J-A13004-20
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`NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37
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` IN THE SUPERIOR COURT OF
` PENNSYLVANIA
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` No. 3007 EDA 2019
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`IN RE: TRUSTS UNDER WILL OF
`ROBERT L. MONTGOMERY, JR.
`DECEASED FOR THE BENEFIT OF
`H.BEATTY CHADWICK (TRUST NO. 6)
`AND MARITAL TRUST UNDER WILL
`OF ROBERT L. MONTGOMERY, JR.,
`DECEASED, FOR THE BENEFIT OF
`ELIZABETH B. MONTGOMERY AS
`APPOINTED BY THE WILL OF
`ELIZABETH B. MONTGOMERY,
`DECEASED FOR THE BENEFIT OF H.
`BEATTY CHADWICK (TRUST NO. 7)
`
`
`APPEAL OF: H. BEATTY CHADWICK
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`Appeal from the Order Entered September 30, 2019
`In the Court of Common Pleas of Montgomery County Orphans’ Court
`Division at No(s): No. 1977-X0448
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`BEFORE: BENDER, P.J.E., LAZARUS, J., and DUBOW, J.
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`MEMORANDUM BY BENDER, P.J.E.:
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`Filed: August 13, 2020
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`H. Beatty Chadwick (Appellant) appeals pro se from the orphans’ court’s
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`adjudication of the 2018 accounts of two trusts created under the will of
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`Robert L. Montgomery, Jr., (Decedent), and the will of Elizabeth B.
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`Montgomery, the deceased wife of Decedent. Pursuant to the court’s
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`adjudication, Appellant’s objections were dismissed and the payment of
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`attorney’s fees to PNC Bank, N.A. (Trustee/Appellee) was approved. We
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`affirm.
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`As noted in a prior decision by this Court, responding to an earlier appeal
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`filed by Appellant, this matter has a “long, torturous, and infamous” history.
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`J-A13004-20
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`See In re Trusts Under the Will of Montgomery, 161 A.3d 392 (Pa. Super.
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`2017) (unpublished memorandum). The terms of the trusts provided that
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`Appellant was to be the lifetime beneficiary of the trusts and that after
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`Appellant’s death, the principal of each trust was to be distributed to various
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`charities. Specifically, with regard to the amount of the payment due
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`Appellant, he was to receive a percentage of the lesser of the net income of
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`the trust or a stated percentage of the fair market value of the principal of the
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`trust.
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`The present appeal arises from the filing of the fifth accounting of trust
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`#6 and the third accounting of trust #7. As part of the petitions for
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`adjudication of the accounts, Appellee requested the payment of attorney’s
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`fees in the amount of $447,635.40 to cover the costs incurred by it, which
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`were expended to defend itself against Appellant’s claims, both past and
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`present. Following the filing of these petitions, Appellant filed objections
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`alleging Appellee breached its fiduciary duties relating to the investment of
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`the trusts’ assets and asserting that its request for attorney’s fees should be
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`denied.
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`A hearing was held on February 26, 2019, at which the court heard
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`testimony and received evidence. On September 30, 2019, the court issued
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`its adjudications, dismissing Appellant’s objections and approving the
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`payment of the attorney’s fees. The orphans’ court also denied Appellant’s
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`motion for reconsideration. Thereafter, Appellant filed a timely appeal.
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`- 2 -
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`J-A13004-20
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`We begin by setting forth our standard of review.
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`Our standard of review of the findings of an Orphans’ Court is
`deferential.
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`When reviewing a decree entered by the Orphans’
`Court, this Court must determine whether the record
`is free from legal error and the court’s factual findings
`are supported by the evidence. Because the Orphans’
`Court sits as the fact-finder, it determines the
`credibility of the witnesses and, on review, we will not
`reverse its credibility determinations absent an abuse
`of that discretion.
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`However, we are not constrained to give the same
`deference to any resulting legal conclusions.
