Trust Under Deed of Walter G, Appeal of:Garrison,M ( 2021 )

J-A13008-21
NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37
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. 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.*
MEMORANDUM BY BENDER, P.J.E.: FILED SEPTEMBER 27, 2021
Mark R. Garrison, Christopher Garrison, Lindsey Garrison, Liza Garrison,
and Brittany Garrison (collectively “Appellants” or “Beneficiaries”) appeal from
the order entered on June 16, 2020, by the Montgomery County orphans’
court, which denied their petition for declaratory judgment and motion for
judgment on the pleadings. Barton J. Winokur, executor of the Estate of
Walter R. Garrison, deceased (“Executor”), filed cross-appeals of the orphans’
court’s June 16, 2020 order, which declared sua sponte that the Estate of
Walter R. Garrison, deceased, does not have an ongoing interest in the trusts
at issue in this matter and is, therefore, not a proper participant to these
proceedings.1 After careful review, we affirm.
The orphans’ court provided the following relevant factual and
procedural background of this matter in its June 16, 2020 opinion:
On July 19, 2019, Mark R. Garrison (“Mark” or “Petitioner”) filed a
petition for declaratory judgment to determine the validity of
modifications to three irrevocable trusts created for Mark’s benefit
by Mark’s father, Walter R. Garrison (“Walter” or “Settlor”): the
Trust under Deed of Walter R. Garrison, dated December 21,
1967, Sprinkle Trust #1 f/b/o Mark R. Garrison [No. 1992-
____________________________________________
* Former Justice specially assigned to the Superior Court.
1 By per curiam order dated September 23, 2020, this Court consolidated sua
sponte the appeals at Nos. 1429 EDA 2020, 1430 EDA 2020, 1431 EDA 2020,
1461 EDA 2020, 1498 EDA 2020, and 1562 EDA 2020. Mark R. Garrison,
Christopher Garrison, Lindsey Garrison, Liza Garrison, and Brittany Garrison
were designated as Appellants/Cross-Appellees, and Barton J. Winokur,
executor of the Estate of Walter R. Garrison, deceased, was designated as
Appellee/Cross-Appellant. See Per Curiam Order, 9/23/20 (single page).
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X1509]; the Trust under Deed of Walter R. Garrison, dated
October 9, 1970, Sprinkle Trust #2 f/b/o Mark R. Garrison [No.
1992-X1518]; and the Trust under Deed of Walter R. Garrison,
dated June 18, 1973, Sprinkle Trust #3 f/b/o Mark R. Garrison
[No. 1992-X1519] (respectively, “Sprinkle Trust #1[,”] “Sprinkle
Trust #2[,”] and “Sprinkle Trust #3[,”] and collectively, “Trusts”
or “Garrison Trusts”). The trust modifications, if valid, would allow
… [B]eneficiaries to remove and replace the trustees at their
discretion after Walter’s death. Walter died [on] February 24,
2019.
The petition also asks the court to confirm the appointment of
successor trustees, who were appointed by … [B]eneficiaries
pursuant to the trust modifications.[2]
On November 8, 2019, Mark filed a motion for judgment on the
pleadings [at Nos. 1992-X1519, 1992-X1518, and 1992-X1509,]
seeking essentially the same relief, asserting that he is entitled to
judgment as a matter of law, that the three agreements to modify
[the T]rusts entered into between Settlor and … [B]eneficiaries
[(“Modification Agreements”)] are enforceable, and that under the
terms of the modifications, the successor trustees appointed after
Walter’s death should be confirmed.
…
Responsive pleadings, including answers with new matter, were
filed to both the petition and the motion by Barton J. Winokur,
Lawrence C. Karlson, Donald W. Garrison, and Michael J. Emmi[,]
as co-trustees of one or more of the Trusts (the “Independent
Trustees”)[,] and by Barton J. Winokur, as executor of Walter’s
estate.
____________________________________________
2 On September 5, 2019, Mark’s children, Christopher, Lindsay, Liza, and
Brittany Garrison, 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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Orphans’ Court Order and Opinion (“OCOO”), 6/16/20, at 1-2 (unnecessary
capitalization omitted).
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 Trust under
Agreement of Edward Winslow Taylor, 164 A.3d 1147 (Pa. 2017), 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. Thus, the orphans’ court requested supplemental briefing
from the parties on this issue. Id. at 2. The court subsequently 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. Accordingly, the orphans’ court did not
consider the memoranda submitted on behalf of the estate in its analysis of
the Taylor issue. Id.
