IN RE: TRUST OF MARILYN MIHORDIN, DECEASED APPEAL OF: VICKI MIHORDIN
from the Order June 24, 2016 In the Court of Common Pleas of
Mercer County Orphans' Court at No(s): No. 2014-660
BEFORE: GANTMAN, P.J., BENDER, P.J.E., and MOULTON, J.
Vicki Mihordin, appeals from the order entered in the Mercer
County Court of Common Pleas, which granted the petition
filed on behalf of Appellees Lynda J. Pozzuto and her former
husband, Michael L. Pozzuto ("Pozzutos") for
reformation of a deed. We reverse.
relevant facts and procedural history of this appeal are as
follows. The Pozzutos sought to transfer property located in
Rayburn Township, Armstrong County to Lynda Pozzuto's
parents, Richard and Marilyn Mihordin
("Mihordins"). In 1995, the Pozzutos executed a
Real Estate Sales Agreement ("1995 Agreement")
between the Pozzutos as sellers and the Mihordins as buyers
of a parcel of land. Michael Pozzuto contacted his counsel to
prepare the 1995 Agreement. Pursuant to the 1995 Agreement,
the Mihordins would pay the Pozzutos $5, 000.00 per year for
a period of three years and an additional $5, 000.00 at
closing for a total of $20, 000.00. The 1995 Agreement in
THIS AGREEMENT, made this 28th day of March, 1995, by and
between Mike Pozzuto and Lynda Pozzuto, his wife (hereinafter
referred to as Sellers).
Richard L. Mihordin and Marilyn R. Mihordin, his wife
(hereinafter referred to as Buyers);
WHEREAS, the Sellers are in the process of purchasing certain
property in Kittanning, Pennsylvania; and
WHEREAS, the Buyers wish to purchase some of the aforesaid
property from the Sellers;
NOW THEREFORE, THE PARTIES INTENDING TO BE LEGALLY BOUND,
AGREE AS FOLLOWS:
1. Sellers will sell and Buyers will purchase a parcel of
land of Buyers choice fronting on 100 feet of river for the
sum of $20, 000.00 payable at $5, 000.00 on day of closing
and $5, 000.00 a year, each and every year for the succeeding
three (3) years.
2. If Buyers decide to sell the aforesaid parcel, they give
the Sellers the option to purchase the property for $20,
000.00. Said option to be exercised within 90 days after
written notice received by Sellers from Buyers.
3. If Sellers would default on the purchase of the said
property, they must refund the Buyers all hand monies paid by
Buyers to Sellers.
4. Upon Buyers payment of the full purchase price to Sellers,
they will receive a deed subject to any encumbrances then
existing on the property.
5. Upon the death of Buyers, the land is to revert back to
6. If Sellers sell the complete parcel of land, they will
deed over the property of Buyers to Buyers.
IN WITNESS WHEREOF, the parties hereto have set their hands
and seals the day and year first above written.
(See 1995 Sales Agreement, attached as Exhibit A to
the Pozzutos' Rule to Show Cause; Appellant's Brief,
Appendix B at 17.) The Pozzutos and the Mihordins signed the
1998, the Pozzutos executed a deed transferring the
riverfront parcel of property to the Mihordins in fee simple.
(See Deed of September 10, 1998, attached as Exhibit
B to the Pozzutos' Rule to Show Cause; Appellant's
Brief, Appendix C at 18.) The scrivener of the 1995 Agreement
was also the scrivener of the 1998 deed, Attorney William
Panella. He did not refer to the 1995 Agreement in preparing
the deed or include a reversionary interest in favor of the
Pozzutos in the 1998 deed.
Mihordin died in May 2011. After his death, Marilyn Mihordin
created the irrevocable Trust of Marilyn Mihordin on August
23, 2011, and transferred the subject parcel to the trust by
virtue of a new deed of the same date. The trust provided,
inter alia, that upon Marilyn Mihordin's death,
any remaining income and principal or corpus of the trust
would go to her two daughters equally. The named co-trustees
and beneficiaries of the trust are her two daughters, Lynda
Pozzuto and Appellant, who both signed the trust and agreed
to accept the terms and conditions set forth in the trust.