`
`In re Estate of Harrison, 745 A.2d 676, 678-79 (Pa. Super.
`2000), appeal denied, 563 Pa. 646, 758 A.2d 1200 (2000)
`(internal citations and quotation marks omitted). “The Orphans’
`Court decision will not be reversed unless there has been an abuse
`of discretion or a fundamental error in applying the correct
`principles of law.” In re Estate of Luongo, 823 A.2d 942, 951
`(Pa. Super. 2003), appeal denied, 577 Pa. 722, 847 A.2d 1287
`(2003).
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`In re Fiedler, 132 A.3d 1010, 1018 (Pa. Super. 2016) (quoting In re Estate
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`of Whitley, 50 A.3d 203, 206-07 (Pa. Super. 2012)).
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`
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`Appellant raises the following two issues for our review:
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`1. Where the trustee of trusts with a beneficiary entitled only to
`receive trust income invests for total return principally by
`capital appreciation and the trusts achieve substantial capital
`appreciation, did the court below err in dismissing objections
`to [a]ccounts that the trustee violated fiduciary duties by
`refusing to exercise its statutory power to adjust the total
`return of the trusts to produce income which will accomplish
`the purposes of the trusts as set forth in the terms thereof?
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`2. Whether the court below abused its discretion in allowing a
`trustee to collect from trusts additional counsel fees and
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`- 3 -
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`J-A13004-20
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`expenses of $477,635.40 for an [a]ccounting proceeding where
`$516,733.78 already had been allowed for such purposes,
`1,874 hours were billed by counsel to represent the trustee in
`such proceeding where the evidentiary hearing was less than
`one day, and total fees and expenses allowed were 88% of the
`combined assets of the trusts?
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`Appellant’s brief at 37.
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`
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`We have reviewed the certified record, the briefs of the parties, the
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`applicable law, and the thorough 17-page opinion of the Honorable Lois E.
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`Murphy of the Court of Common Pleas of Montgomery County, dated
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`September 30, 2019. We conclude that Judge Murphy’s opinion properly
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`disposes of the issues and accompanying arguments presented by Appellant.
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`Accordingly, we adopt her opinion as our own and affirm the order dismissing
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`Appellant’s objections.
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`Order affirmed.
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`Judge Dubow joins this memorandum.
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`Judge Lazarus files a concurring statement in which President Judge
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`Emeritus Bender and Judge Dubow join.
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`Judgment Entered.
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`Joseph D. Seletyn, Esq.
`Prothonotary
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`Date: 8/13/20
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`- 4 -
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`1911 Jt���:l8€"J'R.if8'61U?t0'H.1:t�. 1
`;J,J o o <1� :io
`,1 f'','
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`IN TiiE COURT OF COMMON PLEAS OF MONTGOMERY COUNTY, PENNSYLVANIA
`ORPHANS' COURT DIVISION
`No. 1977·X0448
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`•
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`ESTA TE OF ROBERT L. MONTOOMER Y, JR., DECEASED
`Sur Trust for Herbert B. Chadwick (Trust No. 6)
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`The fifth account of PNC Bank, N.A.1, trustee of the testamentary trust created und<:r
`Item FOURTH(AX4) (hereinafter refered to as "trust No. 6") of the will of Robert L.
`Montgomery, Jr., Deceased, was called for audit on June 4, 2018. The objections filed therete by
`H. Beatty Chadwick (hereinafter ''the objectant") were heard on February 26, 2019, and the
`matter is now ripe for adjudication
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`COUNSEL APPEARED AS FOLLOWS:
`
`DUANE MO'RRIS LLP
`By: Lewis R. Olshin, Esquire
`for the Accountant
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`COMMONWEALTH OF PENNSYLVANIA
`OFFJCE OF THE ATTORNEY GENERAL
`By: David Dembe, Esquire, Deputy Attorney General
`as par�n: patriae, for charitable interests
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`I. PNC Bank, N.A. succeeded Provident National Biink \Ylllch was named as a trustee in Item 'f6NTH of Robert
`Moncgon.,ery', Win.