After consideration of the foregoing pleadings filed by all parties and
Appellants’ supplemental brief on the Taylor issue, the orphans’ court issued
an order dated June 16, 2020, which denied Appellants’ petition for a
declaratory judgment and the motion for judgment on the pleadings. Id. at
15.3 The order specifically declared that “the Modification Agreements are
____________________________________________
3 The June 16, 2020 order was entered in the Montgomery County Court of
Common Pleas Orphans’ Court at docket nos. 1992-X1519, 1992-X1518, and
1992-X1509.
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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 the successor co-trustees is a
nullity.” Id. The order further stated that the current 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.
On July 14, 2020, Appellants filed timely notices of appeal at docket nos.
1992-X1519, 1992-X1518, and 1992-X1509,4, 5 followed by timely, court-
ordered Pa.R.A.P. 1925(b) concise statements of errors complained of on
appeal. On July 27, 2020, the Executor filed timely notices of cross-appeal,
pursuant to Pa.R.A.P. 903(b), at each of the foregoing docket numbers, and
he complied with the orphans’ court’s Rule 1925(b) order.
Due to inconsistencies in the lower court’s dockets with respect to
whether notice of the June 16, 2020 order was properly provided, this Court
____________________________________________
4 See Commonwealth v. Walker, 185 A.3d 969, 977 (Pa. 2018)
(determining that “the proper practice under Pa.R.A.P. 341(a) is to file
separate appeals from an order that resolves issues arising on more than one
docket”).
5 We note that 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).
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issued a rule to show cause directing the Montgomery County prothonotary to
provide the parties with Rule 236 notice of the orders from which Appellants
appeal, and to indicate on the docket the date(s) on which such notice was
given. Per Curiam Order, 9/25/20, at 1-2. See Pa.R.C.P. 236(a)(2)
(providing that the prothonotary “shall immediately give written notice of the
entry of … any other order or judgment to each party’s attorney of record or,
if unrepresented, to each party[,]” and that the notice shall include a copy of
the order or judgment); Pa.R.C.P. 236(b) (“The prothonotary shall note in the
docket the giving of the notice[.]”). See also Frazier v. City of
Philadelphia, 735 A.2d 113, 115 (Pa. 1999) (determining that “an order is
not appealable until it is entered on the docket with the required notation that
appropriate notice has been given”). The prothonotary failed to timely provide
this Court with documentation reflecting that proper Rule 236 notice had been
given.6 Nevertheless, this Court discharged the rule, without prejudice for the
merits panel to revisit the jurisdictional issue. Per Curiam Order, 11/12/20,
at 1-2.
____________________________________________
6 We acknowledge that the Montgomery County orphans’ court issued
certificates of service, on October 23, 2020, in case nos. 1992-X1519, 1992-
X1518, and 1992-X1509, indicating that it served “the attached document(s)”
on “[a]ll counsel and unrepresented parties” by mail to the addresses noted
on the record. Attached to each certificate was merely a copy of the
corresponding docket, labeled “List of Record Documents Sent to All Counsel
and Unrepresented Parties[.]” To the extent that the certificates of service
were intended to constitute a response to the rule issued by this Court, we
note that said responses were untimely and failed to provide any further
clarification as to whether Rule 236 notice of the June 16, 2020 order was
provided.
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Hence, before we consider the merits of the parties’ issues raised on
appeal, we first determine whether this appeal is properly before us. “The
appealability of an order goes directly to the jurisdiction of the Court asked to
review the order.” Stahl v. Redcay, 897 A.2d 478, 485 (Pa. Super. 2006)
(internal brackets and citation omitted). Initially, we note that it is the
prothonotary’s docketing of the Rule 236 notice that triggers the
commencement of the appeal period.
Rule of Appellate Procedure 108(b) designates the date of entry
of an order as “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.C.P. 236(b).” Pa.R.A.P. 108(b). Our Supreme
Court has held that “an order is not appealable until it is entered
on the docket with the required notation that appropriate notice
has been given.” Frazier…, 735 A.2d [at] 115…. Where there is
no indication on the docket that Rule 236(b) notice has been
given, then the appeal period has not started to run. Id. … Our
Supreme Court has expressly held that this is a bright-line rule,
to be interpreted strictly. That the appealing party did indeed
receive notice does not alter the rule that the 30-day appeal
period is not triggered until the clerk makes a notation on the
docket that notice of entry of the order has been given. Id.In re L.M., 923 A.2d 505, 508-09 (Pa. Super. 2007).
