filed: March 13, 1981.
SHERRI LYNN FIUMARA AND WILLIAM JAMES FIUMARA BY THEIR PARENT AND NATURAL GUARDIAN CAROL FIUMARA
LOUIS H. FIUMARA AND CAROLYN C. KELLY, APPELLANTS AT NO. 96. APPEAL OF IRON WORKERS PENSION PLAN OF WESTERN PENNSYLVANIA, AT NO. 73
Nos. 73 and 96 April Term, 1979, Appeal from the Decree in the Court of Common Pleas of Allegheny County, Civil Division, No. 3719 Equity, July Term, 1974.
Louis J. Krzemien, Pittsburgh, for Iron Workers, appellant (at No. 73) and for appellee (at No. 96).
John W. Jordan, IV, Pittsburgh, for Fiumara, appellees.
Lawrence D. Funsten, Pittsburgh, for Louis Fiumara and Kelly, appellants (at No. 96) and for appellees (at No. 73).
Price, Hester and Cavanaugh, JJ.
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This appeal arises out of an action in equity brought to determine the interests in a claim dispute. Appellants,
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Carolyn Kelly and Louis Fiumara, contest the decree ordering them to disgorge funds they received from appellant Iron Workers Pension Plan of Western Pennsylvania (hereinafter Pension Plan). Pension Plan appeals from the decree holding it liable to appellees for funds paid subsequent to receipt of notification of appellees adverse claim. On February 5, 1979, appellees filed a motion to dismiss Pension Plan's appeal, which motion was denied on November 14, 1979. Pension Plan claims that the court erred in its determination as to their liability. Kelly and Fiumara contend that the adjudication is insufficient in law and fact. Finding both claims to be without merit, we affirm the final decree.
The pertinent facts are as follows.*fn1 Appellees are the only children of John J. Fiumara, deceased. Decedent was a member of Pension Plan and, as such, was entitled to participate in that plan's welfare and pension benefits. On January 5, 1970, decedent changed the beneficiary designation from his estranged wife to his two minor children, the appellees. The daughter was 12 years of age, the son 10 years of age, at the time of his death.
In April or May of 1972, John Fiumara's ex-wife and eight brothers and sisters were told that he had terminal cancer. Thereafter, Pension Plan received a change of beneficiary form dated May 4, 1972, purporting to change the beneficiary to decedent's brother, appellant Louis H. Fiumara. Appellant Fiumara subsequently admitted signing decedent's name to the form while decedent was in surgery and, accordingly, the trial court found the form to be a forgery.
The decedent was hospitalized from December 26, 1972 through January 13, 1973. Following this date, decedent was unable to care for himself and thus moved in with Carolyn Kelly, a sister, with whom he had previously been estranged. Later that month an attorney visited the Kelly
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residence to consult with decedent about his estate. Although the Pension Plan's benefits were never discussed, a will was drafted at that time making Mrs. Kelly the sole heir and executrix of decedent's estate. During the ensuing months decedent's physical condition deteriorated. He received medication for pain, was given radiation and chemotherapy, suffered severe weight loss and became confined to the area where he slept. By the time of his death he was entirely dependent on Mrs. Kelly for all the necessities of life.
On March 7, 1973 decedent's condition appeared to be critical. He was hospitalized and arrangements were made for him to receive the last rites of the Roman Catholic Church. However, by March 11, 1973 decedent recovered sufficiently to be discharged to his sister's care. A change of beneficiary form, dated March 14, 1973, was signed by decedent and completed by Mrs. Kelly, who designated herself sole beneficiary of decedent's welfare and pension benefits. Upon receipt of this form a Pension Plan employee contacted a man identifying himself as John Fiumara. The employee was told that there were to be two beneficiaries, but these names were not disclosed. On March 16, 1973, yet another change of beneficiary form was signed by the decedent. It too was completed by Mrs. Kelly, but this time she designated Louis Fiumara beneficiary of the welfare benefits and retained herself as beneficiary of the pension benefits. Decedent died on March 26, 1973.*fn2
Upon notification of John J. Fiumara's death Pension Plan paid the lump sum welfare benefits to appellant, Louis Fiumara, and commenced monthly pension benefit payments to Kelly. The plan continued the payments to Mrs. Kelly,
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even after it had been notified of the claim dispute. The trial court imposed a constructive trust upon Mrs. Kelly and Mr. Fiumara for the proceeds distributed by Pension Plan prior to notification of appellees' interests. Pension Plan was held liable for payments made subsequent to its receipt of notification. It is from the final decree by the court en banc affirming the decree nisi that appellants now appeal.
