Trust Under Deed of Walter G, Appeal of:Garrison,M ( 2023 )

J-A13008-21
2023 PA Super 151TRUST UNDER DEED OF WALTER R. : IN THE SUPERIOR COURT OF
GARRISON : PENNSYLVANIA
:
:
APPEAL OF: MARK R. GARRISON, :
CHRISTOPHER GARRISON, LINDSEY :
GARRISON, LIZA GARRISON, AND :
BRITTANY GARRISON :
: No. 1429 EDA 2020
Appeal from the Order Entered June 16, 2020
In the Court of Common Pleas of Montgomery County Orphans’ Court at
No(s): No. 1992-X1519
TRUST UNDER DEED OF WALTER R. : IN THE SUPERIOR COURT OF
GARRISON : PENNSYLVANIA
:
:
APPEAL OF: MARK R. GARRISON, :
CHRISTOPHER GARRISON, LINDSEY :
GARRISON, LIZA GARRISON, AND :
BRITTANY GARRISON :
: No. 1430 EDA 2020
Appeal from the Order Entered June 16, 2020
In the Court of Common Pleas of Montgomery County Orphans’ Court at
No(s): No. 1992-X1518
TRUST UNDER DEED OF WALTER R. : IN THE SUPERIOR COURT OF
GARRISON : PENNSYLVANIA
:
:
APPEAL OF: MARK R. GARRISON, :
CHRISTOPHER GARRISON, LINDSEY :
GARRISON, LIZA GARRISON, AND :
BRITTANY GARRISON :
: No. 1431 EDA 2020
Appeal from the Order Entered June 16, 2020
In the Court of Common Pleas of Montgomery County Orphans’ Court at
No(s): No. 1992-X1509
TRUST UNDER DEED OF WALTER R. : IN THE SUPERIOR COURT OF
GARRISON : PENNSYLVANIA
J-A13008-21
:
:
APPEAL OF: BARTON J. WINOKUR, :
EXECUTOR OF THE ESTATE OF :
WALTER R. GARRISON, DECEASED :
:
: No. 1461 EDA 2020
Appeal from the Order Entered June 16, 2020
In the Court of Common Pleas of Montgomery County Orphans’ Court at
No(s): No. 1992-X1509,
No. 1992-X1518, No. 1992-X1519
TRUST UNDER DEED OF WALTER R. : IN THE SUPERIOR COURT OF
GARRISON : PENNSYLVANIA
:
:
APPEAL OF: BARTON J. WINOKUR, :
EXECUTOR OF THE ESTATE OF :
WALTER R. GARRISON, DECEASED :
:
: No. 1498 EDA 2020
Appeal from the Order Entered June 16, 2020
In the Court of Common Pleas of Montgomery County Orphans’ Court at
No(s): No. 1992-X1509,
No. 1992-X1518, No. 1992-X1519
TRUST UNDER DEED OF WALTER R. : IN THE SUPERIOR COURT OF
GARRISON : PENNSYLVANIA
:
:
APPEAL OF: BARTON J. WINOKUR, :
EXECUTOR OF THE ESTATE OF :
WALTER R. GARRISON, DECEASED :
:
: No. 1562 EDA 2020
Appeal from the Order Entered June 16, 2020
In the Court of Common Pleas of Montgomery County Orphans’ Court at
No(s): No. 1992-X1509,
No. 1992-X1518, No. 1992-X1519
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BEFORE: BENDER, P.J.E., DUBOW, J., and STEVENS, P.J.E.*
OPINION BY BENDER, P.J.E.: FILED AUGUST 8, 2023
This case is on remand from the Pennsylvania Supreme Court after it
reversed this Court’s September 27, 2021 memorandum decision,1 in which
we had affirmed the orphans’ court’s extension of the holding in Trust under
Agreement of Edward Winslow Taylor, 164 A.3d 1147 (Pa. 2017), to the
instant matter and thereby upheld the orphans’ court’s determination that
certain trust modification agreements entered into by the settlor of the
underlying trusts, as well as all of the trusts’ beneficiaries, were invalid.2 Our
Supreme Court remanded the case to this Court for consideration of issues
properly preserved but not reached in rendering our prior determination.
Now, on remand, we affirm in part, vacate in part, and remand for further
proceedings consistent with this memorandum.
At issue in this case are three irrevocable trusts created by Walter R.
Garrison (“Walter” or “Settlor”), naming Walter’s son, Mark R. Garrison
(“Mark” or “Petitioner”) and Mark’s children, Christopher Garrison, Lindsey
Garrison, Liza Garrison, and Brittany Garrison (collectively “Mark’s Children”),
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* Former Justice specially assigned to the Superior Court.
1 Trust Under Deed of Walter R. Garrison (“Garrison I”), 2021 WL
4432611 (Pa. Super. Sept. 27, 2021) (unpublished memorandum).
2 See In re Trust Under Deed of Walter R. Garrison (“Garrison II”), 288
A.3d 866 (Pa. 2023).
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as the beneficiaries.3, 4 Under the terms of the Trusts, an individual trustee
appointed by Settlor had the power to designate in writing an individual
successor for himself in the event of Settlor’s death. On August 18, 2017,
Settlor and Beneficiaries entered into agreements (“Modification
Agreements”) to modify the terms of the Trusts regarding the removal and
replacement of trustees. Pursuant to the Modification Agreements, following
Settlor’s death, a majority of the Beneficiaries “may at any time remove, with
or without cause,” any individual trustee and may appoint another trustee in
his or her place. Orphans’ Court Order and Opinion (“OCOO”), 6/16/20, at 4
(citations omitted).
Settlor passed away on February 24, 2019. Following his death,
Beneficiaries acted under the Modification Agreements to remove the existing
independent co-trustees, Lawrence C. Karlson, Donald W. Garrison, and
Michael J. Emmi (collectively “Independent Trustees”), and to appoint Dr.
