J-A18015-19
NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37
IN RE: TRUST OF ALBERT F. QUINN : IN THE SUPERIOR COURT OF
: PENNSYLVANIA
:
:
APPEAL OF: GERALD QUINN : No. 1762 WDA 2018
Appeal from the Order Entered November 15, 2018
In the Court of Common Pleas of Armstrong County Orphans’ Court at
No(s): No. 03-08-026
IN RE: TRUST OF ALBERT F. QUINN : IN THE SUPERIOR COURT OF
: PENNSYLVANIA
:
APPEAL OF: SARAH Q. JOHNSTON :
AND LINDA QUINN : No. 2 WDA 2019
Appeal from the Order Entered November 15, 2018
In the Court of Common Pleas of Armstrong County Orphans’ Court at
No(s): No. 03-08-026
BEFORE: BOWES, J., NICHOLS, J., and MUSMANNO, J.
MEMORANDUM BY BOWES, J.: FILED JANUARY 24, 2020
These consolidated cross-appeals follow the determination of the
orphans’ court that overruled the objections of Gerald Quinn to the account of
the Trust of his father, Albert F. Quinn, but granted in part Gerald’s1 request
for attorney fees. Specifically, Gerald contends, inter alia, that the orphans’
court erred in holding that the actions of his siblings, Randall Quinn (now
deceased) and Sarah Johnston, did not violate the Trust’s no-contest clause,
and that Randall’s widow Linda Quinn is not disinherited as a result of Randall’s
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1 As most of the people involved in this appeal share the same surname, we
refer to them by their first names for the sake of clarity and convenience.
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conduct. In their cross-appeal, Sarah and Linda (collectively “Appellees”)
challenge the award of attorney fees to Gerald. As we agree with Gerald that
Randall and Sarah violated the no-contest clause, and that Linda is not entitled
to Randall’s share of the Trust distribution, we vacate the order and remand
for proceedings consistent with this memorandum.
The background of this case is as follows, based upon the findings of
fact of the orphans’ court. In November 2001, Albert created the Trust, which
was a revocable living trust that became irrevocable upon Albert’s death. The
instrument made Albert the first trustee of the Trust, and named Randall as
the first successor trustee following Albert’s death. During Albert’s lifetime,
he retained full right to direct distribution of any or all of the Trust’s income
or principal as he saw fit. Quinn Living Trust, 11/19/01, at 4-1. Albert was
permitted to add assets to the Trust from time to time but to retain possession
of them. Id. at 4-3. Albert’s will, executed the same day as the Trust
instrument, directed that after his death, his residuary estate be distributed
to the Trust. Albert expressly indicated the point of the Trust was to avoid
having his assets probated. Id. at 11-10.
Randall, Sarah, and Gerald are the named beneficiaries, with each
designated by name to receive a distribution of one-third of the Trust.
Specifically, the trust instrument provided that none of the three beneficiaries
was to receive any distributions of trust income. Rather, all net income from
each beneficiary’s share was to be added to the trust principal which, in turn,
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was to be “immediately” paid by the successor trustee to or for the benefit of
each beneficiary “free of trust.” Quinn Living Trust, 11/19/01, at 8-1 − 8-3.
At the time Albert executed the Trust, Randall was married to Linda, and
the couple had no children. Sarah, who was not married, had three daughters.
Gerald was unmarried and had no children. The trust instrument provided
that if Randall died before distribution, his share was to go to Linda, if she was
still living; otherwise, Randall’s share would lapse. Sarah’s share was to be
distributed to her descendants if she predeceased the Trust distribution, or
would lapse if she had none living at that time. In the event that Gerald died
prior to trust distribution, his share was to lapse. Lapsed shares were to be
reallocated among the remaining beneficiaries.
Notable for purposes of this appeal, the Trust instrument also contains
a no-contest clause, which provides as follows, in relevant part:
If any . . . beneficiary under my Trust . . . directly or indirectly . . .
does any of the following, then in that event I specifically disinherit
each such person, and all such legacies, bequests, devises and
interests given to that person under my Trust or any amendment
to it . . . shall be forfeited and shall be distributed as provided
elsewhere herein as though he or she had predeceased me
without issue:
....
g. in any other manner contests my Trust or any
amendment to it executed by me, or in any other
manner, attacks or seeks to impair or invalidate any
of its provisions;
h. conspires with or voluntarily assists anyone
attempting to do any of the above acts.
