Christine D'Andrea Trust, Appeal of: D'Andrea, M. ( 2023 )

J-A24038-21
NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37
IN RE: THE CHRISTINE D'ANDREA : IN THE SUPERIOR COURT OF
IRREVOCABLE TRUST : PENNSYLVANIA
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APPEAL OF: MARK D'ANDREA :
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: No. 579 EDA 2020
Appeal from the Order Entered January 10, 2020
In the Court of Common Pleas of Montgomery County Orphans' Court at
No(s): No. 2017-X3620
IN RE: THE CHRISTINE D'ANDREA : IN THE SUPERIOR COURT OF
IRREVOCABLE TRUST : PENNSYLVANIA
:
:
APPEAL OF: CHRISTINE D'ANDREA :
:
:
:
: No. 580 EDA 2020
Appeal from the Order Entered January 10, 2020
In the Court of Common Pleas of Montgomery County Orphans' Court at
No(s): No. 2017-X3620
IN RE: THE CHRISTINE D'ANDREA : IN THE SUPERIOR COURT OF
IRREVOCABLE TRUST : PENNSYLVANIA
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APPEAL OF: CHRISTINE D'ANDREA :
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: No. 581 EDA 2020
Appeal from the Order Entered January 10, 2020
In the Court of Common Pleas of Montgomery County Orphans' Court at
No(s): No. 2017-X3620
J-A24038-21
BEFORE: LAZARUS, J., DUBOW, J., and PELLEGRINI, J.*
MEMORANDUM BY LAZARUS, J.: FILED MARCH 21, 2023
These are cross-appeals from the adjudication,1 entered2 in the Court of
Common Pleas of Montgomery County, confirming the account filed by Mark
D’Andrea (“Mark”), Co-Trustee of the Trust Under Deed of Velma D’Andrea,
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* Retired Senior Judge assigned to the Superior Court.
1 At the outset, we note that our review of this matter has been significantly
impeded by the failure of the Orphans’ Court to make proper findings of fact
and determinations of credibility in relation to many of the objections raised
by Christine. Many of the court’s rulings on specific objections were stated in
a conclusory manner, without reference to controlling law or facts of record.
As a result, this Court was compelled to comb the record in an effort to
ascertain the propriety of those rulings. Accordingly, we remind the Orphans’
Court of its obligation to provide an opinion detailing the reasons for its rulings
and where in the record those reasons may be found. See Pa.R.A.P. 1925(a).
2 For reasons which are lost to time, the Orphans’ Court issued two identical
adjudications in this matter. The first was signed by the court on December
30, 2019, mailed to the parties on January 6, 2020, and docketed/sent on
January 10, 2020. The second adjudication was signed by the Orphans’ Court
on January 7, 2020, mailed to the parties on January 8, 2020, and
docketed/sent on February 3, 2020. To confuse matters even further, on
January 31, 2020, the court signed an “Amended Order,” which was docketed
and sent on February 3, 2020, stating that “the Adjudication dated January 7,
2020, is appealable thirty (30) days from the date of this order.” Order,
1/31/20. As a result of the Orphans’ Court’s perplexing actions, Christine filed
two notices of appeal, one referencing each adjudication. Mark filed his notice
of appeal on January 29, 2020, referencing the date of the first adjudication
entered by the court. Because the second adjudication is identical to the first,
we will consider the first adjudication to be the operative one for purposes of
determining the timeliness of the parties’ notices of appeal, both of which were
timely filed within thirty days of January 10, 2020, the date that adjudication
was docketed and sent to the parties. See Pa.R.A.P. 108(b) (“The date of
entry of an order in a matter subject to the Pennsylvania Rules of Civil
Procedure shall be the day on which the clerk makes the notation in the docket
that notice of entry of the order has been given as required by Pa.R.Civ.P.
236(b).”). We have amended the captions to reflect the date on which the
first adjudication was entered.
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Settlor, f/b/o Christine D’Andrea (“Christine”). Upon careful review, we affirm
in part, reverse in part, and remand for additional proceedings consistent with
the dictates of this memorandum.
Settlor was the D’Andrea family matriarch who controlled the family’s
successful cement business. In 1999, Settlor created fourteen separate
irrevocable trusts for the benefit of various family members, including trusts
for her son, Mark, and his wife, Christine. At issue in this matter is the trust
created for the benefit of Christine (“Trust”). Under the terms of the Trust,
Mark and Christine were named as co-trustees,3 with net income payable at
least quarterly to Christine. As co-trustee, Mark was also given discretion to
“pay to or apply for the benefit of [Christine] so much of the principal (up to
the entire amount thereof) as the co-Trustee . . . deems advisable from time
to time, for her comfort, health, education, maintenance[,] and support.”
Christine D’Andrea Irrevocable Trust, at ¶ SECOND(a)(2). Mark was also
named as business trustee and given broad powers to invest Trust funds in
any closely-held businesses as he should deem fit. See id. at ¶ SIXTH. Settlor
waived any conflicts of interest arising from Mark’s investment of Trust funds
in a business in which he also serves as an officer, director, or employee. See
id. at ¶ SIXTH(f). Settlor further released Mark, as business trustee, from
any liability “for depreciation in value or loss by reason of the retention of any
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3As beneficiary of the Trust, Christine was barred from participating in any
decision regarding the distribution of income or principal. See Christine
D’Andrea Irrevocable Trust, at ¶ SEVENTH(b).
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such business interest[,] except for depreciation or loss resulting from
fraudulent acts” of the business trustee. Id. at ¶ SIXTH(g). Upon Christine’s
death, income is distributable to Mark, if he survives, along with such
discretionary distributions of principal as the trustee may deem appropriate
for his health, education, maintenance, and support. See ¶ SECOND(b)(B).
Upon the death of the survivor of Christine and Mark, the remaining principal
is to be held in further separate trusts for Mark’s living descendants until each
such descendant attains the age of 35. See id.
The family cement business was liquidated in 2010 and the proceeds
were distributed to the Trust, Mark’s trust, and Mark individually. The Trust
received $503,715.60 in securities and a 29.985% interest in property located
at 14051 Townsend Road in Philadelphia (“Townsend Road Property”).4
Settlor died on December 24, 2011. On January 1, 2013, Mark formed Mark
D’Andrea, LLC (“LLC”) to maintain and manage the Townsend Road Property.
