author: HERRON, J.,

text:
    In re Testamentary Trust of Conti

      C.P. of Philadelphia County,
    O.C. No. 464 ST of 1982

      Laura E. Stegossi, for Wells Fargo Bank, N.A.

      Sept. 17, 2014
   HERRON, J.,

The account filed by trustee Wells Fargo Bank and a related petition filed by beneficiaries of a testamentary trust established by decedent John Conti raise the issue of whether this court should approve a nonjudicial settlement agreement under 20 Pa.C.S.A. §7710.1 that would amend the trust to provide for the removal or resignation of a corporate trustee without cause or court approval. Under §7710.1, the parties are free to enter into a nonjudicial settlement agreements. The intent of this section is to give all beneficiaries and trustees flexibility in the administration of certain trust matters. Seeking court approval of such a nonjudicial agreement would encumber this option. Because there is no need to extend court approval to the proposed nonjudicial settlement agreement, this court declines to do so. Moreover, for the reasons set forth below, court approval of the proposed nonjudicial agreement would lead to unnecessary conflicts with other sections of the PEF code. In contrast, the more limited request for court approval of the resignation of Wells Fargo Bank as trustee and the appointment of the Philadelphia Trust Company as successor trustee is approved under 20 Pa.C.S.A. §7765(a) and 20 Pa.C.S.A. §7764(c).

Background

John D. Conti died testate October 26, 1980. By Will and codicils dated February 6, 1960, John Conti provided that the residue of his estate should be divided into two separate trusts for the benefit of his wife, Marion Conti, as a marital trust and a residuary trust. The net income of the marital trust was to be paid to Marion for life. Marion was given the right to appoint the corpus of the marital share by her will; if she failed to make such an appointment, the corpus of the marital trust was to be added to the residuary trust. Marion died on January 12,1981 without exercising her power of appointment. As a consequence, the corpus of the marital trust was added to the residuary trust. Under Article Fifth of John Conti’s will, the net income from the Residuary trust after Marion’s death was to be distributed in equal shares to his then living issue per stirpes. This residuary share is to be held in trust until twenty-one years after the death of the last survivor of decedent’s wife, children and grandchildren who were living at the time of decedent’s death.

In article eleventh of his Will, Mr. Conti provided for the appointment of a single corporate trustee, either by writing of his executor or, by default, to the Broad Street Trust Company. Following Mr. Conti’s death, the assets of his estate were awarded to Central Penn National Bank which was appointed trustee of the Residuary Trust by Adjudication dated June 6, 1985.1 Through various mergers, the accountant Wells Fargo Bank, N.A., succeeded Central Penn National Bank and has been serving as the sole Trustee of the Residuary Trust. On September 4, 2013, Wells Fargo Bank filed an account of its administration of the Trust, covering the period October 1, 2009 through August 26,2013.

Within weeks of the filing of the account, certain “sui juris income and remainder beneficiaries of the Residuary Trust” (“beneficiaries”) filed a petition to modify the trust document to include provisions for the removal, resignation and appointment of a trustee because John Conti’s will did not provide for these contingencies. In seeking this broad relief to modify the trust, the beneficiaries rely on 20 Pa.C.S. §7710.1 which provides for nonjudicial settlement agreements as well as In re McKinney, 2013 Pa. Super. 123, 67 A.3d 824 (2013). More specifically, they propose the following amendments of the trust document:

(1) From time to time and without cause, and without permission of any court, the income beneficiaries who are then sui juris may remove any corporate trustee acting hereunder by a writing delivered to such corporate trustee stating the effective date of the removal; provided that if there are then five or fewer sui juris income beneficiaries, all sui juris beneficiaries must consent in writing to the removal, and if there are then more than five such beneficiaries, a majority of sui juris beneficiaries must consent in writing to the removal.
(2) If the sui juris income beneficiaries exercise their power to remove a corporate trustee under subparagraph (i) above, the sui juris income beneficiaries who consented to the removal shall thereupon appoint in writing a substitute corporate trustee, which substitute corporate trustee shall be located in the United States.
(3) Without permission of any court, the corporate trustee may resign by a writing lodged with the permanent records of the trust and notice to the beneficiaries, whereupon a substitute corporate trustee shall be appointed by the beneficiaries in the manner provided in subparagraphs (i) and (ii) above as if they had removed the corporate trustee.

A few weeks later, the trustee Wells Fargo Bank, N.A. filed a similar, but more limited, petition that merely sought court approval of its resignation pursuant to 20 Pa.C.S.A. §7765(a) as trustee of the Residuary Trust under the Will of John Conti. In addition, Wells Fargo sought court approval of the Philadelphia Trust Company as the new, substitute trustee under 20 Pa.C.S.A. §7764(c) based either on the unanimous agreement of the qualified beneficiaries of the trust or by court approval.

The beneficiaries also filed objections to the account and petition for adjudication filed by Wells Fargo. More specifically, they objected, inter alia, to the requested termination fee for Wells Fargo, certain legal fees incurred by Weber, Gallagher et al, and the Pennsylvania Inheritance Tax Returns.

After a period of discovery, the parties informed the court by letter dated June 30, 2014 that they had reached a settlement and release agreement regarding the administration of the trust and the second account that had been filed September 4, 2013. Based on this settlement, the beneficiaries withdrew their objections to the second account. Under the settlement and release agreement, the parties have agreed that the request for Wells Fargo’s attorneys’ fees and costs paid from the trust will be limited as set forth in the Agreement and that the termination fee is waived. A copy of the settlement and release agreement is attached, and its terms are incorporated in this adjudication. The beneficiaries acknowledge that they have each had an opportunity to examine the second account, which has been updated through March 31, 2014 and the sub account for the trust (which has not been formally filed) and they approve the discharge of trustee Wells Fargo for the administration of the trust without the delay of filing either of these accounts with the court. The parties agree that the second account is ready for adjudication, along with the two unopposed, and pending petitions: (1) Wells Fargo Bank’s petition to approve its resignation as trustee and the appointment of The Philadelphia Trust Company, as substitute trustee and; (b) the beneficiaries’ petition to modify the trust to provide for the removal and resignation of the corporate trustee without cause or court approval.

Legal Analysis: Beneficiaries Petition to Amend the Trust

Chapter 77 of the PEF Code, or the Pennsylvania Uniform Trust Act, was enacted fairly recently in 2006. It spans various subchapters with provisions that are at once distinct and interrelated. 20 Pa.C.S.A. §7701 (noting that subchapters A through I are encompassed within the Uniform Trust Act). In terms of this act, the petition of Wells Fargo Bank seeking court approval of its resignation is fairly straightforward and implicates clearly applicable PEF Code provisions. In essence, Wells Fargo is seeking court approval of its resignation and of the appointment of the Philadelphia Trust Company as substitute trustee of the Residuary Trust Under the Will of John B. Conti, Deceased. This request is granted based on specific provisions of the PEF Code. See, e.g. 20 Pa.C.S.A. §7765(a)(“A trustee may resign with court approval) and 20 Pa.C.S.A. §7764(c)(2) & (3)(a vacancy in the trusteeship of a noncharitable trust may be filled by a person appointed by unanimous written agreement of the qualified beneficiaries or by a person appointed by the court).

In contrast, the beneficiaries’ petition for court approval of a nonjudicial settlement agreement to modify the trust term is more problematic because it implicates a number of PEF sections that have not been subjected to judicial interpretation. The beneficiaries, moreover, have neither acknowledged nor tackled these other PEF Code provisions. Finally, the beneficiaries have not attached a copy of any “nonjudicial settlement agreement” to their petition.

