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Regan v. First National Bank of Pennsylvania

United States District Court, W.D. Pennsylvania

February 14, 2017



          David Stewart Cercone United States District Judge

         I. Introduction

         This matter is before the Court on a motion to dismiss (ECF No. 9) filed by Defendant First National Bank of Pennsylvania (“First National”). In the complaint, Plaintiffs Rose M. Regan (“Regan”) and Lois Phillips (“Phillips”) seek damages arising out of First National's alleged “failure” to ensure that the proceeds of a money market account (“Account”) maintained with First National by their father, John J. Strahsmeier (“Decedent”), were paid to Regan upon his death, as he allegedly intended. The Court has jurisdiction pursuant to 28 U.S.C. § 1332. For the reasons set forth below, First National's motion will be granted.

         II. Factual Background

         Decedent died testate on September 13, 2008, survived by Plaintiffs and their brother, John T. Strahsmeier. The Account at issue was created on or about February 13, 2006. Sometime in October 2006, the Account was converted into a trust account “in the name of John J. Strahsmeier, ITF Rose Regan[.]” (Compl., ECF No. 1 ¶ 7). It is Regan's position that she was to be “the beneficiary of any and all funds on deposit in that account at the time of [Decedent's] death.” Id. “Regan did, in fact, receive the funds on deposit in the subject account in or about October of 2008 and in May of 2009, in the amount of $149, 200.26.” (Id. ¶ 10).

         In January 2009, Decedent's estate was probated in the Orphans' Court Division of the Court of Common Pleas of Allegheny County. Decedent's will “directed that his residuary estate was to be distributed to all three of his surviving children in equal shares, subject to a reduction . . . for a loan made by Decedent to Regan during his lifetime.” (Id. ¶ 12).

         On July 1, 2011, Judge Lawrence O'Toole of the Allegheny County Court of Common Pleas issued a Memorandum Opinion and Order, [1] in which he ruled, in pertinent part, that “John T. [Strahsmeier] has presented clear and convincing evidence to establish that all funds in the [account] are assets of the estate.” (ECF No. 1-2 at 5). “Despite the title, ” Judge O'Toole concluded, “the account was meant to be a ‘convenience account' and all estate assets were to be gathered and deposited into that account after the Decedent's death.” (Id. at 4). Thus, Judge O'Toole ordered Regan to deposit the sum of $149, 200.26, which she had withdrawn, back into the account. Id. at 5. Plaintiffs filed a motion for reconsideration of Judge O'Toole's order, which was denied on July 25, 2011.[2] (ECF No. 1-3).

         Plaintiffs appealed Judge O'Toole's decision to the Superior Court of Pennsylvania. (ECF No. 1 ¶ 14). In its Opinion, [3] the Superior Court framed the issues as follows:

We must decide whether the orphans' court was correcting in determining that [John T.] Strahsmeier, as co-executor, proved by clear and convincing evidence that Decedent, when he created the ITF Account, had an intent contrary to Regan's presumed right of survivorship.[4]

(ECF No. 1-4 at 8-9). After reviewing the evidence, the Superior Court affirmed the decision of the orphans' court, finding that

[t]he record supports overriding the distribution scheme enunciated in the [Multiple-Party Accounts Act] because co-executor [John T. Strahsmeier] proved by clear and convincing evidence that Decedent had an intent contrary to Regan's right of survivorship at the time he revised to the ATF Account to include Regan's name. Because Regan had no right to the monies in the ITF Account, they must be returned to the Estate as directed by the orphans' court.

(Id. at 16).[5]

         Plaintiffs initiated this action on April 26, 2016, by filing a two-count complaint against First National. In count I, Regan asserts a breach of contract claim. She “maintains that she was a third party beneficiary of the contract entered into between the Decedent and the Defendant for the establishment of a Totten Trust account no. 97005064, which was designated as an ‘ITF' account naming Regan as the beneficiary.” (ECF No. 1 ¶ 16). As such, she alleges that First National's “failure . . . to ensure that the account was established in a manner as was communicated to Defendant by Decedent, to wit, a Totten Trust account naming Regan as the beneficiary to whom the Account proceeds were to be payable upon the death of the Decedent, has caused her to be deprived of a sum in excess of $149, 00.00 [sic].” (Id. ¶ 17). In count II, Phillips avers that she “has paid substantial sums in excess of $40, 000 to litigate the matter . . . which expenditures would not be necessary had the Defendant properly established the account in accordance with the intentions of the Decedent.” (Id. ¶ 20).

         First National moved to dismiss on June 27, 2016. (ECF No. 9). Plaintiffs filed a brief in opposition on July 27, 2016, (ECF No. 18), to which First National filed a reply on August 5, 2016 (ECF No. 19). The matter is ripe for review.

         III. Standard of Review

         A motion to dismiss pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure tests the legal sufficiency of a complaint. Kost v. Kozakiewicz, 1 F.3d 176, 183 (3d Cir. 1993). A complaint must be dismissed for failure to state a claim if it does not allege “enough facts to state a claim to relief that is plausible on its face.” Bell Atlantic Corp. v. Twombly, 550 U.S. 554, 556 (2007) (rejecting the traditional 12(b)(6) standard set forth in Conley v. Gibson, 355 U.S. 41, 45-46 (1957)); Ashcroft v. Iqbal, 556 U.S. 662, 678 (citing Twombly, 550 U.S. at 570). In ruling on a motion to dismiss, “the Court may consider ...

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