2024 PA Super 54
IN RE: TRUST OF JOHN S. : IN THE SUPERIOR COURT OF MIDDLETON, SETTLOR DATED JULY : PENNSYLVANIA 26, 1996 SUR TRUST FOR JOHN P. : MIDDLETON :
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APPEAL OF: JOHN S. MIDDLETON :
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: No. 2006 EDA 2022
Appeal from the Order Entered July 7, 2022 In the Court of Common Pleas of Montgomery County Orphans’ Court at No(s): 2018-X3959
BEFORE: BENDER, P.J.E., LAZARUS, J., and NICHOLS, J. OPINION BY BENDER, P.J.E.: FILED MARCH 25, 2024 John S. Middleton (“Settlor”) appeals from the order entered on July 7, 2022, in the Court of Common Pleas of Montgomery County Orphans’ Court, sustaining co-trustees’ numerous preliminary objections on the grounds that Settlor lacks standing to participate in the pending proceedings related to an irrevocable trust. After careful review, we are constrained to quash the appeal.
We glean the following relevant facts and procedural history from the record. Settlor established an inter vivos, irrevocable trust under an agreement dated July 26, 1996 (“Trust Agreement”) for the benefit of his children, John P. Middleton (“John P.”) and Frances B. Middleton (“Frances”). Pursuant to its terms, on the fifth anniversary of the Trust Agreement’s execution, the principal of the trust was divided into two equal, separate trusts
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— one for the primary benefit of John P., and the other for the primary benefit of Frances. The separate trust for John P. is referred to herein as the “Trust.” John P. is unmarried, without issue, and is the sole current beneficiary of the Trust. Settlor did not retain any interest in the Trust under the Trust Agreement. Larry P. Laubach (“Laubach”) and John P. are currently serving as co-trustees of the Trust.
On October 31, 2018, Laubach filed an account of the Trust’s administration (“First Account”) with the orphans’ court. After several continuances, an audit of the First Account was conducted on December 2, 2019. On December 17, 2019, Laubach and John P. entered into an agreement which purportedly resolved all issues between the two co-trustees associated with the First Account and Laubach’s administration of the Trust (“Settlement Agreement”). Frances — a remote contingent beneficiary of the Trust — refused to sign the Settlement Agreement, which prompted Laubach to file a petition for approval of the Settlement Agreement (“Settlement Approval Petition”).1 In response, Settlor filed an answer and new matter, to
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1 As explained in the petition, the Settlement Agreement included, but was
not limited to, the following: (a) the resignation of Laubach from his position as a trustee; (b) the revocation of any purported prior appointments of a successor trustee executed by Laubach; (c) the waiver of any right that Laubach may have to designate his successor as trustee of the Trust; (d) the designation, appointment, and acceptance of Bessemer Trust Company, N.A. (“Bessemer”) as successor trustee of the Trust; (e) approval of the First Account; and (f) waiver of the right to object to the First Account and all transactions of the Trust during Laubach’s period of administration. Settlement Approval Petition, 2/18/20, at ¶ 24.
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which Laubach and John P. both filed preliminary objections, asserting that Settlor does not have standing to participate in the proceeding.
On September 24, 2020, John P. filed an emergency petition to summarily remove Laubach as co-trustee of the Trust and to confirm the appointment of Bessemer as successor co-trustee (“Removal Petition”).2 Settlor filed a response to the Removal Petition; John P. filed preliminary objections, again challenging Settlor’s standing to participate.
On December 30, 2020, Laubach filed a second and final account for the Trust (“Second Account”), which also sought approval of the Settlement Agreement and currently remains pending before the orphans’ court. Settlor filed objections to the Second Account (“Settlor’s Objections”). Laubach and John P. filed preliminary objections to Settlor’s Objections, in which they both asserted once again that Settlor lacks standing. OCO at 4.
After giving each of the parties the opportunity to brief the issue of Settlor’s standing, the orphans’ court determined that Settlor does not have standing to participate in the pending proceedings concerning the Trust and entered an order on July 7, 2022, inter alia, striking the pleadings filed by Settlor. Id. at 4-5. Settlor filed a timely notice of appeal, followed by a timely, court-ordered Pa.R.A.P. 1925(b) concise statement of errors
complained of on appeal. The orphans’ court filed a responsive Rule 1925(a)
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2 “By order dated November 20, 2020, the [orphans’ c]ourt determined that
the petition did not establish a need for relief on an emergency basis; the petition remains pending before the [c]ourt.” Orphans’ Court Opinion (“OCO”), 10/3/22, at 4 n.2.