Section 7710.1 of the PEF Code clearly allow all the beneficiaries and the trustee of a trust to enter into a binding nonjudicial settlement agreement as to the resignation or appointment of a trustee or the modification of the trust:

§7710.1 Nonjudicial settlement agreements
(a) (Reserved).
(b) General rule •— Except as otherwise provided in subsection (c), all beneficiaries and trustees of a trust may enter into a binding nonjudicial settlement agreement with respect to any matter involving the trust. The rules of subchapter C (relating to representation) shall apply to a settlement under this section.
(c) Exception — A nonjudicial settlement agreement is valid only to the extent it does not violate a material purpose of the trust and includes terms and conditions that could be properly approved by the court under this chapter or other applicable law.
(d) Matters that may be resolved — Matters that may be resolved by a nonjudicial settlement agreement include the following:
(1) The interpretation or construction of the provisions of a trust instrument.
(2) The approval of a trustee’s report or accounting or waiver of the preparation of a trustee’s report or accounting.
(3) Direction to a trustee to perform or refrain from performing a particular act.
(4) The resignation or appointment of a trustee and the determination of a trustee’s compensation.
(5) Transfer of a trust’s situs.
(6) Liability or release from liability of a trustee for an action relating to the trust.
(7) The grant to a trustee of any necessary or desirable power.
(8) The exercise or nonexercise of any power by a trustee.
(9) Questions relating to the property or an interest in property held as part of a trust.
(10) An action or proposed action by or against a trust or trustee.
(11) The modification or termination of a trust.
(12) An investment decision, policy, plan or program of a trustee.
(13) Any other matter concerning the administration of a trust.
(e) Request of court. —Any beneficiary or trustee may request the court to approve a nonjudicial settlement agreement or determine whether the representation provided in subchapter C was adequate or whether the agreement contains terms and conditions the court could have properly approved. 20 Pa.C.S.A. §7710.1

The comments to this section underscore that the “resolution of disputes by nonjudicial means is encouraged” and that this section “facilitates the making of such agreement by giving them the same effect as if approved by the court.” In light of this section, court approval of a nonjudicial settlement agreement would be superfluous. Moreover, approving the proposed agreement would force this court to diverge from the role and standards envisioned for it by other sections of the PEF Code. The analysis differs as to whether the resignation or removal of a trustee is at issue. Each issue must, therefore, be addressed separately.

A. Proposed Amendment of the Trust for Resignation of the Corporate Trustee Without Cause or Court Approval

Section 7710.1 does provide that the resignation or appointment of a trustee is a matter that may be resolved by nonjudicial settlement agreement. 20 Pa.C.S.A. § 7710.1(d)(4). Under this broad provision, all beneficiaries and trustees of a trust may enter into a binding settlement agreement that is nonjudicial but would have “the same effect as if approved by the court.” The clear intent of this section is to give all beneficiaries and trustees of a trust the flexibility to agree on the resignation of a trustee without the formality of seeking court approval. Seeking court approval would thwart that intent. It also creates conflicts for the court. This is because when a court is presented with a petition to approve the resignation or removal of a trustee, it is compelled to adhere to other sections of the PEF that specifically address these issues.

Another key factor that any court has to consider is the intent of the settlor or testator. Where a settlor’s intent is clear, it controls over any contrary provision of the PEF Code. 20 Pa.C.S.A.§7705(a). Where a testator or settlor does not provide for a certain contingency, the provisions of the PEF Code apply by default. It is thus clear that if John Conti had provided a procedure for the resignation of a trustee, that intent would control. But while John Conti did not provide for the resignation of a corporate trustee, he did provide for a single corporate trustee in article eleventh of his Will. This clearly expressed intent of John Conti for a single corporate trustee triggers the very specific limitations set forth in section 7765 of the PEF Code which provides:

§7765. Resignation of trustee; filing resignation
(c) without court approval and without authorization in trust agreement —
(1) Unless expressly provided to the contrary in the trust instrument, an individual trustee may resign without court approval and without authorization in the trust instrument if:
(1) there is at least one cotrastee and all cotrastees consent in writing to the resignation; and
(ii) all the qualified beneficiaries consent in writing to the resignation.
(2) This subsection shall not authorize the sole trustee of a trust to resign unless the trust instrument names a successor trustee or provides a method for appointing a successor trustee, and in either case the resignation shall not be effective until the successor trustee accepts the appointment in writing.

20 Pa.C.S.A. §7765(c)(2)(emphasis added)

In the present case, the beneficiaries acknowledge that there is no provision in the trust document for the resignation or appointment of a trustee although John Conti did provide for a sole corporate trustee. Therefore, section 7765(c)(2) is clearly on point and does not permit a sole corporate trustee to resign without court approval. The beneficiaries, however, did not tackle the statutory road block presented by section 7765(c)(2) for court approval, ostensibly because they have opted for a nonjudicial settlement agreement under 20 Pa.C.S.A. 7710.1. However, for a court to formally approve this broad use of nonjudicial settlement agreements would eviscerate 20 Pa.C.S.A. §7765(c)(2). In reaching this conclusion, there regrettably is no explicit guidance in the comments. By distinguishing between trustee resignations where there is a cotrastee and where there is only a sole trustee, section 7765 appears to preserve the settlor’s intent that a corporate fiduciary be involved with making decisions for a trust rather than abdicating that supervisory role to the beneficiaries alone.

B. Proposed Amendment of the Trust to Allow Removal of a Corporate Trustee Without Cause or Court Approval

Likewise, the beneficiaries’ nonjudicial agreement to modify the trust to permit the removal of a corporate trustee without court approval conflicts with the specific role assigned to a court when considering removal of a trustee under 20 Pa.C.S.A. § 7766. In contrast to resignations of trustees, the PEF Code provision for nonjudicial settlement agreements as set forth in section 7710.1 does not include removal of trustees as a matter that may be resolved under this section, although that list is admittedly nonexclusive. Instead, section 7766 of the PEF Code provides specific requirements for the removal of a trustee:

(a) Request to remove trustee; court authority. — The settlor, a cotrustee or a beneficiary may request the court to remove a trustee or a trustee may be removed by the court on its own initative.
(b) When court may remove trustee. — The court may remove a trustee if it finds that removal of the trustee best serves the interests of the beneficiaries of the trust and is not inconsistent with a material purpose of the trust, a suitable cotrustee or successor is available and:
(1) the trustee has committed a serious breach of trust;
(2) lack of cooperation among cotrustees substantially impairs the administration of the trust;
(3) the trustee has not effectively administered the trust because of the trustee’s unfitness, unwillingness or persistent failures; or
(4) there has been a substantial change of circumstances. A corporate reorganization of an institutional trustee, including a plan of merger or consolidation, is not itself a substantial change of circumstances.

20 Pa.C.S.A. §7766.

In essence, the modification that the beneficiaries propose would allow for the no-fault removal of a trustee which under 20 Pa.C.S.A. § 7766(b)(4) requires a showing “by clear and convincing evidence that: (1) the removal serves the beneficiaries’ best interests; (2) the removal is not inconsistent with a material purpose of the trust; (3) a suitable successor trustee is available; and (4) a substantial change in circumstances has occurred.” In re McKinney, 2013 Pa. Super. 123, 67 A.3d 824, 838 (Pa. Super. 2013). As the McKinney court observed, “[t]his is the first instance in which we have been asked to interpret and apply Section 7766(b)(4)....” McKinney, 67 A.3d at 830. Likewise, no precedent was presented as to the interplay between the trustee removal provisions of section 7766(b)(4) and the nonjudicial settlement agreement provisions of section 7710.1. Although the beneficiaries invoke In re McKinney to support their broad request for court approval of their nonjudicial settlement agreement to amend the trust document to allow future removals of trustees without court approval, McKinney does not go that far. The McKinney court was not presented with a nonjudicial settlement agreement to broadly amend a trust to permit future removals of trustees without petitioning a court for review. Instead, the Superior Court in McKinney was faced with a much narrower issue: whether a trial court erred in refusing the request of the beneficiaries of a long-term trust to remove a trustee under the “no-fault” provisions of 20 Pa.C.S. §7766(b)(4), which the court characterized as a question of first impression. The McKinney court concluded that the trial court erred in refusing the beneficiaries’ request to remove the trustee of a long-term family trust. In so doing, however, the court did not abdicate the role of the court in making such determinations. On the contrary, it set forth a vigorous standard of review for a court to apply in response to requests to remove a trustee for “no-fault:”

We conclude that courts should consider the following factors when determining whether a current trustee or a proposed successor trustee best serves the interests of the beneficiaries: personalization of service; cost of administration; convenience of the beneficiaries; efficiency of service; personal knowledge of trusts’ and beneficiaries’ financial situation; location of trustee as it affects trust income tax; experience; qualifications; personal relationship with beneficiaries; settlors’ intent as expressed in the trust document; and any other material circumstances.
In re McKinney, 67 A.3d at 833 (emphasis added).

The salient point about McKinney is that it reaffirms-rather than diminishes-the role of the court in reviewing specific petitions to remove trustees.

In this case, however, the beneficiaries base their petition on a nonjudicial settlement agreement as set forth in PEF Code section 7710.1. By its terms, court approval is unnecessary for a nonjudicial agreement. In light of the clear requirements set forth in section 7766 for when a court may approve the removal of a trustee, this court will not bestow a superfluous imprimatur on this nonjudicial agreement.

