Articles by Our Attorneys

A challenge to a decedent’s Last Will and Testament is, without question, the most difficult facet of dealing with a relative’s estate.  Whether you are the proponent of the Last Will or the individual who felt unfairly cheated, a Will Contest will be financially and emotionally costly. Great care should be taken in considering a Will Contest or in defending one.

What are the basics? In general, a properly executed Will is presumed valid. Courts recognize that an individual possesses testamentary capacity (the ability to create a Will) if he has intelligent knowledge regarding the natural objects of his bounty, what his estate consists of, and what he desires done with his estate. This is true even though his memory may have been impaired by age or disease.[1]

It’s also important to know that testamentary capacity is evaluated at the time the Will is executed.[2] However, evidence of incapacity for a reasonable time before and after the making of a Will is admissible as an indication of lack of capacity on the day the Will is executed.[3]

In order to successfully challenge a Last Will, the challenger must establish what is called a prima facie case of undue influence. The challenger must present proof of the following elements, through the presentation of clear and convincing evidence:

(1) a person who is in a confidential relationship with the Testator (a “Testator” is another name for the person whose Will it is);

(2) receives a substantial benefit under the proposed Will; and

(3) at or around the time the Will is executed, the Testator has a weakened intellect.[4]

Who is in a “Confidential Relationship”? That is a difficult question. This is a very fact specific issue. People who are in confidential relationships with a Testator can include a relative or a caregiver. This can also include someone who has fiduciary responsibilities, such as a lawyer or accountant. Essentially, it can be anyone who is in, or who puts themselves in, a situation where they have access to the Testator. Courts will also look to situations where the access is exclusive (meaning, where others are prevented from gaining access to the individual being influenced).

So how do you know if someone received a “substantial benefit” under a Will? It is well-settled that whether the proponent of a Will receives a substantial benefit is determined by examining the facts and circumstances of each case with consideration given to prior Wills executed by the Testator.[5] To that point, “[t]here is no hard and fast rule to ‘exactly define the character of the benefit or the extent of the interest [that] the confidential advisor must receive.’”[6]

What is “Undue Influence? The resolution of a question as to the existence of undue influence is inextricably linked to the assignment of the burden of proof. Once the proponent presents evidence of the proper formation of the Will, a presumption of lack of undue influence arises; the effect is that the risk of non-persuasion and the burden of coming forward with evidence of undue influence shift to the contestant (the individual challenging the Last Will). Once the contestant proceeds with his proof, there are two viable rules of law in this Commonwealth which allow the contestant to shift the onus of going forward with evidence back to the proponent.  The older rule is that where the evidence shows (1) bodily infirmity and (2) greatly weakened mental capacity of the Testator, and (3) a stranger to the blood of Testator, (4) standing in a confidential relation, (5) who is benefited by a Will (6) which he has been instrumental in having written, a Presumption of undue influence arises.[7]

The more recent rule is that where (1) a person in a confidential relationship (2) receives the bulk of the Testator’s property (3) from a Testator of weakened intellect, the burden of proof is upon the person occupying the confidential relation to prove affirmatively the absence of undue influence.[8]

How important is the testimony of the attorney (the scrivener) who drafted the Last Will? That’s an excellent question. Often times the Court will give greater weight to the scrivener, but that is not always the case. In In re Mampe,[9] the Court affirmed the trial court’s decision to give greater weight to the testimony of lay witnesses as opposed to the scrivener where the person charged with undue influence made the appointment for Testator and attended the first meeting with the attorney. The Mampe Court concluded:

[T]his Court’s collective sense of justice, is not shocked at the trial court’s conclusion that Attorney Durante’s testimony was of limited value in probing the weakness of Mrs. Mampe’s intellect in the time period prior to the making of the 2002 will and trust. As stated above, Attorney Durante did not know Mrs. Mampe prior to their first meeting, in January 2002, and, therefore, his observations as to her mental acuity, though important, were not entirely dispositive of the question before the trial court, i.e., whether Mrs. Mampe’s weakened intellect led her to execute a will and trust that were the product of undue influence. Consequently, the trial court’s analysis placed greater weight on the observation of Mrs. Mampe’s behavior by individuals that knew her far longer than Attorney Durante.