Mairi Leining, Christina Zavell, and Michael Zavell (collectively “Successor
Trustees”) in their place, effective April 27, 2019. When notified of
Beneficiaries’ action, the Independent Trustees indicated that they did not
recognize the Modification Agreements as valid, nor did they believe that their
purported removal thereunder was valid.
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3 The three trusts are collectively referred to herein as the “Trusts.”
4 Mark and his Children are collectively referred to herein as “Appellants” or
“Beneficiaries.”
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On July 19, 2019, seeking to uphold the Independent Trustees’
replacements, Mark filed a petition for declaratory judgment to determine the
validity of the Modification Agreements and to confirm the appointment of
Successor Trustees. Petition for Declaratory Judgment, 7/19/19, at 1-17
(unnumbered).5 Barton J. Winokur, the executor of Settlor’s estate
(“Executor”), and Independent Trustees filed separate answers and new
matter, in which they raised the following affirmative defenses: 1) the
Modification Agreements are invalid under Taylor, supra; 2) the Modification
Agreements are invalid for failure to meet the adequate representation
requirements of 20 Pa.C.S. §§ 7723 and 7725; and 3) Walter was unduly
influenced into signing the Modification Agreements by two of his children,
Mark and Susan. See Executor’s Answer in Opposition to Petition for
Declaratory Judgment, 9/6/19, at 22-23; Independent Trustees’ Answer and
New Matter to Petition for Declaratory Judgment, 9/6/19, at 12-13.
Subsequently, Mark moved for judgment on the pleadings, asserting
that he is entitled to judgment as a matter of law, that the Modification
Agreements are enforceable, and that under the terms of the modifications,
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5 On September 5, 2019, Mark’s Children, as beneficiaries of the Trusts, as
well as Walter’s other four children, Jeffrey Garrison, Susan Garrison, Pam
Phelan, and Heather Garrison, as contingent remainder beneficiaries of the
Trusts, joined Mark’s petition for declaratory judgment, pursuant to section
7540(A) of the Declaratory Judgments Act, 42 Pa.C.S. §§ 7531-7541. See
42 Pa.C.S. § 7540(A) (“When declaratory relief is sought, all persons shall be
made parties who have or claim any interest which would be affected by the
declaration and no declaration shall prejudice the rights of persons not parties
to the proceeding.”).
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Successor Trustees should be confirmed. Motion for Judgment on Pleadings,
11/8/19, at 1-11 (unnumbered). Executor filed a responsive pleading
averring that “fundamental disputed issues of fact preclude entry of judgment
on the pleadings in Mark’s favor.” Executor’s Answer in Opposition to Motion
for Judgment on Pleadings, 11/8/19, at 4. He also repeated his claim that
Walter was unduly influenced into signing the Modification Agreements. Id.
at 5, 7-15. See also Independent Trustees’ Answer to Motion for Judgment
on Pleadings, 11/27/19, at 1-2 (incorporating their answers from their Answer
and New Matter to Petition for Declaratory Judgment).
The orphans’ court determined that both the petition for declaratory
judgment and the motion for judgment on the pleadings turned on the narrow
issue of whether the Pennsylvania Supreme Court’s holding in Taylor applies
with respect to a purported modification of a trust made with the consent of
the settlor as well as the beneficiaries, pursuant to 20 Pa.C.S. § 7740.1(a).
See OCOO at 2-3.6 After consideration of the parties’ pleadings and
supplemental briefing on the Taylor issue, the orphans’ court issued an order
dated June 16, 2020, which denied Appellants’ petition for a declaratory
judgment and motion for judgment on the pleadings. Id. at 15. The order
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6 “In Taylor, beneficiaries of an irrevocable trust sought permission from the
orphans’ court, pursuant to section 7740.1(b) of the [Pennsylvania] Uniform
Trust Act [(“UTA”), 20 Pa.C.S. §§ 7701-7799.3,] to modify the terms of the
trust to include the ability of the beneficiaries to replace trustees, in what is
commonly referred to as a portability provision. The settlor of the trust was
at that time deceased.” Garrison II at 869 (citing Taylor, 164 A.3d at 636-
37).
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specifically declared that “the Modification Agreements are ineffective and
invalid[] to the extent that they purport to grant … [B]eneficiaries the power
to remove and replace … Independent Trustees[,]” that “[t]he removal of …
Independent Trustees pursuant to the [Modification Agreements] is invalid,
and the appointment of … [S]uccessor [Trustees] is a nullity.” Id. The order
further stated that Independent Trustees “remain as co-trustees of the
[T]rusts for which each of them is a named trustee and may be removed and
replaced pursuant only to the original terms of the Trusts or to proceedings in
accordance with the requirements of 20 Pa.C.S. § 7766.” Id. Additionally,
the court concluded that “the Estate of Walter R. Garrison, deceased, does not
have an ongoing interest in the Trusts and[,] therefore[,] the estate is not a
proper participant to these proceedings.” Id. at 3.
On July 14, 2020, Appellants filed timely notices of appeal, followed by
timely, court-ordered Pa.R.A.P. 1925(b) concise statements of errors
complained of on appeal.7 On July 27, 2020, Executor filed timely notices of
cross-appeal, pursuant to Pa.R.A.P. 903(b), and he complied with the orphans’
court’s Rule 1925(b) order.8
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7 As we noted in Garrison I, the June 16, 2020 order is appealable pursuant
to Pa.R.A.P. 342(a), which provides that an appeal may be taken as of right
from an orphans’ court order “determining the validity of a will or trust[,]” or
“determining the status of fiduciaries, beneficiaries, or creditors in an estate,
trust, or guardianship.” Pa.R.A.P. 342(a)(2), (5).
8 On September 23, 2020, this Court consolidated sua sponte the appeals and
cross-appeals at Nos. 1429, 1430, 1431, 1461, 1498, and 1562 EDA 2020.