Conclusion

During the administration of the trust, Wells Fargo became aware that not all of the assets due and owing to the Residuary Trust were actually transferred from the decedent’s estate. Consequently, Wells Fargo filed a petition on October 27, 2010, which judge O’Keefe granted by decree dated March 21,2011 to authorize Wells Fargo to recover any assets in the name of the decedent, the decedent’s estate or in the name of Alda Conti Girardi, the executrix of the estate of John B. Conti. In its petition for adjudication, trustee Wells Fargo now seeks an updated decree transferring the authorization of Wells Fargo Bank, N.A. to recover any assets in the name of John B. Conti; in the name of the estate of John B. Conti.; or, in the name of Alda Conti Girardi, executrix of the estate of John B. Conti to The Philadelphia Trust Company, as substitute trustee. This request is granted by a contemporaneously issued decree. The accountant requests approval of the payment of $3,092.60 from principal of the trust to Weber Gallagher Simpson Stapleton Fires & Newby LLP as compensation for its advancement to the Trust of the court filing fee for the account which is hereby approved. Wells Fargo also raised as issues for adjudication its request for trustee’s terminating fee and payment of legal and filing fees, but both of these issues are resolved by the June 16, 2014 settlement and release agreement as incorporated herein. As a question for adjudication, the petitioner requests discharge of Wells Fargo Bank as trustee, which is granted conditioned on the absolute confirmation of the account and the transfer and delivery of assets in accordance with this adjudication.

According to the petition for adjudication, the Eestate of John B. Conti, deceased, paid Pennsylvania Transfer Tax in the amount of $68,822.00 on March 2, 1983. As stated in the March 21,2011 adjudication, the Pennsylvania Attorney General’s Office has preserved its right to claim any Pennsylvania transfer inheritance tax as may be due and assessed without prejudice to the Commonwealth to pass on debts and deductions. The account for the period October 1,2009 through August 26,2013 states that there is a balance of principal before distribution of $ 2,426,598.59 and a balance of income before distribution is $ 463,820.68. The parties attached as exhibit B to their June 16, 2014 settlement and release agreement an updated account for the second account covering the period October 1, 2009 through March 31,2014 which shows a balance of principal before distribution of $2,419,037.24 and a balance of income before distribution of $518,800.11 for a total of $ 2,937,837.35. This sum, composed as stated in the account, plus income received since the filing thereof and subject to distributions already properly made or transfer inheritance tax which may be due and subject to the parties’ June 16, 2014 settlement and release agreement, is awarded as set forth in the accountants’ petition:

Proposed Distributees
Income Amount/Proportion
Elmer J. Conti, Jr. 1/12 of Trust Income
Robert B. Conti 1/12 of Trust Income
Lauren C. Manning 1/12 of Trust Income
Carolyn M. Avellino 1/12 of Trust Income
Eric A. Girardi 1/6 of Trust Income
Nona M. Girardi 1/6 of Trust Income
Emma M.L. Conti 1/3 of Trust Income
Principal
The Philadelphia Trust Company, 100% of Trust Principal in light of the Court's approval of
the resignation of Wells Fargo Bank,
N.A. and the appointment of
Philadelphia Trust Company as
Substitute Trustee

Leave is hereby granted to the accountants to make all transfers and assignments necessary to effect distribution in accordance with this adjudication.

And now, this 17th day of September 2014, the account is confirmed absolutely.

Exceptions to this adjudication may be filed within twenty (20) days from the date of the issuance of the adjudication. An appeal from this adjudication may be taken to the appropriate Appellate Court within thirty (30) days from the issuance of the Adjudication. See Phila. O.C. Rule 7.l.A and Pa. O.C. Rule 7.1 as amended, and Pa.R.A.P. 902 and 903.

      . See 10/7/13 Wells Fargo Petition, ¶ 19; 9/16/13 Sui Juris beneficiaries petition, ¶21. Regrettably, the accountant’s petition for adjudication does not flesh out the details of this appointment. According to the attached letter dated August 4, 2014 of counsel for trustee Wells Fargo, the successor to Broad Street Trust Company was Continental Bank. The June 6, 1985 partial adjudication by Judge Pawelec notes that when Continental Bank declined to serve as trustee, Central Penn National Bank was thereafter approved as trustee “conditioned upon the fact that it be the sole trustee.” 6/6/85 partial adjudication at 11 (Pawelec, J.).

      . 9/16/13 Sui Juris beneficiaries petition, ¶ 25.

      . 9/16/13 Sui Juris beneficiaries petition, ¶ 32.

      . 10/7/13 Wells Fargo petition, ¶¶ 28-39.

      . 9/26/13 Sui juris beneficiaries’ objections.

      . 20 Pa.C.S.A. §7710.1, Uniform law comment.

      . 20 Pa.C.S.A. §7710.1, Uniform law comment.

      . See In re McKinney, 2013 Pa. Super. 123, 67 A.3d 824, 826 n.l (Pa. Super. 2013)(“[w]hen circumstances arise that are not explicitly considered by the trust document, such as when beneficiaries request the removal of a trustee notwithstanding the tmst document’s lack of a portability clause, Pennsylvania’s Probate, Estate and Fiduciaries Code provides a set of default rules that will govern the proceedings”). See also 20 Pa.C.S.A. A. §7705, Uniform Law Comment (the “Uniform Trust Code (UTC) is primarily a default statute).

      . 9/16/13 Sui Juris beneficiaries petition, ¶ 24.

      . See generally 20 Pa.C.S.A. §7710.1(d).

      . 10/7/13 Wells Fargo Petition, ¶¶ 21-24; 9/14/13 Accountant’s petition for adjudication, Rider 13(a).


source: Caselaw Access Project

license: Public Domain

text:
    Bonser v. Chamberlain

      C.P. of Monroe County,
    No. 9994 CIVIL 2012

      David A. Marino, for plaintiff.

      Michael B. Kaspszyk, for defendants.
    Sept. 18, 2014
   WILLIAMSON,/.,

This matter comes before the court on plaintiff’s request for an injunction to enforce restrictive covenants. The defendants also filed a counter-claim alleging plaintiff is violating the same restrictive covenants. The matter came before the court for a hearing and we make the following findings:

FINDINGS OF FACT

1. Carol Chamberlain and William Wesley Gouger are the owners of real property located at 1400 Grandview Drive, Saylorsburg, Pennsylvania.

2. The real property consists of 5.631 acres as described in Deed Book 2165p.7018at the Monroe County Recorder of Deeds Office. (Plaintiff’s exh. 2).

3. The real property is also known as Lot No. 9 on a plan titled “Final Plan, Blue Ridge Estates” recorded in Plot Book 58, page 33 at the Monroe County Recorder of Deeds Office. (Id.)

4. Plaintiff Robert R. Bonser, Jr. is the owner of Lot No. 12 of Blue Ridge Estates. (Plaintiffs exh. 1).

5. Properties in Blue Ridge Estates are subject to restrictive covenants. (Plaintiff’s exh. 3).

6. Plaintiff Robert R. Bonser, Jr. was one of the developers of Blue Mountain Estates and original owner, along with his business partners, of both lots 9 and 12.

7. The restrictive covenants state in part as follows:

“ 1. No building presently on said lot or hereafter erected shall be erected, used or occupied as a public garage, manufacturing establishment or for any offensive or malodorous occupation. The lot shall be for residential purposes only.
2. No building shall be erected except a single family dwelling house with a minimum habitable area of 720 square feet and a private garage or a two family dwelling house with a minimum habitable area of 1200 sq. ft. and a private garage.
3. No other outbuildings, temporary dwellings or buildings shall be erected or placed on the premises, except a utility shed.
5. No animals, livestock or poultry of any kind shall be raised, bred or kept on any lot other than commonly accepted domestic pets, provided they are not raised, bred or kept for any commercial purposes.
6. No unlicensed vehicle nor one that is inoperative for a period in excess of 30 days shall be kept on the premises, unless it is placed completely under the roof of a garage and out of view...”
(Plaintiffs exh. 3).

8. The defendants had the following animals at their real property at time of the hearing:

(3) turkeys; (10) goats; 20 +/- chickens; (1) horse; (3) heifers and bull calves; (3) beagles; and indoor cats.

9. The defendants only keep the heifers/bull calves on the property for a short period of time for the West End Fair; otherwise, they are kept on 120 acres in New Jersey.

10. The defendants have a John Deere Excavator and a Model 710 Backhoe, both housed elsewhere, but sometimes stored at the property if needed for personal use.

