In Re: Estate and Trust of M.A.Turner Liverant ( 2021 )

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NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37
IN RE: ESTATE AND TRUST OF : IN THE SUPERIOR COURT OF
MARTHA ANNE TURNER LIVERANT : PENNSYLVANIA
:
:
APPEAL OF: JAMES M. TURNER, SR. :
:
:
:
: No. 149 MDA 2020
Appeal from the Order Entered December 23, 2019
In the Court of Common Pleas of York County
Orphans’ Court at No(s): 6701-0694
IN RE: ESTATE AND TRUST OF : IN THE SUPERIOR COURT OF
MARTHA ANNE TURNER LIVERANT, : PENNSYLVANIA
DECEASED :
:
:
APPEAL OF: JOHN GAILEY, KATE :
KAMINSKI, AND JEAN SCOTT- :
FRIEND :
: No. 203 MDA 2020
Appeal from the Order Entered December 23, 2019
In the Court of Common Pleas of York County
Orphans’ Court at No(s): 6701-0694
BEFORE: BOWES, J., OLSON, J., and KING, J.
MEMORANDUM BY BOWES, J.: FILED FEBRUARY 18, 2021
In these consolidated cross-appeals, John Gailey, Kate Kaminski, and
Jean Scott-Friend (collectively “the Gailey beneficiaries”), and James M.
Turner, Sr. (“Turner”), challenge different aspects of the December 23, 2019
order of the orphans’ court which, inter alia, imposed surcharges on Turner
and denied the Gailey beneficiaries’ request for counsel fees related to
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defending Turner’s attempt to disqualify their counsel. Upon review, we affirm
the imposition of surcharges on Turner and quash the Gailey beneficiaries’
cross-appeal as interlocutory.
This case has a long, tortuous history, and a shifting cast of litigants. It
all began when Martha Anne Turner Liverant (“Decedent”) died in 2001,
survived by her only child, Anne Peyton Liverant (“Daughter”), who was the
beneficiary of a trust established by her will.1 The will further provided that
upon the death of Daughter, the trust assets were to be divided into three
equal shares and distributed per stirpes to Decedent’s sisters Alice Ray and
Scott Turner Gailey and her brother Turner. The will also named Turner as
the executor of the estate and trustee of the trust, and further designated his
daughter, Martha Peyton Turner (“Peyton”), as his successor. A few months
after Decedent’s death, Daughter was adjudicated incompetent and guardians
of her estate and person were appointed. Daughter, through her guardian,
challenged inter alia Turner’s gifting of $100,000 to family members prior to
Decedent’s death through his power of attorney. Turner conceded that he had
exceeded his authority in making the gifts, and the court ordered him to repay
the estate for them.
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1 The chief assets of the trust were a brokerage account and Mt. Corbett, a
residential estate in Jamaica, later valued at approximately $1.5 million.
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Thereafter, accountings were filed and objected to, eventually resulting
in the orphan’s court ordering Turner’s removal as executor and trustee, as
well as imposing surcharges against him.2 Of import to this appeal, the
orphans’ court at separate times in 2005 directed (1) that no other trust assets
should be spent on Mt. Corbett, a residential estate in Jamaica which was the
chief asset of the estate, unless necessary to maintain its current state of
repair, and that steps to eventually sell Mt. Corbett should instead begin, see
N.T., 1/24/2005, at 11-12; and (2) that Turner was not to receive any further
disbursements from the estate. See N.T. 12/6/2005, at 35. Ultimately, the
orphans’ court confirmed the fourth and final account filed by Turner’s
successor, Peyton. Turner appealed to this Court, challenging his removal and
the imposition of surcharges and fees. We rejected all of his claims of error,
except as to the award of attorney fees to Daughter’s guardian, which we held
required remand for development of a record as to the amount and necessity
of the fees. See In re Estate of Liverant, 987 A.2d 830 (Pa.Super. 2009)
(unpublished memorandum at 23-24).
Decedent’s Daughter died in 2011, triggering division of the trust’s
principal and interest to Decedent’s siblings, namely appellant Turner, Alice
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2 Pursuant to Decedent’s will, Turner was succeeded by his daughter Peyton
as executrix and trustee. However, lacking any pertinent experience, she
largely deferred her responsibilities to Turner and other agents, which is why
Turner is still actively being pursued in this litigation for his mismanagement
of the assets.
