Estate of Geniviva, In re

• Decision Date: 15 April 1996
• Citation: 450 Pa.Super. 54,675 A.2d 306
• Parties: In re ESTATE OF Helen U. GENIVIVA, Deceased. APPEAL OF Nick A. FRISK, Jr. In re ESTATE OF Helen U. GENIVIVA, Deceased. Appeal of Cosmo S. GENIVIVA, Jr., Executor of the Estate of Helen U. Geniviva.
• Court: Pennsylvania Superior Court

Page 306

675 A.2d 306

450 Pa.Super. 54

In re ESTATE OF Helen U. GENIVIVA, Deceased.

APPEAL OF Nick A. FRISK, Jr.

In re ESTATE OF Helen U. GENIVIVA, Deceased.

Appeal of Cosmo S. GENIVIVA, Jr., Executor of the Estate of

Helen U. Geniviva.

Superior Court of Pennsylvania.

Argued Feb. 6, 1996.

Filed April 15, 1996.

Frank G. Verterano, New Castle, for Frisk.

Robert C. Tourek, Pittsburgh, for Estate of Geniviva.

Mark F. Geary, Washington, for Brian and Marilyn Geniviva, participating parties.

Before TAMILIA, JOHNSON and HESTER, JJ.

JOHNSON, Judge:

In these consolidated appeals, we are asked to determine whether a former attorney for the executor of an estate may appeal from a decree which sanctioned the executor of that estate for mismanagement. We also consider whether an executor may be excused from liability for any surcharges that resulted from his alleged reliance upon advice of counsel. Because we find that the attorney could not properly appeal from the present decree, we dismiss his appeal. Further, we conclude that the Orphans' Court did not err when it sanctioned the executor for mismanagement of the decedent's estate. Accordingly, we affirm.

Helen U. Geniviva (decedent) died testate on April 24, 1981, with an estate valued in excess of $600,000. Soon thereafter, her son, Cosmo S. Geniviva (the executor) was granted letters testamentary naming him executor of her estate. The executor retained Nick A. Frisk, Jr. as counsel for the estate and, before any substantial work had been done on the administration of the estate, paid him a fee of $40,000. In addition, the executor immediately paid himself a like sum of $40,000 as executor's compensation. Neither the executor nor Frisk timely filed an accounting, an inventory of the estate, or the required Pennsylvania and federal estate tax returns. In 1989, decedent's other children, Brian and Marilyn Geniviva (the beneficiaries), petitioned the Lawrence County Orphans' Court to issue a citation ordering the executor to file an amended inventory and a full accounting of the estate. In their petition, the beneficiaries alleged that Frisk and the executor were fraudulently delaying the final disposition of the decedent's estate. Following a hearing, the court issued the citation and ordered the executor to comply within 60 days. However, the executor did not comply; rather, through new counsel, he petitioned the court to permit him to withdraw as executor of the estate. The court denied his petition, noting that the executor could not withdraw until he complied with the citation.

Thereafter, the executor filed a document that he styled as the final accounting of the estate, and the beneficiaries filed exceptions to that accounting. On April 19, 1994, the court filed a Memorandum Opinion and Decree Nisi, ordering the executor to reimburse the estate for all sums that the estate was required to pay in back taxes, interest, and penalties due to his mismanagement of the estate. The court also ordered the executor to reimburse the estate for the majority of his executor's fee as well as most of the counsel fees that he paid to Frisk. The executor and the beneficiaries filed exceptions to the decree nisi. Although Frisk no longer represented the estate or its executor, and did not file his own exceptions, he filed a brief in support of the executor's exceptions. At a hearing on the beneficiaries' exceptions, the court heard oral argument from the beneficiaries, the executor, and Frisk. On June 26, 1995, the court entered a final decree that denied the executor's exceptions, awarded the beneficiaries counsel fees, awarded the estate interest on the surcharge applied to the executor, and finalized in all other respects the decree nisi. The court noted, however, that it was unable to determine the exact amount of counsel fees to award because the relevant evidence was not included in the transcribed notes of testimony. Frisk then appealed to this Court. After the missing notes of testimony were transcribed and filed with the court, the Orphans' Court amended the final decree and directed the executor to pay the beneficiaries $20,675.66 in counsel fees. Subsequently, the executor appealed the amended final decree to this Court.

Frisk's Appeal Docketed at No. 1329 Pittsburgh, 1995

On appeal, Frisk, in essence, contends that the Orphans' Court erred in calculating the damages sustained due to his failure to timely liquidate the estate's stocks. Frisk also claims that the Orphans' Court did not have jurisdiction to amend its final decree after an appeal had been lodged from that decree to this Court.

We are precluded from reaching the merits of Frisk's claims, however, because he does not have standing to bring this appeal. Rule 501 of the Pennsylvania Rules of Appellate Procedure provides, in pertinent part, that "any party who is aggrieved by an appealable order ... may appeal therefrom." A party is defined by the Judicial Code as "[a] person who commences or against whom relief is sought in a matter." 42 Pa.C.S. § 102. In an action relating to the administration of an estate, the only party is the estate.