Our review of the record in the present matter reveals that the
corresponding docket entries for the June 16, 2020 order, entered at docket
nos. 1992-X1518 and 1992-X1509, indicate the order was “docketed and
sent” on June 17, 2020. See Docket Entry 36.6 at Docket No. 1992-X1518
(“Opinion and Order Sur Petition for Declaratory Judgment and Motion for
Judgment on the Pleadings (J. Murphy)[.] This document was docketed and
sent on 06/17/2020[.]”); Docket Entry 37.7 at Docket No. 1992-X1509
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(same). The corresponding docket entry entered at docket no. 1992-X1519,
however, contains no such notation. See Docket Entry 71.5 at Docket No.
1992-X1519 (“Opinion and Order Sur Petition for Declaratory Judgment and
Motion for Judgment on the Pleadings (J. Murphy)[.]”). Moreover, we note
that all parties in this matter are represented by counsel; thus, pursuant to
Rule 236, the prothonotary was required to provide each party’s counsel of
record with notice of the entry of the June 16, 2020 order. Counsel for each
party entered their appearance in each of the related cases and, in accordance
with Pa.R.C.P. 1012, provided the address at which counsel may be served.
We have confirmed that each docket reflects the same addresses for the
parties’ respective counsel.
In determining whether proper Rule 236 notice was provided in this
matter, we remain cognizant of the decision in Carr v. Michuck, 234 A.3d
797 (Pa. Super. 2020), in which this Court stated:
A prothonotary should make a notation that specifically states, for
example, “Rule 236 notice provided on” followed by the date the
notice was given, in order to comply with the notification mandate
and procedural requirement of Rule 236. Anything short of such
a notation constitutes a failure by the prothonotary to comply with
the notification mandate and procedural requirement of Rule 236,
and is a breakdown in court operations.
Carr, 234 A.3d at 805-06 (emphasis added).
Guided by our decision in Carr, we recently addressed the issue of
whether a docket entry provides sufficient information for this Court to
ascertain whether the prothonotary provided immediate notice of the entry of
an order, as required by Rule 236. See Smithson v. Columbia Gas of
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PA/NiSource, 2021 WL 3483301 (Pa. Super. August 9, 2021). In Smithson,
“immediately following text indicating the prothonotary docketed the order,
the prothonotary wrote, ‘Sent to [parties’ counsel.]’” Id. at *3. The
Smithson Court opined that based on the context of the docket entry, the
use of the term “sent to” immediately following the text indicating the order
had been docketed, was sufficient “to infer logically that the note references
the prothonotary’s provision of notice pursuant to Rule 236.” Id. It
emphasized, however, that Rule 236 makes clear that “the prothonotary must
note on the docket the date the parties are given notice of the order.” Id.
(quoting Fischer v. UPMC Northwest, 34 A.3d 115, 121 (Pa. Super. 2011)
(emphasis added). “The date the notice was sent is crucial.” Id.7
Consequently, the Smithson Court stated that, “even if it were to infer the
____________________________________________
7 The Court explained:
Rule 236 requires the notice to be immediate. See Pa.R.C.P.
236(a) (“The prothonotary shall immediately give written notice
of the entry of … any order[.]”). Because the appellate clock starts
running once the prothonotary records the giving of the Rule 236
notice in the docket, appellate courts need to have a clear,
verifiable way to determine that Rule 236 notice was indeed
provided. See Carr, 234 A. 3d at 805 (quoting Frazier, 735 A.2d
at 115) (“This procedural requirement serves ‘to promote clarity,
certainty and ease of determination, so that an appellate court will
immediately know whether a pleading was filed in a timely
manner, thus eliminating the need of a case-by-case
determination.’”)[)]; Fischer, 34 A.3d at 122 (“[T]he definitive
assignment of responsibility [to the prothonotary] and the
requirement of a record of performance of that responsibility are
intended to avoid ambiguity and speculation.”).
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notation on the docket indicates the prothonotary sent a Rule 236 notice to
the parties, [the docket entry] is ambiguous [as to] whether the prothonotary
sent the notice to the parties on the same day the order was entered on the
docket[,]” because of the prothonotary’s failure to note the date on which the
notice was provided. Accordingly, it was constrained to conclude there had
been a breakdown in court operations. Id. at *4.
