Estate of John J. Strahsmeier

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NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37
IN RE: ESTATE OF JOHN J. : IN THE SUPERIOR COURT OF
STRAHSMEIER, DECEASED : PENNSYLVANIA
:
:
APPEAL OF: JOHN T. STRAHSMEIER, :
EXECUTOR :
:
:
: No. 1162 WDA 2017
Appeal from the Order Entered July 11, 2017
In the Court of Common Pleas of Allegheny County Orphans' Court at
No(s): 6114 of 2008
IN RE: ESTATE OF JOHN J. : IN THE SUPERIOR COURT OF
STRAHSMEIER, DECEASED : PENNSYLVANIA
:
:
APPEAL OF: ROSE M. REGAN AND :
LOIS A. PHILLIPS, CO-EXECUTRICES :
:
:
: No. 1163 WDA 2017
Appeal from the Order July 11, 2017
In the Court of Common Pleas of Allegheny County Orphans' Court at
No(s): 02-08-06114
BEFORE: SHOGAN, J., KUNSELMAN, J., and STRASSBURGER*, J.
MEMORANDUM BY SHOGAN, J.: FILED APRIL 10, 2019
Appellant, John T. Strahsmeier (“Strahsmeier”), filed the appeal
docketed at 1162 WDA 2017. His sisters, Rose M. Regan (“Regan”) and Lois
A. Phillips (“Phillips”), collectively (“the Sisters”), filed the appeal docketed at
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* Retired Senior Judge assigned to the Superior Court.
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1163 WDA 2017.1 Following our careful review and consideration, we affirm
both orders.
A previous panel of this Court summarized the “long and tortuous factual
and procedural history” of this case as follows:
Decedent [John J. Strahsmeier] died on September 13,
2008, survived by his three children, John T. Strahsmeier, Regan
and Phillips (collectively “children”).
Decedent executed his Will on June 6, 2003. On February
13, 2006, Decedent established a money market checking account
at First National Bank of Pennsylvania (“First National”). Decedent
was the sole owner of this account. On October 17, 2006,
Decedent revised ownership, listing Regan as “ITF” (hereinafter
“ITF Account”). At various times, other accounts owned by
Decedent were opened and revised at First National.
In May 2007, Decedent prepared binders (hereinafter “the
binder”) containing detailed descriptions and information as to his
funeral, burial, assets, debts, accounts, and estate management.
The binders were given to Regan, Phillips, Strahsmeier, and C.
Donald Gates, Jr., Esquire. All binders were updated regularly by
Decedent.
The binder directs that upon his death, Strahsmeier, Regan,
and Phillips were to take the monies from the accounts they
shared with Decedent and deposit them into an estate account.
The Estate Account would, after payment of debts, be divided
equally among the children.8 The ITF Account containing the
majority of the assets of the Estate was to become the Estate
Account.
8 Because of an unpaid loan to Regan made by
Decedent during his life, she was to receive $20,000
less from the balance of the Estate Account than
Strahsmeier and Phillips.
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1 We consolidated the appeals sua sponte on September 6, 2017.
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Following Decedent’s death, Regan and Phillips sought
intestate probate averring they did not know if a valid Will was in
existence. Letters of administration were issued to Regan and
Phillips as co-administrators of the Estate on September 24, 2008.
On October 3, 2008[,] Regan and Phillips, as co-administrators,
filed a petition to show cause why Strahsmeier and his wife should
not be directed to deliver Decedent’s assets to the court.10
10 The [S]isters alleged Strahsmeier had removed
assets from Decedent’s safe deposit box pursuant to
his powers as co-agent under the May 15, 2004 power
of attorney (“POA”).
On October 6, 2008, Strahsmeier presented to the court a
petition to enter a photocopy of the Decedent’s June 6, 2003 Will.
Regan and Phillips immediately filed a caveat with the Register of
Wills.
On October 16, 2008, Treasury Bill *H20 matured and
$40,000 was electronically deposited into the ITF Account.
