J-A10042-20
NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37
ESTATE OF NANCY LYNN LANDIS, : IN THE SUPERIOR COURT OF DECEASED : PENNSYLVANIA : : APPEAL OF: JONATHAN LANDIS : : : : : No. 2105 EDA 2019
Appeal from the Order Entered June 25, 2019 In the Court of Common Pleas of Montgomery County Orphans' Court at No(s): 2016-X4106
BEFORE: BOWES, J., SHOGAN, J., and PELLEGRINI, J.*
MEMORANDUM BY PELLEGRINI, J.: FILED JUNE 23, 2020
Jonathan Landis (Landis) appeals the order of the Court of Common
Pleas of Montgomery County Orphans’ Court (orphans’ court) denying his
petition to declare invalid a change of his beneficiary form regarding the
Individual Retirement Account (IRA) of his mother, Nancy Lynn Landis (the
Decedent). He argues that the document purporting to reduce his 100% share
should be set aside, entitling him to the entire sum. We affirm.
I.
The Decedent contributed to her employer’s 401(k) retirement fund for
over thirty years, accumulating about $600,000 by the time it was converted
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* Retired Senior Judge assigned to the Superior Court. J-A10042-20
to an IRA.1 On February 22, 2016, Landis was designated the sole primary
beneficiary of the IRA, and his three children were made contingent
beneficiaries.
In June 2016, the Decedent was diagnosed with a cancerous brain
tumor, and in July, she began receiving medical care, including neurosurgery.
While recovering, the Decedent frequently consulted her long-time friend and
financial advisor, Robert Bruce Musselman (Musselman), to manage her
affairs. About a month after the cancer diagnosis, the Decedent made a will,
naming Landis as the sole beneficiary. Her sister, Ruth Elaine Lawrie (Lawrie),
was made the executrix.
On August 31, 2016, the Decedent made changes to the beneficiaries of
non-probate assets which are not at issue in this appeal. Those assets include
a pension on which Lawrie and Jack Norsworthy (Norsworthy), the Decedent’s
boyfriend, completely replaced Landis as beneficiaries. Landis was also
replaced as primary beneficiary by Lawrie and Norsworthy on the Decedent’s
Sun Life Financial life insurance policy. The Decedent had intended to remove
Landis as the beneficiary of a State Farm life insurance policy in favor of his
three children (the Decedent’s grandchildren), but Lawrie did not submit the
required paperwork in time prior to the Decedent’s death.
1 The relevant facts are taken from the trial court’s opinion and the certified record.
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For the next few months after her diagnosis, the Decedent resided in an
assisted living facility, and by November 9, 2016, her health had severely
deteriorated to the point that the family decided to admit her to a hospital.
By the next day, the Decedent largely lost the ability to communicate and was
semi-comatose.
On the morning of November 11, 2016, she received a high dose of
steroids which made her much more alert. However, despite the apparent
improvement in her condition, the Decedent’s doctor explained that no further
treatments were viable and that the family should arrange for hospice care.
The Decedent was troubled and confused by the doctor’s assessment but did
not exhibit confusion in any other respect. In fact, the treating doctor wrote
in her evaluation for that day that the Decedent’s speech and thought
processes appeared to be “normal.”2 After receiving the doctor’s news, the
Decedent spent time with her family and asked to speak with Musselman, who
arrived later that day.
Though the Decedent had made or attempted to make beneficiary
changes as to several non-probate assets in August 2016, she had never
2 The parties stipulated to the deposition testimony of the Decedent’s treating oncologist, Dr. Tara Morrison, who described her mental processes following the removal of the brain tumor on July 5, 2016, as having markedly declined. See generally Deposition of Dr. Tara Morrison, M.D., 5/23/2018, at pp. 41- 42. As to the Decedent’s mental state and capacity on the date of her death, Dr. Morrison referred to observations in her evaluation notes that she appeared to have normal behavior, speech and judgment. See id. at p. 120.
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explicitly discussed with anyone the prospect of changing her IRA
beneficiaries. Nevertheless, Musselman brought with him to the hospital a
change of beneficiary form for the IRA. At around noon, Musselman filled out
the form by hand, reducing Landis’ share from 100% to only 20% and naming
Lawrie a 50% beneficiary. Norsworthy was made a 30% beneficiary. The
Decedent signed the last page of the form and Musselman witnessed it. No
contingent beneficiaries were named.
Musselman made a contemporaneous video recording of the Decedent
specifying the above percentages. In the first attempt, the Decedent confused
the names of the beneficiaries, so she started over. On the second attempt,
the Decedent recited the 20/30/50 division between Landis, Norsworthy and
Lawrie, respectively. See Trial Transcript, 9/17/2018, at pp. 50-51.
