J-A02008-18
NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37
IN RE: ESTATE OF CALEEM L. : IN THE SUPERIOR COURT OF JABBOUR : PENNSYLVANIA : : APPEAL OF: MAURA NICOTRA : : : : : No. 1952 WDA 2016
Appeal from the Order Entered December 15, 2016 In the Court of Common Pleas of Allegheny County Orphans' Court at No(s): No. 02-15-01692
BEFORE: BOWES, J., OLSON, J., and KUNSELMAN, J.
MEMORANDUM BY BOWES, J.: FILED JULY 17, 2018
Maura Nicotra, individually and in her capacity as Co-Executrix of the
Estate of Caleem L. Jabbour (“Decedent”), appeals from the December 15,
2016 order dismissing her petition for citation directed to Arlene Jabbour
(“Arlene”).1 Maura, Decedent’s daughter from his first marriage, sought a
rule directing Arlene, Decedent’s second wife, to show cause why she should ____________________________________________
1 Two petitions for citations were filed in the orphans’ court. The instant appeal involves the orphans’ court’s dismissal of Maura Nicotra’s petition challenging Arlene Jabbour’s use of a power of attorney. Terri L. Vargo, Arlene’s daughter and the other Co-Executrix of Decedent’s estate, filed a petition on December 22, 2015, seeking a citation directed to Emmet Pais, Maura Nicotra, and Donna Genes to show cause why they should not file an accounting of all property removed and income received from the Decedent’s accounting business (generally the “business case.”). In its December 15, 2016 order, the orphans’ court dismissed the petition for citation involving the business case, and Ms. Vargo and Arlene appealed at No. 75 WDA 2017. This Court denied a motion to consolidate the two appeals, although we listed the appeals consecutively for oral argument. J-A02008-18
not be required to return funds to Maura personally that Arlene allegedly
diverted from an in trust for (“ITF”) account while acting as attorney-in-fact
for Decedent.2 After thorough review, we affirm.
The facts are as follows. Decedent married Arlene in 1995, and it was
the second marriage for both of them. They each had three children from
their first marriages. Terri L. Vargo is Arlene’s daughter and Decedent’s
stepdaughter, and a Co-Executrix of Decedent’s Will, together with Maura
Nicotra, Decedent’s daughter.
In anticipation of their marriage, Decedent and Arlene entered into an
October 10, 1994 nuptial agreement that, inter alia, listed their separate
assets, waived any interest in each other’s pensions, and allocated the sum
of $150,000 for Decedent’s children. In an addendum to that agreement,
the parties agreed that the sum allocated for Decedent’s children could be
reduced pro rata to cover his institutional care if he suffered a physically
disabling injury or accident not fully covered by insurance. Addendum to
Nuptial Agreement, 11/10/94, at ¶20. Another nuptial agreement was
____________________________________________
2 The within appeal is proper pursuant to Pa.R.A.P. 342, which provides that
(a) General rule. An appeal may be taken as of right from the following orders of the Orphans' Court Division: .... (6) An order determining an interest in real or personal property;
Pa.R.A.P. 342(a)(6).
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executed on August 25, 1998, after the marriage, that provided that all
property owned by the parties during their marriage, not specifically
exempted by the Agreement, was marital property. Nuptial Agreement,
8/25/98, at 2-3. It also stated that the parties were free to gift to each
other or devise any interest in properties that they had or acquired during
the marriage, and that the Agreement superseded all pre-existing
agreements between the parties related to the subject matter covered. Id.
at 3. An addendum to that Agreement was executed on November 30,
2007, increasing the sum designated for Decedent’s children to $200,000.
