IN RE: ESTATE OF SOPHIA M. KRASINSKI A/K/A SOPHIA KRASINSKI A/K/A SOPHIA KRASINSKY LATE OF MORRISDALE (COOPER TOWNSHIP), CLEARFIELD COUNTY, PENNSYLVANIA DECEASED NOVEMBER 4, 2006
No. 1265 WDA 2015
No. 1289 WDA 2015
IN THE SUPERIOR COURT OF PENNSYLVANIA
FILED MAY 15, 2018
2018 PA Super 130
J-E02001-17
APPEAL OF: ESTATE OF SOPHIA M. KRASINSKI AND ITS EXECUTOR, EDWARD KRASINSKI
Appeal from the Order July 16, 2015 In the Court of Common Pleas of Clearfield County Orphans’ Court at No(s): 1707-0003
IN RE: ESTATE OF SOPHIA M. KRASINSKI, A/K/A SOPHIA KRASINSKI A/K/A SOFIA KRASINSKY, LATE OF MORRISDALE, (COOPER TOWNSHIP) CLEARFIELD COUNTY, PENNSYLVANIA DECEASED ON 11/04/06
APPEAL OF: PATRICIA KRASINSKI-DUNZIK
Appeal from the Order July 16, 2015 In the Court of Common Pleas of Clearfield County Orphans’ Court at No(s): No. 1707-0003
BEFORE: GANTMAN, P.J., BENDER, P.J.E., BOWES, J., SHOGAN, J., LAZARUS, J., OLSON, J., OTT, J., STABILE, J., and DUBOW, J.
The Estate of Sophia M. Krasinski (the Estate) through its executor, Edward Krasinski (Edward or the Executor), appeals from the order entered on July 16, 2015, which granted in part and denied in part exceptions to the order confirming the first and final account of the Estate. Patricia Krasinski-Dunzik (Patricia) also appeals from that order. Upon review, we affirm in part, vacate in part, and remand for proceedings consistent with this opinion.
I. Background
This matter arises from a dispute among siblings over the distribution of the real property from the Estate of their mother, Sophia M. Krasinski (the Decedent). The Decedent had four children: Patricia, who is married to Gary Dunzik (Gary) (collectively, the Dunziks); Eleanor J. Krasinski (Eleanor); James P. Krasinski (James); and Edward.
Decedent died testate on November 4, 2006, and the Will was probated and an Estate opened in 2007. Pursuant to the terms of her will, Edward was named as executor of the Estate and granted letters testamentary. The will directed that the Decedent‘s debts and funeral expenses be paid from the assets of the Estate, and that the residue of the Estate be left in equal shares to the Decedent‘s four children.
The primary assets of the Estate included three parcels of real estate.1 Those parcels were: 1) 20 acres of property with an appraised value of $55,000 (Johnny Hoover Place);2 2) a barn and 95 acres of property, which includes 68 acres of coal rights, with an appraised value of $230,000 (Wicks’ Place);3 and 3) a house, buildings,
On July 7, 2010, Edward, in his capacity as Executor of the Estate, filed a petition to permit the private sale of real estate to heirs. In that petition, Edward averred that Patricia was objecting to the distribution of all three properties because it was her position she already owns all of them based on a prior oral agreement between herself and the Decedent. After argument and briefing, on March 22, 2011, the orphans’ court granted the Executor‘s petition to permit private sale of the real estate. Specifically, the orphans’ court concluded that Patricia did not produce a writing to satisfy the requirements of the statute of frauds to prove that she owned these properties. The orphans’ court also concluded that Patricia did not present sufficient evidence to remove the purported oral contract from the statute of frauds.5
Prior to the sale, on February 8, 2013, letters were sent by the Estate‘s attorney to all four heirs explaining the process by which the sale would occur.6 Included in this letter was a statement indicating that if the Dunziks did not purchase all of the property of Homestead Place, there would be steps taken to ensure they could maintain ownership of the home and barn on the property. See Plaintiff‘s Exhibit 30 (Estate‘s Attorney‘s Letter, 2/8/2013).
The private sale was conducted on February 15, 2013. Edward, James, and Patricia attended the sale.7 Patricia did not bid on any of the properties.
James and his wife, Marie, bid $230,000 for Wicks’ Place. Edward bid $55,000 for Johnny Hoover Place. Edward, James, and Marie jointly bid $120,000 for Homestead Place.