Here, Frisk does not represent the estate. The mere fact that Frisk filed a brief in support of the executor's exceptions and appeared at oral argument on those exceptions does not make him a party to this action. See Silver Spring Twp. v. Pennsy Supply, Inc., 149 Pa.Cmwlth. 314, 319-20, 613 A.2d 108, 111 (1992) ("[O]ne, who is not a named party to an action ... cannot become a party to an action by the simple expedience of walking into the office of the prothonotary and filing his appearance in any one or more of the multitude of open actions on file.") Thus, we conclude that Frisk is not a party to this appeal.

Even if Frisk were a party to the instant case, he would not be an aggrieved party. "The requirements of 'aggrievement' are that a party have a direct interest in an immediate consequence of the judgment from which an appeal is taken." Tripps Park Civic Ass'n. v. Pennsylvania Pub. Utility Commission, 52 Pa.Cmwlth. 317, 322, 415 A.2d 967, 970 (1980). See also Venango Newspapers v. Unemployment Compensation Bd. 158 Pa.Cmwlth. 379, 383, 631 A.2d 1384, 1386 (1993) ("If the order causes direct harm, the party is aggrieved and has a right to appeal."); Green by Green v. SEPTA, 380 Pa.Super. 268, 271, 551 A.2d 578, 579 (1988) ("To be 'aggrieved' a party must have been adversely affected by the decision from which the appeal is to be taken.") The Orphans' Court decree does not direct Frisk to take any action whatsoever with respect to the decedent's estate. Only the executor is surcharged by the court order and final decree. Thus, Frisk is not an aggrieved party. Accordingly, we will not entertain the issues raised in his brief.

The appeal at No. 1329 Pittsburgh, 1995 is DISMISSED.

The Executor's Appeal Docketed at No. 1532 Pittsburgh 1995

On appeal, the executor raises five issues for our review:

I. DUE TO [FRISK'S] NEGLIGENCE AND DISHONESTY, SHOULD THE [EXECUTOR BE] EXCULPATED FROM LIABILITY FOR THE FRAUD PENALTY PLUS INTEREST FROM AUGUST 1, 1987, AND FOR ALL THE INTEREST ASSESSED AND ACCRUING ON THE ESTATE TAX CURRENTLY OWED BY THE ESTATE SINCE JANUARY 24, 1982?

II. DUE TO [FRISK'S] NEGLIGENCE, SHOULD THE [EXECUTOR] BE EXCULPATED FROM LIABILITY FOR THE $87,958.16 IN STOCK LOSSES INCURRED BY THE ESTATE?

III. WAS THE [EXECUTOR] ENTITLED TO THE COMPENSATION PAID HIM FOR SERVING AS EXECUTOR FOR THE ESTATE?

IV. SHOULD THE [EXECUTOR'S] NEW ATTORNEY HAVE BEEN AWARDED COUNSEL FEES FOR PAST AND FUTURE SERVICES RENDERED ON BEHALF OF THE [EXECUTOR] AND THE ESTATE?

V. SHOULD THE [EXECUTOR] HAVE BEEN SURCHARGED FOR BRIAN GENIVIVA'S READY ASSET ACCOUNT?

Brief for Appellant at 2.

When reviewing a decree entered by the Orphans' Court, this Court must determine whether the record is free from legal error and the court's factual findings are supported by the evidence. In re Estate of Braun, 437 Pa.Super. 372, 376, 650 A.2d 73, 75 (1994). 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. Id. Moreover, although our review of the court's factual findings is limited to considering whether those findings have support in the record, we are not constrained to give the same deference to any resulting legal conclusions. Id. at 377, 650 A.2d at 76.

As his first issue, the executor contends that he should not be liable for any surcharges or penalties in connection with his failure to file estate taxes because these charges resulted from attorney Frisk's negligent advice concerning the need for estate tax returns. We disagree.

An executor, as a fiduciary of the estate, "is required to use such common skill, prudence and caution as a prudent man, under similar circumstances, would exercise in connection with the management of his own estate." In re Estate of Lohm, 440 Pa. 268, 273, 269 A.2d 451, 454 (1970). Further, the executor has the duty to pay the federal estate tax, and neglect of this duty will result in the executor's personal liability. In re Estate of Maurice, 433 Pa. 103, 249 A.2d 334 (1969). In addition, a surcharge may be imposed on the executor to compensate the estate for any losses incurred by the executor's lack of due care. In re Dobson's Estate, 490 Pa. 476, 417 A.2d 138 (1980). When seeking to impose a surcharge against an executor for the mismanagement of an estate, those who seek the surcharge bear the burden of proving the executor's wrongdoing. Lohm, supra. However, where a significant discrepancy appears on the face of the record, the burden shifts to the executor to present exculpatory evidence and thereby avoid the surcharge. Id. Although the court will consider that the executor acted upon the advice of counsel in determining whether he acted in good faith, this does not provide the executor...