Appeal from the Order of the Superior Court entered September 25, 2007 at No. 265 WDA 2007, affirming the Order of the Court of Common Pleas of Westmoreland County entered January 8, 2007 at No. 65-01-2214.
The opinion of the court was delivered by: Mr. Justice McCAFFERY
CASTILLE, C.J., SAYLOR, EAKIN, BAER, TODD, McCAFFERY, GREENSPAN, JJ.
Appellant, Thomas V. Proch, appeals from the order of the Superior Court, which affirmed the decree of the Westmoreland County Orphans' Court, directing Appellant, as executor of the Estate of Alice G. Novosielski ("Decedent"), to inventory with Decedent's estate the principal and proceeds of a United States Treasury account titled in Appellant's and Decedent's names. Because we conclude that both the Superior Court and orphans' court misinterpreted relevant provisions of the act known as the Multiple-Party Accounts Act ("MPAA"), 20 Pa.C.S. §§ 6301-6306, and failed to properly apply the MPAA's relevant provisions, we reverse.
The relevant factual and procedural history, taken from the decisions below and evidence of record where noted, is as follows. Decedent died testate on November 16, 2001, at the age of 79. Decedent's husband predeceased her in 1998, and the couple had no children. Decedent's will, dated June 12, 1995, provided that in the event her husband predeceased her, her estate would be divided equally among her five sisters, per stirpes. At the time of Decedent's death, only one sister was living, Helen Modzelewski, while others left surviving children.
At some point after she executed her will, Decedent began experiencing health problems and required assistance with household and personal needs. Appellant, who was the son of Decedent's deceased sister Loretta, began to provide such assistance, along with his wife, beginning in 1995, according to their uncontradicted testimony. Assistance was also provided by caregivers hired by Decedent and supervised by Appellant. On August 25, 2000, Decedent appointed Appellant her attorney-in-fact under a duly executed power of attorney. The power of attorney was drafted by James E. Kopelman, Esq., who later testified at the hearing in this case that he was comfortable with Decedent's decision to execute the power of attorney because he "felt that she had the capacity to do it[,] that she understood what she was signing[,] and that there was no undue influence." Master's Hearing, 11/16/05, at 396. Kopelman further testified that at the time, Decedent was "mentally. still very, very sharp[,]. knew what she wanted to do[, and] understood the Power of Attorney...." Id. at 394.
On September 15, 2000, shortly after she executed the power of attorney, Decedent executed a codicil to her will naming Appellant executor of her estate, appointing an alternative executrix, and granting specific bequests of $5,000 to each of these two individuals. In all other respects, the codicil ratified and republished Decedent's 1995 will. The codicil was prepared by Kopelman, who had also prepared the original will.
Four days later, on September 19, 2000, Decedent executed a United States Treasury Bill Tender ("the Tender"), with a non-competitive bid, or offer to buy, of $500,000. The Tender further provided that a "Treasury Direct" account was to be created in the account name of "Alice G. Novosielski or Thomas V. Proch." The "Investment Kit" that accompanied the Tender, and which explained the process and ramifications of the investment, indicated that an account in the names of two people joined by the word "or" creates a conclusive right of survivorship. Treasury Direct Investor Kit at 6; Master's Hearing Exhibit 2. Appellant, acting as Decedent's attorney-in-fact, had procured the Tender and Investment Kit in order to consolidate Decedent's several existing financial accounts. Kopelman testified that Appellant had discussed with him the possibility of combining Decedent's various accounts into a Treasury Direct account, and that Kopelman had advised Appellant that he "was on the right track" for two reasons: the relatively low FDIC insured limits on the other accounts, and ease of administration of one account. Master's Hearing, 11/16/05, at 399. Later, the master specifically found as a fact that Decedent had directed Appellant to place the Treasury Direct account in the names of Decedent or Appellant after she had had an opportunity to review the Investment Kit prior to her executing the Tender, including that portion of the Investor Kit explaining the different ways of registering accounts and their ramifications. Master's Report and Recommendation ("Master's Report"), dated July 7, 2006, at 2.
