In Re: Kline, C.

J-S22001-19
NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37
IN RE: CECELIA KLINE, AN : IN THE SUPERIOR COURT OF
INCAPACITATED PERSON : PENNSYLVANIA
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APPEAL OF: ANGELA BIROS :
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: No. 1276 MDA 2018
Appeal from the Order Entered June 28, 2018
In the Court of Common Pleas of Berks County
Orphans’ Court at No(s): 83221
BEFORE: SHOGAN, J., DUBOW, J., and PELLEGRINI*, J.
MEMORANDUM BY SHOGAN, J.: FILED JUNE 21, 2019
Appellant, Angela Biros, appeals from an order entered on June 28,
2018, in the Berks County Court of Common Pleas. The underlying matter
involves the guardianship and estate of Ms. Cecelia Kline (“Kline” or
“Ms. Kline”), an incapacitated person, the removal of Appellant as guardian,
and the imposition of a surcharge. The June 28, 2018 order denied Appellant’s
exceptions to a Master’s Report and Recommendation and imposed a
surcharge upon Appellant in the amount of $14,825. We affirm.
A prior panel of this Court provided the following factual and procedural
background:
[Appellant] is the great-niece of Kline. This matter arose
when Kline’s great-niece, Pamela Rokoskie [(“Rokoskie”)], who is
[Appellant’s] sister, petitioned the court to declare Kline an
incapacitated person and appoint a plenary guardian. The
orphans’ court’s opinion sets forth the background of this case, as
follows:
____________________________________
* Retired Senior Judge assigned to the Superior Court.
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This guardianship matter began its tortuous path on
July 9, 2013, when [Ms.] Kline’s great-niece,
[Rokoskie], filed a Petition for Adjudication of
Incapacity and Appointment of Plenary Guardian for
Ms. Kline. A hearing was scheduled for August 21,
2013. Apparently an off-the-record indication was
made to the Court that the matter would be contested
in some fashion because on July 26, 2013, the Court
appointed counsel for Ms. Kline.
On August 21, 2013, [Appellant], another great-niece,
filed Response/Objections to the Petition indicating
that she is the agent under Ms. Kline’s power of
attorney, that Ms. Kline is not incapacitated, and that
even if Ms. Kline is incapacitated there is no need for
a guardian because her needs are met. After some
off-the-record discussion, the hearing was continued
to September 27, 2013.
On September 27, 2013, the parties took some time
to reach an agreement regarding Ms. Kline’s
incapacity and who should serve as her guardian. The
parties stipulated to the expert report, which
concluded Ms. Kline was incapacitated and in need of
a guardian. The parties agreed that [Appellant] would
be appointed guardian of Ms. Kline’s person and
estate. The parties also agreed to terms regarding
family visits with Ms. Kline. The Court directed that
[Appellant] file an inventory and accounting within
four months, and provided for the payment of fees to
the doctor and Ms. Kline’s court-appointed counsel.
Although the Court ordered the appointment of
[Appellant] as guardian for Ms. Kline and directed the
submission of a written order to that effect, counsel
did not submit a written order.
On March 25, 2014, Rokoskie’s attorney requested the
transcript of the September 27, 2013 hearing. On
April 23, 2014, Rokoskie filed a Petition for Special
Relief to Memorialize Settlement Agreement to an
Order of Court and Contempt of Court Order.
Rokoskie alleged that she, through counsel, made
several attempts to memorialize the parties’
agreement into a stipulated order, but [Appellant]
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refused to sign. Rokoskie also averred a failure by
[Appellant] to file an inventory and accounting, to pay
Ms. Kline’s attorney, Mr. Grenko, and to allow visits
with Ms. Kline as agreed. Rokoskie requested an
order to enforce [Appellant’s] compliance with the
September 27, 2013 agreement or to remove
[Appellant] as guardian. A hearing on the Petition for
Special Relief was scheduled for June 12, 2014.
On June 10, 2014, [Appellant] filed an Answer to the
Petition for Special Relief, an Inventory, and a First
Account for the period of September 27, 2013 to
January 31, 2014. After argument/hearing, the Court
directed counsel to submit an order appointing
[Appellant] as Ms. Kline’s guardian, directing
[Appellant] to file an account for the time period of
April 22, 2013 through the present, and otherwise
memorializing the terms of the September 27, 2013
agreement, including payment of Mr. Grenko. That
Order was signed on June 24, 2014.