The LLC was owned as follows: (1) Mark, individually, 40.612%; (2) the Trust,
29.985%; and (3) Mark’s trust, 29.403%. Contributions totaling $423,000
were made by the members, in proportion to their ownership interests. Mark
began to market the Townsend Road Property for sale in 2012. After Mark
rejected several offers he deemed too low, the property was ultimately sold
in July 2017 for $1,750,000, nearly $700,000 over its appraised value. See
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4The Townsend Road Property was purchased in the early 2000s by the family
business, which was operated out of a building at that location. Mark also
operated his separate business, Mark D’Andrea, Inc., out of the Townsend
Road Property.
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N.T. Trial, 4/9/19, at 93, 96 (Mark’s accountant testifying as to sale and
appraised values). Following the closing of the sale, on September 18, 2017,
Mark repaid the Trust its $126,836.55 principal investment in the LLC. The
remainder of the sale proceeds were deposited into an interest-bearing money
market account pending final distribution. On May 9, 2018, Mark issued a
final distribution of the Trust’s proportional share of the settlement proceeds
in the amount of $315,023.90.
Exponentially complicating this matter is the fact that Mark and Christine
were separated in 2016 and acrimonious divorce proceedings are still ongoing.
Christine spent the majority of the couple’s marriage as a stay-at-home
mother, while Mark ran his lucrative business until his retirement in 2012. As
sole breadwinner, Mark paid the vast majority (if not all) of the family’s
expenses. At trial, Mark expressed frustration with Christine’s spending and
housekeeping habits, and even accused her of killing his dog. Christine
accused Mark of being abusive and controlling. This unfortunate situation
forms the backdrop of this case, which was initiated by Christine with the
filing, on October 2, 2017, of a “Petition for Citation to Show Cause Why Mark
D’Andrea Should Not Be Removed as Co-Trustee and a Successor Co-Trustee
Appointed, Why Mark D’Andrea Should Not Immediately Deposit Proceeds
from the Sale of a Trust Asset to the Trust, and Why Mark D’Andrea Should
Not Be Surcharged.” On November 21, 2017, the court ordered Mark to file
an account of his trusteeship, which he did on January 3, 2018. Christine filed
objections, raising numerous claims regarding, inter alia, Mark’s alleged
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improper use of Trust funds. Following discovery, a hearing was conducted
on April 8 and 9, 2019. At the April 8, 2019 hearing, Mark advised the court
of his resignation as co-trustee. Both parties filed post-trial briefs.
On September 9, 2019, Mark filed a petition for adjudication, to which
Christine raised numerous additional objections. Among other things,
Christine objected to Mark’s request for counsel fees and requested that the
court order Mark to pay her counsel fees. The parties submitted briefs
addressing the issues raised in Christine’s objections to the petition for
adjudication. On January 10, 2020, the Orphans’ Court entered its
adjudication, in which it sustained, in part, and denied, in part, Christine’s
objections to the account. Both parties filed motions for reconsideration.
Before the court could act on those motions,5 the parties filed cross-appeals,
followed by court-ordered Pa.R.A.P. 1925(b) concise statements of errors
complained of on appeal.
Mark raises the following issues for our review:
1. Did the Orphans’ Court err when it only surcharged Mark
despite [finding] that Christine breached her fiduciary duties as
co-trustee and is responsible for any loss that results from her
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5 A trial court no longer has the power to act on a motion for reconsideration
when it fails to issue an order expressly granting the motion within the time
prescribed for seeking appellate review. See Manufacturers and Traders
Trust Co. v. Greenville Gastroenterology, SC, 108 A.3d 913, 918 (Pa.
Super. 2015) (“If a court fails to act on a timely reconsideration motion within
the appeal period, it loses jurisdiction to do so.”). Here, the Orphans’ Court
did not act on the motions for reconsideration within the thirty-day appeal
period. Accordingly, the court’s inaction had the effect of a denial pursuant to
Pa.R.A.P. 1701.
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negligence as co-trustee and by summarily dismissing Mark’s
equitable claims in a footnote?
2. Did the Orphans’ Court err when it surcharged Mark for 50% of
certain household expenses contrary to the terms of the Trust,
the RESTATEMENT (THIRD) OF TRUSTS, testimony of counsel
for the Trust, and undisputed facts that Mark personally paid
the majority of household expenses?
3. Did the Orphans’ Court err when it held that $126,000 from the
Trust was the only liquidity for sustaining the operations of
Mark D’Andrea, LLC[,] and surcharged Mark as a result when
the Trust only owned 29.985% of the LLC?
4. Did the Orphans’ Court err in surcharging Mark for alleged
mathematical and accounting errors[,] and in particular[,] for
failing to identify a “loan” to the LLC in the accounting[,] when
Christine presented no evidence on this issue at trial and when
the accounting reflects that such “loan” was repaid to the Trust
[as a “capital contribution”]?
5. Did the Orphans’ Court err in surcharging Mark in the amount
of $14,175 for the alleged loss of interest on the sale of the
Townsend Road Property when the Trust already received
interest as part of the distribution from the LLC, the timing of
the payment was due to actions of professionals to complete
the sale, there was no objection to the timing[,] and had the
sale been completed sooner, the proceeds would have been
placed in the Trust’s investment account with interest well
below 6%?
6. [D]id the Orphans’ Court err in finding that Mark engaged in
self-dealing?
7. Did the Orphans’ Court err in denying Mark’s request for
attorneys’ fees?
Brief of Appellant, at 10-11 (unnecessary capitalization omitted).
Christine raises the following claims on cross-appeal:
1. Did the [Orphans’ Court] err in failing to surcharge [Mark] for
household expenses [he] paid directly from the [T]rust, where
substantial evidence demonstrated that these household expense
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payments were improper and indistinguishable from other
household expense payments for which [Mark] was surcharged?
2. Did the [Orphans’ Court] err in failing to surcharge [Mark] for
paying credit card bills with [T]rust funds, where the credit card
bills related to household expenses that were indistinguishable
from other household expense payments for which [Mark] was
surcharged, and the [Orphans’ Court] improperly based its ruling
on the beneficiary/co-trustee being aware of the payments?
3. Where [Mark] solely controlled a management company that
he co-owned with the [T]rust, paid his own personal expenses
with that company’s funds, then reimbursed the company from
the [T]rust, was the [Orphans’ Court] erroneously unclear as to
whether it surcharged [Mark] for those specific personal expense
payments or[,] in the alternative, did it err in failing to surcharge
[Mark] for the lost interest to the [T]rust from those payments?