11. The defendants have a Model 9000 Dump Truck (double axle) used for their business, Gouger Construction/ Excavating/Septic Systems.

12. William Gouger is a “hobby farmer” maintaining a half dozen or so fields for farming purposes. The farming activity does not take place on the property subject to this action.

13. The defendants have the following farming equipment at the real property:

1600 Oliver tractor; 1850 Oliver tractor; hay baler; 1190 International hay bine; Ford baler; Hay tetter; manure spreader; and chisel plow.

14. Most of the defendants’ farming and all of the livestock are for personal use or consumption.

15. The horse is the defendants’ daughter’s pet.

16. Other properties in Blue Ridge Estates contain horses thereon and the plaintiff has no objection to the horse.

17. The defendants’ property has a house thereon with chicken coops, a 12’xl6’ shed, a lean-to shed, and a 28’x30’pole bam.

18. The defendant conducts no business at his property, but does park his double axle dump truck and other equipment there at times.

19. The parties have previously been before the Chestnuthill Township Zoning Hearing Board for similar issues.

20. Plaintiff contributed to the drafting of the restrictive covenants.

21. Plaintiff complains of animals wandering off of the defendants’ property, excessive noise of the equipment, truck and animals, and the smell of the animals and diesel fumes.

22. William Gouger does fix and maintain his equipment at the property, and he uses the manure from the animals to spread as fertilizer on the fields that he farms.

23. The plaintiff’s own property has a house with an attached garage, an outdoor furnace and a 12’x20’ storage shed.

DISCUSSION

An owner of a lot in a subdivision has the right to enforce restrictive covenants as they run with the land and may be enforced in equity by owners of other lots in the development. Doylestown Township v. Teeling, 635 A.2d 657 (Pa. Cmwlth. 1993). The enforcement is within the court’s equitable powers. Perrige v. Horming, 440 Pa. Super. 31, 654 A.2d 1183 (1995). Land use restrictions must be strictly construed and will not be expanded by implication. Buck Hill Falls Co. v. Clifford Press, 791 A.2d 392 (Pa. Super. 2002). The court must rely upon the ordinary meaning of the language used in the covenants to ascertain the parties’ intent. Berger v. Ackerman, 439 A.2d 200 (Pa. Super. 1981).

We first find that the use of the property is not violative of restrictive covenant#l. No evidence existed that any building is being occupied or used as a public garage, manufacturing establishment, or any offensive or malodorous occupation. The lot is being used for residential purposes. In strictly construing the language of the restrictive covenants, there is no occupation being conducted at the defendants’ property. While they store some trucks and at times some excavation equipment, there was no evidence customers come to the property. There was no evidence the property was used as a public garage. The defendant works on the equipment himself when necessary. All of the equipment worked on belongs to the defendants. This is not prohibited by the language of the covenants. Use of the property for an occupation infers that business is being conducted at the property, and customers come there or the business activity takes place there.

The mere parking of vehicles at the property used in a commercial business and repair or maintenance of said vehicles by Mr. Gouger, is not the same as an occupation or commercial use of the property. The defendants live at the property, and choose to park their vehicles and equipment there. No one else comes to the property and no actual business is conducted there. Furthermore, there was no evidence that a building was used for any use prohibited by the covenants. A strict reading of the covenants does not prohibit Mr. Gouger’s activity. While the loud noise of the vehicles, repairs and maintenance, and the diesel smell may be unpleasant, it is not an ongoing establishment or occupation in a building at the property pursuant to the strict language of the covenants.

Likewise, the farm equipment is not prohibited from being on the real property. No building was used as a public garage, manufacturing establishment, or for any offensive or malodorous occupation by storage of farming equipment. No farming is conducted on the lot. There was no evidence of storage of vegetables, produce, or other crops farmed by the defendants at the property. There was no evidence such crops are sold at the property. There also was no evidence that any of the vehicles or equipment on the property were unlicensed or inoperable for a period in excess of thirty (30) days. We further note that farm equipment is exempt from licensing requirements in Pennsylvania. The storage of these vehicles and equipment are not prohibited by a strict interpretation of the covenants.

The plaintiff also seeks injunctive relief regarding the animals at the defendants’ property. The cats and beagles are clearly domestic pets and exempt from the prohibition of the restrictive covenants. (Covenant no. 5). The testimony also showed that the horse is kept as a domestic pet. Also, testimony indicated there are other horses kept on properties in Blue Ridge Estates, and the plaintiff was “probably” not objecting to the horse. The plaintiff’s concerns were the other animals at the property. Therefore, the horse is not prohibited by the covenants.

The testimony indicated the other animals are kept for personal consumption or use. The chickens are all egg-laying hens. Restrictive covenant #5 prohibits animals, livestock or poultry of any kind other than commonly accepted domestic pets. Poultry is specifically addressed in the covenant and chickens and turkeys are poultry. The testimony indicated they are raised for personal consumption, (i.e. eggs, etc.). There was no testimony that they are considered pets. We cannot say that chickens or turkeys are commonly accepted domestic pets, and the use is for consumption, thereby negating use as a pet. By the plain meaning of the covenants, the chickens and turkeys are prohibited from being raised, bred or kept at the property as poultry.

The heifers and bull calves are livestock. By the plain meaning of restrictive covenant #5, livestock are not to be raised, bred or kept on the property. They are not commonly accepted domestic pets. The fact the livestock are only on the property for a short period of time for the West End Fair does not matter. The covenant’s plain meaning prevents any livestock from being kept on the premises with no requirement of a certain duration.

There was no testimony whether the goats are used for milk, food or simply kept as pets. There is no specific prohibition of goats. There was no testimony ofthe purpose of the goats. Therefore, it is possible they are kept as pets. The only applicable language is that no animals of any kind may be raised, bred or kept on the property other than commonly accepted domestic pets. The term “animals”, in conjunction with “other than commonly accepted domestic pets” is overly broad. The term animals could apply broadly, while one’s view of a commonly accepted domestic pet could be narrow or broad. Since there was no testimony on the particular use for the goats, it is possible they are kept as pets under a broad interpretation of the covenants. As the burden is on the plaintiff to show a violation, and the covenants are strictly construed as to this burden, we find the plaintiff is unable to do so in this regard. The restrictive covenant #5 is overly broad as to animals and domestic pets with different interpretations. Therefore, it does not apply.

Plaintiff’s final request is that the defendants remove those structures in excess of their home, private garage and a utility shed. At issue are restrictive covenants #2 and #3. Covenant #2 states no building except a single family dwelling house and a private garage is allowed on the property. Covenant #3 states: “(N)o other outbuildings, temporary dwellings or buildings shall be erected or placed on the premises, except a utility shed.”

The language of covenant #3' is sufficiently broad regarding a private garage, such that the defendants’ pole bam qualifies. The covenant does not specify whether or not the private garage has to be attached to the house. The language does not indicate how the garage is to be used. A garage is a building in which to keep a motor vehicle according to the Oxford American Dictionary. Mr. Gouger testified he uses the pole bam to store his equipment. It is large enough that it could house one or more motor vehicles. The covenant is overly broad such that the pole bam can be classified as a garage. The defendant uses it to store his equipment, a use being the same as a garage. A single family dwelling house may customarily have a private garage attached, or detached. The covenants do not specify. Furthermore, there was no testimony whether or not the defendants’ residence had an attached garage or not. We find this to be irrelevant anyway, as the covenants are sufficiently broad that an attached garage is part of the single-family residence. The additional language, “and a garage”, can be interpreted to include either an attached or detached garage, or both. Therefore, the pole bam on the defendants’ property is an allowed garage within the meaning of the covenants.

The remaining issue is the other outbuildings on the property. The testimony was that the defendants also have a 12’xl6’ shed, a lean-to shed, and chicken coops. We find that these structures are “other outbuildings” contemplated by restrictive covenant #3. As such, only a utility shed can exist in addition to the pole bam, which is a private garage, and the defendants’ single family dwelling house. It is not for this court to decide which structure may remain; but, of the chicken coops, the 12’xl6’ shed and the lean-to shed, only one is allowed under the restrictive covenants. The others must be removed, as the covenant is sufficiently specific in that regard.

The defendants’ counter-claim alleges the plaintiff is also violating the restrictive covenants. We agree. Looking at restrictive covenant #2 and #3 collectively, plaintiff is allowed a single-family dwelling house and a private garage and a utility shed. The plaintiff has a single — family dwelling with a garage, a 12’x20’ storage shed, and an outdoor wood-buming furnace. We find the outdoor furnace is an outbuilding contemplated by the restrictive covenants. The shed does not appear to be a garage, nor was there testimony supporting the fact a motor vehicle could be stored in it. The covenants must be strictly construed against the party seeking to enforce them. They must also be strictly construed against the party who drafted them.