On July 7, 2014, [Appellant] filed a Motion for
Reconsideration alleging the existence of
discrepancies in the written order as compared to the
Court’s oral instructions. On July 11, 2014, the Court
issued an Order slightly modifying certain terms
contained in the June 24, 2014 Order.
On July 21, 2014, [Appellant] filed Objections to
Mr. Grenko’s itemized bill. On July 28, 2014,
Mr. Grenko filed an Answer to the objections and
attached his invoice. On July 31, 2014, the Court
ordered [Appellant] to pay Mr. Grenko a slightly
discounted sum from Ms. Kline’s estate within ten
days or face surcharge.
On August 27, 2014, [Appellant] filed a First Amended
Account for the period of April 22, 2013 to August 22,
2014. On November 10, 2014, Rokoskie filed a
Petition for Special Relief and Contempt of Court
Order. Rokoskie averred a list [of] 30 payments or
withdrawals from Ms. Kline’s funds that did not appear
in the August 27, 2014 account. Rokoskie averred
that [Appellant] made payments to herself and to her
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daughter and liquidated certificates of deposit without
accounting for the liquidated sums, which exceeded
$123,000. Rokoskie also averred [that Appellant
moved] Ms. Kline from her home to [an] undisclosed
facility. Rokoskie requested that [Appellant] be
removed as guardian and agent under power of
attorney and be ordered to return certain sums to
Ms. Kline and comply with Rokoskie’s Request for
Production of Documents that was issued in July 2014.
On November 20, 2014, a rule was issued upon
[Appellant] to show cause why she should not be held
in contempt of court, be removed as guardian and
agent, and be ordered to return assets and produce
discovery. The rule was returnable December 12,
2014, and a status conference was set for
December 17, 2014. After the conference, the Court
entered an order directing [Appellant] to produce
requested discovery, capping payment of monthly
expenses not directly related to Ms. Kline’s care, and
prohibiting [Appellant] from receiving any payments
for her services as guardian. Counsel were given time
to attempt an amicable resolution.
On February 11, 2015, the Court scheduled a hearing
on the Petition for Special Relief and Contempt of
Court Order for March 18, 2015. On request of
[Appellant’s] counsel, the hearing was continued to
March 25, 2015. The Court also froze Ms. Kline’s
accounts.
Orphans’ Court Opinion, 6/11/2015, at 1–4.
The hearing in this matter took place on March 25, 2015.
On the same day, the orphans’ court removed [Appellant] as
guardian for Kline and appointed a third-party, Mark R. Sprow,
Esquire, as Kline’s guardian. The court also found that because of
[Appellant’s] waste and mismanagement of the estate, a
surcharge was appropriate. The court ordered the surcharge
amount would be determined by the parties or, failing that, a
master. See Order, March 25, 2015. This appeal followed.
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In re Kline, 136 A.3d 1028, 772 MDA 2015 (Pa. Super. filed January 8, 2016)
(unpublished memorandum at 3-6) (internal footnotes omitted). In that prior
appeal, this Court concluded that there was no basis upon which to disturb
the orphans’ court’s order removing Appellant as guardian or its conclusion
concerning a surcharge. Id. at 19. However, the task of determining the
amount of a surcharge was “left open.” Id. at 2, n.3.
Following this Court’s January 8, 2016 decision, the matter returned to
the orphans’ court for a resolution of the surcharge issue. The orphans’ court
explained:
[Appellant] served as guardian of the person and estate of
[Ms. Kline]. Pursuant to a Petition for Special Relief and Contempt
of Court filed by Ms. Kline’s niece, Pamela Rokoskie, the Honorable
Peter Schmehl found “that a surcharge against [Appellant] is
appropriate for waste and apparent mismanagement of Ms. Kline’s
estate. Within the next thirty days, counsel for the parties shall
review the financial records of this matter and negotiate an
appropriate surcharge amount for consideration and approval by
the [c]ourt. Failing the ability to reach an amicable surcharge
amount, the [c]ourt will appoint a master to make findings and a
recommendation to the [c]ourt regarding surcharge.”
The parties were unable to reach an agreement and a
hearing was held before Hearing Master Mark Morolla, Esq. on
October 13, 2017. The Master, after considering all of the
evidence and documents presented, determined that a surcharge
in the amount of [$14,825.00] was appropriate. On January 8,
2018, [Appellant], through her attorney, filed exceptions to the
Master’s Report. This [c]ourt conducted a hearing on June 28,
2018 and after argument denied [Appellant’s] exceptions finding
that she was liable to the Estate of Cecelia Kline for a surcharge
in the amount of Fourteen Thousand Eight Hundred Twenty Five
Dollars ($14,825.00). The instant appeal ensued.