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Expenses to resist any above contest or other attack of any nature
upon any provision of my Trust or any amendment to it shall be
paid from the trusts created hereunder as expenses of
administration.
....
If any person or entity, singularly or in conjunction with any other
person or entity, directly or indirectly, in any court, contests the
validity of my Trust Agreement, including any amendments
thereto, then the right of that person or entity to take any interest
in my Trust Estate or to act in any fiduciary capacity shall cease,
and the demise of that person (and his or her descendants) or
entity shall be deemed to have occurred prior to my death, as
applicable.
Quinn Living Trust, 11/19/01, at 12-3 − 12-5.
Albert died in November 2007. Randall became trustee and opted to
administer the trust without the assistance of legal counsel.2 Sarah and
Gerald disagreed among themselves concerning the distribution of some Trust
assets, in particular the Quinn family farm (“the Farm”). Sarah maintained
that Albert had desired that the Farm ultimately go to Sarah’s daughters, who
had a particular emotional attachment to it. However, the Trust instrument
contained no such provision. Rather, the trustee was expressly empowered
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2 Randall explained his antipathy for attorneys to Gerald as follows:
I’m not going to get a lawyer. Any small town where there is one
lawyer, he starves to death. In a town with two lawyers, they
both do well. You seem to want to become the dupe of the legal
system. . . . Don’t you think you have enough smarts to argue
your own case?
N.T. Hearing, 3/13/18, at 52-53, Exhibit 7.
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“to make any distribution or payment in kind or in cash, or partly in kind and
partly in cash, and to cause any share to be composed of cash, property or
undivided interests in property different in kind from any other share . . . .” 3
Quinn Living Trust, 11/19/01, at 11-5.
When apprised of Sarah and Gerald’s disagreement about the
disposition of the Farm, Randall initially took the position that the Trust
language did not support Sarah’s position. Randall advised Sarah that,
whatever intentions their parents may have expressed elsewhere, the Trust
document did not indicate that her daughters were to ultimately inherit the
Farm; rather, it provided that Gerald owns one-third and “can take his portion
and do whatever he wants with it[.]” N.T. Hearing, 3/13/18, at 23, Exhibit 3.
“After several years of attempted negotiations, during which the several
beneficiaries employed the services of a mediator and discussed several
possibilities for dividing the Farm, no agreement was reached. During and
after this period, the relationships among the beneficiaries degenerated.”
Orphans’ Court Opinion, 11/15/18, at 5 (paragraph numbers and breaks
omitted).
As the dispute among the three beneficiaries intensified,
Randall became less sympathetic with Gerald’s position and began
to pressure him into either agreeing with Sarah’s position or to
some other form of settlement. This included attempts by Randall
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3 One unfortunate result of his Randall’s eschewing trained legal assistance
was his failure to appreciate the extent of his authority as the successor
trustee to make these decisions rather than force a consensus among the
beneficiaries as to the distribution.
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to make Gerald’s participation in Trust administration increasingly
difficult and expensive, described in his own words as playing legal
“hard ball.”
Id. For example, Randall informed Gerald: “Because you are being a shit over
this and trying to deny our parents’ fondest dreams, my plan is to make it
increasingly uncomfortable for you. I will deny you everything I can think of.
([A]nd I can think of a lot of things[.])” N.T. Hearing, 3/13/18, at Exhibit 4.
Randall openly stated to Gerald:
I am going to wait until you sue me then I’m going to counter sue
with a series of lawsuits that will be meant to beggar you.
You can look at that as a threat or a promise.
I have been purposely dragging my feet hoping that you will
(somehow) come to your senses.