As you can see, the Court may not necessarily believe the word of the attorney who wrote the Will.

Conclusion

These considerations are very fact-specific. There are few hard and fast rules. Challenge to a decedent’s Last Will can be one of the more difficult areas of the law. This should never be taken lightly.

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[1] In re Estate of Hunter, 416 Pa. 127, 135, 205 A.2d 97 (1965).
[2] Stafford Will, 25 Fiduc. Reptr. 2d 265, 278 (citing Williams v. McCarroll, 374 Pa. 281, 293, 97 A.2d 14, 20 (1953).
[3] In re Estate of Hastings, 479 Pa. 122, 127, 397 A.2d 865, 867 (1978) (further citations omitted).
[4] Estate of Clark, 461 Pa. 52, 59-60, 334 A.2d 628, 632 (1975).
[5] In re Estate of LeVin, 419 Pa. Super. 89, 96, 615 A.2d 38 (Pa. Super. 1992); In re Estate of Easby, 2008 Phila. Ct. Com. PL LEXIS 152, *22 (Phila. Cty. 2008).
[6] Estate of Stout, 2000 Pa. Super 37, P9, 746 A.2d 645, 648 (2000).
[7] See, Boyd v. Boyd, 66 Pa. 283, 293-94 (1870); Wilson v. Mitchell, 101 Pa. 495 (1882).  Stewart Will, 354 Pa. 288, 296, 47 A.2d 204 (1946); Quein Will, 361 Pa. 133, 62 A.2d 909 (1949).
[8] Cuthbertson’s Appeal, 97 Pa. 163, 171 (1881); Yorke’s Estate, 185 Pa. 61, 69, 39 A. 1119 (1898); Button Estate, 459 Pa. 234, 328 A.2d 480, 483 (1974), and cases cited therein at n. 6.
[9] In re Mampe, 2007 Pa. Super. 269, 932 A.2d 954 (2007).

Robert A. Burke is an active trial attorney who has tried cases to verdict in six different jurisdictions. His practice is focused on complex commercial and estate and trust litigation. This includes trial and appellate work in federal, state and international courts. He regularly presents matters before alternative dispute resolution panels and frequently lectures on trial tactics, practice and procedure. Bob can be reached at 610-840-0211.

 

By Duke Schneider, Esq. and Don Bristol, Pa.C.P.

When contemplating your estate plan, one of the items often assumed to be a simple task is the decision as to the naming of the executor of your Will, or the Trustee of any trusts created under your Will. For married couples the spouse is almost always the first named. After that, it is almost always the children or other members of the family. The best practice is to have some sort of succession plan in mind when deciding who will be responsible for administering your estate or trust when you’re gone.

A consideration in naming children or other family members is whether they will have the sophistication to serve, and the time to handle the tasks associated with their fiduciary duties. If you’re thinking of naming your children as executors or trustees, consider whether you are going to name them in some sort of hierarchy, or if you are going to name them as a group. Naming children in a hierarchy does not necessarily mean “I love you more” or “I trust you more than the others.” We counsel clients to speak with their children about the duties entailed in administering an estate, and to consider the effectiveness of a single fiduciary versus a group of fiduciaries being called upon to review and sign documents and facilitate the administration of the estate.

For various reasons, including geography, sophistication, and “life issues,” it is not uncommon for clients to lack a depth of choices among family members to serve as executor or trustee. In these situations, corporate fiduciaries (bank trust departments or trust companies) are a good choice to serve. And while these fiduciaries are paid for their services, their fees are usually quite reasonable. Naming a corporate fiduciary can also give clients confidence that the fiduciary duties will be carried out timely and professionally.