According to Musselman, the Decedent made the changes in order for Lawrie
to distribute the majority of her share to the Decedent’s grandchildren and for
Norsworthy to distribute a portion of his share to his own grandchildren.
Musselman left the hospital after his meeting with the Decedent ended.
He learned on his drive home about an hour after leaving that the Decedent
had passed away. A few days later, Musselman replaced the handwritten
change of beneficiary form with a typed version, attaching the signed and
witnessed signature page that was part of the handwritten version prepared
at the hospital. The original handwritten form was subsequently lost or
destroyed.
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Musselman contacted the company responsible for the management and
distribution of the Decedent’s IRA funds, Voya Financial (Voya), and explained
the circumstances in which the typed form was completed. He also disclosed
that he took a video recording of the Decedent to corroborate that the form
reflected her wishes. With that information in mind, Voya accepted the typed
change of beneficiaries as reflected on the typed form. Musselman had also
arranged to manage the IRA funds distributed to Lawrie.
Lawrie and Norsworthy testified that they were surprised to be added as
IRA beneficiaries, and once notified by Musselman, they committed to abiding
by the Decedent’s instructions. Before the money could be dispersed, on
September 8, 2017, Landis petitioned the orphans’ court to invalidate the
change of beneficiary form and recognize him as the sole beneficiary of the
IRA funds in accordance with the Decedent’s original designation. Lawrie and
Norsworthy filed a joint answer and new matter to Landis’ petition. The
Decedent’s estate also filed a separate answer and new matter.
Before the orphans’ court, the parties presented evidence concerning
the Decedent’s mental capacity to make a knowing and conscious decision to
add beneficiaries to her IRA. To show that his mother was mentally unfit on
the last day of her life and to prove that the change of beneficiary form and
accompanying video did not reflect the Decedent’s intent, Landis focused on
the fact that she was often forgetful or confused at relevant times. Moreover,
Landis stressed that earlier in the year of her death, his mother had named
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him the sole beneficiary of the IRA and her will, and that he and his mother
remained close throughout her illness.
Lawrie and Norsworthy agreed that Landis and his mother had a strong
relationship up until the day she died. Those parties and other witnesses also
acknowledged that the Decedent was in extremely poor mental and physical
condition on November 9 and 10, 2016. However, it was undisputed that the
Decedent’s condition improved to a surprising extent on November 11 due to
a large dose of steroidal medication which reduced the swelling of her brain.
Lawrie and Norsworthy emphasized that the Decedent was lucid, appearing
more like herself than she had in many months. Both Landis and his wife also
conceded at trial that they were surprised at how much the Decedent had
seemed to recover.
Musselman testified that when he met with the Decedent to add
beneficiaries to her IRA, she did so knowingly and consciously. Lawrie and
Norsworthy introduced into evidence the video recording Musselman took of
the Decedent on the day of her death. In that video, she directed Musselman
to have Lawrie and Norsworthy added as primary beneficiaries of the IRA and
she specified their respective shares:
Ms. Nancy Landis: Take two. All right. This is Nancy Landis. [My birthday is] 1/20/59 for people who don’t know that. I am talking about my IRA and I just want to clarify things in case there is any questions brought up later down the road.
IRA I would like disbursed as follows: 20 percent to my son Jonathan; 50 percent to go to my sister [Lawrie]; and 30 percent to go to my son Jonathan –
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Mr. Musselman: Jack [Norsworthy]?
Ms. Nancy Landis: I am sorry, Jack, to go to my boyfriend Jack.
Mr. Musselman: And of the money that’s going to [Lawrie], is some of that supposed to go to your grandchildren?
Ms. Nancy Landis: That is, yes.
Mr. Musselman: And you had discussed that you would like to have out of that amount that goes to [Lawrie], the 50 percent, 10 percent each to each of the children.
Ms. Nancy Landis. To the grandchildren, yes.
Mr. Musselman: All right.
Ms. Nancy Landis: And then I will leave it – Should I put in there about Jack and his kids?
Mr. Musselman: Yes.
Ms. Nancy Landis: I will leave it up to Jack. I can’t take care of his kids, but I want to do right by them also, because they are – I love them like they are my own. They are part of our family to me just like my own family. And I would leave it to Jack to whatever he would want to take from what he is getting to disburse amongst his children, if he wants to do that, and the amount would be left up to him. I just want to do something for them. But I can’t do a whole lot financially, so the little bit that I can do would be helpful, I hope.
Trial Transcript, 9/17/2018, at pp. 50-52.