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Ray, and Ms. Scott Turner Gailey. However, Ms. Gailey had predeceased
Daughter, resulting in Ms. Gailey’s share devolving to her children, cross-
appellant Gailey beneficiaries, who took up the mantle of challenging the
management of the trust assets by Peyton and Turner. The orphans’ court
summarized the subsequent history as follows:
[Turner’s counsel, Sara A. Austin, Esquire,] filed . . . a motion to
remove counsel for Gailey beneficiaries which was filed on
December 19, 2011. Gailey beneficiaries answered the petition
on February 14, 2012. By opinion and order dated May 16, 2012,
this court, per the Honorable Penny L. Blackwell, Judge, dismissed
the petition to remove Attorney Glenn Vaughn as counsel for the
Gailey beneficiaries. That order plays a part in the cross-appeal
filed to our order by the Gailey beneficiaries.
. . . On May 14, 2013, Gailey beneficiaries petitioned the
court to have [Turner] surcharged, citing his mismanagement of
the Mt. Corbett estate and his receipt of funds in violation of an
order from this court by the Honorable Gregory M. Snyder dated
January 24, 2005. The petition also sought recovery of capital
expenditures made by . . . Turner on Mt. Corbett in violation of
that same order. Finally[,] it sought to hold Turner in contempt
for violating Judge Snyder’s 2005 order.
On October 22, 2013, Judge Blackwell entered an order and
a 79[-]page opinion sustaining most of the objections to the
various accounts. The order surcharged [Peyton] for various
items. Significantly, Judge Blackwell surcharged Peyton . . . the
amount of $83,666.47 for amounts she wrongfully paid to
[Turner], which is also significant for the instant appeal. The order
also removed [Peyton] as trustee of the estate.
....
On September 9, 2014, a petition was filed by Gailey
beneficiaries seeking a hearing on a motion for sanctions against,
among others, [Turner and Attorney Austin]. The request for
sanctions was filed on January 24, 2012, and alleged, inter alia,
that [Attorney] Austin and Turner sought to wrongfully remove
Attorney Vaughn from representing Gailey beneficiaries. Judge
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Blackwell had ruled on May 16, 2012, that Vaughn should not be
removed from representing the Gailey beneficiaries. It is this
motion for sanctions which is implicated in the cross[-]appeal filed
by Gailey beneficiaries.
....
On April 2, 2015, Gailey beneficiaries filed a motion for
summary judgment on Counts I, II, and III of their May 14, 2013
petition to have Turner surcharged. That summary judgment
motion is also implicated in this appeal.
....
Various petitions and answers were subsequently filed and
we attempted to identify and resolve all outstanding issues which,
we believe, we did in a series of conferences and hearings
resulting in orders entered on October 18, 2018, February 11,
2019, February 12, 2019 (to list the Mt. Corbett property), and
April 22,2019 (granting summary judgment against Turner on
Counts I, II, and III of Gailey beneficiaries’ motions for summary
judgment and reserving the issue of damages on Count III, as well
as addressing several collateral issues.) We also scheduled an
additional hearing for May, 2019, which resulted in our order and
opinion of December 23, 2019, the subject of this appeal.
Orphans’ Court Opinion, 3/6/20, at 2-6 (citations, footnote, and unnecessary
capitalization omitted). The December 23, 2019 order, inter alia, assessed
damages against Turner at $213,251.12 as to Count I of the Gailey
beneficiaries’ surcharge petition, and $90,454.61 on Count II (capital
expenditures).3 See Order, 12/23/19, at 3.
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3 While the orphans’ court also granted the Gailey beneficiaries summary
judgment on Count III of their petition, related to Turner’s liability for the
delinquency of federal taxes, it declined to assess damages on that claim. See
id. at 14 (“[U]ntil the amount of the delinquency and any penalties and
interest becomes finally ascertained, we are unable to assess, without
speculation, the amount to be surcharged[.]”).
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On January 22, 2020, Turner filed a timely notice of appeal. The Gailey
beneficiaries filed a cross-appeal on February 3, 2020. The orphans’ court
directed Turner to file a Pa.R.A.P. 1925(b) statement of errors complained of
on appeal, and he timely complied. The orphans’ court did not require the
Gailey beneficiaries to file a statement, but did file a Pa.R.A.P. 1925(a) opinion
addressing both Turner’s complaints and the reasons for its denial of the
Gailey beneficiaries’ request for counsel fees.
Turner presents this Court with a single question: “Whether Part VI of
the [orphans’] court’s order of December 23, 2019, which imposed surcharges
against Mr. Turner for operational and capital expenses, was proper (both in
imposition and amounts)?” Turner’s brief at 3. The Gailey beneficiaries
likewise state one issue for our review: “Whether the trial court abused its
discretion and committed errors of law in determining that the conduct of
Turner and his counsel was not obdurate, dilatory and vexatious, and denying
the request for sanctions in the nature of counsel fees and costs?” Gailey
beneficiaries’ brief at 25-26.
