Estate of: DiMatteo, A., Appeal of: DiMatteo, C. ( 2023 )

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NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37
IN RE: ESTATE OF ANGELA : IN THE SUPERIOR COURT OF
DIMATTEO : PENNSYLVANIA
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APPEAL OF: CASIMIRO DIMATTEO :
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: No. 362 WDA 2022
Appeal from the Order Entered March 2, 2022
In the Court of Common Pleas of Allegheny County Orphans' Court at
No(s): No. 02-18-6412
BEFORE: BOWES, J., OLSON, J., and COLINS, J.*
MEMORANDUM BY OLSON, J.: FILED: JANUARY 27, 2023
Appellant, Casimiro DiMatteo, appeals from an order entered on March
2, 2022, setting aside a conveyance of real property from the estate of Angela
DiMatteo, Appellant’s mother, following the removal of Appellant as executor.
We affirm.
We briefly set forth the facts and procedural history of this case as
follows. On September 25, 2013, Angela DiMatteo executed a last will and
testament naming Appellant as executor of her estate. The will further stated
that, should Appellant be unable to serve as executor, then his wife, Silvia
Collucio DiMatteo, should serve in his stead. On October 5, 2018, Angela
DiMatteo died. On October 18, 2018, letters of testamentary were issued to
Appellant. On December 12, 2019, Annina Radakovich DiMatteo, one of the
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* Retired Senior Judge assigned to the Superior Court.
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other heirs to Angela DiMatteo’s estate, filed a petition to compel Appellant to
file an accounting of the estate. Thereafter,
[a]lmost a year later, during a conference with the orphans' court,
the parties reached a consent order, dated January 20, 2021, and
recorded January 25, 2021. In relevant part, it required that
Bodnar Real Estate perform an appraisal of the real estate at 412
Pearl Street, Pittsburgh, Pennsylvania (“Pearl Street property”)
within 30 days. Additionally, [Appellant] was to file state and
federal fiduciary tax returns within 30 days after he received the
last 1099 for estate income, receipt of which was to be provided
to all counsel. [Appellant] was then to file a formal first and final
account within 30 days after the tax returns were filed.
On February 12, 2021, before [the arrival of Appellant’s deadline]
to comply with that order, Annina filed an emergency petition to
remove [Appellant] as executor. Annina claimed that [Appellant]
failed to adhere to the terms of the consent order, filed a
$180,000[.00] claim with the estate for caretaking services,
transferred the Pearl Street property from the estate to his wife
and children for one dollar, and filed a claim for an executor's fee.
Additionally, as a result of [Appellant’s] actions and failure to
adhere to legal advice, his counsel sought permission to withdraw.
[Appellant] filed a pro se response to Annina's petition.
On February 19, 2021, the orphans' court granted counsel's
request [to withdraw]. Following a hearing on Annina's
emergency petition, the court also revoked the letters
testamentary issued to [Appellant] and directed that Warner
Mariani, Esquire, be appointed administrator of the Estate of
Angela DiMatteo upon proper application to the Wills Division of
the Allegheny County Department of Court Records.
Notably, the orphans' court bypassed the substitute executrix
named in Ms. DiMatteo's Will, [Appellant’s] wife Sylvia, because
of her participation in [the transfer of] property from the estate to
herself and [her] children.
In re Est. of DiMatteo, 272 A.3d 486, at *1-2 (Pa. Super. 2022)
(unpublished memorandum).
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Appellant challenged his removal as executor in a prior appeal to this
Court. Ultimately, we affirmed Appellant’s removal as executor and approved
the appointment of Attorney Mariani as successor. See id. More specifically,
and important to the current appeal, this Court determined:
Shortly after issuance of the consent order, [Appellant] sent a
family settlement agreement to the other beneficiaries proposing
to distribute the remaining Estate assets, apparently to resolve
[the distribution of the estate] informally. He filed a status report
indicating that the administration of the Estate was complete. He
did this despite being directed by the orphans' court to obtain an
appraisal of the Pearl Street property and to file a formal account.
Additionally, [Appellant] created a substantial conflict of interest
with his fiduciary duties as executor of the Estate, when he
claimed the Estate owed him $180,000[.00] for taking care of his
mother prior to her death.
* * *
Furthermore, [Appellant] engaged in self-dealing by paying his
caretaking claim out of the Estate and transferring the Pearl Street
property to his wife and children. We [] therefore conclude[d] that
the trial court did not abuse its discretion in removing [Appellant]
as executor of the Estate.