In addition, Decedent and Arlene executed a Joint and Mutual Will dated
November 25, 1998, which was admitted to probate.3
3 The Joint Will provided that:
C. There is approximately $150,000.00 derived from Caleem's liquid investments titled solely in his name, and entrusted for his children in various instruments. From these funds, it is agreed that the parties or their Co-Executrices, or other assigns, shall spend such sums as are reasonable and desirable for Caleem's medical care, whether as an outpatient or inpatient, as well as the cost of his care in a nursing home or other personal care facility. The balance of such funds thereafter remaining, shall pass and be divided equally among Caleem's living children, RENEE JABBOUR, MAURA NICOTRA, and DANA JABBOUR, and their issue per stirpes. . . .
D. All other property of the parties shall pass to the survivor, or as set forth in any beneficiary designations of such property, where applicable.
(Footnote Continued Next Page)
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Decedent was an accountant operating as a sole proprietorship, C.L.
Jabbour, PA. The practice consisted largely of tax return preparation for
about 400 clients, and general accounting services for approximately twenty
to thirty business clients.
On August 4, 2014, Decedent suffered a stroke, and thereafter, he
was unable to perform tax and accounting services for his clients. Nine days
later, Arlene arranged for Attorney Gary Kalmeyer to meet with Decedent to
discuss a power of attorney (“POA”). She told the attorney that she needed
to get access to money to pay her husband’s medical expenses. Attorney
Kalmeyer met with Decedent privately for purposes of discussing a POA, and
he testified that the Decedent was lucid and competent. N.T., 10/12-13/16,
at 262, 286, 320-323. Decedent executed the document naming his wife as
his attorney-in-fact.
The POA conferred upon the agent the power to “sign, make, execute,
acknowledge and deliver any and all documents, contracts, checks, drafts,
deposits, withdrawals, assignments, transfers, acceptances, and all other (Footnote Continued) _______________________
Arlene elected to take her marital share against the Joint Will. Title 20 Pa.C.S.§ 2203 entitles a surviving spouse to take a one-third share of specified categories of property, including the probate estate as well as assets nominally transferred during the decedent's lifetime (inter vivos) as to which the decedent retained control of at the time of his death, and the total amount of the elective share is reduced by other property and assets the surviving spouse obtained from the decedent by other means. See 20 Pa.C.S. § 2204; In re Trust Under Deed of Kulig, 175 A.3d 222 (Pa. 2017).
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undertakings of any kind, including but not limited to: deposit or withdraw
money . . . in any bank . . . and, even change insurance policy
beneficiaries.” POA, 8/13/14, at 2. It also contained the broad catchall
provision granting Arlene “full power and authority to do all and every act . .
. as if I might do if personally present.” Id.
On August 18, 2014, Arlene went to the First Commonwealth Bank
with the POA for purposes of gaining access to a savings account there that
Decedent had established in his own name in 1997, and re-designated in
2009 as an ITF account for his daughter, Maura. Arlene utilized the POA to
close the account, transfer the money into an existing account in her name,
and to add Decedent to the latter account. She and Decedent subsequently
had full access to the funds. As of the date of the transfer, the ITF account
contained $106,209.83.
In the succeeding months, Arlene continued to deposit her social
security and pension checks into the joint account; Decedent’s social
security checks were deposited automatically into the account. Arlene
distinguished between withdrawals for her own use and withdrawals for
Decedent’s expenses by the numbers on the checks. With Decedent’s funds,
she purchased a stair lift, a bed, a refrigerator, and a hot water tank, and
paid doctor co-pays.
Decedent died on December 22, 2014. The 1998 Joint Will
subsequently was admitted to probate, designating Maura and Ms. Vargo as
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Co-Executrices. On December 29, 2015, Maura filed the instant petition for
citation with the orphans’ court, in both her individual and representative
capacities. She requested that a citation issue directing Arlene to show
cause why she should not be required to return the sum of $106,209.83 to
Maura individually, the beneficiary on the ITF account. Following the close of
discovery, Maura filed a motion for summary judgment. The orphans’ court
denied the motion, and held an evidentiary hearing on October 12 and 13,
2016.
