In Re: The Estate of Butz, K.

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NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37
IN RE: ESTATE OF KARL E. BUTZ, IN THE SUPERIOR COURT OF
DECEASED PENNSYLVANIA
APPEAL OF: LORRI ZIMMERMAN
No. 3161 EDA 2015
Appeal from the Order Entered October 1, 2015
in the Court of Common Pleas of Monroe County Orphans' Court
at No(s): 26 O.C. 2013
BEFORE: FORD ELLIOTT, P.J.E., OTT, and FITZGERALD,* JJ.
MEMORANDUM BY FITZGERALD, J.: FILED OCTOBER 19, 2016
Appellant, Lorri Zimmerman, appeals from the judgment entered in
the Monroe County Court of Common Pleas, Orphans’ Court Division,
granting Participant’s, Jeffrey T. Butz’s, petition to compel the sale of real
estate. Appellant contends that the trial court erred by denying her petition
for the partial distribution of the real estate in question and instead ordering
the immediate sale of the property. We affirm.
The facts underlying this case are well-known to the parties. For
purposes of this appeal, we note the following pertinent background gleaned
from the trial court opinion and from the record. Appellant and Participant
are brother and sister and are the sole beneficiaries of the estate of Karl E.
Butz (“Decedent”). Decedent died testate on January 14, 2011. Initially,
Appellant and Participant served as co-executors but both ultimately
*
Former Justice specially assigned to the Superior Court.
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resigned and the trial court appointed James F. Marsh, Esq., as
Administrator.
The estate has remained open as the beneficiaries have long
attempted to resolve various disputes. After a failed attempt to sell
Decedent’s home, Administrator Marsh distributed the property in-kind to
Appellant and Participant. Also in Decedent’s estate is the large farm
property (“Farm”) here at issue. The Farm, having been in the Butz family
for generations, was given to Appellant and Participant in Decedent’s Will as
part of a general bequest. The Farm consists of approximately sixty-four
acres of unimproved land along Route 715 in Jackson Township, Monroe
County and was valued at $715,000 for Pennsylvania Inheritance Tax
purposes.
On March 21, 2014, Participant filed a petition to compel the sale of
the Farm. Appellant opposed the sale of the Farm, citing a possible border
dispute with a neighboring property, which could negatively impact the sale
price. On July 21, 2014, the trial court conducted a hearing concerning,
inter alia, the distribution of the Farm. Counsel for Appellant indicated that
a survey had been performed regarding the Farm but the results were
unavailable. N.T., 7/21/14, at 26. Counsel for Participant indicated that
there was no evidence of record regarding a current border dispute and any
title issue could be rectified through sale. Id. at 60. On July 25, 2014, the
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trial court issued an order continuing the matter for consideration of any
survey results and other alternatives for the Farm.
On April 29, 2015, Appellant filed a petition requesting that the Farm
be distributed in-kind equally to both beneficiaries. On September 22, 2015,
the trial court conducted a hearing to consider Appellant’s petition for
distribution of the Farm and Participant’s petition to sell the Farm. Appellant
testified and presented evidence of a survey performed during the
Decedent’s lifetime, which indicated that a border dispute might exist. N.T.,
9/22/15, at 22-23. At the hearing, Joseph Fisher, a certified real estate
appraiser, also testified. He stated that the value of the Farm had likely
decreased due to declining values of real estate generally in Monroe County.
Id. at 26-28. Fisher also opined that any boundary dispute, which could
reduce the total acreage of the Farm significantly, would result in a lower
market value at the time of sale. Id. at 34. Conversely, counsel for
Participant indicated that the most recent survey commissioned by the
Estate would show a lack of any border dispute. Id. at 70-71. However, the
survey was not entered into evidence.
On October 1, 2015, the trial court issued an order and opinion
denying Appellant’s petition for partial distribution and granting Participant’s
petition to compel the sale of the Farm. To that end, the court directed that
Administrator Walsh list the Farm for absolute auction, with no reserve,
within sixty days of the trial court’s order. The court cited 20 Pa.C.S. §
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3534, which permits the public sale of any estate property unable to be
divided, partitioned, or allotted. The trial court specifically noted that no
definitive expert testimony was presented at trial regarding the boundary
dispute and a survey, which was done by a reputable title company in
Monroe County, was not offered into evidence. Trial Ct. Op., 10/1/15, at 2-
3.