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opinion on October 3, 2022, in which it opines that Settlor has appealed from an interlocutory order and urges this Court to quash the appeal. Id. at 1-3.
Herein, Settlor presents the following issues for our review:
1. Whether the orphans’ court erred in sustaining the preliminary objections and striking Settlor’s Objections to the Second Account and the answer and new matter to [the Settlement Approval] Petition … when Settlor is “entitled to fundamental information about the [T]rust’s administration” and Settlor exercised his statutory right under 20 Pa.C.S.[] § 7780.3(a), but was refused by both co-trustees, and Settlor then properly raised the demand for such information in his pleadings?
2. Whether the orphans’ court erred in sustaining the preliminary objections and dismissing Settlor’s Objections to the Second Account, the answer and new matter to [the Settlement Approval] Petition…[,] and the answer to [the Removal]
Petition … because Settlor had the statutory right to participate in proceedings related to the removal of a trustee under 20 Pa.C.S.[] § 7766?
Settlor’s Brief at 14 (unnecessary capitalization omitted).
On September 13, 2022, we issued a rule directing Settlor to show cause why the July 7, 2022 order is appealable. Settlor filed a timely response stating that the order is appealable under Pa.R.A.P. 342(a)(4), (5), (6), (8), and Pa.R.A.P. 313. By per curiam order dated October 19, 2022, the rule to show cause was discharged, allowing the appeal to proceed. See Per Curiam Order, 10/19/23 (single page) (notifying the parties that the ruling is not binding on this Court as a final determination of the propriety of the appeal and that the issue of appealability may be revisited by the merits panel).
Hence, we begin our review by examining whether this appeal is properly before us, as “[t]he appealability of an order directly implicates the
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jurisdiction of the court asked to review the order.” See Estate of Considine v. Wachovia Bank, 966 A.2d 1148, 1151 (Pa. Super. 2009) (citing Mother’s Restaurant Inc. v. Krystkiewicz, 861 A.2d 327, 331 (Pa. Super. 2004)). “[T]his Court has the power to inquire at any time, sua sponte, whether an order is appealable.” Id. (citing Kulp v. Hrivnak, 765 A.2d 796, 797 (Pa. Super. 2000)). It is well-settled that “[a]n appeal may be taken from: (1) a final order or an order certified as a final order; (2) an interlocutory order as of right; (3) an interlocutory order by permission; or (4) a collateral order.” In re Estate of Cella, 12 A.3d 374, 377 (Pa. Super. 2010) (citations and quotation marks omitted).
Instantly, the order from which Settlor appeals is not a final order, as the First and Second Accounts, the Removal Petition, and the Settlement Approval Petition remain pending before the orphans’ court. See Pa.R.A.P. 341 (defining “final order” as one that “disposes of all claims and of all parties”); OCO at 1 (“The issues presented in this case concerning the confirmation of accounts, the requested approval of a settlement agreement, the resignation of a trustee[,] and the appointment of a successor trustee … remain pending.”). Moreover, we observe that the order in question was not certified as a final order in accordance with Pa.R.A.P. 341(c), nor did Settlor seek permission to appeal the order pursuant to Pa.R.A.P. 312.
Next, we consider whether the July 7, 2022 order is appealable as of right. Rule 342 of the Pennsylvania Rules of Appellate Procedure governs the
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appealability of interlocutory orphans’ court orders and provides, in relevant part:
(a) General rule. An appeal may be taken as of right from the following orders of the Orphans’ Court Division:
(1) An order confirming an account, or authorizing or directing a distribution from an estate or trust;
(2) An order determining the validity of a will or trust;
(3) An order interpreting a will or a document that forms the basis of a claim against an estate or trust;
(4) An order interpreting, modifying, reforming or terminating a trust;
(5) An order determining the status of fiduciaries, beneficiaries, or creditors in an estate, trust, or guardianship;
(6) An order determining an interest in real or personal property;
(7) An order issued after an inheritance tax appeal has been taken to the Orphans’ Court pursuant to either 72 Pa.C.S. § 9186(a)(3) or 72 Pa.C.S. § 9188, or after the Orphans’
Court has made a determination of the issue protested after the record has been removed from the Department of Revenue pursuant to 72 Pa.C.S. § 9188(a); or
(8) An order otherwise appealable as provided by Chapter 3 of these rules.
Pa.R.A.P. 342(a).