To rebut the claim that the change of beneficiary form did not further
the Decedent’s intent, Lawrie and Musselman testified extensively about the
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Decedent’s concern that Landis had poor spending habits.3 They recounted
the Decedent’s annoyance at Landis’ multiple requests for her to gift him a
vacation home, as well as Landis’ charges on a credit card that was in her
name.4 Lawrie and Musselman testified that the Decedent wanted to reduce
Landis’ share in the IRA to ensure that his children (her grandchildren) would
receive a portion of those funds.
After considering the evidence, the orphans’ court denied Landis’
petition. See Opinion and Order, 6/25/2019, at pp. 6-7. In its opinion, the
orphans’ court credited evidence that the Decedent had the required mental
capacity to add beneficiaries to her IRA. Id. Conversely, the orphans’ court
found no credible evidence that the Decedent had been unduly influenced by
anyone to designate Lawrie or Norsworthy as new IRA beneficiaries. Id.
Landis then filed the instant appeal.5
3Lawrie’s daughter, Carol Jayne Miner, corroborated that the Decedent was bothered by Landis’ spending habits and frequent vacations.
4 Landis testified that the Decedent had no problem with his credit card charges and lifestyle. He testified that it was the Decedent’s idea to gift him the vacation home in order to avoid estate taxes. However, the inter vivos transfer of that home never occurred.
5 On review, we will defer to the findings of the trial court “unless there has been an abuse of discretion or a fundamental error in applying the correct principles of law.” In re Estate of Luongo, 823 A.2d 942, 951 (Pa. Super. 2003). A judgment that is unreasonable, arbitrary, or capricious, or if it fails to apply the law or was motivated by partiality, prejudice, bias or ill will. Harman v. Borah, 756 A.2d 1116, 1123 (Pa. 2000). “If the record adequately supports the trial court’s reasons and factual basis, the court did
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II.
A.
Landis initially contends that the typed change of beneficiary form was
invalid because it was not executed with sufficient formality. He argues that
the form was defective because Musselman prepared and submitted the
document after the Decedent had died, attaching a signature page that was
originally appended to the destroyed or lost handwritten version. Landis also
asserts that the form is invalid because it does not comport with the
Decedent’s intent to make Landis’ children additional primary beneficiaries.
In a factually analogous case involving the last-minute change of an IRA
beneficiary, In re Estate of Golas, 751 A.2d 229 (Pa. Super. 2000), we gave
effect to a grantor’s wishes even though he had not completed a change in
beneficiary form prior to his death. Like the Decedent in the present case, the
grantor in Golas sought to make changes to his IRA beneficiary designations
in the midst of a fatal illness. He made several attempts to obtain the required
forms, but succumbed to cancer before his financial advisor could supply
them. See Golas, 751 A.2d at 230. The grantor made it clear that he wanted
his estate to receive his IRA funds instead of his sister, who had been
designated as the primary beneficiary. After the grantor died, the estate and
not abuse its discretion.” Ambrogi v. Reber, 932 A.2d 969, 974 (Pa. Super. 2007).
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the grantor’s sister litigated the matter before the orphans’ court, where the
estate prevailed. Id.
Despite that the grantor in Golas was never able to submit and execute
any change of beneficiary form at all, we upheld the orphans’ court’s ruling
that the decedent’s IRA funds would go to his estate rather than to the original
beneficiary. Id. at 231-32. Since the grantor intended that outcome but died
before he could complete the necessary paperwork, the intended change was
given effect. Id. at 233 (“The absence of any writing to indicate this particular
change is of no moment under these circumstances.”). In so holding, we
adopted several equitable principles:
In general, one must follow the requirements specified by the policy in order to validly change the beneficiary. However, the law in this Commonwealth is also clear that “[t]he intent of the insured will be given effect if he does all that he reasonably can under the circumstances to comply with the terms of the policy which permit a change of beneficiary.” Carruthers [v. $21,000, 434 A.2d 125, 127 (Pa. Super. 1981)]. Most U.S. jurisdictions follow this equitable principle. We also note that the formal procedures which an insurance company requires in order to effect a change of beneficiary are in place to protect the company. Thus an original beneficiary is without the right to insist upon strict compliance with those requirements.
Id. at 231 (some citations and footnote omitted). We reasoned that the
standards adopted in the context of an insurance policy are equally applicable
in the context of a retirement plan, such as an IRA. See id. at 231 n.3.
In this case, Musselman, after completing a handwritten change of
beneficiary form in the presence of the Decedent, submitted to Voya a typed
version of that form. He attached to the typed version the signature page
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from the handwritten version, which he claims was lost or destroyed.
