In re Educational Trust for the Benefit of Chambers

40 Pa. D. & C.5th 278, 2014 Phila. Ct. Com. Pl. LEXIS 237
CourtPennsylvania Court of Common Pleas, Philadelphia County
DecidedAugust 19, 2014
DocketO.C. No. 169 IC of 2005
StatusPublished

This text of 40 Pa. D. & C.5th 278 (In re Educational Trust for the Benefit of Chambers) is published on Counsel Stack Legal Research, covering Pennsylvania Court of Common Pleas, Philadelphia County primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
In re Educational Trust for the Benefit of Chambers, 40 Pa. D. & C.5th 278, 2014 Phila. Ct. Com. Pl. LEXIS 237 (Pa. Super. Ct. 2014).

Opinion

CARRAFIELLO, J.,

— Ronald Chambers and Leslie Chambers, (hereinafter referred to as “appellants”), appeal the trial court’s adjudication dated April 28, 2014 of the first and final account of the Ferren Chambers Educational Trust as stated by appellee Wells Fargo Bank, N.A., the appellants’ objections, and the objections of appellee School District of Philadelphia.

Appellants also appeal the trial court’s decree of the same date disposing of the same issues raised in appellants’ petition for declaratory judgment.

[280]*280By Per Curiam order, the Superior Court consolidated both appeals.1

Facts and Procedural History

Appellants are the settlors arid co-trustees with appellee, Wells Fargo Bank, N.A., (hereinafter referred to as “Wells Fargo”), of the educational trust for the benefit of Ferren Chambers, as well as her parents and the guardians of her person and estate.2

On April 2, 2004, special education hearing officer Rosemary E. Mullaly, following a due process hearing, issued her order finding that appellee, the School District of Philadelphia, owed Ferren Chambers, (hereinafter referred to as “Ferren”), 3,180 hours of compensatory education based upon two and one-half years of denial of a Free and appropriate public education.3

The resultant remedy was the creation of the educational trust for the Benefit of Ferren Chambers under agreement of trust dated January 10, 2005, (hereinafter referred to as the “trust”)4. Appellants and appellee Wells Fargo Bank, N.A. (formerly Wachovia Bank, N.A.) were appointed co-trustees.

[281]*281The specific purpose of the trust was to “provide for the supplemental educational needs of the beneficiary pursuant to the special education hearing officer Rosemary E. Mullaly order dated April 2, 2004.” Exhibit A-l/P-1, p.2, emphasis added.

The controlling trust provisions are as follows:

Second: Purpose — This trust is to be primarily an education trust for the beneficiary and secondarily a special needs trust pursuant to 42 USC §1396p(d)(4) (a) and shall bo, for the sole benefit of the beneficiary. The purpose of this trust shall be to provide for the beneficiary’s supplemental educational needs. The Trust shall not provide for those needs of the beneficiary which are provided or should be provided under the beneficiary’s Individualized Educational Plan (IEP) by a school district or other public agency or governmental program.
A. Educational needs shall mean those requisite items, products or services that can be provided to the beneficiary to assist or supplement the beneficiary’s Individualized Educational Plan (IEP).
B. Educational needs shall include but not be limited to teaching assistants, psychiatric/psychological services, recreational therapy, occupational therapy, physical therapy, vocational therapy, durable medical needs, prosthetic devises {sic}, special rehabilitative services or equipment, programs of training, education, transportation and required travel expenses and related insurance.
[282]*282Fourth: Use of Principal — Trustee shall have the power to distribute such amount of principal (including accumulated income) as the trustee may from time to time determine to be necessary or appropriate for the beneficiary’s supplemental educational needs. Expenditures from the Trust fund must have a reasonable relationship to the educational needs of the beneficiary. Pursuant to the order of the special education hearing officer, the trustee will reimburse the parents from the fundfor any service recommended in writing by the Kennedy-Kreiger Institute or Dupont that will assist the beneficiary in making up for lost educational opportunity. If costs are incurred to obtain recommendation, the parents may seek reimbursement from the Trust to obtain these recommendations.
Furthermore, the trustee is authorized to expend from this fund to pay for those services which the parent and/or trustee notifies the school district in advance where it has failed to provide services to the beneficiary clearly articulated in the students current IEP and which the district has failed to provide. If the district wishes to challenge the trustee’s reimbursement of costs described in this paragraph, it must seek review through the bureau of special educational division of compliance or due process hearing or its objections are deemed waived.
Trustee may pay for the services obtained for the beneficiary starting as of the date of the order of the hearing officer, April 2, 2004, and continuing until December 31, 2010.