On March 7, 2013, the Executor petitioned the orphans’ court to approve the sale of these properties to the residuary heirs for these amounts. Contrary to the letter of the Estate‘s attorney, no provision for Patricia and her husband‘s ownership of the house and barn at Homestead Place was included in the deeds. On March 14, 2013, Patricia filed pro se an objection to
On May 30, 2014, the Executor filed a first and final account. Patricia, through counsel, filed six objections. Those objections challenged: 1) the manner in which the private sale was conducted; 2) the failure to include a limiting condition regarding the Dunziks’ home and barn and underlying land in the Homestead Place deed; 3) the proposal to sell Homestead Place with a right-of-way from Johnny Hoover Place; 4) the appraised values of the properties as either suppressed or inflated; and 5) tax implications related to the Executor‘s report to the Internal Revenue Service that Patricia sold her interest in the land, and the Executor‘s date of death valuation of the real estate. Objection No. 6 was a series of miscellaneous objections, and is discussed in section III, infra, as that objection relates solely to the Executor‘s appeal.
A hearing was held on all objections on September 5, 2014. Testimony and evidence were sparse at this hearing and the majority of the testimony did not relate to the objections filed by the Dunziks. Furthermore, Patricia did not appear; however, both her husband, Gary, and the Dunziks’ attorney appeared.
On September 10, 2014, the orphans’ court ordered Patricia to file a brief within 30 days, and also provided the Executor 20 days thereafter to respond. Patricia did not file a brief, but the Executor filed answers to the objections on October 27, 2014.
On April 22, 2015, the orphans’ court entered an order and opinion in this matter. The orphans’ court sustained, in part, Objection No. 6, finding that natural gas payments received by the Estate for Homestead Place in the amount of $39,536.00 were the property of Patricia and not the Estate, and directed the filing of an Amended Account to remove the $39,536.00 from the Estate. The orphans’ court overruled the remaining objections. With respect to Objection Nos. 1 through 4, concerning the private sale of the properties, the orphans’ court concluded these issues were waived because they should have been raised in an appeal from the order confirming the private sale on April 30, 2013, pursuant to
On May 4, 2015, Patricia filed a motion for reconsideration, contending, inter alia, the April 30, 2013 order approving the private sale was interlocutory; the Executor and James and his wife removed a significant amount of timber from Homestead Place; the party who sold the Decedent‘s real estate was the Executor, and not Patricia; and seeking a revised account that properly reflected the value of the land on the date of the Decedent‘s death as the appraised value, and retraction of improper tax filing.9 On May 13, 2015, the
The Executor timely filed a notice of appeal, and Patricia filed a cross appeal.12 A divided panel of this Court affirmed the orphans’ court‘s order in part, vacated in part, and remanded for further proceedings. Thereafter, Patricia sought en banc review, which this Court granted. The matter is now ready for our disposition.13
In considering both appeals, we bear in mind our well-settled standard of review.
The [o]rphans’ [c]ourt decision will not be reversed unless there has been an abuse of discretion or a fundamental error in applying the correct principles of law. This Court‘s standard of review of questions of law is de novo, and the scope of review is plenary, as we may review the entire record in making our determination. When we review questions of law, our standard of review is limited to determining whether the [orphans‘] court committed an error of law.
In re Fiedler, 132 A.3d 1010, 1018 (Pa. Super. 2016) (citations and quotation marks omitted). For ease of discussion, we begin with Patricia‘s appeal.
II. Patricia‘s Appeal
We first consider Patricia‘s arguments related to the private sale of property that occurred on February 15, 2013. She argues that the orphans’ court erred in permitting the private sale that only allowed the heirs to participate in the bidding because it “was never intended to and did not, in fact, maximize the value of the real estate for the benefit of all of the heirs[.]” Patricia‘s Brief at 13. Patricia also argues that she was not given adequate notice of the sale. Id. at 15. Patricia further contends that there was no need for the Executor to offer Homestead Place for sale with a right of way in favor of Johnny Hoover Place, except to serve as an impediment and deterrent to her and her husband‘s purchase of Homestead Place. Id. at 16-17. Patricia also argues that James and Edward “changed[d] the terms of the sale” of Homestead Place by failing to recognize ownership by Patricia and her husband of the home and barn, the lands
The orphans’ court concluded that Patricia waived these issues by failing to appeal from the April 30, 2013 order confirming and approving the private sale, as required by
Effective February 12, 2012,
(a) General rule. An appeal may be taken as of right from the following orders of the Orphans’ Court Division: ...