"The trial judge, sitting in equity as a chancellor, is the ultimate fact-finder." Balin v. Pleasure Time, Inc., 243 Pa. Super. 61, 68, 364 A.2d 449, 453 (1976). "The court en banc having affirmed the chancellor's findings of fact, they must receive the weight of a jury verdict. Our scope of review is therefore to determine if such findings are supported by sufficient evidence and whether the court below committed an error of law." Reifschneider v. Reifschneider, 413 Pa. 342, 344, 196 A.2d 324, 325 (1964), citing Penneys v. Pennsylvania Railroad Co., 408 Pa. 276, 183 A.2d 544 (1962); Chambers v. Chambers, 406 Pa. 50, 176 A.2d 673 (1962). Since appellants have not furnished us with a transcript, we accept the court's findings of fact as conclusive. Sauber v. Nouskajian, 286 Pa. 449, 133 A. 642. Therefore, "[o]nly if it is plain that . . . the rule of law relied upon was palpably erroneous or misapplied will we interfere with the decision of the chancellor." Cardamone v. University of Pittsburgh, 253 Pa. Super. 65, 72, 384 A.2d 1228, 1232 (1978), quoting Roberts v. School District of Scranton, 462 Pa. 464, 341 A.2d 475 (1975).
Appellants Kelly and Fiumara claim that the adjudication fails to fulfill the mandates of Pennsylvania Rule of Civil Procedure 1517(a).*fn3 We cannot agree. "Rule 1517
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itemizes the contents of the chancellor's 'adjudication'. This adjudication must contain, in addition to a decree nisi, a summary of the issues raised in the pleadings, specified findings of fact and conclusions of law, and a discussion of the factual and legal questions involved in the case." In Re Involuntary Termination of Parental Rights v. Dingus, 487 Pa. 387, 391-392, 409 A.2d 404, 407 (1979) citing Community Sports, Inc. v. Oakland Oaks, 429 Pa. 412, 240 A.2d 491 (1968). The rule no longer requires numerated findings of law and fact, but rather "allows an adjudication and discussion in narrative form." Omracanin v. Hassler, 8 Pa. Commw. 224, 226 n.2, 302 A.2d 878, 882 n.2 (1973). The policy behind the rule is to assure that the adjudication provides an adequate basis for appellate review.
Instantly, the court articulated detailed findings and considerations in an adjudication that was ten pages long. Indeed, it is difficult to imagine an adjudication being more specific in its analysis of the interaction between the parties during the period in question. The chancellor accurately identified the principal legal question as whether the disputed beneficiary forms were "the act and deed of John F. Fiumara." It is clear that the court recognized the issues involved and granted them full consideration.*fn4
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Appellants Kelly and Fiumara next contend that the adjudication is legally insufficient to support a finding of fraud. The applicable standard of appellate review in cases involving issues of fraud, confidential relationship or undue duress is "whether the findings of fact of the chancellor, approved by the court en banc, are based upon legally competent and sufficient evidence, and whether the trial court committed an error or abused its discretion." In Re Estate of Clark, 467 Pa. 628, 634, 359 A.2d 777, 781 (1976). Treitinger Will, 440 Pa. 616, 269 A.2d 497 (1970). However, it is unnecessary for us to reach the question whether the record supports a finding of fraud since we find the evidence sufficient to establish a confidential relationship and, therefore, shift the burden of proof to the purported beneficiaries. Dzierski Estate, 449 Pa. 285, 296 A.2d 716 (1972).*fn5 The facts, as found by the chancellor, clearly sustain a holding that appellants failed to meet that burden.
