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HomeMy WebLinkAbout93-3913 CivilJOHN WAIDLICH, Executor : IN THE COURT OF COMMON PLEAS OF of the Estate of MARY H. : CUMBERLAND COUNTY, PENNSYLVANIA DROLSBAUGH, Deceased, : Plaintiff : : v. : CIVIL ACTION - LAW : JOAN SINGER, : Defendant : NO. 3913 CIVIL 1993 IN RE: PLAINTIFF'S MOTION TO ORDER JOINDER AND ASSESS SANCTIONS ON COUNSEL FOR DEFENDANT BEFORE SHEELY, P.J., and OLER, J. ORDER OF COURT AND NOW, this ~_~ day of May, 1995, upon consideration of Plaintiff's MOtion To Order Joinder and Assess Sanctions on Counsel for Defendant, and for the reasons stated in the accompanying Opinion, the motion to order joinder is GRANTED and the motion to assess sanctions is DENIED. JOINDER shall be accomplished in accordance with the rules of civil procedure applicable to joinder of, and service upon, additional defendants.~ BY THE COURT, Leslie B. Handler, Esq. 319 Market Street P.O. Box 1177 Harrisburg, PA 17108 Attorney for Plaintiff ~ Cf. Lower Frederick Twp. v. Clemmer, 518 Pa. 313, 543 A.2d 502 (1988). Kenneth A. Wise, Esq. 126 Locust Street P.O. Box 11489 Harrisburg, PA 17108-1489 Attorney for Defendant : rc JOHN WAIDLICH, Executor : IN THE COURT OF COMMON PLEAS OF of the Estate of MARY H. : CUMBERLAND COUNTY, PENNSYLVANIA DROLSBAUGH, Deceased, : Plaintiff : : v. : CIVIL ACTION - LAW : JOAN SINGER, : Defendant : NO. 3913 CIVIL 1993 IN RE: PLAINTIFF'S MOTION TO ORDER JOINDER AND ASSESS SANCTIONS ON COUNSEL FOR DEFENDANT BEFORE SHEELY, P.J., and OLER, J. OPINION and ORDER OF COURT Oler, J. The present action was brought by the executor of a decedent's estate and involves a dispute as to whether a certain transaction between the decedent and Defendant was a loan or a gift. Plaintiff has filed a motion to join Defendant's husband as a defendant and to "assess sanctions on counsel for Defendant." Plaintiff's motion as it relates to the husband's joinder is premised upon an alleged discovery by Plaintiff's attorney that the husband was a beneficiary of the transaction.~ The motion as it relates to requested sanctions against Defendant's counsel is premised upon counsel's allegedly improper interposition of a "false defense" to the proposed joinder.2 Defendant's opposition to the proposed joinder is predicated upon the belief that it is "a procedural tactic" to preclude the husband's testimony under the ~ Plaintiff's Brief in Support of Motion for Joinder and for Sanctions on Counsel for Defendant, at 1. ~ Plaintiff's Motion To Order Joinder and Assess Sanctions on Counsel for Defendant, paragraph 5. NO. 3913 CIVIL 1993 dead man's act.3 For the reasons stated in this Opinion, Plaintiff's motion to join the husband as a defendant will be granted and his motion to assess sanctions against Defendant's counsel will be denied. FACTS AND PROCEDURAL HISTORY Facts. Plaintiff is John Waidlich, executor of the estate of Mary H. Drolsbaugh (Decedent), who died on February 17, 1993.4 Defendant is Joan Singer, a niece of Decedent, who resides at 25 Highland Drive, Camp Hill, Cumberland County, Pennsylvania.s According to Plaintiff, Decedent, during her lifetime, borrowed $18,000.00 from Harris Savings Association for the benefit of Defendant.~ As collateral for the loan from Harris Savings Association, Decedent pledged a certificate of deposit in the amount of $20,000.00.7 During the lifetime of Decedent, interest on the loan taken out by Decedent was paid by Defendant.8 Insofar as Plaintiff knows, any arrangements made between Decedent and 3 Brief of Defendant in Support of Her Opposition to Joinder and Her Opposition to Plaintiff's Motion To Assess Sanctions, at 6. 4 Plaintiff's Amended Complaint, paragraph 1. 5 Plaintiff's Amended Complaint, paragraph 2; Defendant's Amended Answer to Amended Complaint with New Matter and Counterclaim, paragraph 10. Plaintiff's Amended Complaint, paragraph 3; Exhibit 1. Plaintiff's Amended Complaint, paragraph 5; Exhibit 3. Plaintiff's Amended Complaint, paragraph 4. 