In Re: Rosenbloom, C., Appeal of: Hammer, M.

• Court: Superior Court of Pennsylvania
• Decided: February 14, 2020
• Docket: 464 WDA 2019
• Status: Unpublished

Opinion

J-A29020-19

NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37

IN RE: CAROL SHINER : IN THE SUPERIOR COURT OF ROSENBLOOM, AN INCAPACITATED : PENNSYLVANIA PERSON : : : APPEAL OF: MARGIE HAMMER : : : : No. 464 WDA 2019

Appeal from the Order Entered, March 1, 2019, in the Court of Common Pleas of Allegheny County, Orphans' Court at No(s): No. 02-16-04661.

BEFORE: BENDER, P.J.E., KUNSELMAN, J., and PELLEGRINI, J.*

MEMORANDUM BY KUNSELMAN, J.: FILED FEBRUARY 14, 2020

Margie Hammer, Esq., appeals part of the orphans’ court order, directing

her to pay $65,000 into the Estate of Carol Shiner Rosenbloom, Esq., an

incapacitated person1 and former client of Attorney Hammer. An orphans’

court has no authority under the Probate, Estates, and Fiduciaries Code

(“PEFC”)2 to force a person to give money to an estate, if, as here, the money

does not belong to the estate. We therefore reverse. ____________________________________________

* Retired Senior Judge assigned to the Superior Court.

1 “‘Incapacitated person’” means an adult whose ability to receive and evaluate information effectively and communicate decisions in any way is impaired to such a significant extent that he is partially or totally unable to manage his financial resources or to meet essential requirements for his physical health and safety.” 20 Pa.C.S.A. § 5501.

2 20 Pa.C.S.A. §§ 101-8815. J-A29020-19

This guardianship matter began August 22, 2016, when Dr. Richard

Rosenbloom petitioned the Orphans’ Court of Allegheny County to have Ms.

Rosenbloom, his wife, adjudged an incapacitated person. The court granted

Dr. Rosenbloom’s request two months later. It simultaneously appointed

Aligned Partners Trust Company (“the Guardian”) the plenary guardian of Ms.

Rosenbloom’s estate.3

The Guardian subsequently petitioned to invalidate certain gifts that Ms.

Rosenbloom had given to the Rosenblooms’ daughter, Kate, in the summer of

2016. Ms. Rosenbloom gave Kate title to a home and certain investment

accounts worth $283,000. The court found that Kate exerted undue influence

over Ms. Rosenbloom and negated the transfer of the $283,000 accounts to

Kate. However, it refused the Guardian’s request to negate Ms. Rosenbloom’s

gift of the Hartwood Drive home to Kate, because the orphans’ court found

that Ms. Rosenbloom had wanted to give that home to Kate despite any undue

influence.4

At the hearing regarding Ms. Rosenbloom’s capacity and her gifts to

Kate, the Guardian learned from Attorney Hammer’s testimony that Attorney

Hammer had performed legal work for Kate and Ms. Rosenbloom during 2016.

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3 Several other individuals and agencies have served as limited guardians of Ms. Rosenbloom’s person. Their identities are irrelevant to the disposition of this appeal.

4Dr. Rosenbloom contested the transfer of the house to Kate in a separate appeal. Kate did not appeal the portion of the order directing her to return $283,000 to the estate.

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The orphans’ court found that Attorney Hammer prepared documents at Ms.

Rosenbloom’s request to transfer the home and accounts to Kate. Attorney

Hammer also had represented Kate in her divorce.

Attorney Hammer testified that every payment she received for her legal

services to both Kate and Ms. Rosenbloom came from Kate. Even so, the

orphans’ court found that the money Kate used to pay Attorney Hammer

originated from the $283,000 that Kate received from Ms. Rosenbloom. The

orphans’ court therefore ordered Attorney Hammer to forfeit that money to

the estate.

The orphans’ court entered its order regarding Attorney Hammer’s fees

and the Hartwood Drive home on March 1, 2019. Attorney Hammer appealed

on April 1, 2019.

She asserts four grounds of error regarding the orphans’ court decree

directing her to pay $65,000 into Ms. Rosenbloom’s estate. Before addressing

those claims, we first consider the Guardian’s assertion that Attorney

Hammer’s appeal is premature.