We begin by examining whether we have jurisdiction over these
appeals.4 See, e.g., Adams v. Erie Ins. Co., 238 A.3d 428, 431 (Pa.Super.
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4 Turner’s brief cites 42 Pa.C.S. 742 (providing this Court has jurisdiction over
final orders of the courts of common pleas), and Pa.R.A.P. 342 (discussed
infra), generally, as bases of jurisdiction. See Turner’s brief at 2. Of note,
the Gailey beneficiaries’ brief contains no Pa.R.A.P. 2114 statement of
jurisdiction.
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2020) (providing that this Court’s jurisdiction over an appeal may be
determined sua sponte). We must make separate examinations as to the
initial appeal and the cross-appeal, as neither Pa.R.A.P. 511 (regarding the
timing for cross-appeals) nor Pa.R.A.P. 513 (regarding consolidation of
multiple appeals) permits a cross-appellant to piggy-back on the original
appellant’s establishment of jurisdiction. See Commonwealth v. Ivy, 146
A.3d 241, 255 (Pa.Super. 2016) (rejecting Rules 511 and 513 as bases of
jurisdiction in quashing defendant’s cross-appeal from an interlocutory order
that granted in part and denied in part the Commonwealth’s motion in limine,
although this Court had jurisdiction pursuant to Pa.R.A.P. 311(d) over the
Commonwealth’s appeal from the same order). See also Cty. of Butler v.
Local 585, Serv. Employees Int’l Union, AFL-CIO, 631 A.2d 1389, 1392
n.1 (Pa.Cmwlth. 1993) (adjudicating one party’s appeal from interlocutory
order, but quashing cross-appeal from same order, where the cross-appellant
had no immediate right to appeal).
The appealability of orders of orphans’ courts is governed by Pa.R.A.P.
342, which provides as follows:
(a) General rule. An appeal may be taken as of right from the
following orders of the Orphans’ Court Division:
(1) An order confirming an account, or authorizing or directing
a distribution from an estate or trust;
(2) An order determining the validity of a will or trust;
(3) An order interpreting a will or a document that forms the
basis of a claim against an estate or trust;
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(4) An order interpreting, modifying, reforming or terminating
a trust;
(5) An order determining the status of fiduciaries, beneficiaries,
or creditors in an estate, trust, or guardianship;
(6) An order determining an interest in real or personal
property;
(7) An order issued after an inheritance tax appeal has been
taken to the Orphans’ Court pursuant to either 72 Pa.C.S.
§ 9186(a)(3) or 72 Pa.C.S. § 9188, or after the Orphans’ Court
has made a determination of the issue protested after the
record has been removed from the Department of Revenue
pursuant to 72 Pa.C.S. § 9188(a); or
(8) An order otherwise appealable as provided by Chapter 3 of
these rules.
Pa.R.A.P. 342(a). As noted by the orphans’ court, the appealed-from order in
the instant case does not fit within any specific description of an appealable
order enumerated in Rule 342. See Orphans’ Court Opinion, 3/6/20, at 7.
We agree that the order, which assessed surcharges against Turner and
denied the Gailey beneficiaries’ requests for counsel fees associated with
Turner’s attempt to remove their counsel, is not appealable under Pa.R.A.P.
342(a)(1)-(7).
We next consider whether the order is otherwise appealable under
Chapter 3 of the rules. Chapter 3 provides for the appealability of specific
interlocutory orders as of right or by permission, collateral orders, and final
orders. See Pa.R.A.P. 311, 312, 313, 341.
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The December 23, 2019 order did not dispose of all issues and all
parties, was not designated by the orphans’ court as a final order, and the
estate’s final account has yet to be confirmed. Hence, the order does not
qualify as a final order as defined by Pa.R.A.P. 341(b). See In re Estate of
Cherwinski, 856 A.2d 165, 166-67 (Pa.Super. 2004) (providing that the
order appealable as a final order under Pa.R.A.P. 341 is the one confirming
the final account). Nonetheless, we have held that an order imposing a
surcharge on an estate’s personal representative5 is immediately appealable,
noting that if “the surcharged amount paid to the estate by the representative
was in error, then the error may be impossible to correct if addressed after
the estate has been distributed.” Id. at 167 n.2. Accordingly, we conclude
that the December 23, 2019 order was immediately appealable as to the
surcharges against Turner, and we have jurisdiction to dispose of the merits
of Turner’s appeal.
