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

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NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37
IN RE: THE ESTATE OF ANGELA : IN THE SUPERIOR COURT OF
DIMATTEO : PENNSYLVANIA
:
:
APPEAL OF: SILVIA DIMATTEO, :
ENRICO DIMATTEO, AND ROSSELLA :
DIMATTEO :
:
: No. 363 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: FEBRUARY 22, 2023
Appellants, Silvia DiMatteo, Enrico DiMatteo, and Rosella DiMatteo
(Appellants), appeal from the order entered on March 2, 2022, setting aside
a conveyance of real property from the estate of Angela DiMatteo to
Appellants, following the prior removal of Casimiro DiMatteo (Casimiro) as
executor of the estate.1 We affirm.
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* Retired Senior Judge assigned to the Superior Court.
1 Casimiro and Silvia DiMatteo are married; Enrico and Rosella DiMatteo are
their adult children. Angela DiMatteo was Casimiro’s mother. Casimiro, in
his own right, separately appealed the March 2, 2022 order voiding the sale
of the property at issue herein. That appeal is docketed in this Court at 362
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
Casimiro. On September 12, 2022, this Court received correspondence from
Casimiro’s attorney stating that Casimiro “joins in the brief and argument
presented by Appellants” but he would “not be filing a brief or participating in
oral arguments.” Correspondence, 9/11/2022, at *1.
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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 Casimiro as executor of her estate. The will further stated
that, should Casimiro 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 testamentary were issued to
Casimiro. On December 12, 2019, Annina Radakovich DiMatteo, Angela
DiMatteo’s daughter and one of the other heirs to the estate, filed a petition
to compel Casimiro 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, Casimiro 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. Casimiro 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 Casimiro’s deadline]
to comply with [the consent] order, Annina filed an emergency
petition to remove [Appellant] as executor. Annina claimed that
Casimiro 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 Casimiro’s actions and failure to adhere
to legal advice, his counsel sought permission to withdraw.
Casimiro filed a pro se response to Annina's petition.
On February 19, 2021, the orphans' court granted counsel's
request. Following a hearing on Annina's emergency petition, the
court also revoked the letters testamentary issued to Casimiro and
directed that Warner Mariani, Esquire, be appointed administrator
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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, Casimiro’s wife Silvia, 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).
Casimiro challenged his removal as executor in a prior appeal to this
Court. Ultimately, we affirmed Casimiro’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, Casimiro 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, Casimiro 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, Casimiro 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 Casimiro 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
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entitled to payment for caretaker services and accepting the
transfer of the property. Casimiro 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.
On December 21, 2022, Attorney Mariani, as successor executor, filed
a petition to revoke the conveyance of the Pearl Street property to Appellants.
On March 1, 2022, the trial court held a hearing on the petition to revoke. At
that hearing, Casimiro appeared but did not testify and, instead, invoked his
right against self-incrimination under the Fifth Amendment of the United
States Constitution. Appellants 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 Appellants. This appeal
resulted.2
On appeal, Appellants raise the following issues for our review:
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2 Appellants filed a notice of appeal on March 31, 2022. On April 7, 2022, the
trial court directed Appellants to file a concise statement of errors complained
of on appeal pursuant to Pa.R.A.P. 1925(b). Appellants complied timely on
April 25, 2022. The trial court issued an opinion pursuant to Pa.R.A.P. 1925(a)
on May 31, 2022.
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 Casimirio nor
Appellants appealed that decision.
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I. Whether the trial court’s issuance of an order revoking
conveyance of real property by the former executor of the
estate constituted a surcharge action[?]
II. If a surcharge action, whether the trial court erred as a
matter of law and fact and abused its discretion in issuing
the order revoking conveyance of real property without
giving any interested party an opportunity to be heard and
without taking any evidence[?]
III. If not a surcharge action, whether the trial court erred as a
matter of law and fact and abused its discretion in issuing
the order revoking conveyance of real property without
giving any interested party an opportunity to be heard and
without taking any evidence[?]
IV. Whether the order revoking conveyance of real property by
the former executor of the estate was a denial of the claim
filed against the estate[?]
V. If the order was a denial of the claim, whether the trial court
erred as a matter of law and fact and abused its discretion
in issuing an order revoking conveyance of real property by
the former executor of the estate, thus denying the claim
filed against the estate that the conveyance satisfied,
without giving any interested party an opportunity to be
heard and without taking any evidence[?]
Appellants’ Brief at 3-4 (complete capitalization omitted).3
In their first issue presented, Appellants argue that the trial court’s
revocation of the conveyance of real property by the former executor,
Casimiro, constituted a surcharge action. Id. at 8-9. More specifically,
Appellants suggest that “when the executor of an estate fails to fulfill his
____________________________________________
3 Initially, we note that Appellants concede that issues four and five as set
forth above are both moot. See Appellants’ Brief at 8 and 14-15. As such,
we need not address the merits of those claims.