We agree with the orphans’ court that its July 7, 2022 order does not fall within any of the categories enumerated in Rule 342(a). See OCO at 2. Nonetheless, because Settlor claims in his response to our rule to show cause that the order is immediately appealable as of right pursuant to subsections (a)(4), (5), (6), and (8) of this rule, we address these provisions in further
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detail herein. Initially, Settlor surmises that the orphans’ court “interpreted” the Trust Agreement in reaching its conclusion that he lacked standing to participate in the pending proceedings. Response Letter, 9/27/22, at 3. He further avers that the Uniform Trust Act (“UTA”), 20 Pa.C.S. §§ 7701-7790.3, entitles him to information regarding the Trust’s administration 3 and permits him to seek removal of a trustee.4 Id. (citations omitted). Yet, Settlor maintains that, despite these provisions, the orphans’ court “determined [his] status under the Trust” and found that he had “no interest in the Trust or its assets[.]” Id. He therefore concludes that subsections (a)(4), (5) and (6) apply. Id. at 3-4. We disagree.
First, we reject Settlor’s contention that the July 7, 2022 order constitutes “[a]n order interpreting … a trust[.]” See Pa.R.A.P. 342(a)(4). To the contrary, the order in question merely sustained Laubach’s and John P.’s preliminary objections to Settlor’s filings based on its finding that Settlor lacks standing to participate in the underlying proceedings. See OCO a 4-5 (“By [o]rder dated July 7, 2022, the [c]ourt determined that Settlor does not have standing to participate in the pending proceedings concerning the … Trust and ordered that the pleadings filed by Settlor in this matter be stricken.”). The
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3 See 20 Pa.C.S. § 7780.3(a) (“A trustee shall promptly respond to a reasonable request by the settlor of a trust … for information related to the trust’s administration.”).
4 See 20 Pa.C.S. § 7766(a) (“The settlor … may request the court to remove a trustee….”).
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orphans’ court was not required to “interpret” the Trust Agreement in reaching its decision. As John P. set forth in his objections:
“Standing requires a party to have a substantial interest in the subject matter of the litigation; the interest must be direct; and the interest must be immediate and not a remote consequence.”
Rock v. Pyle, 720 A.2d 137, 142 (Pa. Super. 1998)…. “[A]
person who is not adversely affected in any way by the matter he seeks to challenge is not ‘aggrieved’ thereby and has no standing to obtain judicial resolution of his challenge.” Wm. Penn Parking Garage, Inc. v. City of Pittsburgh, 346 A.2d 269, 280 ([Pa.]
1975).
Preliminary Objections to Settlor’s Answer and New Matter to Settlement Approval Petition, 6/15/20, at ¶ 40. John P. further averred that Settlor has no beneficial interest in the Trust; has no substantial, direct, or immediate interest in the outcome of the pending proceedings; and would not be adversely affected by the approval of the Settlement Agreement or confirmation of the accounts as filed. Id. at ¶¶ 44, 46; Preliminary Objections to Settlor’s Answer to Removal Petition, 11/2/20, at ¶¶ 5, 12; Preliminary Objections to Settlor’s Objections to Second Account, 2/22/21, at ¶¶ 5, 20.
In response, Settlor admitted that he is not a beneficiary of the Trust, but denied having “no interest” in the Trust. Answer to Preliminary Objections, 11/23/20, at ¶ 5. Significantly, Settlor does not point to any specific terms of the Trust Agreement which grant him an interest in the Trust or that would permit him to participate in the underlying proceedings. He only avers that he has a statutory right to enforce the Trust. See id.; Answer to Preliminary Objections, 3/15/21, at ¶¶ 5, 20. See also Memorandum of Law in Opposition to Preliminary Objections, 2/1/21, at 15 (asserting that Sections
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7766(a) and 7780.3 of the UTA grant Settlor standing to participate in the pending proceedings regarding the Trust). Thus, there is no dispute between the parties requiring the court’s “interpretation” of the Trust Agreement.
Instead, it is evident that the orphans’ court’s determination regarding Settlor’s standing was largely based on its analysis of the statutory rights asserted by Settlor. See OCO at 12-13 (explaining that Settlor’s reliance on Section 7780.3 to support his position that he has standing to participate in the proceedings is misplaced); id. at 13-14 (concluding that a settlor’s right to seek removal of a trustee under Section 7766(a) does not confer upon Settlor standing in the proceedings currently pending before the orphans’ court). See also id. at 14 (opining that “Settlor cannot bootstrap the right to request removal of a trustee under [Section] 7766(a) to expand his standing to allow him to participate in other proceedings concerning the Trust”); id. (noting that, here, “a request has been made by another party (John P.) to remove Laubach as trustee[,]” and stating that Section 7766(a) does not grant Settlor standing to intervene in another party’s request to remove a trustee) (emphasis added). Based on the foregoing, we conclude that the order from which Settlor appeals does not fall within Rule 342(a)(4).
