In re Trust Under Deed of Walter R. Garrison
| Decision Date | 19 January 2023 |
| Docket Number | 61 MAP 2022, No. 62 MAP 2022, No. 63 MAP 2022 |
| Citation | 288 A.3d 866 |
| Parties | IN RE: TRUST UNDER DEED OF WALTER R. GARRISON Appeal of: Mark R. Garrison, Christopher Garrison, Lindsey Garrison, Liza Garrison, and Brittany Garrison In re: Trust Under Deed of Walter R. Garrison Appeal of: Mark R. Garrison, Christopher Garrison, Lindsey Garrison, Liza Garrison, and Brittany Garrison In re: Trust Under Deed of Walter R. Garrison Appeal of: Mark R. Garrison, Christopher Garrison, Lindsey Garrison, Liza Garrison, and Brittany Garrison |
| Court | Pennsylvania Supreme Court |
Glen H. Ridenour II, Esq., Law Offices of Peter L. Klenk & Associates, Philadelphia, PA, for Appellant.
John Allen Guernsey, Esq., Conrad O'Brien, P.C., Philadelphia, PA, John F. Higgins, Esq., James Francis Mannion, Esq., Mannion Prior, L.L.P., King of Prussia, PA, for Appellee.
Michelle Janae Gambler Phelan, Pro Se.
Heather Garrison, Pro Se.
Jeffrey C. Garrison, Pro Se.
Juliana E. Garrison, Pro Se.
Leah A. Garrison, Pro Se.
Susan K. Garrison, Pro Se.
Jonathan W. Myer, Pro Se.
Allison R. Phelan, Pamela G. Phelan, Emily M. Retief, et al, Pro Se.
OPINION
In this appeal by permission, we consider the validity of the modified terms, made by agreement of the settlor and beneficiaries, for removal and/or replacement of a trustee by the beneficiaries of irrevocable inter vivos trusts.1 Specifically, we review the lower courts’ extension of our holding in Trust under Agreement of Edward Winslow Taylor , 640 Pa. 629, 164 A.3d 1147 (2017) to unified action of beneficiaries and settlor of a trust under section 7740.1(a). For the reasons set forth below, we hold that such extension is improper. At issue in this case are three trusts created by Walter R. Garrison, "Settlor," founder and CEO of CDI Corp., a successful computer serving company. The trusts all named Settlor's son Mark Garrison and any children Mark would have as beneficiaries.2
The original Trusts contained the following provisions relative to replacement of an individual trustee:
Orphans’ Court Opinion, at 3.
On August 18, 2017, Settlor and Beneficiaries entered into agreements to modify the Trusts by substituting the provisions quoted above with the following language:
Id. at 4. This agreement was made pursuant to section 7740.1(a) of the Pennsylvania Uniform Trust Act ("UTA"). See infra , 20 Pa.C.S. § 7740.1(a).
Settlor subsequently passed away on February 24, 2019. Proceeding under the modified provision, Beneficiaries, in April of 2019, acted to remove the existing independent co-trustees and to appoint Dr. Mairi Leining, Christina Zavell, and Michael Zavell in their place. The existing co-trustees, when notified of Beneficiaries’ action, advised that they did not recognize the modifications to the Trusts as valid or their purported removal thereunder. Seeking to uphold the co-trustee replacements, Mark, on July 19, 2019, filed a declaratory judgment petition to test the validity of the August 18, 2017, modifications. Following the filing of all responsive pleadings, the parties moved for judgment on the pleadings. The orphans’ court, based upon the pleadings, denied Beneficiaries’ petition, relying chiefly on our decision in Taylor . Id. at 5-11.