Musselman testified that the handwritten and typed versions listed the same
beneficiaries and the same percentages. As we explained in Golas, a change
of beneficiary form will be found valid if it ultimately achieves what the
decedent, in fact, intended, and the decedent substantially complied with the
applicable procedures by doing enough under the circumstances to carry out
her intentions.
The typed change of beneficiary form memorialized the intent of the
Decedent. The trial court credited Musselman’s testimony that the information
concerning beneficiaries on the typed form was the same as the handwritten
iteration. As she stated in the video recording and as she instructed
Musselman, the Decedent wanted to designate Lawrie and Norsworthy as IRA
beneficiaries. The shares allotted to Landis, Lawrie and Norsworthy in the
typed form match the apportionments the Decedent articulated in her video.
Under the circumstances, the Decedent could not have done more to
effectuate the changes that she intended to make regarding her IRA
beneficiaries. See Golas, 751 A.2d at 233 (“It would be wholly fallacious to
expect [the decedent] to have done any more than he did to accomplish the
change [of IRA beneficiary], particularly in light of his rapidly deteriorating
health.”).
Moreover, the form Musselman executed remains valid even though it
does not explicitly reflect the Decedent’s intent to add her grandchildren as
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beneficiaries. The Decedent had stated in her video that each of the
grandchildren was to receive 10% each of the IRA proceeds, to be taken out
of the 50% share allotted to Lawrie. At the proceedings in this matter, Lawrie
promised to abide by the Decedent’s wishes, conditioning her receipt of a 50%
share on the understanding that the majority of that amount would go to the
grandchildren as the Decedent directed. See Trial Transcript, 9/18/2018, at
pp. 58-59.
Even though Lawrie was named as a beneficiary for purposes of
receiving an IRA distribution, the Decedent’s video statement also made
Lawrie a trustee of the portion of the IRA intended for the three grandchildren,
precluding her from using those funds for her own personal benefit. See
Nagle v. Nagle, 799 A.2d 812, 819 (Pa. Super. 2002) (“A constructive trust
arises when a person holding title to property is subject to an equitable duty
to convey it to another on the ground he would be unjustly enriched if he were
permitted to retain it.”).6 Accordingly, a constructive trust was established
for the benefit of Landis’ children, as any IRA distribution should so reflect.
6 To clarify, the Decedent’s three grandchildren are each to receive 10% of the entire IRA, not just a tenth of Lawrie’s 50% share. For example, if the entire IRA were now worth its previous value of $600,000, then each grandchild would receive $60,000. Lawrie’s 50% share would actually be worth 20% of the total IRA, or $120,000. This distribution corresponds to the Decedent’s video, as well as to Landis’ unrebutted testimony that Musselman informed him on November 11, 2016, that each of his children would receive about $60,000 pursuant to the executed form. See Trial Transcript, 9/17/2018, at p. 183.
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Thus, because Decedent’s intent was clear on how her IRA funds were
to be distributed, and the Decedent did all she could to change her beneficiary
designations, the subject form was valid.
B.
Landis next contends that even if the change of beneficiary was validly
executed, the orphans’ court abused its discretion in finding that there was no
clear and convincing evidence that the change of his beneficiary status
resulted from undue influence.
“[U]ndue influence is a ‘subtle,’ ‘intangible’ and ‘illusive’ thing,’” making
it difficult to prove. In re Estate of Clark, 334 A.2d 628, 635 (Pa. 1975). It
is “generally accomplished by a gradual, progressive inculcation of a receptive
mind.” Id. at 634. A presumption of undue influence arises when it is
demonstrated by clear and convincing evidence: (1) that a person or persons
in a confidential relationship with a grantor has (2) received a substantial
portion of the grantor’s property, and (3) that the grantor suffers from a
weakened intellect. See In re Estate of Glover, 669 A.2d 1011, 1015 (Pa.
Super. 1996). If the presumption applies, then the burden of proof shifts to
the defendant to disprove by clear and convincing evidence at least one of the
elements of undue influence. See Clark, 334 A.2d at 632.
While both Lawrie and Norsworthy admit they received a substantial
benefit from the disputed change of beneficiaries, they contested the
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“confidential relationship” and “weakened intellect” elements of undue
influence. Each of these contested elements will be discussed below in turn.
First, a confidential relationship “exists whenever circumstances make
it certain that the parties did not deal on equal terms but that on the one side
there was an overmastering influence, and on the other, dependence or trust,
justifiably reposed.” Matter of Estate of Ross, 462 A.2d 780, 783 (Pa.
