Vincent J. Fumo Irrevocable Children's Trust Ex Rel. Benefit of Fumo

104 A.3d 535, 2014 Pa. Super. 235, 2014 Pa. Super. LEXIS 3926, 2014 WL 5305814
CourtSuperior Court of Pennsylvania
DecidedOctober 17, 2014
Docket2459 EDA 2013
StatusPublished
Cited by15 cases

This text of 104 A.3d 535 (Vincent J. Fumo Irrevocable Children's Trust Ex Rel. Benefit of Fumo) 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
Vincent J. Fumo Irrevocable Children's Trust Ex Rel. Benefit of Fumo, 104 A.3d 535, 2014 Pa. Super. 235, 2014 Pa. Super. LEXIS 3926, 2014 WL 5305814 (Pa. Ct. App. 2014).

Opinions

OPINION BY

JENKINS, J.

Vincent J. Fumo (“Father”) appeals from a decree' removing Anthony Repici, M.D. as trustee of a trust Father created for his daughter, Allison Fumo (“Daughter”), and appointing Sylvia DiBona as successor trustee of Daughter’s trust. After careful review, we affirm.

I.

Through a Trust Agreement created in 2006, Father created inter vivos irrevocable trusts for two of his children, Vincent E. Fumo, Jr. (“Son”) and Allison Fumo (“Daughter”), so that they and their children could live comfortably. Under the Trust Agreement, Son’s and Daughter’s trusts each became a 49.5% owner of the assets in the Fumo Family Limited Partnership (“FFLP”). Father named Rose-anne Pauciello as the trustee of both trusts.

In 2009, Father was convicted of mail fraud and other offenses. In early 2010, shortly before going to federal prison, and faced with dwindling finances, Father obtained a $1.4 million loan from the FFLP with a repayment date of 2013. In 2011 and 2012, he modified the loan to extend [538]*538the repayment date to 2040, when he will be 97 years old, and he then defaulted on the loan in its modified form.

On September 8, 2011, Pauciello announced that she was resigning as trustee. No one performed the duties of trustee between September 2011 and October 23, 2012, when, despite her prior resignation, Pauciello purported to appoint Samuel Bennett, the brother-in-law of Father’s fi-ancé, as successor trustee.

On October 23, 2012, fearing that Bennett would not enforce repayment of the $1.4 million loan to the FFLP, Daughter filed a petition opposing Bennett’s appointment as successor trustee and requesting termination of the trust. Daughter amended her petition twice in October and November of 2012. In response, Father and Bennett each appointed Anthony Rep-ici, Father’s longtime friend and personal physician, as successor trustee in place of Bennett.

On August 1, 2013, following an eviden-tiary hearing, the Orphans’ Court entered a decree declaring Bennett’s appointment of Repici null and void; declaring Father’s appointment of Repici null and void; denying Father’s motion to keep the record open so that he could testify in court following his release from prison; and appointing Daughter’s nominee, Sylvia DiBo-na, as successor trustee1. On August 29, 2013, Father filed a timely notice of appeal2. Without ordering Father to file a statement of matters complained of on appeal, the court filed a detailed opinion articulating its findings of fact and conclusions of law.

Father raises four arguments on appeal: (1) the Orphans’ Court abused its discretion in nullifying Repici’s appointment as successor trustee; (2) Daughter had no right to seek Repici’s removal because her petitions only sought Bennett’s removal as trustee; (3) the Orphans’ Court improperly refused to keep the record open so that Father could testify in court following his release from prison; and (4) the court improperly overruled Father’s preliminary objections to Daughter’s second amended petition.

We hold that the Orphans’ Court properly decreed Bennett’s appointment of Repici null and void. The Trust Agreement required Pauciello to appoint a successor trustee within sixty days after she became unwilling to serve as trustee. Pauciello did not appoint Bennett as successor trustee until 13 months after she became unwilling to serve. Thus, Pauciel-lo’s appointment of Bennett was a nullity, which in turn nullified Bennett’s appointment of Repici.