See Per Curiam Order, 9/23/20 (single page).
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On appeal, Appellants raised the following issues for our review:
1. Did the orphans’ court err by not enforcing modifications to
[the T]rusts under 20 Pa.C.S.[] § 7740.1(a), which were
agreed to by … [S]ettlor and [B]eneficiaries to allow for the
replacement of [Independent T]rustees by a majority of
[B]eneficiaries after the death of … [S]ettlor?
2. Were Appellants entitled to judgment on the pleadings on the
claim that their agreements to modify [the T]rusts were the
product of undue influence where the facts alleged do not state
any action upon which relief could be granted?
Appellants’ Brief at 6 (unnecessary capitalization omitted).
Additionally, Executor presented the following issues for our
consideration in his cross-appeal:
1. Does the orphans’ court’s clear and accepted error in sua
sponte raising the issue of the Estate’s standing require
reversal, where the court recognized the disputed questions of
material fact proffered by the Estate for which, absent reversal
and should this case continue, the Estate will be precluded from
presenting supporting evidence?
2. Does the orphans’ court’s express recognition of disputed
questions of material fact concerning whether any agreement
to the purported Trust modifications was obtained as a result
of undue influence serve as an alternate basis to deny
Appellants’ motion for judgment on the pleadings?
Executor’s Brief at 5 (unnecessary capitalization omitted).
At the crux of Appellants’ claim that the orphans’ court erred in failing
to enforce the Modification Agreements was the interpretation and application
of sections 7740.1(a) and 7766 of the UTA.9 The Taylor Court considered
____________________________________________
9 Section 7740.1 governs the modification of noncharitable, irrevocable trusts
by consent. See 20 Pa.C.S. § 7740.1(a) (allowing for modification upon
(Footnote Continued Next Page)
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Pennsylvania’s “long history of strictly limiting the removal and replacement
of a trustee to circumstances in which an [o]rphans’ [c]ourt determines that
good cause exists to do so[,]” Taylor, 164 A.3d at 1158 (citations omitted),
and it concluded that “the legislative intent with respect to the interplay
between sections 7740.1 and 7766 is clear — the scope of permissible
amendments under section 7740.1 does not extend to modifications …
permitting beneficiaries to remove and replace a trustee at their discretion;
instead, removal and replacement of a trustee is to be governed exclusively
by section 7766.” Id. at 1160-61.
The orphans’ court extended the holding in Taylor to the instant matter
and opined:
In light of the Supreme Court’s opinion in Taylor, we are
constrained to hold that if the trust modification allows for removal
and replacement of a trustee, it is governed by [section] 7766….
The Taylor Court made no exception to allow modifications of
trusts for removal of trustees made with the consent of a settlor
and beneficiaries. Following the legislature’s intent, the Court held
that UTA [section] 7766 is the exclusive provision for removal of
trustees and, therefore, an end run on the stringent requirements
of [section] 7766 could not be made by using a different UTA
provision governing modification by consent to add a portability
clause to a trust. As such, … Independent Trustees of the Garrison
Trusts may be removed and replaced only pursuant to [section]
7766, the statutory default provision for removal and replacement
of trustees.
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consent of the settlor and all beneficiaries even if the modification is
inconsistent with the material purpose of the trust). Section 7766 governs
the removal of a trustee. See 20 Pa.C.S. § 7766(a) (requiring court approval
for the removal of a trustee at the request of a settlor, co-trustee, or a
beneficiary); 20 Pa.C.S. § 7766(b) (outlining the circumstances under which
the court may approve removal of a trustee).
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OCOO at 11-12. The orphans’ court concluded that its foregoing legal analysis
was sufficient to uphold its denial of Appellants’ petition for declaratory
judgment and motion for judgment on the pleadings. We affirmed.10
Our Supreme Court granted Appellants’ petition for allocator to review
“the lower courts’ extension of [its] holding in … Taylor … to a unified action
of beneficiaries and settlor of a trust under section 7740.1(a).” Garrison II
at 868. Emphasizing that the settlor in Taylor was deceased at the time the
modification of the trust was sought, thus, the interests of the settlor in that
case were not represented, our Supreme Court determined that the lower
courts’ extension of Taylor to the instant matter which involves a unified
action by Settlor and Beneficiaries to modify the Trusts under section
7740.1(a) was improper. Id. at 871-74. The Court reversed our decision and
remanded for our consideration of any legal or factual issues that were
properly preserved but not reached in rendering our prior determination. Id.
at 874.
We begin our analysis of the parties’ claims by noting our standard and
scope of review:
As our Supreme Court has explained, appellate review of a trial
court’s decision to grant or deny judgment on the pleadings is
limited to determining whether the trial court committed an error
of law or whether there were facts presented which warrant a jury
trial. In conducting this review, we look only to the pleadings and
any documents properly attached thereto. Judgment on the
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10 Due to our disposition, we did not reach the merits of the issues raised by
Appellants and Executor regarding whether the Modification Agreements were
the product of undue influence. See Garrison I at *11.
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pleadings is proper only where the pleadings evidence that there
are no material facts in dispute such that a trial by jury would be
unnecessary.
John T. Gallaher Timber Transfer v. Hamilton, 932 A.2d 963, 967 (Pa.
Super. 2007) (citation omitted).
Instantly, at the core of the parties’ claims is the validity of the
Modification Agreements. Considering our Supreme Court’s ruling that the
extension of Taylor to this matter was improper, the orphans’ court erred in
deeming the Modification Agreements invalid based on Taylor and, thus, we
cannot uphold its denial of the petition for declaratory judgment and motion
for judgment on the pleadings on that basis. Nevertheless, we consider
Executor’s assertion that the Modification Agreements are the product of
undue influence and whether there are questions of material fact which would
serve as an alternate basis to deny Appellants’ motion for judgment on the
pleadings.11 See 20 Pa.C.S. § 7736 (“A trust or an amendment to a trust is
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11 While the orphans’ court did not deny judgment on the pleadings on the
grounds of undue influence and/or the existence of disputed, material facts,
we may affirm a lower court’s decision if there is a proper basis for the result
reached, even if it is different than the basis relied upon by the trial court.
