Trust Under Agreement of Edward W. Taylor
124 A.3d 334
Pa. Super. Ct.2015Background
- Settlor Edward W. Taylor created an irrevocable trust in 1928 (amended 1928, 1930) to provide income for his daughter Anna and her descendants; trustee succession led to Wells Fargo as corporate trustee.
- Trust income was payable to Anna for life, then via appointment to her eldest son Frank R. Wallace, Jr., and thereafter to his children; trust terminates 20 years after certain deaths or by May 4, 2028.
- After Frank Jr.’s death, the trust was partitioned in 2009 into four subdivided trusts (each ≈ $1.8M) with his children as co-trustees alongside Wells Fargo.
- Three income beneficiaries (Elise Carr, W. Sewell Wallace, Christopher G. Wallace) petitioned in 2013 to modify Paragraph FIFTEENTH to add a portability/removal-by-beneficiaries clause allowing beneficiaries to remove and replace a corporate trustee without court approval.
- Wells Fargo opposed, arguing trustee removal is governed exclusively by 20 Pa.C.S. § 7766 (removal by court only) and that the modification statute (20 Pa.C.S. § 7740.1) cannot be used to alter removal rules; the Orphans’ Court granted judgment for Wells Fargo and denied the petition.
- The Superior Court reversed, holding § 7740.1 is clear and unambiguous, contains no exclusion for modifying trustee-removal provisions, and therefore the petition to amend the trust could proceed; the case was remanded for merits consideration.
Issues
| Issue | Petitioners' Argument | Wells Fargo's Argument | Held |
|---|---|---|---|
| Whether beneficiaries may use 20 Pa.C.S. § 7740.1 to modify a trust to add a future power to remove/replace a corporate trustee | § 7740.1 authorizes modification of noncharitable irrevocable trusts (with court approval when not all beneficiaries consent); petitioners complied with § 7740.1 requirements and seek only to amend the instrument (not remove the trustee now) | Trustee contends § 7766 (trustee removal) is the exclusive mechanism for removing trustees; § 7740.1 cannot be used to effect or enable trustee removal and the UTC comment bars such use | Majority: Reverse. § 7740.1 is unambiguous and contains no exclusion for trustee-removal provisions; petitioners may proceed to seek the amendment under § 7740.1 (remand) |
| Proper role of statutory comments and specific-remedies rule in interpreting § 7740.1 vis-à-vis § 7766 | Rely on plain text of § 7740.1; comments are irrelevant where statute is unambiguous | Reliance on Uniform Law/UTC comment that Section 411/§ 7740.1 was not intended to allow modification to remove trustees; specific removal statute (§ 7766) should control | Majority: Reverse. Court will not apply comments where statutory text is plain; no textual cross-reference excludes § 7740.1 modifications and § 1939/1921 rules do not permit importing § 7766 limits absent ambiguity; dissent would apply § 1933 special-over-general canon to uphold § 7766 |
Key Cases Cited
- Estate of Fuller, 87 A.3d 330 (Pa. Super. 2014) (standard of review—statutory interpretation in Orphans’ Court is de novo)
- Brown v. Levy, 73 A.3d 614 (Pa. 2013) (principles on appellate review and statutory interpretation cited for plenary review)
- Cavallini v. Pet City & Supplies, Inc., 848 A.2d 1002 (Pa. Super. 2004) (statutory-construction admonition to invoke canons only when statute is ambiguous)
- In re T.P., 78 A.3d 1166 (Pa. Super. 2013) (textual clarity controls; courts must give effect to plain statutory language)
- Commonwealth v. Brown, 981 A.2d 893 (Pa. 2009) (statutory-comment use limited to ambiguous statutes)