Further, the court found that the Farm could not be fairly divided
between the parties because the property is not physically contiguous. Id.
at 4. The court also specifically emphasized that the parties had
demonstrated the inability to cooperate. Id. Therefore, a joint distribution
of the Farm would likely devolve into a partition action that would, after
considerable expense, ultimately also result in the sale of the Farm. Id.
Thus, the court found that the public sale of the Farm would be the most
expeditious method to resolve the matter, while allowing either party to buy
out the other. Id. Further, any title issue could be resolved through the
sales process. Id.
Appellant filed the instant timely appeal and a court-ordered Pa.R.A.P.
1925(b) statement of matters complained of on appeal. The trial court
issued a responsive opinion, referencing the reasoning set forth in the
court’s October 1, 2015 opinion. Appellant sets forth the following issues for
review:
Did the lower Court abuse its discretion and commit an
error of law by granting the Petition to Compel the Sale of
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Real Estate filed by [Participant], and denying the Petition
for Partial Distribution brought by [Appellant] as:
1. any sale by absolute auction without reserve of the
Property is in contravention of the lower Court’s Order of
July 25, 2014 as no title search has been completed, and
thus, [Participant’s] Petition is violative of Pennsylvania
Supreme Court Orphans’ Court Rule 12.9;
2. any sale by absolute auction without reserve of the
Property will irreparably harm the Estate and result in a
sale price which is far less than the market value and thus
will result in waste and dissipation, particularly in light of
existing and unaddressed title issues impacting the
Property in contravention of the lower Court’s prior Order
of July 25, 2014;
3. the lower Court made its determinations without
sufficient reasons to discredit the unrebutted evidence of
[Appellant] and Fisher and as such, the Court abused its
discretion and committed an error of law, and the finding
necessary to support the Opinion and Order are not
supported by substantial evidence of record?
Appellant’s Brief at 8-9.
The crux of all three of Appellant’s arguments concern the possible
boundary dispute and whether such potential dispute would substantially
diminish the value received for the Farm at a public sale.1 Accordingly, we
1
To the extent that Appellant contends that Participant’s petition to compel
the sale of the Farm was deficient under Orphans’ Court Rule 12.9 because it
did not contain any reference to the possible boundary dispute, we hold such
argument to be waived. Appellant failed to present this issue to the trial
court in the over two years since Appellant’s petition was filed and also failed
to raise it in her Rule 1925(b) statement. It is axiomatic that “[i]ssues not
raised in the lower court are waived and cannot be raised for the first time
on appeal.” Pa.R.A.P. 302(a). Further, any issue not raised in a Rule
1925(b) statement is deemed waived. Pa.R.A.P. 2116(a); In re Estate of
Daubert, 757 A.2d 962, 963 (Pa. Super. 2000).
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discuss all of Appellant’s contentions together. Appellant specifically avers
that the trial court erred by granting Participant’s petition to compel the sale
of the Farm at a public auction because the potential boundary dispute will
diminish any sale proceeds leading to waste and dissipation of estate assets.
Appellant contends that the trial court’s July 25, 2014 order acknowledged
the boundary dispute by continuing the case for review of survey results and
other alternatives for the Farm. Further, Appellant argues that the trial
court failed to properly consider the testimony of Appellant and Fisher
regarding the boundary dispute and the resulting diminished value that the
Farm would receive at a public sale. We hold Appellant is not due relief.
We begin by noting our standard of review:
Our standard of review of the findings of an [O]rphans’
[C]ourt is deferential. When reviewing a decree entered
by the Orphans’ Court, this Court must determine whether
the record is free from legal error and the court’s factual
findings are supported by the evidence. Because the
Orphans’ Court sits as the fact-finder, it determines the
credibility of the witnesses and, on review, we will not
reverse its credibility determinations absent an abuse of
that discretion.
As an appellate court we can modify an Orphan’
Court decree only if the findings upon which the
decree rests are unsupported by competent or
adequate evidence or if there has been an error of
law, an abuse of discretion or a capricious disbelief of
competent evidence. The test to be applied is not
whether we, the reviewing court, would have
reached the same result, but whether a judicial
mind, after considering the evidence as a whole,
could reasonably have reached the same conclusion.