Super. 1983). Such conduct must “consist of imprisonment of the body or
mind, fraud, or threats, or misrepresentations, or circumvention, or inordinate
flattery or physical or moral coercion, to such a degree as to prejudice the
mind of the [grantor], to destroy his free agency and to operate as a present
restraint upon him in the making of a [bequest].” In re Estate of Angle,
777 A.2d 114, 123 (Pa. Super. 2001) (quoting In re Estate of Ziel, 359 A.2d
728, 733 (Pa. 1976)).
There is no evidence in the record that suggests the Decedent had this
type of relationship with Lawrie, Norsworthy or any other party. As a result,
we can find no error in the orphans’ court’s finding that the Decedent was at
the time of her death “a strong-willed, determined person who was not easily
susceptible to advice or guidance that was contrary to her interests.” Order
and Opinion, 6/25/2019, at p. 5.
As for the weakened intellect element, there is no “bright-line test by
which [it] can be identified to a legal certainty, [but cases] have recognized
that it is typically accompanied by persistent confusion, forgetfulness and
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disorientation.” Owens v. Mazzei, 847 A.2d 700, 707 (Pa. Super. 2004).
These factors are especially significant in the context of spoken words and
conduct at the time a disputed document is executed. See In re Myers’
Estate, 150 A.2d 525, 528-29 (Pa. 1959).7
In this case, the orphans’ court heard conflicting evidence regarding the
Decedent’s state of mind at the time she made changes to her IRA beneficiary
designations. Landis contends that he offered clear and convincing evidence
that the Decedent was incapable of making a knowing and conscious decision
to add beneficiaries to her IRA. He points out that she struggled with severe
physical and cognitive limitations after her brain surgery and in the days
preceding her death. By all accounts, she was often forgetful during that
period of her illness and nearly comatose just a day before reducing Landis’
share. Landis also showed that he always maintained a strong bond with his
mother, and in the months preceding her death, she had planned for him to
7 On appeal, an orphan’s court’s findings as to a decedent’s capacity must be afforded a high degree of deference:
The Orphans’ Court’s mandate in assessing such evidence is relatively broad. If the court’s decision rests upon legally competent and sufficient evidence, we will not revisit its conclusions. Under no circumstance will we substitute our judgment of credibility for that of the Orphans’ Court.
Owens v. Mazzei, 847 A.2d 700, 707 (Pa. Super. 2004) (citation omitted).
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be the sole beneficiary of her IRA funds. Landis remained the sole heir of her
estate.
However, numerous witnesses testified that the Decedent was lucid on
the last day of her life. Significantly, months preceding her death and
incapacity on November 9 and 10, 2016, the Decedent, on August 31, 2016,
had Landis removed as a beneficiary of her pension and a life insurance policy.
This evidences the Decedent’s general intent to reduce the amount of her non-
probate funds going to Landis.
A number of witnesses also testified that on the date of her death.
November 11, 2016, the Decedent was fully alert and aware of her
surroundings. The attending oncologist noted that her behavior, speech and
judgment had appeared “normal.” See Deposition of Dr. Tara Morrison, M.D.,
5/23/2018, at p. 120.
Moreover, through the video taken by Musselman, the orphan’s court
had the opportunity to view the Decedent’s speech and demeanor at the very
moment she directed the subject changes to her IRA beneficiary designations.
The trial court believed the Decedent to be at the time of the form’s execution
“aware of the value of her IRA and . . . firm in her desired disposition of the
IRA assets upon her death.” Id. at 6. The orphans’ court accepted this
evidence in finding that Decedent had the capacity to make Lawrie and
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Norsworthy beneficiaries of her IRA and to reduce Landis’ share. See Order
and Opinion, 6/25/2019, at pp. 6-7.8
The orphans’ court’s findings are supported by competent substantial
evidence. Accordingly, because the orphans’ court did not abuse its discretion
in finding that the change of beneficiary form was valid, and that Landis failed
to prove the Decedent was subject to undue influence when making changes
to her IRA beneficiary designations, the order on review must be affirmed.
Order affirmed.
Judgment Entered.
Joseph D. Seletyn, Esq. Prothonotary
Date: 6/23/2020
8 In addition to Lawrie and Norsworthy, Landis argues in his brief that the executed form resulted from the undue influence of Musselman. However, the record reflects that Musselman’s alleged undue influence was never litigated in the orphans’ court. Nor did Landis raise the undue influence of Musselman as an issue in his 1925(b) statement, precluding our consideration of that issue on appeal. See Pa.R.A.P. 1925(b)(4)(vii). Even if Landis could raise Musselman’s undue influence as an appellate issue, it would lack merit because of the above-discussed lack of clear and convincing evidence regarding the Decedent’s weakened intellect.
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