(6) An order determining an interest in real or personal property;
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(c) Waiver of objections. Failure to appeal an order that is immediately appealable under paragraphs (a)(1)-(7) of this rule shall constitute a waiver of all objections to such order and such objections may not be raised in any subsequent appeal.
At the outset, it is important to recognize that the Executor had the authority to sell the Decedent‘s real estate, pursuant to Sections 3311(a) and 3351 of the Probate, Estate and Fiduciaries (PEF) Code.14 Furthermore, the orphans’ court authorized the Executor to sell the real estate by private sale to the heirs by order entered March 22, 2011. The private sale took place on February 15, 2013. Thereafter, on April 30, 2013, the orphans’ court approved the sale and ordered the properties conveyed to the grantees. See Order, 4/30/2013.
By way of background to the adoption of current Rule 342, we begin with the Pennsylvania Supreme Court‘s decision in In re Estate of Stricker, 977 A.2d 1115 (Pa. 2009), which involved the prior version of Rule 342. In Stricker, our Supreme Court held that an orphans’ court‘s order directing the co-executors to sell the estate‘s real estate was an interlocutory order that was not appealable under Rule 342 or Rule 313 (collateral order). At that time, under Rule 342, the determination of the finality of an order “making a distribution, or determining an interest in realty
In a concurring opinion, Mr. Justice Saylor wrote:
The majority aptly observes that our Rules of Appellate Procedure contain a vehicle to address the particularized concerns arising from orders determining interests in estate property. Specifically, Rule 342 permits an appeal from a distribution order or an order determining an interest in estate property to proceed as of right, inter alia, upon a determination of finality by the orphans’ court. See Pa.R.A.P. 342(1). The majority correctly interprets the rule as investing absolute, largely standardless discretion in the orphans’ court. I differ, however, with the majority‘s categorical assessment regarding the wisdom of the rule in this regard. See Majority Opinion, slip op. at 4.
In my view, there are substantial arguments to be made that estate administration would be better served by a rule providing for the general appealability of estate-related orders determining property interests at least in the real property setting. Notably, the present “determination of finality” procedure does not closely align with the justifications for permitting immediate appeals (facilitating the prompt resolution of potential title disputes to benefit purchasers, the estate, and beneficiaries). Further, the vesting of absolute, standardless discretion in our orphans’ courts yields the potential for disparate treatment. ...
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... Thus, I believe our Appellate and Orphans’ Court Procedural Rules Committees should continue to study the application of the present rule in practice and make recommendations for improvements where appropriate, particularly given the troubling implications of maintaining a system based on absolute, largely standardless discretion.
Id. at 1120-1121 (Saylor, J., concurring).
Thereafter, Rule 342 was revised, effective February 12, 2012. The revised rule eliminated the requirement that the orphans’ court make a determination of finality, and identified certain orders that would be appealable as of right.15 The Rule
[I]t is difficult to analogize civil litigation to litigation arising in estate, trust and guardianship administration. The civil proceeding defines the scope of the dispute, but the administration of a trust or estate does not define the scope of the litigation in Orphans’ Court. Administration of a trust or an estate continues over a period of time. Litigation in Orphans’ Court may arise at some point during the administration, and when it does arise, the dispute needs to be determined promptly and with finality SO that the guardianship or the estate or trust administration can then continue properly and orderly. Thus, the traditional notions of finality that are applicable in the context of ongoing civil adversarial proceedings do not correspond to litigation in Orphans’ Court.
In order to facilitate orderly administration of estates, trusts and guardianships, the 2011 amendments list certain orders that will be immediately appealable without any requirement that the Orphans’ Court make a determination of finality. Orders falling within subdivisions (a)(1)-(7) no longer require the lower court to make a determination of finality.
Subdivisions (a)(1)-(7) list orders that are unique to Orphans’ Court practice, but closely resemble final orders as defined in Rule 341(b).
Pa.R.A.P. 342, Comment.
