J. A09013/16


NON-PRECEDENTIAL DECISION – SEE SUPERIOR COURT I.O.P. 65.37

IN RE: ESTATE OF JOHN H. NORRIS,       :     IN THE SUPERIOR COURT OF
JOHN H. NORRIS LIFE INSURANCE          :           PENNSYLVANIA
TRUST AGREEMENT                        :
                                       :
APPEAL OF: PEOPLESBANK,                :         No. 1117 MDA 2015
A CODORUS VALLEY COMPANY,              :
TRUSTEE                                :


               Appeal from the Order Entered May 27, 2015,
               in the Court of Common Pleas of York County
                 Orphans’ Court Division at No. 67-08-1482



IN RE: ESTATE OF JOHN H. NORRIS,       :     IN THE SUPERIOR COURT OF
JOHN H. NORRIS LIFE INSURANCE          :           PENNSYLVANIA
TRUST AGREEMENT                        :
                                       :         No. 1178 MDA 2015
APPEAL OF:                             :
YVONNE RENEE PLOURDE GURZELL           :


               Appeal from the Order Entered May 27, 2015,
               in the Court of Common Pleas of York County
                 Orphans’ Court Division at No. 6708-1482


BEFORE: FORD ELLIOTT, P.J.E., JENKINS AND PLATT,* JJ.


MEMORANDUM BY FORD ELLIOTT, P.J.E.:                  FILED JULY 20, 2016

     PeoplesBank, a Cordorus Valley Company (“the Bank”), appeals from

the order entered May 27, 2015, removing it as co-trustee of the John H.

Norris inter vivos life insurance trust (“the Trust”). Yvonne Rene Plourde

Gurzell (“Gurzell”) has cross-appealed from the same order.   After careful




* Retired Senior Judge assigned to the Superior Court.
J. A09013/16


review, we vacate the order, reinstate the Bank as co-trustee, and remand

for further proceedings.

      The trial court has aptly summarized the history of this case, in

relevant part, as follows:

                  John H. Norris (“Decedent”) executed a Last
            Will and Testament on February 8, 2005. Decedent
            died on September 28, 2008. The York County
            Register of Wills issued Letters Testamentary on
            October 9, 2008 to Anna L. Norris, Decedent’s wife.
            The will named Anna L. Norris as executrix of the
            estate and as individual trustee of [the Trust].
            American Guaranty & Trust Company was named
            corporate trustee from the Deed of Trust signed
            February 21, 2000 and amended May 17, 2000.
            American Guaranty & Trust Company has since been
            purchased by Royal Bank of Canada Trust Company
            (“RBC”).   RBC resigned as corporate trustee on
            December 29, 2008 having never received or
            administered any trust assets. [The Bank] accepted
            the successor trusteeship on December 20, 2012.
            [The Bank] received trust assets from Mrs. Norris
            and began service on December 21, 2012.

                   Decedent was survived by his wife, children
            from     his   first  marriage     and    step-children.
            Mary Florence Norris Michel, Patricia Jane Norris
            Slaughter and John C. Norris are Decedent’s children
            from his first marriage.      [Gurzell], Samantha R.
            Plourde and Jeffery James Plourde are Decedent’s
            step-children. In his will, Decedent left his personal
            and household effects, including automobiles, and
            insurance on that property to his wife, Anna Norris.
            Decedent gives the residue of the estate, real and
            personal to the trustee or trustees under the Deed of
            Trust signed February 21, 2000, as amended
            May 17, 2000 under which American Guaranty &
            Trust Company, is named as the trustee, in trust, to
            treat it as an addition to the principal subject to that
            deed as it exists at Decedent’s death. The will
            names Anna Norris as executrix with [] Gurzell as


                                     -2-
J. A09013/16


              replacement executor [sic] should Anna Norris not
              qualify for any reason. The will does not name any
              other beneficiaries aside from Anna Norris.

Trial court opinion, 10/28/15 at 1-2.

