J-A05004-17
2017 PA Super 145
IN RE: TRUST OF MARILYN : IN THE SUPERIOR COURT OF
MIHORDIN, DECEASED : PENNSYLVANIA
:
:
APPEAL OF: VICKI MIHORDIN : No. 1084 WDA 2016
Appeal from the Order Entered June 24, 2016
In the Court of Common Pleas of Mercer County
Orphans’ Court at No(s): No. 2014-660
BEFORE: GANTMAN, P.J., BENDER, P.J.E., and MOULTON, J.
DISSENTING OPINION BY BENDER, P.J.E.: FILED MAY 16, 2017
I respectfully disagree with the Majority’s decision to reverse the order
granting the reformation of the 1998 deed and its conclusion that the
evidence is legally insufficient to prove a scrivener’s error or mistake to
overcome the merger doctrine.
As the Majority indicates, the Pozzutos executed a real estate sales
agreement (“1995 sales agreement”) with the Mihordins, which expressly
stated that the Mihordins would receive a deed to the subject property upon
payment in full of the purchase price and that the property would revert
back to the Pozzutos upon the death of the Mihordins. 1 In 1998, after the
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1
The 1995 sales agreement states, in its entirety, as follows:
AGREEMENT
THIS AGREEMENT, made this 28th day of March, 1995, by
and between Mike Pozzuto and Lynda Pozzuto, his wife
(hereinafter referred to as Sellers).
(Footnote Continued Next Page)
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Mihordins completed the payments to the Pozzutos pursuant to the sales
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(Footnote Continued)
AND
Richard L. Mihordin and Marilyn R. Mihordin, his wife
(hereinafter referred to as Buyers);
WHEREAS, the Sellers are in the process of purchasing
certain property in Kittanning, Pennsylvania; and
WHEREAS, the Buyers wish to purchase some of the
aforesaid property from the Sellers;
NOW THEREFORE, THE PARTIES INTENDING TO BE LEGALLY
BOUND, AGREE AS FOLLOWS:
1. Sellers will sell and Buyers will purchase a parcel of land of
Buyers choice fronting on 100 feet of river for the sum of
$20,000.00 payable at $5,000.00 on day of closing and
$5,000.00 a year, each and every year for the succeeding
three (3) years.
2. If Buyers decide to sell the aforesaid parcel, they give the
Sellers the option to purchase the property for $20,000.00.
Said option to be exercised within 90 days after written notice
received by Sellers from Buyers.
3. If Sellers would default on the purchase of the said property,
they must refund the Buyers all hand monies paid by Buyers
to Sellers.
4. Upon Buyers payment of the full purchase price to Sellers,
they will receive a deed subject to any encumbrances then
existing on the property.
5. Upon the death of Buyers, the land is to revert back to
Sellers.
6. If Sellers sell the complete parcel of land, they will deed over
the property of Buyers to Buyers.
IN WITNESS WHEREOF, the parties hereto have set their
hands and seals the day and year first above written.
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agreement, the Pozzutos contacted Attorney Panella to request that he
prepare the deed. Attorney Panella did not refer to the 1995 sales
agreement in preparing the deed and, thus, he failed to include any
reversionary interest in the deed. Instead, the 1998 deed executed by the
Pozzutos transferred the property to the Mihordins in fee simple.
I believe that this is a clear case of scrivener’s error which overcomes
the merger doctrine, as further explained herein, and that reformation of the
deed is the proper outcome in this case. This Court has long held that a trial
court has the power to reform a deed to correct a scrivener’s error. See
DiMaio v. Musso, 762 A.2d 363, 366 (Pa. Super. 2000) (concluding trial
court erred in failing to reform deed to correct scrivener’s error that depicted
wrong parcel of land); Armstrong County Bldg. & Loan Ass’n of Ford
City v. Guffey, 200 A. 160 (Pa. Super. 1938) (upholding a decree directing
the reformation of a deed to correct a scrivener’s error).
As noted in the lower court’s opinion, the Pennsylvania Supreme Court
has outlined the following, well-defined principles to consider when
determining whether reformation of a written instrument, such as a deed, is
appropriate:
(1) [T]he mistake of a scrivener in preparing a deed, will[,] or
other writing may be established by parol evidence and the
instrument reformed accordingly[.]
(2) [W]hile generally, the mistake must be mutual, the rule is
otherwise where, as herein, the [s]ettlor receives no
consideration for the creation of a trust. In such a case a
unilateral mistake on the part of the settlor is sufficient,
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and it is immaterial that the beneficiary did not induce the
mistake, or know of it or share in it.
(3) [W]hether the mistake be unilateral or bilateral, the quality
of proof required to establish the existence of the mistake
is the same; that proof of the mistake must be established
by evidence that is clear, precise, convincing and of the
most satisfactory character….
(4) [W]hile it is true that where the auditing judge sees and
hears the witnesses, determines their credibility and the
weight to be given their testimony, his findings, like those
of a jury, will not be disturbed except for clear error; it is
also the law that where a trial judge passes upon the
question of whether the evidence introduced to reform a
written instrument meets the standard of being clear,
precise and convincing his ruling is open to review here.
In re Duncan’s Estate, 232 A.2d 717, 720 (Pa. 1967) (internal citations
and quotation marks omitted).
