Georgiana's Estate, In re

• Decision Date: 31 March 1983
• Citation: 312 Pa.Super. 339,458 A.2d 989
• Parties: In re ESTATE OF Joseph F. GEORGIANA, Deceased. Appeal of Joseph F. GEORGIANA, Jr., and Lawrence S. Georgiana.
• Court: Pennsylvania Superior Court

Page 989

458 A.2d 989

312 Pa.Super. 339

In re ESTATE OF Joseph F. GEORGIANA, Deceased Appeal of Joseph F. GEORGIANA, Jr., and Lawrence S. Georgiana.

Superior Court of Pennsylvania.

Argued May 20, 1982.

Filed March 31, 1983.

Roslyn M. Litman, Pittsburgh, for appellants.

Ira B. Coldren, Jr., Uniontown, for Gallatin Bank, participating party.

Carl W. Brueck, Jr., Pittsburgh, for Campbell, participating party.

Before ROWLEY, MONTEMURO and VAN der VOORT, JJ.

MONTEMURO, Judge:

On August 11, 1981, the Orphans Court of Fayette County (per the Honorable Charles G. Sweet, President Judge, sitting by special designation) entered an order dismissing exceptions to a previous order denying a petition for removal of executor and appointment of a successor. The petition had been filed by Joseph F. Georgiana, Jr. and Lawrence S. Georgiana, residual legatees and the appellants herein, seeking removal of Gallatin National Bank as executor of the estate of their deceased father, Joseph F. Georgiana, Sr. The appellants contended that the executor bank should be removed because of multiple breaches of its fiduciary duty, including: (1) loss, waste and mismanagement of estate assets; (2) refusal to collect estate assets; (3) engaging in profitable self-dealing; (4) hostility to certain of the residual legatees; and (5) general incompetence. The lower court found there was insufficient "misconduct or ineptitude or hostility to justify the severe action of removing the corporate fiduciary."

Before addressing the merits of the appeal we find it necessary to resolve a preliminary question of jurisdiction raised by appellee, Gallatin National Bank [Bank]. The Bank contends that the present appeal should be quashed as interlocutory because the order of the court below was not a final order.

In Pugar v. Greco, 483 Pa. 68, 394 A.2d 542 (1978), our Supreme Court succinctly set forth the standard by which Pennsylvania appellate courts determine whether or not an appeal is from a final order.

It is, of course, well settled that an appeal will lie only from a final order unless otherwise permitted by statute. See, e.g., T.C.R. Realty, Inc. v. Cox, 472 Pa. 331, 372 A.2d 721 (1977); Caplan v. Keystone Weaving Mill, 431 Pa. 407, 246 A.2d 384 (1968); Stadler v. Mt. Oliver Borough, 373 Pa. 316, 95 A.2d 776 (1953). 7 A final order is one which usually ends the litigation, or alternatively, disposes of the entire case. Piltzer v. Independence Federal Savings and Loan Association, 456 Pa. 402, 404, 319 A.2d 677, 678 (1974). In determining what constitutes a final order we have followed the approach of Cohen v. Beneficial Industrial Loan Corporation, 337 U.S. 541, 69 S.Ct. 1221, 93 L.Ed. 1528 (1949), in that we look to "a practical rather than technical construction" of an order. In Cohen, the Supreme Court of the United States carved out an exception to the final judgment rule for situations where postponement of appeal until after final judgment might result in irreparable loss of the right asserted. Under Cohen, an order is considered final and appealable if (1) it is separable from and collateral to the main cause of action; (2) the right involved is too important to be denied review; and (3) the question presented is such that if review is postponed until final judgment in the case, the claimed right will be irreparably lost. Id. at 546, 59 S.Ct. at 1226, 93 L.Ed. at 536.

Id. at 72-73, 394 A.2d 544-545.

In the present case, the order of the court below did not "[end] the litigation, or alternatively, [dispose] of the entire case." There has been no final account of distribution of the estate. If we were required to be strictly technical we would have to find that the lower court's order was not final. However, Pugar recognizes the exception carved out by the United States Supreme Court in Cohen v. Beneficial Industrial Loan Corporation, supra, for that small class of decisions "which fully determines claims of rights separable from, and collateral to, rights asserted in the action, too important to be denied review and too independent of the cause itself to require that appellate consideration be deferred until the whole case is adjudicated." Cohen v. Beneficial Industrial Loan Corporation, supra 337 U.S. at 546, 69 S.Ct. at 1226, 93 L.Ed. at 1536.