* * *
[Moreover], the orphans' court explained that Silvia clearly was
aligned with her husband by advancing his position that he was
entitled to payment for caretaker services and accepting the
transfer of the property. [Appellant] had conveyed a valuable
parcel of real estate from the estate to his wife and children for
the nominal consideration of one dollar. Silvia's participation in
that conveyance severely compromised her fitness to serve as a
successor executrix.
Id. at *3 (quotations, case citations, and original brackets omitted). No
further appeal resulted.
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On December 21, 2021, Attorney Mariani, as successor executor, filed
a petition to revoke the conveyance of the Pearl Street property to Appellant’s
wife, Silvia DiMatteo, and their two children, Enrico DiMatteo and Rosella
DiMatteo. On March 1, 2022, the trial court held a hearing on the petition to
revoke. At that hearing, Appellant did not testify and, instead, invoked his
right against self-incrimination under the Fifth Amendment of the United
States Constitution. Silvia DiMatteo, Enrico DiMatteo, and Rosella DiMatteo
also attended the hearing, but did not testify or otherwise present evidence.
On March 2, 2022, the trial court entered an order voiding the sale of the Pearl
Street property to Silvia DiMatteo, Enrico DiMatteo, and Rosella DiMatteo.
This appeal resulted.1
On appeal, Appellant presents the following issues for our review:
I. Whether the trial court’s order revoking the conveyance of
real [] property by Appellant[,] who[] is the former executor
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1 Appellant filed a notice of appeal on March 31, 2022. On April 7, 2022, the
trial court directed Appellant to file a concise statement of errors complained
of on appeal pursuant to Pa.R.A.P. 1925(b). Appellant complied timely on
April 27, 2022. The trial court issued an opinion pursuant to Pa.R.A.P. 1925(a)
on May 31, 2022.
Silvia DiMatteo, Enrico DiMatteo, and Rosella DiMatteo, in their own right,
appealed the March 2, 2022 order voiding the sale of the Pearl Street property.
That appeal is docketed at 363 WDA 2022. The trial court issued a separate
opinion pursuant to Pa.R.A.P. 1925(a) on May 31, 2022, that specifically
addressed the issues pertaining to Silvia, Enrico, and Rosella DiMatteo.
Finally, we note that upon review of the certified record, the trial court
subsequently approved the sale of the Pearl Street property to an independent
third-party by order entered on May 18, 2022. Neither Appellant nor his wife
and/or two children appealed that decision.
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of the estate[,] constituted a surcharge action2 and was
entitled to an accounting of the estate?
II. Whether the trial court erred as a matter of law and abused
its discretion when it issued an order revoking the
conveyance of real property because it failed to give []
Appellant an opportunity to be heard [and precluded]
Appellant [from presenting evidence]?
III. Whether the order revoking the conveyance of real property
constituted a denial of the claim [] Appellant filed against
the estate for services provided to the estate?3
Appellant’s Brief at 5 (complete capitalization omitted).
In his first issue presented, Appellant argues, in sum:
Here, the [t]rial [c]ourt voided the real estate transfer made by []
Appellant that was settlement for a claim [] Appellant had against
the estate. Thus, after the revocation of the deed [of] transfer of
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2 Surcharge is a remedy when an executor fails “to exercise common
prudence, skill and caution in the performance of [his] fiduciary duty, resulting
in a want of due care.” In re Est. of Warden, 2 A.3d 565, 573 (Pa. Super.
2010), citing In re Miller's Estate, 26 A.2d 320, 321 (Pa. 1942) (defining
“surcharge” as “the penalty for failure to exercise common prudence, common
skill and common caution in the performance of the fiduciary's duty ...
imposed to compensate beneficiaries for loss caused by the fiduciary's want
of due care”); see also In re Paxson Trust I, 893 A.2d 99, 120–121 (Pa.
Super. 2006) (“a surcharge was viewed not as compensation for any possible
loss, but as punishment for the fiduciary's improper conduct”). “[A] fiduciary
who has negligently caused a loss to an estate may properly be surcharged
for the amount of such loss.” In re Scheidmantel, 868 A.2d 464, 494 (Pa.