Instantly, we note that unlike Smithson, the docket entries at docket
nos. 1992-X1518 and 1992-X1509 clearly indicate the date on which notice of
the June 16, 2020 order was sent. Thus, not only are we able to infer logically
that the docket entry references the prothonotary’s sending of the requisite
Rule 236 notice, see id. at *3, we are also able to state “with certainty and
confidence” the date on which such notice was given. See Carr, 234 A.3d at
806 (noting that in order to apply the bright-line rule announced in Frazier
and to determine when the appeal period has begun to run, the Court needs
to know “with certainty and confidence” when the appellate period
commenced). Based on the foregoing, we deem the record regarding docket
nos. 1992-X1518 and 1992-X1509 to be sufficient to discern that proper
notice of the June 16, 2020 order was provided to all parties’ counsel, on June
17, 2020, in compliance with Rule 236.8
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8 To avoid confusion and/or uncertainty in future cases, we emphasize the
importance of the prothonotary’s including in its docket entries reference to
“Rule 236 notice” and the date on which such notice was provided, in order to
ensure compliance with the notification requirements of Pa.R.C.P. 236. See
Carr, 234 A.3d at 805-06.
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Regarding docket no. 1992-X1519, however, the prothonotary’s failure
to note on the docket that Rule 236 notice was provided and the date on which
it was sent plainly constitutes a breakdown in court operations. See Fischer,
34 A.3d at 120 (determining there was an administrative breakdown where
the prothonotary failed to comply with the requirements of Rule 236).
Nevertheless, given the specific circumstances of this matter, in which
Appellants appeal from a single order entered on three separate dockets, in
three related cases involving the same parties, which have been consolidated
sua sponte on appeal, and having already determined that proper Rule 236
notice was given in the other two cases, we discern that it would be a waste
of judicial resources to quash the appeal at no. 1992-X1519 and remand the
matter merely for the prothonotary to provide duplicative notice of the June
16, 2020 order. Rather, in the interest of judicial economy, and in keeping
with the spirit of Johnston the Florist, Inc. v. TEDCO Const. Corp, 657
A.2d 511 (Pa. Super. 1995), recognizing that appellate courts may “regard as
done that which ought to have been done,” see id. at 514-15 (citation
omitted), we deem the requisite Rule 236 notice to also have been provided
in this case, on June 17, 2020.9
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9 We direct the Montgomery County prothonotary to make a notation at docket
no. 1992-X1519 that Rule 236 notice was given on June 17, 2020.
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Having determined that this Court possesses appellate jurisdiction over
the instant appeal, we now turn to the merits of the parties’ claims. Herein,
Appellants raise 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 trustees by a majority of beneficiaries 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 presents 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).
As we begin our review of the foregoing claims, we remain mindful of
the following:
“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.”
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In re Shoemaker, 115 A.3d 347, 354 (Pa. Super. 2015) (quoting
In re Estate of Whitley, 50 A.3d 203, 206 (Pa. Super. 2012)
(citation omitted)). Because the orphans’ court sits as the fact-
finder, it determines the credibility of the witnesses, and on
review, we will not reverse the orphans’ court’s credibility
determinations absent an abuse of discretion. Id. at 354-[]55
(citation omitted). “However, we are not constrained to give the
same deference to any resulting legal conclusions.” Id. at 355
(quoting Whitley, 50 A.3d at 207 (citations omitted)). “The
orphans’ court decision will not be reversed unless there has been
an abuse of discretion or a fundamental error in applying the
correct principles of law.” Id. (quoting Whitley, 50 A.3d at 207
(citation omitted)).
In re Cohen, 188 A.3d 1208, 1210-11 (Pa. Super. 2018) (some brackets
omitted).
Additionally, we note our well-settled standard of review for the grant
or denial of judgment on the pleadings:
Entry of judgment on the pleadings is permitted under
Pennsylvania Rule of Civil Procedure 1034, which provides that
“after the pleadings are closed, but within such time as not to
unreasonably delay trial, any party may move for judgment on
the pleadings.” Pa.R.C.P. 1034(a). A motion for judgment on the
pleadings is similar to a demurrer. It may be entered when there
are no disputed issues of fact and the moving party is entitled to
judgment as a matter of law. In determining if there is a dispute
as to facts, the court must confine its consideration to the
pleadings and relevant documents. On appeal, we accept as true
all well-pleaded allegations in the complaint.
On appeal, our task is to determine whether the trial court’s ruling
was based on a clear error of law or whether there were facts
disclosed by the pleadings which should properly be tried before
a jury or by a judge sitting without a jury.
Neither party can be deemed to have admitted either
conclusions of law or unjustified inferences. Moreover, in
conducting its inquiry, the court should confine itself to the
pleadings themselves and any documents or exhibits
properly attached to them. It may not consider inadmissible
evidence in determining a motion for judgment on the
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pleadings. Only when the moving party’s case is clear and
free from doubt such that a trial would prove fruitless will
an appellate court affirm a motion for judgment on the
pleadings.
