HomeMy WebLinkAbout95-844 orphansIN RE: IN THE COURT OF COMMON PLEAS OF
CUMBERLAND COUNTY, PENNSYLVANIA
ORPHANS' COURT DIVISION
ESTATE OF
DAVID W. MAGARO, NO. 21-95-844
Deceased
IN RE: Final Account of Ma.qaro Estate
Before HOFFER, P.J., Hess, J;
ORDER
AND NOW, December 29, 2000, after careful consideration of all
exceptions raised to our prior opinion, the Court directs that the PNC Trust is
deemed an intestate asset that falls into the residuary estate; the Estate is
required to reimburse all of Objector's attorney's fees; the $10,000.00 CD at the
Dauphin National Bank was bequeathed to the Accountant; the Accountant must
reimburse the Estate $27,815.39, for payments of real estate taxes, maintenance,
hazard insurance premiums which have been improperly distributed from the
residuary estate; the Accountant must reimburse the Estate for monies paid
toward the outstanding lien on the 1995 Dodge diesel pickup truck; the
Accountant must reimburse the Estate a statutory rate of six (6) percent interest
per annum from December 15, 1995 to the date of this Order for each beneficiary
who did not receive the $15,000.00 advancement.
By the Court,
,'/~, j.
~e~eV~. H°ffer, P.
~..~.~_-:. ?,. Coyne, Esquire
3901 Market Street
Camp Hill, PA 17100
(Auditor)
Jill M. Wineka, Esquire
Purcell, Krug & Hailer
1719 North Front Street
Harrisburg, PA 17102-2392
(For Tina M. Magaro)
Mark E. Halbruner, Esquire
Gates & Associates, P.C.
1013 Mumma Road, Suite 100
Lemoyne, PA 17043
(For the David W. Magaro Estate)
IN RE: IN THE COURT OF COMMON PLEAS OF
CUMBERLAND COUNTY, PENNSYLVANIA
ORPHANS' COURT DIVISION
ESTATE OF
DAVID W. MAGARO, NO. 21-95-844
Deceased
IN RE: Final Account of Ma.qaro Estate
Before HOFFER, P.J., HESS, J.
HOFFER, P.J.:
On September 12, 1997, Marie K. Magaro, Administratrix c.t.a. (hereinafter
"Accountant") of the Estate of David W. Magaro, Deceased, filed a First and
Partial Accounting with this court. On October 13, 1997, intestate heir Tina M.
Magaro (f/k/a Tina M. Mestlin, hereinafter "Objector") filed Objections to the First
and Partial Accounting. This Court appointed an auditor on October 17, 1997.
The Auditor held hearings on November 26, 1997, and December 8, 1997. On
May 3, 1999, the Auditor issued a report. The Objector and Accountant both
raised objections to the Auditor's report. On April 12, 2000, this Court issued its
opinion regarding the objections. Subsequently, the Accountant and the Objector
filed exceptions to the Court's April 12, 2000 opinion. The Accountant filed the
following three (3) exceptions:
A-1. Was Decedent's PNC Bank trust account bequeathed to the
Accountant in Decedent's will?;
A-2. Must the Accountant reimburse the Estate for loan payments made
on Decedent's Dodge diesel pickup truck while Mestlin's [Objector's] will
contest was pending?; and
A-3. Should the Estate pay any of Mestlin's [Objector's] attorney fees?'
The Objector filed the following four (4) exceptions:
O-1. Should all of the attorney's fees and expenses incurred by the
Objector, Tina M. Magaro, be paid by the Estate in light of the Court's
determination that Tina's efforts alone have brought back to the residuary
portion of the Estate in excess of $400,000.00 and because the
Administratrix continues to exhaust residuary monies to fund litigation from
which only she benefits?;
0-2. Did the Auditor and the Court incorrectly determine that the
Decedent's $10,000.00 Certificate of Deposit at the Dauphin National Bank
was specifically bequeathed to the Administratrix in the Decedent's
holographic Will?;
0-3. Did the Court incorrectly overturn the Auditor's Finding that the
Administratrix improperly disbursed principal of the Estate as administrative
expenses in the form of repairs, maintenance, hazard insurance and real
estate taxes for specially devised real and personal property?; and
0-4. Did the Court fail to address the issue of interest reimbursement
regarding the Administratrix' first set of $15,000.00 payments which the
Court determined shall be treated as advancements to the four
beneficiaries who received such sums?2
In this opinion, we address these exceptions.
DISCUSSION
A-1. Was the Decedent's PNC trust account bequeathed to
the Accountant in Decedent's will?
A fundamental rule of testamentary interpretation is that "if the language
employed by the testator in disposing of his estate is plain and clearly discloses
~ Brief in Support of Exceptions of Administratrix c.t.a, to Orphans' Court Opinion Re; First and Partial Account,
filed May 19, 2000
2 Tina M. Magaro f/k/a Tina M. Mestlin's Brief in Support of her Four Exceptions Filed to the Orphans' Court April
12, 2000 Opinion In Re: Objections to Auditor's Report, filed May 18, 2000.
