In Re: Gonsiewski Trust, Appeal of: Heckscher, PC ( 2022 )

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NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37
IN RE: GONSIEWSKI FAMILY LIVING : IN THE SUPERIOR COURT OF
TRUST : PENNSYLVANIA
:
:
APPEAL OF: HECKSCHER, TEILLON, :
TERRILL AND SAGER, P.C. :
:
:
: No. 165 EDA 2022
Appeal from the Order Entered December 6, 2021
In the Court of Common Pleas of Philadelphia County
Orphans’ Court at No(s): 560IV of 2021
BEFORE: PANELLA, P.J., NICHOLS, J., and COLINS, J.*
MEMORANDUM BY PANELLA, P.J.: FILED OCTOBER 13, 2022
Heckscher, Teillon, Terrill, and Sager, P.C. (collectively “Appellants”)
appeal from the orphans’ court order overruling their objection and finding
that the court did not have subject matter jurisdiction to address Appellants’
breach of contract claim for unpaid counsel fees against a beneficiary of the
trust, and further confirming the first and final account of Robert Gonsiewski,
Trustee of the Gonsiewski Family Living Trust. Appellants argue that the
orphans’ court was the appropriate forum to raise their claim. We affirm.
On December 20, 1996, Alfred and Theresa Gonsiewski, husband and
wife, established the Gonsiewski Family Living Trust. Alfred and Theresa were
the settlors, trustees, and lifetime beneficiaries of the trust. The trust
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* Retired Senior Judge assigned to the Superior Court.
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terminated upon the death of Alfred and Theresa, whereupon the remaining
property in the trust would be divided into equal shares for each of Alfred’s
and Theresa’s children — Robert, Paul Gonsiewski, and Barbara Thompson.
In January 2009, Alfred died, and Robert became successor co-trustee
with Theresa. In September 2018, Theresa died, and the trust was terminated.
On June 2, 2021, Robert, as trustee, filed the accounting of the trust, covering
the period from January 24, 2009, to December 30, 2020. The orphans’ court
placed the matter on its July audit list.
However, on July 1, 2021, Appellants, on behalf of Paul,1 sent notice to
the orphans’ court, indicating that they represent Paul,2 and requested that
the matter be continued to the August audit list because notice to Paul was
inadequate. The orphans’ court ultimately concluded that the audit would
proceed as scheduled. However, Paul did not appear at the audit on July 6,
2021, and the orphans’ court continued the matter.
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1 Paul hired Appellants as counsel for matters relating to the distribution of
the trust in June 2019. Relevant herein, the engagement letter included the
following regarding payment of fees:
We are not asking you for a retainer at this time, but reserve the
right to do so, particularly if litigation is required. As to the source
of payment of our fees and costs, our fees and costs are payable
by you personally. When the trust is ready for distribution, we will
ask you to direct the trustee to pay any balance of our counsel
fees and costs out of your share.
Engagement Letter, 6/20/19, at 2.
2 At this time, Appellants had not entered their appearance on behalf of Paul.
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On July 16, 2021, Appellants advised Paul that they were terminating
their representation of him, and stated the following regarding the payment
of outstanding fees:
I am willing to discuss with you a reduction in our fees, but I will
expect you to direct your brother to pay us directly from your
share. If I do not hear from you by the end of the day on Thursday,
July 29, 2021, then we will have no choice but to file a request
with the [orphans’ c]ourt that your brother be directed to pay our
entire unpaid balance from your share of the trust.
Letter, 7/16/21.
Subsequently, Appellants filed an objection to the accounting, arguing
that Robert, as trustee, failed to include in his accounting an entry by which
Appellants’ unpaid counsel fees and costs, totaling $30,483.93, would be paid
out of Paul’s share of the trust.
The orphans’ court held a hearing, at which Paul acknowledged that he
received the invoices for Appellants’ legal fees; Appellants provided their
outstanding bills that Paul owed; and Robert indicated that he would take no
position on the objection. Thereafter, the orphans’ court entered a decree
overruling Appellants’ objection and confirming the accounting absolutely,
finding no outstanding issues with the proposed distribution, equal to 1/3 of
the trust balance each to Barbara, Paul, and Robert. Specifically, the orphans’
court found that it did not have jurisdiction to address Appellants’ objection,
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as it was merely a breach of contract action and not an objection to any
information contained in the trust’s accounting.3 Appellants timely appealed.