Shortly thereafter, Regan withdrew the contents of that account,
totaling $140,200.26.[2]
When on January 14, 2009, Strahsmeier presented for filing
the original June 6, 2003 Will and the March 20, 2007 Codicil,11
Regan and Phillips withdrew the caveat. Pursuant to the June 6,
2003 Will, Strahsmeier, Phillips, and Regan were appointed co-
executors of the Estate.
11 Although Decedent prepared a Codicil to the Will
dated March 20, 2007, it is not relevant for purposes
herein. The Codicil directs where the three executors
cannot all agree, then John T. Strahsmeier’s decision
will prevail. The trial court found “Strahsmeier has
the authority to make the final decision if all three Co-
Executors are unable to agree; it does not mean,
‘majority rules,’ as was posited by Regan and Phillips.”
Trial Court Opinion, July 1, 2011, at 3–4 ¶ 6. This
issue was not appealed.
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2 Elsewhere in the record, this amount is referred to as $149,200.26. See,
e.g., Order, 7/1/11.
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On June 23, 2009, Phillips filed an Inheritance Tax Form on
behalf of the Estate. The tax form listed the ITF Account
($108,477.75) and Treasury Bill *H20 ($40,000) as assets of the
Estate.
On May 12, 2010, the orphans’ court directed Regan and
Phillips12 to file an Account for the Estate. Strahsmeier was
required to cooperate fully in providing information they might
need. Regan and Phillips filed, on June 15, 2010, a First and Final
Account and Inventory. Strahsmeier filed objections as well as
supplemental objections to both the Account and Inventory on
July 27, 2010. Among the objections to the Inventory were those
stating that the ITF Account ($108,477.75) and Treasury Bill *H20
($40,000) were not listed as assets of the Estate. A prolonged
and contentious period of discovery followed.
12The order was so directed because they had served
as co-administrators of the Estate from September
24, 2008[,] until January 14, 2009.
On December 3, 2010, Regan and Phillips filed an amended
Inventory. An amended Account was filed on December 20, 2010.
After further procedural posturing and filings, a hearing was finally
held on May 12, 2011. The Honorable Lawrence J. O’Toole filed
his memorandum opinion and order on July 1, 2011.[3] Regan and
Phillips filed timely exceptions to the order.
In re Estate of Strahsmeier, 54 A.3d 359, 360–362 (Pa. Super. 2012)
(some footnotes omitted).
On appeal to this Court in 2012, the Sisters contended the orphans’
court erred in:
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3 The July 1, 2011 order sustained objections and supplemental objections to
Strahsmeier’s Joint First and Final Account, sustained objections to
Strahsmeier’s Inventory, dismissed the Sisters’ joint objections to
Strahsmeier’s Inventory, denied the Sisters’ Motion for Summary Judgment,
and directed Regan to deposit the sum of $149,200.26 into the estate account.
Order, 7/1/11.
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1) concluding Strahsmeier produced clear and convincing
evidence to overcome the presumption the bank account was a
Totten trust;14 2) concluding the account was a convenience
account rather than a Totten trust; and 3) concluding the Treasury
Bill (*H20) which matured on October 16, 2008, in the principal
amount of $40,000, was the property of the Estate and not Regan.
14. . . “A Totten trust allows the depositor to retain ...
complete control of the fund during his life and yet
secure to the beneficiary any balance standing in the
account at the death of the depositor.” In re
Rodger’s Estate, 374 Pa. 246, 97 A.2d 789, 790
(1953).
Estate of Strahsmeier, 54 A.3d at 362. On September 7, 2012, this Court
determined that the trial court correctly found that the $40,000 treasury bill
belonged to the Estate, not to Regan, that co-executor Strahsmeier proved
that Decedent intended that the ITF Account was not Regan’s sole property
after her father’s death, and therefore, the money from the ITF Account must
be returned to the Estate. Thus, this Court concluded that Regan was to return
the monies she had unilaterally withdrawn, to the ITF Account.4 Estate of
Strahsmeier, 54 A.3d at 363–368. Our Supreme Court denied further
review. In re Estate of John J. Strahsmeier, 69 A.3d 603 (Pa. 2013).