Following the hearing, the court found that Arlene did not misuse the
POA to her advantage or convert funds lawfully belonging to the Decedent or
to Maura. The court credited Arlene’s representations that she did not
expend the Decedent’s funds for her own expenses. The court ordered
Arlene to provide to the Estate a detailed list of all expenses paid on behalf
of her late husband both prior to and after his death, “with receipts if
available,” and to tender the balance of the $106,209.83 remaining from the
closed ITF account to the Estate.4
Maura timely appealed. She alleges that the orphans’ court erred by
not ordering that the balance of the money be returned to her individually ____________________________________________
4 Although Arlene asserts on appeal that the money in the joint account is hers, she did not appeal or file a cross-appeal from that portion of the order directing her to tender the balance of the $106,209.83 remaining from the closed ITF account to the Estate. Thus, the propriety of that disposition is not before us.
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rather than to Decedent’s estate. Specifically, Maura presents three issues
for our review:
1. Whether the orphans’ court erred in failing to grant summary judgment in favor of Maura L. Nicotra?
2. Whether the orphans’ court erred, following an evidentiary hearing, in ruling that the attorney-in-fact did not breach her fiduciary duty and/or exceed her authority under the terms of the [POA]?
3. Whether the orphans’ court abused its discretion when it permitted [Arlene] to testify regarding authority she purportedly obtained outside of the [POA] to change the terms of the trust account, in violation of the Dead Man’s Act and hearsay rules?
Appellant’s brief at 6 (unnecessary capitalization omitted).
Initially, Maura contends that the trial court erred in denying her
motion for summary judgment. The law is well settled that
summary judgment is appropriate only in those cases where the record clearly demonstrates that there is no genuine issue of material fact and that the moving party is entitled to judgment as a matter of law. When considering a motion for summary judgment, the trial court must take all facts of record and reasonable inferences therefrom in a light most favorable to the non-moving party. In so doing, the trial court must resolve all doubts as to the existence of a genuine issue of material fact against the moving party, and, thus, may only grant summary judgment where the right to such judgment is clear and free from all doubt.
Yenchi v. Ameriprise Fin., Inc., 161 A.3d 811, 818 (Pa. 2017) (quoting
Summers v. Certainteed Corp., 997 A.2d 1152, 1159 (Pa. 2010))
(internal quotations and citations omitted).
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Herein, the orphans’ court denied summary judgment. “Our scope of
review of a trial court’s order granting or denying summary judgment is
plenary, and our standard of review is clear: the trial court’s order will be
reversed only where it is established that the court committed an error of
law or abused its discretion.” Abrams v. Pneumo Abex Corp., 981 A.2d
198, 203 (Pa. 2009); see also Windows v. Erie Ins. Exch., 161 A.3d 953,
955 (Pa.Super. 2017). “[T]he issue as to whether there are no genuine
issues as to any material fact presents a question of law, and therefore, on
that question our standard of review is de novo. This means we need not
defer to the determinations made by the lower tribunals.” Yenchi, supra at
818.
The orphans’ court was charged with determining, for purposes of
summary judgment, whether there was a genuine issue of material fact to
be tried. See Pa.R.C.P. 1035.2(1). At issue was the nature of the ITF
account, whether Maura was entitled to those funds, and whether Arlene
exceeded her authority under the POA when she closed that account and
transferred the funds.
Maura argues that the record established that Arlene breached her
fiduciary duty under the POA when Arlene diverted trust funds from her, the
intended beneficiary, without lawful justification. She relies upon Estate of
Slomski v. Thermoclad, 956 A.2d 438 (Pa.Super. 2008), in support of her
position that the power of attorney is the sole measure of an agent’s
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authority and must be strictly construed. Maura contends that summary
judgment was indicated because it was clear that Decedent’s account was a
trust account, and that the POA did not imbue Arlene with the specific power
to modify Decedent’s trust arrangements. Alternatively, if it was not a trust
account, she contended that Arlene had no power under the POA to do what
she did, i.e., close one account and transfer those funds into a joint account
that effectively resulted in a gift to herself.