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his intention, the will interprets itself, and no rules of construction are necessary
to aid in its interpretation." In Re England's Estate, 414 Pa. 115, 118,200 A.2d
897,898 (1964) citing Wood v. Schoen, 216 Pa. 425 (1907). However, in the
case at bar, the language contained in Decedent's holographic will does not
clearly disclose his full intention.
In our April 12, 2000, Opinion, this Court determined that the Trust was
intestate property and part of the residuary estate. We determined this by
deconstructing the phrase "1 give to my wife- Marie Magaro .... My saving acct in
PNC Bank + Stock + Dauphin Bank" from the will. Because the terms "PNC
Bank" and "Dauphin Bank" clearly disclose Decedent's intention to bequeath his
savings accounts at both PNC Bank and Dauphin Bank to his wife, no rules of
construction are necessary to aid in the interpretation of those two terms.
Another rule of testamentary interpretation is that "rules of construction are
of no consequence unless and until we [the court] find[s] that the language of the
testamentary writings fails to reveal with clarity testator's intent". In Re Estate of
Grimm, 442 Pa. 127, 138, 275 A.2d 349, 355 (1971). In the present case, "+
stock" does not clearly disclose Decedent's intent and is susceptible to different
interpretations. The Accountant believes the insertion of"+ stock" between "PNC
Bank" and "Dauphin Bank" suggests the Decedent wished the Accountant to
receive his additional investments at PNC Bank. The Objector disputes this
assertion and claims the Trust at PNC Bank was not specifically identified in the
Decedent's will, and therefore it should be divided amongst the intestate heirs.
Pennsylvania law states that if the testator's language is reasonably
susceptible of two constructions, one of which will make a bequest and the other
will avoid an intestacy, the latter interpretation or construction will be adopted
unless it defeats the testator's intentions. In Re Beisgen's Estate, 387 Pa. 425,
436, 128 A.2d 52, 57, (1956) citing In re Ingham's Estate, 315 Pa. 293, 172 A.2d
662. In our prior decision, we were unable to determine the testator's intent of
the term "+ stock". As such, when a court fails to establish a testator's intent and
is unable to penetrate through the obscurity in which the testator has involved his
intention, the questionable provision passes into the residuary. In Re Estate of
Thomas, 457 Pa. 546,553,327 A.2d 31,35 (1974).
Moreover, a court will not adopt a testamentary construction that will
produce an unnatural and inequitable distribution of a testator's property unless
the language of the will unequivocally requires it. In Re Clark's Estate, 359 Pa.
411,442, 59 A.2d 109, 114, (1948). The language of the will at bar does not
clearly bequest the Trust to Accountant individually. As a result, the Court cannot
adopt a testamentary construction which will award Accountant such a valuable
asset. Where there is doubt about the meaning and intent of the testator's will,
the interpretation which gives almost perfect equality is preferred to one which
gives gross inequality. In Re Estate of Schappell, 424 Pa. 390,391,227 A.2d
651,652 (1967). If a will does not devise all of a testator's assets, the residuary
is distributed through intestacy. 20 Pa.C.S.A. §2101; In Re Knox's Estate, 328
Pa. 188, 192, 195 A. 34 (1938). Because the will did not specifically devise the
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Trust, it follows that the Trust falls into the residuary estate and will be distributed
through intestacy. Pa.C.S.A. §2101. Based upon the foregoing principals, we
properly determined that the Trust is an intestate asset.
A-3 and O-1. Should all of the attorney's fees and expenses
incurred by the Obiector be paid by the Estate?
As a general rule, a party objecting to a personal representative's
account must pay her own costs and attorney's fees. In Re Lux Estate, 480
Pa. 256,272,389 A.2d 1053, 1061 (1978). She will be awarded such
expenses from the estate only in exceptional cases where the objections result
in a substantial benefit or where the personal representative is guilty of bad
faith. Id. Although the Auditor found the Accountant did not act in bad faith,
Objector's efforts have resulted in a recovery to the residuary beneficiaries in
excess of $400,000.00. Throughout the litigation, Objector has retained private
counsel and filed timely objections to the Accountant's actions which have
resulted in a substantial benefit to all the intestate heirs. Based upon this
$400,000.00 figure that will be reimbursed to the Estate, the Estate is required
to reimburse the entire amount of Objector's attorney's fees?
0-2. Did the Court correctly determine the Decedent's
$10,000.00 Certificate of Deposit at the Dauphin National
Bank was specifically bequeathed to Accountant in
Decedent's will?
Decedent's will devised his savings account at Dauphin National Bank to
3 Objector's attorney's fees are currently $12,755.00. Because Accountant did not raise objections to reasonableness
of Objector's legal fees, the Estate must pay the entire amount.