Here, plaintiff helped draft the restrictive covenants. An outbuilding is a building, such as a shed or bam, etc. belonging to, but separate from a house. Oxford American Dictionary. The outdoor furnace is enclosed in what appears to be a small shed structure. (PL exh. 8 and 9). It serves to heat plaintiff’s house, but it exists as a separate stand-alone structure. Therefore, it is an outbuilding as contemplated by the restrictive covenants. Together with the 12’x20’ shed, there is more than a utility shed on the property. Although there is no definition in the covenants for a utility shed, we find the plain and unambiguous meaning is any outdoor structure used for any purpose or reason, resembling a shed, and without a specific size stated. It is a structure that could not accommodate a motor vehicle, making it a garage for purposes of the covenants. As such, the plaintiff will need to remove one of these two structures, as well.

ORDER

And now, this 18th day of September, 2014, it is ordered and decreed as follows:

1. Defendants are permanently enjoined from breeding, raising or keeping the turkeys, chickens, heifers and bull calves at their property located at 1400 Grandview Drive, Lot 9, Blue Ridge Estates, Saylorsburg, Pennsylvania;

2. The defendants are permanently enjoined from maintaining outbuildings on their property other than their residence, pole bam, and one shed.

3. The plaintiff is permanently enjoined from maintaining outbuildings on his property other than his residence, a garage and one shed. The storage shed and outdoor wood burning furnace are both outbuildings under the covenants for purposes of this order.

4. All other requests for an injunction by the parties are denied.


author: ANDERSON, J.,

text:
    McCloskey v. Wildwood Cemetery, Inc.

      C.P. of Lycoming County,
    No. 12-00,106

      Chrisitan Lovecchio, for plaintiff.

      J. David Smith, for defendant.

      Sept. 23, 2014
   ANDERSON, J.,

Before the court is defendant’s motion for summary judgment. Argument on the motion was heard September 18, 2014.

plaintiff was formerly employed by defendant, having been discharged from that employment on June 24, 2011. In this suit, plaintiff contends he was wrongfully discharged. In its motion, defendant contends plaintiff has failed to make out a case of wrongful discharge.

Ordinarily, employment in Pennsylvania is “at-will”. Hennessy v. Santiago, 708 A.2d 1269 (Pa. Super. 1998). An exception is made only where the discharge would threaten clear mandates of public policy. Clay v. Advanced Computer Applications, 559 A.2d 917 (Pa. 1989). In those cases where our courts recognized a violation of a clear mandate of public policy, the plaintiff demonstrated that a statute or constitution applied to his case and that the discharge resulted from his duty to act in accordance with that applicable law. Krajsa v. Keypunch, Inc., 622 A.2d 355 (Pa. Super. 1993).

In the instant case, plaintiff has offered evidence that he was discharged because he questioned his general manager about certain record-keeping directions he had been given and because he had refused to comply with those directions. Plaintiff argues that the record-keeping is required by regulations promulgated by the Department of Environmental Protection and in support of that argument has produced a copy of a “General Plan Approval and/or General Operating Permit,” which indicates in Paragraph one thereof that it is issued in accordance with Section 6.1(f) of the Air Pollution Control Act, 35 P.S. Section 4006.1(f) and 25 Pa. Code Section 127.611, by the Department of Environmental Protection for human or animal crematories. The Permit requires compliance with the monitoring, recordkeeping and reporting requirements set forth therein, requires the collection and recording of certain information (including times and corresponding temperatures of each cremation cycle), and the maintenance of that information at the facility for a five-year period, during which it must be made available to the department upon request. The Permit also indicates that failure to comply with applicable terms and conditions requires suspension or revocation of the Permit by the Department.

In Field v. Philadelphia Electric Co., 565 A.2d 1170 (Pa. Super. 1989), the Court recognized a cause of action for wrongful discharge where the employee was discharged for reporting the employer’s violations of the Nuclear Regulatory Commission to that Commission. The Court noted that under the federal Energy Reorganization Act, the plaintiff was required to report the violations and further, that the federal law at issue was designed to protect the health and safety of the public against the dangers of radiation.

Here, plaintiff is alleging that he was fired for refusing to lie when recording certain information, which, if recorded accurately, would have revealed a violation of the DEP regulation. In essence, assuming the regulations require accurate recording, the regulations require the recording (and, by virtue of their availability to the Department upon request, the reporting) of violations. By terminating plaintiff, defendant prevented plaintiff from reporting the violations. As noted above, the Permit is issued under the Air Pollution Control Act, which declares it “to be the policy of the Commonwealth of Pennsylvania to protect the air resources of the Commonwealth to the degree necessary for the (i) protection of public health, safety, and well-being of its citizens; ....” 35 P.S. 4002(a). Thus, compliance with the regulations at issue has been declared by the legislature to be necessary for the protection of the public and an attempt to thwart such compliance would constitute a violation of the public policy of this Commonwealth. While it remains to be seen whether plaintiff can substantiate his allegations, defendant is not entitled to judgment as a matter of law.

ORDER

And now, this 23rd day of September 2014, for the foregoing reasons, defendant’s motion for summary judgment is hereby denied.

      . Specifically, plaintiff was required to perform cremations and, as part of that job duty, to record times and temperatures. Plaintiff alleges he was directed to record certain temperatures even if those temperatures were not accurate.

      . Paragraphs 8 and 11 of the Permit.

      . Paragraph 5 of the Permit.

      . Although the Court in McLaughlin v. Gastrointestinal Specialists, Inc., 750 A.2d 283, 290 (Pa. 2000), held that “a bald reference to a violation of a federal regulation, without any more articulation of how the public policy of this Commonwealth is implicated, is insufficient to overcome the strong presumption in favor of the at-will employment relation,” and seemed to question the Superior Court’s ruling in Field, it did not disagree with the ruling’s implication that protection of the public against the dangers of radiation was also part of this Commonwealth’s public policy.

      . The court is assuming plaintiff ‘s allegations to be true, for purposes of ruling on the Motion for Summary Judgment.

      . Plaintiff must prove that he was indeed fired for the reasons alleged, and that there were no other, legitimate reasons. See Betts v. Stroehmann Brothers, 512 A.2d 1280 (Pa. Super. 1986)(Once an important public policy is recognized, an employee’s discharge is still lawful if the employer has separate, plausible and legitimate reasons for such).


author: WILLIAMSON, /.,

text:
    In re Estate of Shepley
    C.P. of Monroe County,
    No. 32 O.C. 2012

      Sept. 25, 2014
   WILLIAMSON, /.,

Kenneth Shepley, the petitioner, seeks issuance of a subpoena to secure a copy of the estate planning file of the late James F. Shepley, the decedent, from attorney Lori J. Cerato. Gertrude Shepley, widow of the decedent and executrix of his estate, has objected to issuance of the subpoena, (“objector”). The petitioner seeks a subpoena for the estate planning files retained by attorney Cerato as part of discovery in a Will challenge claiming undue influence in execution of the Will submitted to probate. Attorney Cerato met with the decedent and drafted the Will the Petitioner is challenging.

Generally, we note that maintaining a client’s confidence is a sacred duty of a lawyer. See Pennsylvania Rules of Professional Conduct 1.6. This duty continues even after the death of a client. Even when a subpoena is issued for such attorney-client documents, it is common for parties to seek judicial intervention. It is only in the most compelling circumstances, that a court should permit a subpoena for a client’s file with their lawyer. One such circumstance where previously permitted is obtaining the file of a scrivener of a Will, where it was alleged the decedent was subject to undue influence. See Thevaos Estate, 30 Fiduc. Rep. 2d 140 (Centre County 2010).

Here, petitioner alleges the decedent executed a new Will with attorney Cerato, due to undue influence of the executrix of this Will. At a hearing held January 10, 2014 for other matters related to this estate, attorney Cerato testified regarding a meeting with the decedent and subsequently drafting a Will based upon discussion at that meeting. Attorney Cerato referred to her own notes and other contents in the file at that hearing. While the petitioner could have inspected the file contents and attorney Cerato’s notes at that time and inquired on cross examination, we cannot state at this time that such information is irrelevant or immaterial. The file may contain nothing material or germane to petitioner’s claim of undue influence; however, due to the nature of the claim, we believe petitioner has a need to inspect the file.