As to Settlor’s assertion that the order is appealable under subsection (a)(5) because the order “determined Settlor’s status,” we note that (a)(5) expressly applies only to orders determining the status of “fiduciaries, beneficiaries, or creditors[.]” Pa.R.A.P. 342(a)(5). Settlor makes no claim that he is a fiduciary, beneficiary, or creditor of the Trust, nor are there any
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facts of record to establish him as such.5 Likewise, we reject Settlor’s claim that the order determined an interest in Trust assets and is therefore appealable under subsection (a)(6). The July 7, 2022 order made no determination regarding the assets of the Trust. To the contrary, it merely determined that Settlor has no standing to participate in confirmation of the accounts filed regarding the Trust or in approval of the Settlement Agreement entered between John P. and Laubach. Moreover, we observe that Settlor has made no claim to any Trust assets.
Additionally, Settlor argues that Rule 342(a)(8) is applicable, which provides that an orphans’ court order “is immediately appealable when it is otherwise appealable under Chapter 3 of the Rules of Appellate Procedure.” Response Letter at 4 (citing Pa.R.A.P. 342(a)(8)). By way of this catchall provision, Settlor points to Rule 311(a)(8), which states that an interlocutory order is appealable as of right if it is made final by statute or general rule. Id. (citing Pa.R.A.P. 311(a)(8)). He then suggests that the preliminary objections “were the functional equivalent of a request for declaratory relief[,]” and that the July 7, 2022 order “effectively awarded declaratory relief regarding [Settlor’s] status and rights under the [Settlement Agreement] and the
[UTA.]” Id. Settlor concludes therefore that the order had “the force and
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5 See 20 Pa.C.S. § 102 (defining “fiduciary” as including “personal representatives, guardians, and trustees, whether domiciliary or ancillary, individual or corporate, subject to the jurisdiction of the orphans’ court division”); Answer to Preliminary Objections, 11/23/20, at ¶ 5 (Settlor’s admitting that he is not a beneficiary of the Trust); OCO at 3 (indicating that John P. is the sole current beneficiary of the Trust).
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effect of a final judgment or decree” under Section 7532 of the Declaratory Judgment Act, 42 Pa.C.S. §§ 7531-7541. Id. (citing 42 Pa.C.S. §§ 7532, 7533, 7535). In doing so, we believe that Settlor misconstrues the nature of the order from which he appeals.
The July 7, 2022 order made no declaration regarding Settlor’s “status or rights” under the Trust Agreement or the UTA. It merely made the threshold determination that Settlor does not have standing to participate in the underlying proceedings, which remain pending before the orphans’ court. No final judgment or decree has been entered. See OCO at 2 (“Indeed, two accounts of this Trust remain pending and [are] awaiting adjudication by this [c]ourt at this time.”); id. at 4 n.2 (noting that the Removal Petition remains pending). Thus, we remain unconvinced that Rule 342(a)(8) applies here.
Finally, Settlor claims that the July 7, 2022 order is appealable as a collateral order under Pa.R.A.P. 313.
A “collateral order” is “an order separable from and collateral to the main cause of action where the right involved is too important to be denied review and the question presented is such that if review is postponed until final judgment in the case, the claim will be irreparably lost.” Pa.R.A.P. 313(b). “All three elements must be satisfied to permit review of an interlocutory appeal under the collateral order rule.” Jacksonian v. Temple University Health System Foundation, 862 A.2d 1275, 1279 (Pa. Super. 2004).
In re Estate of Moskowitz, 115 A.3d 372, 389 (Pa. Super. 2015). The collateral order doctrine must be narrowly applied. Geniviva v. Frisk, 725 A.2d 1209, 1214 (Pa. 1999) (citing Digital Equipment Corporation v. Desktop Direct, Inc., 511 U.S. 863, 868 (1994)). Our Supreme Court has
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further emphasized that “[c]laims must be analyzed not with respect to the specific facts of the case, but in the context of the broad public policy interests that they implicate. Only those claims that involve interests deeply rooted in public policy can be considered too important to be denied review.” Id. (emphasis added; internal quotation marks and citation omitted).
