In Re: Koepfinger, J. Appeal of: Koepfinger, M. ( 2021 )

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NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37
IN RE: JOSEPH L. KOEPFINGER, AN: IN THE SUPERIOR COURT OF
INDIVIDUAL : PENNSYLVANIA
:
:
APPEAL OF: MARGARET KOEPFINGER :
:
:
:
: No. 123 WDA 2020
Appeal from the Order Entered January 24, 2020
In the Court of Common Pleas of Allegheny County Orphans' Court at
No(s): No. 02-18-03244
BEFORE: BENDER, P.J.E., McLAUGHLIN, J., and MUSMANNO, J.
MEMORANDUM BY McLAUGHLIN, J.: FILED FEBRUARY 04, 2021
Margaret Koepfinger (“Daughter”) appeals from the order declaring the
Joseph Koepfinger Irrevocable Trust (“Trust”) void and terminated. We
reverse and remand for proceedings consistent with this memorandum.
The facts as gleaned from the certified record are as follows. Joseph
Koepfinger (“Father”) is an approximately 94-year-old professional engineer
and disabled veteran. Father has several children, including Daughter. After
Father’s wife, the children’s mother, passed away, Father signed a power of
attorney (“POA”) in favor of Daughter in 2016 (“2016 POA”). Thereafter,
tension allegedly ensued between Father and Daughter due to a relationship
Father had begun with another woman. In 2017, Father revoked Daughter’s
POA and instead appointed his son, Joseph Koepfinger, Jr., as his agent.
Daughter contends that she was never told that her POA had been revoked in
favor of her brother until May 2018. Father maintains that Daughter was orally
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told that she was no longer Father’s agent at the time he revoked the 2016
POA.
The month before Daughter alleges that she first learned of the
revocation, but after Father alleges he orally informed Daughter that her
agency had been revoked, Daughter, acting pursuant to the 2016 POA,
created the Trust on April 27, 2018. Daughter proceeded to transfer a majority
of Father’s assets, including his residence, into the Trust. Daughter appointed
herself as Trustee of the Trust and was thereby charged with providing for the
care and needs of Father.
Shortly thereafter, on May 21, 2018, Daughter filed the instant
Declaratory Judgment action, asking the orphans’ court to determine, inter
alia, that the 2016 POA was valid, she had authority under the 2016 POA to
create the Trust, and that the Trust was valid. Father filed a motion seeking
to dismiss the declaratory action alleging that Daughter lacked standing and
that the 2016 POA had not been properly executed. The Honorable Kathleen
A. Durkin entered an order on February 13, 2019, concluding that the 2016
POA was void ab initio because Father had failed to sign it in the presence of
a notary. Judge Durkin’s February 2019 order made no determination as to
the continuing validity of the Trust.
Father subsequently filed a motion to terminate the Trust in June 2019,
claiming that because the court had deemed the 2016 POA void ab initio, the
Trust was likewise void. He also alleged that he had revoked the POA to
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Daughter before she purported to create the Trust, and she had “acted in bad
faith in creating the Trust.” Motion to Terminate Trust, at 2 (unpaginated).
Daughter filed preliminary objections averring that Father’s motion to
terminate was both procedurally and legally deficient. The orphans’ court
issued an order, on June 11, 2019, simply ordering “that the Motion to
Terminate Trust is DENIED.” The order was signed on Judge Durkin’s behalf
by the Administrative Judge of orphans’ court, the Honorable Lawrence
O’Toole.
Due to Judge Durkin’s retirement, this matter was then transferred to
the Honorable Michael E. McCarthy. Judge McCarthy conducted conferences
and requested that the parties prepare legal memoranda regarding the
question of whether the Trust remained valid. Ultimately, Judge McCarthy
issued an order on January 22, 2020, declaring the Trust “void and
terminated.” The instant timely appeal followed and both the orphans’ court
and Daughter complied with Pa.R.A.P. 1925.
In Judge McCarthy’s Rule 1925(a) opinion, he concludes that the Trust
must be considered void because it was created with the 2016 POA, which the
court concluded was void ab initio. The court considered 20 Pa.C.S.A. § 5608
and found Vine v. Commonwealth of Pennsylvania, State Employees’
Retirement Board, 9 A.3d 1150 (Pa.Super. 2010), instructive. See Rule
1925(a) Op. 3/23/20, at 5-6. The court cited Vine for the proposition that an
invalid POA cannot create a valid principal and agent relationship. Id.-3-
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Therefore, according to the court, because actions an agent takes pursuant to
an invalid POA are a legal nullity, the instant Trust is void. Id.In response, Daughter raises the following issues for our review:
1. Whether the Orphans’ Court erroneously failed to follow or to
consider relevant statutory provisions governing powers of
attorney, 20 Pa.C.S.[A.] § 5608 as amended in 2014, as applied
to a power of attorney executed in 2016.