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Orphans’ Court Opinion, 9/21/18, at 2-3. Both the orphans’ court and
Appellant complied with Pa.R.A.P. 1925.
In the instant appeal, Appellant raises the following issue for this Court’s
consideration:
A. Whether the [orphans’] court committed an error of law, or
abused its discretion, when it denied [Appellant’s] exceptions to
the report of the Master, entered judgment against [Appellant] in
the amount of $14,825.00 and concluded that said report was
compliant with the scope and purpose as ordered by the
Honorable Peter W. Schmehl, on April 21, 2017, “being that the
Master was to determine an appropriate amount of surcharge due
the estate” because said findings were not supported by
substantial evidence of record?
Appellant’s Brief at 4 (full capitalization and internal ellipses omitted).
The standard we apply when reviewing an order from the orphans’ court
is as follows:
We accord the findings of an Orphans’ Court, sitting without a jury,
the same weight and effect as the verdict of a jury. Thus, we will
not disturb those findings absent manifest error. We shall modify
an Orphans’ Court order only if the findings upon which the order
rests are not supported by competent or adequate evidence or if
the court engaged in an error of law, an abuse of discretion, or
capricious disbelief of competent evidence.
In re Marsh, 175 A.3d 993, 996 (Pa. Super. 2017) (citation omitted).
The orphans’ court thoroughly addressed Appellant’s claim of error as
follows:
[Appellant] complains on appeal that this Court committed
an error of law and/or abused its discretion, when it concluded
that the Master’s Report was compliant with the Honorable Peter
W. Schmehl’s order of April 21, 2017. In that order the Judge
directed that Master Merolla “shall communicate with the Guardian
and counsel for the parties to determine an appropriate surcharge
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amount due the incapacitated person’s estate from her former
Guardian, [Appellant], and shall communicate his findings and
recommendation to this Court.” Master Merolla did precisely what
the Court directed him to do. He conducted a full hearing, took
testimony, and reviewed exhibits. He questioned [Appellant]
about her mismanagement of Ms. Kline’s estate and reviewed
specific accounts and purchases with counsel present. Master
Merolla’s findings, and subsequently, this Court’s affirmation of his
report are supported by the record.
[Appellant] further argues that [t]his Court committed an
error of law and abused its discretion when it concluded that
[Appellant] was liable to Ms. Kline for a surcharge in the amount
of $14,825.00 and further when it concluded that the Master’s
findings of waste and mismanagement as well as the resulting
amount of surcharge were support[ed] by substantial evidence of
record. This issue has been argued and addressed ad nauseum.
In fact, the learned Superior Court, while not ruling specifically on
this issue, did note in its decision filed January 8, 2016 in this
same matter that:
...the evidence showed that during the guardianship
period [Appellant] paid herself from Kline’s funds
multiple times, including a number of flat $1,000.00
payments for assistance to Kline. [Appellant] testified,
[Ms. Kline] requested these checks to be written to
me and it was for cumulative things, of taking care of
her, taking care of the property, doing everything for
her. She made the decision of what the amount is.
N.T., 3/2/15 at 20. However, there is no evidence that
[Appellant] sought or was granted court approval for
these payments as required under the PEF Code ...[.]
In addition, although [Ms.] Kline had not lived in her
home for over one-and-one-half years and her
residential care was $10,500.00 monthly at the time
of the hearing, the residence remained vacant and
property related expenses continued to be paid. The
residence was not rented to anyone, and [Appellant]
had the power to lease [Ms.] Kline’s residence.
[In re Kline, 136 A.3d 1028, (unpublished memorandum at 7)
(internal quotation marks omitted)].
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Further, in that same opinion, the Superior Court recounted
a partial excerpt from the Honorable Peter Schmehl’s trial court
opinion. Stating:
At the hearing on March 25, 2015[, Rokoskie]
called [Appellant] as the first witness as on cross
examination. Much of the examination concerned
entries in a check register. [Appellant] explained
certain entries as describing expenses incurred for
toiletries, groceries, and lawn maintenance. Some of
the purchases were made by Ms. Kline with a credit
card, even after she was adjudicated incapacitated.
Other purchases were paid by [Appellant] at
Ms. Kline’s direction.