4. Where the trustee that co-owns real property with the [T]rust
collects a large management fee for himself from the sale
proceeds of that property, and the [Orphans’ Court] found that
the purported basis for the fee was incredulous, did the [Orphans’
Court] err by failing to surcharge [Mark] for the [T]rust’s share of
the management fee?
5. Where the [Orphans’ Court] found that [Mark] breached his
fiduciary duty to the [T]rust, caused financial harm to the
[T]rust[,] and surcharged the [T]rustee, did the [Orphans’ Court]
err in failing to rule that [Christine] was entitled to attorneys’ fees?
Brief of Cross-Appellant, at 5-6.
We begin by noting our standard and scope of review:
When reviewing a decree entered by the Orphans’ Court, this
Court 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. The Orphans’ Court[’s] decision
will not be reversed unless there has been an abuse of discretion
or a fundamental error in applying the correct principles of law.
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This Court’s standard of review of questions of law is de novo, and
the scope of review is plenary, as we may review the entire record
in making our determination. When we review questions of law,
our standard of review is limited to determining whether the trial
court committed an error of law.
In re Fiedler, 132 A.3d 1010, 1018 (Pa. Super. 2016) (citations and
quotation marks omitted).
We begin by addressing Mark’s claims. However, where appropriate,
we will address certain of the parties’ claims together for ease of disposition.
Mark first asserts that the Orphans’ Court erred by only surcharging him,
despite finding that Christine breached her fiduciary duties as co-trustee and
by dismissing Mark’s equitable claim of laches on the basis of unclean hands.
Specifically, Mark asserts that the court erred in summarily concluding that,
because Mark’s conduct as Trustee was “less than respectable,” he was barred
by the doctrine of unclean hands from asserting the defense of laches. He
also asserts that, because Christine was a co-trustee who failed to uphold her
fiduciary obligation to use reasonable care to prevent her co-trustee from
committing a breach of trust, the court erred by only imposing a surcharge on
him. He is entitled to no relief.
We begin by addressing Mark’s laches claim. The question of whether
laches applies is a question of law; thus, we are not bound by the trial court’s
decision on the issue. Fulton v. Fulton, 106 A.3d 127, 131 (Pa. Super. 2014)
(citations omitted).
Laches, similar to a statute of limitations, may bar a party from
seeking equitable relief after the lapse of a certain period, usually
six years. Laches bars relief when the complaining party is guilty
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of want of due diligence in failing to promptly institute the action
to the prejudice of another.
Laches is not excused by simply saying: “I did not know.” If by
diligence a fact can be ascertained[,] the want of knowledge so
caused is no excuse for a stale claim. The test is not what the
plaintiff knows, but what he might have known, by the use of the
means of information within his reach, with the vigilance the law
requires of him.
In re Estate of Warden, 2 A.3d 565, 579 (Pa. Super. 2010) (internal
citations and quotation marks omitted).
In order to prevail on an assertion of laches, a trustee must establish:
(1) a delay arising from the beneficiary’s failure to exercise due diligence; and
(2) prejudice to the trustee resulting from the delay. Sprague v. Casey, 550
A.2d 184, 187 (Pa. 1988). “[T]he sort of prejudice required to raise the
defense of laches is some changed condition of the parties [that] occurs during
the period of, and in reliance on, the delay.” Id. at 188. The question of
laches is factual and is determined by examining the circumstances of each
case. Id. at 188.
Here, Mark has failed to argue, much less establish, that he suffered
any prejudice as a result of any delay on Christine’s part. See id. Accordingly,
we cannot say that the Orphans’ Court erred in declining to apply the doctrine
of laches in this matter.6
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6 Although the Orphans’ Court declined to apply laches based on the doctrine
of unclean hands, “it is a well-settled doctrine in this Commonwealth that a
trial court can be affirmed on any valid basis appearing of record.” In re T.P.,
78 A.3d 1166, 1170 (Pa. Super. 2013).
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Mark also asserts that the Orphans’ Court should have also imposed a
surcharge on Christine because she, too, breached her fiduciary duties as co-
trustee. However, Mark failed to raise this claim before the Orphans’ Court.
“Issues not raised in the trial court are waived and cannot be raised for the
first time on appeal.” Pa.R.A.P. 302(a). Accordingly, Mark has waived this
claim for purposes of appellate review.
Mark next claims that the Orphans’ Court erred by surcharging him for
50% of certain household expenses paid from the Trust, which he claims was
contrary to the terms of the Trust, the Restatement (THIRD) of Trusts, the
testimony of William C. Hussey, II, Esquire, counsel for the Trust, and the fact
that Mark, personally, paid the majority of household expenses. Specifically,
the court surcharged Mark for 50% of the following expenses that were paid
from Trust funds:
• $450.00 for child psychiatric evaluation;
• $12,137.61 for school property taxes for marital home;
• $12,680.00 for joint property at Commodore Bay Club (shore
home);
• $400.00 to Progressive Insurance for snowmobile insurance;
• $993.00 for children’s dental care;
• $691.63 for clothes dryer for marital home; and
• 6% statutory interest for loss of interest on trust funds used
for children’s tuition and later reimbursed.
See Adjudication, 1/7/20, at 12.
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Mark asserts that these distributions were permissible under the
discretionary powers granted to him under Paragraph SECOND(a)(2) of the
Trust, which provides that the trustee may “pay to or apply for the benefit of
[Christine] so much of the principal (up to the entire amount thereof) as [the
trustee] deems advisable from time to time, for her comfort, health,
education, maintenance and support[.]” See Brief of Appellant, at 36;
Christine D’Andrea Irrevocable Trust, 6/30/99, at ¶ SECOND(a)(2). He claims
that “[t]he word ‘support’ is generally used to mean articles for the sustenance
of the family, as food, etc.” Id., quoting Winthrop Co. v. Clinton, 46 A.
435, 437 (Pa. 1900). Mark argues that “[t]rust terms for ‘support’ have also
been ‘interpreted to mean that the trustee is to be guided by the beneficiary’s
accustomed standard of living, or “station in life,” and usually also includes
support for the beneficiary’s household.’” Brief of Appellant, quoting BOGERT’S
THE LAW OF TRUSTS AND TRUSTEES § 228. Mark asserts that, as a family member,
he was permitted to tangentially benefit from the expenditures and it would
be “hard to conceive of a distribution to a parent or a married person . . . that
does not have an ancillary benefit for that person’s immediate family
members.” Brief of Appellant, at 37, quoting N.T. Trial, 4/9/19, at 178
(testimony of Attorney Hussey). Mark also argues that, because he paid the
vast majority of the household’s large expenses, including the mortgage,
vacation home, taxes, insurance, and vehicle expenses, it was proper to use
Christine’s trust to discharge a portion of her obligation of support. Id. at 39.