Arlene countered that there were material issues of fact and law that
were “zealously disputed,” and which precluded the grant of summary
judgment. She pointed to issues involving the nature of the bank account,
the authority conferred by the POA, the Decedent’s overall estate plan, and
Arlene’s use of the money, which involved credibility decisions. Appellees’
brief at 11.5 In addition, Arlene maintains that, in evaluating the August 13,
2014 POA at issue, Maura was relying incorrectly upon a version of the
Decedents, Estates and Fiduciaries Code (the “PEF Code”) that only became ____________________________________________
5 The parties have advanced several technical arguments relative to the propriety of summary judgment. Maura would have us find that summary judgment should have been granted by default because Arlene did not file a point-by-point response to her motion, and she attached documentation to her brief in opposition rather than to a response. Arlene argues that summary judgment was properly denied as the motion was not supported by any affidavits, depositions, or admissions. She also faults Maura for failing to appeal the denial of the motion, which was not appealable at that time, and for seeking a retroactive grant of summary judgment post-trial. We find no abuse of discretion on the part of the orphans’ court in ignoring the technical procedural arguments, none of which is dispositive, in favor of a decision on the merits.
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effective on January 1, 2015, after the date the POA was executed herein.
Furthermore, Arlene contended that the ITF account was nothing more than
a bank account with a named beneficiary in the event of the owner’s death.
She relied upon the statutory presumption in 20 Pa.C.S. § 6303(b) that the
ITF account was a revocable trust, that the Decedent retained control over
the account during his lifetime, and that Maura had offered no evidence that
it was irrevocable.
Certain principles govern powers of attorney. As this Court recently
reiterated in In re Fiedler, 132 A.3d 1010, 1021 (Pa.Super. 2016), “The
scope of authority under a POA is determined by the language of the
document creating the agency and the Code.” See 20 Pa.C.S. §§ 5601-
5611. For instance, the PEF Code addresses the proper manner in which a
principal may authorize his agent to make gifts under a power of attorney.
See 20 Pa.C.S. § 5603(a)(2) (power to make limited gifts); see also §
5603(m) (power to engage in banking and financial transactions); § 5603(b)
(power to create a trust); and § 5603(f) (power to withdraw and receive the
income or corpus of a trust).
Maura maintained that the ITF account was a trust account, and since
the POA did not specifically authorize Arlene to engage in trust transactions,
she lacked the power under that instrument to close that account and
withdraw the funds. Even if it was not a trust account, Maura argues that
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Arlene had no power to close and open another account or provide herself
with a gift. Appellant’s brief at 36.
Arlene characterized the ITF account as a bank account that would
pass to the named beneficiary when the owner died. In opposition to
summary judgment, Arlene supplied, inter alia, the affidavit of Matthew
Mergo, the former Commonwealth Bank office manager, who facilitated the
closing of the ITF account and the transfer of the funds. He averred therein
that he had spoken to Decedent and obtained the approval of the bank’s
legal department before closing the ITF account, transferring the funds into
Arlene’s account, and adding Decedent to that latter account. Mr. Mergo
recited that he explained to the Decedent what the change would mean, and
that Decedent acknowledged his understanding. Decedent directed him to
complete the transaction by retitling Arlene’s existing account to a joint
account so that she would immediately be able to write checks. Mergo
Affidavit, 9/21/15. We find the affidavit alone raised disputed issues of fact
and law, and we find no error or abuse of discretion on the part of the
orphans’ court in denying summary judgment on the record that existed at
that time.