Here, the private sale occurred on February 15, 2013, having been authorized by the orphans’ court‘s March 22, 2011 order. On March 7, 2013, the Executor filed a Report and Return of Private Sale (Report), seeking court approval of the private sale. The Report attached fiduciary deeds for the properties as Exhibits “1“, “2” and “3“. The Executor‘s fiduciary deed for Homestead Place contained NO provision regarding the Dunzik‘s ownership of the house and barn, underlying land, and appurtenances. The April 30, 2013 order finalized the sale of the real estate by the Executor and approved the fiduciary deeds attached to the Report as Exhibits 1, 2, and 3.
Significantly, the orphans’ court‘s April 30, 2013, order explicitly directs that “the Report of Edward P. Krasinski, Executor of the estate of the above Decedent, is hereby approved in all regards and the properties described in Exhibits 1, 2 and 3 of said Report shall be conveyed to the grantees in accordance with the terms set out in the Report.” Order, 4/30/2013. As such, the order clearly “determines an interest in real ... property.”
Furthermore, Patricia had challenged ownership of the properties in a civil action that caused the court to issue a stay on the Executor‘s sale of the properties. The civil suit resulted in the trial court‘s December 24, 2012, determination that there was no oral agreement upon which Patricia could base her claim of ownership of the properties. This Order was never appealed. See Footnote 5, supra. Therefore, it is evident that Patricia was aware that her claims of ownership to the properties would be lost upon sale of the properties.
When the orphans’ court entered its April 30, 2013, order, approving the private sale and the fiduciary deeds, Patricia
In Patricia‘s next two issues, she contends that the Executor mishandled the tax ramifications of the Estate by (1) reporting to the Internal Revenue Service that Patricia was the seller of her interest in real estate, rather than the Estate and, (2) improperly valuing the Decedent‘s real estate, resulting in unrealistic appreciation and capital gains. See Patricia‘s Brief at 23-32.
Our standard of review is well settled:
The findings of a judge of the orphans’ court division, sitting without a jury, must be accorded the same weight and effect as the verdict of a jury, and will not be reversed by an appellate court in the absence of an abuse of discretion or a lack of evidentiary support. This rule is particularly applicable to findings of fact which are predicated upon the credibility of the witnesses, whom the judge has had the opportunity to hear and observe, and upon the weight given to their testimony. In reviewing the [o]rphans’ [c]ourt‘s findings, our task is to ensure that the record is free from legal error and to determine if the Orphans’ Court‘s findings are supported by competent and adequate evidence and are not predicated upon capricious disbelief of competent and credible evidence.
In re Estate of Bechtel, 92 A.3d 833, 837 (Pa. Super. 2014).
We begin with Patricia‘s contention that it is the Estate that sold the real property, and not Patricia individually, and therefore she should not have been subjected to any tax ramifications of the sale. See Patricia‘s Brief at 23-29. In concluding that this issue was without merit, the orphans’ court opined:
In regard to Objection No. 5 wherein [Patricia] objects to receiving the 1099-S documents as to her sale of the one-half interest in the properties thereby incurring a capital gains tax, the Estate has acted appropriately.
20 Pa.C.S.A. § 301 entitled Title to Real and Personal Estate of the Decedent indicates, in part, as follows: (b) Real Estate. - Legal title to all real estate of a decedent shall pass at his death to his heirs or devisees, subject to all the powers granted to the personal representative by this Code and lawfully by the will and to all orders of the court.Therefore, while the Estate may have appeared to be the owner and seller of the properties, legal title actually was immediately vested in Sophia‘s four children as of her date of death. Since [Eleanor] renounced her right to her one-fourth interest to [Patricia], [Patricia] is deemed to have sold her 50% interest in the real estate via [Edward], the Executor, who had the legal power to do so pursuant to Court Order....
Orphans’ Court Opinion, 4/22/2015, at 10-11.
We disagree with the orphans’ court‘s analysis. Because the real estate was not specifically devised, we conclude the taxable gain from the private sale should have been borne by the Estate, as the Executor was the seller of the real estate.
Both the orphans’ court and the Executor fail to recognize the import of the second half of Section 301(b) of the PEF Code, which provides:
Legal title to all real estate of a decedent shall pass at his death to his heirs
or devisees, subject however, to all powers granted to the personal representative by this title and lawfully by the will and to all orders of the court.
Except as otherwise provided by the will, if any, the personal representative may sell, at public or private sale, any personal property whether specifically bequeathed or not, and any real property not specifically devised, and with the joinder of the specific devisee real property specifically devised. ...
