Vincent J. Fumo Irrevocable Children's Trust Ex Rel. Benefit of Fumo
104 A.3d 535
Pa. Super. Ct.2014Background
- Vincent J. Fumo (Settlor/Father) created irrevocable inter vivos trusts (2006) for his children; each trust held 49.5% of Fumo Family Limited Partnership (FFLP) interests. Roseanne Pauciello was initial trustee; Mitchell Rubin was first successor designee.
- After criminal convictions and financial decline, Father borrowed $1.4M from FFLP (2010) and later amended the loan to extend repayment (ultimately to 2040) and then defaulted when he changed property titles.
- Pauciello resigned as trustee (Sept. 2011) and Rubin renounced (Oct. 2011) but neither timely appointed a successor within the 60‑day window required by Paragraph 14 of the Trust; the trusteeship was effectively vacant from Sept. 2011 to Oct. 2012.
- Pauciello belatedly appointed Samuel Bennett (Oct. 23, 2012); Daughter petitioned to remove Bennett and for appointment of a successor trustee. Father and Bennett later named Anthony Repici (Father’s longtime friend/physician) as successor trustee (June 2013).
- Orphans’ Court (Aug. 1, 2013) declared Bennett’s appointment void, declared Father’s appointment of Repici void, removed Repici and appointed Daughter’s nominee, Sylvia DiBona (CPA), as successor trustee. Father appealed; the Superior Court affirmed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Bennett’s appointment (and thus his appointment of Repici) was valid under trust’s Paragraph 14 | Daughter: Pauciello/Rubin failed to appoint within 60 days; Bennet’s appointment was therefore void | Father: belated appointment valid or cured; Bennett acted as trustee | Held: Appointment void — Pauciello/Rubin missed 60‑day window so Bennett’s appointment (and Bennett’s appointment of Repici) was nullity |
| Whether Father’s subsequent appointment of Repici was permissible though settlor is barred from appointing beneficiaries/issue as successor | Daughter: Father barred and Repici is Father’s alter ego who would serve Father’s interests, so appointment void | Father: Settlor may designate successor under Paragraph 14 when trustees fail; his designation should be honored | Held: Void — Paragraph 14 proscribes settlor (and implicitly his alter egos); court found Repici was Father’s alter ego and would not protect beneficiary interests |
| Whether equitable doctrine (unclean hands) justified refusing to enforce Father’s designation | Daughter: Father acted to thwart repayment (loan modifications, defaults); unclean hands bars his relief | Father: no such equitable bar; designation valid | Held: Orphans’ Court properly applied unclean‑hands reasoning — Father’s misconduct (manipulation, self‑dealing) supported nullification |
| Whether removal/replacement of trustee was proper under 20 Pa.C.S. § 7766(b)(4) (substantial change in circumstances) | Daughter: clear & convincing evidence removal serves beneficiary, consistent with trust purpose, suitable successor available, and substantial change occurred | Father: removal drastic; settlor intent and trustee powers favor honoring Settlor’s choice; Daughter didn’t plead removal of Repici | Held: Affirmed — McKinney factors met: removal in beneficiary’s best interest, consistent with trust purpose, DiBona suitable, substantial change (Settlor’s financial decline and self‑serving maneuvers) justified removal |
Key Cases Cited
- In re Estate of Brown, 30 A.3d 1200 (Pa. Super. 2011) (standards for appellate review of Orphans’ Court findings)
- In re Estate of Warden, 2 A.3d 565 (Pa. Super. 2010) (settlor’s intent is controlling; trust terms govern trustee duties)
- In re McKinney, 67 A.3d 824 (Pa. Super. 2013) (four‑part test for removal under § 7766(b)(4): best interests, consistency with material purpose, suitable successor, substantial change)
- Bosley v. Bosley, 26 A.3d 1104 (Pa. Super. 2011) (unclean‑hands doctrine applicable in trust/Orphans’ Court matters)
- Stauffer v. Stauffer, 351 A.2d 236 (Pa. 1976) (equitable unclean‑hands principles)