Opinion
No. 708 C.D. 2014
04-22-2015
Straban Township v. Hanoverian Trust, Heywood Becker, Trustee and Lisa M. Phillips Appeal of: Heywood Becker
BEFORE: HONORABLE RENÉE COHN JUBELIRER, Judge HONORABLE MARY HANNAH LEAVITT, Judge HONORABLE JAMES GARDNER COLINS, Senior Judge
OPINION NOT REPORTED
MEMORANDUM OPINION BY JUDGE LEAVITT
Heywood Becker, pro se, appeals an order of the Court of Common Pleas of Adams County (trial court) directing Becker, as the trustee of the Hanoverian Trust, to obtain counsel to represent the trust in an injunction proceeding. Becker argues that he may represent the trust pro se and that this representation will not constitute the unauthorized practice of law. Concluding that more facts are needed to determine whether the Hanoverian Trust is the equivalent of a corporation, which can be represented in court proceedings only by a member of the bar, we vacate and remand.
On February 27, 2013, Straban Township filed a complaint seeking to enjoin the Hanoverian Trust from operating a motel on real estate the trust owns at 2440 Old Harrisburg Road, in Gettysburg, Pennsylvania (Property). The Township served Becker, as the only known trustee of the trust, who resided in a house on the Property. The complaint also named Lisa M. Phillips, who also resided at the Property, as a defendant.
The Township's complaint alleged that the Property has been developed by two houses, a former motel and several mobile homes. Complaint, ¶5. It further alleged that in 2009 the motel contained tenants, which violated the Township's Zoning Ordinance because a motel use was no longer a permitted use in the zoning district. Complaint, ¶¶6-7. The Township instituted an enforcement action for the violation of the Zoning Ordinance, and it prevailed. Complaint, ¶8. Becker then requested the Township to issue a certificate of a pre-existing legal non-conforming use, asserting that the motel use was a lawful use at the time it was instituted. Complaint, ¶9. After litigation, the Township's denial of the certificate was upheld. Complaint, ¶¶9-10. The Township now seeks an injunction to require the Hanoverian Trust to remove all persons presently residing in the motel.
In his answer to the Township's complaint, Becker alleged that he was "the owner of the real property" and that the "Trustee of the Hanoverian Trust, is the owner of the said real estate." Answer, ¶¶3, 4. Acknowledging that a motel use is not a lawful use in the zoning district, the answer alleged that the Property was not being used as a motel for overnight transient guests. Rather, tenants live in the building under written leases. Answer, ¶6. Asserting that long term residential tenancy is a permitted use in the zoning district, the answer requested that the injunction be denied.
Becker's preliminary objections to the Township's complaint were overruled.
At a pre-trial conference, Becker stated that the motel building has been leased to eight tenants. He requested that they be given notice and an opportunity to intervene in the case. The trial court ordered that the Township provide notice to the tenants.
The Township then filed a motion to compel the Hanoverian Trust to appoint an attorney to represent the trust in the injunction hearing. In support, the Township relied upon In re Estate of Rowley, 84 A.3d 337 (Pa. Cmwlth. 2013), petition for allowance of appeal denied, 97 A.3d 746 (Pa. 2014), wherein this Court held that a decedent's estate had to obtain legal counsel in order to pursue its litigation to set aside a tax sale. Further, the Township explained that counsel was necessary because it did not know the identity of the trust's beneficiaries. Specifically, the Township's motion to compel stated:
The full caption is In re Petition of the Tax Claim Bureau of Westmoreland County, Pennsylvania, to Sell Free and Clear the Property of: Estate of Anna S. Rowley. Both parties and the trial court reference it as Westmoreland, and for consistency we will also.
Beneficiaries (identities unknown) of the trust, and the currently [sic] residents of the motel building, theoretically have interests in the outcome of this case so that the protection of members of the public by way of authorized counsel being involved is extant.Motion to Compel, ¶7. Becker answered Paragraph 7 of the motion to compel as follows:
Denied. With all due respect, the undersigned is somewhat uncertain, due to the interesting grammar and phrasing employed by the [Township], as to what is actually meant by this complex allegation, but notwithstanding, does emphatically deny that the beneficiary of the trust has standing here, nor that such beneficiary have counsel representing them [sic] in this case. Moreover, the residents of the non-existent "motel
building" [a term which plaintiff uses as if it connoted some legal effect, or has any legal significance, which is denied] may have some theoretical interest [to use the plaintiff's words] in the outcome of this case, but as they are not parties, they cannot have counsel here.Answer to Motion to Compel, ¶7.