If it should happen that none your named executors are able or willing to serve, or if you die without having created a Will (which is called intestacy), Pennsylvania has specific rules concerning who has the right to serve as the executor/administrator of an estate in the absence of a named successor (20 Pa.C.S.A § 3155 (b)). In the absence of a named successor in your testamentary documents (or your intestacy), in the following order, those who have the right to serve are (the statute, summarized and with some emphasis added):

1. Those entitled to the residuary estate under the Will, and in the absence of a Will;
2. The surviving spouse, and in the absence of a surviving spouse;
3. Those entitled under the intestate law of Pennsylvania (according to the size of the shares of those parties), and in the absence of such party(ies);
4. The principal creditors of the decedent at the time of his (or her) death, and in the absence of such party(ies);
5. Other fit persons.
6. If any of these should renounce their right to serve, the Register of Wills may appoint someone to succeed them in preference to the above order of successors.
7. A guardianship support agency serving as guardian of an incapacitated person who dies during the guardianship administered pursuant to Subchapter F of Chapter 55 (relating to guardianship support).
8. A redevelopment authority formed pursuant to the act of May 24, 1945, known as the Urban Redevelopment Law.

Is this how you’d like your executor or trustee to be selected? If not, be sure thoughtfully to plan out and dictate a solid succession plan for your executors and trustees.

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Together, Duke Schneider, Esq. and Donald P. Bristol, Pa.C.P. work closely with individuals on a wide variety of wealth management, business succession and estate and trust administration matters. If you’d like more information about our estate planning services or to schedule a consultation, please complete the form or call our office at 610-436-0100.

Recently, I was asked whether a contractor would be covered under a commercial general liability (“CGL”) insurance policy for faulty workmanship. This issue was explored in the case of State Farm Fire and Casualty Co. v. McDermott, 2014 WL 5285335 at *6 (E.D. Pa. Oct. 15, 2014).

In State Farm v. McDermott, a dispute arose out between a private contractor, McDermott, and the PulteGroup, a home developer, in connection with plastering, stucco and flashing and felt paper installation work provided by McDermott for approximately 299 homes in a residential development. The home developer was later sued by homeowners as a result of ongoing and recurring water infiltration issues. After engaging a water intrusion specialist, the PulteGroup determined that the water infiltration issues were the result of defects in the work of McDermott. The home developer then sued the private contractor, setting forth claims for negligence and breach of contract/warranty.  

McDermott, in turn, sought out defense and indemnity from their insurer, State Farm, under McDermott’s CGL policy. Operating under a reservation of rights, State Farm challenged their obligation to cover McDermott, maintaining that the PulteGroup’s claims did not trigger coverage under McDermott’s CGL.

In Pennsylvania, “[a] carrier’s duty to defend and indemnify an insured in a suit brought by a third party depends upon a determination of whether the third party’s complaint triggers coverage.” Kvaerner Metals Div. of Kvaerner U.S., Inc. v. Commercial Union Ins. Co., 908 A.2d 888, 896 (Pa. 2006). “The Pennsylvania Supreme Court has also emphasized that Courts are to determine the obligation by a casualty insurance company to defend and indemnify an action brought against an insured solely by the allegations of the complaint.” State Farm, 2014 WL 5285335 at *6 (citing Knaerner Metals, 908 A.2d at 896).

Under McDermott’s CGL, an insured can only obtain coverage if the alleged bodily injury or property damage is caused by an “occurrence,” which is defined under the CGL policy as an “accident.” Looking past the technical claim for negligence and focusing on the substance of the PulteGroup’s complaint, the court in State Farm v. McDermott held that there was no coverage for McDermott under the CGL policy and that State Farm was not required to defend or indemnify McDermott in connection with the PulteGroup action.

Specifically, the court in State Farm v. McDermott, citing other Pennsylvania cases interpreting identical language in CGL insurance contracts which defined “accident” as “[a]n unexpected and undesired event, or something that occurs unexpectedly or unintentionally,” reasoned that McDermott’s potential liability stemmed from his alleged failure to meet contractual obligations and that his failure to live up to his contractual obligations “cannot be seen as an accident or some unforeseeable event, as McDermott was specifically tasked with forestalling such a result.” Id. at *9. In addition, the court noted that “Pennsylvania law does not recognize the applicability of a general liability policy to breach of contract and breach of warranty claims….” Id. at *7.