We find the petitioner is entitled to issue a subpoena to attorney Cerato for a copy of the estate planning file of the decedent including any notes therein made by attorney Cerato. We do so without taking this matter lightly, as we do not question attorney Cerato’s veracity. Therefore, the contents of said file shall be maintained under a protective order such that petitioner’s counsel shall not provide a copy of the file to anyone else, including his own client (petitioner), nor discuss the contents with anyone other than his client (petitioner) who shall not discuss with anyone else, without further order of court. This will preserve the attomey/client privilege as much as possible.

ORDER

And now, this 25th day of September, 2014, the objection to Subpoena filed by the executrix of the estate of James F. Shepley are overruled. The petitioner may issue the proposed subpoena to attorney Lori J. Cerato as proposed.

It is further ordered that a protective order shall be in place prohibiting counsel for the petitioner from providing a copy of the contents of the file to anyone, including the petitioner, nor discuss the contents with anyone except the petitioner, who is also prohibited from discussing the contents with anyone else, without further order of court.

      . We note attorney Cerato testified to facts and circumstances at the time of the January 10,2014 hearing that were known to her that do not appear to support petitioner’s claim; however, since that was a separate proceeding limited to a petition to freeze assets, compel accounting and recovery of assets, and for removal of executrix, the issue remains open at this time.


author: HARLACHER SIBUM, J.,

text:
    O’Brien v. O’Brien

      C.P. of Monroe County,
    No. 1375 DR 2011; 11043 CV 2011

      Megan Reaser, for plaintiff.

      Lawrence F. Finn, for defendant.
    Sept. 30, 2014
   HARLACHER SIBUM, J.,

Monroe

This matter comes before the court after argument on Martin O’Brien’s exceptions to the master’s report of Robert C. Lear. On March 16, 1978, plaintiff Lou-Ann O’Brien (“wife”) and Martin O’Brien (“husband”) were married. The couple has three adult children. On December 1, 2011, the parties separated and on December 22, 2011, wife instituted the within action in divorce by complaint. On January 17,2013, Robert C. Lear, Esq., was appointed as the divorce master to hear this matter. After multiple continuances, master’s hearings were held on July 15,2013 and December 11, 2013. On March 18, 2014, the master filed his master’s report (“report”) to which the defendant filed exceptions on April 7, 2014. After receiving briefs from both parties, we heard arguments on husband’s exceptions on June 2, 2014. After review of the master’s report, husband’s exceptions, husband’s and wife’s briefs, and in consideration of the representations made at oral arguments, we are prepared to decide this matter.

DISCUSSION

As a preliminary matter, we note that while a master’s report is advisory only, it is given great deference. See Fiorilli v. Fiorilli, 198 A.2d 369 (Pa. Super. 1964). Nonetheless, “[a] reviewing court has a duty to make a complete and independent review of the proceeding below.” Rollman v. Rollman, 421 A.2d 755 (Pa. Super. 1980).

The rules of procedure require that, where exceptions are filed to a master’s report, each exception must set forth a separate objection precisely and without discussion. Pa.R.Civ.P. 1920.55-2(b). The court must address all issues that are raised in good faith, and the fact that the number of errors alleged is large does not automatically result in waiver. See Reinert v. Reinert, 926 A.2d 539 (Pa. Super. 2007).

With this standard in mind, we set forth the following analysis on husband’s seventeen exceptions. For purposes of judicial economy, we collectively analyze certain exceptions which could be logically grouped. Husband’s exceptions have been grouped into the following categories: vehicle disposition, real estate, cash/liquid assets, alimony issues, and counsel fees.

(1) Vehicle Disposition

In regards to exceptions (A), (H), and (I), we find that the master did not err in his valuations and distribution of the vehicles in question. Husband argues that ownership of some of the vehicles was predetermined by a prior PFA agreement. However, we find the master was correct in his distribution of these vehicles as the PFA related to the specific time and duration of the agreement and was not a permanent transfer of title or a waiver of equitable distribution rights. Further, with respect to the value of the multiple marital vehicles, husband failed to present concrete or convincing evidence relating to the current market value of any of the vehicles in question. Husband presented only vague and unverifiable estimations as to their value. No documentation or appraisals were submitted to the master regarding the vehicles. As such, the master was forced to conduct his own valuation. Master Lear gives a reasonable basis for his valuing of the vehicles, including the motor home, the transmission of which was in poor condition.

Husband next argues that the master erred because he used the Kelly Blue Book, ahearsay document, to determine the value of these vehicles. Even though proceedings before the master must adhere to the Pennsylvania Rules of Evidence, the use of the Kelly Blue Book was proper because it falls under Pa.R.E. 803(17), allowing “market reports and similar commercial publications”. We find that the Kelly Blue Book reports as to the value of motor vehicles were properly admitted under this exception to the hearsay rule.

Further, husband contends that the 50%/50% division of the value of the vehicles is inequitable and in error in light of the 45%/55% division of other property the master awarded in favor of wife. The master found that these vehicles were to be divided equally; thereby giving husband more value than he would have had if the master adhered to the 45%/55% division of the other marital property. Not only do we find husband’s arguments in this regard unwise, but meritless as well.

Husband particularly claims that the master committed error in determining the value of the 1976 Corvette. Both husband and his close friend, Anthony Tarantino, testified that the car was valued greater than the $3,700 value for which the vehicle was sold. Transcript of record, at 97, O’Brien v. O’Brien, 11043 CV 2011, 7/15/2013; Transcript of record, at 60, O’Brien v. O’Brien, 11043 CV 2011, 12/11/2013. However, Mr. Tarantino’s expertise and certification were in automobile mechanics, not valuation. Transcript of record, at 88, O’Brien v. O’Brien, 11043 CV 2011, 7/15/2013. Husband did not present any objective valuation of the vehicle that placed its value in the $65,000 range he claimed it was worth. Transcript of record, at 62, O’Brien v. O’Brien, 11043 CV 2011, 12/11/2013. In fact, at the time wife sold the vehicle, it had not been started in four or five years because the rear end gears were blown out, and possibly the engine. Transcript of record, at 168-69, O’Brien v. O’Brien, 11043 CV 2011, 7/15/2013.

After evaluating the master’s recommendations for the valuation of the vehicles in light of the testimony and exhibits on file, this court finds no error in the master’s valuation and distribution of the vehicles. The master has latitude in valuing these items, especially where there is no current appraisal testimony offered. We find that master Lear had a reasonable basis for his conclusion. The car is no longer available to be appraised and no evidence was proffered to show how much it would cost to repair the vehicle. Though Mr. Tarantino was familiar with the car, he was not admitted as an expert in vehicle valuation and did not testify to the cost of the vehicle in the condition in which it was sold. In fact, he had not seen the car since it ceased functioning properly. We find master Lear’s recommendations appropriate given the evidence presented. Accordingly husband’s exceptions dealing with vehicle valuation and distribution are denied.

(2) Real Estate

Husband filed exceptions to the master’s report regarding the disposition of assets for two pieces of property, the former marital residence at 276 Cedar Drive, Long Pond, Pennsylvania, and wife’s jointly owned Florida property. These exceptions are noted in exceptions (B), (G), and (T).

First in regard to the former marital residence, husband argues that the terms and procedure determined by the master for sale were in error. We disagree and affirm the master’s findings. The master’s plan avoids the possibility of further disagreement as neither party wants the house. We also note that an expedited sale in this case is desirable as there is a tax lien on the property and a substantial amount of overdue home owner’s association dues. Moreover, no one is currently living in the residence, making the property more susceptible to vandalism while unoccupied. We find no error in the master’s procedure for disposal of the marital home and, thus, husband’s exception (B) is denied.

Next in exception (T), husband alleges that wife should be required to pay $3,500 for the time period in which she had exclusive possession of the marital home (1/2013-7/2013). Husband’s expert testified the rental value of the marital property to be $ 1,000 per month. Transcript of record, at 11, O’Brien v. O’Brien, 11043 CV 2011, 7/15/2013. Husband’s calculation of seven months of potentially earned rent divided by two equates to the $3,500 he claims to be owed by wife. However, the record indicates that wife tended to the upkeep of the home and paid fees associated with home ownership, including the taxes as well as the homeowner’s fees to the Emerald Lake Community Association. As the record does not indicate husband contributed in this regard, we find husband’s demand for rent to be erroneous. Further, the determination and award of the rental value of property is an equitable determination that may be awarded on a discretionary basis. Butler v. Butler, 621 A.2d 659, 668 (Pa. Super. 1993) aff’d in part, rev’d in part, 663 A.2d 148 (1995). As such, we find that master Lear’s decision to exclude this calculation from his distribution scheme was not an abuse of discretion. Husband’s exception (T) is denied.