Applying the Cohen analysis herein leads us to the conclusion that an order granting or denying removal of an executor is a final order which may be appealed to this court. First, it is an order which finally determines a claimed right; i.e. the right of a beneficiary or beneficiaries to a competent and trustworthy executor who will carefully and faithfully carry out the intentions of the testator and also use its best efforts to maximize and fairly distribute the estate to the devisees and legatees. By denying the petition the lower court has made a determination that this right has not been infringed, just as an order granting the petition would, of course, indicate an opposite conclusion. Such a determination is not the end of the litigation since it is part of the administration, accounting and distribution of the decedent's estate. It is, however, a separate and collateral order in that the executor, while performing an important administrative and fiduciary function, can be replaced by another party. The administration of the estate, while delayed, would continue.

Second, the right is one which is too important to be denied review. Neither party contends anything to the contrary. When the assets of an estate are subject to possible harm or diminution because of acts or omissions of an executor the courts are the appropriate forum to decide what action is necessary to remedy that harm. While the trial courts, because of the experience acquired in handling estate cases, are eminently capable of deciding questions of removal, such questions involve serious issues bearing upon the property in question, the reputation of the executor and also the interest of the state in assuring orderly administration and in properly ascertaining and collecting revenues. We find these issues important enough to merit appellate review.

Third, in many, if not all, cases the right will be irreparably lost if review is deferred. Appellee Bank argues that any loss due to its acts or omissions can be remedied by levying a surcharge pursuant to 20 Pa.C.S.A. § 3501.1 and thus immediate review is not necessary. While this may be true in the case of a solvent corporate fiduciary, it may not be true where the executor is an insolvent or financially unstable corporation, or an individual. ¹ In the latter event, deferral of review may mean that the assets of the estate will be dissipated or destroyed in the interim. Thus, the right would be lost because surcharge would be nothing more than a hollow remedy.

We find that an order denying a petition for removal of an executor is a final order proper for appellate review. We note that appellate courts in Pennsylvania have decided appeals from orders denying petitions for removal, but without addressing the jurisdictional issue. In Re Estate of Pitone, 489 Pa. 60, 413 A.2d 1012 (1980); Estate of Hamill, 487 Pa. 592, 410 A.2d 770 (1980); Estate of Halper, 487 Pa. 408, 409 A.2d 415 (1980); cf. In Re Estate of Croessant, 482 Pa. 188, 393 A.2d 443 (1978) (citing In Re Crawford's Estate, 340 Pa. 187, 16 A.2d 521 (1940) (lower court order removing trustee subject to appellate review)). The action taken by the courts in these cases clearly indicates that the question involved is of sufficient importance to necessitate immediate appellate review.

Before discussing the merits of the case, a recitation of some of the relevant facts would be appropriate. Joseph F. Georgiana died leaving a will which divided his estate equally between his sons, Joseph F. Georgiana, Jr. and Lawrence S. Georgiana, and a business associate, Loretta Campbell. Appellee Gallatin National Bank was named as executor. The decedent's widow, Barbara Georgiana, gave notice of her right of election pursuant to 20 Pa.C.S.A. § 2508(a). She eventually settled her claim against the estate for $200,000.00.

The decedent's estate consisted primarily of stock in four closely held corporations, including: (1) New Venetian Corporation, in which the decedent held a majority interest and Loretta Campbell held a minority interest, through which they operated the Venetian Restaurant and the Gourmet Shoppe; (2) Georgiana Realty Co., in which the decedent held a fifty (50%) per cent interest and his brother, Samuel Georgiana held a fifty (50%) per cent interest, through which they owned and managed real estate in the Uniontown area; (3) Fayette Frozen Foods, in which the decedent held a minority interest, decedent's sons held a minority interest and decedent's brother held a majority interest, a wholesale food distributor; and (4) Fayette Leasing Co., principally owned by decedent's sons, with decedent holding a minority interest, which leased vehicles to Fayette Frozen Foods.

In the early stages of administration the parties proceeded relatively amicably. They agreed that Loretta Campbell would purchase from the estate the decedent's stock in New Venetian Corporation, and that the decedent's sons would likewise purchase the stock in Fayette Frozen Foods. The sale of Fayette Frozen Foods was, in fact, consumated, but the sale of New Venetian Corporation was not, because of a fire which destroyed the restaurant, the corporation's principal asset.

Relations between the parties quickly deteriorated. Charges and countercharges were exchanged which led to legal proceedings and inevitably delayed the administration of the estate. The charges most pertinent to the present appeal can be delineated into three categories. One, that the appellee Bank was guilty of waste, mismanagement and ineptitude in collecting and preserving the assets of the estate. Two, that the appellee Bank favored the interests of Loretta...