Furthermore, Section 3357(a) provides, in relevant part:
If the personal representative has given such bond, if any, as shall be required in accordance with this title, any sale, mortgage, or exchange by him, whether pursuant to a decree or to the exercise of a testamentary power or of a power under this title, shall pass the full title of the decedent therein, unless otherwise specified, discharged from the lien of legacies, from liability for all debts and obligations of the decedent, from all liabilities incident to the administration of the decedent‘s estate, and from all claims of distributees and of persons claiming in their right, ...
In Quality Lumber & Millwork Co. v. Andrus, 200 A.2d 754 (Pa. 1964), the Pennsylvania Supreme Court construed several sections of the Fiduciaries Act, now sections 301(b), 3351 and 3357 of the PEF Code. The question was whether Mrs. Andrus, the sole heir and personal representative of the decedent, acquired title in her individual capacity to real estate owned by the decedent upon the death of the decedent, or not until a later distribution of real estate from the estate. Our Supreme Court held that title may pass to heirs upon death, but during the administration of the estate the title was ”expressly subjected to those powers statutorily granted to her in her capacity of personal representative.” Id. at 756 (emphasis in original). The Quality Lumber Court concluded: “Until a distribution had been made, the only proper source of full title of the decedent was the administratrix.” Id. at 759. Accord Tigue v. Basalyga, 304 A.2d 119 (Pa. 1973) (personal representative was an indispensable party in plaintiff‘s action against heirs to set aside a deed allegedly obtained by fraudulent acts committed by deceased-grantee).
Furthermore, because Patricia is a residuary beneficiary and the real estate was sold to liquidate the assets for distribution, Item III of the Will is controlling: “[A]ll taxes that may be assessed in consequence of my death, of whatever nature, and whatever jurisdiction imposed, shall be paid from my residuary estate as a part of the expense of the administration of my estate.” Last Will and Testament, 8/18/1999, at Item III.
Finally, and significantly, the Executor conveyed the properties by separate fiduciary deeds, wherein he identified himself as the Grantor.
Accordingly, based upon the above-cited provisions of the PEF Code, the holding in Quality Lumber, Item III of the Decedent‘s Will, and the fiduciary deeds, we conclude the Executor was the seller of the Decedent‘s real estate, and not Patricia, who was not specifically devised the real estate. As such, the Estate was responsible for the taxable gain from the private sale,
Next, Patricia argues that the Executor did not properly value the properties on the date of death of the Decedent, which resulted in unrealistic appreciation and capital gains. Here, the Executor used the real estate tax assessment value and a factor called the common level ratio to establish minimal values of the real estate interests on the date of the Decedent‘s death. Patricia points out “the Executor sold four (4) tracts of land, in fee, for a total consideration of $405,000.00, and experienced a ‘gain’ in value of $321,620.79 (nearly 500%) over the $83,379.00 reported.” Patricia‘s Brief at 31. Patricia maintains there should have been no gain at all.
Patricia argues the Internal Revenue Code provides for a “step-up” in basis pursuant to
We find no reason to conclude Patricia is entitled to relief on this claim. The Executor‘s Pennsylvania inheritance tax return, which used the real estate tax assessment value and the common level ratio to establish the date of death values, was “accepted as filed” by the Pennsylvania Department of Revenue. See Commonwealth of Pennsylvania Department of Revenue Notice of Inheritance Tax Appraisement, Allowance or Disallowance of Deductions and Assessment of Tax, 6/22/2009. Therefore, Patricia‘s argument that the Executor‘s method of determining the value of the real estate on the date of death was “grossly flawed”17 is unavailing.
Finally, while Patricia also argues that the properties were overvalued or undervalued in the appraisals, any issue as to valuation relates to the private sale that was approved by the April 30, 2013 order. Because we have determined, supra, that order was an appealable order, Patricia has waived this aspect of her claim.
In sum, we reverse Paragraph 3 of the orphans’ court‘s July 16, 2015 order, to the extent that it dismissed Patricia‘s exceptions that sought relief on her claim that the Estate, and not Patricia, was responsible for the taxable gain from the private sale. The remaining claims have been waived or warrant no relief.
III. The Estate‘s Objections
We now turn to the issues raised by the Estate and provide the following background. Contained within Patricia‘s sixth objection to the first and final account was the following:
41. [Edward] has received and improperly withheld from [Patricia] revenues related to gas exploration and leasing in the approximate amount of $40,000.00 related to the oil and gas
contained within and underlying [Homestead Place]. 42. [Patricia] is the owner of the oil & gas interest underlying [Homestead Place], by virtue of a deed from Edith Nearhood, dated July 9, 2002, and recorded as Instrument No. 200211242.