Second, Maura alleges that the orphans’ court erred when it found
after the evidentiary hearing that Arlene did not violate the POA when she
closed the ITF account and transferred the funds to the joint account. Our
standard of review of the findings of an orphans’ court is deferential. In re
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Estate of Harrison, 745 A.2d 676, 678-79 (Pa.Super. 2000). We must
determine whether the record is free from legal error and the court’s factual
findings are supported by the evidence. Id. We will not reverse the court’s
decision “unless there has been an abuse of discretion or a fundamental
error in applying the correct principles of law.” In re Fiedler, supra at
1018 (quoting In re Estate of Whitley, 50 A.3d 203, 206-7 (Pa.Super.
2012). Our standard of review of questions of law is de novo, and our scope
of review is plenary. Id.
Maura contends that the court misapplied the law and ignored relevant
testimony in arriving at its holding. Specifically, she faults the court for
failing to credit the testimony of Attorney Kalmeyer, Decedent’s attorney,
who testified that the purpose of the POA was to enable Arlene to gain
access to funds to pay her husband’s medical expenses. She points to
Attorney Kalmeyer’s response to a hypothetical question that, “if Mrs.
Jabbour, without providing any consideration to Mr. Jabbour, went and
changed the account that she had no title or interest to and made it her
own, do you believe that the Power of Attorney permitted that transaction to
be done?” Attorney Kalmeyer responded that he did not think that “[t]he
agent giving herself access to $106,000 as if it’s her own,” was permitted
under the POA. N.T., 10/12-13/16, at 334.
Preliminarily, we note that the orphans’ court, sitting as factfinder, was
free to believe or disbelieve the testimony of the various witnesses, including
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Attorney Kalmeyer, and we will not disturb those credibility findings unless
they are unsupported in the record. Furthermore, with regard to the
foregoing testimony, we find that the record does not support the facts
assumed in the hypothetical question. Arlene did not make the account her
own. She closed the ITF account owned by Decedent and transferred the
funds into her account, which she then converted to a joint account with
Decedent. Furthermore, the transfer was effectuated only after Mr. Mergo
spoke to Decedent, the inference being that Decedent expressly authorized
it.
Maura alleges that the POA did not authorize Arlene “to change,
modify, or amend any of [Decedent’s] trust arrangements (including any
revocable trust arrangements).” Appellant’s brief at 35. Furthermore, she
asserts that the ITF designation was consistent with the Decedent’s estate
plan, as well as their Joint Will.6 The right of survivorship, according to
Maura, should have applied to determine the rights of the parties since the
account was a trust account and Arlene had no power to act as a fiduciary as
to a trust account. See 20 Pa.C.S. §6304(b). Alternatively, Maura claims
that the POA did not authorize Arlene to make gifts, and thus she had no
6 Although Maura maintained that the account was one of the assets designated in the nuptial agreements for Decedent’s children, she offered no proof thereof. Furthermore, the record indicates that more than $200,000 in assets were earmarked for Maura and her only surviving sibling.
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power to close the trust account and open another account that resulted in a
gift to herself.
Arlene counters that the ITF account was nothing more than a bank
account that would pass to the named beneficiary when the owner died.
She contends that the Multi-Party Account Act (“MPAA”) governs the
disposition of the ITF account, and that “[u]nless a contrary intent is
manifested under the terms of the account or deposit agreement or there is
other clear and convincing evidence of an irrevocable trust, a trust account
belongs beneficially to the trustee during his lifetime. 20 Pa.C.S. §
6303(b).”7 Appellee’s brief at 16. There was no evidence that this was an
irrevocable trust. Maura, Arlene contends, had only an expectancy in the
account, and no immediate right to the funds. Decedent owned the account;
he retained the power to withdraw or transfer funds or close the account
throughout his lifetime.
7 Section 6303(b) provides:
b) Trust account. — Unless a contrary intent is manifested by the terms of the account or the deposit agreement or there is other clear and convincing evidence of an irrevocable trust, a trust account belongs beneficially to the trustee during his lifetime, and if two or more parties are named as trustees of the account during their lifetimes beneficial rights as between them are governed by subsection (a). If there is an irrevocable trust, the account belongs beneficially to the beneficiary.