                     Under [Paragraph XXIII(C) of the Deed of
              Trust], it is mentioned that the individual trustee is
              authorized at any time, and from time to time by an
              instrument in writing delivered to the other trustee
              serving, to remove the corporate trustee without
              stating any reason for such action, provided he or
              she simultaneously by written instrument appoints
              another corporate trustee in its place. Under D, no
              successor trustee shall be obliged to examine the
              accounts, records or acts of a previous trustee, nor
              shall any such trustee in any way or manner be
              responsible for any act or omission to act on the part
              of any such previous trustee or such individual
              trustee.    Any claim or action against any such
              trustee shall, in any event, be filed by a beneficiary
              in the appropriate court. Subparagraph E mentions
              that any individual trustee may resign at any time
              without court approval.       Under F, the fiduciaries
              serving are given the power to invest the principal
              and/or income of the trust estate in any assets or
              security. Lastly, subparagraph G provides that the
              corporate trustee shall receive compensation in
              accordance with its standard schedule of fees in
              effect while its services are performed.

Id. at 3-4.

                     On or about August 12, 2013, [the Bank]
              notified Mrs. Norris of its intent to resign as
              co-trustee. On August 14, 2013, [the Bank] filed a
              Petition for Adjudication/Statement of Proposed
              Distribution for [the Trust]. The case was listed for
              the September 11, 2013 audits with the Honorable
              Judge Penny L. Blackwell presiding. [The Bank] filed
              its accounting and gave proper notice of the audit to
              all interested parties.       At the time of the
              September 11, 2013 audit no objections were filed
              as to [the Bank]’s accounting, save for counsel for


                                        -3-
J. A09013/16


            John C. Norris, one of Decedent’s children,
            expressing no objections to the account itself or to
            [the Bank] withdrawing, but that a successor trustee
            should be named before [the Bank] could withdraw.
            [The Bank] agreed that Mrs. Norris should select a
            successor pursuant to the terms of the trust and that
            no selection has been made at the time by
            Mrs. Norris. [Gurzell] was also present during the
            audit as one of the beneficiaries but made no
            objections at the call of the audit or filled [sic] any
            written objections by the end of that business day.[1]
            Judge Blackwell rescheduled the matter for a
            subsequent hearing on October 1[6], 2013 to resolve
            pending matters.

                  At the October 16, 2013 hearing, new petitions
            were filed and counsel for [Gurzell] entered his
            appearance.      Counsel requested an additional
            sixty days to discuss the matters pending and
            determine the issues that would be the subject of a
            hearing. The parties agreed that [the Bank] can
            remain involved for the time being, that its
            investment strategy is appropriate and that it will not
            be responsible for losses to the trust from the date of
            the close of the accounting until the date that funds
            are transferred.

                   On November 18, 2013, Mrs. Norris filed a
            Petition to Appoint Successor Trustee and Authorize
            Payment of Expenses.       Counsel Trust Company
            located in York, Pennsylvania was identified as the

1
  Gurzell takes issue with the statement that no objections were raised to
the Bank’s Petition for Adjudication/Statement of Proposed Distribution
presented for audit on September 11, 2013. According to Gurzell, she
appeared in person, without counsel, and voiced her objections. (Gurzell’s
brief at 2; notes of testimony, 9/11/13 at 3.) The trial court found that
while Gurzell did appear at the September 11, 2013 audit hearing, she did
not actually voice any objection to the Trust accounting. (Trial court
opinion, 10/28/13 at 21-22.) Gurzell did not file any written objections as
required by local rule. (Id. at 22.) While counsel for Gurzell filed a petition
to stay the adjudication of the Bank’s accounting, no formal objections to the
Trust accounting were actually filed. (Id. at 22.) The issue is not germane
to the instant appeal.


                                     -4-
J. A09013/16


           successor trustee.    On November 7, 2013, [the
           Bank] filed an Answer to Petition to Appoint
           Successor Trustee and Authorize Payment of
           Expenses. In its Answer, [the Bank] did not object
           to the appointment of Counsel Trust as its successor
           and indicated that any issues concerning Mrs. Norris’
           loans did not preclude a confirmation of its
           accounting.[2] On November 22, 2013, [Gurzell]
           filed a Motion to Stay Executrix’s Petition to Appoint
           Successor Trustee and Authorize Payment of
           Expenses Pending Adjudication of Executrix’s
           Accounting for the Norris Trust. In [her] Petition,
           [Gurzell] alleged that Mrs. Norris should provide
           documentation as to the funding of the Marital and
           Residual Trusts and also questions some expenses
           incurred by the estate.