Finally, Mark asserts that his reliance on the advice of counsel regarding the
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propriety of payments from the trust relieves him of liability pursuant to the
terms of Paragraph FIFTH of the Trust, which provides that the “Trustee is
expressly relieved of any liability or responsibility whatsoever for any act or
failure to act, or for following the advice of . . . attorneys . . ., so long as the
Trustee exercises due care in their selection.” Id. at 40-42, quoting Christine
D’Andrea Irrevocable Trust, 6/30/99, at ¶ FIFTH(p).
In response, Christine argues that “[t]here is no provision in the Trust
that allows Trustee to make distributions to benefit himself or relieve his own
support obligations” and that Paragraph SECOND(a)(2) “is clearly designed to
benefit [Christine], for her comfort, health, education, maintenance, and
support.” Brief of Appellee, at 27 (emphasis in original). She asserts that “a
careful reading of Winthrop Co. finds support for a more narrow definition of
support, applying the definition to costs related to ‘necessities,’ something
costs such as the Commodore Bay Club condominium fees and snowmobile
insurance premiums do not meet.” Id. Regarding Mark’s argument that the
payments discharged Christine’s duty of support, Christine argues that “courts
do not get involved in support determinations where the parties are living
under the same roof” and that “married persons are liable for [the] support of
each other according to their respective abilities to provide support[.]” Id. at
29. Thus, “[g]iven that [Mark] voluntarily retired from his wildly successful
business[,] which generat[ed] over $1,000,000 annually versus [Christine,]
who was primarily a [housewife] raising the parties’ children, if there were
support obligations[,] they would be substantially larger on [Mark’s part].”
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Id. Christine also challenges Mark’s claim that he paid “virtually all” of the
household expenses, asserting that the testimony supporting the claim is
“vague” and “self-serving” and “in no way establishes relative support
obligations to entitle [Mark] to unilaterally justify the amount of money he
distributed from the Trust for household expenses to benefit himself.” Id. at
32. Finally, Christine argues that Mark’s “advice of counsel” defense fails,
because Mark “selectively or falsely presented information to his attorney to
get the advice he wanted” and legal advice “is only as accurate and reliable
as the underlying information [the attorney] receives from the client.” Id. at
33.
In general, “[a] trustee is under a duty to the beneficiary to administer
the trust solely in the interest of the beneficiary.” In re Paxson Trust I, 893
A.2d 99, 121 (Pa. Super. 2006).
It is abundantly clear that trustees may not profit from trust
property. Cases old and new, decided by every level of court in
this Commonwealth, support this basic rule. “[T]here is no
principle better settled than that a trustee is not permitted to
obtain any profit or advantage to himself in managing the
concerns of the cestui que trust.” Raybold[ v. Raybold], 20 Pa.
[308,] 312 [(1853)]. “It is a well[-]recognized general rule that
a trustee or fiduciary may not use trust property for his own
benefit and if he does[,] he is liable to a cestui que trust for profits
made by him from the use of trust property.” Stahl, Attorney
General v. First Pennsylvania Banking and Trust Company,
[] 191 A.2d 386, 388 ([Pa.] 1963).
Id. at 122.
The terms “support” and “maintenance” are “[p]robably the most
common guides used in grants of discretion” and are “sometimes accompanied
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by a reference to the beneficiary’s accustomed standard of living or station in
life.” Restatement (Third) of Trusts, § 50, cmt. (d)(2). “The accustomed
manner of living for these purposes is ordinarily that enjoyed by the
beneficiary at the time of the settlor’s death or at the time when an irrevocable
trust is created.” Id.
Language of “comfort” often accompanies a support standard.
Whether modifying support (e.g., “comfortable support” or
“support in reasonable comfort”) or as an additional standard
(“support and comfort”), the normal construction is the same: the
language adds nothing to the usual meaning of accustomed
support (supra) for a beneficiary whose lifestyle is already at least
reasonably comfortable.
Id. at cmt. (d)(3).
A support standard normally covers not only the beneficiary’s own
support but also that of persons for whom provision is customarily made as a
part of the beneficiary's accustomed manner of living. Id. at cmt. (d)(2). This
generally includes the support of members of the beneficiary’s household and
the costs of suitable education for the beneficiary’s children. Id.
Here, the record reflects payments from the Trust for everyday family
and household expenses, of the type generally borne by married persons,
which Mark, in his capacity as trustee, chose to pay—in full—from Christine’s
trust. The Orphans’ Court was presented with a unique situation in which one
spouse is serving as the trustee of the other spouse’s trust and making
discretionary distributions that not only discharge the beneficiary spouse’s
obligation of support, but also relieves the trustee spouse of his own
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obligation. To the extent that Mark historically paid the vast majority of the
family expenses from his own income, this was the result of a joint decision
of the parties, that Mark would work outside the home to support the family
financially, while Christine would work as a homemaker and raise the couple’s
children. Mark’s desire to be relieved of some of these financial obligations
does not justify his use of Trust assets to do so. The Orphans’ Court made
credibility determinations and concluded that Mark simply took advantage of
his access to Trust funds to offset his own obligation of support to the family
unit and did so in violation of his fiduciary duty.7 In re Paxson Trust I,
supra (trustees may not profit from trust property). We can discern no abuse
of discretion.
The court also acted within its discretion to reject Mark’s claim that he
relied on the advice of counsel in utilizing Trust funds to pay for these specific
expenses is not supported by the record. As the Orphans’ Court noted, “[n]o
clear and convincing evidence was presented [that Mark] consulted a
professional prior to [engaging in] the . . . transactions.” Adjudication,
1/7/20, at 11 (emphasis in original).
In a related claim, Christine asserts that the Orphans’ Court erred in
failing to surcharge Mark for other household expenses for which he
reimbursed himself from the Trust, where substantial evidence demonstrated
that these payments were improper and indistinguishable from the above
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7We note that the Orphans’ Court only surcharged Mark for one-half of the
expenditures in question.
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payments for which Mark was surcharged. Specifically, Christine challenged
the following payments: (1) payments dated 1/18/11, 3/1/11, and 5/16/11
totaling $18,294.51, identified in the account as “distribution[s] FBO Christine
D’Andrea” and testified to by Mark as payments made directly to himself in
reimbursement of household expenses such as housecleaning, groceries, and
the family dog; (2) a payment to the Avalon Yacht Club dated 2/28/12 in the
amount of $1,350 for family membership dues and a required food minimum;
and (3) additional payments dated 4/8/11, 4/10/12, 7/3/12, 7/10/12, and
8/16/12, made directly to Mark from the trust, totaling $14,078.29, in
reimbursement for “household expenses.”