Lastly on the matter of real estate, husband, in exception (G) claims that the master erred in not crediting wife with having constructive income from her one-third interest in an inherited property in Florida. Wife inherited a one-third interest in property in Florida from her mother. Her two brothers owned the remaining two-thirds. One of wife’s brothers lives on the property and pays the taxes, insurance, and maintains the property but does not pay the other co-tenants rent. It is husband’s position that wife should have been credited with having “constructive” rental income from this property during the marriage that he is entitled to.

The master took this property into account when determining the equitable division of the property. However, husband claims entitlement to the constructive value of the rent that the wife did not receive. It is well settled law in Florida, and almost all other jurisdictions, that unless there are extraordinary circumstances, a tenant in common who has exclusive possession of real property and who uses it for his or her own benefit without receiving any rents or profits therefrom, is not liable or accountable to a co-tenant out of possession unless such possession is adverse to or the result of ouster. Brisciano v. Byard, 615 So.2d 213 (Fla. 1st DCA 1993); Fitzgerald v. Fitzgerald, 558 So.2d 122 (Fla. 1st DCA 1990); Goins v. Goins, 762 So.2d 1049 (Fla. Dist. Ct. App. 5th Dist. 2000). Relatedly, it has been held that it is not necessary that a tenant in common have been excluded from the premises in order for the occupying tenant to be held liable for the rental value to off-set the amount sought in contribution from a co-tenant for taxes, maintenance, and other expenses. Barrow v. Barrow, 527 So.2d 1373 (Fla. 1988).

Here, there is no adverse possession of the co-tenant in possession and the co-tenant has not excluded wife. Thus, no rental income is owed to wife and she has not accrued constructive income simply because one tenant chose to live in the house and wife chose to live elsewhere.

Husband also claims the master erred in refusing to allow him to testify to the increase in value of the Florida property. He cites Semasek v. Semasek, 502 A.2d 109 (Pa. 1985) which held that owners of property are considered experts when testifying as to the property’s value. Semasek, 502 A.2d at 110 (citing Sgarlat Estate v. Commonwealth, 158 A.2d 541 (Pa. 1960)). There is a line of jurisprudence that states that if there is no manner for determining a property’s value, the market value may be established by the testimony of persons acquainted with the property, and whose knowledge and experience qualify them to form an intelligent judgment as to its proper valuation. See Pittsburgh R. Co. v. Patterson, 107 Pa. 461 (Pa. 1884).

Here, husband claims that he is the owner of his marital share in the increase in value of the Florida property. Master Lear made a distinction between an equitable owner and a legal owner and excluded husband’s testimony. We agree with master Lear’s decision. Pennsylvania cases have allowed an owner to testify about the value of a property if he had a legal interest in the property. Here, although husband claims that he is familiar with wife’s Florida property from visiting for vacation when the couple was still together, he is not the owner of the property and we will not extend this rule to non-owners. Thus, we find that master’s exclusion of husband’s testimony pertaining to the increase of value of the Florida home to be without error and husband’s exception (G) is denied.

(3) Cash/Liquid Assets

The vast majority of husband’s exceptions relate to the master’s characterization and valuation of assets and the status of the parties. The master divided the marital property based on these characterizations and valuations. Husband’s exceptions on this matter are as follows: (F) to the marital checking account, (J) to his earning capacity, (M) to wife’s status/eaming capacity, (N) to the auctioning of personal property, (Q) to the annuity distribution, (R) to division of personal property, and (S) to the division of husband’s pension. Instead of responding to husband’s exceptions in this category individually and to avoid repetitive analysis, we instead largely defer to the master’s discretion.

As we have previously discussed, master Lear is given great discretion in his distribution of the marital property and we find that he employed that discretion appropriately and in a standard manner. In his report master Lear detailed a litany of factors he considered when determining how to divide the property and the most equitable means to effectuate the division. Wife’s status over the last thirty plus years as a mother and homemaker contributed greatly to the master’s findings. Husband has been working, although sporadically, throughout the duration of the marriage and had the ability to accumulate a pension and benefits. These factors, along with the others supporting the master’s conclusions, provide this court with the facts and adequate reasoning to affirm the master’s division of the sale of real estate, the pension funds, and the annuity at 45%/55% in favor of wife. Given these factors, the master’s distribution of the pension and other accounts are not in error.

We also find sufficient support for the master’s valuation and 50/50 distribution of the personal property. Husband avers master Lear ignored the evidence and supplanted his own idea of the value of the marital personal property. In his report, master Lear stated that there was a normal amount of personal property within the residence including used TVs, furniture, appliances, albums, etc. At the hearings, husband testified that the value of these items totaled $117,820.00. The master stated in his report that he did not find this to be a reasonable valuation of used household items that are in a $150,000 house. Master Lear recommended that any items currently in possession by both husband and wife stay in their respective possession. The appliances necessary to expedite the sale of the home, i.e. washer/dryer, freezer, stove, etc., should be returned to the residence. Due to husband’s questionable valuation of the property, master Lear did not value the remaining property and recommended that the remaining personal property items be auctioned with the net proceeds from the auction being divided on a 50/50 basis.

Master Lear found husband’s valuation “difficult to believe” which ultimately is a credibility determination which is given great deference in these matters. The divorce code does not specify a particular method of valuing assets subject to equitable division under § 3502. See Smith v. Smith, 904 A.2d 15, 21 (Pa. Super. 2006). Thus the court must“exercise discretion andrely on estimates, inventories, records of purchase prices, and appraisals submitted by both parties.” Id. When “determining the value of marital property, the court is free to accept all, part or none of the evidence as to the true and correct value of the property.” Schenk v. Schenk, 880 A.2d 633, 642 (Pa. Super.) (citation omitted). Given the evidence and testimony presented, we find master Lear’s recommendations appropriate. As such, husband’s exceptions (E) and (N) are denied.

In husband’s brief, he states that there was no evidence presented at either hearing concerning the small amount of money in the parties’joint checking account and it has subsequently been utilized by the parties. Thus, husband’s exception (F) is dismissed as moot.

(4) Alimony Issues

As discussed above, husband has filed exceptions to the award of alimony (exceptions (D) and (U)). These findings support the award of $750 per month for four years of alimony to wife to allow her to establish a decent standard of living in her new location. For the reasons above, as well as the factors listed and considered by the master, we find no error in the master’s findings. As such, husband’s exception (D) is dismissed. Exception (U) has been acknowledged by husband to be moot and will also be dismissed as such.

(5) Counsel Fees

Husband argues in exception (C) that the granting of counsel fees and expenses to the wife is arbitrary, denies him due process and a fair hearing, is against the weight of the evidence and has a chilling effect in that it penalizes him for asserting his rights to present a legitimate defense of indignities. We agree.

An award of counsel fees is warranted when it will promote the fair administration of justice by enabling the dependent spouse to maintain or defend the case without being placed at a financial disadvantage. Perlberger v. Perlberger, 626 A.2d 1206 (Pa. Super. 1993). Counsel fees are awarded based on a review of all relevant factors, including the payor’s ability to pay, the requesting party’s financial resources, the value of the services rendered, and the property received in equitable distribution. Id. at 1207; Teodorski v. Teodorski, 857 A.2d 194, 201 (Pa. Super. 2004); Miller v. Miller, 744 A.2d 778, 790-91 (Pa. Super 1999).

Both husband and wife requested counsel fees, costs and expenses. Testimony revealed that wife had approximately $15,000 in attorney’s fees and husband had nearly $30,000 in fees. The master stated that considering the small size of the marital estate, these fees were “substantial” and realistically out of proportion to the assets. The master indicated that had it not been for the husband’s refusal to execute an affidavit of consent at the first hearing, the case could have been addressed in one day and the parties would not have needed the second and more costly hearing. Master Lear found that husband delayed the process by disputing the indignities and decided wife was entitled to $2,500 to be paid toward her counsel fees.

We find the master’s award of $2,500 to the wife for legal fees to be in error and disproportionate to the actual delay caused. We will not require husband to pay wife’s fees simply because he did not settle the matter more promptly. While we find that both parties caused unnecessary delay and obstruction to the finalization of the divorce, we will not penalize a litigant for presenting a valid defense to a claim. In fact, the testimony indicates that the master stated “I think he [husband] has an absolute right when there’s an indignities in play he has a chance to rebut it.” Transcript of record, at 142, O’Brien v. O’Brien, 11043 CV 2011, 7/15/2013. It is inconsistent for the master to make this statement on one hand and then to force payment of attorney’s fees for exercising that right on the other.