"When the donee establishes a prima facie case of a gift a rebuttable presumption arises that the gift is valid and the burden is then on the contestant to rebut the presumption by clear, precise and convincing evidence." In Re Estate of Clark, 467 Pa. at 634, 359 A.2d at 781. Estate of Reichel, 484 Pa. 610, 400 A.2d 1268 (1979). However, our supreme court has stated that:
When the relationship between persons is one of trust and confidence, the party in whom the trust and confidence are reposed must act with scrupulous fairness and good faith in his dealings with the other and refrain from using his position to the other's detriment and his own advantage. McCown v. Fraser, 327 Pa. 561, 192 A. 674 (1937);
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all the necessities of life. In addition, the beneficiary designations were completed by Mrs. Kelly rather than by decedent. These facts were more than sufficient to establish the existence of a confidential relationship between decedent and Mrs. Kelly. Therefore, the burden was upon Mrs. Kelly to show that the designation was free from any taint of fraud or deception.*fn7
To carry that burden it was incumbent upon Mrs. Kelly to demonstrate by clear and convincing evidence that the beneficiary change was the free, voluntary and intelligent act of decedent. Estate of Reichel, 484 Pa. 610, 400 A.2d 1268; In Re Estate of Clark, 467 Pa. 628, 359 A.2d 777. Here, she produced witnesses who testified that decedent had become disaffected with his children. The chancellor found this testimony untrustworthy in light of evidence establishing decedent's continued affection and concern for his children. After a careful consideration of the chancellor's findings of fact we conclude that appellant fell far short of sustaining the burden of showing that the beneficiary designations were free of fraud. Therefore, the chancellor's finding that said designations are void must be affirmed.
Appellant Fiumara claims that the court erred in finding that the change of beneficiary form dated May 4, 1972 was not the act and deed of decedent. However, since Mr. Fiumara admitted signing the form, and since he did not
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do so as an authorized agent of decedent, the form is clearly invalid.*fn8
Appellant Pension Plan claims that the trial court erred in finding it liable for payments it made subsequent to notification of a claim dispute. We find this allegation to be without merit.
It is . . . manifest that where the insurer knows of the existence of adverse claims to the proceeds and chooses to pay one of the claimants, it acts under the risk that the recipient selected by it is the one who is lawfully entitled thereto. Thus an insurer which, with notice of adverse claims, pays the full amount to the named beneficiary, is liable over for the amount wrongfully paid.
5 Couch on Insurance 16-17 (2d ed. 1960). We consider the responsibility of an insurer to be equated with that of a pension plan in regard to the distribution of death benefits. As fiduciaries, both have a duty to exercise a high standard of care in the payment of such funds. Thus, we discern no reason for imposing different standards of liability where the standards of care are identical.
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Appellants contend that the written notification they received from appellees' attorney apprising them of the claim dispute was inadequate notice to justify a termination of payments to the designated beneficiaries. Although there is no Pennsylvania case directly on point, the general rule holds that such a party is liable for all payments made with knowledge of a claim dispute. Stravros v. Western and Southern Life Insurance Company, Inc., 486 S.W.2d 712 (Ky.Ct.App.1972); Golden State Mutual Life Insurance Page 352} Company v. Adams, 340 S.W.2d 77 (Tex.Ct.Civ.App.1960); Redden v. Prudential Life Insurance Company, 193 Minn. 228, 258 N.W. 300 (1935); Sink v. Waco Mutual Life and Accident Association, 49 S.W.2d 888 (Tex.Ct.Civ.App.1932).*fn9 Pension Plan's contention that appellees had to state specific legal grounds in support of their claim to vitiate its duty to the designated beneficiaries is contrary to the weight of authority and, we believe, is not in accord with the law and public policy of Pennsylvania.*fn10 Accordingly, we adopt the prevailing view that appellant is liable for all payments made following notification of an adverse claim and affirm the chancellor's decree.
The final decree of the Allegheny County Court of Common Pleas is affirmed.