[Appellant] let Ms. Kline do her own
banking...[.] In July and/or August 2014, [Appellant],
who had acted as agent under the power of attorney
prior to her appointment as guardian of [Ms.] Kline,
had at least one of Ms. Kline’s bank accounts re-titled
as a joint account with [Appellant] and/or had
[Appellant] added as a [Payable on Death Account
(“POD”)] beneficiary as Ms. Kline allegedly wished.
[Appellant] stated that monies that she paid to
herself and her daughter were paid at Ms. Kline’s
direction upon terms set by Ms. Kline. For example, in
deciding to pay herself for yard work performed,
[Appellant] asked Ms. Kline, the adjudicated
incapacitated person, what she would pay for the
services in order to set her pay scale. [Appellant] also
accepted money from Ms. Kline on account of
[Appellant] caring for her. [Appellant] acknowledged
several $1,000 payments to herself for services
rendered, but she never obtained a court order
authorizing payments to herself. [Appellant]
repeatedly testified that the checks written to herself
were written at Ms. Kline’s request and that Ms. Kline
decided the amounts.
[Appellant] acknowledged that Ms. Kline is no
longer occupying her residence. [Appellant] testified
that she continued to maintain the residence at
Ms. Kline’s direction rather than sell the wasting
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asset. [Appellant] had no plans or intentions to sell
the real estate.
...On cross-examination, it was revealed that
[Appellant] was convicted of welfare fraud
approximately 11 years ago.
...The Incapacitated person should not be the
decision-maker, or the banker, or the bill-payer...[.]
The guardian also cannot be self-dealing with the
incapacitated person’s funds. If [Appellant] had
legitimate reason to be paying herself anything, she
should have obtained court approval first. [Appellant]
had a duty to safeguard Ms. Kline’s estate for
Ms. Kline, not for [Appellant].
[In re Kline, 136 A.3d 1028, (unpublished memorandum at 3-
4)], citing Orphan’s Court Opinion, 6/11/2015, at 4-5 [(internal
quotation marks omitted)].
While the above is a lengthy recitation of the prior history
of the case, it bears reiteration because even now, almost three
(3) years after that opinion was penned, [Appellant] still
inexplicably argues that a surcharge in the amount of fourteen
thousand eight hundred and twenty five dollars ($14,825.00) was
not appropriate and further that no surcharge at all was
warranted. This defies logic.
In the performance of his fiduciary duties, the fiduciary must
exercise the “judgment, skill, care and diligence that a reasonable
or prudent person would ordinarily exercise in the management of
his or her own affairs.” In re Estate of Campbell, 692 A.2d 1098,
1101-02 (Pa. Super. 1997). A surcharge is the penalty imposed
by the court for the failure of a fiduciary to meet his duty of care
owed his estate. As noted in Miller’s Estate, 345 Pa. 91, 95, 26
A.2d 320, 321 (1942), “Surcharge is the penalty for failure to
exercise common prudence, common skill and common caution in
the performance of the fiduciary’s duty and is imposed to
compensate beneficiaries for loss caused by the fiduciary’s want
of due care.” Estate of Stephenson, supra, 469 Pa. at 138, 364
A.2d at 1306. A fiduciary is permitted “reasonable and just”
compensation for services rendered. In Re Ischy Trust, 490 Pa.
71, 82, 415 A.2d 37, 42 (1980); Williamson Estate, 368 Pa. 343349, 82 A.2d 49 (1951); See, 20 Pa.C.S.A. § 7185(a). However,
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the fiduciary’s claim to recompense should be based on actual
services, not an arbitrary formula. In Re Estate of Breyer, 475
Pa. 108, 379 A.2d 1305, 1311 (1977); In Re Ischy Trust, 415 A.2d
at 42; In Re Reed, 467 Pa. 371, 357 A.2d 138, 142 (1976); In re
Estate of Sonovick, 373 Pa. Super. 396, 399 (Pa. Super. Ct.
1988). Under Pennsylvania law, the determination of whether the
compensation claimed by the fiduciary is “reasonable and just” is
left to the sound discretion of the trial court. In Re Estate of
Breyer, 379 A.2d at 1311; In Re Ischy Trust, 415 A.2d at 42-43;
In Re Etate of Loutsion, 344 Pa.Super. 477, 496 A.2d 1205, 1206
(1985).