1. Attorney Hammer’s Appeal Is of Right

The Guardian contends that Attorney Hammer’s appeal is interlocutory

in nature. According to the Guardian, the orphans’ court merely directed

Attorney Hammer to refund $65,000 to the estate, because she “was paid

with funds belonging to [Ms. Rosenbloom] without receiving authorization

from [the orphans’ court].’” Guardian’s Brief at 14 (quoting Orphans’ Court

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Opinion, 5/20/19, at 7). The Guardian provides no argument to support its

claim that Attorney Hammer’s appeal is interlocutory, nor does it explain what

further proceeding Attorney Hammer needed to pursue in the orphans’ court

before the order in question would become appealable.

Although the Guardian does not directly say so, we infer that it believes

this Court does not yet have appellate jurisdiction over Attorney Hammer’s

appeal. “Jurisdiction is purely a question of law; the appellate standard of

review is de novo, and the scope of review plenary.” Barak v. Karolizki, 196

A.3d 208, 215 (Pa.Super. 2018).

An appellate court “has jurisdiction to entertain appeals taken (1) as of

right from a final order; (2) from interlocutory orders by permission; (3) from

certain interlocutory orders as of right; and (4) from certain collateral orders.”

Redevelopment Auth. of Cambria City v. Int'l Ins. Co., 685 A.2d 581,

585 (Pa.Super. 1996) (citations omitted). “An order is final if it disposes of

all claims and all parties, and an order is interlocutory when it does not

effectively put a litigant out of court.” Koken v. Colonial Assurance Co.,

885 A.2d 1078, 1101 (Pa.Cmwlth. 2005) (citation omitted), affirmed per

curiam, 893 A.2d 98 (Pa. 2006).

We need not resolve whether the order in question was interlocutory,

because, even if it was, Attorney Hammer could immediately appeal it as of

right. “An appeal may be taken as of right from the following orders of the

Orphans’ Court Division . . . (5) an order determining the status of . . .

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creditors in an estate, trust, or guardianship . . . .” Pa.R.A.P. 342(a)

(emphasis added). The orphans’ court found that Attorney Hammer had

wrongfully acquired funds belonging to Ms. Rosenbloom. The court therefore

determined Attorney Hammer’s status to be an unlawful creditor of the estate.

Accordingly, Attorney Hammer could immediately appeal as of right under

Pa.R.A.P. 342(a)(5).

We have jurisdiction to hear appeals from “interlocutory orders as of

right . . . .” Redevelopment Auth. of Cambria City, supra. We are thus

satisfied that appellate jurisdiction over Attorney Hammer’s appeal has vested

in this Court. Accordingly, we may reach the merits of her appeal.

2. Application of the PEFC, Section 5536(a)

Attorney Hammer raises four claims of error regarding the decree of the

orphans’ court. They are:

1. Did the court err in applying 20 Pa.C.S.A. § 5536 to attorney’s fees that were earned prior to a determination of incapacity and paid by [Kate]?

2. Did the court err in ordering the return of fees based on a presumption that the funds originated from assets transferred by [Ms.] Rosenbloom prior to the date that she was adjudicated incapacitated?

3. Did ordering the return of fees, in addition to requiring Kate . . . to return the value of assets transferred to her, result in a windfall to the . . . estate?

4. Whether sufficient evidence exists to support the [Orphans’] Court’s findings that [Ms.] Rosenbloom lacked capacity to make financial decisions four months prior to an adjudication of incapacity?

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Hammer’s Brief at 3. We only address Attorney Hammer’s first issue, because

our disposition of it moots her remaining three claims.

Attorney Hammer claims the orphans’ court misapplied Section 5536 of

the PEFC. She argues that the basis for the Guardian’s claim against her was

“factually inaccurate.” Id. at 24.

According to the Guardian’s filing in the orphans’ court, both payments

to Attorney Hammer occurred after that court declared Ms. Rosenbloom an

incapacitated person. As such, the Guardian argued that Attorney Hammer

needed to petition the court for disbursement under 20 Pa.C.S.A. § 5536(a).

See September 26, 2018 Letter of Mario Santilli, Esq. on behalf of Guardian

at 1. The Guardian reasserts that arguments in this Court.