                 On November 25, 2013, Judge Blackwell issued
           an Order directing that [the Bank]’s action to defer
           payments from the trust is deemed reasonable given
           the status of the case. In addition, it was ordered
           that no successor corporate guardian can occur
           unless all parties agree to the appointment and/or by
           order of court after a hearing. Another hearing for
           the request to stay payment was scheduled for
           July 9, 2014 before this Court.

                  At the July 9, 2014 hearing this Court indicated
           that Mrs. Norris had filed an inventory and directed
           that an estate accounting should be filed within
           sixty days. [The Bank] was not permitted to resign
           until this Court could further review the record and
           see if a decision could be made. [The Bank] was
           permitted to file[] a memorandum of law addressing
           the topic of due diligence when taking trust funds.
           The memorandum of law was filed on July 17, 2014.
           On July 22, 2014, this Court stayed Mrs. Norris’
           Petition to Appoint Successor Trustee and Authorize
           Payment of Expenses pending adjudicating of the
           estate accounting. [The Bank] indicated that it is

2
 This is a reference to a $450,000 loan from the Bank to Mrs. Norris which
Mrs. Norris contends should be repaid from the estate. (Trial court opinion,
10/28/15 at 4.)


                                    -5-
J. A09013/16


          only involved in the trust accounting and has no role
          in the estate accounting.

                  On January 28, 2015, [Gurzell] filed a Motion
          to Compel Distribution for the Residuary Trust for
          litigation expenses.     A hearing was held on
          January 28, 2015 that concerned the estate
          accounting and subpoenas issued in regards to
          documents from an accountant. The parties were
          directed to come up with a case management plan
          so that the Court could address the remaining issues.
          A subsequent hearing was held on May 27, 2015.
          [The Bank] indicated that [Gurzell]’s objections dealt
          with the estate accounting not the trust accounting.
          [The Bank] requested its administration adjudicated
          so that funds could be transferred for further
          administration.    [Gurzell] alleged that the trust
          should not be transferred until the residuary trust
          accounting is reconciled. [The Bank] concurred on
          the appointment of its successor and indicated that it
          assumed no liability for its predecessor. [Gurzell]
          alleged that there were pending objections on the
          residuary trust accounting. This Court issued an
          Order removing [the Bank] as trustee and appointing
          Counsel Trust as successor trustee at the conclusion
          of the May 27, 2015 hearing.

                On June 12, 2015, [the Bank] filed a Petition
          Seeking Confirmation of Trust Accounting and
          Amendment of the Court’s May 27, 2015 Order
          Removing [the Bank] as Trustee. On June 23, 2015,
          Mrs. Norris filed an Answer to [the Bank]’s Petition
          Seeking Confirmation of Trust Accounting and
          Amendment of the Court’s May 27, 2015 Order
          Removing [the Bank] as Trustee. [The Bank] also
          filed a Notice of Appeal to the Superior Court on
          June 26, 2015 before this Court could decide its




                                  -6-
J. A09013/16


              June 12, 2015 Petition.[3] On July 1, 2015, this
              Court issued an Order Directing [the Bank] to File [a]
              Statement of Matters Complained [of] on Appeal.
              [The Bank] filed [its] 1925(b) statement on July 13,
              2015. A Notice of Cross-Appeal to the Superior
              Court was filed on July 9, 2015 by [] Gurzell []. On
              July 10, 2015, this Court issued an Order Directing
              [Gurzell] to File [a] Statement of Matters
              Complained [of] on Appeal. [Gurzell] filed [her]
              1925(b) statement on July 20, 2015. [The Bank]
              and [Gurzell] now appeal to the Superior Court from
              this Court’s Order issued on May 27, 2015.

Id. at 4-7.

      The Bank has raised the following issues for this court’s review:

              A.    Did the Orphans’ Court’s removal of the
                    Trustee sua sponte, without a hearing, fail to
                    comply with the requirements of 20 Pa.C.S.
                    §§ 3183, 3184, and 7766?

              B.    Did the Orphans’ Court’s removal of the
                    Trustee sua sponte, without a hearing, violate
                    the consent Order dated November 25, 2013,
                    ordering that no successor corporate trustee
                    shall be appointed “unless all parties agree to
                    the appointment and/or by order of court after
                    a hearing,” and the Order dated July 22, 2014,
                    staying the appointment of a successor trustee
                    pending the adjudication of the Trustee’s
                    accounting?




