J-A23014-18
NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37
IN RE: ESTATE OF MARY D. FRANO : IN THE SUPERIOR COURT OF
NOREEN M. SWANSON, ELAINE B. : PENNSYLVANIA
WEHNER GACZKOWSKI, BEVERLEY :
J. FRANO BURKETT AND GORDON F. :
FRANO, CO-EXECUTORS :
:
:
APPEAL OF: ELAINE B. WEHNER :
GACZKOWSKI, BEVERLEY J. FRANO :
BURKETT AND GORDON F. FRANO, :
REMAINING LIVING CO-EXECUTORS :
OF THE ESTATE OF MARY D. FRANO : No. 1680 WDA 2017
Appeal from the Order Entered October 10, 2017
In the Court of Common Pleas of Clearfield County Orphans’ Court at
No(s): 95-284 O.C.
BEFORE: BOWES, J., SHOGAN, J., and STABILE, J.
MEMORANDUM BY BOWES, J.: FILED APRIL 30, 2019
Elaine B. Wehner Gaczkowski, Beverley J. Frano Burkett, and Gordon F.
Frano, the co-executors of the Estate of Mary D. Frano, appeal from the order
that, inter alia, dismissed the defense of laches and required the Estate to
convey certain real property to Eagle Environmental, LP (“Eagle”).1 We affirm.
This case has a long and convoluted history, much of which we need not
revisit. Relevant to this appeal, the decedent granted Eagle an option to
purchase approximately 150 acres of real estate in Washington Township,
Jefferson County. Although the contract indicated that the option must be
exercised, inter alia, “as soon as necessary permits are obtained by [Eagle]
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1 Judgment was entered on the order on December 7, 2017.
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for a solid waste disposal facility,” it did not make the transaction contingent
upon Eagle’s so utilizing the land. Option Agreement, 2/22/93, at 2. Also of
importance to understanding the issues at hand, the land subject to the option
contract was only a portion of the decedent’s holdings, such that subdivision
would be necessary to consummate the sale to Eagle.
Eagle gave notice of its intent to exercise the option shortly after the
decedent’s death for the purpose of building a waste disposal facility on the
land. It was discovered that approximately one acre of the land was located
in Sandy Township, Clearfield County, rather than in Washington Township,
Jefferson County. Zoning and subdivision issues, along with the decedent’s
interim conveyance of a portion of the property to someone else, resulted in
litigation in both counties.
In 1999, following resolution of the Jefferson County case in Eagle’s
favor, the orphans’ court in the instant action ordered specific performance of
Eagle’s contract with the decedent pursuant to 20 Pa.C.S. § 3390.2 The Estate
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2 That statute provides, in relevant part:
If any person makes a legally binding agreement to purchase or
sell real or personal estate and dies before its consummation, his
personal representative shall have power to consummate it, but if
he does not do so, the court, on the application of any party in
interest and after such notice and with such security, if any, as it
may direct, in its discretion, may order specific performance of the
agreement if it would have been enforced specifically had the
decedent not died.
20 Pa.C.S. § 3390(a).
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appealed, claiming that, because the one acre of the property located in
Clearfield County did not meet the township’s minimum lot size requirement,
compliance with the specific performance order was illegal. In re Estate of
Frano, 757 A.2d 1002 (Pa.Super. 2000) (unpublished memorandum at 10).
This Court disagreed, holding that regardless of what the township decides
upon application for subdivision approval, the co-executors of the Estate can
comply with the court’s order. Id. We explained:
The option agreement provides in relevant part as follows:
If at the closing date the title to said tract of land is
not good and marketable title in fee simple, or so
insurable, then and in such event the Buyer shall have
the option either (a) to take such title as Seller can
give without abatement in price, or (b) to rescind this
agreement and to be repaid all monies paid by Buyer
to Seller.
Thus, the co-executors here must seek subdivision approval,
apply for a modification or variance if necessary, and otherwise
comply with the provisions of the option agreement and the order
of the trial court. If subdivision approval, or a modification
or variance, is not granted, and the co-executors cannot
convey good title to that portion of the property located in
Clearfield County, then Eagle must decide whether to take
title to property the co-executors are able to convey, or
rescind the agreement.