If a proceeding is undertaken solely for the purpose of delay or is frivolous in nature, costs such as counsel fees may be imposed against the party causing the delay. Thunberg v. Strause, 682 A.2d 295, 302 (Pa. 1996). But, where a party is reasonably contesting an issue or presenting a reasonable defense, attorney’s fees should not be imposed. See Blunt Ltd. v. W.C.A.B. (Riley), 654 A.2d 253, 255 (Pa. Commw. Ct. 1995) (finding that a reasonable contest of employer liability precludes an award of attorney’s fees for those proceedings in favor of plaintiff). Here the record supports husband’s contest to wife’s claim of indignities. The testimony on record, combined with the master’s statement that husband had a right to defend the claim, suggests to the court that husband should not be responsible for paying wife counsel fees solely for contesting the issue of indignities. This analysis in conjunction with the above mentioned factors including payor’s ability to pay (husband is receiving less marital assets than wife; wife is receiving substantial assets that will enable her to pay her fees) and the value of the services rendered (husband had nearly double the amount of fees to pay for) suggest an award of attorney fees to be improper. Husband’s exception issue (C) is granted.

DECREE

And now, this 30th day of September, 2014, upon consideration of the hearing transcripts, the masters report, and following a hearing and consideration of the parties’ briefs, it is ordered and decreed as follows:

1. Lou-Ann O’Brien and Martin O’Brien are divorced from the bonds of matrimony.
2. Husband’s exceptions (A), (B), (D), (E), (G)-(J), (M), (N), (Q)-(T) are denied.
3. Husband’s exception (C) is granted and the master’s recommendation is modified to provide that husband is not required to pay wife $2,500.00 in counsel fees and expenses.
4. Husband’s exception (F) and (U) are dismissed as moot.
5. In all other aspects, the master’s recommendation is adopted as an order of the court and the parties are directed to carry out the terms thereof.


author: WILLIAMSON, J.,

text:
    Ball v. Borger

      C.P. of Monroe County,
    No. 7500 CV 2013

      Gregory L. Schell, for plaintiff.

      Seth J. Schwartz, for defendants.
    Oct. 1, 2014
   WILLIAMSON, J.,

This matter comes before us on a motion for summary judgment filed by Glen Borger a/k/a Glenn A. Borger, Ruth L. Borger, and Borger’s Speedway, Inc. a/k/a/t/d/b/a Borger’s Speedway and Kart Shop (hereinafter, “moving defendants”) on March 21, 2014. Leonard Ball (hereinafter, “plaintiff’) filed an Answer to the moving defendants’ motion on May 2, 2014. In the motion, moving defendants argue that plaintiff voluntarily executed a valid and enforceable Waiver and Release which contained an exculpatory clause, thereby releasing defendants from any and all liability in connection with plaintiff’s activities on the date of the incident. For this reason, defendants seek summary judgment on their behalf.

According to the parties’ pleadings, the accident in question occurred on or about September 10, 2011 at Borger’s Speedway in Saylorsburg, Pennsylvania. It is alleged that, at the time of the accident, the plaintiff was assisting as a “flagman” in the race track infield. According to the complaint, there existed on the subject premises an area of mud buildup. On the above date, the plaintiff became injured and fell due to the buildup of mud in an attempt to avoid an out of control racing vehicle.

Plaintiff filed his complaint alleging negligence on March 4, 2014. The moving defendants filed an answer with new matter on March 17,2014. Plaintiff then filed a reply to new matter of defendants on March 20, 2014. Subsequently, moving defendants filed the instant motion for summary judgment and a memorandum of law in support on March 21, 2014. Plaintiff filed an answer to defendants’ motion for summary judgment on May 2, 2014 and filed their memorandum of law in opposition to defendants’ motion for summary judgment on September 5,2014. Oral arguments on the motion were held on September 8,2014. After review of the parties’ motions and briefs, and in consideration of the representations made at oral arguments, we are ready to dispose of moving defendants’ motion.

DISCUSSION

Summary judgment may be granted pursuant to Pennsylvania Rule of Civil Procedure 1035.2 where there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law. Thompson Coal Co. v. Pike Coal Co., 412 A.2d 466, 468-69 (Pa. 1979). Summary judgment is properly entered where the pleadings, depositions, answers to interrogatories, and admissions, together with affidavits, demonstrate that no genuine, triable issue of fact exists and that the moving party is entitled to judgment as a matter of law. Pa. R.C.P 1035(b); Cosmas v. Bloomingdales Bros., Inc., 660 A.2d 83, 85 (Pa. Super. 1995).

Summary judgment may be granted only in cases where the right is clear and free from doubt. Musser v. Vilsmeier Auction Co., Inc., 562 A.2d 279, 280 (Pa. 1989). The court must examine the record in the light most favorable to the non-moving party and resolve all doubts against the moving party. Davis v. Pennzoil Co., 264 A.2d 597 (Pa. 1970). Moreover, the burden is on the moving party to prove that no genuine issue of material fact exists. Long v. Yingling, 700 A.2d 508, 512 (Pa. Super. 1997). All doubts as to the existence of a genuine issue of material fact must be resolved against the moving party. Thompson, 412 A.2d at 469. In response, the non-moving party may not rest upon the pleadings, but must set forth specific facts demonstrating a genuine issue for trial. Phaff v. Gerner, 303 A.2d 826 (Pa. 1973). The court may also accept as true all well-pled facts contained in the non-moving party’s pleadings. Mattia v. Employment Mut. Cos., 440 A.2d 616 (Pa. Super. 1982); Ritmanich v. Jonnel Enters, Inc., 280 A.2d 570 (Pa. Super. 1971). A general denial is unacceptable and deemed an admission where it is clear that the non-moving party has adequate knowledge and that the means of information are within the control of the non-moving party. Elia v. Olszewski, 84 A.2d 1889 (Pa.1951).

The instant motion for summary judgment requires us to determine whether, at this stage of the proceedings, granting summary judgment in favor of doving defendants is appropriate. Moving defendants ask this court to grant summary judgment on the basis of a waiver and release bearing plaintiff’s signature. Moving defendants argue that an exculpatory clause is valid under Pennsylvania law when three conditions are met: (1) when the clause does not contravene public policy; (2) when the contract was between persons relating entirely to their own private affairs; and (3) when each party is a free bargaining agent to the agreement, so that the contract is not one of adhesion. Topp Copy Prods, Inc. v. Singletary, 626 A.2d 98 (Pa. 1993). Moving defendants contend that the exculpatory clause in this matter meets all three of the above stated requirements, and as a result, there are no genuine issues of material fact which establish that the waiver and release is not valid and enforceable.

In response, plaintiff makes two arguments. First, plaintiff argues that the waiver and release presented by moving defendants should not be enforced by this court. Plaintiffpoints to the size of the font, the use of legal j argon, and the all-encompassing scope and lack of specificity of the document. Plaintiff states that the waiver and release agreement presented to plaintiff does not actually mention any specific negligence of the moving defendants and is instead meant to be all encompassing. Plaintiff contends that the agreement would protect moving defendants from acts of gross negligence, recklessness, and intentional conduct and therefore violates public policy.

Second, plaintiff argues that moving defendants’ motion is premature. Plaintiff asserts that there is still discovery outstanding, including plaintiffs supplemental interrogatories directed to defendants and plaintiffs deposition. Plaintiff argues that the deposition of plaintiff is necessary to identify the signature on the waiver and release and to further determine whether there was a “meeting of the minds” when the agreement was signed. Beck-Hummel v. Ski Shawnee, Inc., 902 A.2d 1266 (Pa. Super. 2006).

Without making factual determinations regarding whether the waiver and release at issue is valid and enforceable, we agree with the position asserted by the plaintiff in regards to the outstanding discovery. As such, summary judgment in favor of moving defendants cannot be entered at this time.

ORDER

And now, this 1st day of October, 2014, upon consideration of defendants’, Glen Borger a/k/a Glenn A. Borger, Ruth L. Borger, and Borger’s Speedway, Inc. a/k/ a/t/d/b/a Borger’s Speedway and Kart Shop’s, motion for summary judgment and any response thereto, it is hereby ordered and decreed that defendants’ motion for summary judgment is denied without prejudice until such a time that plaintiff, Leonard Ball’s, deposition is scheduled and more facts are established.