3
  The trial court indicates that it was inclined to amend the order of May 27,
2015, in order to allow the Bank to resign as opposed to being removed.
(Trial court opinion, 10/28/15 at 15.) An order removing a trustee is a final
order proper for appellate review. In re Georgiana’s Estate, 458 A.2d
989, 991 (Pa.Super. 1983), affirmed, 475 A.2d 744 (Pa. 1984). Therefore,
the Bank was required to file its appeal notice within 30 days.
Pa.R.A.P. 903(a).


                                      -7-
J. A09013/16


The Bank’s brief at 2.4

            This Court recently reaffirmed our standard of review
            of an Orphans’ Court decree:

                  When reviewing a decree entered by the
                  Orphans’     Court,   this   Court   must
                  determine whether the record is free
                  from legal error and the 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, we will
                  not reverse its credibility determinations
                  absent an abuse of that discretion.
                  However, we are not constrained to give
                  the same deference to any resulting legal
                  conclusions. Where the rules of law on
                  which the court relied are palpably wrong
                  or clearly inapplicable, we will reverse
                  the court’s decree.

            In re Estate of Hooper, 80 A.3d 815, 818
            (Pa.Super. 2013).

                  When the Orphans’ Court arrives at a legal
            conclusion based on statutory interpretation, our
            standard of review is de novo and our scope of
            review is plenary. Brown v. Levy,     Pa.     , 73
            A.3d 514, 517 (2013).

In re Estate of Fuller, 87 A.3d 330, 333 (Pa.Super. 2014).

      The Probate, Estates and Fiduciaries (“PEF”) Code, Section 7766,

“Removal of trustee,” provides, in relevant part, as follows:

            (a)   Request     to   remove     trustee;    court
                  authority.--The settlor, a cotrustee or a
                  beneficiary may request the court to remove a

4
  Gurzell raises substantially the same issues on appeal and agrees with the
Bank that the trial court’s order of May 27, 2015, removing the Bank as
trustee, was in error.


                                     -8-
J. A09013/16


                 trustee or a trustee may be removed by the
                 court on its own initiative.

           (b)   When court may remove trustee.--The
                 court may remove a trustee if it finds that
                 removal of the trustee best serves the
                 interests of the beneficiaries of the trust and is
                 not inconsistent with a material purpose of the
                 trust, a suitable cotrustee or successor trustee
                 is available and:

                 (1)   the trustee has committed           a
                       serious breach of trust;

                 (2)   lack    of   cooperation     among
                       cotrustees substantially impairs the
                       administration of the trust;

                 (3)   the trustee has not effectively
                       administered the trust because of
                       the       trustee’s       unfitness,
                       unwillingness or persistent failures;
                       or

                 (4)   there has been a substantial
                       change of circumstances.         A
                       corporate reorganization of an
                       institutional trustee, including a
                       plan of merger or consolidation, is
                       not itself a substantial change of
                       circumstances.

           (d)   Procedure.--The procedure for removal and
                 discharge of a trustee and the effect of
                 removal and discharge shall be the same as
                 that set forth in sections 3183 (relating to
                 procedure for and effect of removal) and 3184
                 (relating    to   discharge     of    personal
                 representative and surety).

20 Pa.C.S.A. § 7766(a), (b) & (d).

           [R]emoval of a trustee is a drastic remedy which
           should be employed only when clearly necessary.


                                     -9-
J. A09013/16


           In Re White, 321 Pa.Super. 102, 104, 467 A.2d
           1148, 1150 (1983), rev’d. on other grounds, 506
           Pa. 218, 484 A.2d 763 (1984). An order removing a
           trustee will only be reversed however, if there has
           been an abuse of discretion. Crawford’s Estate,
           340 Pa. 187, 190, 16 A.2d 521, 523 (1940).

In re Francis Edward McGillick Foundation, 594 A.2d 322, 332

(Pa.Super. 1991), reversed in part on other grounds, 642 A.2d 467 (Pa.

1994).