2 NO. 3913 CIVIL 1993 Defendant with regard to the money borrowed and repayment thereof were oral in nature.9 On the date Decedent died, the loan balance was $18,074.52, and the pledged certificate of deposit in her estate was liquidated in order to satisfy the loan.~° At no time did Decedent transfer title to the pledged certificate of deposit to Defendant, and Decedent did not provide in her will for Defendant to receive the certificate of deposit.~ Plaintiff has demanded payment by Defendant of the outstanding balance of the loan, $18,074.52, into Decedent's estate, and Defendant has thus far not made such a payment.~2 Plaintiff has also demanded interest from February 17, 1993.~3 Defendant does not deny that Decedent, during her lifetime, borrowed $18,000.00, which she provided to Defendant, and that she pledged a $20,000.00 certificate of deposit as security for the loan.TM However, according to Defendant, there was no promise by Defendant to repay the $18,000.00 that Decedent provided to her, 9 Plaintiff's Amended Complaint, paragraph 7. Plaintiff's Amended Complaint, paragraph 6. Plaintiff's Reply to New Matter and Counterclaim, paragraph 14. Plaintiff's Amended Complaint, paragraph 8. Plaintiff's Amended Complaint, Demand Clause. See Defendant's Answer to Amended Complaint with New Matter and Counterclaim. 3 NO. 3913 CIVIL 1993 since this was part of a gift and bequest arrangement between Decedent and Defendant.~s Defendant maintains that, during the lifetime of Decedent, the two developed a close relationship as niece and aunt.~ Sometime during November of 1982, Defendant claims, Decedent told her that she had a certain certificate of deposit from Harris Savings Association in the amount of $20,000.00 which she wanted to give Defendant.~? According to Defendant's husband, Donald Singer, Decedent stated that she did not know how much longer she would live, and she wanted to see that Defendant received something from her in case her assets were totally depleted by the time she died.~8 According to Defendant, because of concern that Decedent, who was on a fixed income, would not get the benefit of the regular interest payments from the certificate of deposit, Defendant's husband proposed an alternate arrangement.~9 Defendant's husband proposed that Decedent go to the bank and borrow the money she wished to give Defendant, in turn pledging the certificate of ~s Defendant's Amended Answer to Amended Complaint with New Matter and Counterclaim, paragraph 7. ~6 Defendant's Amended Answer to Amended Complaint with New Matter and Counterclaim, paragraph 11. ~7 Defendant's Amended Answer to Amended Complaint with New Matter and Counterclaim, paragraph 12; Affidavit of Donald Singer, paragraph 4. ~8 Affidavit of Donald Singer, paragraph 5. ~9 Affidavit of Donald Singer, paragraphs 5-6. 4 NO. 3913 CIVIL 1993 deposit as collateral.2° Defendant claims that she agreed to pay the interest expense on the loan for as long as Decedent lived, and that Decedent agreed to provide in her will that Defendant would receive the certificate of deposit, with the proceeds from cashing said certificate to be used to pay off the loan and with any balance to be paid to Defendant.2~ Decedent agreed to this arrangement, according to Defendant, and to date Defendant has paid over $18,600.00 in interest on the amount borrowed.22 However, Decedent did not provide in her will for the certificate of deposit to be transferred to Defendant.23 Procedural History. Plaintiff initiated this action by filing a complaint on December 10, 1993. This was followed by preliminary objections filed by Defendant on December 23, 1993. Thereafter, Plaintiff filed an amended complaint on February 10, 1994, to which Defendant filed an answer with new matter and counterclaim on March 3, 1994. A reply to the new matter and counterclaim was filed by Plaintiff on April 2, 1994. On May 11, 1994, the parties entered 20 Defendant's Amended Answer to Amended Complaint with New Matter and Counterclaim, paragraph 13; Affidavit of Donald Singer, paragraph 6. 