Attorney Hammer counters that Section 5536(a) of the PEFC does not

apply, because (1) her legal services to Kate and Ms. Rosenbloom predated

Ms. Rosenbloom’s incapacity; and (2) the legal fees were paid by Kate – i.e.,

not the incapacitated person. Therefore, Attorney Hammer believes Kate’s

payments to her are valid, and she may retain the funds. Hammer’s Brief at

25-16.

When reviewing a decree of the orphans’ court, our scope of review is

confined to determine if “the record is free from legal error and to determine

if the orphans’ court’s findings are supported by competent and adequate

evidence.” In re Klein’s Estate, 378 A.2d 1182, 1187 (Pa. 1977). In the

latter pursuit, we defer to the finder of fact and “take as true all the evidence

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supporting the [orphans’ courts’] findings and all reasonable inferences

therefrom.” In re William L., 383 A.2d 1228, 1237 n.12 (Pa. 1978).

“However, we are not limited when we review the legal conclusions that [the]

orphans’ court has derived from those facts.” In re Estate of Cherwinski,

856 A.2d 165, 167 (Pa.Super. 2004) (capitalization omitted). In addition, any

“issue of statutory construction presents a question of law for which our

standard of review is de novo.” In re Navarra, 185 A.3d 342, 350 (Pa.Super.

2018).

When the orphans’ court ordered Attorney Hammer to pay $65,000 into

the estate of Ms. Rosenbloom, it reasoned as follows:

Attorney Hammer testified that, pursuant to an invoice issued to [Ms. Rosenbloom], she received the following payments for attorney’s fees on the stated dates:

June 5, 2016 $1,500.00 June 17, 2016 $3,000.00 June 17, 2016 $2,300.00 September 8, 2016 $11,565.26 October 24, 2016 $55,000.00 November 24, 2016 $10,000.00

She further stated that the payments were made by [Kate], not from [Ms. Rosenbloom’s] funds.

Reviewing [Attorney] Hammer’s testimony, in conjunction with the testimony set forth in the other two hearings, the Court finds that [Attorney] Hammer was paid with funds belonging to [Ms. Rosenbloom] without receiving authorization from this Court. Per the above testimony and the Court’s findings, the $283,000 transferred to [Kate] was undertaken at a time when [Ms. Rosenbloom] was cognitively impaired and not capable of making an informed decision about her financial affairs. Accordingly, the Court has ordered that those funds are to be returned to [Ms.

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Rosenbloom’s] estate. As [Attorney] Hammer was unable to accurately quantify [Kate’s] financial estate or her assets, and [Kate] failed to trace the $55,000 payment and the $10,000 payment to funds belonging solely to her, it must be presumed that the funds used to pay [Attorney] Hammer were the funds that [Ms. Rosenbloom] transferred to [Kate] approximately four months prior to paying the invoices. For those reasons, [Attorney] Hammer is directed to return the sum of $65,000 to the estate of [Ms. Rosenbloom].

Orphans’ Court Memorandum Opinion and Order, 3/1/19, at 9-10 (citations to

the record omitted).

The analysis of the orphans’ court followed a three-step process. First,

it determined that Ms. Rosenbloom was incapacitated when she gave money

to Kate, who had exerted undue influence over Ms. Rosenbloom to acquire

that money.5 Second, the court found that Kate used that money to pay

Attorney Hammer’s legal bills. Third, the orphans’ court concluded that,

because the gift from Ms. Rosenbloom to Kate was invalid, the payment from

Kate to Attorney Hammer was equally invalid.

In making this determination, the court did not find that Attorney

Hammer exerted undue influence over Ms. Rosenbloom, that she overcharged

for her legal service, that she failed to render proper service, or that she in

anyway defrauded Ms. Rosenbloom. Instead, the orphans’ court relied on the

5Kate has not appealed the court’s decision that she exerted undue influence over Ms. Rosenbloom. Our review therefore extends only to whether Kate’s payment to a third party for services rendered is subject to the control of the orphans’ court.

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argument of the Guardian, namely that Kate’s payments to Attorney Hammer

violated Section 5536(a) of the PEFC. We disagree.