N.T. Hearing, 3/13/18, at Exhibit 7.4
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4 Randall, operating as he was without legal training or counsel, erroneously
believed that the Trust instrument permitted him to keep the Farm within the
Trust for as long as twenty-one years despite the provision for immediate
distribution of Trust assets. See N.T. Hearing, 3/13/18, at Exhibit 10 (“Article
Twelve, Section 2 of the Trust clearly states that I am not bound by the Trust
to divide the real estate for up to twenty-one years.”). In actuality, that
provision addresses the Rule Against Perpetuities, stating as follows:
Section 2. The Rule Against Perpetuities
Notwithstanding any other provision of my Trust Agreement;
unless sooner terminated or vested in accordance with other
provisions of my Trust Agreement, all interests not otherwise
vested, including, but not limited to, all trusts and powers of
appointment created hereunder, shall terminate: (i) one day prior
to twenty-one (21) years after the death of the last survivor of
the group composed of me, those beneficiaries described herein
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Ultimately, Gerald involved the orphans’ court in the dispute through a
petition for the filing of an account. Gerald requested that the court issue a
rule to show cause why Randall should not be required to file an accounting
for the trust administration from the time of Albert’s death in 2007 through
November 2010. In response, Randall filed a rejoinder to Gerald’s petition
wherein he, inter alia, declined to admit that Gerald is Albert’s son, and
instead requested that the court require Gerald to provide a DNA sample and
hold the proceedings in abeyance until Gerald proved he was Albert’s son.
See Rejoinder to Petition, 2/11/19, at 2.
In October 2011, nearly four years after Albert’s death, Randall filed a
motion to exclude Gerald as a beneficiary of the Trust, citing Gerald’s request
for an accounting as a violation of the Trust’s no-contest clause because
Gerald “in essence was attempting to force an in-kind distribution of the real
estate in the Trust.” Orphans’ Court Opinion, 11/15/18, at 7. Randall
requested at one point that the court exclude Gerald and his heirs from
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and my lineal descendants living on the date of my death or (ii) if
longer, such period as may be authorized under the laws of the
state identified in the Governing State Law Section of this Article.
At that time, distribution of all principal and all accrued,
accumulated and undistributed income shall be made to the
persons (or their representatives as authorized herein) then
entitled to distributions of income or principal and in the manner
and proportions herein stated irrespective of their then attained
ages.
Quinn Living Trust, 11/19/01, at 12-1.
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receiving any real property from the Trust, and at another that Gerald be
excluded as a beneficiary entirely. Motion to Exclude, 10/3/11, at 3.
Sarah supported Randall in pursuing this course of action. See N.T.
3/13/18, at 117. Sarah, an English teacher, proofread and suggested edits
for Randall’s drafts, including the motion to exclude and the motion for
summary judgment. See id. at 118-22. Sarah and Randall engaged in
communications in which they discussed how the Farm would be handled if
Gerald’s share lapsed. Orphans’ Court Opinion, 11/15/18, at 9.
Randall moved for summary judgment on the exclusion motion.
However, before the Court disposed of the motion, Randall filed in April 2012
a proposed disposition of the Trust, wherein he suggested that all of the
remaining Trust assets be liquidated, and the resultant funds distributed in
equal shares to the three beneficiaries. Shortly thereafter, Randall resigned
as trustee.
Sarah became the successor trustee, and, in June 2012, withdrew the
requests that Gerald take a DNA test and be excluded for violation of the no-
contest clause. The orphans’ court entered orders dismissing those motions
and appointing Roger T. Mechling, Esquire as successor trustee upon the
consent of Sarah and Gerald. Randall died on October 25, 2012.
Ultimately, Attorney Mechling liquidated most of the Trust assets and
filed an amended final account on December 2, 2015. Therein, he proposed
to distribute one-third of the resultant cash, bonds, and oil, gas, and mineral
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rights each to Linda, Sarah, and Gerald. Gerald filed exceptions and
objections to the account, contending that Randall, Linda, and Sarah violated
the Trust’s no-contest clause by “contest[ing] the directives of the Trust and
otherwise act[ing] in violation of the No-Contest Clause generally and
specifically. . . .” Exceptions and Objections, 1/6/16, at 2, 4. As specific
instances of violations, Gerald cited Randall’s DNA motion, Randall’s motion
to exclude, and Sarah’s support/conspiring with Randall in pursing those
filings. Id. at 3, 4. Gerald also sought reimbursement of attorney fees and
costs from the Trust. Id. at 5-7.