Id. at 10-11 (cleaned up; emphasis added). Our Supreme Court declined
discretionary review of this Court’s decision. In re Estate of Frano (“Frano
I”), 761 A.2d 550 (Pa. 2000).
Upon remand to the orphans’ court following the appeal, Eagle deposited
funds with the court while subdivision and zoning variance applications were
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submitted. After the applications to subdivide the property to use the land for
a waste storage facility were denied in both counties, Eagle chose to construct
its facility elsewhere.
There was no additional docket activity in the instant case until 2013,
when the orphans’ court informed Eagle that its deposited funds would be
forfeited to the Commonwealth absent prompt action. Eagle, desiring to
acquire title to the property for a use other than a landfill, responded with a
petition to compel conveyance of the property. The Estate, which had in the
interim granted leases to third parties for the Marcellus Shale resources under
the optioned land, inter alia, raised the defense of laches.
The orphans’ court ruled that, as a matter of law, laches was not an
available defense to the enforcement of a judgment. On appeal from that
determination, this Court disagreed, but concluded that whether laches
entitled the Estate to relief was not apparent from the record. In Re Estate
of Frano (“Frano II”), 156 A.3d 344 (Pa.Super. 2016) (unpublished
memorandum at 9), appeal denied, 169 A.3d 13 (Pa. 2017). This Court noted
that Eagle sat on its rights by waiting so long to decide whether to rescind the
contract or take the title that the Estate was able to convey after the
subdivision and zoning variance applications were denied. Id. (unpublished
memorandum at 10) (indicating that, at the time the applications were denied,
“specific performance of the contract became illegal”). However, this Court
also observed that the Estate had at times acted obdurately. Id. (unpublished
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memorandum at 11). Therefore, this Court remanded “for the limited purpose
of consideration of whether the Estate was prejudiced by Eagle’s delay, and
whether such prejudice is sufficient to tip the equities involved in the Estate’s
favor.” Id.
On remand following the second appeal, the orphans’ court found that
the Estate did not suffer prejudice and granted Eagle’s petition to compel.
Accordingly, it ordered the Estate to cooperate with Eagle to submit a
subdivision application for the Jefferson County portion of the property and,
after its issuance, proffer a deed to Eagle for that land. 3 Opinion and Order,
10/10/17, at 8. The Estate filed a timely notice of appeal, and both the Estate
and the orphans’ court complied with Pa.R.A.P. 1925.
The Estate presents the following questions for our review.
I. Whether the lower court committed an error of law in
granting Eagle’s request for specific performance of the
option contract on remand after the Superior Court had
found as a conclusion of law that specific performance of the
contract became illegal the moment the subdivision and
zoning variance applications were denied?
II. Whether the lower court committed an error of law in failing
to determine if the doctrine of laches operated to bar Eagle
from now choosing its remedy under the option contract
after subdivision approval was denied in 2001 by
Washington Township?
Estate’s brief at 8 (unnecessary capitalization omitted).
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3 Eagle’s petition requested that the conveyance be compelled “even if it does
not include the one acre portion of the property located in Sandy Township”
in Clearfield County. Petition to Compel, 10/21/13, at ¶ 14(c).
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We begin our consideration by noting our standard of review:
When reviewing a decree entered by the Orphans’ Court, this
Court must determine whether the record is free from legal error
and the court’s factual findings are supported by the evidence.
Because the Orphans’ Court sits as the fact-finder, it determines
the credibility of the witnesses and, on review, we will not reverse
its credibility determinations absent an abuse of that discretion.
However, we are not constrained to give the same deference to
any resulting legal conclusions. Where the rules of law on which
the court relied are palpably wrong or clearly inapplicable, we will
reverse the court’s decree.
In re Estate of Walter, 191 A.3d 873, 878–79 (Pa.Super. 2018) (cleaned
up).
The Estate first argues that, under the law of the case doctrine,4 the
orphans’ court lacked the authority to enter its order granting specific
performance of the contract. The Estate contends that this Court’s 2016
decision in Frano II “conclusively resolved the legal question of whether
specific performance could be granted by declaring, ‘Specific performance of
the contract became illegal the moment the subdivision and zoning variance
applications were denied.’” Estate’s brief at 34-35 (quoting Frano II, supra
(unpublished memorandum at 10)). The Estate maintains that, given the
rejections of the prior applications for subdivision were final adjudications,
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4 The law of the case doctrine provides, inter alia, that “upon remand for
further proceedings, a trial court may not alter the resolution of a legal
question previously decided by the appellate court in the matter[.]” Pollock
v. Nat’l Football League, 171 A.3d 773, 781 (Pa.Super. 2017) (quoting
Zane v. Friends Hosp., 836 A.2d 25, 29 (Pa. 2003)).