Objections to First and Final Account, 7/3/2014, at ¶¶ 41-42.
In sustaining this objection, ruling in favor of Patricia, and ordering the Executor to pay Patricia $39,536, the orphans’ court stated:
[The aforementioned objection] claims that [Edward] improperly withheld gas monies in the amount of $40,000.00 relating to [Homestead Place]. It states therein that [Patricia] is the actual owner of oil and gas interests underlying [Homestead Place] by virtue of a deed recorded in Clearfield County as Instrument No. 200211242. This deed was not offered as an exhibit at [the] time of [the] non-jury trial. Following the non-jury trial and receipt of briefs, while preparing the court‘s opinion, the undersigned went to the recorder of deeds office and obtained a copy of [the deed which Patricia references]. The court hereby takes judicial notice of the deed, and the court has caused it to be filed with the record for potential appellate review. This 2002 deed is from Edith Nearhood as grantor, to [Patricia] as grantee. The deed describes a parcel of 96 acres and one hundred and eight perches in Cooper Township, Clearfield County, with Tax Map number 110-R7-9, and purports to convey coal, gas and oil, and other subsurface rights to [Patricia]. [Homestead Place] in the case at bar is identified with tax map number 110-R7-9.
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This court can find no testimony from the non-jury trial where this issue, being [Patricia‘s] claim that she is the full and complete owner of the oil and gas interests under this tract, was discussed. In fact, no evidence was submitted by either party.
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A close examination of the first and final account shows on page 9 under “Other Income” the gas lease payments. By far, most of the payments are from [Homestead Place]. (A total of $39,536.00). On page 3 under “Receipts of Principal” the Estate lists its assets; [Homestead Place] is number 4 under the “Real Estate” heading. It is described as “House, buildings, and 98.84 acres (less 96 A of coal, minerals, gas & oil)....” (Emphasis added). The same exclusion of sub-surface rights [appears in other exhibits]. The court, in trying to analyze this mishmash, wondered if perhaps the sale of [Homestead Place] was not to include the oil and gas rights such that the same could be retained in the Estate for the future benefit of all heirs. However, a review of the documents describing the terms of the private sale provides no reference whatsoever to any oil, gas or other sub-surface rights as to [Homestead Place].
[] Exhibit 27 is a copy of the memorandum of lease dated September 15, 2009 wherein [Edward, as executor of the Estate,] confirms the Estate has entered into a gas lease (or consultant agreement) with Long Consulting Group. This is clearly referring to [Homestead Place,] as the property subject to the lease is described as Tax Parcel No. 110-R07-9, 98.84 acres and in Cooper Township. The court wonders how the executor can enter into a gas lease on a property which the first and final account (and the inheritance tax return) clearly indicates that the oil and
gas rights are excluded. (at least 96 acres thereof). Based upon a substantial lack of information and a severely inadequate record, the court must decide if the Estate properly accounted for the gas royalties from [Homestead Place]. The court boils it down to the following. [Patricia] has a deed purporting to convey to her all sub-surface rights beneath the Homestead surface. The Estate in its Inheritance Tax return and first and final account clearly indicates it does not own 96 acres of oil, gas and other sub-surface rights below the Homestead [Place] surface. The court finds [Patricia] has met her burden of proof and finds the Estate erred by including Homestead [Place] gas royalties in the amount of $39,536.00 as an Estate asset. These monies will be paid to [Patricia] and removed from the Estate assets.
Orphans’ Court Opinion, 4/22/2015, at 17-19 (unnecessary capitalization and some citations omitted omitted).
Based on the foregoing, the orphans’ court sustained Patricia‘s Objection No. 6, paragraphs 41 and 42, and required the Executor to pay Patricia $39,536. The Executor filed exceptions, arguing that Patricia was not the owner of the sub-surface estate at issue, and the orphans’ court erred by granting Patricia compensation on this basis. The Executor also contended that Edith Nearhood never owned the sub-surface estate and that any deed she granted could not have conveyed what she did not own.