We next consider our jurisdiction over the Gailey beneficiaries’ cross-
appeal. As indicated above, the Gailey beneficiaries ask this court to reverse
that portion of the interlocutory December 23, 2019 order that denied their
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5 The orphans’ court observed that In re Estate of Cherwinski, 856 A.2d
165, (Pa.Super. 2004), and the cases upon which it relied, dealt with
surcharges upon the personal representative of an estate, and Turner is no
longer in that position. See Orphans’ Court Opinion, 12/23/19, at 7. While
Turner’s liability is based upon his actions as the agent of the successor
trustee, rather than as the trustee, pursuant to 20 Pa.C.S. § 7777(b)
(discussed infra), we conclude the distinction makes no difference as to the
appealability of the surcharge.
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request for counsel fees related to opposing Turner’s motion to disqualify their
counsel. We have held that an interlocutory order refusing to award counsel
fees is not an appealable order. Compare Hall v. Lee, 428 A.2d 178, 180
(Pa.Super. 1981) (quashing appeal from interlocutory order refusing to award
counsel fees which could be deferred until appeal from final order), with
Dooley v. Rubin, 618 A.2d 1014, 1018 n.6 (Pa.Super. 1993) (entertaining
merits of claim that counsel fees were improperly refused because the denial
was incorporated in a final order terminating the litigation).
Further, an interlocutory order adjudicating a fee request made
pursuant to 42 Pa.C.S. 2503 does not qualify as an immediately-appealable
collateral order. Since it may be challenged in an appeal from the final order
terminating the litigation, the Gailey beneficiaries’ claim will not be irreparably
lost by postponing review. See Brawley Distrib. Co., Inc. v. Heartland
Properties, 712 A.2d 331, 332 (Pa.Super. 1998) (quashing pretrial order
granting an award of attorney fees under 42 Pa.C.S. § 2503(7) and (9)). Cf.
Kulp v. Hrivnak, 765 A.2d 796, 799 (Pa.Super. 2000) (“Since the instant
appeal presents the only chance for Appellants to challenge the attorneys’ fees
award, we conclude that the order is appealable[.]”). Moreover, the order
denying the Gailey beneficiaries’ request for counsel fees does not fall within
any of the categories immediately appealable as of right provided by Pa.R.A.P.
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311,6 and they did not seek permission for an interlocutory appeal pursuant
to Pa.R.A.P. 312.
Therefore, we conclude that we lack jurisdiction to determine the merits
of the Gailey beneficiaries’ challenge to that portion of the orphans’ court’s
December 23, 2019 order that denied their request for attorney fees pursuant
to 42 Pa.C.S. § 2503. Accordingly, we quash the Gailey beneficiaries’ cross-
appeal.
We now proceed to address the merits of Turner’s appeal, mindful of the
applicable legal principles. Our review of an orphans’ court determination is
deferential. This Court will not disturb the decision of the orphans’ court
“unless there has been an abuse of discretion or a fundamental error in
applying the correct principles of law.” In re Estate of Leipold, 208 A.3d
507, 510 (Pa.Super. 2019). “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.”
In re Estate of Walter, 191 A.3d 873, 878 (Pa.Super. 2018) (cleaned up).
“Where the findings of fact are supported by evidence, our review is limited
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6 Rule 311 provides for immediate appeals from orders refusing to open,
vacate, or strike off a judgment, relating to attachments, changing criminal
venue or venire, relating to injunctions, granting peremptory judgment in
mandamus, awarding a new trial, directing partition, sustaining venue or in
rem jurisdiction in certain instances, changing venue, certified by the
Commonwealth as substantially handicapping a criminal prosecution,
overruling preliminary objections in eminent domain cases, or remanding a
matter to an administrative agency. See Pa.R.A.P. 311(a)-(f).
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to rectifying errors of law.” Estate of McCredy, 470 A.2d 585, 593
(Pa.Super. 1983).
Turner challenges the decision of the orphans’ court to impose
surcharges on him for his administration of the trust. The following principles
guide our consideration of his arguments.
A surcharge is the penalty imposed for failure of a trustee
to exercise common prudence, skill and caution in the
performance of its fiduciary duty, resulting in a want of due care.
The standard of care imposed upon a trustee is that which a man
of ordinary prudence would practice in the care of his own estate.
If a fiduciary has greater skill than that of a person of ordinary
prudence, then the fiduciary’s standard of care must be judged
according to the standard of one having this special skill.
In re Estate of Scharlach, 809 A.2d 376, 384 (Pa.Super. 2002) (cleaned
up) (citing Restatement (Second) of Trusts § 174). “The court must find the
following before ordering a surcharge: (1) that the trustee breached a
fiduciary duty and (2) that the trustee’s breach caused a loss to the trust.”
In re Estate of Warden, 2 A.3d 565, 573 (Pa.Super. 2010).
