Rellick-Smith, S. v. Rellick, B.
147 A.3d 897
| Pa. Super. Ct. | 2016Background
- Decedent opened two CDs in 2006 "in trust for" three relatives: Rellick-Smith, Rellick, and Vasil (Totten-style accounts). The decedent retained power to revoke or withdraw.
- Rellick and Vasil held a power of attorney (POA) executed in 2006 authorizing broad financial powers.
- In July 2009 Rellick and Vasil (using their POA authority) signed bank forms removing Rellick-Smith as a named co-beneficiary; Rellick-Smith was not informed.
- The decedent died in December 2012. In March 2013 the CDs were allegedly withdrawn by Rellick and Vasil, who divided the funds and excluded Rellick-Smith.
- Rellick-Smith sued in Orphans’ Court (October 2014) alleging misuse of POA and breach of fiduciary duty; defendants moved to dismiss for lack of standing (and statute of limitations). Orphans’ Court dismissed for lack of standing. Rellick-Smith appealed.
- Superior Court vacated dismissal, holding a named beneficiary of a Totten trust has standing to sue agents who, acting under a POA, improperly changed beneficiary designations inconsistent with the principal’s intent. Case remanded.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Rellick-Smith had standing to sue agents who changed beneficiary designations | Rellick-Smith contends she is an intended beneficiary of the CDs (Totten trust) and was directly injured when agents removed her name and took funds | Defendants argue only the principal (while alive) or the decedent's personal representative may challenge agent actions after death; thus Rellick-Smith lacks standing | Held: Beneficiaries named in Totten-style accounts have standing to challenge agent breaches of fiduciary duty where agent actions contradicted the principal's known intent; dismissal for lack of standing vacated |
| Whether agent authority under the POA permitted changing beneficiaries | Rellick-Smith argues the decedent never authorized changing beneficiaries; removing her name exceeded agents' fiduciary authority | Defendants maintain their POA powers authorized banking and financial transactions and handling trusts/estates | Held: Under the pre-2015 POA law, agents owe fiduciary duties and additions/changes to trusts must be consistent with the principal’s known intent; factual issue whether acts were authorized precludes dismissal |
| Whether Kilpatrick bars non–personal-representative challenges | Defendants/Orphans’ Court relied on Kilpatrick to limit standing to personal representatives | Rellick-Smith argues Kilpatrick is inapplicable where funds were held outside the estate (Totten trust) and intended to avoid probate | Held: Kilpatrick does not control this Totten-trust context; beneficiary standing recognized to avoid an unjust result |
| Procedural/pleading sufficiency: whether complaint pleaded a cause of action | Defendants did not object to form; complaint alleged facts supporting breach of fiduciary duty | Defendants argued lack of specificity | Held: Under Pennsylvania fact-pleading, the complaint alleged sufficient material facts to state a claim and withstand preliminary objection |
Key Cases Cited
- In re B.L.J., Jr., 938 A.2d 1068 (Pa. Super. 2007) (standard of review on sustaining preliminary objections)
- Office of Governor v. Donahue, 98 A.3d 1223 (Pa. 2014) (standards for prudential standing in Pennsylvania)
- In re Estate of McFetridge, 372 A.2d 823 (Pa. 1977) (recognition and principles of Totten trusts)
- In re Kilpatrick’s Estate, 84 A.2d 339 (Pa. 1951) (limits on who may seek accounting under Fiduciaries Act — discussed and distinguished)
- In re Estate of Bechtel, 92 A.3d 833 (Pa. Super. 2014) (discussion of breach of fiduciary duty by agent under a POA)