claims that he paid himself for his POA services $4,444.25 from
the $15,000, and that the balance of that account was used to pay for
Decedent’s furnishings at the nursing home. Appellant argues that his
counsel did not advise him that it was necessary to obtain a separate
contract to charge POA fees. He further claims that, when he visited
Decedent, he felt it was a POA service and that he could charge for the time.
He believed that $20 per hour was a reasonable fee to charge for his POA
services. Finally, Appellant argues that, although he claimed an executor’s
fee of $20,160 on the Inheritance Tax Return, he never received the
commission.
The findings of an orphans’ court judge who heard the testimony of
witnesses are to be given the same weight as a jury verdict, particularly
when those findings are based on determinations of credibility. In re
Estate of Campbell, 692 A.2d 1098, 1101 (Pa.Super. 1997). The test to
be applied is not whether we, the reviewing court, would have reached the
same result, but whether a judicial mind, after considering the evidence as a
whole, could reasonably have reached the same conclusion. Id.
Here, the orphans’ court was presented with Appellant’s First
Accounting, in which he did not seek fees for his services, and in which he
did not disclose that he had written the $15,000 check to himself. Instead,
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he described the $15,000 check as one of the “Unknown Origin Checks
Written by Leona E. Ford” “prior to [Appellant’s] administration.” First
Accounting, 11/5/15, at unnumbered 15. Appellant now concedes that he
did, in fact, write and deposit the $15,000 check into his personal account.
Appellant’s brief at 13. He also concedes that he paid himself $4,444.25 for
his services as POA. Id. Appellant prepared a petition for
adjudication/proposed distribution in which he claimed fees in the amount of
$19,649.73. Orphans’ Court Opinion, 6/23/17, at 2. Finally, Appellant
concedes that he also filed an Inheritance Tax Return in which he claimed a
commission of $20,160. Id. at 14. Based on this record, Appellant paid
himself $4,444.25 for his services as POA, and claimed fees in the amount of
$19,649.73 and a commission of $20,160 for a total of $44,250.98.
Accordingly, we find no error in the orphan’s court’s determination that
Appellant seeks fees and commissions in excess of $44,000. Thus, his third
issue warrants no relief.
In his final issue, Appellant contends that there was no evidence to
support his removal as executor under section 3182. Instead, he claims that
the evidence merely supports a finding of animosity amongst the parties,
which is not a basis for his removal. Appellant argues that at all times
relevant hereto, he relied upon the good faith opinion of counsel.
Appellant’s brief at 11.
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The record supports the orphans’ court’s determination that Appellant
wasted and mismanaged the Estate’s property and comingled Decedent’s
funds with his own. Thus, we find no error in the orphans’ court’s conclusion
that his continued involvement as executor would likely jeopardize the
Estate. For the reasons expressed above, we affirm the orphans’ court’s
determination that Appellant’s removal as executor of the Estate was
warranted under section 3182.
Order affirmed.
Judgment Entered.
Joseph D. Seletyn, Esq.
Prothonotary
Date: 9/25/2018
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