Following additional litigation in which the parties responded and
objected to each other’s filings, the orphans’ court held a hearing on the
exceptions on March 13, 2018, at which Gerald, Sarah, and Linda testified.
Thereafter, the parties filed post-hearing briefs and proposed findings of fact.
On November 15, 2018, the orphans’ court overruled Gerald’s
exceptions and objections except for his request for attorney fees. The
orphans’ court concluded that Randall’s DNA motion and motion to exclude
Gerald as a Trust beneficiary lacked any basis in law or fact, and that Randall’s
conduct was vexatious and arguably in breach of his fiduciary duties as
Trustee. See Orphans’ Court Opinion, 11/15/18, at 14-17. However, the
orphans’ court found that Randall’s intent was to force Gerald to agree to the
distribution proposed by Sarah and Randall, not to impair or invalidate the
provisions of the Trust granting Gerald one-third of the assets. See id.
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Accordingly, the court found no violation of the no-contest clause by Randall.
The orphans’ court further held that, even if Randall did violate the no-contest
clause, (1) Linda is still entitled to Randall’s share, and (2) Gerald failed to
prove that the assistance Sarah supplied to Randall’s pursuit of his motions
rose to the level of conspiring with Randall to violate the no-contest clause.
Nonetheless, the court awarded Gerald a portion of the requested attorney
fees, not under the terms of the Trust, but based upon 42 Pa.C.S. § 2503(7),
which allows a court to award attorney fees for defense of vexatious conduct.
Orphans’ Court Opinion, 11/15/18, at 19-20.
The parties timely filed their respective appeal and cross-appeal
following the entry of the November 15, 2018 order. Thereafter, the parties
and the orphans’ court complied with Pa.R.A.P. 1925. This Court consolidated
the appeals sua sponte, the parties filed their briefs, and the case was heard
at oral argument. As such, the matter is ripe for our decision.
Gerald presents this Court with the following issues, which we have re-
ordered for ease of disposition:
1. Whether the [orphans’] court erred by finding that
Randall . . . did not violate the Trust’s [no contest] clause when
Randall engaged in vexatious conduct against Gerald . . . by filing
multiple motions without probable cause in order to have the
[orphans’] court declare that Gerald was disinherited and
prohibited from receiving anything from the Trust, with the
[orphans’] court eventually dismissing those motions with
prejudice.
2. Whether the [orphans’] court erred when it
interpreted the provisions of the Trust so as to find that even if
Randall would be disinherited from the Trust for a violation of the
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Trust’s [no-contest] clause, Randall’s share of the Trust’s assets
would go to Linda, Randall’s wife, when such an interpretation lifts
the Trust’s general terms over the Trust’s specific language
applicable to this situation, makes the [no contest] clause
meaningless, and otherwise goes against the express language of
the Trust.
3. Whether the [orphans’] court erred by finding that
Sarah . . . did not violate the Trust’s [no contest] clause when she
aided and conspired with Randall to disinherit Gerald by editing
and making suggestions regarding the improper motions Randall
filed to disinherit Gerald.
4. The [orphans’] court erred by refusing to award
Gerald all of his attorney fees in this matter because should this
Court agree that Randall and Sarah did violate the [no contest]
clause, then, pursuant to the language of the Trust, Gerald is due
all of his attorney fees because he was acting to resist an attack
on the directives of the Trust by Randall and Sarah as set forth
herein.
Gerald’s brief at 5-6. Sarah and Linda present one question: “Did the
[orphans’ c]ourt err in awarding Gerald any attorney’s fees, given the
circumstances of the case[?]” Appellees’ brief at 2.
We begin our consideration of these questions with an examination of
the applicable law.
The findings of a judge of the orphans’ court division, sitting
without a jury, must be accorded the same weight and effect as
the verdict of a jury, and will not be reversed by an appellate court
in the absence of an abuse of discretion or a lack of evidentiary
support. . . . In reviewing the orphans’ court’s findings, our task
is to ensure that the record is free from legal error and to
determine if the orphans’ court’s findings are supported by
competent and adequate evidence and are not predicated upon
capricious disbelief of competent and credible evidence.