That section permits the orphans’ court to direct payments on behalf of

an incapacitated person from his or her estate. It provides:

(a) In general.--All income received by a guardian of the estate of an incapacitated person . . . in the exercise of a reasonable discretion, may be expended in the care and maintenance of the incapacitated person, without the necessity of court approval. The court, for cause shown and with only such notice as it considers appropriate in the circumstances, may authorize or direct the payment or application of any or all of the income or principal of the estate of an incapacitated person for the care, maintenance, or education of the incapacitated person, his spouse, children or those for whom he was making such provision before his incapacity, or for the reasonable funeral expenses of the incapacitated person’s spouse, child, or indigent parent. In proper cases, the court may order payment of amounts directly to the incapacitated person for his maintenance or for incidental expenses and may ratify payments made for these purposes. For purposes of this subsection, the term “income” means income as determined in accordance with the rules set forth in Chapter 81 (relating to principal and income), other than the power to adjust and the power to convert to a unitrust.

20 Pa.C.S.A. § 5536(a).6 ____________________________________________

6 Aside from reproducing this statute in its appellate brief, the Guardian cites no authority to defend its assertion that an orphans’ court may order an attorney to forfeit her legal fees to an estate. Nor does the Guardian attempt to analyze the language of the statute to demonstrate how the General Assembly imparted such authority to an orphans’ court. Instead, the Guardian says, “even the earliest cases recognize the obligation of the orphans’ court to oversee and question any request to use the incapacitated person’s resources.” Guardian’s Brief at 15-16. Assuming that that proposition is correct, it is of no help to the Guardian in its quest to render Attorney Hammer’s legal fees an asset of the estate.

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We note the Rules of Statutory Construction mandate that “the court

must give plain meaning to the words of the statute. It is not a court’s place

to imbue the statute with a meaning other than that dictated by the plain and

unambiguous language of the statute.” In re R.D.R., 876 A.2d 1009, 1016

(Pa.Super. 2005); see also 1 Pa.C.S.A. § 1921(b).

The language of 20 Pa.C.S.A. § 5536(a) only authorizes the orphans’

court to exert authority over funds within the estate. Nothing in that section

gives the court the authority over funds that lie outside “the income or

principal of the estate of an incapacitated person.” 20 Pa.C.S.A. § 5536(a).7

Moreover, this section does not authorize an orphans’ court to seek

payment of funds into the estate of an incapacitated person from a third-party

transaction. For the court to exercise its authority, the principal and income

in question must be a part of the estate.

Here, the orphans’ court ordered Kate to refund the full $283,000 to the

estate, as an invalid, inter vivos gift from Ms. Rosenbloom to Kate. However,

under Section 5536(a), the court could not go beyond Kate to recover estate

7 Our legislature defined both “principal” and “income” for PEFC purposes. The “principal” of an estate is “Property held in trust for distribution to a remainder beneficiary when the trust terminates or property held in trust in perpetuity.” 20 Pa.C.S.A. § 8102 (definition of “Principal”). In other words, the principal is the current assets of an estate at the time of the estate’s establishment. An estate’s “income” is “Money or property which a fiduciary receives as current return from a principal asset. The term includes a portion of receipts from a sale, exchange, or liquidation of a principal asset to the extent provided in Subchapter D (relating to allocation of receipts during administration of trust).” 20 Pa.C.S.A. § 8102 (definition of “Income”). In other words, income is profit generated from the principal.

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funds that Kate may have subsequently transferred to third parties, including

Attorney Hammer.

The $65,000 that Kate paid to Attorney Hammer and her law firm was

never “property held in trust for distribution to” Ms. Rosenbloom. 20 Pa.C.S.A.

§ 8102 (definition of “Principal”). Nor was it money “which [the guardian]

receive[d] as current return from a principal asset [or] a portion of receipts

from a sale, exchange, or liquidation of a principal asset . . . .” 20 Pa.C.S.A. §

8102 (definition of “Income”). Thus, the $65,000 was neither principal nor

income of the estate. The Guardian’s attempt to secure that money in an

orphans’-court proceeding under 20 Pa.C.S.A. § 5536(a) fails.

Contrary to the belief of the orphans’ court and the Guardian, Attorney

Hammer had no obligation to petition that court to be paid for services to Kate

and Ms. Rosenbloom, when those services predated the decree of incapacity

and were paid for by Kate. Regardless of how Kate obtained the money she

paid Attorney Hammer, those funds had been passed to a third party and,

thus, may not be acquired under Section 5536(a) of the PEFC.

Order reversed.

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Judgment Entered.

Joseph D. Seletyn, Esq. Prothonotary

Date: 2/14/2020

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