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`THIS DOCUMENT WAS DOCKETED AND SENT ON 09l30/2019
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`

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`1977-X0448.105.3 Adjudication, Page�
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`UNREPRESENTED PAR TY APPEARED
`AS FOLLOWS:
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`H. Beatty Chadwick, objectant
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`The account shows a balance of principal and income in the amount of $468,139.89
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`composed of stocks, bonds, cash, and cash equivalents as set forth on pages 18, 19 and 40.
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`Principal of$462,221.59 has been revalued as of February 15, 2018 at $571,026.86.
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`The account was filed to acquaint interested parties with the transactions that have
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`occurred during the period of this administration (April 7, 2014 to February 15, 2018) and to
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`seek Court approval of the payment of certain legal fees and costs from principal. The trust
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`continues.
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`1t is stated that all parties in interest, including representatives of those not sui juris and
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`of those still unborn or otherwise undetermined, have had timely notice of the filing of the
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`account.
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`The relevant terms of the trust are as follows: Subparagraph B.(2)(c) of Item FOURTH
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`of the WilJ as reformed by a 1976 decree of this Court directs the trustees to hold one-sixth (1/6)
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`of the residue of the decedent's estate in trust (Trust No. 6) and, following the death of the
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`decedent's wife, Elizabeth B. Montgomery, to pay to the decedent's nephew, the objectant, for
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`his life, in each taxable year of the trust, a unitrust amount equal to the lesser of (i) the net
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`income of the trust for such taxable year and (ii) six percent (6%) of the fair market value of the
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`•
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`

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`1977-X0448.105.3 Adjudication, Page �
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`trust assets, valued annually on the first business day of the taxable year of the trust. The taxable
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`year of the trust shall end on December 31. If the net income of the trust for any taxable year
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`exceeds six percent (6%) of the net fair market value of the trust assets, the uni trust amount
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`payable to the objectant shall include such excess net income to the extent that the aggregate of
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`the amounts paid in prior years is less than six percent (6%) of the aggregate fair market value of
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`the trust assets for such years. Any income not distributed shall be added to principal.
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`Elizabeth B. Montgomery died on September 13, 1980, and the trust continues for the
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`benefit of the objectant, Upon his death, the remaining principal and income is distributable to
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`the charitable organizations listed in subparagraph B.(2)(e) ofltem FOURTH of the will as
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`reformed by the 1 976 decree.
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`The objectant filed fifteen objections to the account2 all of which were heard3 on
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`February 26, 20 I 9. The first five objections to the account raise essentially the same claim --
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`that the trustee's management of the trust is not generating enough income for the objectant, At
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`the hearing, the objectant first called Francis J. O'Grady as on cross. Mr. O'Grady is the PNC
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`officer in charge of investments for this trust and the companion trust (trust no. 7) of which the
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`objectant is also the income beneficiary. Mr. O'Grady stated 1.hat the assets of both trusts are
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`2 The objectant's filing lists eight objections to the account and seven to the trustee's petition for additional counsel
`fees. That petition was filed on November 13, 2017, and dismissed without prejudice by the Court on November 15,
`2017. The requests for additional fees and costs are set forth as questions for adjudication in the trustee's petition
`for adjudication now before us.
`3 The objections to a companion trust under the Robert Montgomery will for the benefit of this objectant (trust no.
`7) were heard at the same time as those to this trust. The No. 7 trust is being adjudicated contemporaneously
`herewith, and for that reason, there are multiple references to "accounts" and "trusts" (plural) herein.
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`3
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`1977-X0448.105.3 Adjudication, Page'
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`allocated 65% in equities and 35% in fixed income. He explained the goal of this allocation is:
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`to manage the trusts in a balanced and impartial way so that we can meet the needs of the
`income beneficiary as well as grow the principal relative to inflation and hopefully in
`excess of inflation for the reminder interest.
