Appeal from the ORDER ENTERED June 5, 1996, in the Court of Common Pleas of CUMBERLAND County, ORPHANS, No. 21-91-836. Before SHEELY, J.
Before: Cavanaugh, Popovich, and Olszewski, JJ. Opinion BY Olszewski, J.
The opinion of the court was delivered by: Olszewski
OPINION BY OLSZEWSKI, J.:
We are called upon to decide whether the co-executors of the estate of John W. Frey were properly removed as administrators of his estate. Although probate issues such as this are necessarily delicate due to the intricate familial relationships that they involve, we find that the record evidence amply supports the trial court's Conclusion that Michael and Darlien Frey mismanaged the estate and engaged in self-dealing. We therefore affirm the order of the trial court.
On November 25, 1991, John W. Frey died testate, naming in his will his second wife, Darlien, and his son, Michael, co-executors of his estate. The estate consisted of three residential properties, bank accounts totaling approximately $15,885.18 and two vehicles. Darlien was willed a life interest in one of the homes, the balance of a joint banking account and one-half of the residuary estate. The remainder of the estate was devised in equal shares to the six Frey children of John W. Frey and his former wife.
Prior to a final accounting of the estate, several bank account balances were transferred into Darlien's name. Additionally, Darlien's life estate interest in the residence left to her was deeded into a fee simple interest. This transfer was accomplished without court approval.
In February of 1992, Michael and his brother Richard, desirous of purchasing one of the estate homes, had one of the residences appraised by a certified Dauphin County appraiser. At the time, the property was valued at $44,500. Fourteen months later, the lending institution that was contemplating giving the brothers a mortgage on the property conducted an independent appraisal of the property, which valued the property at $75,000. The substantial difference between the two appraisals was due to repairs and improvements made by the brothers in the interim. Soon thereafter, the home was sold by Michael and Darlien, as co-executors, to Michael and Richard for $44,500. Again, the executors neither sought nor received court approval for the sale.
As a result of these questionable transfers, as well as a general speculation that their father's estate was being mismanaged, Ruth and Joseph Frey, two of the six Frey children, filed objections to the final accounting which was filed by the co-executors on November 12, 1993. Based upon the objections, the trial court appointed an independent auditor, Stephen J. Hogg, Esquire, to take testimony, make findings of fact and proposed Conclusions of law.
On April 18, 1994, the auditor's hearing, at which Ruth, Michael and Richard Frey testified, was conducted. Two months thereafter, Attorney Hogg filed his report. While some of the objections were denied, the report proposed, inter alia, that the transfer in fee simple to Darlien of her former life interest be revoked and that the transfer to Michael and Richard of one of the other estate properties be disallowed. Additionally, the auditor directed that the property sold to Michael and Richard be reappraised and ordered that the brothers pay the estate the difference between the appraised value and the sale price.
On April 5, 1995, the auditor's report was confirmed by the Honorable Harold E. Sheely of the Court of Common Pleas of Cumberland County. Three and one-half months later, after ascertaining that the co-executors had not complied with the court order confirming the report, a citation was issued directing the co-executors to show cause why such compliance had not been forthcoming.
Pursuant to the citation, a hearing was held on December 4, 1995. Testimony was taken from Michael, Darlien, Ruth and Richard Frey. Michael admitted that he had not voided the property transfers as directed in the auditor's report. Further, he testified that the property sold to him and his brother had been appraised for a third time and that the current value of the house was estimated to be $90,000. Additionally, when questioned about the particulars of his administration of his father's estate, Michael stated that (1) he did not know whether there was an estate checking account; (2) he paid estate expenses from his personal accounts, expecting to be reimbursed; (3) rental income from the third estate property was paid in cash and that receipts were not given; and, (4) he did not know how to complete the administration of the estate.
Darlien Frey, co-executor and surviving spouse, testified that she did not know whether there was an estate checking account and that she was not involved in the estate finances. For example, although she signed the deed transfers in her capacity as co-executor, she did not arrange or investigate the transfers and was unaware of the significantly higher bank appraisal conducted just prior to the sale of the home bought by Michael and Richard. Darlien also testified that she did not know the amount of the estate's rental incomes or whether the incomes were deposited or invested.
Based upon this testimony, Judge Sheely issued an order on May 2, 1996, which removed Michael and Darlien as co-executors of the estate. Additionally, calculating the difference between the first and second appraisals, the court directed that Michael and Richard pay a surcharge of $30,000 to the estate. Richard then filed a petition to open and/or strike the judgment and Darlien filed a notice of appeal to this Court.
Thereafter, on June 3, 1996, Judge Sheely issued an amended order intended to correct several errors and ambiguities present in his original order. As to the $30,000 surcharge assessed against Michael and Richard, the court amended both the amount and the payees to reflect a $30,500 surcharge against Michael and Darlien, as co-executors. The original judgment was marked satisfied. Finally, the court directed that, in the event any inconsistencies existed between the order and the auditor's report, the order was to control.
Darlien then praecipiced to discontinue the appeal of the May 21 order. Darlien and Michael presently appeal from the June ...