See Grabowski v. Carelink Cmty. Support Servs., Inc., 230 A.3d 465,
472 n.3 (Pa. Super. 2020) (citing Generation Mortgage Co. v. Nguyen, 138
A.3d 646, 651 n.4 (Pa. Super. 2016); In re Estate of Rood, 121 A.3d 1104,
1105 n.1 (Pa. Super. 2015)). See also OCOO at 14 (acknowledging “[t]here
remain disputed questions of material fact concerning whether … Settlor’s
agreement to the purported modifications was obtained as a result of undue
influence … that would … preclude granting … Petitioner’s motion for judgment
on the pleadings with respect to [his] petition for declaratory judgment[,]” but
concluding that these questions “need not and cannot be decided at this
juncture[,]” in light of the orphans’ court’s holding that the Modification
Agreements are invalid).
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voidable to the extent its creation was induced by fraud, duress[,] or undue
influence.”).
Executor argues that his pleadings contain factual averments sufficient
to establish undue influence or, at the very least, genuine issues of material
fact, which preclude the entry of judgment on the pleadings in Mark’s favor.
Executor’s Brief at 18 (citing Keil v. Good, 356 A.2d 768 (Pa. 1976) (stating
“the court is required to consider not only the pleadings, but also the
reasonable inferences therefrom, in the light most favorable to the party
opposing the motion”); Parish v. Horn, 768 A.2d 1214 (Pa. Cmwlth. 2001),
aff’d 800 A.2d 294 (Pa. 2002) (declaring that judgment on the pleadings is
proper only when no genuine issue of fact exists and the moving party is
entitled to judgment as a matter of law)).
Conversely, with respect to Executor’s affirmative defense of undue
influence, Appellants insist that they are entitled to judgment on the
pleadings, as Executor failed to allege sufficient facts upon which relief could
be granted. Appellants’ Brief at 35. In support of their claim, they aver that
undue influence “is a species of fraud, which must be pled with particularity.”
Id. at 37 (citing Pa.R.Civ.P. 1019). In order to plead an action for undue
influence, Appellants maintain “a party must allege facts that if proven would
establish three elements: (1) the settlor suffered from a weakened intellect,
and that (2) he had a confidential relationship with (3) an individual receiving
a substantial benefit under the terms of the trusts.” Id. at 37-38 (citing In
re Estate of Luongo, 823 A.2d 942, 963 (Pa. Super. 2003)). They conclude
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that Executor failed to set forth sufficient, well-pled factual averments to
establish any of these three elements and, thus, Appellants are entitled to
judgment on the pleadings. Id. at 38.
First, after conducting an extensive review of relevant caselaw, we
conclude that Appellants erroneously attempt to hold Executor to the three-
part standard set forth in Luongo in support of their argument that he failed
to set forth a cause of action for undue influence. Unlike the present matter,
Luongo sets forth the burden of proof for establishing undue influence in the
context of a will contest.12 Whereas in decisions concerning whether a party
was unduly influenced into entering a contract outside the context of a will
contest, the courts have generally not applied this standard and instead have
focused only on the issue of whether a confidential relationship existed. 13 See
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12 In considering whether the appellant set forth a prima facie case for undue
influence in an action contesting the validity of his father’s will in probate, the
Luongo Court explained that “[a] presumption of validity arises once a will is
probated, and the burden shifts to the contestant [of the will] to prove undue
influence.” Luongo, 823 A.2d at 963 (citations omitted).
To meet this burden, the contestant must establish by clear and
convincing evidence that: (1) the testator was of weakened
intellect at the time the will was executed; (2) the proponent of
the will stood in a confidential relationship with the testator; and
(3) the proponent received substantial benefit under the will.
Id.13“While the two terms [confidential relationship and undue influence] are
sometimes used interchangeably, the latter is used mostly in will contests,
and the former is employed most often in contract disputes.” Biddle v.
Johnsonbaugh, 664 A.2d 159, 162 n.1 (Pa. Super. 1995).
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Yenchi v. Ameriprise Financial, Inc., 161 A.3d 811 (Pa. 2017) (focusing
only on whether a fiduciary duty or confidential relationship existed in the
context of a consumer transaction to purchase a life insurance policy);
Frowen v. Blank, 425 A.2d 412 (Pa. 1981) (considering only whether a
confidential relationship existed in connection with the execution of an
agreement for the sale of real estate). See also In re Balogh, 2021 WL
3206111, at *4 (Pa. Super. July 29, 2021) (unpublished memorandum)
(concluding that the orphans’ court erroneously applied the more stringent,
three-part undue influence standard for testamentary transfers to a matter
involving an inter vivos transfer).14
The matter before us involves a dispute over agreements to modify inter
vivos trusts.15 As we explained in Balogh, a challenge to a transfer made
during an individual’s lifetime is subject to a different standard than that of a
testamentary transfer. Id. The challenger of an inter vivos transfer need only
establish a single thing: that the donor and donee were in a confidential
relationship. Id. “If the challenger carries that burden, the burden then shifts
to the donee to ‘prove affirmatively that it is unaffected by any taint of undue
influence, imposition, or deception.’” Id. (quoting McCown v. Fraser, 192
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14 See Pa.R.A.P. 126(b) (unpublished, non-precedential decisions of the
Superior Court, filed after May 1, 2019, may be cited for their persuasive
value).
15 An inter vivos trust is defined as “an express trust other than a trust created
by a will, taking effect during the lifetime or at or after the death of the
settlor.” 20 Pa.C.S. § 711(3).