Consolidation Coal Co. v. White, 875 A.2d 318, 326 (Pa. Super. 2005)
(some citations omitted).
Instantly, Walter, along with his son, Mark, and Walter’s four adult
grandchildren (Christopher, Lindsey, Liza, and Brittany), entered into
Modification Agreements, which were effective August 18, 2017. These
agreements specifically amended the terms of the Trusts regarding the
appointment of successor trustees. Appellants’ Brief at 16. The Trusts, as
written in 1967, 1970, and 1973, provide in relevant part:
B. If an individual trustee other than my son resigns or dies during
the lifetime of the settlor, the settlor shall have the power
exercisable within ninety days of such death or resignation to
designate a successor trustee other than himself by any writing.
C. If the settlor is not living or if the settlor fails to make such a
designation within ninety days of the death or resignation of a
trustee, each trustee appointed by the settlor shall have the power
to designate an individual successor for himself by a writing.
OCOO at 3. The Trust agreements do not expressly provide Beneficiaries with
any power to remove Independent Trustees. Id.The Modification Agreements provide, in relevant part:
Following the settlor’s death or incapacity, a majority of the sui
juris permissible income beneficiaries of a trust held hereunder
(excluding the Trustees of an Income Accumulation Trust under
Article Second) may at any time remove, with or without cause,
any Independent Trustee of such trust (whether a bank or trust
company or an individual Independent Trustee) and may appoint
in his, her[,] or its place another Independent Trustee, or may
leave such office vacant.
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Id. at 4. “Following Walter’s death, by Removal and Appointment of Trustees
effective April 27, 2019, Mark and the other current income beneficiaries
purportedly removed the Independent Trustees and replaced them with three
successor trustees.” Id.
In their first claim, Appellants assert that the orphans’ court erred in
refusing to enforce the Modification Agreements and in declaring that the
removal of Independent Trustees was invalid. Appellants’ Brief at 16. They
maintain that section 7740.1(a) of the Pennsylvania Uniform Trust Act
(“UTA”), 20 Pa.C.S. §§ 7701-7799.3, does not require court approval for a
modification made with the consent of the settlor and the beneficiaries to be
effective, and that the Taylor opinion does not preclude a settlor and
beneficiaries from modifying a trust to allow for the replacement of trustees
pursuant to section 7740.1(a). See id.; Appellants’ Brief at 16-24.
Conversely, Appellees argue that:
[I]n Pennsylvania, trustees must be removed in accordance with
the dictates of [section] 7766(b) and … a trust agreement may
not be modified pursuant to [section] 7740.1 to provide
beneficiaries of a trust with the power to remove a trustee without
court approval. [Appellees] contend that Taylor holds that a
modification under [section] 7740.1, without regard to subsection,
is invalid, even when all internal requirements of [section] 7740.1
are fulfilled, where the modification purports to permit the
removal or replacement of trustees by beneficiaries without court
approval. [Appellees] maintain that Taylor holds, without
qualification or exception, that court approval in accordance with
[section] 7766 is required to accomplish the removal and
replacement of trustees.
OCOO at 4-5.
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As the orphans’ court so aptly stated: “The question boils down to
whether a modification that alters a trust to permit the removal and
replacement of trustees is a trust modification or a removal and replacement
of a trustee.” Accordingly, we reproduce the following relevant sections of the
UTA:
§ 7740.1. Modification or termination of noncharitable
irrevocable trust by consent
(a) Consent by settlor and beneficiaries.—A noncharitable
irrevocable trust may be modified or terminated upon
consent of the settlor and all beneficiaries even if the
modification or termination is inconsistent with a material
purpose of the trust. A settlor’s power to consent to a trust’s
modification or termination may be exercised by a guardian,
an agent under the settlor’s general power of attorney or an
agent under the settlor’s limited power of attorney that
specifically authorizes that action. Notwithstanding
Subchapter C (relating to representation), the settlor may
not represent a beneficiary in the modification or
termination of a trust under this subsection.
(b) Consent by beneficiaries with court approval.—A
noncharitable irrevocable trust may be modified upon the
consent of all the beneficiaries only if the court concludes
that the modification is not inconsistent with a material
purpose of the trust. A noncharitable irrevocable trust may
be terminated upon consent of all the beneficiaries only if
the court concludes that continuance of the trust is not
necessary to achieve any material purpose of the trust.
