Estate of Petro, In re

• Decision Date: 03 July 1997
• Citation: 694 A.2d 627
• Parties: In re ESTATE OF John PETRO, Deceased. Appeal of John IURLANO, Esquire, Administrator of the Estate of John Petro, Deceased.
• Court: Pennsylvania Superior Court

Page 627

694 A.2d 627

In re ESTATE OF John PETRO, Deceased Appeal of John IURLANO, Esquire, Administrator of the Estate of John Petro, Deceased.

Superior Court of Pennsylvania.

Argued Nov. 12, 1996.

Filed April 25, 1997.

Reargument Denied July 3, 1997.

Lawrence F. Leventon, Pittsburgh, for appellant.

John J. McLean, Jr., Pittsburgh, for participating parties.

Before JOHNSON, HUDOCK and FORD ELLIOTT, JJ.

JOHNSON, Judge:

In this appeal, we are asked to consider whether certain assets were properly removed from a decedent's estate by either inter vivos gift or the valid use of a power of attorney. In reviewing this matter, we must re-visit the proper application of the dead man's act. Before reaching that issue, however, we must determine when an appeal will lie of a matter that arises during the administration of a decedent's estate. We conclude that the issue of whether an administrator may recover assets allegedly missing from a decedent's estate is separable from and collateral to the main cause of action and is, therefore, appealable. We also find that the Orphans' Court erred in permitting the daughters of the decedent to testify in violation of the dead man's act. Accordingly, we reverse and remand for a new hearing on the administrator's petition.

Anna and John Petro had eight children. Anna Petro died on April 15, 1990. At the time of her death, John Petro, either individually or jointly with Anna, had acquired bank accounts and certificates of deposit with a total value of $506,533.23 and stock valued at $140,454.00.

After the death of Anna Petro, Irene Bucci, one of Petro's daughters, assumed the primary responsibility for John Petro's financial affairs. Irene obtained a general power of attorney for this purpose one month after her mother's death. Christine Cuniak, another daughter of Anna and John Petro, was also appointed attorney-in-fact by this document. After becoming John Petro's attorneys-in-fact, Irene and Christine (collectively, "the daughters") were surprised to discover the extent of their father's estate. Thereafter, pursuant to their powers as attorneys-in-fact, the daughters retitled their father's bank accounts. John Petro signed blank forms that authorized the retitling of his bank accounts in various ways, adding Irene and Christine to his accounts. The daughters also opened a brokerage account with their father's assets. Municipal bearer bonds were purchased with assets from this account and delivered to the daughters, who have retained possession of these bonds.

John Petro died on June 15, 1992, survived by the daughters, four other adult children, and several adult grandchildren born to his two deceased sons. The record reflects that Petro died without a will; his estate therefore proceeded to administration under the laws of intestacy. When the presumptive heirs could not agree on which of them should administer Petro's estate, they consented Within three months of appointment, the administrator filed a petition in the Orphans' Court seeking a return of assets that were in the decedent's possession as of the date of Anna Petro's death, April 15, 1990. All assets noted in the petition were under the control of the daughters. In response to this petition, as well as a second petition naming additional assets alleged to be a part of John Petro's estate, the daughters averred that the assets in question had been received from their father as inter vivos gifts. Following a hearing, the court denied the administrator's petition to return the assets. Order, dated September 9, 1994.

to the appointment of an independent administrator, Mr. John Iurlano.

The administrator filed exceptions to this order, and arguments on these exceptions were heard before the Orphans' Court en banc. The en banc court, with one judge dissenting, dismissed the administrator's exceptions on July 10, 1995. After the administrator filed a motion for a new trial nunc pro tunc on July 17, 1995, the court filed a preliminary order that stayed the entry of final judgment on the dismissal of the exceptions pending the receipt of evidence on the motion for a new trial. Order, dated July 17, 1995. This appeal follows from the denial of the motion for a new trial on March 11, 1996, and the entry of judgment, on March 29, 1996, in favor of the daughters and against the administrator on the denial of the petition to turn over assets.

