In Re: Estate of Norris, J. Appeal of: PeoplesBank, 1117 MDA 2015

Background

John H. Norris established an inter vivos life insurance trust and died in 2008; his wife Anna Norris was individual trustee and American Guaranty & Trust (later RBC) was corporate trustee; RBC resigned and PeoplesBank (the Bank) accepted successor trusteeship in December 2012.
The Bank filed its trust accounting and petition for adjudication in August 2013 and sought to resign as corporate trustee in 2013; Mrs. Norris identified Counsel Trust Company as successor.
Multiple court orders (Nov. 25, 2013 consent order and July 22, 2014 stay) limited appointment of any successor corporate trustee to party agreement or a court hearing and stayed successor appointment pending adjudication of the Bank’s accounting.
On May 27, 2015 the Orphans’ Court sua sponte removed the Bank as co‑trustee and appointed Counsel Trust as successor without holding an evidentiary hearing or adjudicating the Bank’s accounting; the Bank appealed and Gurzell cross‑appealed.
The Superior Court vacated the removal, reinstated the Bank, and remanded: holding that (1) statutory procedure required a hearing under 20 Pa.C.S. §§ 3183/3184 before removal absent summary necessity, (2) the court erred in treating the Bank’s desire to resign as a no‑fault basis for removal under § 7766, and (3) prior court orders restricting successor appointment were not complied with.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether the court properly removed the Bank sua sponte without a hearing	Gurzell/Orphans’ Ct: removal was appropriate to resolve trust standstill and served beneficiaries’ interests	Bank: removal required a hearing under 20 Pa.C.S. § 3183; no petition for removal was filed	Held: improper — summary removal was unwarranted; statute required an evidentiary hearing before removal absent emergency
Whether a trustee’s desire to resign qualifies as a "substantial change of circumstances" under 20 Pa.C.S. § 7766(b)(4) permitting no‑fault removal	Orphans’ Ct: Bank’s intent to resign constituted a substantial change justifying removal	Bank: resignation is distinct from removal; no grounds under § 7766(b)(1)‑(3) and resignation does not equal substantial change	Held: erroneous — resignation alone is not a statutory basis for no‑fault removal under § 7766
Whether removal violated earlier court orders restricting successor appointment	Orphans’ Ct: removal justified despite prior orders because trust was stalled	Bank: Nov. 25, 2013 and July 22, 2014 orders required party agreement or a hearing and stayed successor appointment	Held: removal contravened the prior consent and stay orders; court of coordinate jurisdiction could not override them without lifting the stay or holding a hearing
Whether the Bank was entitled to adjudication/ discharge (resignation) rather than removal (with potential continued liability)	Bank: sought adjudication and discharge under § 3184 to avoid future liability; resignation after adjudication would protect it	Orphans’ Ct: characterized relief as removal (not full discharge) and questioned need to discharge successor liability	Held: Bank was entitled to adjudication of its accounting and discharge; removal rather than formal discharge prejudiced the Bank because resignation + adjudication shields from future liability whereas removal does not

Key Cases Cited

In re Estate of Hooper, 80 A.3d 815 (Pa. Super. Ct.) (standard of review for Orphans’ Court decrees)
Brown v. Levy, 73 A.3d 514 (Pa.) (de novo review for statutory interpretation)
In re McKinney, 67 A.3d 824 (Pa. Super. Ct.) (no‑fault removal and beneficiary‑interest requirement under § 7766)
In re White, 467 A.2d 1148 (Pa. Super. Ct.) (removal of trustee is drastic remedy)
Matter of Estate of Velott, 529 A.2d 525 (Pa. Super. Ct.) (requirement for hearing before removal)