On November 18, 2014, Strahsmeier filed a motion for partial summary
judgment, which the trial court granted on February 12, 2015. The February
12, 2015 order, inter alia, confirmed Strahsmeier’s account, found that the
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4 Regan did not return the funds to the estate. She filed for bankruptcy in
Colorado, claiming the funds were her own. Ultimately, the Bankruptcy Court
deferred to the Pennsylvania Courts to determine the disposition of the funds.
Motion for Partial Summary Judgment, 11/18/14, at Exhibit A.
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Sisters “acted . . . in a dilatory, obdurate and vexatious manner,” removed
the Sisters both as co-executors of the Estate and from the Estate checking
account, authorized payment of previously awarded legal fees to Robert J.
Amelio, agent for the Estate, authorized payment of an executor’s commission
solely to Strahsmeier, denied reimbursement of certain other creditor’s claims
against the Estate, and imposed a surcharge upon the Sisters. Order,
2/12/15.
The Sisters filed exceptions in the trial court on March 4, 2015. While
the exceptions were pending in the trial court, the Sisters appealed the
February 12, 2015 order, which was docketed at 402 WDA 2015. Strahsmeier
filed a motion to quash the appeal, which we granted on April 30, 2015.5
On June 12, 2015, the Sisters filed a motion for summary judgment.
Strahsmeier filed a court-ordered response on July 15, 2015. In new matter,
Strahsmeier requested punitive damages. By order filed July 13, 2017, the
trial court, inter alia, denied the Sisters’ motion for summary judgment and
Strahsmeier’s request for punitive damages. On August 9, 2017, Strahsmeier
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5 Although the order quashing the appeal does not so state, Strahsmeier’s
motion to quash was based on former Pa.O.C.R. 7.1(a), effective January 1,
2001, until September 1, 2016. Pa.R.A.P. 8.1 (Explanatory Comment)
(explaining former exception practice was discontinued as of September 1,
2016). Former Rule 7.1 precluded the filing of an appeal “of an order, decree,
or adjudication which would become a final appealable order under Pa.R.A.P.
341(b) or Pa.R.A.P. 342 following disposition of the exceptions. If exceptions
are filed, no appeal shall be filed until the disposition of
exceptions. . . .” Former Pa.O.C.R. 7.1(a) (emphasis added). The Sisters
did not respond to the motion to quash.
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filed the instant notice of appeal docketed at 1162 WDA 2017, and the Sisters
filed their notice of appeal docketed at 1163 WDA 2017. Strahsmeier filed a
Pa.R.A.P. 1925(b) statement on August 30, 2017, wherein he challenged the
trial court’s refusal to award punitive damages. The Sisters filed their concise
statement on September 8, 2017, wherein they raised twenty-one issues
purportedly related to the trial court’s denial of their June 12, 2015 motion for
summary judgment.
The trial court addressed Strahsmeier’s appeal in a one paragraph
explanation:
The Executor has filed an appeal from this [c]ourt’s denial
of his request for punitive damages. In Friedman Estate, 1 Fid.
Rep. 2d 60, 68 (Allegheny County O.C. 1980 (en banc), affirmed
on other grounds, 453 A.2d 651 (Pa. Super. 1982)[,] five judges
from [the Superior] Court held that punitive damages for losses
due to the mismanagement of a trust are not a viable remedy in
Orphans’ Court. This [c]ourt has no power to decline to follow, or
authority to overrule, the en banc Friedman decision because the
holding in Friedman is precedent for this [c]ourt. Yudacufski v.
D.O.T., 454 A.2d 923, 926 (Pa. 1982).