Becker also filed a brief with the trial court, asserting that as trustee, he represented himself, not the beneficiary of the Hanoverian Trust. Attached to his brief were pages from the Trust Agreement. In relevant part, the Trust Agreement stated as follows:
The Trustee shall have all of the powers permitted and allowed by Pennsylvania law regarding the ownership and management of real property, and more specifically shall have the power to make and execute leases, mortgages secured by the Trust Property, option or sale agreements for the sale or lease of the Trust Property, and to otherwise manage and dispose of the Trust Property as the Trustee shall solely determine and decide, including bringing or defending litigation, and in such event, the Trustee shall have the sole discretion to represent himself, or to retain counsel to represent him, as he shall see fit. However, in no event, may the Trustee bind the Beneficiary personally to any debt or obligation.Trust Agreement at 1-2; Certified Record at 31 (C.R. ___). A complete copy of the Trust Agreement is in the reproduced record filed with this Court because Becker filed a motion for reconsideration with the trial court, to which he attached the entire Trust Agreement. The Trust Agreement lists "Heywood Eric Becker" as 100% beneficiary and "Heywood Becker" as Trustee. Trust Agreement at 5, Reproduced Record at 5 (R.R. ___). The trust res consists solely of the Property.
There is no transcript of the proceeding in the record. The parties agree it was strictly an oral argument and not an evidentiary proceeding.
In the reconsideration motion, Becker contended that the trial court should have held a hearing before deciding the issue. Reconsideration was denied by the trial court on April 15, 2014.
On March 7, 2014, the trial court heard argument on the Township's motion to compel and at the conclusion granted the motion. In doing so, the trial court acknowledged that the question of whether a trust must be represented by counsel has not been directly decided. However, the trial court found Westmoreland, 84 A.3d 337, which held that an administrator could not represent a decedent's estate in a court proceeding, supported the conclusion that a trust cannot appear in court except by counsel.
In Westmoreland, we held that an administrator's representation of a decedent's estate would constitute the unauthorized practice of law. In so holding, we noted, first, the general rule that only an attorney can represent another person. Accordingly, a corporation can appear in court only through counsel, and this includes non-profit corporations such as churches. We also relied upon our Supreme Court's holding in Harkness v. Unemployment Compensation Board of Review, 920 A.2d 162 (Pa. 2007), which considered the circumstances where a non-attorney may represent an employer, even a corporation, in an administrative hearing involving unemployment compensation. Essentially, the Supreme Court focused on how closely the administrative hearing mirrored a formal court proceeding. Where the administrative hearing is somewhat informal, does not involve discovery or require the factfinder to be an attorney, it is more likely to be permissible for a non-attorney to represent a party in that hearing. Applying this analysis, the Supreme Court held that employers may be represented by non-attorneys in unemployment compensation proceedings.
The Supreme Court identified the factors relevant to the analysis. These factors include: (1) whether the proceedings are designed to be brief and informal and not intended to be intensely litigated; (2) whether the evidentiary rules apply; (3) whether there is pre-hearing discovery; (4) whether there is a right to a jury trial; (5) whether only questions of fact are normally involved; (6) whether the fact-finder is required to be a lawyer; and (7) the amount in controversy. Harkness, 920 A.2d at 168.
Here, the trial court found that the Hanoverian Trust was similar to a Pennsylvania business trust, which is defined as a "corporation or similar entity." PA. R.C.P. No. 2176. A corporation may appear in court proceedings only by counsel. The trial court also found that the Hanoverian Trust was similar to an estate and, thus, Westmoreland compelled the same result, i.e., the trust had to be represented by counsel. Finally, using the Harkness analysis, the trial court held that a formal injunction proceeding required the trust to be represented by counsel, not the trustee. The trial court ordered Becker to obtain counsel, and he appealed to this Court.
It provides that a "corporation or similar entity"
includes any public, quasi-public or private corporation, insurance association or exchange, joint stock company or association, limited liability company, professional association, business trust....