20 Pa.C.S. § 6303(b).
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Arlene disputes that she made a gift to herself of the proceeds of the
account. She maintains that Decedent spoke to bank officials and
authorized the transfer of the funds into what became a joint account, the
inference being that Decedent, as the principal and owner of the account,
approved the transfer of the funds to her.
Arlene is correct in her assertion that the POA at issue herein,
executed on August 13, 2014, must be evaluated in light of the law existing
when it was executed, which was prior to recent amendments to the PEF
Code, effective January 1, 2015. Furthermore, the notice for the POA
expressly references the law in effect at that time in defining the powers and
duties of the agent. (“The powers and duties of an agent under a power of
attorney are explained more fully in 20 Pa.C.S. Ch. 56.”). The later enacted
amendments do not govern herein.
As to the savings account established by Decedent in his own name
and later changed to an ITF account for Maura, we find the following. Such
an account is a totten trust, which is “essentially a ‘poor man’s will,’ a
judicial creation that, strictly speaking, is neither a will nor a trust, but is a
fairly obviously testamentary transfer.” Rellick-Smith v. Rellick, 147 A.3d
897, 900 n.5 (Pa.Super. 2016) (cleaned up). The depositor “retain[s]
complete control of the fund during his life and yet secure[s] to the
beneficiary any balance standing in the account at the death of the
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depositor.” In re Estate of McFetridge, 372 A.2d 823, 825 (Pa. 1977).8
Until the death of the owner, the beneficiary has only an expectancy in the
account because it is revocable at will during the lifetime of the depositor.9
Id.
The POA expressly authorized Arlene to “Deposit or withdraw any
money or property in any bank, saving and loan, investment funds or other
place.” POA, 8/13/14, at 2. We find that to be the equivalent of the power
defined in the then-applicable PEF Code to “engage in banking and financial
transactions,” 20 Pa.C.S. § 5603(m), and which permitted the agent to open
and close accounts in the name of the principal and transact any banking
8 See Estate of McFetridge, 372 A.2d 823, 825 (Pa. 1977), relying upon Section 58 of The Restatement (Second) of Trusts, which provides as follows:
Where a person makes a deposit in a savings account in a bank or other savings organization in his own name as trustee for another person, intending to reserve a power to withdraw the whole or any part of the deposit at any time during his lifetime and to use as his own whatever he may withdraw, or otherwise to revoke the trust, the intended trust is enforceable by the beneficiary upon the death of the depositor as to any part remaining on deposit on his death if he has not revoked the trust.
9 Maura Nicotra has standing as the beneficiary of the ITF account to challenge Arlene’s use of the POA to revoke the account. See Rellick- Smith, 147 A.3d 897, 900 n.5 (Pa.Super. 2016) (citing Scott on Trusts, (4th Ed. 1987) § 58.4, p. 224) (finding beneficiary had standing to challenge agents’ withdrawal of money from the account before the death of the depositor and without his consent, acting pursuant to a power of attorney).
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business that the principal could do if present. 20 Pa.C.S. § 5603 (m)(2)
and (6) (effective October 27, 2010).
No one disputes that Decedent had the power to withdraw the money
from the ITF account during his lifetime. Furthermore, the evidence
established that the action was not unilateral on the part of Arlene. Mr.
Mergo testified that the ITF account was closed and the money transferred
only after he personally spoke to Decedent and explained the consequences
of the transfer. Thus, Decedent authorized the closing of the account and
transfer of funds or ratified Arlene’s use of the POA for that purpose.
Furthermore, Maura’s attempt to characterize Decedent’s authorization as an
oral modification of the POA is unpersuasive. Decedent’s execution of the
POA did not preclude him from continuing to exercise control over his
accounts.