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A. 674, 676 (Pa. 1937) (footnote omitted)). See also Frowen, 425 A.2d at
416 (“Where a confidential relationship exists, the law presumes the
transaction voidable, unless the party seeking to sustain the validity of the
transaction affirmatively demonstrates that it was fair under all of the
circumstances and beyond the reach of suspicion.”) (citation omitted).
Moreover, we determined that
[a] challenger to an inter vivos gift claiming undue influence bears
no burden of showing that the donor had a weakened intellect.
Rather, an inter vivos gift to one in a confidential relationship with
the donee “will be condemned, even in the absence of evidence of
actual fraud, or of mental incapacity on the part of the donor,
unless there is full and satisfactory proof that it was the free and
intelligent act of the donor, fully explained to him, and done with
a knowledge of its consequence.”
Balogh, 2021 WL 3206111, at *4 (quoting McCown, 192 A. at 676-77)
(emphasis omitted).
Thus, the crucial question here is whether Executor alleged sufficient
facts to establish that a confidential relationship existed between Walter and
either Mark or Susan. The existence of a confidential relationship is dependent
upon the facts of each particular case. See Yenchi, 161 A.3d at 817; In re
Estate of Scott, 316 A.2d 883, 885 (Pa. 1974) (“The concept of a confidential
relationship cannot be reduced to a catalogue of specific circumstances,
invariably falling to the left or right of a definitional line. The essence of such
a relationship is trust and reliance on one side, and a corresponding
opportunity to abuse that trust for personal gain on the other.”) (internal
citation omitted).
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As explained by our Supreme Court,
[a] fiduciary duty[16] is the highest duty implied by law. A fiduciary
duty requires a party to act with the utmost good faith in
furthering and advancing the other person’s interests, including a
duty to disclose all relevant information…. In some types of
relationships, a fiduciary duty exists as a matter of law. Principal
and agent, trustee and cestui que trust, attorney and client,
guardian and ward, and partners are recognized examples. The
unique degree of trust and confidence involved in these
relationships typically allows for one party to gain easy access to
the property or other valuable resources of the other, thus
necessitating appropriate legal protections.
Where no fiduciary duty exists as a matter of law, Pennsylvania
courts have nevertheless long recognized the existence of
confidential relationships in circumstances where equity compels
that we do so. Our courts have found fiduciary duties in
circumstances where the relative position of the parties is such
that the one has the power and means to take advantage of, or
exercise undue influence over, the other. The circumstances in
which confidential relationships have been recognized are fact
specific and cannot be reduced to a particular set of facts or
circumstances. We have explained that a confidential relationship
“appears when the circumstances make it certain the parties do
not deal on equal terms, but, on the one side there is an
overmastering influence, or on the other, weakness, dependence
or trust, justifiably reposed[.]” Frowen[,] … 425 A.2d [at] 416-
17…. In these cases, which have typically been brought in courts
of equity, if a confidential relationship was found to exist, then the
burden shifts and the fiduciary has to demonstrate that there has
been no breach of trust. Id. Transactions between persons
occupying a confidential relationship are voidable, and the party
seeking to benefit from such a transaction must demonstrate that
his or her actions were at all times “fair, conscientious, and
beyond the reach of suspicion.” Young[ v. Kaye], 279 A.2d
[759,] 766[ (Pa. 1971)]; Matter of Estate of Evasew, … 584
A.2d 910, 913 ([Pa. ]1990).
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16 The Court uses the terms “fiduciary relationship” and “confidential
relationship” interchangeably. See Yenchi, 161 A.3d at 817 n.5 (citing
Stewart v. Hooks, 94 A.2d 756, 759 (Pa. 1953)).
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Yenchi, 161 A.3d at 819-21 (some citations omitted).
Moreover, our Supreme Court has recognized that,
[w]hile disease or advancing age “do not by themselves create a
confidential relationship with another,” such limitations “may
support an inference of confidentiality” if they bear on a party’s
“capacity to understand the nature of the transaction in question.”
Scott, 316 A.2d at 886. Family relationships or close personal
friendships, while also not dispositive of the existence of a
confidential relationship, have also often played significant roles
in particular determinations. Silver v. Silver, … 219 A.2d 659,
662 ([Pa. ]1966) (stating that kinship, while not dispositive, is a
factor “which cannot be ignored”).
Where one party lacks the ability to understand the nature and
terms of the transaction and simultaneously reposes their
complete trust in the other party based upon well-established
relationships, this circumstance provides an opportunity for the
second party to exercise undue influence over the first and, thus,
effectively control the decision-making process to their
advantage…. Undue influence resulting in a loss of control has
also been found to exist when one party places their complete and
unhesitating trust in the other party, and in so doing effectively
cedes their decision-making authority to the other party….
Conversely, even where special vulnerabilities exist, this Court has
not recognized the existence of a confidential relationship if the
person continued to act on his or her own behalf and did not
succumb to any “overmastering influence” of another.
Id. at 821-22.
Our analysis of the pleadings is further governed by Pennsylvania
Orphans’ Court Rule 3.3, which provides, in relevant part:
(b) The material facts on which a cause of action or defense is
based shall be stated in a concise and summary form.
(c) Averments of fraud or mistake shall be averred with
particularity. Malice, intent, knowledge, and other conditions of
mind may be averred generally.
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Pa.R.O.C.P. 3.3(b), (c).17
While Appellant contends that undue influence “is a species of fraud,
which must be pled with particularity[,]” Appellant’s Brief at 37, we reject this
argument. This Court has previously acknowledged that undue influence is “a
similar yet distinct legal theory” from fraud. See In re Passarelli Family
Trust, 206 A.3d 1188, 1194 n.6 (Pa. Super. 2019) (en banc) (involving an
appeal from the granting of a petition to terminate an irrevocable trust on the
basis of fraudulent inducement).18 See also In re Estate of Glover, 669
A.2d 1011, 1016 (Pa. Super. 1996) (“Although undue influence is very much
like fraud, the two are not identical.”) (quoting 31 Standard Pennsylvania
Procedure 2d § 148:60).