Super. 2005). “Before the court can impose a surcharge, it must give the
executor an opportunity to be heard.” In re Est. of Westin, 874 A.2d 139,
145 (Pa. Super. 2005), citing In re Stitzel's Est., 70 A. 749, 750 (Pa. 1908)
(“A surcharge is an adjudication against the accountant which cannot be made
without notice to him and an opportunity to be heard before he is
condemned.”).
3 Appellant concedes that “this [third] issue is deemed moot as [] Appellant
may still pursue a claim against the estate.” Appellant’s Brief at 16. As such,
we need not address this claim.
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real property, the [e]state has been unjustly enriched. The
[e]state has received the benefit of care services for
approximately four years and has not had to pay for the benefit
of receiving those services. Therefore, by voiding the transfer of
real estate [which was] part of the settlement for services, [the
orphans’ court order] constituted a surcharge action against []
Appellant.
Here, [] Appellant provided care services and detrimentally relied
on the payment for his services. Now that his conveyance has
been revoked, [] Appellant had [the] value of services provided
stripped from him and his compensation for those services has
been taken away from him. Thus, such actions constitute a
surcharge.
Id. at 12.
We adhere to the following standard of review:
When reviewing a decree entered by the Orphans' Court, this
Court must determine whether the record is free from legal error
and [whether] the trial court's factual findings are supported by
the evidence. Because the Orphans' Court sits as the fact-finder,
it determines the credibility of the witnesses and, on review, this
Court will not reverse the trial court's credibility determinations
absent an abuse of discretion.
In re Est. of Aiello, 993 A.2d 283, 287 (Pa. Super. 2010) (citations omitted).
Our Supreme Court has explained that “the power to set aside” an estate
administrator’s sale of real property “is delimited by Section 3360” of the
Probate, Estates and Fiduciaries Code. Est. of Bosico, 412 A.2d 505, 506
(Pa. 1980), citing 20 Pa.C.S.A. § 3360. More specifically, under Section 3360:
(a) Inadequacy of consideration or better offer.--When a personal
representative shall make a contract not requiring approval of
court, or when the court shall approve a contract of a personal
representative requiring approval of the court, neither inadequacy
of consideration, nor the receipt of an offer to deal on other terms
shall, except as otherwise agreed by the parties, relieve the
personal representative of the obligation to perform his contract
or shall constitute ground for any court to set aside the contract,
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or to refuse to enforce it by specific performance or otherwise:
Provided, That this subsection shall not affect or change the
inherent right of the court to set aside a contract for fraud,
accident or mistake. Nothing in this subsection shall affect
the liability of a personal representative for surcharge on
the ground of negligence or bad faith in making a contract.
20 Pa.C.S.A. § 3360(a) (emphasis added). “[A]bsent a showing of fraud, if
an administrator fails to comply with his fiduciary duties in a manner
evidencing neglect or bad faith, the remedy of surcharge is available under
Section 3360.” Est. of Bosico, 412 A.2d at 507. “The intent of the
legislature in enacting this statute was to prevent courts from [assuming] the
position of [a] super executor/administrator, and to leave essentially private
transactions in the hands of the individuals involved.” In re Est. of Hughes,
538 A.2d 470, 472 (Pa. 1988) (citation omitted).
This Court has further explained:
An executor, as a fiduciary of the estate, is required to use such
common skill, prudence and caution as a prudent man, under
similar circumstances, would exercise in connection with the
management of his own estate. [….A] surcharge may be imposed
on the executor to compensate the estate for any losses incurred
by the executor's lack of due care. When seeking to impose a
surcharge against an executor for the mismanagement of an
estate, those who seek the surcharge bear the burden of proving
the executor's wrongdoing. However, where a significant
discrepancy appears on the face of the record, the burden shifts
to the executor to present exculpatory evidence and thereby avoid
the surcharge.
In re Est. of Geniviva, 675 A.2d 306, 310–311 (Pa. Super. 1996) (internal
citations and quotations omitted).
Whereas,
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this Court has recognized the rule forbidding an executor from
placing his own interests ahead of the interests of other
beneficiaries:
An executor is a fiduciary no less than is a trustee and, as
such, primarily owes a duty of loyalty to a beneficiary of his
trust. Executors, as well as other fiduciaries, are under an
obligation to make full disclosure to beneficiaries respecting
their rights and to deal with them with utmost fairness.
The Supreme Court has elaborated accordingly that:
He that is entrusted with the interest of others, cannot be
allowed to make the business an object of interest to
himself; because from the frailty of nature, one who has the
power will be too readily seized with the inclination to use
the opportunity for serving his own interest at the expense
of others for whom he is entrusted.