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In re Devoe, 74 A.3d 264, 267 (Pa. Super. 2013) (quotation marks and
citations omitted).
Further, it is axiomatic that “the Orphans’ Court Division has
mandatory and exclusive jurisdiction over the administration and distribution
of the real and personal property of decedents’ estates.” In re Ciuccarelli,
81 A.3d 953, 958 (Pa. Super. 2013) (citation omitted). Specifically,
regarding the sale of real estate by a fiduciary, it is well-settled that when
“we deal with the estate of a decedent, over which the court exercises a
supervisory control for the benefit of all interested, it is well recognized that
not only the power, but also the duty, exists to see that a fair value is
received.” McCullough’s Estate, 140 A. 865, 867 (Pa. 1928). Further, it is
beyond cavil “that fiduciaries entrusted with the administration of an estate
have a duty to exercise the upmost fairness in dealing with beneficiaries.”
Estate of Bosico, 412 A.2d 505, 507 (Pa. 1980).
Also pertinent is Section 3534 of the Probate Code, which provides for
the distribution of estate property as follows:
§ 3534. Distribution in kind
The court, for cause shown, may order the estate to be
distributed in kind to the parties in interest, including
fiduciaries. In such case, when there are two or more
distributees, distribution may be made of undivided
interests in real or personal estate or the personal
representative or a distributee may request the court to
divide, partition and allot the property, or to direct the sale
of the property. If such a request is made, the court, after
such notice as it shall direct, shall fairly divide, partition
and allot the property among the distributees in proportion
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to their respective interests, or the court may direct the
personal representative to sell at a sale confined to the
distributees, or at a private or public sale not so confined,
any property which cannot be so divided, partitioned or
allotted.
20 Pa.C.S. § 3534.
Instantly, while Appellant is correct that the trial court’s 2015 order
continued the matter for the review of survey results and potential other
alternatives for the Farm, Appellant did not present the most current survey
results, commissioned by the estate, to the court. Therefore, we decline to
conclude that the trial court erred by entering an order without the benefit of
such survey.
With respect to Appellant’s argument that the trial court erred by not
considering her own testimony and that of Fisher to be dispositive regarding
the existence of a boundary dispute, the determination of witnesses’
credibility is a task reserved for the Orphans’ Court as the fact-finder. See
In re Devoe, 74 A.3d at 267. Thus, we hold that the trial court did not err
by concluding that conclusive evidence of a boundary dispute was not
presented. Id. Accordingly, the trial court aptly determined that a public
sale for the Farm would yield a fair price where the presence of a border
dispute was not established and any potential encumbrance on the Farm’s
title could be resolved through the process of sale. See McCullough’s
Estate, 140 A. at 867. Appellant’s issues on appeal lack merit.
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Moreover, the trial court was well within its purview by ordering the
sale of the Farm. The Probate Code specifically permits courts to order the
sale of real property within an estate, upon request of a distributee, where
such property cannot be divided, partitioned, or allotted. See 20 Pa.C.S. §
3534. In this case, the trial court specifically found that any attempt to
distribute the Farm “in-kind” would likely result in a partition action because
the parties had demonstrated an inability to cooperate within the confines of
joint ownership. See Trial Ct. Op. at 4. Further, the non-contiguous nature
of the Farm itself makes any attempt to fairly divide the property physically
untenable. Id. Indeed, as noted by the trial court, a public sale of the Farm
will allow for the efficient distribution of the property and will avoid a likely
partition action leading to the same end: the sale of the Farm. Therefore,
we conclude that the trial court did not err in granting Appellant’s petition to
compel the immediate sale of the Farm and we affirm the trial court’s order.2
See 20 Pa.C.S. § 3534; In re Ciuccarelli, 81 A.3d at 958.
Order affirmed.
2
Consistent with the trial court’s October 1, 2015 order, we order the
Administrator to list the Farm with an auctioneer for an absolute sale,
without reserve, within sixty days. Accordingly, we direct the Administrator
to prepare the Farm for sale by, inter alia, obtaining clear title for the
property.
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Judgment Entered.
Joseph D. Seletyn, Esq.
Prothonotary
Date: 10/19/2016
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