J-A29020-19
NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37
IN RE: CAROL SHINER : IN THE SUPERIOR COURT OF
ROSENBLOOM, AN INCAPACITATED : PENNSYLVANIA
PERSON :
:
:
APPEAL OF: MARGIE HAMMER :
:
:
: No. 464 WDA 2019
Appeal from the Order Entered, March 1, 2019,
in the Court of Common Pleas of Allegheny County,
Orphans' Court at No(s): No. 02-16-04661.
BEFORE: BENDER, P.J.E., KUNSELMAN, J., and PELLEGRINI, J.*
MEMORANDUM BY KUNSELMAN, J.: FILED FEBRUARY 14, 2020
Margie Hammer, Esq., appeals part of the orphans’ court order, directing
her to pay $65,000 into the Estate of Carol Shiner Rosenbloom, Esq., an
incapacitated person1 and former client of Attorney Hammer. An orphans’
court has no authority under the Probate, Estates, and Fiduciaries Code
(“PEFC”)2 to force a person to give money to an estate, if, as here, the money
does not belong to the estate. We therefore reverse.
____________________________________________
* Retired Senior Judge assigned to the Superior Court.
1 “‘Incapacitated person’” means an adult whose ability to receive and
evaluate information effectively and communicate decisions in any way is
impaired to such a significant extent that he is partially or totally unable to
manage his financial resources or to meet essential requirements for his
physical health and safety.” 20 Pa.C.S.A. § 5501.
2 20 Pa.C.S.A. §§ 101-8815.
J-A29020-19
This guardianship matter began August 22, 2016, when Dr. Richard
Rosenbloom petitioned the Orphans’ Court of Allegheny County to have Ms.
Rosenbloom, his wife, adjudged an incapacitated person. The court granted
Dr. Rosenbloom’s request two months later. It simultaneously appointed
Aligned Partners Trust Company (“the Guardian”) the plenary guardian of Ms.
Rosenbloom’s estate.3
The Guardian subsequently petitioned to invalidate certain gifts that Ms.
Rosenbloom had given to the Rosenblooms’ daughter, Kate, in the summer of
2016. Ms. Rosenbloom gave Kate title to a home and certain investment
accounts worth $283,000. The court found that Kate exerted undue influence
over Ms. Rosenbloom and negated the transfer of the $283,000 accounts to
Kate. However, it refused the Guardian’s request to negate Ms. Rosenbloom’s
gift of the Hartwood Drive home to Kate, because the orphans’ court found
that Ms. Rosenbloom had wanted to give that home to Kate despite any undue
influence.4
At the hearing regarding Ms. Rosenbloom’s capacity and her gifts to
Kate, the Guardian learned from Attorney Hammer’s testimony that Attorney
Hammer had performed legal work for Kate and Ms. Rosenbloom during 2016.
____________________________________________
3 Several other individuals and agencies have served as limited guardians of
Ms. Rosenbloom’s person. Their identities are irrelevant to the disposition of
this appeal.
4Dr. Rosenbloom contested the transfer of the house to Kate in a separate
appeal. Kate did not appeal the portion of the order directing her to return
$283,000 to the estate.
-2-
J-A29020-19
The orphans’ court found that Attorney Hammer prepared documents at Ms.
Rosenbloom’s request to transfer the home and accounts to Kate. Attorney
Hammer also had represented Kate in her divorce.
Attorney Hammer testified that every payment she received for her legal
services to both Kate and Ms. Rosenbloom came from Kate. Even so, the
orphans’ court found that the money Kate used to pay Attorney Hammer
originated from the $283,000 that Kate received from Ms. Rosenbloom. The
orphans’ court therefore ordered Attorney Hammer to forfeit that money to
the estate.
The orphans’ court entered its order regarding Attorney Hammer’s fees
and the Hartwood Drive home on March 1, 2019. Attorney Hammer appealed
on April 1, 2019.
She asserts four grounds of error regarding the orphans’ court decree
directing her to pay $65,000 into Ms. Rosenbloom’s estate. Before addressing
those claims, we first consider the Guardian’s assertion that Attorney
Hammer’s appeal is premature.