Trial Court Opinion, 9/18/17, at 1. Without addressing any issues identified
by the Sisters in their Rule 1925 statement, the trial court concluded:
“[Counsel for Regan and Phillips] filed a Concise Statement of
Matters Complained of on Appeal that raised twenty-one (21)
separate issues. None of the issues raised, however, deal with
the appealed Order. Therefore, all issue[s] raised are without
merit.
Trial Court Opinion, 9/18/17, at 1.
In considering both appeals, our standard of review of the orphans’
court’s findings is deferential.
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When reviewing a decree entered by the [o]rphans’
[c]ourt, 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
[o]rphans’ [c]ourt 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.
However, we are not constrained to give the same deference
to any resulting legal conclusions.
The [o]rphans’ [c]ourt decision will not be reversed unless there
has been an abuse of discretion or a fundamental error in applying
the correct principles of law.
This Court’s standard of review of questions of law is de novo, and
the scope of review is plenary, as we may review the entire record
in making our determination. When we review questions of law,
our standard of review is limited to determining whether the trial
court committed an error of law.
In re Fiedler, 132 A.3d 1010, 1018 (Pa. Super. 2016) (en banc) (internal
citations and quotation marks omitted).
For ease of discussion, we address the Sisters’ appeal first. The Sisters
raise the following issues on appeal:
I. Did the lower court err and commit an abuse of discretion
and/or error of law in granting [Strahsmeier’s] motion for partial
summary judgment as there were genuine issues of material fact
as to whether [Phillips] and/or [Regan] should be removed as co-
executrices of the estate?
II. Did the lower court err and commit an abuse of discretion
and/or error of law in granting [Strahsmeier’s] motion for partial
summary judgment to the extent that the order granting that
motion accepted [Strahsmeirer’s] estate accounting, which
included payments to himself and to his attorney as well as other
disbursements, without conducting an evidentiary hearing on the
objections to the various restated accounts filed by [Strahsmeier]
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and/or a hearing on the accounts filed by [Phillips] and [Regan]
and the various objections thereto?
III. Did the lower court err and commit an abuse of discretion
and/or error of law in granting [Strahsmeirer’s] motion for partial
summary judgment insofar as the order issued a surcharge
against [Regan and Phillips], denied them reimbursement for
estate expenses advanced, and denied them a distributive share
of the estate, without conducting an evidentiary hearing?
IV. Did the lower court err and commit an abuse of discretion
and/or error of law in denying [Strahsmeier’s] request for punitive
damages?[6]
The Sisters’ Brief at 9–10.
We are constrained to find that the Sisters’ issues in their appeal are
waived.7 The issues asserted in their appellate brief to this Court, indeed all
of the claims delineated in the Sisters’ Rule 1925(b) statement, relate to the
February 12, 2015 trial court order. As noted supra, previously the Sisters
erroneously appealed the February 12, 2015 order while their exceptions to
that order were pending in the trial court. Former Pa.O.C.R. 7.1(a), which
was effective until September 1, 2016, precluded the filing of an appeal until
such time as exceptions were adjudicated. See In re Estate of Krasinski,
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6 Because Issue IV is the Sisters’ response to the issue raised in Strahsmeier’s
appeal, it is addressed infra.
7 On September 21, 2017, Strahsmeier filed a motion to quash the Sisters’
appeal. Strahsmeier filed the motion after the Sisters filed their notice of
appeal but before the case was assigned to a merits panel. This Court denied
the motion without prejudice on November 3, 2017, to be raised either in the
appellate brief or in a new application to the merits panel. Strahsmeier has
raised the dismissal of the Sisters’ appeal in his “Designated Appellant’s
Second Brief.”
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188 A.3d 461, 466 n.1 (Pa. Super. 2018) (Pursuant to former Pa.O.C.R.
7.1(a), when exceptions are filed to an order, decree, or adjudication that
would become a final, appealable order under Pa.R.A.P. 341 or 342, “no
appeal shall be filed until the disposition of exceptions.”). For this reason, this
Court quashed that appeal on April 30, 2015.