On appeal, Appellants raise the following questions for our review:
1. Did the Trial Court err when it concluded that it did not have
mandatory or non-mandatory jurisdiction to address
[Appellants’] Objection?
2. Did the Trial Court err by implying that the presence of a
spendthrift provision would bar [Appellants’] claim and by
raising the spendthrift clause as a defense sua sponte?
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3Additionally, the orphans’ court noted that Appellants could not collect
money from the trust due to the spendthrift provision in the trust document,
which stated the following:
To the fullest extent permitted by law, the interests of all of the
beneficiaries in the various trusts and trust property subject to
this agreement, except for our interests in the various trusts or
trust property subject to this agreement, shall not be alienated,
pledged, anticipated, assigned, or encumbered unless specifically
authorized by the terms of this agreement.
Such interests shall not be subject to legal process or to the claims
of any creditors, other than our creditors to the extent of each of
our respective interests in the trusts or trust property, while such
interests remain trust property.
Trust, 12/20/96, at Article 18, Section 4; see also In re Ware, 814 A.2d
725, 731 (Pa. Super. 2002) (noting that spendthrift clauses “insulate the
assets of the trusts from the incursions of creditors until such time as those
assets, either as principal or income, are delivered into the hands of the
beneficiary.” (citation omitted)). While acknowledging that a spendthrift
provision is unenforceable against “a judgment creditor who has provided
services for the protection of the beneficiary’s interest in the trust,” Orphans’
Court Opinion, 3/7/22, at 9 (quoting 20 Pa.C.S.A. § 7743(b)(3)), the orphans’
court found that Appellants were not judgment creditors, as the agreement in
question with Paul was for fees payable by Paul. See Orphans’ Court Opinion,
3/7/22, at 9-11. Given our disposition of this appeal, we do not reach the
issue of the proper application of the spendthrift provision.
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3. Did the Trial Court err when it concluded that there was
insufficient evidence to prove Paul Gonsiewski breached his
agreement with [Appellants]?
Brief for Appellants at 2.
In their first claim, Appellants claim that the trial court erred in
concluding that it lacked jurisdiction to address the objections. See id. at 13,
19. Appellants contend that the dispute directly implicated the administration
and distribution of the inter vivos trust assets and the orphans’ court had
mandatory jurisdiction under 20 Pa.C.S.A. § 711(3). See id. at 16.
Alternatively, Appellants argue that the orphans’ court could exercise
non-mandatory jurisdiction under 20 Pa.C.S.A. § 712(3), which allows the
court to exercise jurisdiction over “other matters” that arise during the
disposition of an action before the court. Id. Appellants thus conclude that
because the dispute involved their representation of Paul concerning the
administration and distribution of the inter vivos trust and Paul’s agreement
with Appellants that stated that the trust would pay the counsel fees, the
orphans’ court had jurisdiction over the matter and could grant relief on the
breach of contract action. See id. at 13-17.
Appellants additionally highlight that orphans’ courts have previously
adjudicated a dispute between an attorney and a beneficiary of an estate. See
also id. at 16-17, 18, 20-23 (citing, inter alia, Conti Estate, 8 Fid. Rep. 2d
272 (O.C. Phila. 1988), and Fischer Estate, 10 Fid. Rep. 3d 277 (O.C. Monroe
2020)). Appellants claim that consideration of their action by the orphans’
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court would promote judicial efficiency, highlighting that the court already held
a hearing on the matter and having a new action in a separate division of the
common pleas court was unnecessary. See id. at 17-18, 20. Appellants
disregard the orphans’ court’s concern that granting jurisdiction to the instant
case would open the “floodgates” to hear cases outside its statutory
jurisdiction, asserting that the language in Sections 711 and 712(3) limits the
matters that can be heard by the court. See id. at 17, 19.
Our standard of review for questions involving jurisdiction is as follows:
A court’s decision to exercise or decline jurisdiction is subject to
an abuse of discretion standard of review and will not be disturbed
absent an abuse of that discretion. Under Pennsylvania law, an
abuse of discretion occurs when the court has overridden or
misapplied the law, when its judgment is manifestly unreasonable,
or when there is insufficient evidence of record to support the
court’s findings. An abuse of discretion requires clear and
convincing evidence that the trial court misapplied the law or
failed to follow proper legal procedures.