Neither the trust nor the 2011 deed (both prepared by
different counsel) referred to any reversionary interest in
favor of the Pozzutos. (See The Marilyn R. Mihordin
Irrevocable Trust Agreement, attached as Exhibit 1 to
Appellant's Answer to the Pozzutos' Rule to Show
Cause; Appellant's Brief, Appendices D and E, at 19, 20.)
Marilyn Mihordin died on October 22, 2014.
December 21, 2015, the Pozzutos filed a Rule to Show Cause
Why A Deed Should Not Be Reformed, seeking to reform the 1998
deed to reflect their ownership of the property in question
via a reversionary interest, asserting a
scrivener's error or mistake as well as the intent of the
parties as represented in the 1995 Agreement. Appellant filed
an answer on January 12, 2016, and a counterclaim for
enforcement of the 2011 deed in trust and an order directing
the real estate to be distributed equally between the
daughters pursuant to the trust. The Pozzutos filed their
answer to the counterclaim on February 1, 2016, with new
matter. Appellant replied to the new matter on February 12,
court held a hearing on February 23, 2016. By order of June
24, 2016, the court granted the Pozzutos' petition and
directed the 1998 deed to be reformed to reflect the asserted
reversionary interest in favor of the Pozzutos, consistent
with Article five of the 1995 Agreement. Appellant timely
filed a notice of appeal on July 20, 2016. On July 25, 2016,
the court ordered Appellant to file a concise statement of
errors complained of on appeal per Pa.R.A.P. 1925(b);
Appellant timely complied on August 5, 2016.
Appellant raises this issue on appeal:
DID THE [TRIAL] COURT COMMIT ERROR IN ORDERING THAT THE DEED
IN QUESTION SHOULD BE REFORMED DUE TO SCRIVENER'S ERROR?
(Appellant's Brief at 4).
argues this case presents the classic example of the merger
doctrine, under which the 1995 Agreement merged with the 1998
deed, which superseded any provisions of the 1995 Agreement
not included in the 1998 deed. Appellant maintains that none
of the instruments executed after the 1995 Agreement,
including the 1998 deed and the 2011 trust and 2011 deed,
refer to a life estate or reversionary interest. Appellant
reasons any reversionary interest allegedly in the 1995
Agreement was lost, once the 1998 deed and all later
instruments did not include it.
Appellant argues the Pozzutos failed to prove a
"scrivener's error" by clear and convincing
evidence. Specifically, Appellant asserts Attorney
Panella's testimony, which the trial court cited in its
decision to allow reformation of the 1998 deed, was
insufficient to meet the high standard of proof for
reformation of the deed. Appellant directs our attention to
Attorney Panella's testimony that he made no mistake when
he prepared the 1998 deed. Appellant also claims Attorney
Panella could not have known the Mihordins' intentions,
because he had no contact with them and had not even met
them. Appellant insists Attorney Panella's failure to
refer to the 1995 Agreement when preparing the 1998 deed was
not a mere "scrivener's error" under
Pennsylvania law because he was the same attorney who
prepared both documents. Appellant observes the Pozzutos
presented no testimony from Attorney Carolyn E. Hartle, who
drafted the 2011 deed and trust for Marilyn Mihordin,
concerning Marilyn Mihordin's intentions. Regardless,
Appellant maintains the Dead Man's Act would bar any
testimony adverse to the intentions of Marilyn Mihordin, as
expressed in her testamentary documents, because she is
deceased. Appellant submits the Pozzutos failed to prove by
clear and convincing evidence that the disputed reversionary
interest was omitted from the 1998 deed solely by virtue of a
"scrivener's error" or mistake. Appellant
concludes the doctrine of merger governs this matter, and the
court's order to reform the 1998 deed must be reversed.
For the following reasons, we conclude relief is due.
review of the court's decision to allow reformation of
the 1998 deed implicates the following principles:
[T]he Orphans' [c]ourt is a court of equity, [which
means] that in the exercise of its limited jurisdiction
conferred entirely by statute, it applies the rules and
principles of equity. In equity matters, [w]e must accept the
trial court's finding of fact, and cannot reverse the
trial court's determination absent a clear abuse of
discretion or error of law. The trial court's conclusions
of law, however, are not binding on an appellate court
because it is the appellate court's duty to determine if
the trial court correctly applied the law to the facts of the
case. If a decision of the Orphans' ...