2~ Defendant's Amended Answer to Amended Complaint with New Matter and Counterclaim, paragraph 13; Affidavit of Donald Singer, paragraph 6. 22 Affidavit of Donald Singer, paragraph 7. 23 Defendant's Amended Answer to Amended Complaint with New Matter and Counterclaim, paragraph 14. 5 NO. 3913 CIVIL 1993 into a stipulation whereby Defendant was permitted to amend her new matter and counterclaim to assert defenses relating to the dead man's act, the statute of frauds, and the statute of limitations.24 On June 17, 1994, Defendant filed a motion for summary judgment, based in part upon the contention that by virtue of the dead man's act competent evidence would not be available to sustain Plaintiff's claim.25 By an Opinion and Order of Court dated December 6, 1994, this position was rejected. In so ruling, the court noted that it could not be said with certainty based on the existing record, that Plaintiff's interest was adverse to that of Decedent so as to implicate the incompetency provisions of the act in a manner unfavorable to, and dispositive of, his case.~6 On January 6, 1995, Plaintiff filed a petition for leave to join Defendant's husband as a defendant, averring that the transaction between Decedent and Defendant had been partly for the benefit of Defendant's husband.~7 A rule was issued on January 9, ~4 See Stipulation, Exhibit A, paragraphs 15, 16, 17. Paragraph 1 of the Stipulation inadvertently states that "Plaintiff may file an Amended Response as attached hereto as Exhibit A," when, in reality, the pleading attached as Exhibit A is Defendant's Amended Answer to Amended Complaint with New Matter and Counterclaim. See Stipulation, paragraph 1, and attached Exhibit A. 2s See Waidlich v. Singer, No. 3913 Civil 1993, slip op. at 1 (December 6, 1994). ~6 Id. at 11. ~7 Plaintiff's Petition for Leave To Join Donald Singer, paragraph 1. 6 NO. 3913 CIVIL 1993 1995, upon Defendant to show cause why the joinder should not be permitted. Defendant filed an answer opposing the joinder on February 6, 1995.28 On February 15, 1995, Plaintiff filed the instant Motion To Order Joinder and Assess Sanctions on Counsel for Defendant. Defendant filed an answer to the motion on March 31, 1995, characterizing "the action of Plaintiff in seeking to make Donald Singer a party" as "a procedural gambit [under the dead man's act] to try to silence what Plaintiff considers to be unfavorable testimony [from Defendant's husband]."29 Plaintiff listed his motion for argument on March 14, 1995. The matter was argued on April 19, 1995. DISCUSSION The dead man's act provides, in pertinent part, as follows: [I]n any civil action or proceeding, where any party to a thing or contract in action is dead ... and his right thereto or therein has passed ... to a party on the record who represents his interest in the subject in controversy, neither any surviving or remaining party to such thing or contract, nor any other person whose interest shall be adverse to the said right of such deceased ... shall be a competent witness to any matter occurring before the death of said party .... 28 Answer to [sic] Defendant to Plaintiff's Petition for Leave To Join Donald Singer. 29 Defendant's Answer to Motion of Plaintiff To Order Joinder and Assess Sanctions on Counsel for Defendant and Defendant's Motion To Assess Sanctions on Counsel for Plaintiff, paragraph 9. 7 NO. 3913 CIVIL 1993 Act of July 9, 1976, P.L. 986, ~2, as amended, 42 Pa. C.S. ~5930. "The purpose of the dead man's act is to prevent the injustice that would result from permitting a surviving party to a transaction to testify favorably to himself and adversely to the interest of the decedent when the representative of the decedent would be hampered in attempting to refute the testimony by reason of the death of the decedent." Visscher v. O'Brien, 274 Pa. Super. 