R.M. v. J.S., 20 A.3d 496, 500 (Pa. Super. 2011) (citation omitted).
Orphans’ court is not a court of general jurisdiction; rather the “orphans’
court’s jurisdiction is purely a creature of statute.” Harley v. HealthSpark
Found., 265 A.3d 674, 687 (Pa. Super. 2021) (citation omitted). Orphans’
courts have jurisdiction over “the administration and distribution of the real
and personal property of inter vivos trusts, and the reformation or setting
aside of any such trusts[.]” 20 Pa.C.S.A. § 711(3); see also id. (“‘Inter vivos
trust’ means an express trust other than a trust created by a will, taking effect
during the lifetime or at or after the death of the settlor.”). However, where a
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dispute involves “substantial questions concerning matters enumerated in
section 711 and also matters not enumerated in that section[,]” the orphans’
court may, but is not required, to exercise non-mandatory jurisdiction over
the matter. 20 Pa.C.S.A. § 712(3); see also Mark Hershey Farms, Inc. v.
Robinson, 171 A.3d 810, 815 (Pa. Super. 2017) (permitting concurrent
jurisdiction in either the orphans’ court and civil court when the controversy
involves matters enumerated in Section 711 and matters not enumerated in
that section).
Initially, as the orphans’ court noted, Appellants’ “objection to the
account is actually just an allegation that Paul breached their agreement and
is not an objection to any information contained in the accounting of the
[t]rust.” Orphans’ Court Opinion, 3/7/22, at 7. Therefore, this dispute falls
outside the exclusive, or mandatory, purview of the orphans’ court, as
contractual disputes are not statutorily enumerated issues that must be
adjudicated by the orphans’ court. See 20 Pa.C.S.A. § 711.
Rather, because Appellants’ objection to the trust accounting, seeking
trust funds from Paul’s share based upon his purported breach of the
engagement letter, is the type of case where the orphans’ court may, but is
not required, to exercise jurisdiction, because it concerns the enforcement of
a contract independent of the trust. See id. § 712(3) (providing that the
orphans’ court division has non-mandatory jurisdiction when a controversy
involves the administration and distribution of an inter vivos trust, as
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enumerated in Section 711, but also involves matters that are not enumerated
in that section). Here, the orphans’ court specifically declined to exercise non-
mandatory jurisdiction over this matter, and Appellants have provided no
authority that the orphans’ court’s refusal was an abuse of discretion.4 To that
end, Appellants’ judicial efficiency claim does not establish an abuse of
discretion, and Appellants are free to raise their claim in the civil division.5 In
light of the foregoing, we conclude the orphans’ court acted within its
discretion in declining to address this case. See Mark Hershey Farms, Inc.,
171 A.3d at 815-16 (concluding that the civil division, not the orphans’ court,
properly exercised jurisdiction over matter that was based upon a breach of
contract and did not directly raise any issues regarding the administration of
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4 Appellants’ reliance on two decisions by the courts of common pleas to
support their argument that the orphans’ court should have exercised
jurisdiction is misplaced. Indeed, it is well-settled that Court of Common Pleas
decisions “are not binding precedent for this Court.” Discover Bank v.
Stucka, 33 A.3d 82, 87 (Pa. Super. 2011). Nevertheless, we do not find that
either of these cases to be dispositive, as the orphans’ court had discretion to
accept jurisdiction over this case under Section 712(3) and exercised its
discretion not to. The fact that other orphans’ courts have accepted jurisdiction
for similar issues does not establish an abuse of discretion in the instant case.
See 20 Pa.C.S.A. § 712(3). In other words, a prior discretionary decision to
exercise jurisdiction over a similar dispute does not act to convert “may” into
“must.”
5 Appellants make passing reference to an argument that the orphans’ court
should have transferred their claim to the civil division sua sponte. See Brief
for Appellants at 22. However, Appellants do not develop this argument or
provide any authority for it. Nor is this argument reasonably suggested by the
Rule 1925(b) statement filed by Appellants. We therefore conclude they have
waived this issue.
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an estate). Because the orphans’ court did not abuse its discretion in finding
that it did not have subject matter jurisdiction over this matter, we need not
address Appellants’ remaining claims.
Order affirmed.
Judgment Entered.
Joseph D. Seletyn, Esq.
Prothonotary
Date: 10/13/2022
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