2. Whether the Orphans’ Court (per McCarthy, J.) erroneously held
that the [Trust] had been declared void by a prior order of court
entered by Judge Durkin declared a 2016 [POA] void ab initio and
did not declare the [Trust] void.
3. Whether the Orphans’ Court erroneously failed to apply the
doctrine of the law of the case and the doctrine of coordinate
jurisdiction by failing to recognize and follow a prior order of court
dated June 10, 2019 (per Durkin, J.) (Docket No. 56) expressly
denying [Father’s] Motion to Terminate Trust (Docket No. 55).
Daughter’s Br. at 5 (footnote omitted).1
Our standard of review in a declaratory judgment action is limited to
determining whether the trial court clearly abused its discretion or committed
an error of law. Erie Ins. Group v. Catania, 95 A.3d 320, 322 (Pa.Super.
2014). When we review an orphans’ court decree we employ a deferential
standard of review and “must determine whether the record is free from legal
error and the court’s factual findings are supported by the evidence.” In re
Fiedler, 132 A.3d 1010, 1018 (Pa.Super. 2016) (en banc) (citation omitted).
Because the orphans’ court sits as the fact-finder, we will not reverse
credibility determinations absent an abuse of discretion. Id. “However, we are
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1 We have reordered Daughter’s questions for ease of disposition.
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not constrained to give the same deference to any resulting legal conclusions.”
Id. (citation omitted).
In Daughter’s first and second issues, she argues that the orphans’ court
erroneously terminated the Trust by failing to consider the version of 20
Pa.C.S.A. § 5608 in effect at the relevant time. She also contends that the
court erred by finding that the Trust had effectively already been determined
to be void due to the court’s prior determination that the 2016 POA was void
ab initio. We agree with both contentions and vacate the orphans’ court’s
order.
The orphans’ court rendered a declaratory judgment regarding the
validity of the Trust, relying on the Vine Court’s understanding of 20 Pa.C.S.A.
§ 5608. However, that reliance was misplaced. As Daughter points out, the
Pennsylvania legislature amended Section 5608 with the intention of reversing
Vine, in 2016, which was two years before Daughter created the Trust. The
General Assembly explicitly said so in the Act amending the statute. It stated,
“In interpreting and applying the amendment or addition of 20 Pa.C.S. §§
5601(f), 5608, 5608.1, 5608.2 and 5611, a court shall give due consideration
of the intent of the General Assembly to reverse the interpretation of 20 Pa.
C. S. § 5608 as set forth in Teresa M Vine v. Commonwealth of
Pennsylvania, State Employees ' Retirement Board, 9 A.3d 1150 (Pa.
2010.” See 2014, July 2, P.L. 855, No. 95, § 9(5). Thus, the court’s reliance
on Vine to conclude that a trust instrument created by an improperly
executed, but otherwise facially proper, POA is void upon creation, was error.
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Moreover, Section 5608 is not applicable to the question of the
continuing validity of the Trust, which is the sole issue addressed in the order
currently before this Court. Section 5608 concerns “liability” incurred upon the
reliance of a facially valid POA. Here, although Daughter requested a
determination regarding any potential liability she may have incurred due to
her creation of the Trust with the 2016 POA, the instant orphans’ court order
does not address this issue.
Further, Daughter is correct that prior to the instant order, the orphans’
court had not issued any other order declaring the Trust void. Indeed, neither
the court nor Father points to anything in the law in force at the relevant time
that would automatically render an irrevocable trust created pursuant to a
POA void ab initio because the POA is ultimately found to have been improperly
executed. As previously explained, the court’s reliance on Vine was
misplaced.
We thus reverse and remand. Because of our disposition, we need not
address Daughter’s third issue, which contends that the prior order denying
the motion to terminate the trust on different grounds, i.e., voidness, was law
of the case.
Order reversed.2 Case remanded. Jurisdiction relinquished.
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2 Our disposition is without prejudice to Father’s ability to seek termination of
the Trust because of fraud or mistake. See 20 Pa.C.S.A. § 7736. See also
Rebidas v. Murasko, 677 A.2d 331, 333 (Pa.Super. 1996) (“An irrevocable
trust may be rescinded by the settlor, however, if it is demonstrated that the
trust was created through fraud, duress, undue influence, or mistake.”).
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Judgment Entered.
Joseph D. Seletyn, Esq.
Prothonotary
Date: 2/04/2021
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