Additionally, the UTA notes that Section 7736 (regarding the voidability
of a trust or an amendment to a trust subject to fraud, duress, or undue
influence) is a specific application of the Restatement (Second) and (Third) of
Trusts and closely tracks the language of the Restatement (Third) of Property:
Wills and Other Donative Transfers Section 8.3. See 20 Pa.C.S. § 7736,
____________________________________________
17 Rule 3.3 is derived from Pa.R.Civ.P. 1019.
18 We opined:
Theoretically, fraud is separate and distinct from undue influence,
since, when the former is exercised the testator acts as a free
agent but is deceived into acting by false data, and when the latter
is exercised the mind of the testator is so overmastered that
another will is substituted for his own.
Id. (citation omitted).
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Comment. See also Rest. 3d Property § 8.3(a) (“A donative transfer is invalid
to the extent that it was procured by undue influence, duress, or fraud.”);
Rest. 3d Property § 8.3, Comment a. (noting this section applies to all donative
transfers, whether inter vivos or testamentary; references in this section to
the term “donative transfer” include amendments of a donative transfer);
Rest. 3d Trusts § 12, Comment b. (incorporating the definitions of undue
influence and fraud, as set forth in the Restatement (Second) of Property
(Donative Transfers) § 34.7). Hence, we look to the Restatement (Second)
and (Third) of Property for guidance regarding the distinction between undue
influence and fraud.
The Restatement (Third) of Property distinguishes between undue
influence and fraud as follows:
(b) A donative transfer is procured by undue influence if the
wrongdoer exerted such influence over the donor that it overcame
the donor’s free will and caused the donor to make a donative
transfer that the donor would not otherwise have made.
…
(d) A donative transfer is procured by fraud if the wrongdoer
knowingly or recklessly made a false representation to the donor
about a material fact that was intended to and did lead the donor
to make a donative transfer that the donor would not otherwise
have made.
Rest. 3d Property § 8.3(b), (d). “The doctrine of undue influence protects
against overreaching by a wrongdoer seeking to take unfair advantage of a
donor who is susceptible to such wrongdoing on account of the donor’s age,
inexperience, dependence, physical or mental weakness, or other factor.” Id.,
Comment e.
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In the case sub judice, we observe that Executor does not expressly
allege fraud on the part of Mark and/or Susan. Rather, he alleges that Mark
and Susan unduly influenced Walter into signing the Modification
Agreements. We have determined that fraud may be part of a scheme to
improperly influence an individual, but it is not the only means by which a
defendant may exercise undue influence. Kern v. Kern, 892 A.2d 1, 8 (Pa.
Super. 2005). See also id. (defining undue influence as “conduct including
‘imprisonment of the body or mind, fraud, or threats, or misrepresentations,
or circumvention, or inordinate flattery or physical or moral coercion,
[manifested in] such a degree as to prejudice the mind of the testator, to
destroy his free agency and to operate as a present restraint upon him in the
making of a will.’”) (quoting In re Angle, 777 A.2d 114, 123 (Pa. Super.
2001)). Moreover, in Kern, we declined “to ferret fraud out from a myriad of
possible causes of [a] … controversy[,]” absent “a particularized allegation of
fraud[.]” See id. Similarly, we decline here to elicit an allegation of fraud
from the averments in Executor’s new matter. Based on the foregoing, we
conclude that Executor’s allegations of undue influence must only be pled
generally. See Pa.R.O.C.P. 3.3(c).
Mindful of the foregoing principles, we now turn to the parties’ pleadings
and consider whether sufficient facts have been pled to establish a claim of
undue influence and/or whether material facts are in dispute, which would
preclude the entry of judgment on the pleadings.
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In his petition for declaratory judgment, Mark averred that Walter and
Beneficiaries entered into Modification Agreements prior to Walter’s death,
which amended the terms of the Trusts “to allow the su[i] juris income
beneficiaries to remove and appoint new trustees.” Petition for Declaratory
Judgment at ¶ 7. He alleged that Walter and Beneficiaries “all had capacity
to amend the Trust Agreements, and the Modification[ Agreements] were all
properly executed and otherwise compliant with the requirements for creating
a valid trust amendment.” Id. at ¶ 8 (citing 20 Pa.C.S. § 7732 (codifying the
basic requirements for the creation of a trust)). See also id. at ¶ 32 (noting
that the Modification Agreements were signed and notarized by Walter and all
Beneficiaries). Following Walter’s death, Mark averred that Beneficiaries
merely exercised their rights under the Modification Agreements to remove
Independent Trustees and to appoint Successor Trustees. Id. at ¶ 12.
Accordingly, he sought declaratory judgment in his favor regarding the validity
of the Modification Agreements and confirmation of the appointment of
Successor Trustees.
Subsequently, in his motion for judgment on the pleadings, Mark
emphasized that Walter was represented by his own attorney in connection
with the Modification Agreements, that Walter signed the Modification
Agreements, and that he intended to amend how successor trustees would be
selected following his death. See Motion for Judgment on Pleadings at ¶¶ 10-
14. See also id. at ¶ 12 (stating that no allegations have been made that
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Walter’s signature was a forgery); id. at ¶ 15 (observing that Walter’s initials
also appear on numerous pages of the Modification Agreements).