On July 16, 2015, the orphans’ court dismissed the Executor‘s exceptions, concluding that the Estate “has attempted to introduce facts and documents not of record in the present matter” in support of its dismissal. Order, 7/16/2015, at ¶ 1. This issue is the basis of the Estate‘s appeal.
The Executor first contends that the orphans’ court erred by purporting to take judicial notice of the Nearhood deed, then giving it conclusive effect, and thereby sustaining Patricia‘s objections related to the oil and gas payments. Estate‘s Brief at 12-16.
Kinley v. Bierly, 876 A.2d 419, 421 (Pa. Super. 2005) (some citations and quotation marks omitted).
Here, the orphans’ court took judicial notice of a deed filed in the recorder of deeds office. This, in and of itself, was not error because it is well settled that “the court has the right to take judicial notice of public documents.” Bykowski v. Chesed, Co., 625 A.2d 1256, 1258 n.1 (Pa. Super. 1993). However, the rule provides that “[o]n timely request, a party is entitled to be heard on the propriety of taking judicial notice and the nature of the fact to be noticed. If the court takes judicial notice before notifying a party, the party, on request, is still entitled to be heard.”
Instantly, the Executor became aware of the orphans’ court‘s decision to take judicial
In this case, the need was even more apparent where the orphans’ court took judicial notice without any request by Patricia or notice to any party. The orphans’ court then went on to offer a series of factual conclusions on this basis. The Nearhood deed may or may not be a valid deed to the property. However, the orphans’ court should leave it to Patricia and the Executor to litigate that issue. Accordingly, we vacate Paragraph 1 of the orphans’ court‘s July 16, 2015 order, dismissing the Estate‘s exceptions, and we remand to the orphans’ court to conduct a hearing on this objection. At that hearing, the burden is on Patricia, as the party objecting to the first and final account, to present evidence of her right to those oil and gas payments.
In conclusion, based upon the above discussion concerning the appeals of Patricia and the Estate, we affirm the orphans’ court‘s July 16, 2015, order in part, reverse in part, vacate in part, and remand for proceedings consistent with this Opinion.
Order affirmed in part, reversed in part, vacated in part, and remanded for further proceedings consistent with this Opinion. Rule to Show Cause discharged. Jurisdiction relinquished.
President Judge Gantman, President Judge Emeritus Bender, Judge Bowes, Judge Lazarus, Judge Olson, Judge Stabile and Judge Dubow join the majority opinion.
Judge Shogan files a concurring and dissenting opinion.
Judgment Entered.
Joseph D. Seletyn, Esq.
Prothonotary
Date: 5/15/2018
Notes
A personal representative shall have the right to and shall take possession of, maintain and administer all the real and personal estate of the decedent, except real estate occupied at the time of death by an heir or devisee with the consent of the decedent. He shall collect the rents and income from each asset in his possession until it is sold or distributed, and, during the administration of the estate, shall have the right to maintain any action with respect to it and shall make all reasonable expenditures necessary to preserve it. The court may direct the personal representative to take possession of, administer and maintain real estate so occupied by an heir or a devisee if this is necessary to protect the rights of claimants or other parties. Nothing in this section shall affect the personal representative‘s power to sell real estate occupied by an heir or devisee.
Except as otherwise provided by the will, if any, the personal representative may sell, at public or private sale, any personal property whether specifically bequeathed or not, and any real property not specifically devised, and with the joinder of the specific devisee real property specifically devised. ...
Id. at 269.Prior to the most recent revision, [Rule 342] “[did] not require that any particular class of orders be treated as final, but instead [left] the determination of finality of orders not disposing of all claims and all parties up to the Orphans’ Court judge.” In re Estate of Stricker, 602 Pa. 54, 977 A.2d 1115, 1118 (Pa. 2009). Concurring in Stricker, then-Justice, now Chief Justice, Saylor questioned the prudence of this rule, as the case-by-case determination of finality procedure could lead to inconsistent results in different Orphans’ Courts, and could cause undue delays in estate administration. Justice Saylor opined that “allowing appeals as of right most frequently would result in a net benefit.” Id. at 1121 (Saylor, J., concurring). Following Justice Saylor‘s recommendation in Stricker, Rule 342 was revised to provide for appeals as of right for specified categories of Orphans’ Court orders. See
Pa.R.A.P. 342(a) . The rule explicitly states that objections to such orders must be raised in an immediate, timely appeal, on pain of waiver. SeePa.R.A.P. 342(c) .