On appeal, Becker raises several issues. First, he asserts that this Court has jurisdiction even though the trial court's order is not final. It is a collateral order and, thus, appealable by right. Second, he contends that the trial court erred in holding that the Hanoverian Trust is a business trust or similar to a corporation.
When the issue before us involves a pure question of law, our standard of review is de novo and our scope of review is plenary. Buffalo Township v. Jones, 813 A.2d 659, 664 n.4 (Pa. 2002). --------
We begin with the question of whether the trial court's order is appealable, which is not contested by the Township. Rule 313 of the Pennsylvania Rules of Appellate Procedure states as follows:
(a) General rule. An appeal may be taken as of right from a collateral order of an administrative agency or lower court.PA. R.A.P. 313. In Westmoreland, this Court held that a trial court order directing an estate to appoint counsel was a collateral order appealable as of right. This is because the issue of whether a non-attorney may represent an estate was separable from the main cause of action; the order raised an important question, i.e., whether a non-attorney may represent another person in court; and the claim would be lost if not appealable. Westmoreland, 84 A.3d at 340. Westmoreland is dispositive, and we conclude that the trial court's order to Becker is appealable as a collateral order.
(b) Definition. A collateral order is an order separable from and collateral to the main cause of action where the right involved is too important to be denied review and the question presented is such that if review is postponed until final judgment in the case, the claim will be irreparably lost.
In his second issue, Becker argues that the trial court erred because he is the trustee and the sole beneficiary of the Hanoverian Trust. Although Becker raised this point in his Rule 1925(b) statement of errors complained of on appeal, the trial court did not respond in its Rule 1925(a) opinion. The trial court simply relied upon its initial opinion.
The trial court's initial opinion states that the Trust Agreement was missing pages and that it was unclear what kind of trust it created. Nevertheless, the trial court went on to decide that the Hanoverian Trust was a business trust. Becker counters that the Trust Agreement actually states it is not to be construed as "a corporation, limited partnership, association or estate, but rather ... a contract between the Trustee and the Beneficiary." R.R. 1. Becker requests that this Court reverse the trial court or remand the matter so that the nature of the Hanoverian Trust can be established.
The Township responds that the Uniform Trust Act establishes that a trust is created when "the same person is not the sole trustee and sole beneficiary of the trust." 20 Pa. C.S. §7732(a)(5). If Becker is the sole trustee and sole beneficiary, as he argues, then no trust was ever formed, making the representation of the Hanoverian Trust a moot issue. Further, the Township would have to name Becker, in his individual capacity, as defendant. The Township requests that this Court remand the matter to the trial court for a determination regarding the legal status of the Hanoverian Trust.
To determine the nature of a trust, the court must determine the settlor's objective intent; this requires "a detached analysis of the document itself." Miller v. Commonwealth, 84 A.3d 620, 623 (Pa. 2013) (construing whether the trust at issue was a living trust). The trial court did not have a complete copy of the Trust Agreement and, thus, lacked important information, such as the date the trust was created; the identity of the beneficiary; the identity of the trustee; and the property owned by the trust. Where a "record is not adequate for meaningful appellate review" a remand is necessary, even when a party has already had an opportunity to develop an evidentiary record. Allegheny County Department of Administrative Services v. A Second Chance, Inc., 13 A.3d 1025, 1042 (Pa. Cmwlth. 2011). We agree with the parties that, given these lacunae in the record, a remand is necessary.
Accordingly, we vacate the order of the trial court and remand for an evidentiary hearing. On remand, the trial court must determine the settlor's objective intent; decide whether the Hanoverian Trust is a valid trust; and, if so, what type of trust was created by the Trust Agreement. It is premature to consider whether Becker's representation of the Hanoverian Trust is the unauthorized practice of law.
/s/_________
MARY HANNAH LEAVITT, Judge ORDER
AND NOW, this 22nd day of April, 2015, the order of the Court of Common Pleas of Adams County, dated March 27, 2014, is VACATED and REMANDED in accordance with the attached opinion.
Jurisdiction relinquished.
/s/_________
MARY HANNAH LEAVITT, Judge
PA. R.C.P. No. 2176 (emphasis added).