In re Jackson, 174 A.3d 14, 23 (Pa.Super. 2017) (internal quotation marks
and unnecessary capitalization omitted). However, the interpretation of wills
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and trust instruments is a question of law for which our standard of review is
de novo and our scope of review is plenary. See id. at 29.
“When interpreting a trust agreement, the intent of the settlor is
paramount, and if that intent is not contrary to law, it must prevail.” In re
Cohen, 188 A.3d 1208, 1214 (Pa.Super. 2018). The settlor’s intent is
determined from an examination of the following: “(a) all the language
contained in the four corners of the instrument; (b) the distribution scheme;
(c) the circumstances surrounding the testator or settlor at the time the will
was made or the trust was created; and (d) the existing facts.” Id. (cleaned
up). This Court must “give effect, to the extent possible, to all words and
clauses in the trust document.” In re Estate of Loucks, 148 A.3d 780, 782
(Pa.Super. 2016). “However great the temptation is to supply terms in
accordance with what the settlor presumably would have provided had the
omission been called to his attention, the court is without power to reform an
unambiguous instrument.” In re Ins. Tr. Agreement of Sawders, 201 A.3d
192, 197 (Pa.Super. 2018).
“Because no contest clauses protect estates from costly, time
consuming and vexatious litigation; and serve to minimize family bickering
concerning the competency and capacity of the testator, as well as the
amounts bequeathed, they are favored by public policy.” In re Estate of
Simpson, 595 A.2d 94, 100 (Pa.Super. 1991) (internal quotation marks
omitted). Provisions penalizing a person for contesting a trust are enforceable
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only if the person lacked probable cause to institute the contest. 20 Pa.C.S.
§ 2521. As noted above, the orphans’ court in the case sub judice determined
that Randall lacked probable cause to file his DNA request or the motion to
exclude. See Orphans’ Court Opinion, 11/15/18, at 14-17. However, it held
that Randall’s filings did not violate the no-contest clause because Randall
sought to force Gerald to agree as to the disposition of the Farm, not to deprive
Gerald of his one-third share of the Trust assets. See id.
Gerald argues that Randall’s vexatious conduct constitutes a violation of
the no-contest clause because “Randall was attempting to alter the
distribution scheme of the Trust . . . in an attempt to force Gerald to agree to
what Randall wanted the Trust to provide instead of what it actually did
provide.” Gerald’s brief at 33. In addition, Gerald contends that Randall’s
motion to exclude “specifically and unequivocally sought to disinherit Gerald”
and the orphans’ court should not have ignored Randall’s prayer for relief in
favor of its belief that “Randall didn’t really want what he explicitly said he
wanted[.]” Id. at 37. Further, in responding to Randall’s motion back in
2011, Gerald advised the court that all he was asking was for Randall to do
his job as Trustee pursuant to Article Eight, Section One of the Trust
instrument: “My Trustee shall immediately pay or apply to the benefit of such
beneficiary all principal from such beneficiary’s trust share free of trust.”
Answer to Motion to Exclude, 10/25/2011, at ¶ 3.
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We agree with Gerald that the court erred in holding that Randall did
not violate the no-contest clause. Again, the language of Albert’s no-contest
clause is as follows:
If any . . . beneficiary under my Trust . . . directly or indirectly . . .
does any of the following, then in that event I specifically disinherit
each such person, and all such legacies, bequests, devises and
interests given to that person under my Trust or any amendment
to it . . . shall be forfeited and shall be distributed as provided
elsewhere herein as though he or she had predeceased me
without issue:
....
g. in any other manner contests my Trust or any
amendment to it executed by me, or in any other
manner, attacks or seeks to impair or invalidate
any of its provisions;
h. conspires with or voluntarily assists anyone
attempting to do any of the above acts.
Expenses to resist any above contest or other attack of any nature
upon any provision of my Trust or any amendment to it shall be
paid from the trusts created hereunder as expenses of
administration.
....