     Section 3183 of the PEF Code provides,

           The court on its own motion may, and on the petition
           of any party in interest alleging adequate grounds for
           removal shall, order the personal representative to
           appear and show cause why he should not be
           removed, or, when necessary to protect the rights of
           creditors or parties in interest, may summarily
           remove him. Upon removal, the court may direct
           the grant of new letters testamentary or of
           administration by the register to the person entitled
           and may, by summary attachment of the person or
           other appropriate orders, provide for the security
           and delivery of the assets of the estate, together
           with all books, accounts and papers relating thereto.
           Any personal representative summarily removed
           under the provisions of this section may apply, by
           petition, to have the decree of removal vacated and
           to be reinstated, and, if the court shall vacate the
           decree of removal and reinstate him, it shall
           thereupon make any orders which may be
           appropriate to accomplish the reinstatement.

20 Pa.C.S.A. § 3183.

     Here, the first three subsections of 20 Pa.C.S.A. § 7766(b) are clearly

inapplicable. There is no allegation that the Bank has committed a serious

breach of trust, that there is a lack of cooperation between the Bank and



                                   - 10 -
J. A09013/16


Mrs. Norris as co-trustees, or that the Bank has not effectively administered

the Trust. The trial court relied on Subsection (4), a substantial change of

circumstances. See In re McKinney, 67 A.3d 824, 832 (Pa.Super. 2013)

(a showing that the current trustee has administered the trust in a way that

undermined or harmed the beneficiaries’ interests is not needed for a

no-fault removal of a trustee for a substantial change in circumstances).

According to the trial court, the Bank’s desire to resign as corporate trustee

is, in and of itself, a “substantial change of circumstances” which permits

removal. (Trial court opinion, 10/28/15 at 18.) We disagree. As explained

further infra, there is a significant difference between discharge and

removal. The PEF Code does not allow no-fault removal of a trustee anytime

a trustee requests to resign.

      In addition, in any trustee removal action, the plain language of the

statute requires that removal best serve the interests of the beneficiaries of

the trust. In re McKinney, 67 A.3d at 831, citing 20 Pa.C.S.A. § 7766(b).

The trial court found that Mrs. Norris has been prejudiced by the delay in

adjudication of the Bank’s accounting.       (Trial court opinion, 10/28/15 at

16-17.)   According to the trial court, the Trust is “at a standstill” with no

distributions able to be made to Mrs. Norris until the issue of the Bank’s

resignation and accounting is resolved. (Id. at 17.) However, the trial court

acknowledges that any delay was caused by Gurzell, not the Bank. (Id. at

16-17.)   In addition, the Bank disputes the trial court’s assertion that



                                    - 11 -
J. A09013/16


Mrs. Norris is not receiving distributions of income from the Trust while the

matter is stayed. (The Bank’s brief at 18 n.7.)

      Furthermore, the trial court failed to hold a hearing on the matter as

required by 20 Pa.C.S.A. § 3183, which provides that,

            The court on its own motion may, and on the petition
            of any party in interest alleging adequate grounds for
            removal shall, order the personal representative to
            appear and show cause why he should not be
            removed, or, when necessary to protect the rights of
            creditors or parties in interest, may summarily
            remove him.

Contrary to the trial court’s reference to “Mrs. Norris’ request to remove [the

Bank] as trustee,” Mrs. Norris never petitioned for removal of the Bank.

(Trial court opinion, 10/18/15 at 17.) Rather, Mrs. Norris acquiesced in the

Bank’s petition to resign by identifying a successor corporate trustee. The

Bank was removed on the court’s own motion. There is no allegation that

summary removal was necessary to protect the rights of creditors or parties

in interest. In fact, as stated above, the trial court relied on Section 7766’s

no-fault removal provision and indicated that, “this Court was inclined to

amend its Order issued on May 27, 2015 in order to allow [the Bank] to

resign as opposed to being removed[.]”         (Id. at 15.)     The trial court

explicitly did not find any fault on behalf of the Bank as to its administration

of the Trust. (Id. at 10.) Therefore, before it could be removed, the Bank

was statutorily entitled to an evidentiary hearing.     Matter of Estate of




                                     - 12 -
J. A09013/16


Velott, 529 A.2d 525, 527 (Pa.Super. 1987).         Summary removal was

inappropriate and unwarranted.

     The trial court states that at the May 27, 2015 hearing, counsel were

given the opportunity to present argument as to the Bank’s potential

removal and appointment of Counsel Trust Company as successor trustee.