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Eagle was left only with “the choice to take whatever land the Estate could
convey without subdivision approval or rescind the agreement.” Id. at 38.
Therefore, the Estate insists, “the lower court on remand was barred from
directing the Estate to cooperate in submitting another subdivision application
to Washington Township after the original subdivision request had been denied
in October of 2001.” Id. at 43.
Eagle suggests that the Estate’s representation of the issues to be
decided by the orphans’ court following the Frano II remand is inaccurate.
Eagle’s brief at 35. Eagle argues that, viewing the above-quoted portion of
Frano II in context, “it is clear that the Court was merely indicating that
specific performance for the purpose noted in the subdivision application, i.e.
use of the property as a landfill and rail transfer station, became illegal
upon denial of the application.” Id. at 37 (emphasis in original). Eagle
contends that the fact that this Court remanded for the trial court to assess
the equities of the laches defense “clearly supports the position that denial of
the initial subdivision application did not irrevocably void or rescind Eagle’s
contractual rights.” Id.
We agree with Eagle that this Court’s Frano II decision did not preclude
the orphans’ court from entering its October 10, 2017 order. This Court did
opine that the Estate’s ability to legally convey the land to Eagle terminated
once the applications based upon that proposed use were denied. However,
rather than hold that the only remedy remaining for Eagle was to rescind the
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contract, this Court indicated that, after the applications were denied, Eagle
then had to choose “‘whether to take [what] title to property the co-executors
[were] able to convey, or [to] rescind the agreement.’” Frano II, supra
(unpublished memorandum at 10 (quoting Frano I, supra (unpublished
memorandum at 11)). If specific performance were no longer an available
remedy for Eagle following the denial of its applications, there would have
been no choice for Eagle to make; rather, this Court would have remanded
solely for the orphans’ court to determine whether laches barred Eagle’s right
to rescission. Instead, this Court, after noting that both rescission and specific
performance (in the form of conveyance of the scope of title that the Estate
was able to convey) remained available to Eagle following the rejection of its
applications, remanded for the orphans’ court to determine whether Eagle’s
delay in making its choice warranted preclusion of its right to any remedy.
Accordingly, the decision of the orphans’ court to grant Eagle’s petition
electing specific performance (conveyance of title generally as opposed to for
operation of a waste storage facility) was not contrary to the law of the case.
The orphans’ court acted within its authority in ordering the Estate to
cooperate with Eagle in submitting a new subdivision application, in
Washington Township only, that, unlike the previously-rejected application, is
not based upon the land’s being used as a landfill. That is the title that the
Estate is able to lawfully convey. As such, the Estate’s first issue thus warrants
no relief.
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With its second question to this Court, the Estate claims that the
orphans’ court erred in failing to properly apply laches. In so contending, the
Estate heavily relies upon the argument rejected above: that this Court’s
decision in Frano II precluded the orphans’ court from ordering that the
property be conveyed to Eagle. Estate’s brief at 45-54, 65-66. The Estate
also asserts that the orphans’ court did not conduct an appropriate analysis of
its laches defense, and that this Court should hold that laches bars the Estate
from electing any remedy at this point. Id. at 65-66.
This Court has summarized the legal principles applicable to a laches
defense as follows.
The question of whether laches applies is a question of law; thus,
we are not bound by the trial court’s decision on the issue.
Laches bars relief when the complaining party is guilty
of want of due diligence in failing to promptly institute
the action to the prejudice of another. Thus, in order
to prevail on an assertion of laches, respondents must
establish: a) a delay arising from petitioner’s failure
to exercise due diligence; and, b) prejudice to the
respondents resulting from the delay.
The question of laches itself, however, is factual and is determined
by examining the circumstances of each case. Laches arises when
a party’s position or rights are so prejudiced by length of time and
inexcusable delay, plus attendant facts and circumstances, that it
would be an injustice to permit presently the assertion of a claim
against him.
