Estate of Baehr

• Decision Date: 26 September 1991
• Citation: 596 A.2d 803,408 Pa.Super. 172
• Parties: ESTATE OF Leonard F. BAEHR, Deceased. Appeal of ARENTZEN, Jr.
• Court: Pennsylvania Superior Court

Page 803

596 A.2d 803

408 Pa.Super. 172

ESTATE OF Leonard F. BAEHR, Deceased.

Appeal of ARENTZEN, Jr.

Superior Court of Pennsylvania.

Argued March 20, 1991.

Filed July 16, 1991.

Reargument Denied Sept. 26, 1991.

Emmett F. Fitzpatrick, III, Philadelphia, for appellant.

Thomas F. Delaney, Ardmore and Joseph L. Higgins, West Chester, for Meridian Bank, participating party.

Before CIRILLO, OLSZEWSKI and CERCONE, JJ.

OLSZEWSKI, Judge:

Charles F. Arentzen, Jr., appeals from an order finding him in contempt for refusing to file an accounting of his actions as executor of the estate of Leonard F. Baehr and related transactions completed under a power of attorney. The order also remanded Arentzen to the custody of the Sheriff of Philadelphia County until such time as Arentzen purged the contempt by filing the required accounts. This Court granted a stay of Arentzen's commitment to custody until further order of the court.

On appeal, Arentzen asserts that he cannot be forced to file the accountings, because to do so would violate his right against self-incrimination under the Fifth Amendment to the United States Constitution and Article 1, Section 9 of the Pennsylvania Constitution. ¹ Arentzen also claims that if the finding of contempt was proper, the trial court had no power to imprison him as he acted indirectly through his attorney. Therefore, Arentzen concludes, he did not personally refuse to comply with the trial court's directives and so was not guilty of direct contempt and cannot be imprisoned. After consideration of Arentzen's arguments, we affirm the trial court's order, vacate the stay and remand Arentzen to the custody of the Sheriff of Philadelphia County until such time as he purges himself of the contempt by filing the required accountings.

The factual history of this case may be summarized as follows. On January 28, 1988, the decedent Baehr appointed Arentzen attorney-in-fact and agent by a power of attorney. (Appellant's brief at 4.) Upon Baehr's death in November 1988, Arentzen was appointed executor of Baehr's will. (Trial court opinion at 1.) Arentzen filed an inventory with the Orphans' Court on August 29, 1989, listing assets of the estate in excess of $1,500,000.00. (Id. at 2.)

A dispute arose over the validity of a codicil to the decedent's will dated August 8, 1988. (Id. at 1.) That codicil revokes residual gifts to the decedent's two granddaughters and leaves his estate to his daughter, Joyce Furst. (Id.) The disinherited granddaughters filed a petition with the Orphans' Court alleging that Arentzen had engaged in improper conduct during his administration of the decedent's estate. (Id. at 2.) At a hearing on this petition, Arentzen agreed to resign his appointment as executor. (Id. at 3.) The Orphans' Court entered a decree ordering Arentzen to file an account of his administration of the estate and an account of any transactions occurring pursuant to the power of attorney. (Id.) Said accountings were to be filed within 60 days. (Id.)

Arentzen declined to file the required accountings because he claims that to do so would force him to incriminate himself. Arentzen based his claim upon a grand jury subpoena issued to Joyce Furst. (Appellee's brief, exhibit "C".) Although the subpoena does not specify the subject of the investigation, Arentzen's counsel claims that an unidentified deputy district attorney informed him that Arentzen was the target of the investigation, which concerned Arentzen's handling of the estate and activities pursuant to the power of attorney. (Trial court opinion at 4.) The counsel for the decedent's estate testified that other grand jury subpoenas had been issued to his staff and that the investigation did target Arentzen. (Reproduced record [R.R.] at 14a-15a.)

The Orphans' Court found Arentzen in contempt for refusing to file the accountings. This appeal followed. As an initial matter, we note our extremely narrow standard of review. On appeal from a finding of contempt, our inquiry is limited to an examination of whether the trial court committed a clear abuse of discretion. East & West Services Corp. v. Papahagis, 344 Pa. 188, 189-190, 25 A.2d 341, 342 (1942) (citations omitted). With this standard in mind, we examine Arentzen's claims.

When the privilege against self-incrimination is invoked, the Court must ascertain whether the witness is entitled to the protection claimed. Commonwealth v. Carrera, 424 Pa. 551, 552-553, 227 A.2d 627, 629 (1967). Prosecution need not be imminent to justify the exercise of the privilege, a reasonable cause for the witness to apprehend a danger of prosecution is sufficient. Id. Further, it is clear that the privilege can be claimed in a civil as well as criminal proceeding. United States Steel & Carnegie Pension Fund v. Decatur, 364 Pa.Super. 294, 296-298, 528 A.2d 165, 166-167 (1987).