Executor, however, asserted undue influence as an affirmative defense
to Mark’s allegations. Specifically, he averred:
On August 18, 2017, Mark Garrison and Susan Garrison, who was
acting as Mark’s attorney, came to [Walter’s] home following his
lengthy hospital stay and presented him with the signature page
of a document, the entirety of which they would not permit him to
read. They exerted enormous undue and unnecessary pressure
and stress on [Walter] to sign the document, which [Walter]
thereafter learned did not evince his intent.[19] Despite [Walter’s]
being represented by counsel at the time in connection with this
very issue[,] … [Walter’s] attorney was not invited to this meeting
or otherwise informed thereof until after[ward,] when Susan sent
him a copy of the purported signed [Modification Agreements].
Executor’s Answer and New Matter at ¶ 7. Moreover, he asserted that Mark
and Susan “improperly pressured and influenced [Walter] to sign a document
which did not reflect his intent at a time when he was ill, without counsel
present[,] and denied [him] the opportunity to review the document before
signing [it.]” Id. at ¶ 8. Additionally, he stated that “Attorney Susan Garrison
exercised undue influence over Walter … in derogation and in conflict of her
role as attorney for an adverse party and in her own self-interest[,] which was
contrary to [Walter’s] desire and intent.” Id. at ¶ 9.
____________________________________________
19 “[Walter] did not intend that any modification of the Trust[s] include any
power to remove trustees, but rather that any modification would be limited
to addressing the process for replacing a trustee who resigned or died after
[his] death. Specifically, [Walter] contemplated a committee of 4-6 persons
whose judgment he valued who would have the responsibility of appointing a
successor trustee(s).” Executor’s Answer and New Matter, 9/6/19, at 22 ¶ 7.
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Executor expressly “denied as stated” Mark’s contention that Walter
intended to modify the Trusts as to “how successor trustees would be selected
following his death.” Answer to Motion for Judgment on Pleadings at ¶ 10;
Motion for Judgment on Pleadings at ¶ 10. He clarified, rather, that “Mark and
Susan approached [Walter] during his lifetime to consider a modification of
the … Trusts[;]” that Walter intended any modification to be limited to
amending the process for replacing trustees after his death; and that he
contemplated such modification to involve a committee responsible for
appointing a successor trustee, comprised of 4-6 persons whose judgment he
valued. Answer to Motion for Judgment on Pleadings at ¶ 10. Executor further
explained:
This is because, during [Walter’s] lifetime, the selection of
trustees had been from individuals serving on the Board of
Directors of CDI [Corporation (“CDI”)] [20] who were recognized
for their business acumen, knowledge of CDI and their personal
values. It was contemplated that after [Walter’s] death, and after
the sale of CDI, there would be less need for successor trustees
with CDI experience, but still need for trustees with business
acumen and values. Thus, [Walter] envisioned a committee of
individuals that [he] knew well, to ensure that these requirements
would be met by persons to be offered appointment as successor
trustees. [Walter] engaged counsel to represent him in
connection with issues surrounding [the] possible modification of
the … Trusts….
Following [Walter’s] release from the hospital[,] Susan, acting as
attorney for Mark, improperly influenced [Walter] through an
escalating pattern of directed contact and discussions with [him]
over a period of decline in his health, rather than proceeding
through his retained counsel whom had been engaged to
____________________________________________
20 Walter was the founder and President/CEO of CDI. Petition for Declaratory
Judgment at ¶ 2.
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represent him in connection with issues surrounding possible
modification of the trust instruments. This escalating pattern of
behavior culminated in a signing session at [Walter’s] house when
he was feeling ill, his attorney was not present[,] and his
protestations and requests to review the documents before having
to sign anything were forcefully rejected. It was … contrary to
[Walter’s] expressed intent that modification not include any
removal of trustees….
Id. See also id. at ¶ 14 (averring that “Mark, acting through his sister Susan,
improperly influenced [Walter] through an escalating pattern of direct contact
and discussions over a period of decline in [Walter’s] health, rather than
proceeding through his retained counsel”); id. at ¶ 18 (“[A]s counsel for Mark,
Susan acted as agent for Mark, furthering his and their collective interests in
attempting to acquire that which no provision in [the T]rusts permitted: the
ability for [Walter’s] children to choose their own trustees to bypass the
controls [Walter] intentionally left to a select group of chosen individuals.”);
id. at 19 (“In her representation of Mark, Susan exploited her and Mark’s
positions as beloved children of [Walter], raising the issue of a potential trust
modification with him prior to and during a lengthy hospital stay with serious
illness.”); id. (“Susan and Mark further abused their familial associations in
arranging a signing session for a document that they did not allow [Walter] to
read….”).
Additionally, Executor “denied as stated” Mark’s allegation that Walter
signed the Modification Agreements, explaining that Walter “signed a
document that he was not permitted to read and that which was contrary to
his stated intent.” Id. at ¶ 12. He added that the evidence will establish the
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Modification Agreements were “revised prior to presentation without
[Walter’s] knowledge or consent[.]” Id.21
We discern from the pleadings that Executor has met his burden under
Rule 3.3 to generally aver the affirmative defense of undue influence.
Nevertheless, even if we were to consider undue influence as a form of fraud
that must be pled with particularity, we would still conclude that Executor
satisfied this requirement, as the pleadings contain sufficiently detailed
allegations to allow Appellants to prepare a defense and to convince this Court
that the averments are not mere artifice. See In re Estate of Schofield,
477 A.2d 473, 477 (Pa. 1984) (“In satisfaction of the particularity requirement
we have required that two conditions must always be met: the pleadings must
adequately explain the nature of the claim to the opposing party so as to
permit him to prepare a defense, and they must be sufficient to convince the
court that the averments are not merely subterfuge.” (citing Bata v. Central-
Penn National Bank of Philadelphia, 224 A.2d 174, 179 (Pa. 1966)).
Additionally, we reiterate that, to raise a claim of undue influence,
Executor must only allege facts that if proven would establish the existence of
____________________________________________
21 We observe that Executor’s responsive pleadings also contain allegations
which, arguably, could establish that Walter suffered from a weakened
intellect and that Mark would ultimately benefit from the appointment of
Successor Trustees under the terms of the Modification Agreements.