The Tender had an initial thirteen-week investment term and authorized automatic reinvestment in the bill for the next three succeeding thirteen-week terms, for a total term of one year. At the conclusion of the final thirteen-week investment term, Appellant, acting under the power of attorney, unilaterally authorized a further one-year reinvestment of the account holdings without consulting Decedent. Approximately two months after Appellant reinvested the account holdings for a further one-year term, Decedent died.
On December 11, 2002, Appellant, then acting in his role as executor of Decedent's estate, filed a first and final account of the estate, excluding from the estate's property the value of the Treasury Direct account. Decedent's surviving sister, Helen Modzelewski, filed objections to the account, contending that the Treasury Direct account should be listed as property of the estate. Appellant thereafter filed an amended first and final account of the estate; however, he continued to exclude from it the Treasury Direct account. In the interim, Helen had died, and John Modzelewski ("Appellee"), Helen's son and administrator of his mother's estate, filed objections to Appellant's amended first accounting, raising the additional argument that Appellant had abused his role as attorney-in-fact by misappropriating or misusing approximately $90,000 of Decedent's funds.
The orphans' court appointed a special master to take testimony and issue a report and recommendation on the filed objections. Following four days of hearings, during which evidence was admitted concerning Decedent's mental and physical condition prior to, at, and after the execution of the Tender,*fn1 the master issued a report and recommendation that determined (1) Appellant should be surcharged $96,059 because he had breached his fiduciary duty by making various payments from Decedent's funds beyond the powers conferred by the power of attorney and/or for not keeping proper records of these transactions; and (2) Appellant was the sole owner of the Treasury Direct account. Regarding the latter determination, the master found, based on testimony given by Kopelman and other witnesses, that Decedent had possessed the mental acuity to make a knowing execution of the Tender; that "[D]ecedent understood that [Appellant] would be the sole owner of the Treasury Direct account upon her death;" and that "even if the Power of Attorney had established a confidential relationship, [Appellant] has proven by his credible testimony that the creation of the joint Treasury Direct Account was the free, voluntary and intelligently made transfer of [Decedent]." Id. at 2, 21. Appellant and Appellee filed cross-exceptions with the orphans' court.*fn2
The orphans' court adopted the master's recommendation in part and reversed in part without making additional findings of fact or specifically rejecting those findings made by the master. The court agreed with the master that Appellant should be surcharged $96,059 for questionable or undocumented transfers of funds made pursuant to his power of attorney.*fn3 However, the court disagreed with the master's conclusion that Appellant, and not the estate, was the owner of the Treasury Direct account.
In arriving at this contrary conclusion, the court considered relevant provisions of the MPAA, in particular, Section 6304(a). That section provides:
(a) Joint account.--Any sum remaining on deposit at the death of a party to a joint account belongs to the surviving party or parties as against the estate of the decedent unless there is clear and convincing evidence of a different intent at the time the account is created. If there are two or more surviving parties, their respective ownerships during lifetime shall be in proportion to their previous ownership interests under section 6303 (relating to ownership during lifetime) augmented by an equal per capita share for each survivor of any interest the decedent may have owned in the account immediately before his death; and the right of survivorship continues between the surviving parties.
20 Pa.C.S. § 6304(a) (emphasis added).
The court did not conduct an analysis concerning, or make a conclusive determination as to, whether the Treasury Direct account is a joint account as defined, and thus governed, by the MPAA. Rather, the court determined that even if the Treasury Direct account was governed by the MPAA, clear and convincing evidence of record rebutted the presumption of survivorship. The court reasoned:
Accepting [Appellant's] own testimony, [Decedent's] intent at the time the account was created was that the money would be used for her care, depending on how long she lived. [Appellant] testified that the account was created as an 'interest pump that would supplement [Decedent's] salary [sic] to pay for her care.' The interest earned on the account was automatically deposited to [Decedent's] individually titled National City [Bank] account, and was reported on her tax returns. Pursuant to the terms of the [I]nvestor [K]it, when the securities matured, the funds were to be automatically deposited into [Decedent's] individually titled National City account. The above evidence is sufficient to rebut the survivorship presumption, by clear and convincing evidence, as the account was obviously a 'convenience account' and was not intended as a present gift of the monies to [Appellant] at the time the account was created.