Thus, where a contractual obligation is owed, there is no CGL coverage for negligent work performance.

This article was written by P.J. Gallo, a member of the firm’s Litigation Department. P.J. Gallo concentrates his practice in the areas of business and commercial litigation, construction and architectural liability, and insurance coverage disputes. With respect to his construction litigation practice, P.J. represents commercial and residential property owners in cases involving construction and design defects. He can be reached at [email protected] or 610-840-0246.

A contract is simply a document that defines a relationship. It sets forth the obligations that contract partners owe one another during the course of that relationship and, like a loving spouse, it may reward certain activities and forbid others. As in any personal relationship, we typically do not begin contractual relations with the expectation that the other party will one day break an important promise. Yet, it happens. As a commercial litigator, I frequently meet my clients only after this betrayal occurs and, while I would not dare claim to be a relationship expert, I can offer a few tips to help avoid contractual heartbreak:

▪ Due diligence. There may be no single act more important that performing due diligence before agreeing to terms. Investigate the potential partner’s reputation in the marketplace. Does it have adequate resources or capacity? Is a credit check necessary to confirm that the potential partner can pay timely? Is additional insurance necessary should something go wrong? The answers to these questions will go a long way toward avoiding messy breakups.

▪ Termination. Sometimes, it was just not meant to be. Occasionally, for example, a vendor’s performance is just not up to snuff. If the contract with the vendor does not contain a clause allowing for termination, the contract may continue for the remainder of its term. Contracts of this nature are very risky because the unhappy party is faced with the choice of continuing to receive poor performance or intentionally breaching the contract.

▪ Adequate Descriptions. It is important that the contract adequately describe the parties’ understanding. The contract should describe the exact goods or services to be delivered, where the goods or services are to be delivered, and for what price. Additional terms may include the method of payment and when payment must be made. Any misunderstanding between the parties concerning these facts can have calamitous results.

▪ Forum selection. Be wary of inconvenient forum selection clauses. A forum selection clause is any term that requires that litigation occur in a certain geographic area. Imagine that your company does business in Delaware. It signed an agreement with a vendor requiring that all litigation must occur in Alaska. These claims are sometimes enforceable and it may be that you will find yourself providing testimony in Anchorage.

▪ Full and final agreement. Often, a dispute may arise concerning verbal promises made before the parties commit an agreement to writing. If oral assurances are made, these must be in the contract. If those verbal promises are not in the contract, they are very difficult—often impossible— to enforce through litigation.

▪ Sensitive information. If you are concerned about trade secrets or other sensitive disclosures, it is advisable that you seek a strong confidentiality or non-disclosure agreement before sharing information—not after.

Of course, there are many other ways to avoid litigation through careful contracting. If you are concerned about the strength of your contracts, contact the attorneys at MacElree Harvey, Ltd. We can help ensure that your next contract relationship is a lasting one.

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Andrew R. Silverman is a member of the firm’s business and corporate law practice group. He counsels businesses and individuals, including directors, officers, and stakeholders, on corporate compliance and internal governance, business formation, commercial contracts, and business acquisitions and financing. He can be reached at 610-840-0286 or [email protected].

 

Farming has never been easy. And, according to many advocates of agriculture, an administrative rule promulgated by the Environmental Protection Agency (EPA) and United States Army Corps of Engineers (“Army Corps”), just made it even harder.

In 1972, the United States Congress enacted the Federal Water Pollution Control Act Amendments of 1972, commonly known as the Clean Water Act (the “Act”). This popular legislation was supported by Republicans and Democrats alike, passing in Senate, for instance, by an 86-0 margin.

The Act uses the term “navigable waters” when referring to the jurisdictional reach of many of its regulatory prohibitions, including a prohibition on discharging pollutants or fill materials. Accordingly, in order to determine whether the Act applies to a body of water, all one has to do is look to see what “navigable” means, right?

According to the Oxford University Press Dictionary, 5th. Edition, “navigable” means “[s]ufficiently deep and wide to provide passage for vessels.” So the Act only applies to lakes, rivers, seas, and streams, and any other body of water deep and wide enough for a boat, right?