Furthermore, the Orphans’ Court properly decreed Father’s appointment of Rep-ici null and void. The Trust Agreement prohibits Father from serving as successor trustee. The Orphans’ Court’s opinion makes clear that it regards Repici as Father’s alter ego due to their close, longtime friendship. It therefore was necessary to decree Repici’s appointment a nullity to enforce the Trust Agreement’s plain language and intent.

In addition, the Orphans’ Court properly nullified Father’s appointment of Repici under the doctrine of unclean hands. The [539]*539Orphans’ Court found, and the record confirms, that Father appointed Repiei as part of his plan to thwart repayment of his loan to the FFLP. Although the Orphans’ Court did not use the term “unclean hands,” it obviously regarded Father as acting in this fashion. We do as well, since the evidence shows that Father appointed Repiei to exalt his own interests over Daughter’s.

Alternatively, the Orphans’ Court properly removed Repiei and appointed DiBona as successor trustee based on clear and convincing evidence of a “substantial change in circumstances.” 20 Pa.C.S. § 7766(b)(4). Daughter proved that Repi-ci’s appointment was part of Father’s plan to stymie repayment of his $1.4 million loan to the FFLP, and Repiei is unqualified to serve as trustee due to his close ties with Father and his lack of expertise in trust administration. Conversely, DiBona, a CPA and insurance broker as well as Daughter’s godmother, is well qualified to administer the trust and can be counted on to protect Daughter’s interests.

Finally, for the reasons provided below, we find no merit in the other arguments that Father raises on appeal.

II.

In an appeal from an Orphans’ Court decree,

[we] must determine whether the record is free from legal error and the court’s factual findings are supported by the evidence. Because the Orphans’ Court sits as the fact-finder, it determines the credibility of the witnesses and, on review, we will not reverse its credibility determinations absent an abuse of that discretion. However, we are not constrained to give the same deference to any resulting legal conclusions. Where the rules of law on which the court relied are palpably wrong or clearly inapplicable, we will reverse the court’s decree.

In re Estate of Brown, 30 A.3d 1200, 1206 (Pa.Super.2011) (citation omitted).

The Orphans’ Court’s decision to appoint or remove a trustee is subject to review for abuse of discretion. In re Croessant’s Estate, 482 Pa. 188, 393 A.2d 443, 446 (1978); Holmes Trust, 392 Pa. 17, 139 A.2d 548, 551 (1958) (“the court may remove a trustee if his continuing to act as trustee would be detrimental to the interests of the beneficiary. The matter is one for the exercise of a reasonable discretion by the court”); In Re Taylor’s Estate, 320 Pa. 1, 181 A. 482, 483 (1935) (appointment of successor trustee would not be disturbed on appeal in absence of abuse of discretion).

Moreover, the Orphans’ Court may invoke the doctrine of unclean hands when considering whether to appoint or remove a trustee. In Re Bosley, 26 A.3d 1104, 1114 (Pa.Super.2011) (citing Stauffer v. Stauffer, 465 Pa. 558, 351 A.2d 236, 245 (1976)). The decision to apply the unclean hands doctrine against a party is subject to review for abuse of discretion. Id.

In addition, the Orphans’ Court’s decision to deny a continuance or to keep the record open is also subject to review for abuse of discretion. In Re B.M.D., 492 Pa. 454, 424 A.2d 1278, 1280 n.

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Vincent J. Fumo Irrevocable Children's Trust Ex Rel. Benefit of Fumo
104 A.3d 535 (Superior Court of Pennsylvania, 2014)
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Bluebook (online)
104 A.3d 535, 2014 Pa. Super. 235, 2014 Pa. Super. LEXIS 3926, 2014 WL 5305814, Counsel Stack Legal Research, https://law.counselstack.com/opinion/vincent-j-fumo-irrevocable-childrens-trust-ex-rel-benefit-of-fumo-pasuperct-2014.