Exhibit A-1/P-1, p. 2-4, emphasis added.

The Trust was funded by the School District of [283]*283Philadelphia (hereinafter referred to as “School District”), with an initial balance of $216,369.83.5 The appellants routinely requested and received payments and/or reimbursements from Wells Fargo, with their requests concluding with the statement: “As usual endorse checks to individuals, but forward to me for disbursement.”6

In accordance with paragraph fifth, the trust terminated on December 31,2010, and any balance remaining was to be paid to the School District subject to the claim of the Pa. Department of Public Welfare.7

Approximately two weeks prior to the trust’s termination, the appellants requested Wells Fargo issue checks totaling $133,722.50, which, with the exception of $3,412.50 paid to Freidman Associates, were denied as not within the terms of the trust document.8 The combined balance of principal and income remaining in the trust as per the account was $117,253.57.9

Appellants’ prior request for payment of $20,000.00 to Robert B. Gidding, Esquire for federal court litigation was denied by Wells Fargo by letter dated April 27,2010.10 Appellants renewed their request and included it in their December requests.11

On December 22,2010, Wells Fargo denied appellants’ requests for reimbursement of the $20,000.00 they paid to attorney Gidding, payment of an additional $40,000.00 to attorney Gidding to continue the federal court litigation, [284]*284and payment of $59,560.00 to Potential, Inc. for additional special education services. On January 3, 2011, Wells Fargo denied appellants’requests for reimbursement of the additional $10,000.00 they paid to attorney Gidding and for payment of the Freidman Associates bills of $750.00. Wells Fargo denied the requests claiming they not within the terms of the trust document.12

On October 21, 2011, ten (10) months after the trust terminated, the appellants filed their petition for declaratory judgment requesting determination that the above requested expenditures totaling $130,260.00 “have a reasonable relationship to the educational needs of Ferren Chambers” and should be paid by the trust.13 The School District filed an answer with new matter and counterclaim against the trustees and the Department of Public Welfare.14

Free access — add to your briefcase to read the full text and ask questions with AI

Related

In Re Estate of Lychos
470 A.2d 136 (Supreme Court of Pennsylvania, 1983)
In Re Trust of Hirt
832 A.2d 438 (Superior Court of Pennsylvania, 2003)
In Re Estate of Lux
389 A.2d 1053 (Supreme Court of Pennsylvania, 1978)
In Re Estate of Geniviva
675 A.2d 306 (Superior Court of Pennsylvania, 1996)
In Re Estate of Harrison
689 A.2d 939 (Superior Court of Pennsylvania, 1997)
Estate of Wanamaker
460 A.2d 824 (Superior Court of Pennsylvania, 1983)
Miller's Estate
26 A.2d 320 (Supreme Court of Pennsylvania, 1942)
In re Trust Under Will of McFadden
705 A.2d 930 (Superior Court of Pennsylvania, 1998)

Cite This Page — Counsel Stack

Bluebook (online)
40 Pa. D. & C.5th 278, 2014 Phila. Ct. Com. Pl. LEXIS 237, Counsel Stack Legal Research, https://law.counselstack.com/opinion/in-re-educational-trust-for-the-benefit-of-chambers-pactcomplphilad-2014.