The order from which Settlor appeals does not meet all three prongs necessary to establish a collateral order. While the order may be separable from the main cause of action in the underlying proceedings, we cannot say that Settlor’s claim involves interests deeply rooted in public policy. Rather, resolution of this matter is only important to the parties involved in this litigation. See Jacksonian, 862 A.2d at 1280 (explaining that, in determining whether the importance prong of the collateral order doctrine is met, “it is not sufficient that the issue be important to the particular parties…[. I]t must involve rights deeply rooted in public policy going beyond the particular litigation at hand.”) (citation omitted). Hence, the instant order fails the importance prong of the collateral order rule. Because an order must satisfy all three prongs of the rule to qualify as a collateral order, see id. at 1282, we do not need to address the third prong.
Based on the foregoing, we conclude that the orphans’ court’s July 7, 2022 order is interlocutory and that the instant appeal is not properly before us. Accordingly, we are constrained to quash Settlor’s appeal.
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Nevertheless, even if we were to reach the merits of Settlor’s claims, we would affirm the orphans’ court’s decision sustaining the preliminary objections to Settlor’s filings in this matter on the grounds that he lacks standing. Notably, “[t]hreshold issues of standing are questions of law; thus, our standard of review is de novo and our scope of review is plenary.” Rellick- Smith v. Rellick, 147 A.3d 897, 901 (Pa. Super. 2016) (quoting Johnson v. Am. Std., 8 A.3d 318, 326 (Pa. 2010)).
In Pennsylvania, the doctrine of standing … is a prudential, judicially created principle designed to winnow out litigants who have no direct interest in a judicial matter. In re Hickson, … 821 A.2d 1238, 1243 ([Pa.] 2003)…. For standing to exist, the underlying controversy must be real and concrete, such that the party initiating the legal action has, in fact, been “aggrieved.” … [T]he core concept of standing is that a person who is not adversely affected in any way by the matter he seeks to challenge is not “aggrieved” thereby and has no standing to obtain a judicial resolution to his challenge. A party is aggrieved for purposes of establishing standing when the party has a substantial, direct and immediate interest in the outcome of litigation. A party’s interest is substantial when it surpasses the interest of all citizens in procuring obedience to the law; it is direct when the asserted violation shares a causal connection with the alleged harm; finally, a party’s interest is immediate when the causal connection with the alleged harm is neither remote nor speculative.
Id. (quoting Office of Governor v. Donahue, 98 A.3d 1223, 1229 (Pa. 2014)).
We have assessed the detailed and well-reasoned opinion of the Honorable Lois E. Murphy of the Court of Common Pleas of Montgomery County, Orphans’ Court Division. Judge Murphy’s opinion thoroughly explains her basis for finding that Settlor lacks standing to participate in the underlying
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proceedings and for sustaining the preliminary objections. See OCO at 5-14. Specifically, Judge Murphy addresses Settlor’s lack of standing under both Pennsylvania case law and the UTA. After considering relevant case law, she concludes that Settlor will not be impacted in any way by the outcome of the pending proceedings pertaining to the Trust, as he has no substantial, direct, or immediate interest in the Trust. Id. at 5-9. Additionally, Judge Murphy considers the UTA’s recognition of a settlor’s ability to participate, in limited circumstances, in the ongoing administration of non-charitable irrevocable trusts. See id. at 10-14 (citing, inter alia, 20 Pa.C.S. §§ 7780.3(a), 7766(a)). However, she determines that none of these circumstances are applicable here. Id. at 12.6 Judge Murphy’s decision is supported by ample, competent evidence in the record, and we would discern no error of law or abuse of discretion. Accordingly, we would adopt her opinion as our own, and we would affirm the order sustaining the preliminary objections.
Appeal quashed.
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6 We note that the orphans’ court’s ruling that Settlor lacks standing to participate in the pending proceedings concerning the Trust does not prevent Settlor from filing a petition under 20 Pa.C.S. § 7766(a), to seek the removal of a trustee. See OCO at 13-14 (“Settlor has suggested in his filings before the [o]rphans’ [c]ourt that he has concerns about John P.’s fitness to serve as co-trustee of the Trust and was ‘exploring whether to petition to remove John P. as co-trustee of the Trust’ pursuant to 20 Pa.C.S. § 7766(a).”); id. at 14 (acknowledging that “Settlor has standing under [Section] 7766(a) to file a request to remove John P. as co-trustee[,]” and noting that “Settlor has not to date filed such a petition”). Nor does it prevent Settlor from making (or seeking enforcement of) a reasonable request for information concerning the administration of the Trust, pursuant to 20 Pa.C.S. § 7780.3(a).
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Date: 3/25/2024
Circulated 03/14/2024 10:36 AM