Actually, no.

The problem is that Congress defined “navigable waters” within the Act itself, rendering the traditional, dictionary definition of “navigable waters” almost irrelevant. And, as if determined to create ambiguity, uncertainty, and argument, it defined “navigable waters” as “waters of the United States.” “Waters of the United States,” is, you guessed it, not defined in the Act.

The Supreme Court of the United States considered – and to a certain extent limited – the meaning of “Waters of the United States” in decisions issued in 2001 and 2007, but the question of how the EPA and the Army Corps would determine the Act’s reach in each case has been relatively uncertain.

Pursuant to their administrative rule-making powers, the EPA and Army Corps sought to define “Waters of the United States” by publishing a proposed definition on April 21, 2014. Opposition to the proposed rule was immediate and intense, and, by the time the public comment period closed on November 14, 2014 , EPA and the Department of the Army had received over one million public comments. The agencies issued responses to the public comments, and published the final rule on June 29, 2015. The final rule (the “Rule”) became effective on August 28, 2015 in the states (including Pennsylvania) not challenging it in the Federal Courts.

The Rule defines “Waters of the United States” in eight enumerated categories. The majority of the definitions are not particularly controversial; for instance, few would dispute that waters that are, were, or could be used in interstate commerce (Section 203.3(o)(1)(i)) are contemplated under the Act. The same could be said for interstate waters (including interstate wetlands), territorial seas, and impoundments. Less obvious, but only marginally controversial is the inclusion of tributaries (as defined in the Rule) of waters capable of being used in commerce, interstate waters, and territorial seas.

More controversial, however, is that the EPA and Army Corps have defined “waters of the Unites States” to include:

• all waters adjacent to those capable of being used in commerce, interstate waters, territorial seas, and tributaries including “wetlands, ponds, lakes, oxbows, impoundments, and similar waters”;
• certain waters (“prairie potholes,” “Carolina bays and Delmarva bays,” “Pocosins,” “Western vernal pools,” and “Texas coastal prairie wetlands”) “where they are determined, on a case-specific basis, to have a significant nexus to” a water capable of being used in commerce, interstate waters, or a territorial sea, and;
• “All waters located within the 100-year floodplain of” a water capable of being used in commerce, interstate waters, or a territorial sea and “all waters located within 4,000 feet of the high tide line or ordinary high water mark” of a water capable of being used in commerce, interstate waters, territorial seas, impoundments, or tributaries of same “where they are determined on a case-specific basis to have a significant nexus to” a water capable of being used in commerce, interstate waters, or a territorial sea.

Few have been more steadfast in opposition to the Rule as lobbyists, PACs, and other groups advocating for agriculture.

While the EPA and Army Corps assert that the Rule will help to clarify the meaning, reach, and scope of the “Waters of the United States,” many in agriculture contend that the Rule leads to further uncertainty; more pointedly, many in agriculture are of the opinion that the Rule constitutes an unprecedented federal land grab. In fact, the American Farm Bureau (“AFB”) claims that the Rule grants EPA and the Army Corps “almost unlimited authority to regulate, at their discretion, any low spot where rainwater collects, including common farm ditches, ephemeral drainages, agricultural ponds, and isolated wetlands found in and near farms across the nation.” The AFB is telling its members that the Rule expands the EPA and Army Corps’ regulatory reach to 99% of land in Pennsylvania.

There is no doubt that the Rule expands the jurisdiction of EPA and the Army Corps. In fact, the agencies concede that the Rule increased their assertion of jurisdiction over approximately 3%-5% more waters in the United States, compared with “current field practice.” And certainly, the idea of federal intervention into local farming matters is concerning.

In states without meaningful clean water legislation at the state level, the Rule may very well have a dramatic regulatory impact on agriculture.

In Pennsylvania, however, the Rule is unlikely – in practice – to have the extensive deleterious effect on agriculture predicted by the groups who lobbied against its adoption. As an initial matter, prior converted cropland, puddles, and the overwhelming majority of ditches, irrigated areas, and erosional features are specifically excluded as “Waters of the United States,” under the Rule. In other words, the Rule, on its face, has no application to most surface waters.