If any person or entity, singularly or in conjunction with any other
person or entity, directly or indirectly, in any court, contests the
validity of my Trust Agreement, including any amendments
thereto, then the right of that person or entity to take any
interest in my Trust Estate or to act in any fiduciary capacity
shall cease, and the demise of that person (and his or her
descendants) or entity shall be deemed to have occurred prior to
my death, as applicable.
Quinn Living Trust, 11/19/01, at 12-3 − 12-5 (emphases added).
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The Trust instrument unambiguously prohibited, upon pain of forfeiture,
any beneficiary from acting in any manner to impair any of the Trust’s
provisions. The Trust’s provisions stated that Gerald was entitled to
distribution of one-third of the principal of the Trust “immediately . . . free of
trust.” Id. at 8-3. The evidence accepted by the orphans’ court establishes,
by Randall’s own words, that, knowing full well that Gerald had the right under
the Trust documents to do as he pleased with his one-third, Randall boldly
and unabashedly acted to impair those provisions by calculated, systematic
delay, to force Gerald to agree with a disposition of the Farm that was not
included in the Trust instrument. The orphans’ court fully acknowledged that
Randall’s conduct was so inappropriate as to be vexatious. As this is precisely
the type of conduct that Albert sought to prevent by including the no-contest
clause, the orphans’ court erred as a matter of law in failing to hold that
Randall triggered the clause to disinherit himself.
Moreover, regardless of the subjective intent Randall harbored in filing
his motion to exclude, it is objectively beyond question that Randall asked the
orphans’ court to disinherit Gerald without having any basis in law or fact to
support that Motion. The no-contest clause forbids all attacks upon the Trust
provisions unsupported by probable cause, not just ones that were undertaken
in earnest. It is beyond dispute that, in his motion to exclude, Randall asked
the court, without probable cause, to invalidate the provisions of the Trust
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pertaining to Gerald’s one-third share. As such, the orphans’ court erred in
holding that Randall did not violate the no-contest clause.
Gerald next argues that the orphans’ court erred in finding that Sarah
did not violate the no-contest clause by conspiring with Randall to impair the
Trust’s provisions for Gerald’s share. Pointing to Sarah’s assistance detailed
above, Gerald maintains that she also forfeited her share pursuant to the
conspiracy portion of the clause and this Court’s decision in In re Estate of
Simpson, supra. We again agree with Gerald.
Randall had no reason to interfere with the distribution of the Trust
according to its terms but for Sarah’s insistence that her daughters ultimately
inherit the Farm. Indeed, the orphans’ court specifically noted that Randall
originally agreed with Gerald, but Sarah convinced Randall to proceed contrary
to the terms of the Trust. By assisting Randall in his vexatious course of
conduct for the benefit of her children, at all times aware that the actions were
not supported by the language of the Trust instrument, Sarah is just as
culpable as Randall of seeking to impair the provisions of the Trust.
We reached a similar result in In re Estate of Simpson, supra. In
that case, James brought an unfounded undue influence challenge to his
grandmother’s will. Two of his siblings, Denise and Mark, did not officially join
the will contest, but assisted James by discussing the contest, deciding who
would file it, retaining counsel, and thwarting attempts at negotiating a
resolution. This Court recognized such conduct as “a collaborative effort
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among James, Mark and Denise” to contest the will. Id. at 100. Therefore,
we held that Mark and Denise also forfeited their shares for aiding in the
contest, explaining that
such a rule is beneficial for two reasons. First, the rule honors the
idea that the will is to be construed so as to promote the intentions
of the testator. Second, the rule promotes the favorable public
policy of limiting costly, time-consuming litigation against the
estate when such litigation is not founded upon probable cause
but rather upon disappointment over amount received.
Id.
Sarah was disappointed that the Trust did not provide that her
daughters would ultimately own the Farm, which she believed was her parents’
desire. The record unequivocally demonstrates that Sarah not only aided
Randall in his efforts to impair the immediate distribution provision in the
Trust, but convinced Randall to do so despite his initial instincts to the
contrary. To allow Sarah to avoid application of the no-clause because she
did not file or sign any of the motions ignores the portion of the no-contest
clause that prohibits a beneficiary from voluntarily assisting anyone in
violating the clause, and is contrary to our precedent. Thus, we hold that the
orphans’ court erred in failing to apply the no-contest clause to forfeit Sarah’s
share of the Trust.