Turner makes the following three arguments, which he supports with no
citations to authority. First, he contends that the orphans’ court should not
have imposed the $213,251.12 surcharge on him for operational expenditures
related to Mt. Corbett because he did not retain those funds, but rather applied
them for the maintenance of Mt. Corbett, which inured to the benefit of all the
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trust’s beneficiaries.7 See Turner’s brief at 10-11. Second, Turner argues in
the alternative that the orphans’ court made a calculation error by failing to
credit him for the rental income from Mt. Corbett and inflating the amount of
funds Turner received from the trust, such that, if any operational surcharge
is proper, it should be only $56,777.93. Id. at 12-13. Third, Turner applies
his prior arguments to the capital expenditures surcharge, contending that no
surcharge is appropriate because he used those funds to increase the value of
a trust asset rather than for his own benefit.8 Id. at 13-14.
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7 In his brief, Turner also suggests that the surcharge was improper because
he was no longer trustee, but merely acting under the direction of Peyton
during the time-period at issue, and that the Gailey beneficiaries’ petition was
untimely. See Turner’s brief at 10-11. However, in his Pa.R.A.P. 1925(b)
statement, Turner claimed error only as to the orphans’ court’s failure to
account for the fact that the funds were used to maintain Mt. Corbett and its
failure to apply the rental income to offset the operational expenditure
surcharge. See Concise Statement, 2/10/20, at (2)(A) (“there should be no
operational expenditure surcharge”), (2)(B) (“the operational surcharge
should be reduced”). We shall address only those arguments that were raised
in his Rule 1925(b) statement. See, e.g., U.S. Bank, N.A. for
Certificateholders of LXS 2007-7N Tr. Fund v. Hua, 193 A.3d 994, 997
(Pa.Super. 2018) (“Any issues not raised in a 1925(b) statement will be
deemed waived.”). In any event, a trustee has the power to delegate powers
to an agent. See 20 Pa.C.S. § 7777(a). When such occurs, “[t]he agent shall
comply with the scope and terms of the delegation and shall exercise the
delegated duties and powers with reasonable care, skill and caution and shall
be liable to the trust for failure to do so.” 20 Pa.C.S. § 7777(b) (emphasis
added).
8 Turner also argues on appeal that if a capital expenditure surcharge is
deemed to be appropriate, it should be reduced to $69,790.19. See Turner’s
brief at 14-15. However, while Turner raised both the propriety and the
amount of the operational expenditures surcharge in his Pa.R.A.P. 1925(b)
statement, Turner therein claimed only that imposition of any capital
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Fundamentally, Turner argues that the investment of the trust funds in
Mt. Corbett served to benefit the trust and all of its beneficiaries. However,
the orphans’ court, after hearing extensive testimony from Turner and his
successor, as well as the Gailey beneficiaries, appraisers, individuals who
worked at or on Mt. Corbett, and a third-party partial owner of Mt. Corbett,
reached the opposite conclusion. The court concluded that Mt. Corbett saw
no increase in renters despite the renovations and improvements and the
money Turner paid to advertisers and property agencies. See Orphans’ Court
Opinion, 10/22/13, at 65-66. To the contrary, “these actions likely caused
more harm than good to the reputation of Mt. Corbett, which now has a poor
commercial rental history, which will be disclosed to potential interested
buyers.” Id. at 66. Further, given a possible tax liability of the estate, the
court indicated that retaining the cash, or investing it into stocks or bonds
rather than foreign real estate, would have better served the trust. Id. at 67.
Thus, the record does not support Turner’s contention that his
contumacious use of the funds nonetheless served to benefit the trust. Nor
do the findings of the orphans’ court suggest that Turner’s expenditures in
managing Mt. Corbett had any causal relationship to the rental income it
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expenditure surcharge was improper, without the alternative contention that
it should be a lesser amount. See Concise Statement, 2/10/20, at (2)(C)
(“there should be no capital expenditure surcharge”). Accordingly, his
reduced-amount argument as to the capital expenditure surcharge is not
preserved for our review.
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realized. As the Gailey beneficiaries note, so far as the record shows, “Mt.
Corbett may have had rental income without these expenses.” Gailey
beneficiaries’ brief at 15. Turner has failed to demonstrate that the decision
of the orphans’ court is the result of “an abuse of discretion or a fundamental
error in applying the correct principles of law.” In re Estate of Leipold,
supra at 510. As such, no relief is due.
Order affirmed in pertinent part. Cross-appeal quashed. Jurisdiction
relinquished.
Judgment Entered.
Joseph D. Seletyn, Esq.
Prothonotary
Date: 02/18/2021
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