However, as we determined supra that Executor must only establish the
existence of a confidential relationship in order to shift the burden to
Appellants to prove that the Modification Agreements were entered into free
of any undue influence, we need not recount these averments here. See
Yenchi, supra; Frowen, supra; Balogh, supra.
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a confidential relationship. See Yenchi, supra. Instantly, Executor claims
that he has pled sufficient facts to establish a confidential relationship between
Walter and either Susan or Mark. Executor’s Brief at 23. First, he states that
through her representation of Mark as his legal counsel regarding the
modification of the Trusts, Susan exploited their position as Walter’s beloved
children. Id. at 24. She improperly contacted Walter directly regarding the
proposed modifications, despite the fact that he was represented by counsel,
and she arranged for a signing of the documents without Walter’s attorney
present. Id. Moreover, Susan and Mark abused their familial relationships
by not allowing Walter to read the documents before signing them. Id.
Executor argues:
Reasonably, it can also be inferred from the totality of these
allegations that Susan and Mark’s position as [Walter’s] children
afforded a level of trust and/or reliance. [Walter] permitted
[Susan] ex-parte contacts, despite having an attorney in place to
represent him, likely because she was his daughter. [Walter] also
allowed [Susan and Mark] into his home when he was ill and
without his attorney, with a document that they refused to let him
read, and that he later learned did not express his intent.
Id. See also id. at 25 (“Susan’s position as [Walter’s] daughter provided her
access to [him] and the ability to bypass his counsel on this issue.”).
Appellants dispute Executor’s claim that a confidential relationship has
been established, stating that Executor failed to “set forth any facts to suggest
the parties did not deal on equal terms or which otherwise establish a
confidential relationship.” Appellant’s Brief at 39 (internal quotation marks
and citation omitted). Additionally, they note that Susan was acting as Mark’s
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attorney, not Walter’s, and that the mere existence of a parent-child
relationship has never been sufficient to establish a confidential relationship.
Id. (citation omitted).
As the parties clearly dispute whether a confidential relationship existed
between Walter, Susan, and Mark, neither party is entitled to judgment on the
pleadings at this juncture. See John T. Gallaher Timber Transfer, 932
A.2d at 967 (“Judgment on the pleadings is proper only where the pleadings
evidence that there are no material facts in dispute such that a trial by jury
would be unnecessary.”) (citation omitted). Due to the orphans’ court’s prior
disposition in this matter, we observe that it never made any factual findings
as to whether Walter was unduly influenced into signing the Modification
Agreements. See OCOO at 14. See also Rebidas, 677 A.2d at 333 (noting
that the existence of a confidential relationship is generally a question of fact
to be established by the evidence). Accordingly, we affirm the orphans’ court’s
denial of Appellants’ motion for judgment on the pleadings on the grounds
that genuine issues of material fact are in dispute,22 we vacate its denial of
Appellants’ petition for declaratory judgment as premature, and we remand
this matter for the completion of any outstanding discovery and the scheduling
of an evidentiary hearing.23
____________________________________________
22 See Grabowski, supra; In re Estate of Rood, supra.23 In the event the orphans’ court determines that Walter was not subjected
to undue influence, it must then consider whether the Modification
(Footnote Continued Next Page)
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Finally, we reexamine Executor’s claim that the orphans’ court erred in
sua sponte determining the Estate is not a proper participant in these
proceedings, as it does not have an ongoing interest in the Trusts. Executor’s
Brief at 13. The essence of his argument is that in the event this Court allows
the Modification Agreements to stand, the error could result in the loss of the
Estate’s defense and its ability to present evidence to support its claims of
undue influence going forward. Id. at 16-17.
In its supplemental Rule 1925(a) opinion, the orphans’ court noted that
the parties waived the issue of the Estate’s standing in this matter, and it
acknowledged that Pennsylvania law prohibits a court from raising the issue
of standing sua sponte. Orphans’ Court Supplemental Opinion (“OCSO”),
10/14/20, at 3 (citing In re Nomination Petition of DeYoung, 903 A.2d
1164, 1168 (Pa. 2006); Pa.R.A.P. 302(a) (“Issues not raised in the lower court
are waived and cannot be raised for the first time on appeal.”)).
Notwithstanding, due to its disposition at the time regarding the validity of the
Modification Agreements and its determination that it need not address the
issue of undue influence, the orphans’ court opined that its ruling regarding
the Estate’s lack of standing in this matter constituted harmless error. Id. at
2. We are constrained to disagree.
____________________________________________
Agreements are invalid for failure to meet the adequate representation
requirements of 20 Pa.C.S. §§ 7723 and 7725, as raised in Executor’s New
Matter. See Executor’s Answer in Opposition to Petition for Declaratory
Judgment at 22 ¶ 5. See also OCOO at 2 (acknowledging that, in light of its
holding regarding the extension of Taylor to this matter, the orphans’ court
did not previously address this issue).
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As a result of our Supreme Court’s determination that Taylor could not
be extended to the instant matter, as well as our disposition regarding the
issue of undue influence, we cannot deem the orphans’ court’s finding that the
Estate lacked standing to be merely harmless error, as its decision would
effectively prevent the Estate from presenting evidence in pursuit of its undue
influence claim going forward. Hence, we vacate, in part, the orphans’ court’s
June 16, 2020 decision to the extent that it concluded the Estate is not a
proper participant to the instant proceedings.
In summary, we affirm in part and vacate in part the orphans’ court’s
June 16, 2020 order, and we remand with instructions consistent with this
opinion.
Order affirmed in part and vacated in part. Case remanded. Jurisdiction
relinquished.
Judgment Entered.
Joseph D. Seletyn, Esq.
Prothonotary
Date: 8/8/2023
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