Master Merolla painstakingly combed through the bank
records of Ms. Kline and the purchases of [Appellant] to determine
which of those purchases were not appropriate. He separates his
report into three tables. “Table A” included the transactions
completed by checks or included within the first amended account,
for the months when bank statements were not available from
October 2013 to May 2014. “Table B” included electronic
transactions included within the bank record and “Table C”
included balances of Ms. Kline’s certificates of deposit. Within
those tables, the items highlighted in bold were to be included
within the surcharge. The majority of the emboldened checks are
to [Appellant] for one thousand dollars ($1,000) for “supplies”,
though some are smaller amounts. There is a “gift” to
[Appellant’s] daughter in the aggregate amount of one thousand
one hundred and thirty one dollars and ninety one cents
($1,131.91). There are also multitudes of small charges
including, but not limited to, Walmart purchases, Spa Nails, China
Max, Friendly’s, A.C. Moore, Jumbo China Buffet, Joann Stores and
Hair Cuttery, just to name a few.
What Master Merolla’s Report and this Court’s own review of
the entire record before it makes very clear is that [Appellant]
was comfortably living on Ms. Kline’s bill, making
purchases and handsomely paying herself in monthly
installments, without Court approval. She failed to meet
the duty of care she owed to Ms. Kline’s estate.
[Appellant’s] explanation that the purchases and gifts
were at the behest of Ms. Kline is simply not credible. This
Court is constrained to believe that almost weekly hair
appointments, frequent visits to Chinese restaurants, large
lump sum payments to [Appellant] and [Appellant’s]
daughter are indicative of the judgment, skill, care and
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diligence that [Appellant] would exercise in the
management of her own affairs. This record is devoid of
ambiguity. [Appellant] owes the amount of fourteen thousand
eight hundred and twenty five dollars ($14,825.00) to Ms. Kline’s
estate.
Orphans’ Court Opinion, 9/21/18, at 4-8 (emphasis added).
As noted above, in disposing of Appellant’s prior appeal, this Court
stated that the orphans’ court “left the surcharge issue open.” In re Kline,
136 A.3d 1028, (unpublished memorandum at 2, n.3) (citing the Orphans’
Court’s Order, 3/25/15). In the orphans’ court order, it directed as follows:
Within the next thirty days, counsel for the parties shall review
the financial records of this matter and negotiate an appropriate
surcharge amount for consideration and approval by the Court.
Failing the ability to reach an amicable surcharge amount, the
Court will appoint a master to make the findings and a
recommendation to the Court regarding surcharge.
Order, 3/25/15. In this appeal, Appellant avers that the surcharge was not
mandatory, the Master was to determine what amount, if any, should be
surcharged, and the evidence was insufficient to support a surcharge of
$14,825. Appellant’s Brief at 9. Appellant’s position is meritless.
It is undisputed that the parties failed to reach a stipulated surcharge.
Thus, it was necessary to involve the Master. Order, 3/25/15. The Master
discharged his duty as directed by the orphans’ court, made credibility
determinations, reviewed the financial evidence, and determined an amount
for a surcharge. Master’s Report, 12/18/17.
Appellant asserts that the Master failed to consider the possibility that a
surcharge was unwarranted. Appellant’s Brief at 9. This bald claim is
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unsupported and specious. There is nothing in the record that prohibited the
Master from concluding no surcharge was warranted or awarding a symbolic
surcharge of $1.00. However, the Master found that a surcharge in the
amount of $14,825 was appropriate. Although Appellant may not be pleased
with the Master’s determination or the amount of the surcharge, there is
substantial evidence supporting the Master’s conclusion that a surcharge of
$14,825 was appropriate. See Master’s Report, 12/18/17 (making credibility
determinations and examining Appellant’s disbursements of Ms. Kiline’s
funds). Appellant’s expenditures for “supplies,” direct payments to herself,
gifts to her daughter of more than $1,000, and weekly, if not, daily trips to
Walmart, restaurants, and hair and nail salons, illustrate the waste and
mismanagement of Ms. Kline’s assets. Master’s Report, 12/18/17, Tables A
and B. The orphans’ court credited the Master’s findings and conclusion.
Orphans’ Court Opinion, 9/21/18, at 7.
After review, we discern no basis upon which to disturb the orphans’
court’s order. The evidence established that Appellant mismanaged
Ms. Kline’s finances, and Appellant’s waste warranted a surcharge of $14,825.
Appellant’s argument to the contrary is meritless and unsupported by the
record. Accordingly, Appellant is due no relief, and we affirm the orphans’
court’s order.
Order affirmed.
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Judgment Entered.
Joseph D. Seletyn, Esq.
Prothonotary
Date: 06/21/2019
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