Klein, A. v. Silverman, A.

CourtSuperior Court of Pennsylvania
DecidedFebruary 10, 2020
Docket330 EDA 2019
StatusUnpublished

This text of Klein, A. v. Silverman, A. (Klein, A. v. Silverman, A.) is published on Counsel Stack Legal Research, covering Superior Court of Pennsylvania primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Klein, A. v. Silverman, A., (Pa. Ct. App. 2020).

Opinion

J-A27038-19

NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37

AMY B. KLEIN AND WENDY BECK AS : IN THE SUPERIOR COURT OF CO-EXECUTORS OF THE ESTATE OF : PENNSYLVANIA EDGAR A. WAITE AND : INDIVIDUALLY, : : Appellants : : v. : : ALAN D. SILVERMAN, ESQUIRE AND : GOLD, SILVERMAN, GOLDENBERG & : BINDER, : : Appellees : No. 330 EDA 2019

Appeal from the Order Entered December 20, 2018 in the Court of Common Pleas of Montgomery County Civil Division at No(s): 2015-10607

BEFORE: BOWES, J., SHOGAN, J. and STRASSBURGER, J.*

MEMORANDUM BY STRASSBURGER, J.: FILED FEBRUARY 10, 2020

Amy B. Klein and Wendy Beck (collectively, Appellants), both

individually and as co-executors of the estate of Edgar A. Waite, appeal from

the order entered on December 20, 2018, which granted summary judgment

in favor of Alan D. Silverman, Esquire and Gold, Silverman, Goldenberg and

Binder (collectively, Appellees) in this legal malpractice case. After review,

we reverse the order granting summary judgment.

For over [40] years, Attorney Silverman was the attorney for Waite. Attorney Silverman provided legal advice for Waite’s business interests and for Waite’s estate planning matters. Attorney Silverman’s last [face-to-face] contact with Waite was in ____________________________________________

* Retired Senior Judge assigned to the Superior Court. J-A27038-19

the mid to late 1990s. Appellants are the daughters of Waite and his first wife, who [is] deceased. Waite and his second wife, Janet Waite [(“Mrs. Waite”)], were married for approximately [30] years before Waite’s death in August 2013. The case sub judice arises from the May 31, 2013, sale of two income producing properties, a Midas Muffler and a 7-Eleven Store, (“Commercial Properties”), owned by Waite.

In 2001, Waite established the Edgar A. Waite, Jr. 2001 Family Trust. The 2001 Family Trust reflected Waite’s intention to provide for [Mrs. Waite] during her lifetime with income derived from assets placed in the trust, and upon Mrs. Waite’s death, the remainder principal would be distributed to separate trusts for the benefit of Waite’s issue (daughters and granddaughters of his first marriage). On January 30, 2006, Waite executed a Last Will and Testament. Appellants do not dispute that Waite had testamentary capacity in 2006. The Will provided, inter alia, at ITEM 3:

Specific Bequests--C. "If my wife, JANET WAITE, survives me, I direct that my interests in the following parcels of real estate: 120 South York Road, Hatboro, PA 19040, (Red Barn, Parcel No. 08-00-06661-009); 1790 Easton Road, Doylestown, PA 18901, (Midas Muffler, Parcel No. 09-019003); and 1796 East Road, Doylestown, PA 18901, (7-Eleven, Parcel No. 09- 019004), if owned by me at my death, be held in further trust for the benefit of my said wife upon the following terms and condition [(sic)]:

(1) Trustee shall pay the entire net income therefrom, in quarterly or more convenient installments, to my wife, JANET WAITE, during her life.

[See Amended Complaint, 7/17/2017, Exhibit C (emphasis added)]. The Will provided that if Waite owned certain commercial properties at the time of his death, the income from those properties would be paid to the marital trust for the benefit of his wife, and that during her lifetime, she was to receive the entire income from those properties. Mrs. Waite had the ability to invade the principal for her welfare, care, maintenance and support. Appellants were the residuary beneficiaries of the marital trust. Attorney Silverman did not draft the January 30, 2006 Will, but

-2- J-A27038-19

he was aware of the terms and on two separate occasions he drafted two codicils to the Will.

In August 2006, Waite was diagnosed with Alzheimer’s disease. In 2007, Attorney Silverman drafted a durable power of attorney [(POA)] in which Waite appointed his wife as his agent and appointed his daughter as the alternative agent. The durable [POA] did not comply with statutory requirements.

As the disease progressed in 2012, it became necessary to obtain nursing services in the Waite home to assist Mrs. Waite in caring for her husband. At this time, the Waites did not have sufficient income to pay the substantial additional expenses, their living expenses and other, multiple outstanding debts. Eventually, costly [24] hour care became necessary.

In early 2012, Mrs. Waite consulted [Attorney Silverman] as to whether she could sell the Commercial Properties to pay medical bills related to Waite’s healthcare. Attorney Silverman advised her that this was possible and it was determined that the Commercial Properties would be sold. Mrs. Waite did not seek financial or tax advice from Attorney Silverman, and there is no evidence that any such financial advice was provided by Attorney Silverman.

Mrs. Waite accomplished the sale of the Commercial Properties as attorney in fact for Waite. As mentioned above, Waite signed a durable [POA] appointing Mrs. Waite as his attorney in fact in 2007. Said 2007 [POA], drafted by Attorney Silverman, did not include the statutory notice. Thus, the title company required a new [POA] form for each property.

Attorney Silverman did not make any inquiry as to Waite’s mental capacity to sign but emailed Mrs. Waite that, “[Waite] had to [be] able to comprehend what he is signing for the POA to be valid.” Attorney Silverman forwarded the [POAs] prepared by the title company to Mrs. Waite for Waite’s signature, and the powers were signed in March 2013, at the time of closing of the sale.

The Commercial Properties’ sales price was $1.8 million, and after expenses, realized $1,596,475.24[.] Because the Commercial Properties were sold during Waite’s lifetime, the sale was subject to capital gains tax. On the Waites’ 2013 federal and

-3- J-A27038-19

state tax returns, capital gains tax (plus underpayment penalty) totaled $414,791.

Waite passed away on August 5, 2013. Attorney Silverman became the attorney representing the Estate of Edgar A. Waite, thus representing Appellants as executor[s] of their father’s estate. The 2006 Will was probated along with the First and Second Codicils from 2011. Unfortunately, Mrs. Waite did not live very long after the death of her husband and she passed away on April 13, 2014, just eight [] months after the death of Waite.

Upon Waite’s death, Appellants [filed a complaint against Appellees, wherein Appellants] alleged that they [] suffered damages in the amount of $939,932.24, the difference between the net proceeds of sale and the funds that were deposited into the Family Trust following Waite’s death. Alternatively, Appellants allege they are entitled to the present value of $130,491 annual loss of net income suffered by the sale of the Commercial Properties calculated for [a] number of years determined by the trier of fact to be sufficient to fully compensate Appellants. Additionally, Appellants allege they are entitled to an award of punitive damages.

Trial Court Opinion, 4/30/2019, at 1-4 (footnote and some citations omitted;

party designations altered).

Following the completion of discovery, Appellees filed a motion for

summary judgment. On June 29, 2018, Appellants filed a cross-motion for

summary judgment. Following argument,1 the trial court granted Appellees’

motion for summary judgment and dismissed Appellants’ claims. Order

12/20/2018. In its opinion to this Court, the trial court explained that, while

it determined that Attorney Silverman owed a duty to Waite and his estate

____________________________________________

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Klein, A. v. Silverman, A., Counsel Stack Legal Research, https://law.counselstack.com/opinion/klein-a-v-silverman-a-pasuperct-2020.