Thus, the rule forbidding self-dealing serves both to shield the
estate and its beneficiaries and ensures the propriety of the
executor's conduct. Consequently, the rule is inflexible, without
regard to the consideration paid, or the honesty of intent.
In re Est. of Walter, 191 A.3d 873, 881 (Pa. Super. 2018) (internal
quotations, citations, and original brackets omitted).
“Where there is self-dealing on the part of a fiduciary, it is immaterial
to the question of his liability in the premises whether he acted without
fraudulent intent or whether the price received for his sale of trust property
was fair and adequate.” In re Noonan's Est., 63 A.2d 80, 84 (Pa. 1949)
(citation omitted). “[T]he situation is no different where the breach consists
of the fiduciary's marked preference of a third person over the beneficiary in
respect of a disposition of estate property.” Id. “As in the case of
self-dealing, such conduct constitutes a violation of the fiduciary's basic duty
to the beneficiary.” Id. (citation omitted). “In the case of an offending
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fiduciary, if the trust property which he improperly sold is held by or for him,
the remedy is a direct setting aside of the sale upon attack by one having
standing to complain, e.g., a testamentary beneficiary or cestui que trust.”
Id. (citation omitted; emphasis added).
Within the context of a prior appeal, this Court determined that
Appellant’s conveyance of the Pearl Street property to his wife and children
for nominal consideration constituted an act of self-dealing and, thus, a breach
of his duties to other beneficiaries of the estate. The orphans’ court
acknowledged this determination as the law of the case in the proceedings
that led up to this appeal wherein the property transfer was revoked. This
Court has previously explained the law of the case doctrine as follows:
The law of the case doctrine refers to a family of rules which
embody the concept that a court involved in the later phases of a
litigated matter should not reopen questions decided by another
judge of that same court or by a higher court in the earlier phases
of the matter.... The various rules which make up the law of the
case doctrine serve not only to promote the goal of judicial
economy ... but also operate (1) to protect the settled
expectations of the parties; (2) to insure uniformity of decisions;
(3) to maintain consistency during the course of a single case; (4)
to effectuate the proper and streamlined administration of justice;
and (5) to bring litigation to an end.
Thus, under the doctrine of the law of the case,
when an appellate court has considered and decided a
question submitted to it upon appeal, it will not, upon a
subsequent appeal on another phase of the case, reverse its
previous ruling even though convinced it was erroneous.
This rule has been adopted and frequently applied in our
own [Commonwealth]. It is not, however, inflexible. It does
not have the finality of the doctrine of res judicata. “The
prior ruling may have been followed as the law of the case
but there is a difference between such adherence and res
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judicata; one directs discretion, and the other supercedes
[sic] it and compels judgment. In other words, in one it is
a question of power, in the other of submission.” The rule
of the “law of the case” is one largely of convenience and
public policy, both of which are served by stability in judicial
decisions, and it must be accommodated to the needs of
justice by the discriminating exercise of judicial power.
Neidert v. Charlie, 143 A.3d 384, 390–391 (Pa. Super. 2016) (internal
citations omitted).
In this case, the trial court opined:
[Appellant] maintains that the action which properly should have
been taken by the court was a surcharge rather than a revocation
of the transfer of title. That argument disregards the complicity
of [Appellant] and his wife, to whom the property was transferred.
As the Superior Court has already determined in its opinion filed
on January 19, 2022, Silvia was cognizant of [Appellant’s] conduct
and was complicit in the illicit transfer. In such circumstances,
the impropriety is not fully addressed by a surcharge; the
transaction must be deemed void.
* * *
The Superior Court has observed that: “[Appellant] created a
substantial conflict of interest with his fiduciary duties as executor
of the [e]state when he claimed the [e]state owed him
$180,000.00 for taking care of his mother prior to her death. An
executor has ‘a duty to see that her purely private interests were
not advanced at the expense of the estate.’”
* * *
[Moreover, Appellant] asserts that the court erred and abused its
discretion when it unjustly enriched the estate by revoking the
transfer of the deed. To the extent that that complaint is again
referencing forgiveness of the purported $180,000[.00] claim of
[Appellant] and is asserting that such forgiveness enriched the
estate but provided no quid pro quo to [Appellant], the contention
remains unconvincing. Voiding the transaction does not
necessarily preclude a reassertion of the claim during the
pendency of the estate.