375, 382, 418 A.2d 454, 458 (1980). Consistent with the rationale of the dead man's act, it has been held that, where an alleged donee is attempting to prove an inter vivos gift by a decedent, under the dead man's act three conditions must exist before the surviving party or witness is disqualified: "'(1) the deceased must have had an actual right or interest in the matter at issue, i.e. an interest in the immediate result of the suit; (2) the interest of the witness -- not simply the testimony -- must be adverse; [and] (3) a right of the deceased must have passed to a party of record who represents the deceased's interest.'" Weschler v. Carroll, 396 Pa. Super. 41, 45, 578 A.2d 13, 15 (1990), quoting In Re Hendrickson's Estate, 388 Pa. 39, 45, 130 A.2d 143, 146-47 (1957). Additionally, it has been held that "spouses of an interested party to a transaction with a decedent may not be barred from testifying on the basis of marital status alone." Estate of Grossman v. Kesselman, 486 Pa. 460, 474, 406 A.2d 726, 733 (1979). NO. 3913 CIVIL 1993 "[A]pplication of the 'Dead Man's Act' is difficult where there are allegations of an inter vivos gift by the decedent to the challenged donee. In such situations, both the alleged donee and the estate have an interest in the property which may be adverse to the interest of the decedent, depending on whether the alleged transfer took place or not." Friedman v. Kinnon, 452 Pa. 365, 368- 69, 305 A.2d 3, 4 (1973). "[T]he court may not admit statements of [the] decedent [through testimony of the donee] absent independent testimony establishing prima facie evidence of donative intent and delivery." Hera v. McCormick, 425 Pa. Super. 432, 444, 625 A.2d 682, 688 (1993). "[I]f the alleged donee fails to establish prima facie evidence of a gift or transfer by independent testimony before he takes the stand, he is not competent to testify." Id. Finally, it is noted that the surviving or remaining "party" to a contract with an interest adverse to that of decedent who will be rendered incompetent under the dead man's act is not necessarily a "party" in the sense of being a "litigant." Incompetency under the act is not dependent upon one's status as a party to the litigation. See, e.g., Stevenson v. Titus, 332 Pa. 100, 2 A.2d 853 (1938). In the present case, at such time as Defendant's husband is called as a witness, and if an objection is made to his competency under the dead man's act by Plaintiff, the trial court will have to make a ruling on the basis of the record then existing, in 9 NO. 3913 CIVIL 1993 accordance with the foregoing authority and any other relevant principles,3° as to his competency. It is not clear at this point that his testimony would be precluded, and in any event a determination of whether he should be considered a party to the transaction at issue with an interest adverse to that of Decedent for purposes of the dead man's act would not be governed by his joinder as a defendant. Consequently, Plaintiff's motion to order joinder will be granted. With respect to Plaintiff's motion to assess sanctions upon counsel for Defendant, the court is unable to perceive any improper conduct on the part of Defendant's counsel in opposing Plaintiff's motion. The following Order will therefore be entered: ORDER OF COURT AND NOW, this ~-~ day of May, 1995, upon consideration of Plaintiff's Motion To Order Joinder and Assess Sanctions on Counsel for Defendant, and for the reasons stated in the accompanying Opinion, the motion to order joinder is GRANTED and the motion to assess sanctions is DENIED. 30 E.g., the principles of waiver applicable to the dead man's act. 10 NO. 3913 CIVIL 1993 JOINDER shall be accomplished in accordance with the rules of civil procedure applicable to joinder of, and service upon, additional defendants.3~ BY THE COURT, s/ J. Wesley Oler, Jr. J. Wesley Oler, Jr., J. Leslie B. Handler, Esq. 319 Market Street P.O. Box 1177 Harrisburg, PA 17108 Attorney for Plaintiff Kenneth A. Wise, Esq. 126 Locust Street P.O. Box 11489 Harrisburg, PA 17108-1489 Attorney for Defendant :re ~ Cf. Lower Frederick Twp. v. Clemmer, 518 Pa. 313, 543 A.2d 502 (1988). 11