In re Estate of Devoe
74 A.3d 264
| Pa. Super. Ct. | 2013Background
- Mooney and Decedent were domestic partners who purchased the Residence as joint tenants with right of survivorship.
- Decedent obtained a $132,400 HSBC loan secured by a mortgage on the Residence; loan proceeds funded the Commercial Property owned by Decedent.
- Mooney had no ownership interest in the Commercial Property or Monard Testing, of which Decedent owned 50%.
- Decedent died intestate in October 2009; Co-Administrators were appointed January 2010.
- Estate declined to pay the HSBC Loan; HSBC foreclosed; Mooney sold the Residence in 2010 to satisfy the loan.
- Estate sold the Commercial Property privately in 2010 for $95,000; Mooney objected to the Estate’s accounting; the Orphans’ Court denied relief sought by Mooney in 2012, which the Superior Court reversed and remanded for surcharge-related issues.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Equitable subrogation against the Estate | Mooney paid to protect his interests and not as a mere volunteer. | Estate argues Mooney acted as a volunteer by securing the loan for Decedent and thus cannot recover. | Subrogation should be allowed; Court erred in denying. |
| Unjust enrichment | Equitable subrogation supports recovery, implying unjust enrichment against Estate if Mooney pays. | Unjust enrichment not applicable given the mortgage/relationship. | Resolved by ruling on subrogation; not reached separately. |
| Whether the court should address Mooney's remaining objections and surcharge | Mooney has legitimate claims and the surcharge should be considered on remand. | Estate maintains Mooney has no legitimate claim for distribution. | Remanded for consideration of remaining objections and surcharge. |
Key Cases Cited
- First Commonwealth Bank v. Heller, 863 A.2d 1153 (Pa. Super. 2004) (four-factor test for equitable subrogation)
- Dominski v. Garrett, 419 A.2d 73 (Pa. Super. 1980) (volunteer restriction; elements of equitable subrogation)
- Glaudzowski v. Felczak, 31 A.2d 718 (Pa. 1943) (equitable lien theory; unjust enrichment considerations)
- Jacobs v. Northeastern Corp., 206 A.2d 49 (Pa. 1965) (surety rights under equitable subrogation)
- Employers Insurance of Wausau v. Commonwealth, Dept. of Transportation, 865 A.2d 825 (Pa. 2005) (equitable remedies; subrogation as equity-based remedy)
- United States Fidelity & Guaranty Co. v. United Penn Bank, 524 A.2d 964 (Pa. Super. 1987) (equitable subrogation framework and privity concepts)