***
(d) Consent by some beneficiaries with court approval.—
If not all the beneficiaries consent to a proposed
modification or termination of the trust under subsection (a)
or (b), the modification or termination may be approved by
the court only if the court is satisfied that:
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(1) if all the beneficiaries had consented, the trust could
have been modified or terminated under this section;
and
(2) the interests of a beneficiary who does not consent
will be adequately protected.
20 Pa.C.S. § 7740.1.
§ 7766. Removal of trustee
(a) Request to remove trustee; court authority.—The
settlor, a cotrustee or a beneficiary may request the court
to remove a trustee or a trustee may be removed by the
court on its own initiative.
(b) When court may remove trustee.—The court may
remove a trustee if it finds that removal of the trustee best
serves the interests of the beneficiaries of the trust and is
not consistent with a material purpose of the trust, a
suitable cotrustee or successor trustee is available and:
(1) the trustee has committed a serious breach of trust;
(2) lack of cooperation among cotrustees substantially
impairs the administration of the trust;
(3) the trustee has not effectively administered the trust
because of the trustee’s unfitness, unwillingness or
persistent failures; or
(4) there has been a substantial change of circumstances.
A corporate reorganization of an institutional trustee,
including a plan of merger or consolidation, is not itself
a substantial change of circumstances.
20 Pa.C.S. § 7766(a), (b).
The interplay between sections 7740.1 and 7766 of the UTA was
considered in Taylor. Therein, the Court treated the question of whether
beneficiaries of a trust may amend the trust to allow them to remove a trustee
without judicial approval as one of statutory interpretation and concluded that
when sections 7740.1 and 7766 are read together, ambiguities exist. Taylor,
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164 A.3d at 1155 (“We must read all sections of a statute ‘together and in
conjunction with each other,’ construing them ‘with reference to the entire
statue.’”) (citing 1 Pa.C.S. § 1922(2); Housing Auth. of the County of
Chester v. Pa. State Civil Serv. Comm., 730 A.2d 935, 945 (Pa. 1999)).
“We must presume that in drafting the statute, the General Assembly intended
the entire statute, including all of its provisions to be effective.” Id. at 1157
(citing 1 Pa.C.S. § 1922). “Importantly, this presumption requires the
statutory sections are not to be construed in such a way that one section
operates to nullify, exclude or cancel another, unless the statute expressly
says so.” Id. (citations omitted).
The Taylor Court observed:
Permitting beneficiaries to modify a trust agreement pursuant to
section 7740.1 to add a portability clause would have precisely
this effect, namely to “nullify, exclude or cancel” the effectiveness
of section 7766. To obtain modification of the trust agreement
under section 7740.1 to permit beneficiaries to remove and
replace the trustee—at any time thereafter (including on the day
of approval of the modification), at their discretion, and without
cause or judicial approval—the beneficiaries need show only that
modification would not be inconsistent with a material purpose of
the trust. 20 Pa.C.S. § 7740.1(b). In significant contrast, to
remove and replace a trustee under section 7766, beneficiaries
have to demonstrate, by clear and convincing evidence to the
satisfaction of the [o]rphans’ [c]ourt, that: (1) removal serves the
best interest of the beneficiaries of the trust, (2) removal is not
inconsistent with a material purpose of the trust, and (3) the
beneficiaries have identified a suitable successor trustee. 20
Pa.C.S. § 7766(b). In addition, beneficiaries also have to show
that the current trustee (1) has committed a serious breach of
trust, (2) has demonstrated a lack of cooperation among
cotrustees substantially impairing the administration of the trust,
(3) has not effectively administered the trust as a result of
unfitness, unwillingness or persistent failures, or (4) there has
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been a substantial change of circumstances (not including a
corporate reorganization). 20 Pa.C.S. § 7766(b)(1)-(4).
Beneficiaries seeking to remove and replace a trustee pursuant to
section 7766 thus have substantial evidentiary hurdles to
overcome, and the [o]rphans’ [c]ourt must make numerous
findings of fact and conclusions of law…. Modification under
section 7740.1 entails no similar detailed analysis, as that
provision imposes no comparable evidentiary requirements. As a
result, beneficiaries seeking to remove and replace a trustee can
totally avoid section 7766, as they may accomplish the same end
much more easily by modification under section 7740.1.
Id. at 1157-58.