Unlike the application of the statute of limitations,
exercise of the doctrine of laches does not depend on
a mechanical passage of time. Indeed, the doctrine
of laches may bar a suit in equity where a comparable
suit at law would not be barred by an analogous
statute of limitations. Moreover,
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the party asserting laches as a defense
must present evidence demonstrating
prejudice from the lapse of time. Such
evidence may include establishing that a
witness has died or become unavailable,
that substantiating records were lost or
destroyed, or that the defendant has
changed his position in anticipation that
the opposing party has waived his claims.
In the absence of prejudice to the one asserting laches, the
doctrine will not be applied. In other words, prejudice to the
defendant must be shown as a prerequisite to the application of
laches.
In re Estate of Moskowitz, 115 A.3d 372, 380 (Pa.Super. 2015) (cleaned
up).
As this Court noted in Frano II, “it is clear that Eagle slept on its right
to choose a remedy,” meeting the first prong of the test for application of
laches. Frano II, supra (unpublished memorandum at 10). The questions
for the orphans’ court on remand were (1) the factual determination of
whether the Estate suffered prejudice as a result of Eagle’s delay, and, if so,
(2) whether a balancing of the equities warranted application of laches to bar
Eagle from obtaining relief.
The orphans’ court offered the following discussion of its analysis.
Material prejudice may be shown on the grounds of
economic or evidentiary prejudice.
Evidentiary prejudice occurs when, by reason of the
delay, a defendant is unable to present a full and fair
defense on the merits due to the loss of records, the
death of a witness, or the unreliability of memories.
Economic prejudice occurs when a defendant suffers
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the loss of monetary investments or incurs damages
which would have been prevented if the patentee
brought suit earlier. In determining if there is
economic prejudice, the court must not merely
consider those losses attributable to a finding of
liability for infringement, but must look for a change
in the defendant’s economic position during the period
of delay.
The Estate has not sufficiently argued, nor does the record
reflect, that the Estate was unable to present a full and fair
defense on the merits due to the loss of records, the death of a
witness, or the unreliability of memories to the extent of suffering
evidentiary prejudice. Several court proceedings have been held
over the last 20 plus years, and the Estate has provided no
testimony indicating that they were unable to produce evidence,
documentary or testimonial, due to a delay in time. Thus, this
Court cannot find that evidentiary prejudice exists due to the
passage of time.
For economic prejudice to exist, it is not enough that a party
changed their position, suffering a loss of monetary investment or
incurring damages, a connection must be shown between the
change in position and the passage of time. The Estate has
changed its position in one significant way, as it now has taken
out leases to develop the Marcellus Shale located on the property.
However, the use of the property by the Estate to collect gas
royalties could hardly be seen as a loss of a monetary investment,
or that the Estate in some way has incurred damages due to this
change. It is no secret that the land at issue has become more
valuable over the years, and the Estate has capitalized on that
value. However, option contracts are, by their nature, risky
because they are meant to be held in limbo for a period of time
while the party providing consideration for the option determines
if they desire to purchase the property. . . .
. . . As the Estate has not met their burden of showing they have
been prejudiced by Eagle’s delay in exercising the option, and in
fact have financially benefited from the use of the property, this
Court can find no prejudice to the Estate.
Orphans’ Court Opinion and Order, 10/10/17, at 5-7 (some citations and
emphasis omitted).
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We discern no error of law or abuse of discretion in the trial court’s
decision. The orphans’ court clearly complied with this Court’s instruction to
consider whether the Estate has suffered prejudice as a result of Eagle’s delay
that would make it unjust to allow Eagle to enforce its rights. Although the
Estate makes bald assertions that it was prejudiced by the loss of witnesses
and documents, see Estate’s brief at 62-63, it offers no explanation of what
information or evidence it is no longer able to offer as a result. As such, we
have no basis to disturb the factual determination of the orphans’ court that
no prejudice was suffered by the Estate. The Estate hence cannot prevail in
its laches defense. Moskowitz, supra at 380 (quoting Brodt v. Brown, 172
A.2d 152, 154 (Pa. 1961)) (“In the absence of prejudice to the one asserting
laches, the doctrine will not be applied.”). Accordingly, the Estate’s second
issue merits no relief from this Court.
Order affirmed.
Judgment Entered.
Joseph D. Seletyn, Esq.
Prothonotary
Date: 4/30/2019
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