Mark counters that, unlike the expenses discussed above for which the
Orphans’ Court surcharged him, the household expenses referenced in this
claim were “beyond normal household expenses and/or were for Christine’s
sole benefit.” Brief of Cross-Appellee, at 29. Mark asserts:
These [payments] were for reimbursement for payments he
personally made for Christine’s personal credit cards at Kohl’s,
American Express, Bloomingdale[’]s and Macy[’]s. No testimony
was presented regarding the March 1, 2011 payment in the
amount of $2,405.19. With respect to the $5,000 payment, Mark
testified that this was for the non-essential household expenses
of a housekeeper Christine hired and grooming bills for a puppy
Christine bought.
Id. at 28. With regard to the 2015 Avalon Yacht Club payment, Mark argues
that he derived no benefit from the family’s membership in the club that year.
Mark testified that he “told Christine he wanted to resign their membership .
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. . but ultimately they did not resign because Christine wanted to keep it.” Id.
at 29.
“When seeking to impose a surcharge against [a trustee] for the
mismanagement of an estate, those who seek the surcharge bear the burden
of proving the [trustee’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 [trustee] to present
exculpatory evidence and thereby avoid the surcharge.” Id. See In re Ellis’
Estate, 333 A.2d 728 (Pa. 1975) (where account reflected dual payment of
realty commissions for same property, burden of going forward with evidence
establishing prudence, skill, and due care shifted to accountant); In re
Lohm’s Estate, 269 A.2d 451 (Pa. 1970) (where large overpayment in taxes
is shown, burden shifts to fiduciary to present exculpatory evidence to avoid
surcharge).
Here, the Orphans’ Court overruled these objections “due to
insufficient evidence presented at trial.” See Adjudication, at 12 (overruling
objections to household expenses). In doing so, the court improperly placed
the burden on Christine to prove the impropriety of the distributions. On the
face of the account, the descriptions of the distributions—i.e., “Distribution
FBO Christine D’Andrea,” “Check Number 1004,” and “Household Expenses”—
are vague and, particularly in the case of those distributions labelled
“household expenses,” suggestive of a breach of fiduciary duty, where Mark
had an obligation of support to the family unit and that obligation was satisfied
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by the Trust to which he owed a fiduciary duty. See discussion, supra.
Moreover, where Mark paid the bills and maintained control of the Trust’s
check register, any documentary proof supporting these distributions would
be in Mark’s possession and most readily available to him, not Christine.
Accordingly, the burden fell to Mark to present evidence of the propriety of
these distributions. He failed to do so.
At trial, Mark presented no evidence other than his own, often vague,8
testimony in support of payments he made from the Trust to himself in
____________________________________________
8For example, the following exchange occurred between Mark and Christine’s
counsel:
Q: Now, let’s go down further. We are going to the 5/12/11 entry,
check 1007, all right?
A: All right.
Q: That’s $5,000. It’s a deposit to Sovereign, right?
A: Yes.
Q: So that was a check to you, not to a credit card or reimbursing
you for a credit card payment, right?
A: Um-hum.
Q: And that’s not itemized anywhere, correct?
A: That is not itemized anywhere, I do not believe, at least not in
the stuff you gave me.
Q: But you are aware that they were household expenses, right,
such as housecleaning?
(Footnote Continued Next Page)
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reimbursement of household expenses. He provided no receipts, credit card
bills, or other documentary support for his claim that the expenses were for
Christine’s sole benefit. In short, Mark failed to demonstrate that the
payments for “household expenses” were properly paid from the Trust.
Estate of Geniviva, supra. Accordingly, we direct the court to impose an
additional surcharge in the amount of $16,186.40, or 50% of the total
payments, for “household expenses.”
____________________________________________
A: They were—I don’t know what they were, because I don’t
know what they were. I would have to really go back and
research that and see if I still have those bills. I don’t know
what they are.
...
Q: If we go further there is another check entry at 1041 on April
10, 2012?
A: Yes.
Q: That’s also $5,000 to Mark D’Andrea?
A: Correct.
Q: For household expenses, right?
A: Yes.
Q: And household expenses means things like a cleaner, is that
right?
A: They could mean a lot of things. Household expenses, I am
not sure specifically what they are. I could probably get you
an answer[,] if you want one[,] of what they are exactly. I didn’t
make the number up. I didn’t just flip a coin and say $5,000. It
was done for a reason like I did everything accounting-wise for a
reason.
N.T. Trial, 4/8/19, at 201-03 (emphasis added).
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Our review of the Avalon Yacht Club payment is hampered by the
Orphans’ Court’s application of the incorrect evidentiary standard, as well as
its failure to make any credibility determinations. Christine testified that Mark
used the yacht club membership during the summer of 2015; Mark testified
that he wanted to relinquish the membership and only visited Avalon once
that season. Accordingly, we are constrained to remand this issue to the
Orphans’ Court for reevaluation in light of the proper evidentiary standard.
Next, Mark asserts that the Orphans’ Court erred in ruling on Christine’s
objection number 12.9 In ruling on that objection, the court stated as follows:
Among the [LLC’s] three initial investing entities, evidence
presented at trial showed that only the $126,000 trust fund
investment provided liquidity for sustaining company operations.
[Mark’s] admission that he used Management Company funds for
debts outside of company operations, some of which he repaid, is
sufficient to SUSTAIN Objection #12, and [Mark] is subject to
surcharge as stated in objection 2 herein[,10] as these expenses
appear to be the same.
____________________________________________
9 Objection No. 12 stated:
Objection is made to [Mark’s] deviation from the Trust terms
governing investments of principal in any closely-held business,
which specifically provide that “only assets actually invested in
any such business shall be liable for the debts incurred in its
operation,” by paying additional expenses not related to the
management of Townsend Rd. out of the LLC, including but not
limited to [Mark’s] household bills and All Seasons Marina
expenses for [Mark’s] personal boat.
Objections to First Intermediate Accounting, 2/2/18, at ¶ 12.
10The surcharges related to Christine’s objection number 2 were addressed
above in Mark’s first claim on appeal.
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Adjudication, at 14.