Trial Court Opinion, 5/31/2022, at 1-3.
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Having already determined, in a prior appeal, that Appellant engaged in
self-dealing by paying his alleged caretaking claim out of the estate and
transferring the Pearl Street property to his wife and children and that this
conveyance constituted a substantial conflict of interest with his fiduciary
duties as executor of the estate, we discern no trial court abuse of discretion
in setting aside the property sale. We are bound by the prior panel’s
determinations under the law of the case doctrine. Through self-dealing,
Appellant’s conduct constituted a violation of his basic duty as fiduciary to the
beneficiaries. Therefore, as set forth at length above, the proper remedy was
to set aside the property sale. Finally, we note that the orphans’ court never
ordered Appellant to pay a penalty as punishment for improper fiduciary
conduct. Accordingly, we reject Appellant’s suggestion that the court’s
remedy constituted a surcharge. Hence, Appellant is not entitled to relief on
his first claim.
Next, Appellant argues that he “is entitled to a hearing because the
action involved a surcharge action and [] Appellant never had an opportunity
to be heard during a formal surcharge hearing.” Appellant’s Brief at 13.
Appellant claims that the trial court based its decision “solely []upon a false
assertion that the settlement claim by [] Appellant had already been decided
previously” when he was removed as executor and that the successor
administrator “presented no other evidence[.]” Id. at 15. Appellant claims
that he was entitled to “a formal surcharge hearing” and, as a result, the trial
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court “erred as a matter of law and fact because it abused its discretion when
it issued an order revoking the conveyance of real property and didn’t give []
Appellant an opportunity to be heard.” Id. at 15-16.
We adhere to the following standards:
A question regarding whether a due process violation occurred is
a question of law for which the standard of review is de novo and
the scope of review is plenary. Due process requires that the
litigants receive notice of the issues before the court and an
opportunity to present their case in relation to those issues. It is
well settled that procedural due process requires, at its core,
adequate notice, opportunity to be heard, and the chance to
defend oneself before a fair and impartial tribunal having
jurisdiction over the case.
Int. of S.L., 202 A.3d 723, 729 (Pa. Super. 2019) (internal citations and
quotations omitted”). “Due process requires only that a party be provided an
opportunity to be heard; it does not confer an absolute right to be heard.”
Captline v. County of Allegheny, 718 A.2d 273, 275 (Pa. 1998) (citations
omitted).
Appellant’s second claim presumes that the revocation of the transfer of
the Pearl Street property constituted a surcharge action and that, within the
context of such a proceeding, he was entitled to, but denied, certain
procedural rights such as notice, opportunity to be heard, and the chance to
present evidence. As set forth above, we have rejected Appellant’s suggestion
that a surcharge was imposed or that surcharge was the appropriate remedy
for the improper sale of the property at issue. Furthermore, as the trial court
properly observed, “[o]n March 1, 2022, [Appellant] was given the opportunity
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to present testimony regarding his claim and conduct as [e]xecutor” but,
instead, “invoke[ed] his right against self-incrimination under the Fifth and
Fourteen Amendments to the Constitution of the United States, declin[ing] to
testify regarding either matter.” Trial Court Opinion, 5/31/2022, at 6.
Further, the orphans’ court opined that Appellant’s argument “that he had
been denied an opportunity to be heard [] would be seen to be in conflict with
his filing of a thirty-eight[-]page response, inclusive of exhibits, in advance of
the March 1[, 2022] hearing and his subsequent assertion of a right not to
testify at the hearing.” Id. Upon review, we agree with the trial court’s
assessment. Appellant was given the opportunity to be heard at the March 1,
2022 hearing, which was convened on the successor administrator’s petition
to revoke the conveyance of the Pearl Street property. There is no dispute
that Appellant received notice of the issues before the court, the proposed
revocation of the property sale, and was given an opportunity to present his
case in relation to those issues but, ultimately, he invoked his right not to
testify and did not avail himself of the opportunity to contest the
administrator’s contentions. See N.T., 3/1/2022, at 20. Accordingly,
Appellant is not entitled to relief.4
Order affirmed.
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4 We express no opinion regarding the merits of Appellant’s claim against
the estate for caretaking services.
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Judgment Entered.
Joseph D. Seletyn, Esq.
Prothonotary
Date: 1/27/2023
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