(Trial court opinion, 10/28/15 at 11.) However, the purpose of the May 27,

2015 hearing was to address outstanding discovery motions related to

objections to the estate accounting.      No witnesses were sworn and no

testimony was offered on behalf of any party.     The order scheduling the

May 27 proceeding specifically stated that no testimony would be taken. In

addition, while the parties discussed the resignation of the Bank and

appointment of a successor corporate trustee, the Bank’s “removal” was

never discussed since no one had petitioned for its removal. The trial court

failed to hold a hearing in accordance with 20 Pa.C.S.A. § 3183 before

ordering the Bank’s removal as trustee.

     We also agree that the order sua sponte removing the Bank as

trustee was contrary to at least two prior orders of court, including the

November 25, 2013 consent order by Judge Blackwell specifically directing

that no successor corporate trustee can be appointed without agreement of

all the parties and/or by order of court after a hearing. Neither contingency

had occurred in this case; the parties had not consented to appointment of a

successor corporate trustee, and no hearing had been held on the issue.



                                   - 13 -
J. A09013/16


The trial court states that the Bank’s status has remained in limbo for nearly

two years, and “This Court also highly doubts that the Honorable

Judge Blackwell intended for [the Bank] to continue their involvement for

nearly two years after a successor trustee was identified.”        (Trial court

opinion, 10/28/15 at 10.)     Nevertheless, the November 25, 2013 order,

which has never been amended or rescinded, could not be overruled by a

court of coordinate jurisdiction. Commonwealth v. Starr, 664 A.2d 1326,

1331 (Pa. 1995) (“[T]his Court has long recognized that judges of coordinate

jurisdiction sitting in the same case should not overrule each other[’s]

decisions.”).

       Similarly, the July 22, 2014 order stayed Mrs. Norris’ Petition to

Appoint Successor Trustee and Authorize Payment of Expenses pending

adjudication of the Bank’s trust accounting.      There has never been an

adjudication of the accounting.     It was improper for the trial court to

summarily remove the Bank as trustee without lifting the stay and holding a

hearing.

       Resignation and removal are not interchangeable.        The trial court

correctly observes that under 20 Pa.C.S.A. § 7770,5 a successor trustee is

not liable for the acts of its predecessor. (Trial court opinion, 10/28/15 at

14.)   Therefore, the Bank is not liable for any acts or omissions of RBC.


5
  “A successor trustee shall not be personally liable for the acts or omissions
of the trustee’s predecessor and shall have no duty to investigate the acts or
omissions of the predecessor.” 20 Pa.C.S.A. § 7770.


                                    - 14 -
J. A09013/16


(Id.) The trial court states that, “While [the Bank’s] accounting should have

been adjudicated, we find no reason to further discharge [the Bank] from

liability under § 3184 when § 7770 specifically states that a successor

trustee shall not be personally liable.”       (Id. at 15.)      However, under

Section 3184,6 a trustee is discharged from all future liability, not only acts

or omissions of a predecessor trustee. By removing the Bank as a trustee

under Section 7766 instead of granting its petition for resignation following

an   adjudication   and   discharge   under    Section   3184,   the   Bank   was

substantially prejudiced. The removal of a trustee, even on a no-fault basis,

does not shield the trustee from all future liability.    Resignation, following

adjudication and discharge, shields the trustee from future liability, while

removal does not.      Therefore, the distinction is crucial.    There were no

grounds for removal and the Bank was entitled to an adjudication of the

Trust accounting and discharge.




6
            After confirmation of his final account and
            distribution to the parties entitled, a personal
            representative and his surety may be discharged by
            the court from future liability.       The court may
            discharge only the surety from future liability,
            allowing the personal representative to continue
            without surety, upon condition that no further assets
            shall come into the control of the personal
            representative until he files another bond with
            sufficient surety, as required by the register.

20 Pa.C.S.A. § 3184.


                                      - 15 -
J. A09013/16


      Order vacated.    The Bank is hereby reinstated as corporate trustee.

Remanded for further proceedings consistent with this memorandum.

Jurisdiction relinquished.



Judgment Entered.




Joseph D. Seletyn, Esq.
Prothonotary

Date: 7/20/2016




                                   - 16 -