In Taylor , beneficiaries of an irrevocable trust sought permission from the orphans’ court, pursuant to section 7740.1(b) of the Uniform Trust Act (UTA), to modify the terms of the trust to include the ability of the beneficiaries to replace trustees, in what is commonly referred to as a portability provision. Taylor , supra at 636-637, 164 A.3d 1147. The settlor of the trust was at that time deceased. The orphans’ court denied the modification. The beneficiaries appealed, and a panel of the Superior Court reversed. Id. at 638, 164 A.3d 1147. On appeal from the Corporate Trustee, this Court reversed. We determined sections 7740.1(b) and 7766 of the UTA each provided a path for beneficiaries to apply to a court for removal or replacement of a trustee, the former by amendment and the latter for cause. Id. at 643, 164 A.3d 1147. This, we held, created a latent structural ambiguity in the act triggering our review based on the rules of statutory construction. Id. at 645, 164 A.3d 1147. Applying those rules and reviewing the legislative history and prior judicial treatment of issues concerning trustee removal, we held that the more particular section 77663 must be applied. Id. at 646-653, 164 A.3d 1147. In this case the orphans’ court determined that our reasoning in Taylor applied equally to the instant facts under section 7740.1(a) of the UTA.
The beneficiaries appealed and a panel of the Superior Court in a memorandum opinion affirmed, determining the orphans’ court correctly interpreted that our decision in Taylor precludes any party or parties from bypassing the more particular section 7766 of the UTA through the more general modification provisions of section 7740.1 when the goal is gaining authority to remove or replace a trustee. The panel quoted with approval the orphans’ courts holding:
When adopting [ section] 7766, the legislature did not carve out an exception for modifications made under [ section] 7740.1(a) and did not distinguish the application of [ section] 7766 to [ section] 7740.1(a) from its applicability to [ section] 7740.1(b) or (d). Likewise, the Taylor Court made no exception to allow modifications of trusts for removal of trustees made with the consent of a settlor and beneficiaries. Following the legislature's intent, the Court held that UTA [ section] 7766 is the exclusive provision for removal of trustees and, therefore, an end run on the stringent requirements of [ section] 7766 could not be made by using a different UTA provision governing modification by consent to add a portability clause to a trust.
Trust Under Deed of Walter R. Garrison , slip opinion 1429-1431, 1461, 1498, 1562 EDA 2020 at 22-23 (quoting Orphans’ Court Opinion at 11-12).4
We accepted Appellants’ petition for allocatur to address the following question.
Did the Superior Court err by not enforcing modifications to trusts under 20 Pa. C.S.A. § 7740.1(a), which were agreed to by both the settlor and all beneficiaries to allow for the replacement of trustees by a majority of beneficiaries after the death of the settlor?
Trust Under Deed of Walter R. Garrison, 278 A.3d 854 (Pa.2022), per curiam .
The question presents a pure question of law for which our review is plenary and our standard de novo. Commonwealth v. Long , 592 Pa. 42, 922 A.2d 892, 897 (2007). Further we recognize our standard of review and standards for statutory construction as set forth in Taylor , which, as further explained infra , we find consistent with Appellants’ position in this appeal. See Taylor , supra at 1154-1155, 1157.
Appellants’ central argument is that the lower courts failed to appreciate the distinguishing circumstances presented by the facts of this case coming under § 7740.1(a) as precluding applicability of our reasoning in Taylor to the instant case. Appellants’ Brief at 12-13. In support, Appellants argue that Taylor was grounded on four premises which distinguish it from the instant case. First, in Taylor the settlor's interest was unrepresented in the application to the orphans’ court by the beneficiaries. Here, the joint agreement of the settlor and beneficiaries leaves no unrepresented interests for a court to protect. This obviates the structural ambiguity found by this Court in Taylor between two potential court actions initiated by a subset of interests in the subject trust. Id. at 18. Second, the authority recognized in Taylor of limitations on a court in removing trustees, again pertained to applications of a subset of interests in the subject trust. Id. at 20 (). Third, Taylor recognized the legislature's omission of Section 7740.1(b) Joint State Government Commission Comment from Pennsylvania's enactment of the uniform code, as evidence of legislative intent not to extend the empowerment of beneficiaries’ unilateral action. Id. Such is not implicated by the coordinated action of all interests as dealt with in § 7740.1(a). Finally, for similar reasons, the Taylor decision's reliance on the comment to § 7740.1 does not implicate coordinate action by all interests. Id. at 22. Appellants also argue that Pennsylvania precedent and precedent from other jurisdictions support its position that § 7766 does not limit the pre-existing ability at common law for all parties of interest in an otherwise irrevocable trust to...
To continue reading
Request your trial