No. 28 March Term 1979, Appeal from the Decree of the Court of Common Pleas of Westmoreland County, Orphans' Court Division at No. 65-74-91.
Reed J. Davis, Davis & Mazzotta, P. C., Pittsburgh, for appellant.
Richard E. Myers, Bertani, Myers & Makoski, Greensburg, for appellee.
Eagen, C. J., and O'Brien, Roberts, Nix, Manderino, Larsen and Flaherty, JJ. Manderino, J., did not participate in the consideration or decision of this case.
Appellant-administratrix, Ellen Kurkowski Simon, appeals from a decree of the Court of Common Pleas of Westmoreland County, Orphans' Court Division, dismissing exceptions to the court's decree nisi surcharging her for improper administration of the estate of her husband, Carl J. Kurkowski, upon consideration of objections to the final account.
Carl J. Kurkowski died intestate on November 22, 1973, survived by his wife, the administratrix, and two minor sons from a prior marriage, Carl W. and Wayne Kurkowski. At the time of his death, decedent was president and sole shareholder of Monroe Cycle Center, Inc. which was in the business of selling and servicing motorcycles. The business was valued in the estate inventory by administratrix at $43,797.88. Decedent also owned a home valued at $75,000.00, subject to a mortgage, in addition to furniture, fixtures, and tools. Further, the decedent's life was insured for approximately $90,000.00 of which approximately $75,000.00 was paid to Monroe Cycle Center, Inc. as beneficiary. The administration of the estate was undertaken by Ellen Kurkowski Simon in January 1974 upon the posting of a $500.00 bond.
After her husband's death, Ellen Kurkowski Simon was elected president, secretary, and treasurer of Monroe Cycle Center, Inc. Prior to his death, she had served as a corporation's vice-president and had worked part-time in the business. Shortly after her election, the two other members of the Board of Directors, including the attorney for the estate, resigned. Thereafter, the administratrix ignored corporate procedures and formalities. The administratrix paid herself a salary in excess of $33,000.00 during the twenty-month period she continued to operate the business. One of decedent's sons worked part-time in the business as a mechanic and received compensation of $1,148.86. Administratrix utilized a car titled in the corporate name for her personal use and subsequently traded it in on a new car which she titled
in her own name without any accounting to the corporation for the value of the car. She paid the decedent's funeral bill from the corporate assets and subsequently included the bill in her final account as an expense of the estate without having repaid the corporation the cost of the funeral.
The business operated at a continuing loss for the entire twenty-month period. During this period, administratrix made no attempt to sell the business or its assets. She testified she intended to operate it indefinitely. The record indicates some attempts to sell were made after administratrix closed the business. However, when these efforts were not successful, administratrix made no provision for disposition or liquidation of the corporate assets or for payment of the corporate debts. At the time administratrix closed the doors of the business, the corporate accounts reflected over $120,000.00 in assets.
In June 1976, nine months after it ceased operating, the corporation was placed into state receivership to avoid the landlord's execution on a judgment for past due rents. Several months later, all of its assets were sold by the receiver for $22,759.00. This fund was exhausted after the payment of administrative expenses and priority claims including $5,783.25 to the estate for reimbursement ...