The Taylor Court further considered prior Pennsylvania law and the
legislative history of section 7766, noting 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.” Id.
at 1158 (citations omitted). The Court recognized that the enactment of
section 7766 reflected the General Assembly’s intent to retain these principles
in connection with the removal and replacement of a trustee. Id. at 1159.10
In fact, the legislative history of section 7766 reflects a refusal by the General
____________________________________________
10 As the Court explained:
In section 7766, the General Assembly retained the requirement
of judicial approval, and three of its four provisions still demand a
showing of fault or negligence by the current trustee. 20 Pa.C.S.
§ 7766(b)(1)-(3). While section 7766 includes one no-fault
provision permitting trustee replacement upon proof of a
“substantial change in circumstances,” even this subsection has
been restricted in its application to preclude corporate
reorganizations, mergers, or consolidations from constituting such
a substantial change. 20 Pa.C.S. § 7766(b)(4).
Id. (footnote omitted).
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Assembly to include a provision that would permit the beneficiaries of a trust
to remove a trustee “whether or not the trustee was at fault.” Id.
Finally, the Taylor Court considered the Uniform Law Comment to
section 7740.1 to resolve any remaining doubt as to whether the power to
modify trust terms under section 7740.1 may be used to bypass the more
onerous requirements for trustee removal in section 7766. Id.11
The UTC comment to section 7740.1 provides, in relevant part:
Subsection (b), similar to Restatement Third but not
Restatement Second, allows modification by beneficiary
action. The beneficiaries may modify any term of the trust
if the modification is not inconsistent with a material
purpose of the trust. Restatement Third, though, goes
further than this Code in also allowing the beneficiaries to
use trust modification as a basis for removing the trustee if
removal would not be inconsistent with a material purpose
of the trust. Under the Code, however, [s]ection 706
is the exclusive provision on removal of trustees.
Section 706(b)(4) recognizes that a request for removal
upon unanimous agreement of the qualified beneficiaries is
a factor for the court to consider, but before removing the
trustee the court must also find that such action best serves
the interests of all the beneficiaries, that removal is not
inconsistent with a material purpose of the trust, and that a
suitable cotrustee or successor trustee is available.
20 Pa.C.S. § 7740.1, Uniform Law Comment (emphasis added).
____________________________________________
11 “The prefatory comment to the UTA states that the sections of the UTA that
are substantially similar to their UTC counterparts are indicated by a reference
to the UTC section number in the UTA section headings, and that the UTC
comments for these designated provisions are applicable to the extent of the
similarity.” Id. at 1159-60 (internal quotation marks and citation omitted).
The Court observed that the heading for section 7740.1 contains a reference
to the corresponding UTC section number (UTC 411) and, thus, concluded that
it could “consider the UTC’s Uniform Law Comment as evidence of the General
Assembly’s intent with respect to the proper application and scope of section
7740.1.” Id. at 1160.
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Id. at 1160. By enacting section 7740.1 of the UTA, in light of this comment,
the Taylor Court 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 (emphasis added).
Instantly, the orphans’ court noted that, just “[a]s the Taylor trust did
not expressly provide the beneficiaries with any power to remove the
corporate trustee, the Garrison Trusts [also] did not expressly provide …
[B]eneficiaries with any power to remove … Independent Trustees.” OCOO at
10. Thus, the court 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.
To allow a modification pursuant to [section] 7740.1 that provides
for removal and replacement of a trustee, whether the
modification is made pursuant to the provisions of subsection (a),
(b), or (d), would render [section] 7766 meaningless. The Taylor
Court’s analysis and reasoning are equally applicable to any
modification of an irrevocable trust to permit for removal of
trustees. When adopting [section] 7766, the legislature did not
carve out an exception for modifications made under [section]
7740.1(a) and did not distinguish the application of [section] 7766
to [section] 7740.1(a) from its applicability to [section] 7740.1(b)
or (d). Likewise, 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
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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.
Id. at 11-12. The orphans’ court added: “While the Trusts theoretically could
be terminated with the consent of the settlor and all beneficiaries, what cannot
be done, even with the consent of the settlor and all beneficiaries, is to modify
the Trusts under [section] 7740.1(a) to override the requirements of [section]
7766 for removal of trustees.” Id. at 13. The court concluded that its
foregoing legal analysis was sufficient to deny both the petition for declaratory
judgment and motion for judgment on the pleadings. Id. at 14. We discern
no error of law or abuse of discretion in the orphans’ court’s analysis regarding
the validity of the Modification Agreements. Accordingly, we deem Appellants’
first claim to be meritless.