Mark argues that
to the extent that [his] conduct as manager of the LLC is being
challenged, such conduct is not properly addressed via this
lawsuit, and would instead need to be challenged under the
Pennsylvania Revised Uniform Limited Partnership Act, 15
Pa.C.S.A. § 8611 et seq., or the Pennsylvania Uniform Limited
Liability Company Act of 2016, 15 Pa.C.S.A. § 8811 et seq. See
Retina Assocs. of Greater Phil. v. Retinovi[t]reous Assocs.,
176 A.3d 263, 277 (Pa. Super. 2017). Challenges to the action[s]
of a[n] LLC manager or member may only be brought pursuant to
15 Pa.C.S.A. § 8881 (involving direct actions by LLC member) or
15 Pa.C.S.A. § 8882 (involving derivative actions). Christine
failed to raise any such claims before the Orphans’ Court.
Brief of Appellant, at 42-43.
Mark further asserts that, even if his conduct as manager of the LLC
could be challenged in this litigation, “[t]he Trust terms give the Business
Trustee the power to operate that closely[-]held business as he see[s] fit[]
and without regard to any conflicts that would normally exist between his roles
as Trustee and in the business.” Id. at 43. Thus, in failing to distinguish
between his actions as manager of the LLC and trustee of the Trust, the court
improperly surcharged Mark for actions taken in his capacity as manager of
the LLC.
In addition, Mark alleges that the court’s finding that “only the $126,000
trust fund investment provided liquidity for sustaining company operations,”
Adjudication, 1/7/20, at 12, is directly contrary to the evidence of record and
“completely disregards the fact that the Trust owned only a 29.985% interest
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in the LLC, a fact which it explicitly recognizes earlier in the Adjudication.”
Brief of Appellant, at 44. Mark argues that
the evidence established that Mark created a checking account for
the LLC, which each member contributed to in proportion to their
ownership interest, and that any expenses for sustaining the
company operations were paid from that account (i.e. in
proportion to the ownership interest of the LLC). This fact is
further supported by the Operating Agreement—as executed by
Christine—and general ledgers of the LLC, which reflect capital
contributions from both Mark personally and from Mark’s [t]rust
in addition to the contributions made by [Christine’s] Trust.
Id. at 44.
Finally, Mark asserts that the court’s reference to “Objection 2” is
misplaced, as the expenses for which Mark was surcharged under that
objection were paid from the Trust and not the LLC.
In a related claim on cross-appeal, Christine argues that the court’s
ruling on this objection is “unclear as to whether an additional, separate
amount should be imposed for this surcharge, or if the [Orphans’ Court] found
that the surcharge amount awarded [with regard to] Objection No. 2 also
covers” this objection. Brief of Cross-Appellant, at 39. She asserts that, to
the extent the Orphans’ Court intended to impose a separate surcharge
amount related to Objection No. 12, it must specifically include that amount
in the Adjudication. If no additional surcharge was intended, Christine asserts
she is entitled to “interest income lost for the period that the funds relating to
the [c]apital [c]ontributions [s]urcharge were improperly removed from the
Trust[.]” Id. at 40.
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Here, the parties are correct that the Orphans’ Court adjudication is
completely unclear as it relates to the disposition of Objection No. 12.
However, we agree with Mark that, in ruling on this objection, the Orphans’
Court both misconstrued the record and committed an error of law by
purporting to surcharge Mark for his conduct as manager of the LLC.
First, the court’s statement that the $126,00 capital contribution from
the Trust provided the LLC’s only liquidity is patently belied by the record. The
LLC’s ledgers, introduced at trial, clearly show capital contributions not only
from Christine’s Trust, but from Mark, individually, and from the Mark
D’Andrea Trust, in amounts proportionate to their respective ownership
interests. See generally, Respondent’s Exhibits R2-R7 (Mark D’Andrea LLC
Year-to-Date Ledgers). As discussed infra, the capital contributed to the LLC
by Christine’s Trust was repaid in full, with interest, following the sale of the
Townsend Road Property.
Second, the Settlor permitted Mark, as Business Trustee, to invest Trust
funds in any closely-held business as he saw fit, to “deal with any business
interest as freely as [Settlor] could have done,” and released him from any
loss in value by reason of the retention of any such business interest, except
for losses resulting from fraud. Christine D’Andrea Irrevocable Trust, ¶ SIXTH.
Thus, Mark’s investment of Trust property in the LLC was within his broad
discretionary powers under the Trust. To the extent that Christine wishes to
challenge Mark’s actions in his capacity as manager of the LLC, we agree with
Mark that her recourse must be had under the Pennsylvania Limited Liability
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Company Act. Accordingly, any additional surcharge intended by the court
with respect to Objection No. 12 must be vacated.11
Mark next asserts that the Orphans’ Court erred in surcharging him for
alleged mathematical and accounting errors, and in particular, for failing to
identify a “loan” to the LLC in the accounting, where Christine presented no
evidence on this issue at trial and the accounting reflects that such “loan” was
repaid to the Trust as a “capital contribution.” Specifically, the court
surcharged Mark in the amount of $20,989.50, “[even though] this was not
addressed at trial[,]” Adjudication, 1/7/20, at 15, for a loan purportedly made
by the Trust to the LLC. Because the evidence demonstrates that the court
mischaracterized as loans certain capital contributions from the Trust to the
LLC, which contributions were ultimately repaid with interest, we conclude
that the court erred in imposing this surcharge.
“One who seeks to surcharge a trustee for breach of trust must bear the
burden of proving the particulars of the trustee’s wrongful conduct.” Estate
of Pew, 655 A.2d 521, 543 (Pa. Super. 1994). Here, Christine alleged in
objection number 16 that an entry in a “trial balance sheet” for the LLC12 in
the amount of $20,989.50, characterized as a “loan,” was not included in the
____________________________________________
11 As noted above, it does not appear that the court actually imposed a
separate surcharge as to Objection No. 12. However, in the interest of
thoroughness, we clarify that any such surcharge is, or would have been,
inappropriate.
12The trial balance sheet was introduced at Mark’s deposition as Exhibit MDA-
38.
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account, and was never repaid. Christine presented no evidence at trial
regarding this claim. However, Mark testified at his deposition that he had
initially miscoded contributions of capital from the Trust as “loans” in 2013.
Q: I know we talked earlier about capital contributions that were
made by each person, there’s a series of loans here.