1. Attorney Hammer’s Appeal Is of Right
The Guardian contends that Attorney Hammer’s appeal is interlocutory
in nature. According to the Guardian, the orphans’ court merely directed
Attorney Hammer to refund $65,000 to the estate, because she “was paid
with funds belonging to [Ms. Rosenbloom] without receiving authorization
from [the orphans’ court].’” Guardian’s Brief at 14 (quoting Orphans’ Court
-3-
J-A29020-19
Opinion, 5/20/19, at 7). The Guardian provides no argument to support its
claim that Attorney Hammer’s appeal is interlocutory, nor does it explain what
further proceeding Attorney Hammer needed to pursue in the orphans’ court
before the order in question would become appealable.
Although the Guardian does not directly say so, we infer that it believes
this Court does not yet have appellate jurisdiction over Attorney Hammer’s
appeal. “Jurisdiction is purely a question of law; the appellate standard of
review is de novo, and the scope of review plenary.” Barak v. Karolizki, 196
A.3d 208, 215 (Pa.Super. 2018).
An appellate court “has jurisdiction to entertain appeals taken (1) as of
right from a final order; (2) from interlocutory orders by permission; (3) from
certain interlocutory orders as of right; and (4) from certain collateral orders.”
Redevelopment Auth. of Cambria City v. Int'l Ins. Co., 685 A.2d 581,
585 (Pa.Super. 1996) (citations omitted). “An order is final if it disposes of
all claims and all parties, and an order is interlocutory when it does not
effectively put a litigant out of court.” Koken v. Colonial Assurance Co.,
885 A.2d 1078, 1101 (Pa.Cmwlth. 2005) (citation omitted), affirmed per
curiam, 893 A.2d 98 (Pa. 2006).
We need not resolve whether the order in question was interlocutory,
because, even if it was, Attorney Hammer could immediately appeal it as of
right. “An appeal may be taken as of right from the following orders of the
Orphans’ Court Division . . . (5) an order determining the status of . . .
-4-
J-A29020-19
creditors in an estate, trust, or guardianship . . . .” Pa.R.A.P. 342(a)
(emphasis added). The orphans’ court found that Attorney Hammer had
wrongfully acquired funds belonging to Ms. Rosenbloom. The court therefore
determined Attorney Hammer’s status to be an unlawful creditor of the estate.
Accordingly, Attorney Hammer could immediately appeal as of right under
Pa.R.A.P. 342(a)(5).
We have jurisdiction to hear appeals from “interlocutory orders as of
right . . . .” Redevelopment Auth. of Cambria City, supra. We are thus
satisfied that appellate jurisdiction over Attorney Hammer’s appeal has vested
in this Court. Accordingly, we may reach the merits of her appeal.
2. Application of the PEFC, Section 5536(a)
Attorney Hammer raises four claims of error regarding the decree of the
orphans’ court. They are:
1. Did the court err in applying 20 Pa.C.S.A. § 5536 to
attorney’s fees that were earned prior to a
determination of incapacity and paid by [Kate]?
2. Did the court err in ordering the return of fees based
on a presumption that the funds originated from
assets transferred by [Ms.] Rosenbloom prior to the
date that she was adjudicated incapacitated?
3. Did ordering the return of fees, in addition to requiring
Kate . . . to return the value of assets transferred to
her, result in a windfall to the . . . estate?
4. Whether sufficient evidence exists to support the
[Orphans’] Court’s findings that [Ms.] Rosenbloom
lacked capacity to make financial decisions four
months prior to an adjudication of incapacity?
-5-
J-A29020-19
Hammer’s Brief at 3. We only address Attorney Hammer’s first issue, because
our disposition of it moots her remaining three claims.
Attorney Hammer claims the orphans’ court misapplied Section 5536 of
the PEFC. She argues that the basis for the Guardian’s claim against her was
“factually inaccurate.” Id. at 24.
According to the Guardian’s filing in the orphans’ court, both payments
to Attorney Hammer occurred after that court declared Ms. Rosenbloom an
incapacitated person. As such, the Guardian argued that Attorney Hammer
needed to petition the court for disbursement under 20 Pa.C.S.A. § 5536(a).
See September 26, 2018 Letter of Mario Santilli, Esq. on behalf of Guardian
at 1. The Guardian reasserts that arguments in this Court.
Attorney Hammer counters that Section 5536(a) of the PEFC does not
apply, because (1) her legal services to Kate and Ms. Rosenbloom predated
Ms. Rosenbloom’s incapacity; and (2) the legal fees were paid by Kate – i.e.,
not the incapacitated person. Therefore, Attorney Hammer believes Kate’s
payments to her are valid, and she may retain the funds. Hammer’s Brief at
25-16.