We next consider Gerald’s contention that the orphans’ court erred in
opining that, even if Randall did violate the no-contest clause, Linda is entitled
to Randall’s share of the Trust principal. Gerald argues that this holding both
is contrary to “the beneficiary scheme of the Trust[,]” and leads to the absurd
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result of allowing Randall to violate the clause without suffering any adverse
consequences. Gerald’s brief at 43-44.
Pursuant to the no-contest clause, the Trust share of a beneficiary who
violates the clause “shall be forfeited and shall be distributed as provided
elsewhere herein as though he or she had predeceased me without issue[.]”
Quinn Living Trust, 11/19/01, at 12-3. The clause further provides that if any
person contests the Trust, “the right of that person or entity to take any
interest in my Trust . . . shall cease, and the demise of that person (and his
or her descendants) or entity shall be deemed to have occurred prior to my
death.” Id. at 12-5.
The orphans’ court ruled that the Trust instrument was ambiguous, and
that operation of the no-contest clause did not serve to disinherit Linda
because, even if Randall were treated as having predeceased Albert without
issue, Linda would take Randall’s share under Article Eight, Section 1(a)(3),
as she is not a descendent or issue of Randall. 5 Orphans’ Court Opinion,
11/15/18, at 17-18. We cannot agree.
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5 That section provides that if Randall “should die prior to the time that a
distribution is directed to be made, [Randall’s] interest in the balance of the
trust share shall be distributed to his spouse, LINDA QUINN, if then living; or,
if not, such beneficiary's interest in the trust share shall lapse.” Quinn Living
Trust, 11/19/01, at 8-2. In contrast, the provision for Sarah indicates that if
she should die prior to distribution, her interest “shall lapse and my Trustee
shall distribute the balance of the trust share to such beneficiary's then living
descendants, per stirpes. If such beneficiary has no then living descendants,
such beneficiary's trust share shall lapse.” Id. Gerald’s provision indicates
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First, viewing the Trust instrument as a whole, Albert’s plan for the
disposition of his assets is clear: he wished for each of his children to receive
one-third of the Trust principal upon his death, with exceptions for incapacity
and other contingencies. If any of the children who had an heir known to
Albert predeceased distribution of the Trust assets, that child’s heir or heirs
would receive the deceased child’s share. Otherwise, the deceased child’s
share was to be divided among the remaining children. For example, while
Sarah’s share would go to her daughters if she predeceased the distribution,
Gerald’s share in such circumstances would be distributed to Randall and
Sarah rather than to whomever stood to inherit or otherwise take through
Gerald under the law.
However, if a beneficiary violated the no-contest clause, he or she is
“specifically disinherit[ed]” and “the right of that person or entity to take any
interest in my Trust . . . shall cease, and the demise of that person (and his
or her descendants) or entity shall be deemed to have occurred prior to my
death.” Quinn Living Trust, 11/19/01, at 12-3, 12-5. Hence, if Sarah violated
the clause, her share would be split between Randall and Gerald (or the
beneficiaries at the time), rather than skip her and go to her daughters.
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that if he predeceases distribution, his share lapses. Id. at 8-3. Lapsed
shares are to be reallocated among the remaining named beneficiaries. Id.
at 8-1.
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Despite the use of “descendants” and “issue” rather than “heir” or
“contingent beneficiary,” we conclude that, viewing the document as a whole,
it is apparent that Albert’s intent was that, if the disinheritance of a person
were triggered, the share of any of his children should lapse rather than go to
the alternate beneficiary. Nothing in the document suggests that Albert
intended to disinherit his grandchildren upon Sarah’s contest of the Trust, but
not similarly remove his daughter-in-law as a beneficiary upon Randall’s
violation of the clause.