Subsequently, because the trial court never ruled on the Sisters’
exceptions to the February 12, 2015 order, the exceptions were deemed
denied by operation of law on July 3, 2015, the 121st day from the date of
their filing. Former Pa.O.C.R. 7.1(f).8 Once the exceptions were deemed
denied, the February 12, 2015 order was final and appealable.9 In re Wilton,
921 A.2d 509, 512 n.1 (Pa. Super. 2007); see also In re Estate of
Cherwinski, 856 A.2d 165, 167 (Pa. Super. 2004) (“Under Pa.R.A.P. 341, an
order is final if it disposes of all claims and all parties. In a decedent’s estate,
generally the confirmation of the final account of the personal representative
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8 Former Pa.O.C.R. 7.1(f) stated, in pertinent part: “If the Orphans’ Court
fails to decide the exceptions within . . . 120 days, the exceptions shall be
deemed denied by operation of law on the . . . 121 st day . . . . The appeal
period shall begin to run as of the . . . 121st day.”
9 There was no requirement to have the orphans’ court declare the February
12, 2015 order a final order. See In re Estate of Mumma, 125 A.3d 1205,
1212 (Pa. Super. 2012) (Pa.R.A.P. 342(a), which authorizes an appeal taken
as of right from an order confirming an account or authorizing or directing a
distribution from an estate, “permits an aggrieved party to take an immediate
appeal of all categories of orders therein without any need to obtain a
declaration from the court that the order is ‘final’ in nature.”).
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represents the final order, subject to exceptions being filed and disposed of
by the court.”); In re Estate of Habazin, 679 A.2d 1293, 1295 (Pa. Super.
1996) (“[I]n a decedent’s estate, the confirmation of the final account of the
personal representative represents the final order, subject to exceptions being
filed and disposed of by the court.”). The Sisters never appealed the February
12, 2015 order once their exceptions were deemed denied by operation of
law.
By failing to appeal the February 12, 2015 order, the Sisters have
waived all of the objections they had raised in their exceptions to it. See
Pa.R.A.P. 342(c) (“Failure to appeal an order that is immediately appealable
under paragraphs (a)(1)–(7) of this rule shall constitute a waiver of all
objections to such order and such objections may not be raised in any
subsequent appeal.”). Therefore, because all issues are waived in the appeal
docketed at 1163 WDA 2017, the order is affirmed.10
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10 In U.S. Bank v. Hua, 193 A.3d 994 (Pa. Super. 2018), this Court recently
reiterated: “The Pennsylvania Supreme Court has held that “an appeal is
‘quashed’ when the court lacks jurisdiction over the appeal in the first
instance. When the appellant has failed to preserve issues for appeal, [as
here,] the issues are waived, and the lower court’s order is more properly
‘affirmed.’” Id. at 999 n.3 (quoting In re K.L.S., 594 Pa. 194, 934 A.2d 1244,
1246 n.3 (2007) (citations omitted)).
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We now turn to Strahsmeier’s appeal.11 Strahsmeier contends the trial
court should have addressed his request for punitive damages. He asserts
the facts are not in dispute. In support he cites the trial court’s factual findings
that evidence of Decedent’s intent was overwhelming to it and to this Court,
extraordinary. Strahsmeier’s Brief at 27. Strahsmeier posits:
It is also clear that the facts prove [the Sisters] acted to subvert
[Decedent’s] intent[]. That they would do so is indicative of their
reckless disregard for the truth, their bad faith in the exercise of
their fiduciary duties as co–executor’s of their father’s estate, and
their ruthlessness as daughte[rs’] who knew of their father’s
wishes, but who would embark upon a course to deny their brother
his rightful share. The[ir] acts were malicious. That they have
persisted over the course of more than 9 years since the death of
[Decedent], is itself evidence of their dilatory, obdurate and
vexatious behavior.
Strahsmeier’s Brief at 27. He suggests that the Sisters’ failure to respond to
his Motion for Summary Judgment confirms that the facts therein are
conclusive. Id. at 28.