When reviewing a decree of the orphans’ court, our scope of review is
confined to determine if “the record is free from legal error and to determine
if the orphans’ court’s findings are supported by competent and adequate
evidence.” In re Klein’s Estate, 378 A.2d 1182, 1187 (Pa. 1977). In the
latter pursuit, we defer to the finder of fact and “take as true all the evidence
-6-
J-A29020-19
supporting the [orphans’ courts’] findings and all reasonable inferences
therefrom.” In re William L., 383 A.2d 1228, 1237 n.12 (Pa. 1978).
“However, we are not limited when we review the legal conclusions that [the]
orphans’ court has derived from those facts.” In re Estate of Cherwinski,
856 A.2d 165, 167 (Pa.Super. 2004) (capitalization omitted). In addition, any
“issue of statutory construction presents a question of law for which our
standard of review is de novo.” In re Navarra, 185 A.3d 342, 350 (Pa.Super.
2018).
When the orphans’ court ordered Attorney Hammer to pay $65,000 into
the estate of Ms. Rosenbloom, it reasoned as follows:
Attorney Hammer testified that, pursuant to an invoice
issued to [Ms. Rosenbloom], she received the following
payments for attorney’s fees on the stated dates:
June 5, 2016 $1,500.00
June 17, 2016 $3,000.00
June 17, 2016 $2,300.00
September 8, 2016 $11,565.26
October 24, 2016 $55,000.00
November 24, 2016 $10,000.00
She further stated that the payments were made by [Kate],
not from [Ms. Rosenbloom’s] funds.
Reviewing [Attorney] Hammer’s testimony, in
conjunction with the testimony set forth in the other two
hearings, the Court finds that [Attorney] Hammer was paid
with funds belonging to [Ms. Rosenbloom] without receiving
authorization from this Court. Per the above testimony and
the Court’s findings, the $283,000 transferred to [Kate] was
undertaken at a time when [Ms. Rosenbloom] was
cognitively impaired and not capable of making an informed
decision about her financial affairs. Accordingly, the Court
has ordered that those funds are to be returned to [Ms.
-7-
J-A29020-19
Rosenbloom’s] estate. As [Attorney] Hammer was unable
to accurately quantify [Kate’s] financial estate or her assets,
and [Kate] failed to trace the $55,000 payment and the
$10,000 payment to funds belonging solely to her, it must
be presumed that the funds used to pay [Attorney] Hammer
were the funds that [Ms. Rosenbloom] transferred to [Kate]
approximately four months prior to paying the invoices. For
those reasons, [Attorney] Hammer is directed to return the
sum of $65,000 to the estate of [Ms. Rosenbloom].
Orphans’ Court Memorandum Opinion and Order, 3/1/19, at 9-10 (citations to
the record omitted).
The analysis of the orphans’ court followed a three-step process. First,
it determined that Ms. Rosenbloom was incapacitated when she gave money
to Kate, who had exerted undue influence over Ms. Rosenbloom to acquire
that money.5 Second, the court found that Kate used that money to pay
Attorney Hammer’s legal bills. Third, the orphans’ court concluded that,
because the gift from Ms. Rosenbloom to Kate was invalid, the payment from
Kate to Attorney Hammer was equally invalid.
In making this determination, the court did not find that Attorney
Hammer exerted undue influence over Ms. Rosenbloom, that she overcharged
for her legal service, that she failed to render proper service, or that she in
anyway defrauded Ms. Rosenbloom. Instead, the orphans’ court relied on the
____________________________________________
5Kate has not appealed the court’s decision that she exerted undue influence
over Ms. Rosenbloom. Our review therefore extends only to whether Kate’s
payment to a third party for services rendered is subject to the control of the
orphans’ court.
-8-
J-A29020-19
argument of the Guardian, namely that Kate’s payments to Attorney Hammer
violated Section 5536(a) of the PEFC. We disagree.