The trial court noted that the evidence did not support Arentzen's contention that he had reasonable cause to apprehend a danger of prosecution. (Trial court opinion at 6.) We disagree. It is indisputable that a grand jury investigation is in fact occurring. Arentzen was informed by two separate sources that he was the target. The staff of counsel for the decedent's estate has been subpoenaed, as well as Furst, who was alleged to have aided Arentzen in unduly influencing the decedent. The totality of the circumstances presented in the record must be examined to determine whether a witness invoking the privilege has reasonable cause to fear prosecution. Carrera, supra. See also, Commonwealth v. Franklin, 397 Pa.Super. 265, 273-274 n. 8, 580 A.2d 25, 29 n. 8 (1980) (citations omitted). The circumstances described above are more than enough to give a reasonable man cause for apprehension. A witness need not be sure that prosecution will occur if he testifies, he need only reasonably fear prosecution to invoke the privilege. Carrera, supra. We hold that Arentzen properly invoked the privilege. This, however, does not end our inquiry. The privilege is not absolute, there are exceptions which will require the witness to testify despite the applicability of the privilege. Accordingly, we turn to an examination of whether such an exception applies here.

The trial court relied upon the "collective entity" exception in ordering Arentzen to file the required accountings. (Trial court opinion at 7-10, citing, Wilson v. United States, 221 U.S. 361, 31 S.Ct. 538, 55 L.Ed. 771 (1911); Wheeler v. United States, 226 U.S. 478, 33 S.Ct. 158, 57 L.Ed. 309 (1913); Grant v. United States, 227 U.S. 74, 33 S.Ct. 190, 57 L.Ed. 423 (1913); United States v. White, 322 U.S. 694, 64 S.Ct. 1248, 88 L.Ed. 1542 (1944); United States v. Fleischman, 339 U.S. 349, 70 S.Ct. 739, 94 L.Ed. 906 (1950); Rogers v. United States, 340 U.S. 367, 71 S.Ct. 438, 95 L.Ed. 344 (1951); McPhaul v. United States, 364 U.S. 372, 81 S.Ct. 138, 5 L.Ed.2d 136 (1960); and Bellis v. United States, 417 U.S. 85, 94 S.Ct. 2179, 40 L.Ed.2d 678 (1974).) In essence, the trial court determined that the accountings were records belonging to the estate, an entity separate from Arentzen. As these accountings do not belong to Arentzen, and as the privilege is personal, the trial court concluded that Arentzen cannot invoke the privilege to avoid filing the accountings.

Arentzen responds by disputing the applicability of the "collective entity" exception. Arentzen asserts that the exception only applies to a custodian of records already in existence. Arentzen agrees that a custodian of the records of a collective entity cannot refuse to produce the records by invoking the privilege against self-incrimination. Arentzen distinguishes the present situation as follows: he is not a custodian of the required accountings as they do not yet exist, he has produced all existing financial records of his dealings with the estate and under the power of attorney, and the trial court is now attempting to force him to incriminate himself with the equivalent of oral testimony concerning his affairs in maintaining those records, which is specifically prohibited; therefore, he is not in contempt. (Appellant's brief at 9-10, citing, Braswell v. United States, 487 U.S. 99, 108 S.Ct. 2284, 101 L.Ed.2d 98 (1988) and Curcio v. United States, 354 U.S. 118, 77 S.Ct. 1145, 1 L.Ed.2d 1225 (1957).)

We need not address this dispute, as we find that the trial court's order to file the accountings is amply supported by a different exception to the privilege against self-incrimination. See, Krenzelak v. Krenzelak, 503 Pa. 373, 381, 469 A.2d 987, 991 (1983) (citation omitted) (court should not address constitutional question unless absolutely necessary). See also, Johnson v. Earl Scheib, Inc., 352 Pa.Super. 278, 282, 507 A.2d 1228, 1230 (1986) (citation omitted) (appellate court may affirm a correct ruling of the trial court on an alternate legal theory from that employed below).

We find that the "required records" exception to the privilege applies to the facts herein. ² The required records exception was announced by the United States Supreme Court in Shapiro v. United States, 335 U.S. 1, 68 S.Ct. 1375, 92 L.Ed. 1787 (1948), wherein the Court stated "records required by law to be kept in order that there may be suitable information of transactions which are the appropriate subject of government regulation" are not protected by the privilege. Id. at 17, 68 S.Ct. at 1384, 92 L.Ed. at 1799 (quoting, Davis v. United States, 328 U.S. 582, 589-590, 66 S.Ct. 1256, 1260, 90 L.Ed. 1453 (1946)). The exception does not apply if the purported government regulation specifically targets individuals suspected of criminal activities. See Grosso v. United States, 390 U.S. 62, 88 S.Ct. 709, 19 L.Ed.2d 906 (1968); Marchetti v. United States, 390 U.S. 39, 88 S.Ct. 697, 19 L.Ed.2d 889 (1968); and Haynes v. United States, 390 U.S. 85, 88 S.Ct. 722, 19 L.Ed.2d 923 (1968). Nonetheless, if the government's purposes are essentially regulatory, the...