Strahsmeier cites cases that permitted punitive damages in tort actions.
Strahsmeier’s Brief at 28. He contends the Sisters’ conduct was flagrant and
abusive, and they attempted to defraud him of his rightful share of their
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11 The July 11, 2017 order appealed by Strahsmeier was a final order as it
disposed of all of the issues remaining before the trial court. The order
dismissed the claim of Robert J. Tate, Esquire, denied the motion for summary
judgment filed by the Sisters, and denied Strahsmeier’s request for punitive
damages. Pa.R.A.P. 341(b)(1) (A final order is one that “disposes of all claims
and of all parties.”).
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father’s estate. Id. at 29. Strahsmeier avers that the Sisters’ conduct merits
punishment. Id. at 30.
Strahsmeier acknowledges that Pennsylvania courts have not
recognized punitive damages as an appropriate remedy in orphans’ court
proceedings. Strahsmeier’s Brief at 33. Rather, he argues that relevant
precedent “should be changed.” Id. at 30. He suggests that there is “‘no
good reason’ why a claim for punitive damages could not be ‘appropriate
against a fiduciary in a proper case in an Orphans’ Court proceeding than in
any other.’” Id. at 32.
The Sisters maintain they had a viable legal and factual argument
regarding the ITF account. Therefore, they assert that their defense did not
constitute bad faith or rise to the level of outrageous conduct or evil motive.
The Sisters’ Brief at 33–34. They aver that the trial court’s conclusion in the
February 12, 2015 order, that the Sisters acted in bad faith or in a dilatory,
obdurate, and vexatious manner, was made without the benefit of a hearing
on that issue generally, or on the issue of Strahsmeier’s entitlement to
punitive damages. They make no responsive argument to Strahmeier’s
request that we make new law on this issue. Id. at 33–34.
We decline Strahsmeier’s invitation to make new law. Pennsylvania
appellate courts have not recognized punitive damages as an appropriate
remedy in orphans’ court proceedings. This Court, as an intermediate court,
is not inclined to enunciate and approve such an expansion of punitive damage
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doctrine. We note that the Probate, Estates and Fiduciaries Code (“PEF
Code”), 20 Pa.C.S. § 101 et seq., does not authorize punitive damages as a
remedy. Moreover, because our Supreme Court has not addressed the precise
question, we lack the benefit of direct guidance on this issue. We note that a
case from the Court of Appeals for the Third Circuit predicted that our Supreme
Court would not permit their recovery.12 See Packard v. Provident Nat’l
Bank, 994 F.2d 1039 (3rd Cir. 1993) (court of appeals predicted Pennsylvania
would not authorize the award of punitive damages in orphans’ court matters);
Accord In re Corestates Trust Fee Litigation, 39 F.3d 61 (3rd Cir. 1994)
(same). Therefore, we affirm the appeal docketed at 1162 WDA 2017.
Appeal docketed at 1162 WDA 2017 is affirmed. Appeal docketed at
1163 WDA 2017 is affirmed.13
Judgment Entered.
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12 While we are not bound to follow federal law:
[o]ur law clearly states that, absent a United States Supreme
Court pronouncement, the decisions of federal courts are not
binding on Pennsylvania state courts.... However, whenever
possible, Pennsylvania state courts follow the Third Circuit [Court
of Appeals] so that litigants do not improperly “walk across the
street” to achieve a different result in federal court than would be
obtained in state court.
Feleccia v. Lackawanna College, 156 A.3d 1200, 1214 n.6 (Pa. Super.
2016) (quoting NASDAQ OMX PHLX, Inc. v. PennMont Secs., 52 A.3d 296,
303 (Pa. Super. 2012) (citations omitted)), appeal granted, 175 A.3d 221 (Pa.
2017).
13 Strahsmeier’s Application to Amend Designated Appellant’s Second Brief
filed on November 30, 2018, is granted.
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Judgment Entered.
Joseph D. Seletyn, Esq.
Prothonotary
Date: 4/10/2019
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