That section permits the orphans’ court to direct payments on behalf of
an incapacitated person from his or her estate. It provides:
(a) In general.--All income received by a guardian of the
estate of an incapacitated person . . . in the exercise of a
reasonable discretion, may be expended in the care and
maintenance of the incapacitated person, without the
necessity of court approval. The court, for cause shown and
with only such notice as it considers appropriate in the
circumstances, may authorize or direct the payment or
application of any or all of the income or principal of the
estate of an incapacitated person for the care, maintenance,
or education of the incapacitated person, his spouse,
children or those for whom he was making such provision
before his incapacity, or for the reasonable funeral expenses
of the incapacitated person’s spouse, child, or indigent
parent. In proper cases, the court may order payment of
amounts directly to the incapacitated person for his
maintenance or for incidental expenses and may ratify
payments made for these purposes. For purposes of this
subsection, the term “income” means income as determined
in accordance with the rules set forth in Chapter 81 (relating
to principal and income), other than the power to adjust and
the power to convert to a unitrust.
20 Pa.C.S.A. § 5536(a).6
____________________________________________
6 Aside from reproducing this statute in its appellate brief, the Guardian cites
no authority to defend its assertion that an orphans’ court may order an
attorney to forfeit her legal fees to an estate. Nor does the Guardian attempt
to analyze the language of the statute to demonstrate how the General
Assembly imparted such authority to an orphans’ court. Instead, the Guardian
says, “even the earliest cases recognize the obligation of the orphans’ court
to oversee and question any request to use the incapacitated person’s
resources.” Guardian’s Brief at 15-16. Assuming that that proposition is
correct, it is of no help to the Guardian in its quest to render Attorney
Hammer’s legal fees an asset of the estate.
-9-
J-A29020-19
We note the Rules of Statutory Construction mandate that “the court
must give plain meaning to the words of the statute. It is not a court’s place
to imbue the statute with a meaning other than that dictated by the plain and
unambiguous language of the statute.” In re R.D.R., 876 A.2d 1009, 1016
(Pa.Super. 2005); see also 1 Pa.C.S.A. § 1921(b).
The language of 20 Pa.C.S.A. § 5536(a) only authorizes the orphans’
court to exert authority over funds within the estate. Nothing in that section
gives the court the authority over funds that lie outside “the income or
principal of the estate of an incapacitated person.” 20 Pa.C.S.A. § 5536(a).7
Moreover, this section does not authorize an orphans’ court to seek
payment of funds into the estate of an incapacitated person from a third-party
transaction. For the court to exercise its authority, the principal and income
in question must be a part of the estate.
Here, the orphans’ court ordered Kate to refund the full $283,000 to the
estate, as an invalid, inter vivos gift from Ms. Rosenbloom to Kate. However,
under Section 5536(a), the court could not go beyond Kate to recover estate
____________________________________________
7 Our legislature defined both “principal” and “income” for PEFC purposes. The
“principal” of an estate is “Property held in trust for distribution to a remainder
beneficiary when the trust terminates or property held in trust in perpetuity.”
20 Pa.C.S.A. § 8102 (definition of “Principal”). In other words, the principal
is the current assets of an estate at the time of the estate’s establishment.
An estate’s “income” is “Money or property which a fiduciary receives as
current return from a principal asset. The term includes a portion of receipts
from a sale, exchange, or liquidation of a principal asset to the extent provided
in Subchapter D (relating to allocation of receipts during administration of
trust).” 20 Pa.C.S.A. § 8102 (definition of “Income”). In other words, income
is profit generated from the principal.
- 10 -
J-A29020-19
funds that Kate may have subsequently transferred to third parties, including
Attorney Hammer.
The $65,000 that Kate paid to Attorney Hammer and her law firm was
never “property held in trust for distribution to” Ms. Rosenbloom. 20 Pa.C.S.A.
§ 8102 (definition of “Principal”). Nor was it money “which [the guardian]
receive[d] as current return from a principal asset [or] a portion of receipts
from a sale, exchange, or liquidation of a principal asset . . . .” 20 Pa.C.S.A. §
8102 (definition of “Income”). Thus, the $65,000 was neither principal nor
income of the estate. The Guardian’s attempt to secure that money in an
orphans’-court proceeding under 20 Pa.C.S.A. § 5536(a) fails.
Contrary to the belief of the orphans’ court and the Guardian, Attorney
Hammer had no obligation to petition that court to be paid for services to Kate
and Ms. Rosenbloom, when those services predated the decree of incapacity
and were paid for by Kate. Regardless of how Kate obtained the money she
paid Attorney Hammer, those funds had been passed to a third party and,
thus, may not be acquired under Section 5536(a) of the PEFC.
Order reversed.
- 11 -
J-A29020-19
Judgment Entered.
Joseph D. Seletyn, Esq.
Prothonotary
Date: 2/14/2020
- 12 -