Orphans' Court Opinion, dated January 8, 2007, at 4-5 (citations to the record and footnote omitted).*fn4
Appellant appealed, and the Superior Court affirmed, albeit on different grounds from those of the orphans' court. First, the Superior Court directly addressed the issue of whether the Treasury Direct account was a "joint account" as defined and governed by the MPAA.*fn5 The Superior Court noted that "[t]here is no dispute [D]ecedent was a 'depositor' for purposes of the MPAA definition of 'account,' or "that the Federal Reserve Bank responsible for administering [D]ecedent's treasury account is a 'financial institution' for purposes of section 6301." In re Estate of Alice G. Novosielski, 937 A.2d 449, 453 (Pa.Super. 2007).*fn6 Noting that the Treasury Direct account was not "a checking account, saving account, certificate of deposit, [or] share account," as specifically delineated in Section 6301 of the MPAA, the court pursued the next avenue of inquiry, i.e., whether the Treasury Direct account was an "other like arrangement." Id. (quoting 20 Pa.C.S. § 6301). In exploring this issue, the court examined our plurality decision in Deutsch, Larrimore & Farnish, P.C. v. Johnson, 848 A.2d 137 (Pa. 2004) (plurality), wherein this Court determined that a Morgan Stanley/Dean Witter brokerage account was an "other like arrangement" as contemplated by Section 6301 of the MPAA. After examining both the plurality position, authored by former Justice Newman, and the concurring position, authored by Justice Saylor, the Superior Court concluded that under either analysis, the conclusion was inescapable that the Treasury Direct account was "indeed, an 'account' for purposes of the MPAA."*fn7 Novosielski, supra at 454. Additionally, the Superior Court determined that the Treasury Direct account fit the MPAA definition of "joint account." The court stated: "By virtue of the account being titled with the designation 'Alice G. Novosielski or Thomas V. Proch,' a title that employs the connective 'or,' both [D]ecedent and [A]ppellant had the authority to authorize transactions with the account pursuant to the terms of the [Investor K]it." Id. at 455.
Having determined that the Treasury Direct account was a "joint account" for purposes of Section 6304(a) of the MPAA, the Superior Court "started" with the presumption that the funds in the account belonged to Appellant, citing 20 Pa.C.S. § 6304(a), Jt. St. Govt. Comm. Comment ("The underlying assumption is that most persons who use joint accounts want the survivor or survivors to have all balances remaining at death."). The Superior Court then considered whether Appellee was able to prove by clear and convincing evidence that Decedent had a different testamentary intent when the Tender was executed. 20 Pa.C.S. § 6304(a) ("Any sum remaining on deposit at the death of a party to a joint account belongs to the surviving party or parties as against the estate of the decedent unless there is clear and convincing evidence of a different intent at the time the account is created.") (emphasis added).
The Superior Court, in determining that "clear and convincing evidence of a different intent" did exist, focused upon the fact that contemporaneously with the Tender being executed, Decedent had also ratified her 1995 will through the 2000 codicil. The court observed: "The will left approximately one-tenth (1/10) of [D]ecedent's estate to [A]ppellant, which is a far lesser share than the approximate four-fifths (4/5) share [A]ppellant would receive if he were found to be the owner of the treasury account." Novosielski, supra at 457. The court further reasoned:
When the execution of a valid will pre-dates the creation of a challenged MPAA joint account, we must consider whether the intentions expressed in the will can be read in a manner that is consistent with the decision to place assets in the MPAA joint account. If we cannot find such consistency[,] the expression of intent in the will must control unless we determine ...