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Schnader Appellate Team Obtains a Groundbreaking Decision in Pennsylvania Trust Law

On August 24, 2009 by Schnader in Appellate

On August 24, 2009, the Superior Court of Pennsylvania held that corporate fiduciaries are no longer bound by the long-discredited “rule of Williamson’s Estate,” a 1951 Pennsylvania Supreme Court decision which had forbidden them from receiving compensation for services as a trustee in certain trusts created in the first half of the twentieth century or earlier. The Pennsylvania legislature had sought for many years to repeal the Williamson rule, but the Supreme Court had refused to permit that legislation to take effect, holding that it would violate federal due process guarantees. In Estate of Anna E. Fridenberg, Deceased, the Philadelphia Orphans’ Court ruled that Wachovia Bank was barred under Williamson from receiving commissions on trust principal for trust administration purposes when the original trustee (a predecessor bank to Wachovia) had received compensation for services as executor under the will under which the trust was established.

Wachovia retained Schnader to handle its appeal to the Superior Court and argued that the Superior Court should defer to the Pennsylvania legislature’s repeated attempts to repeal the Williamson rule. It explained that the legislature had made known its desire to repeal the rule five separate times by separate enactments and that any federal due process objections had been removed by changes in federal due process law since the Williamson decision. In a 2-1 decision, the Superior Court agreed with our arguments and found Williamson limited to its facts. The dissent agreed on all substantive grounds as well, but felt that only the Supreme Court could change the Williamson result.

The case was handled by an appellate team consisting of Ralph Wellington, Carl Solano, and Bruce Merenstein, with the assistance of Mark Carlidge from the Firm’s Trusts and Estates Department. Carl Solano argued the case before a panel consisting of Judges Correale Stevens, Richard Klein, and John Kelly¬†on March 31, 2009.

Category: Appellate