Before reaching the merits of the administrator's appeal, it is necessary to determine which orders are properly on appeal to this Court. We begin by carefully reviewing the collateral order rule, first announced by the United States Supreme Court in Cohen v. Beneficial Industrial Loan Corp., 337 U.S. 541, 69 S.Ct. 1221, 93 L.Ed. 1528 (1949), adopted by the Pennsylvania Supreme court in Bell v. Beneficial Consumer Discount Co., 465 Pa. 225, 348 A.2d 734 (1975), and now set forth in Rule 313 of the Pennsylvania Rules of Appellate Procedure. This rule states that:

A collateral order is an order separable from and collateral to the main cause of action where the right involved is too important to be denied review and the question presented is such that if review is postponed until final judgment in the case, the claim will be irreparably lost.

Pa.R.A.P. 313(b).

Whether the assets named in the administrator's petition should be included in Petro's estate is an issue separable from and collateral to the main cause of action here, the administration of the assets inventoried in the estate. Further, the right involved is too important to be denied review and the question is such that the claim may be irreparably lost because of the threat that the assets will disappear before any final accounting and order of distribution is entered. This risk is heightened in this case because the Orphans' Court orders place no restrictions on the daughters' use of the funds that the administrator alleges have been improperly taken from the decedent. The assets may very well have already been spent or hidden from the administrator in such a way that they cannot be recovered. Accordingly, we find that the September 9, 1994, order, which denied the petition to turn over assets, is a collateral order. Cf. In re Estate of Georgiana, 312 Pa.Super. 339, 458 A.2d 989 (1983) (holding that an order denying a petition for the removal of an executor is appealable under Cohen, supra.).

This collateral matter has been the subject of several other orders that are secondary to the administration of this estate. The order of July 10, 1995, denying the administrator's exceptions, and the order of July 17, 1995, which stayed the entry of final judgment, involve the same collateral matter. Likewise, the order of March 11, 1996, that denied the motion for a new trial nunc pro tunc, relates solely to this collateral matter. We must therefore determine the proper procedure for filing an appeal when there are multiple orders concerning a matter collateral to the main cause of action.

As a collateral order, the July 10, 1995, order could have been appealed to this Court within 30 days of the entrance of that order. Pa.R.A.P. 313, 903. Rather than appeal to this Court at that time, the administrator elected to file a Motion for a New Trial Nunc Although Rules 902 and 903 of the Pennsylvania Rules of Appellate Procedure state that an appeal permitted as of right from a lower court order shall be taken within 30 days after the entrance of the order in question, these rules do not preclude our review of the merits of the administrator's appeal. In the context of collateral orders, Rules 902 and 903 merely govern when the appeal must be taken if an appellant decides to exercise his right to file an immediate appeal. These rules do not mandate that such an appeal must be taken at that time or the appellant's claims be forever lost. The administrator did not immediately appeal the July 10, 1995, order, even though it was permissible for him to do so under Rule 313. Thus, although this appeal was taken more than 30 days after July 10, 1995, that fact is not dispositive in this matter.

Pro Tunc based upon after-discovered evidence. Such was his right. We can find no rule of law, either statutory or common law, which states that a collateral order must be appealed within 30 days of its entrance or an appeal based upon the substance of the collateral order is forever precluded. See Pa.R.A.P. 313(a) ("An appeal may be taken as of right from a collateral order of an administrative agency or lower court.") (emphasis added); compare Commonwealth v. Brady, 510 Pa. 336, 508 A.2d 286 (1986) (allowing an immediate appeal from the denial of a motion to dismiss based upon a double jeopardy claim under collateral order doctrine) with Commonwealth v. Yerby, 544 Pa. 578, 679 A.2d 217 (1996) (ruling on appeal from the denial of a motion to dismiss based upon an alleged violation of double jeopardy principles after a jury trial and the imposition of a judgment of sentence and therefore well beyond 30 days after the denial of the collateral order).

We are also guided by Rule of Appellate Procedure 311, which relates to interlocutory appeals as of right. Section (a)(8) of that rule states that an appeal may be taken as of right from any order that is made appealable by statute or general rule. Thus, this section encompasses those orders that are made appealable under the collateral order rule. Rule 311 then discusses when the failure to immediately appeal an order precludes further review. Rule 311 states, in pertinent part:

(g) Waiver of Objections.

(1) Where an interlocutory order is immediately appealable under this rule, failure to appeal:

(i) Under Subdivision[ ] (a) [orders made appealable by general rule] ... shall not constitute a waiver of the objection to the order and the objection may be raised on any subsequent appeal in the matter from a determination on the merits.

Pa.R.A.P. 311(g)(emphasis added). Appeal rights under Rule...