Second, the no-contest clause broadly indicates that any beneficiary
who violates the clause forfeits the right to take any interest in the Trust. If
Randall’s spouse were to take his share despite Randall’s violation of the
clause, he would still be receiving not only a de facto, but a legal interest in
the Trust assets. See Haentjens v. Haentjens, 860 A.2d 1056, 1059 n.7
(Pa.Super. 2004) (“Pursuant to 23 Pa.C.S.A. § 3501(a)(3), property acquired
by bequest, devise or descent is not considered marital property. However,
for purposes of equitable distribution, the increase in value of a non-marital
asset constitutes marital property.”).
Third, as discussed above, this Court has recognized the absurdity in
allowing one beneficiary to abet another beneficiary in contesting an
instrument without taking on the same risk of forfeiture. See In re Estate
of Simpson, supra. Allowing Linda to take Randall’s share in these
circumstances would have the practical effect of eviscerating the no-contest
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clause, as Randall in effect risked nothing by attempting to avoid distributing
Gerald’s rightful share to him. Therefore, we agree with Gerald that the
orphans’ court’s resolution of any ambiguity in favor of Linda retaining her
right to Randall’s share is inconsistent with Albert’s intent in light of his
distribution scheme as a whole. See In re Cohen, supra at 1214 (providing
that a settlor’s intent is determined from an examination of “(a) all the
language contained in the four corners of the instrument; (b) the distribution
scheme; (c) the circumstances surrounding the testator or settlor at the time
the will was made or the trust was created; and (d) the existing facts.”)
(cleaned up).
Accordingly, for the above-stated reasons, we hold that the orphans’
court erred in overruling Gerald’s objections to the proposed distribution of
the remaining Trust assets. While we acknowledge that the result is harsh, it
is consistent with Albert’s intent that any beneficiary contesting his Trust
forfeit his or her interest therein. We thus vacate the November 15, 2018
order to the extent that it does so, and remand for the orphans’ court to enter
an order providing for the Trust shares calculated in the final amended
accounting for Sarah and Linda to be be distributed to Gerald.
In light of our resolution of these issues, we also vacate the portion of
the order awarding Gerald a portion of his attorney fees. The no-contest
clause provides that expenses to resist attempts to impair provisions of the
Trust “shall be paid from the trusts created hereunder as expenses of
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administration.” Quinn Living Trust, 11/19/01, at 12-4. The orphans’ court
determined that Gerald’s fees were not awardable under the Trust provision
because (1) it held that Randall and Sarah did not violate the no-contest
clause, and (2) not all of the fees Gerald requested were related to Randall’s
DNA motion and motion to exclude. Orphans’ Court Opinion, 11/415/18, at
20. It awarded Gerald fees under 42 Pa.C.S. § 2503(7) as a sanction against
Randall for his vexatious conduct. Specifically, it awarded approximately forty
percent of the roughly $100,00 in fees and expenses claimed by Gerald at the
hearing.
On appeal, Sarah and Linda argue that the award cannot stand because
Gerald offered no evidence that the fees were reasonable, pointing to the
acknowledgment of the orphans’ court that there were “no bills on record from
which the court can determine its reasonableness.” Appellees’ brief at 17.
See also Orphans’ Court Opinion, 11/15/18, at 20. On the other hand, Gerald
argues that, if this Court agrees that Randall and Sarah violated the no-contest
clause, then he should recover all of his fees from the Trust. Gerald’s brief at
51.
We agree with Sarah and Linda that the award to Gerald without having
the bills or any evidence of their reasonableness was an abuse of discretion.
Therefore, we vacate that portion of the November 15, 2018 order awarding
Gerald attorney fees. However, we need not remand for a new determination.
Given our ruling that Randall and Sarah did violate the no-contest clause, we
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agree with Gerald that his efforts to uphold the Trust provisions from their
attack should be paid out of the Trust under the terms of the no-contest clause
quoted supra. As we have held that Gerald is entitled to 100% of the
remaining Trust principal, his attorney fees will be paid by Trust assets as they
should without further action by the orphans’ court. The matter thus resolves
itself.
Order vacated. Case remanded for further proceedings consistent with
this memorandum. Jurisdiction relinquished.
Judgment Entered.
Joseph D. Seletyn, Esq.
Prothonotary
Date: 1/24/2020
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