A: Yes, back in ’13 this is initially the first year the company was—
at some point I may have been miscoding stuff and I think
[accountant Victor Broyan] had me change these from loans to—
you know? I thought he told me loans to put them in, I think it’s
been changed. But all the numbers add up, capital contribution[,]
loan[,] I think [they] all [were] intended to be the same thing,
member[’]s capital. It was miscoded one time and he had me fix
it. I think entries were made to do that.
Deposition of Mark D’Andrea, 7/30/18, at 103-04.
A comparison of the LLC’s “trial balance sheet” for the year 2013 with
the account entries showing the Trust’s capital contributions for that same
year confirm Mark’s testimony. Both documents reflect total payments from
the Trust to the LLC of $26,986.50. As the record reflects that the challenged
2013 Trust payments are fully accounted for in the account, see First
Intermediate Account of Mark D’Andrea, 1/3/18, at 152-53, the court erred in
imposing a surcharge in that amount.
Mark next alleges that the Orphans’ Court erred in surcharging him in
the amount of $14,175 for the alleged loss of interest on the sale of the
Townsend Road property.13 Specifically, Mark asserts that: (1) the Trust
____________________________________________
13 The Townsend Road Property was initially constructed by the family
business and was jointly owned by the business and Settlor. At some point,
(Footnote Continued Next Page)
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already received interest as part of the distribution from the LLC; (2) the
timing of the payment was due to actions of professionals in completing the
sale; (3) there was no objection to the timing; and (4) had the sale been
completed sooner, the proceeds would have been placed in the Trust’s
investment account with interest well below 6%. We agree that the court
erred in imposing this surcharge.
To obtain a surcharge, a beneficiary has the burden of proving not only
a breach of fiduciary duty, but also that “a related loss occurred.” Estate of
Lychos, 470 A.2d 136, 142 (Pa. Super. 1983). The burden then shifts to the
trustee to prove that the loss would have occurred in the absence of the breach
of fiduciary duty. Id.At trial, Christine presented no evidence to support her claims that the
ten-month delay in distributing the net proceeds of sale constituted a breach
of fiduciary duty, or that the Trust suffered a loss as a result. In fact, the sole
evidence presented regarding interest on the sale proceeds was a letter from
Mark’s accountant, Victor Broyan, to Mark’s attorney, William Hussey, Esquire,
providing the details of the sale and distribution of the proceeds. See Broyan
Letter, 5/15/18 (Trial Exhibit R-22). The letter reflects that, between the date
of the sale and the date final distribution was made, the sale proceeds earned
interest in the amount of $7,692.94. Mr. Broyan testified that final
____________________________________________
Mark purchased Settlor’s interest in the property. The LLC was operated out
of the property, and the Trust received a 29.985% ownership interest in the
property, commensurate with its ownership share in the LLC.
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distributions were made in proportion to each party’s ownership interests, see
N.T. Trial, 4/9/19, at 104, and the figures contained in Mr. Broyan’s letter
reflect that the Trust’s final distribution included its proportionate share of
interest earned. Accordingly, because Christine failed to sustain her burden
of proof, Estate of Lychos, supra, the Orphans’ Court erred in imposing a
surcharge for lost interest on the Townsend Road sale proceeds.
Mark next claims that the Orphans’ Court erred in finding that he
engaged in self-dealing. Specifically, Mark claims that, in appointing him as
the co-trustee and sole trustee with authority to make distributions to
Christine, Settlor implicitly waived any conflict of interest. See Brief of
Appellant, at 56. Mark also claims that, to the extent he was surcharged for
any conflicts of interest with respect to the LLC, those conflicts were waived
by the Settlor.
In general, [a] trustee is under a duty to the beneficiary to
administer the trust solely in the interest of the beneficiary. The
rule prohibits both self-dealing and conflicts of interest. Thus, the
trustee must neither (1) deal with trust property for the benefit of
himself or third parties, nor (2) place himself in a position
inconsistent with the interests of the trust.
In re Paxson Trust I, 893 A.2d at 119, quoting Estate of McCredy, 470
A.2d 585, 597 (Pa. Super. 1983) (quotation marks and brackets omitted).
[A] trustee is bound not to do anything which can place him in a
position inconsistent with the interests of the trust, or which have
a tendency to interfere with his duty in discharging it . . . [and]
may not profit at the expense of the beneficiaries nor assert any
adverse interest in the trust property.
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In re Union Real Estate Inv. Co. First Mortgage 6% Gold Bonds, 1 A.2d
662, 666 (Pa. 1938) (citations omitted).
Nevertheless, the settlor can waive the application of the rule of
undivided loyalty, either explicitly under the terms of the trust, or by
implication, by knowingly placing her trustee in a position that might conflict
with the interests of the trust or its beneficiaries and giving the trustee power
to act in that dual capacity. Estate of McCredy, 470 A.2d at 600.
Here, we agree with Mark that Settlor explicitly waived all conflicts
relating to Mark’s interests as an owner, officer, director, or employee of any
business with which Mark chose to deal in his capacity as business trustee.
See Christine D’Andrea Irrevocable Trust, 6/30/99, at ¶ SIXTH. However, the
Settlor did not include any similar language in either Paragraph SECOND
(dispositive provisions), or any other provision of the Trust. Moreover, there
is no inherent conflict of interest within an intact marital unit, such that it
would be reasonable to infer that Settlor implicitly waived any such conflicts
by appointing Mark as co-trustee, and Mark cites no case law to support this
proposition. Thus, having concluded, supra, that Mark breached his fiduciary
duty by utilizing Trust funds to discharge his own duty of support, we find no
merit to this claim.
We now turn to our review of the remainder of Christine’s claims on
cross-appeal.14 Christine first asserts that the Orphans’ Court erred in failing
____________________________________________
14We address Mark’s final claim, regarding attorneys’ fees, together with
Christine’s related claim, infra.
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to surcharge Mark for paying her American Express credit card bills with Trust
funds, where the credit card was used for household expenses that were
indistinguishable from other household expenses for which Mark was
surcharged. Christine asserts that, in declining to surcharge Mark, the court
improperly concluded that Christine was aware of those payments, as “the
record establishes that [Christine] did not know of the use[,] or the extent of
the use[,] of the Trust to pay the Amex bills.” Brief of Cross-Appellant, at 31.
We are constrained to agree with the Orphans’ Court’s determination,
as it was based on credibility determinations regarding Christine’s knowledge
as to whether the funds used to pay her credit card bills came out of the trust.
In re Fiedler, supra. While Christine denied knowing the source of the funds,
she also admitted to having personally paid at least one credit card bill using
a check from the trust account, which clearly identified the payors as
“Christine D’Andrea and Mark D’Andrea CO-TTEES.” N.T. Trial, 4/8/19, at 52.
