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In re Barnes Foundation

Superior Court of Pennsylvania

June 19, 2013

IN RE: THE BARNES FOUNDATION, A CORPORATION APPEAL OF: RICHARD RALPH FEUDALE IN RE: THE BARNES FOUNDATION, A CORPORATION APPEAL OF: COMMONWEALTH OF PENNSYLVANIA

Appeal from the Judgment March 7, 2012, in the Court of Common Pleas of Montgomery County, Civil Division, No(s): 1958-X0788

Appeal from the Order March 7, 2012, in the Court of Common Pleas of Montgomery County, Orphans' Court Division, No(s): 58, 788

BEFORE: PANELLA, FITZGERALD [*], and PLATT [*] , JJ.

OPINION

PANELLA, J.

Appellant, Richard Ralph Feudale, Esquire, appeals from the judgment entered March 7, 2012, by the Honorable Stanley R. Ott, which sustained the preliminary objections based on lack of standing to Feudale's petition to reopen proceedings which permitted, inter alia, the relocation of The Barnes Foundation, and awarded The Barnes Foundation ("The Barnes") attorney fees and costs. Additionally, the Commonwealth of Pennsylvania has filed a cross-appeal from the March 7, 2012, order, which made final the trial court's decision not to award attorney fees to the Commonwealth. After review, we affirm the judgment of the trial court insofar as it sustained the preliminary objections to Feudale's petition and determined that he lacked standing to intervene in The Barnes' proceedings, but reverse the trial court's imposition of sanctions. Additionally, we affirm the trial court's decision not to award the Commonwealth counsel fees.

The genesis of this case harkens back nearly a decade ago, when The Barnes, a Pennsylvania non-profit corporation charged with implementation of a charitable trust focused on the advancement of art education and appreciation, petitioned the Montgomery County Orphans' Court to make changes to the administrative provisions of its governing documents pursuant to the doctrine of deviation. Of specific relevance to this case, The Barnes sought permission to relocate its gallery from Lower Merion Township in Montgomery County to Philadelphia. The Attorney General's Office participated in the proceedings as parens patriae. Although several parties sought to intervene in these proceedings, Appellant Feudale did not. Following a two-phase trial over the course of ten days, the Honorable Stanley R. Ott entered a final decree on December 13, 2004, approving The Barnes' 2002 Petition and permitting the proposed relocation. The sole appeal from the court's final decree was quashed by the Pennsylvania Supreme Court on April 27, 2005. In re Barnes Foundation, 582 Pa. 370, 871 A.2d 792 (2005).

Thereafter, in 2007, a group of organizations and individuals filed a petition seeking to reopen the proceedings leading up to the 2004 final decree. While that petition was pending, the County of Montgomery also filed a petition seeking to reopen the proceedings. Feudale neither joined these petitions nor sought to intervene independently at that time. Judge Ott ultimately dismissed these petitions upon the determination that the petitioners lacked standing to reopen the 2002 proceedings.

In 2011, yet another group of individuals and organizations sought to reopen the 2004 final decree (the "Friends" petitioners). Shortly thereafter, Feudale filed his own petition seeking to reopen the 2002 proceedings. Both The Barnes and the Commonwealth filed preliminary objections to the petitions based on lack of standing. Following a hearing, Judge Ott concluded that the 2011 petitioners were "not aggrieved because they can not show a substantial, direct and immediate interest in the outcome of the litigation;" "do not possess a substantial interest in the matter because they are suffering no discernible adverse effect to an interest other than that of the general citizenry;" and "are a private party and [] generally lack standing to enforce a charitable trust since the public is the object of the settlor's benefice in a charitable trust." Trial Court Opinion, 10/6/11, at 5-6. The court granted the preliminary objections and dismissed both petitions.

Additionally, the court determined that both petitions were sanctionable pursuant to 42 Pa.Cons.Stat.Ann. § 2503 as conduct that is "dilatory, obdurate or vexatious." Following a hearing, the court awarded The Barnes $15, 000 in attorney fees from Feudale and $25, 000 from the Friends petitioners and their counsel. Order, 3/7/12. The court did not award the Commonwealth fees or costs. Thereafter, Feudale filed his appeal on March 13, 2012, and the Commonwealth's cross-appeal followed on April 4, 2012.[1]

We proceed to first address the issues Feudale raises for our review:

I. In a case involving the alteration and relocation of an education foundation, The Barnes Foundation, does the Orphans' Court's denial of standing to petitioner/appellant constitute an error of law and/or an abuse of discretion when said petition/appellant bases his cause of action upon Article I, Section 27 of the Pennsylvania Constitution, The History Code, as codified at 37 Pa.C.S.A. Section 101, et seq., and 37 Pa.C.S.A. Section 512 and supports those claims by an education study of the imagery found at The Barnes Foundation and the Merion site that describes The Barnes as a symbolically site specific esthetic whole as much a symbol of Pennsylvania as its other historic landmarks and integral to the fabric of the Pennsylvania esthetic and experience – a study and assertion which has not been refuted by any educator associated with The Barnes – and does the court's imposition of economic sanctions against petitioner as a result of petitioner's assertion of constitutional and statutory standing based upon said study, which standing is specifically provided for in 37 Pa.C.S.A. Section 512, constitute an error of law and/or an abuse of discretion?
II. In light of Article 1, Section 10 of the U.S. Constitution and the bright line standard established in the landmark U.S. Supreme Court decision in [Dartmouth College v. Woodward], 17 U.S. 518 (1819) and its progeny which interprets Article 1, Section 10 of the U.S. Constitution as prohibiting state actors from encouraging or inducing the modification of a private contract and, by logical corollary, the provision of public monies to induce or encourage the same, does the Orphans' Court's denial of standing to petitioner/appellant to complain of the conduct of state actors and the application of public monies appropriated by the legislature in the case of The Barnes Foundation move which violates said constitutional principles enunciated in Article 1, Section 10 and the [Dartmouth College] case and its progeny constitute an error of law and/or an abuse of discretion and is the court's award of economic sanctions against petitioner as a result of petitioner's assertion of these constitutional principles an error of law and/or an abuse of discretion?
III. Is the Orphans' Court's determination that petitioner/appellant's conduct is sanctionable because it is somehow outrageous (i.e. in bad faith) or is the epitome of arbitrary and vexatious conduct unsupported by the competent evidence and does such a ...

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