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fiduciary duty of care, the court may impose a surcharge against him.” Id. at
9 (case citations omitted). Appellants claim that, because the transfer of the
Pearl Street property constituted a “settlement of a claim made partially by”
Casimiro for alleged services rendered to the decedent, the court’s revocation
of the sale was a surcharge. Id.
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).
Primarily, the trial court noted that Appellants stated, in their concise
statement pursuant to Pa.R.A.P. 1925(b), “that the first two matters
complained of [were] only pertinent if the order of court that revoked the
conveyance of real estate between the estate and [Appellants] constituted a
surcharge action” but “[b]ecause that order did not involve a surcharge[,]”
the trial court did not address those issues. Trial Court Opinion, 5/31/2022,
at 3-4.
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:
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(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,
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
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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,
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
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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
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
Casimiro’s conveyance of the Pearl Street property to Appellants for nominal
consideration constituted an act of self-dealing and, thus, a breach of his
duties to other beneficiaries of the estate. This prior determination constitutes
the law of the case, which this Court has previously explained 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
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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
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).
Here, the trial court first recognized that “Appellants fail to consider that
the matter of Casimiro’s conduct as an executor including, specifically, the
transfer [of] the Pearl Street property to [Appellants] for de minimus
consideration has already been addressed by” this Court in our January 2022
decision wherein a prior panel “concluded that Casimiro’s conduct constituted
self-dealing which warranted his removal from the position as executor.” Trial
Court Opinion, 5/31/2022, at 4. It further opined:
In the matter at hand, Casimiro had transferred the property to
[Appellants] for token consideration, engaging in a degree of
self-dealing that severely compromised estate assets. Indeed,
even if it were determined that Casimiro’s conduct had not been
prompted by self-interest but had merely been an occasion of
misapprehending the duties and functions of an executor, the
transaction was so extraordinarily inconsistent with the proper
function of an executor and competent administration of estate
assets that neither Casimiro nor Silvia could be entrusted to
administer the estate in forthright, competent fashion.
Id. at 4-5.
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Having already determined, in a prior appeal, that Casimiro engaged in
self-dealing by paying his alleged caretaking claim out of the estate and
transferring the Pearl Street property to Appellants 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 determination
under the law of the case doctrine. Through self-dealing, Casimiro’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. Moreover, we note that the orphans’ court never ordered
Casimiro to pay a penalty as punishment for improper fiduciary conduct.
Accordingly, we reject Appellants’ suggestion that the court’s remedy
constituted a surcharge. Hence, Appellants are not entitled to relief on their
first claim.
Next, in their second and third issues presented on appeal, which we
examine together, Appellants argue that the trial court erred as a matter of
law or abused its discretion in revoking the conveyance of real property
without giving any interested party an opportunity to be heard and without
taking any evidence. Appellants’ Brief at 10. Appellants complain that
“before the court can impose a surcharge, it must give the executor an
opportunity to be heard.” Id. (case citation omitted). Appellants maintain
that the trial court could not determine whether the parties met their burdens
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of proof without gathering and weighing evidence at a hearing and the
arguments of counsel cannot be used as a substitute. Id. at 11-12.
Appellants suggest that the trial court’s “rationale appears to be that any
action of the [t]rial [c]ourt is justified when an executor is removed.” Id. at
13-14. Appellants concede that “the conveyance of the [Pearl Street property]
look[ed] like text-book self-dealing” by Casimiro, but they argue that
proffered evidence established that he was acting to benefit the estate while
executor. Id. at 13.
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).
Appellants’ claims presume that the revocation of the transfer of the
Pearl Street property constituted a surcharge action and that, within the
context of such a proceeding, they were entitled to, but denied, certain
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procedural rights such as notice, opportunity to be heard, and the chance to
present evidence. As set forth above, we have rejected Appellants’ 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, Casimiro was given the opportunity
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 rejected the argument “that [Casimiro] had been
denied an opportunity to be heard” since such a contention conflicted “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. Casimiro 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 Casimiro received notice of the issues before the court (i.e. 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. Furthermore,
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Appellants were present, and represented by counsel, at the March 1, 2022
hearing on the proposed revocation. See id. at 17. Counsel for Appellants
argued that surcharge was the appropriate remedy and requested a separate
surcharge hearing. Id. at 7. As explained at length above, however, we have
already rejected Appellants’ argument regarding surcharge. Furthermore,
upon further review of the certified record, Appellants did not testify, present
evidence, or otherwise complain that they were denied due process at the
March 1, 2022 hearing on the proposed revocation. Accordingly, for all of the
foregoing reasons, Appellants are not entitled to relief on their second and
third appellate issues.
Order affirmed.
Judgment Entered.
Joseph D. Seletyn, Esq.
Prothonotary
Date: 2/22/2023
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