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Accountant. In our previous opinion, we.found the $10,000.00 Certificate of
Deposit at the Dauphin National Bank (hereinafter "CD") was a savings account
which Decedent bequeathed to Accountant. This determination was based upon
the Auditor stating that a CD is a savings account. The Auditor defined savings
account as "an account that draws interest at a bank." Since no evidence was put
forth to show the CD was not earning interest while the monies were deposited
at Dauphin National Bank, the Auditor decided that the CD was a savings
account.
Additionally, the Pennsylvania Legislature has defined a CD as an account,
"a contract of deposit of funds between depositor and a financial institution," as
are checking and savings accounts. 20 Pa.C.S.A. § 6301. Therefore, we affirm
our previous determination that the CD is a savings account and find that
Decedent had bequeathed the CD to Accountant.
0-3. Does the Accountant need to reimburse the Estate for
maintenance expenses for real property specifically devised
to her?
Although the representative of a decedent's estate has the right and duty
to possess, preserve, maintain and repair estate assets until distribution,
specifically devised property in the possession of the devisee does not receive
these benefits. 20 Pa.C.S. § 3311;20 Pa.C.S. § 3331, Official Comment- 1949;
Estate of Rozanski, 356 Pa. Super. 234, 514 A.2d 587 (1986). Pennsylvania law
states that, "legal title to all real estate of a decedent shall pass at his death to his
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heirs or devisees, subject, however, to all the powers granted to the personal
representative by this code and lawfully by the will and to all orders of the court.
20 Pa.C.S.A §301(b). In the present case, upon Decedent's death and in
accordance with his will, title to his various parcels of real estate automatically
passed to the specific devisees. Therefore, any expenses for repairs, service
charges, hazard insurance and real estate taxes related to the properties became
the sole responsibility of each specific beneficiary upon Decedent's death.
Additionally, Accountant was not denied possession of the property; rather she
had exclusive and unilateral possession of it from the date of Decedent's death.
Although a devisee acquires legal title to specifically devised real property
at the death of the testator, this title is expressly subject to the powers of the
personal representative under the Probate, Estate and Fiduciaries Code, the
testamentary instrument, and to all orders of the court. 20 Pa.C.S.A § 301 (b).
Until distribution is made, the proper source of the full legal title of a decedent's
property is both in the devisee and in the personal representative. Maier v.
Henning, 525 Pa. 160, 166, 578 A.2d 1279, n. 5 (1990). Therefore, following
Decedent's death in the present case, Accountant acquired full legal title as she
was both the devisee and the personal representative.
Based upon the foregoing principals of law, the Accountant is personally
responsible for the expenses in the form of repairs, maintenance, and real estate
taxes for the specially devised real property. Therefore, she must reimburse the
Estate $27,815.39 for payments made towards real estate taxes, maintenance,
and hazard insurance premiums that have been improperly distributed from the
residuary Estate.
A-2. Must Accountant reimburse the Estate for loan
payments made on Decedent's Dodqe pickup truck durinq the
pendinq will contest?
Accountant and her son, Antonio, were specifically devised all of
D-~cede~3['s cars arid trucks and have had sole possession and unilateral use of
the Dodge pickup truck since Decedent's death. According to Section 2514 of the
Probate, Estates and Fiduciaries Code, a specific devise of personal or real
property passes to the beneficiary subject to any security interest existing at the
date of the testator's death. 20 Pa.C.S. §2514. Consequently, the payment of the
lien on the pickup truck is the responsibility of the specific beneficiary and not the
responsibility of the Estate. Allowing the Estate to make the loan payments and
then transferring title to Accountant would result in an improper enhancement of
the testamentary devise. Accordingly, we affirm our previous decision that
Accountant should reimburse the Estate for monies paid toward the outstanding
lien on the 1995 Dodge diesel pickup truck.
0-4. Must the Accountant make interest reimbursement to
the residuary for the first set of $15,000.00 advancements to
the four beneficiaries?
An advancement consists of a gift made to an heir in anticipation of his or
her share to accrue from the decedent's estate. In Re Houston's Estate, 383 Pa
466, 469, 119 A.2d 304, 306 (1956). The value of an advancement shall be
charged against the share of the person who received it and the total share shall
not exceed the share received by each of the other persons who take equally from
the decedent. 20 Pa.C.S.A. 2109(a).
While ensuring the fair treatment of those who did not sign the agreement
and did not receive $15,000.00, and in order to preclude the unjust enrichment of
the beneficiaries who received the money for signing, we concluded in our
previous opinion that each payment shall be treated as an advancement upon the
receiver's respective share of the estate. Thus, those who have already received
$15,000.00 from Accountant will now receive a distribution of $15,000.00 less
than what their total share from the Estate would have been. The two
beneficiaries who did not receive $15,000.00 from Accountant on December 15,
1995 will receive interest upon their respective shares. Each will receive the
statutory rate of six (6) percent interest per annum from December 15, 1995 to the
date of this Order.4
4 The second set of $15,000.00 payments made to the four beneficiaries from Accountant's personal funds were not
objected to, and therefore will not be addressed.
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