Pennsylvania Trust Company v. Leiden, M., Pennsylvania Trust Company v. Leiden, M. No. 2079 EDA 2016

Background

Settlor Helen T. Kaufman executed a 2009 amendment restating her 1981 revocable trust, naming her three children (Carol, Stephen, Susan) as beneficiaries of a $1,000,000 gift under Item III. All three children survived Settlor.
Item III allocated fractions of the $1,000,000 to each surviving child; it included a placeholder directing amounts passing to Carol to be held in a separate "Trust for Carol" (Item V). A per stirpes clause applied only if a child predeceased Settlor.
Appellant Michael Leiden (Carol’s son) argued Item III required each child to hold his/her share in trust for that child’s own children (i.e., Settlor’s grandchildren), so Appellant should have a beneficial interest.
Trustees (Pennsylvania Trust Company, Carol, Stephen) filed a declaratory judgment petition asking the orphans’ court to declare that the $1,000,000 vested in the three children (with Carol’s share held under Item V), not in the grandchildren.
The orphans’ court (after argument but no evidentiary hearing) sustained Trustees’ preliminary objections, dismissed Appellant’s filings, and entered a declaratory judgment holding that the grandchildren have no beneficial interest and the gift vested in the three children (1/7 Susan, 2/7 Stephen, 4/7 Trust for Carol).
Appellant’s exceptions were dismissed; he appealed pro se, raising standing, contract interpretation/ambiguity, request for evidentiary hearing/discovery, and claims concerning constructive trust and anti-challenge clause application.

Issues

Issue	Plaintiff's Argument (Leiden)	Defendant's Argument (Trustees)	Held
1. Standing of Trustees to seek declaratory relief	Trustees lacked standing to pursue beneficiary theory; they had no stake.	Trustees have statutory standing to seek construction of a trust under the Declaratory Judgments Act.	Trustees had standing; Appellant waived belated standing objection and, in any event, trustees have standing.
2. Proper interpretation of Item III (whether grandchildren take)	Item III’s language requires children to hold their shares for their own children (grandchildren).	Item III unambiguously gifts the $1,000,000 to Settlor’s three children; per stirpes clause applies only if a child predeceased Settlor.	Court held Item III unambiguous: gift vested in the three children; grandchildren have no beneficial interest (except Carol’s share held under Item V).
3. Admissibility of extrinsic evidence / need for evidentiary hearing	Court should allow extrinsic evidence, discovery, and a full evidentiary hearing to show Settlor’s intent.	No hearing needed because the trust language is unambiguous; extrinsic evidence is unavailable to vary clear text.	No evidentiary hearing required; trial court properly declined extrinsic evidence because trust language was clear.
4. Anti-challenge clause and request to impose constructive trust	Trustees’ petition should be treated as a challenge triggering Item XVIII or, alternatively, a constructive trust should be imposed to honor Settlor’s intent.	Trustees’ petition sought interpretation, not a challenge; Item XVIII did not apply; no basis for constructive trust because language controls.	Item XVIII did not bar Trustees’ declaratory action; no constructive trust imposed where instrument language controls and is unambiguous.

Key Cases Cited

In re Francis Edward McGillick Found., 642 A.2d 467 (Pa. 1994) (standing requires a substantial, direct, and immediate interest)
Huddleston v. Infertility Ctr. of Am., Inc., 700 A.2d 453 (Pa. Super. 1997) (failure to raise standing in preliminary objections waives the issue)
Hall v. Episcopal Long Term Care, 54 A.3d 381 (Pa. Super. 2012) (standing and lack of capacity must be raised at earliest opportunity)
Kuwait & Gulf Link Transport Co. v. Doe, 92 A.3d 41 (Pa. Super. 2014) (issue of standing is waived if not raised at first opportunity)
In re McFadden, 100 A.3d 645 (Pa. Super. 2014) (trust/will interpretation is a question of law; review is de novo)
In re Loucks, 148 A.3d 780 (Pa. Super. 2016) (extrinsic evidence may be used only if the trust is ambiguous)
Estate of Pew, 655 A.2d 521 (Pa. Super. 1994) (settlor’s intent is the controlling principle in trust interpretation)
Farmers Trust Co. v. Bashore, 445 A.2d 492 (Pa. 1982) (settlor’s intent must be determined from the instrument’s language and circumstances)