Pennsylvania’s Clean Streams Law (35 P.S. §§ 691.1 et seq.,) first enacted in 1937 and amended eight times thereafter, does apply to surface waters. In fact, the Clean Streams Law defines “Waters of the Commonwealth” to include “any and all rivers, streams, creeks, rivulets, impoundments, ditches, water courses, storm sewers, lakes, dammed water, ponds, springs and all other bodies or channels of conveyance of surface and underground water, or parts thereof, whether natural or artificial, within or on the boundaries of this Commonwealth.” Accordingly, Pennsylvania has long regulated “Waters of the Commonwealth” to a degree more expansive than the Rule, and Pennsylvania farmers are, in large part, used to this regulation.

For many farmers, the concern lies with the uncertainty surrounding the interpretation and application of the Rule at the federal level. It is possible, of course, that the EPA and Army Corps may interpret and apply the Rule in a manner differently than the Pennsylvania State Department of Environmental Protection has interpreted and applied the regulations flowing from the Clean Streams Law. As the implementation of the Rule advances in the coming months and years, it is critical that impacted landowners understand not only the intricacies and interplay between the Clean Water Act and Clean Streams Law, but also the interplay and relationship among the state and federal agencies charged with enforcing the legislation.

It is your land, after all.

This article was written by J. Charles Gerbron, Jr., a member of the firm’s Land Use and Litigation Departments. He concentrates his practice primarily on real estate, land use, agricultural, and business litigation related matters. Contact Mr. Gerbron at [email protected] or 610-840-0265. 

As I gained more experience with the elder law field, I’ve found that most people know the basics, that they become eligible for Medicare at the age of 65. What I have come to realize, however, is how intricate and arduous the process of enrolling in Medicare truly can be. It’s best to start at the beginning. Upon turning 65, there is a seven month window, called your enrollment period, in which you must apply for Medicare. Conveniently, the registration period begins three months before turning 65.

The date of your birthday can make a large difference in terms of the start date of your Medicare coverage. If your birthday is on the first of the month and you enroll in the any of the 3 months before your birthday month, your coverage will begin the first day of the prior month. So, if your birthday is July 1st and you register in April, May, or June, your Medicare coverage will begin June 1st. If your birthday is not on the first, your coverage will begin the first day of your birthday month. There are different rules should you register in your birthday month or any of the three subsequent months. Remember that it is extremely important to register timely to avoid any potential penalties, especially because these penalties may last for as long as you have Medicare.

Speaking of penalties, if you do not enroll timely in a Part B plan, a 10% penalty will be assessed against your monthly premium for every full year you fail to register. For failing to enroll in a drug plan, you will be assessed a 1% penalty for each full, uncovered month. Keep in mind that if you wish to also enroll in a COBRA plan, there are different rules governing whether you may have both COBRA and Medicare depending on which plan you enrolled in first.

Lastly, it will be important to assess your specific needs as to whether to enroll in a traditional Medicare plan, which is funded by the state, or a Medicare Advantage Program, which is offered by private companies. One of the biggest benefits to having a traditional Medicare plan is that you can see any doctor in the United States that accepts Medicare, rather than having to choose from a network of providers. On the other hand, a Medicare Advantage Plan may be best for you if you prefer to put a cap on your out of pocket spending, rather than paying a portion of the cost of all your health services in any given year.

There are numerous considerations to keep in mind when embarking on your Medicare enrollment. These can include when to enroll and what type of plan, out of the many available, best fits your needs. Just remember, before enrolling in a Medicare plan, a comprehensive assessment of your health needs can make the process much more manageable.

Kristen R. Matthews works closely with individuals on a wide variety of estate and trust planning and administration matters. She is an experienced elder law attorney and assists clients with matters including advance and crisis Medicaid planning, guardianships, special needs trusts, and Veterans Pension benefits. To learn more about Kristen’s practice email her at [email protected], or call her at 610-840-0272.