26 Pa. D. & C.5th 456
Pennsylvania Court of Common P...2012Background
- Samuel Rappaport died in 1994; his estate included extensive real estate and business interests later administered by executors.
- In 2002, Richard Basciano and Lois Basciano were removed as executors for self-dealing, with the estate continuing under a new administrator.
- The estate’s beneficiaries objected to the initial and supplemental accounts, seeking repossession and surcharges for self-dealing.
- This court issued a 2010 adjudication and decree; objections were filed, and the matter was appealed to the Pennsylvania Superior Court.
- On remand, the court issued an amended adjudication and decree on March 2, 2012 addressing exceptions; beneficiaries and the Bascianos cross-appealed on April 3, 2012.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether res judicata applied to void self-dealing transactions | Estate argues all self-dealing transactions are voidable. | Bascianos contend res judicata and that some transactions were valid. | Issues regarding res judicata were addressed; court held amendments and surcharges appropriate where warranted. |
| Whether the estate owed the Bascianos full recovery of legal fees | Estate argues only removal-related fees are chargeable. | Bascianos contend full fee amount is owed. | Court reduced reimbursement from 2,462,807.47 to 523,807.47, limited to removal-related fees. |
| Whether the Dimeling & Schreiber and Hollywood Beach transactions improperly belonged to the estate | Beneficiaries allege estate ownership; court should surcharge. | Bascianos claim properties not owned by estate or are partnership assets. | Court rejected that ownership hurdles; allowed surcharge/repayment for related transactions. |
| Lois Basciano’s liability for pre-appointment fees and role as co-executor | Lois liable for breach of fiduciary duty; fees improper. | Lois asserts liability limited to tenure as co-executor. | Liability affirmed for activities during tenure; pre-appointment fees appropriately excluded. |
| Whether Richard Basciano’s additional executor commissions were justified | Estate argues additional fees are exorbitant and unwarranted. | Basciano claims compensation for service. | Court denied request for additional $1.1 million in executor fees; existing compensation deemed sufficient. |
Key Cases Cited
- In re Pitone’s Estate, 489 Pa. 60 (Pa. 1980) (executor fees improper if for private interests or removal defense)
- In re Estate of Bruner, 691 A.2d 530 (Pa. Super. Ct. 1997) (fees not benefiting the estate are non-chargeable)
- In re Clark’s Estate, 14 Pa. D&C 751 (Pa. Orph. Ct. 1930) (guardian fees opposing removal not chargeable to the estate)
- Estate of Frey, 693 A.2d 1349 (Pa. Super. Ct. 1997) (executor liability for breach of fiduciary duties; competence standard)
- In re Kendall, 982 A.2d 525 (Pa. Super. Ct. 2009) (equity powers to review and correct decrees)