Christine testified that she did not know what “CO-TTEES” meant and that,
when she asked him, Mark did not provide a clear answer. See id. However,
Mark testified that Christine was, in fact, aware of the payments:
Q: When [Christine] testified that she didn’t know that her trust
was paying her Amex bills, do you agree with that statement?
A: Not even close.
N.T. Trial, 4/9/19, at 82. The Orphans’ Court credited Mark’s testimony that
Christine was aware of, and acquiesced to, these payments, and the court’s
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determination is supported by record testimony. Accordingly, Christine is
entitled to no relief on this claim.
Next, Christine asserts that the Orphans’ Court erred in failing to
surcharge Mark for the Trust’s share of the management fee he paid to himself
as manager of the LLC. Christine asserts she raised this issue in Objection
No. 13, which states as follows:
Objection is made to [Mark’s] failure to distribute the [Property]
sale proceeds from July 18, 2017, in the gross amount of
$524,825.00, causing the Trust assets to remain over-
concentrated in the LLC, resulting in the loss of income and a loss
of principal appreciation.
Objections to First Intermediate Account of Mark D’Andrea, 2/2/18, at ¶ 13.
Christine’s objection makes no mention of the management fee, nor
could it reasonably be read to encompass an objection thereto. Moreover, in
ruling on this objection, the Orphans’ Court made no mention of management
fees. “Issues not raised in the trial court are waived and cannot be raised for
the first time on appeal.” Pa.R.A.P. 302(a). Because she failed to properly
raise a claim regarding LLC management fees before the Orphans’ Court,
Christine has waived it on appeal.
Finally, both parties assert that the Orphans’ Court erred in failing to
award them attorneys’ fees. Christine asserts that the court should have
awarded her attorneys’ fees—which she requested in the WHEREFORE clause
of her objections—in light of the fact that the litigation was made necessary
by Mark’s misconduct as co-trustee. The Orphans’ Court’s adjudication was
silent as to Christine’s request for fees. However, Christine notes in her brief
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that, while she “has not yet filed a petition for payment of her attorneys’ fees,
[she] will do so following [the] results of these cross-appeals.” Brief of Cross-
Appellant, at 44. Because the Orphans’ Court failed to address this issue in
its adjudication, we dismiss this claim, without prejudice to Christine’s right
to file an appropriate petition before the Orphans’ Court.
Mark also asserts that the court erred in failing to award him attorneys’
fees. Mark claims that, “‘[a]s a general rule[,] the expenses of filing an
account by a trustee are properly chargeable to the trust estate,’ including
attorney’s fees.” Brief of Appellant, at 58, quoting In re Band’s Estate, 124
A.2d 498, 500 (Pa. Super. 1956). Mark argues that, because he successfully
defended over half of the objections filed by Christine, he is entitled to a
portion of the attorneys’ fees related to the surcharge action. Mark notes that
one of the primary bases for the Orphans’ Court’s denial of fees is contradicted
by the court’s own findings earlier in the Adjudication. See Brief of Appellant,
at 61. Specifically, the court noted Mark’s “subordinat[ion of] his fiduciary
duty in favor of his personal desire for revenge against” Christine, as a result
of which he “fail[ed] to make income distributions in accordance with trust
terms.” Adjudication, 1/7/20, at 16 (ruling on request for attorneys’ fees).
However, previously, the court specifically overruled Christine’s objection to
Mark’s failure to make those same quarterly distributions because he had
made other discretionary distributions for Christine’s benefit in lieu thereof.
See id. at 12 (ruling on objection relating to mandatory distributions).
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“In passing upon the amount of counsel fee[s] we bear in mind the well
settled principle that: ‘Supervision of the amount of compensation is
peculiarly within the discretion of the court below. Unless such discretion is
clearly abused the judgment will not be disturbed on appeal[.]’” In re
Browarsky’s Estate, 263 A.2d 365, 366 (Pa. 1970), quoting Faust’s Estate,
73 A.2d 369, 370 (Pa. 1950). “The general rule is that each party to adversary
litigation is required to pay his or her own counsel fees. . . . In the absence
of a statute allowing counsel fees, recovery of such fees will be permitted only
in exceptional circumstances[.]” Estate of Wanamaker, 460 A.2d 824, 825
(Pa. Super. 1983).
“It is well[-]established that whenever there is an unsuccessful attempt
by a beneficiary to surcharge a fiduciary[,] the latter is entitled to an allowance
out of the estate to pay for counsel fees and necessary expenditures in
defending himself against the attack.” In re Browarsky’s Estate, 263 A.2d
at 366, quoting Wormley Estate, 59 A.2d 98, 100 (Pa. 1948). However,
where objections to an account result in surcharges with respect to some
claims, but not others, a court acts within its discretion in choosing whether
to award attorneys’ fees. See In re Jones' Estate, 23 A.2d 434 (Pa. 1942).
Here, we conclude that the Orphans’ Court acted within its discretion in
denying Mark’s request for attorneys’ fees related to the surcharge action. In
particular, the court found that Mark breached his fiduciary duty by using trust
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assets for his own benefit, and we affirm that determination herein.15 Under
such circumstances, the court did not abuse its discretion in declining to award
fees stemming from the surcharge action. See id.However, we conclude that the court abused its discretion in failing to
award Mark reasonable attorneys’ fees and costs incurred in the preparation
and filing of the account. “It is the right, and generally the duty, of a trustee
to secure legal advice and assistance in preparing and presenting an account
to the Orphans’ Court.” In re Band’s Estate, 124 A.2d at 501. “As a general
rule the expenses of filing an account by a trustee are properly chargeable to
the trust estate.” Id. at 500. Accordingly, on remand, we direct the Orphans’
Court to hold further proceedings to determine reasonable fees and costs
payable to Mark in conjunction with the preparation and filing of the account.
Order affirmed in part and reversed in part. Case remanded for further
proceedings to determine: (1) the propriety of the payment of Avalon Yacht
Club fees from trust funds and (2) reasonable fees and costs incurred by Mark
in the preparation and filing of the account. Jurisdiction relinquished.
____________________________________________
15We agree with Mark that the Orphans’ Court contradicted itself by faulting
Mark for failing to pay mandatory distributions, while declining to surcharge
him for that reason. However, the fact remains that he engaged in self-
dealing.
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Judgment Entered.
Joseph D. Seletyn, Esq.
Prothonotary
Date: 3/21/2023
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