Applying these principles to the present case, the lower court noted
that “in the case of a scrivener’s error and mutual mistake, the remedy
available is reformation of the deed,” and it concluded that the Pozzutos
satisfied their burden of providing clear, precise and convincing evidence of
a scrivener’s error through the testimony of Attorney Panella. Trial Court
Opinion (“TCO”), 6/24/16, at 5. “[W]here an auditing judge sees and hears
the witnesses, it is for him to determine their credibility and the weight to be
given to their testimony because of their character, intelligence and
knowledge of the subject, and his findings, like those of a jury, will not be
disturbed except for clear error.” In re La Rocca’s Trust Estate, 192 A.2d
409, 412 (Pa. 1963). Based on my review of the record, I discern no clear
error on the part of the lower court.
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Attorney Panella testified that the intent of the 1995 sales agreement
was to create a life estate in the Mihordins with the property reverting back
to the Pozzutos upon their death. N.T. Hearing, 2/23/16, at 23. He further
stated that the reason why the reversionary interest was not reflected in the
deed is that he never referred to the 1995 sales agreement when drafting
the document. Id. at 27-28. Lynda Pozzuto also testified at the hearing
regarding her intent for the documents to include a reversionary interest.2
She claimed that she did not become aware of the fact that the deed failed
to include a reversionary clause until after her parents’ death, and that if she
would have known at the time the deed was executed, she would not have
signed it. Id. at 37-38.
I deem the foregoing testimony sufficient to support the lower court’s
conclusion that:
Attorney Panella’s actions of writing the deed without referring to
the [1995] Sales Agreement resulted in the scrivener’s error.
Furthermore, he presented to this [c]ourt clear and convincing
evidence that the parties to the deed were operating under a
mutual mistake, that being the absence of the life estate in the
deed. Had they referred to the [1995] [s]ales [a]greement, they
would have included the life estate with reversionary clause in
the deed.
TCO at 5.
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2
When asked what her understanding was regarding the 1995 Sales
Agreement, Lynda Pozzuto responded: “When my parents passed away, the
property would go back to myself and my husband, Michael Pozzuto.” N.T.
Hearing at 36.
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As stated supra, “[t]he general rule, in the absence of fraud or
mistake, and of an intent to the contrary, is that an antecedent contract for
the purchase of land is merged in the deed…[.] [U]pon the delivery and
acceptance of the deed, there exists a prima facie presumption of merger.”
Dobkin v. Landsberg, 116 A. 814, 817 (Pa. 1922) (internal citation and
quotation marks omitted; emphasis added). “[T]o rebut the legal
presumption [of merger], the intention to the contrary must be clear and
manifest.” Id. at 818. Here, the Majority opines that the merger doctrine
should prevail due to a lack of manifest intent in the record. However, I
believe that the lower court was correct in finding that the doctrine of
merger does not apply to the present case, as it is clear that the deed does
not accurately reflect the intention of the parties. See Carsek Corp. v.
Stephen Schifter, Inc., 246 A.2d 365, 370 (Pa. 1968) (acknowledging the
merger doctrine does not apply where the expressed intention of the parties
is to the contrary).3
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3
As the trial court explains:
The Pennsylvania Supreme Court has held that “merger depends
on the intention of the parties, as evidenced by the attending
circumstances of each transaction.” [Dobkin], 116 A. at 817.
The intention of the parties “may be shown by their declarations,
acts, or conduct at the time of execution of the agreement in
question or from the terms of the writing itself.” Dick v.
McWilliams, 139 A. 745, 746 (Pa. 1927) (citing Carrow v.
Headley, 25 A. 889 (Pa. 1893); Moats v. Thompson, 129 A.
105 (Pa. 1925)). Yet, “[i]n some instances it may be shown by
(Footnote Continued Next Page)
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The lower court determined that the 1995 sales agreement “serves as
parol[] evidence reflecting the intent of the parties to have a life estate with
reversionary interest in the deed.” TCO at 7. There is no evidence in the
record to suggest otherwise. Clause 5 of the agreement expressly states:
“Upon the death of Buyers, the land is to revert back to Sellers.” See 1995
Sales Agreement (attached as Exhibit “A” to the Pozzutos’ Rule to Show
Cause); see also footnote 1. The agreement further provides that a deed
would be issued to the Mihordins upon payment of the full purchase price to
the Pozzutos. See id. The 1998 deed failed to include a reversionary
interest in accordance with Clause 5 of the sales agreement but, rather,
transferred the property to the Mihordins in fee simple. This was clearly not
the intent of the parties.
The Majority argues that the Pozzutos were negligent in failing to
discover the discrepancy in the documents and, therefore, they do not
deserve protection by means of reformation at this late date. However, this
Court has previously determined that where “the elements required for
reformation are present, the failure of the plaintiffs to discover the variance
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(Footnote Continued)
parol that an effect, which usually is given to a written
instrument, was, as a matter of fact, not intended by the parties
concerned.” [Dobkin], 116 A. at 818.
TCO at 6.
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… even if negligent, is not fatal to their right to have the deed reformed.”
Schwartz v. Gingerich, 14 A.2d 623, 625 (Pa. Super. 1940) (citing Broida
v. Travelers’ Ins. Co., 175 A. 492, 494 (Pa. 1934)).
Finally, I agree with the lower court’s finding that Attorney Panella’s
testimony regarding his preparation of the deed is not barred by the Dead
Man’s Act, as the Act is inapplicable “when the witness does not have an
interest in the outcome of the proceeding, for in that case the witness would
have no reason to misrepresent his dealing with the decedent.” Visscher v.
O’Brien, 418 A.2d 454, 458 (Pa. Super. 1980). See also TCO at 8.
Accordingly, I would affirm the June 24, 2016 order granting the
Pozzutos’ petition for reformation of the 1998 Deed.
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