We find that the record supports the orphans’ court’s finding that
Arlene had the power to withdraw funds from the ITF account during
Decedent’s lifetime, change the beneficiary on the account, or revoke the
ITF designation entirely. The ITF designation and the addition of a
beneficiary in 2009 did not change Decedent’s ownership of the account.
Mr. Mergo confirmed that the ITF account herein was revocable and that
Maura had no right to the funds until Decedent’s death. Since the POA
conferred upon Arlene the same rights possessed by Decedent, she was
authorized to close the ITF account. Furthermore, Arlene’s deposit of the
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funds into an account that she converted into a jointly-held account with
Decedent was within her power under the POA, and also authorized by
Decedent personally. Thus, we find ample support for the court’s finding
that Arlene did not misuse the written durable POA or unlawfully convert
funds belonging to the Decedent or Maura.
Nor did Arlene exceed the scope of her authority when she expended
funds from the account. Sitting as factfinder, the court found that the funds
from the closed account were used for Decedent’s expenses, and that if
Decedent had chosen to do so, he could have used funds from the account
for his own expenses at any time. The court concluded that Arlene was
simply acting pursuant to the POA in her husband’s stead. Although the
transfer of Decedent’s funds into the joint account with Arlene may have
resulted in a gift to her, the orphans’ court nevertheless ordered the balance
of the remaining funds to be placed in the Estate, not disbursed to Arlene.10
Thus, the orphans’ court concluded that Maura had no claim to the funds,
and we find no error or abuse of discretion in the orphans’ court’s decision.
10 Arlene maintains that the account was a tenancy by the entireties, and that she was entitled to the funds remaining in the account as the surviving entireties tenant. In placing the remaining funds in the Estate, the orphans’ court noted only that the funds “may have been protected under the terms of the parties’ Prenuptial Agreement and the Addendum thereto, along with the Post-Nuptial Agreements.” Orphans’ Court Opinion, 12/14/16, at unnumbered 5 n. 1.
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Finally, Maura contends that the orphans’ court erred in permitting
Arlene to testify to matters that were barred by the Dead Man’s Act, 42
Pa.C.S. § 5930. This was the subject of a motion in limine filed by Maura
prior to trial, as well as continuing objections throughout the proceeding. As
with all evidentiary rulings, we apply an abuse of discretion standard of
review:
Questions concerning the admissibility of evidence lie within the sound discretion of the trial court, and we will not reverse the court’s decision absent a clear abuse of discretion. An abuse of discretion may not be found merely because an appellate court might have reached a different conclusion, but requires a manifest unreasonableness, or partiality, prejudice, bias, or ill- will, or such lack of support as to be clearly erroneous. In addition, to constitute reversible error, an evidentiary ruling must not only be erroneous, but also harmful or prejudicial to the complaining party.
Crespo v. Hughes, 167 A.3d 168, 177-78 (Pa.Super. 2017) (internal
quotation marks and internal citations omitted).
The Dead Man’s Act provides in relevant part that
in any civil action or proceeding, where any party to a thing or contract in action is dead . . . and his right thereto or therein has passed . . . to a party on the record who represents his interest in the subject in controversy, neither any surviving or remaining party to such thing or contract, nor any other person whose interest shall be adverse to the said right of such deceased . . . shall be a competent witness to any matter occurring before the death of said party . . .
42 Pa.C.S. § 5930.
The purpose of the Dead Man’s Act is to stave off possible injustice
where a surviving party to a transaction who is adverse to the decedent is
permitted to testify to matters that decedent’s representative cannot refute
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due to death. Weschler v. Carroll, 578 A.2d 13 (Pa. 1990); In re Estate
of Hall, 535 A.2d 47 (Pa. 1987); In re Estate of Petro, 694 A.2d 627
(Pa.Super. 1997).
