Owens v. Mazzei

847 A.2d 700
CourtSuperior Court of Pennsylvania
DecidedApril 7, 2004
StatusPublished
Cited by42 cases

This text of 847 A.2d 700 (Owens v. Mazzei) 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
Owens v. Mazzei, 847 A.2d 700 (Pa. Ct. App. 2004).

Opinion

OPINION BY JOHNSON, J.:

¶ 1 Frances Mazzei, Lucia Squitieri, and Prudential Savings Bank, PaSA, (collectively “Prudential”) appeal the trial court’s order finalizing a decree nisi that held the defendants jointly and severally hable to the Estate of Carmen DiCesare for $563,767.40, together with interest and costs. The court determined that Mazzei and Squitieri had, while acting in the course and scope of their duties as bank employees, exercised undue influence over the decedent to cause him to name them as the sole beneficiaries of a bank account that contained the bulk of his assets. Accordingly, the court imposed liability on the bank under a theory of respondeat superior, and found the bank liable directly for negligent supervision. Prudential asserts that the court erred as a matter of law in determining the duty of care applicable to the bank’s conduct, and argues also that the evidence does not sustain the court’s findings. Upon review of the court’s painstaking findings and conclusions, we find Prudential’s assertions mer-itless and affirm the court’s order.

¶ 2 This matter arose out of a challenge by the decedent’s estate to the transfer to Mazzei and Squitieri of the balance of an account that the decedent held at Prudential Savings Bank. The account, of a type sometimes known as a “poor man’s will,” provided ostensibly that the principal was held by the decedent in trust for Mazzei and Squitieri as beneficiaries. Not coincidentally, Mazzei and Squitieri were the branch manager and assistant manager, respectively, of the bank’s branch at 19th and Snyder Streets in south Philadelphia where the decedent had opened the account. Both had participated in opening the account after Mazzei told the decedent, then 82 years old, that she could not process his request for direct deposit of his social security check into his passbook account because he had lost the passbook. Mazzei required accordingly that to obtain direct deposit the decedent open the new account (ITF account).

[704]*704¶ 3 On August 8, 2000, the decedent opened the account and expressed his intent in a writing prepared by Mazzei: “I CARMEN DICESARE ON 8-8-00 OPEN NEW ACCOUNT # 01-90-31273. I WISH TO PUT THE ACCOUNT IN TRUST TO FRANCES MAZZEI AND LUCIA SQIIERI [sic].” That day, the decedent transferred into the account the balance of his other accounts at Prudential, ($247,165.34), as well as money on deposit at nearby Sharon Savings Bank (Sharon) ($311,263.24). The following day, he withdrew the remainder of his deposits from Sharon, ($122,026.05), and moved the sum to the ITF account at which point the balance reached $680,454.63. Mazzei wrote the account balance on a piece of paper in large numbers with a black marker and gave it to the decedent along with a duplicate passbook. The duplicate passbook did not contain the number of the account and could not be used to transact business at any other Prudential Branch. The original passbook, required either to make withdrawals or to change beneficiaries, remained at the branch in the possession of Squitieri and Mazzei. The account balance was supplemented thereafter with the arrival of the decedent’s social security payments in the amount of $709 per month.

¶ 4 Following the decedent’s passing on June 13, 2001, the bank transferred $698,566.72 from the ITF account to a Prudential account titled to Mazzei and Squitieri. Over the following three months, Mazzei and Squitieri moved the money to other accounts at Prudential using journal debits, and ultimately withdrew the money. Because bank policy prohibited employees from handling transactions on their own accounts, each of the women would handle the other’s transfers. On September 24, 2001, two days after they learned that the decedent’s estate had retained counsel, Mazzei and Squitieri made their final withdrawals, removing a remaining total of $408,000. Again, each counter-signed the other’s withdrawal. Subsequently, Mazzei deposited her share of the money in her husband’s account at the Police Fire Credit Union and he, in turn, wrote a series of checks to various friends and neighbors averaging $9,000 each.

¶ 5 By decree dated December 28, 2001, the Register of Wills appointed Theresa Owens (the Administrator) administrator of the Estate of Carmen DiCesare. On January 8, 2002, the Administrator petitioned the Orphans’ Court for Citation to Show Cause Why Assets Should Not be Turned Over to the Estate. The Administrator sought the return of all sums paid to Mazzei and Squitieri from the ITF account, claiming that the two had obtained the money by exercise of undue influence. Additionally, the Administrator sought recovery from Prudential on theories of re-spondeat superior and negligent supervision, contending that Mazzei and Squitieri had acted within the course and scope of their duties with Prudential when they opened the ITF account, and that Prudential had failed, inter alia, to impose effective policies and procedures to prevent self-dealing by bank employees.

¶ 6 On April 23, 2002, following a hearing, the court ordered Mazzei and Squitieri to pay all remaining proceeds of the ITF account to Jerome R. Balka, Esquire, to be held in escrow pending final disposition of the Estate’s claim. However, Mazzei and Squitieri were able to remit only $156,000. Subsequently, in November 2002, the court commenced trial on the Estate’s claim for the remainder of the money. Following extensive testimony, including that of medical experts, as well as neighbors and caretakers who observed the decedent before and after the opening of the ITF account, the court concluded that the decedent suf[705]*705fered from a weakened state of mind, that he had trusted Mazzei and Squitieri to assist him and protect his assets, and that they had exploited his trust to convert those assets to them own uses. The court concluded further that the defendants failed to rebut the resulting presumption of undue influence. Accordingly, the court held Mazzei, Squitieri, and the bank liable on the Estate’s claims of undue influence.

¶ 7 Concerning the Estate’s claims of negligent supervision, the court reached the conclusion that:

Negligence and inconsistency permeate the bank’s environment....
Throughout the trial, the Court heard evidence of the Bank’s selective application of account opening policies and procedures, and unwritten exceptions or modifications to nearly every Bank policy applicable to the transactions and documents at issue. Both Mazzei and Squitieri exploited this procedurally liquid environment.... The Bank’s environment, and lack of meaningful controls proved fertile soil for the undue influence at issue.

Trial Court Opinion, 5/5/03, 34-35. Consequently, the court held the bank liable for negligent supervision. The court then entered the decree that all three defendants now appeal.

¶ 8 For purposes of appellate review, Mazzei and Squitieri have joined the brief filed by Prudential. Prudential raises the following questions for our review:

1.Did the Orphans’ Court err in finding that a confidential relationship existed between Frances Mazzei (“Mazzei”) and Lucia Squitieri (“Squitieri”), two employees of Prudential Savings Bank, PaSA (“Prudential”), and Carmen DiCesare (the “Decedent”), a bank customer, which enabled Mazzei and Squitieri to exercise undue influence over the Decedent?
2.

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Cite This Page — Counsel Stack

Bluebook (online)
847 A.2d 700, Counsel Stack Legal Research, https://law.counselstack.com/opinion/owens-v-mazzei-pasuperct-2004.