Next, Appellants assert that they were entitled to judgment on the
pleadings regarding Executor’s claim that the Modification Agreements were
the product of undue influence. Appellants’ Brief at 35. Executor alleges that
Walter was unduly influenced by his children, Mark and Susan Garrison, into
signing the Modification Agreements. More specifically, he asserts that Mark
and Susan “exerted enormous undue and unnecessary pressure and stress”
on the decedent following a “lengthy hospital stay” without permitting him to
read the documents, and that the decedent’s attorney was not present at the
time. Id. at 36 (citing Executor’s Answer and New Matter, 11/8/19, at 22-
23). Appellants claim they are entitled to judgment on the pleadings, as
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Executor failed to establish a claim for undue influence, “or in fact, any claim
which could invalidate the [Modification] Agreements.” Id. at 37.
In response to Appellants’ claims, the orphans’ court stated: “There
remain disputed questions of material fact concerning whether the Settlor’s
agreement to the purported modifications was obtained as a result of undue
influence[.]” OCOO at 14. While the court noted that the existence of such
questions of material fact would also preclude it from granting judgment on
the pleadings with respect to Appellants’ petition for declaratory judgment,12
it concluded that these questions “need not and cannot be decided at this
juncture[,]” in light of its holding that the Modification Agreements are invalid.
Id. at 14-15. We agree. In light of our disposition regarding the validity of
the Modification Agreements and our upholding of the orphans’ court’s denial
of the petition for declaratory judgment and motion for judgment on the
pleadings on that basis, we need not address Appellants’ claim regarding
Executor’s undue influence defense.
We now turn to the issues raised by Executor on cross-appeal. First,
Executor asserts that the orphans’ court erred when it sua sponte determined
that the Estate does not have an ongoing interest in the Trusts and, therefore,
is not a proper participant in these proceedings. Executor’s Brief at 13. He
further argues that such consideration of the Estate’s standing in this matter
____________________________________________
12 See John T. Gallaher Timber Transfer v. Hamilton, 932 A.2d 963, 967
(Pa. Super. 2007) (“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).
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constituted reversible error. Id. at 15. The crux 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.
The orphans’ court has since acknowledged, in its supplemental Rule
1925(a) opinion, that in reaching such conclusion, it effectively raised the
issue of standing sua sponte:
Upon further examination, the [c]ourt acknowledges the well-
settled case law in Pennsylvania that a court is prohibited from
raising the issue of standing sua sponte. In re Nomination
Petition of DeYoung, … 903 A.2d 1164, 1168 ([Pa.] 2006).
Neither Mark Garrison nor any other party raised the issue of the
Executor’s standing in the proceedings before this [c]ourt. Rule
302(a) of the Pennsylvania Rules of Appellate Procedure provides:
“Issues not raised in the lower court are waived and cannot be
raised for the first time on appeal.” Pennsylvania courts have
consistently held that the issue of standing may be waived by a
party “if not objected to at the earliest possible opportunity.”
Thompson v. Zoning Hearing Bd. Of Horshum Twp., 963 A.2d
622, 625 n.6 (Pa. [Cmwlth.] 2009). This [c]ourt acknowledges
that the issue of whether the Executor has standing cannot be
raised by the Court sua sponte, and observes that this issue was
waived by Mark Garrison’s failure to raise it in connection with the
proceedings to date.
Orphans’ Court Supplemental Opinion (“OCSO”), 10/14/20, at 3.
Nevertheless, the court asserts that its consideration of the Estate’s
standing in this matter resulted in harmless error. Id. at 3. It explained:
The [c]ourt’s decision not to consider the arguments of the
Executor is harmless error, as most of his arguments were ably
advanced by … [Independent T]rustees and were considered by
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the [c]ourt. With respect to whether the factual allegations in the
answers to the motion for judgment on the pleadings set forth a
claim to invalidate the [M]odificaton [A]greements as the product
of undue influence exercised upon Walter Garrison, … in light of
the [c]ourt’s holding, it was unnecessary to address this issue.
Id. at 2. We agree. Thus, we conclude that Executor is not entitled to any
relief on this claim.
Finally, Executor argues that this Court should affirm the orphans’
court’s denial of the petition for declaratory judgment and motion for
judgment on the pleadings on the grounds that questions of material fact exist
concerning whether the Modification Agreements were obtained as a result of
undue influence. Executor’s Brief at 18. In light of our disposition, we decline
to address this argument.
Accordingly, we affirm the orphans’ court’s June 16, 2020 order denying
Appellants’ petition for declaratory judgment and motion for judgment on the
pleadings.
Order affirmed.
Judgment Entered.
Joseph D. Seletyn, Esq.
Prothonotary
Date: 9/27/2021
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