Matter of Estate of Evasew

584 A.2d 910, 526 Pa. 98, 1990 Pa. LEXIS 222
Supreme Court of Pennsylvania·Decided December 28, 1990·No. 175 Eastern District Appeal Docket 1988·Published·Cited by 38 cases

Opinions

OPINION OF THE COURT

PAPADAKOS, Justice.*

Mary Evasew died testate on September 28, 1985, designating her seven children as residuary beneficiaries including her children, Helen Holeva, Alexander Evasew and Robert Evasew. Helen Holeva was appointed Executrix of the estate and was authorized by the decedent’s will to sell any estate property “for such price or prices and upon such terms and conditions as she, in her sole discretion, may deem best.” (Record Oa). At the time of her death, the decedent owned two parcels of real estate, property situate on Church Street and a farm in Charleston Township, Chester County. In an effort to settle the estate promptly, the Executrix decided to sell both properties. To assist her, the Executrix hired J. Puleo and Sons to appraise both properties for estate tax purposes and engaged them to sell the Church Street property. At this time, the Executrix was already undertaking negotiations with a prospective buyer for the purchase of the farm. Appellant, acting on behalf of J. Puleo and Sons, appraised the farm at between [100] $65,000 and $80,000.1 Negotiations for the sale of the farm were protracted. It was during this process that Appellant overheard a telephone conversation between the Executrix and a prospective buyer in which the buyer offered $75,000 for the farm. Thereafter, Appellant offered to purchase the property for $81,000 which the Executrix requested be submitted in writing to the attorney representing the estate.

After Appellant’s offer was tendered, a second appraisal for the farm from a different appraiser was received. This appraisal suggested a list price for the farm between $145,-000 and $160,000. The trial court later concluded on the basis of independent appraisals that the property was worth far more than the $81,000 offered by Appellant. In spite of the disparity between the appraisals, the Executrix entered into an agreement for the sale with the Appellant for $81,000.2

Robert and Alexander Evasew then commenced this litigation by filing a “Petition to Restrain Sale of Real Estate under PEF Code, Sec. 3353 and 3360 (20 P.C.S. 3360).” In this petition, Robert and Alexander Evasew alleged, inter alia, that Appellant procured the acceptance of his sales agreement for the purchase of the farm through fraud, by his failure to advise the Executrix of the fair market value and by Appellant buying the property himself; that the property was procured through the decedent’s mistake; and that the transaction was tainted as a result of a conflict of interest between Appellant, as agent for the estate with regard to the Church Street property, and as buyer of one of its two principal assets.

Following hearings, the trial court granted the petition, relying in part upon the Estate of Hughes, 357 Pa.Superior Ct. 104, 515 A.2d 581 (1986), and in part upon the trial court’s finding that a confidential relationship existed be[101] tween the Appellant and the Executrix and that Appellant breached that confidence. The Superior Court affirmed summarily on the basis of the trial court’s opinion. 380 Pa.Superior Ct. 656, 547 A.2d 444. In addition, in a footnote, the Superior Court held that the trial court’s reliance on the Superior Court’s opinion in Estate of Hughes, subsequently reversed by this Court, was secondary and not germane to the disposition of this appeal. In any event, the Superior Court concluded that our opinion in Estate of Hughes was distinguishable from this appeal and therefore not applicable. We granted allocatur to review the applicability of our reasoning in Estate of Hughes, 517 Pa. 410, 538 A.2d 470 (1988). For reasons explained below, we affirm.

In Estate of Hughes, the decedent died intestate survived by four children. Hughes’ daughter, Mrs. Solomon, the Administratrix, entered into a sales agreement for the purchase of real estate with James Granito for $42,000. Prior to accepting the offer, the Administratrix had two appraisals performed. The sales agreement was contingent upon court approval. In accordance with the agreement, the Administratrix petitioned the court and provided notice to her brothers and sisters. As a result of this notice, the brothers and sisters tendered a subsequent offer from John Haretos in the amount of $60,000. After taking testimony, the eourt authorized the Administratrix to accept the second offer notwithstanding the first agreement. Granito filed exceptions to the order. The court en banc granted leave to the estate to file a request restraining the sale to Granito. The court then granted the relief, restrained the sale to Granito and authorized the conveyance of the property to Haretos. Granito again filed exceptions which were dismissed and that dismissal was affirmed by the Superior Court.

Although the estate and the lower court relied upon Section 3355 of the Probate and Fiduciary Code, 20 P.C.S. Section 3355, we held that Section 3360(a) of the Code was controlling. Section 3360(a) “clearly and unambiguously states that absent fraud, accident or mistake a court may [102] not set aside an agreement to sell estate property ... The intent of the legislature in enacting this statute was to prevent courts from being put in the position of being super executors/administrators, and to leave essentially private transactions in the hands of the individuals involved.” 517 Pa. at 415, 538 A.2d at 472.

We distinguished Section 3360(a) from Section 3355, which is only applicable under circumstances in which the personal representative has no authority to sell property. We then held that the remedy for an improvident sale is a surcharge action, not a restraint of the sale. 517 Pa. at 416, footnote 5, 538 A.2d 472, footnote 5.

The trial court in this instance restrained the sale of the farm based in part upon the conclusion that the $81,000 offer was grossly deficient. Citing Section 3360(a) and the Superior Court opinion in Estate of Hughes, supra, the trial court concluded that notwithstanding Section 3360(a), the court was empowered to restrain an improvident sale without a finding of fraud, accident or mistake. This was coupled with an expressed finding that no fraud had occurred here. As an alternative theory, the trial court determined that a confidential relationship existed here, that a breach of that relationship occurred, and that the breach made the agreement prima facie voidable. While the trial court’s conclusion here is sound, that court’s reasoning is confused. We find that the trial court was expressly authorized to restrain the sale here under the express language of Section 3360(a), and under our decision in Estate of Hughes, for the following reason.

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Matter of Estate of Evasew, 584 A.2d 910, 526 Pa. 98, 1990 Pa. LEXIS 222 (Pa. 1990).

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