For the Dead Man’s Act to disqualify a witness from testifying, three
prerequisites must be established: (1) the deceased must have had an
actual right or interest in the matter at issue; (2) the interest of the witness,
not simply the testimony, must be adverse; and (3) a right of the deceased
must have passed to a party of record who represents the deceased’s
interest. In re Hendrickson’s Estate, 130 A.2d 143 (Pa. 1957). An
adverse interest is one where the witness will either gain or lose as a direct
legal operation in effect of the judgment. In re Estate of Gelb, 228 A.2d
367 (Pa. 1967).
The specific error Maura alleges is that the court permitted Arlene to
testify, in violation of the Dead Man’s Act, that Decedent approved of the
closing of the account and transfer of the funds. Maura contends that all
three prerequisites for the application of the Act were satisfied herein, and
that the testimony should have been barred. She argues first that Decedent
was the owner of the ITF account. Second, Arlene’s interest was adverse to
that of Decedent because “she intentionally converted more than $100,000
through the use of a POA.” Appellant’s brief at 52. In addition, Maura
maintains that she is the party of record, i.e., the Co-Executrix, who
represents the Decedent’s interest.
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Maura argues further that, the Dead Man’s Act aside, a surviving wife
is prohibited from testifying regarding civil contracts with her deceased
husband, regarding ante-nuptial and postnuptial agreements, and
statements about the decedent’s testamentary intentions. See 9 Standard
Pennsylvania Practice 2d, § 54:35.
According to Arlene, Maura was representing her own individual
interest, not that of the Decedent, in seeking to invalidate the closing of the
ITF account and transfer of the funds to herself. Moreover, Arlene
characterizes herself as the putative transferee of an inter vivos transfer by
Decedent. She cites Friedeman v. Kinnen, 305 A.2d 3 (Pa. 1973), in
support of her contention that, once she demonstrated a valid inter vivos
transfer with independent evidence from Mr. Mergo, she was competent to
testify as the representative of the Decedent.
In Friedeman, supra at 4, our Supreme Court cited Ford Estate,
245 A.2d 443 (Pa. 1968), for the proposition that “application of the ‘Dead
Man’s Act’ is difficult where there are allegations of an inter vivos gift by the
decedent to the challenged donee.” Our High Court further explained that,
in such situations, both the alleged donee and the estate have an interest in
the property which may be adverse to the interest of the decedent,
depending on whether the alleged transfer took place or not.” Id. The
Court applied the holding in Ford that, “if a valid inter vivos transfer can be
shown by independent evidence before the admission of any testimony by
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the alleged donee, the donee will be considered to represent the interest of
the decedent and will be permitted to testify.” Id. If not, the putative
donee would not be competent to testify.
The orphans’ court did not explain its rationale for permitting Arlene to
testify over an objection based on the Dead Man’s Act. However, the record
establishes that Mr. Mergo testified prior to Arlene. He confirmed that the
bank’s legal department reviewed the POA, and that he personally spoke to
Decedent while he was in the hospital and explained the nature of the
proposed transactions. Based on that conversation, Mr. Mergo facilitated the
closing of the ITF account and the transfer of the funds to the existing
account owned by Arlene, and added Decedent as a co-owner. Mr. Mergo’s
testimony was prima facie independent evidence of a valid inter vivos
transfer; as the putative transferee, Arlene was then competent to testify as
the Decedent’s representative. Friedeman, supra; Ford, supra; see also
King v. Lemmer, 173 A. 176 (Pa. 1934). Her testimony was largely
cumulative of Mr. Mergo’s with regard to the closing of the ITF account and
the transfer of the funds into a joint account. In light of these facts, we find
no violation of the Dead Man’s Act in permitting Arlene to offer this
testimony.11
11 The Joint Will and nuptial agreements, together with addendums, were introduced into evidence. Arlene did not offer any testimony regarding Decedent’s testamentary intent.
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Order affirmed.
Judgment Entered.
Joseph D. Seletyn, Esq. Prothonotary
Date: 7/17/2018
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