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`(N.T. 13.) The witness confirmed that the investment objective for this trust during the
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`accounting period has been capita) appreciation with current income as a secondary objective.
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`(N. T. 23.) He agreed the trustee does not seek to achieve any particular amount of income.
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`(N.T. 24.) When asked why the bank's strategy, in 1994, was to achieve a 5 percent income
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`return, the witness explained that interest rates were much higher at that lime, and the return
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`from bonds was then close to 5 percent -- much higher than their return in the last five years.
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`(N.T. 26.) The witness explained that investing the entire trust in bonds could maximize income,
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`however, doing so would not be the balanced and impartial approach needed to treat all the
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`beneficiaries fairly. The witness stated that increasing the bond content of the portfolio at
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`present would increase the income by onJy a small amount. (N.T. 37.) In response to questions
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`about investing the assets entirely in bonds, he stated:
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`If we invest the portfolio 100 percent in fixed income, the income will flow completely to
`the income beneficiary, and we wilJ not be ... positioning the portfolio for potential
`long-term growth that can offset inflation and the negative impact of inflation, as well as
`grow the portfolio above the rate of inflation for the future charitable interests.
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`(N.T. 44-45.) He further explained the portfolio would not grow at all if the entire res was
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`invested in bonds. Thus, over time, the balanced portfolio approach would assure growth in the
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`trust assets that would benefit not only the remainder beneficiaries, but also the income
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`beneficiary, as a higher net income would be generated in future years from a higher principal
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`4
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`1977-X0448.105.3 Adjudication, Page�
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`balance than would be generated from an eroded principal balance. He denied the objectant's
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`suggestion that the balance mix represents a judgment call to benefit the remainder patties at the
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`expense of the income beneficiary. (N.T. 48.) He also added that the income beneficiary
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`benefits from the growth of principal on the equities side because the equities throw off
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`dividends that are paid to the income beneficiary. (N.T. 50.)
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`In response to questions by counsel for the trustee, Mr. O'Grady stated he has a master's
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`degree in business and has been employed at PNC for thirty-plus years. Regarding the bank's
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`process for establishing investment policies, he explained: "We have an investment review
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`committee, and we have an investment strategy committee that set strategy for the asset
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`allocations and sub-allocations in each asset category." (N.T. 54.) He stated the employees on
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`the review committee do their due diligence regarding the various types of investments. The
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`witness stated the asset allocation is of primary importance and the 65/35 allocation is ideal for
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`the long-term objective of this trust. (N.T. 59.) He also noted that: "in the [present) low-yield
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`environment, the dividend yield from equities is competitive with the current yield from bonds."
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`(N.T. 60.)
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`Jeffrey Mills then testified as an expert for the trustee. He is employed as the co-chief
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`investment strategist for all of the asset management businesses at PNC Financial Services
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`Group. He stated he manages the overall investment direction of the firm from asset allocation
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`to execution. His duties include researching, writing investment publications, meeting with
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`clients, and interacting with the media. He described PNC's approach to developing investment
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`5
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`1977-X0448.105.3 Adjudication, Page c
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`strategies as follows:
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`It's a combination of a number of groups that work within our asset management group,
`my group, investment strategy as well as portfolio construction. They're responsible
`really for the implementation of the asset allocation, and then there is our investment
`adviser research group that does the due diligence for the menu of products we have to
`..
`choose from to make those implementations ... Our investment policy committee
`would be the committee that governs the actual assets allocation. We develop a number
`of different strategic allocations. So they would be long-term asset allocation profiles
`[for] different client types, from institutional clients, endowments, foundation, et cetera.,
`to wealth management clients ... So all of those are brought to that committee and voted
`upon by a fairly diverse group that represents not only our group in strategy but other
`groups throughout asset management in the multiple businesses.
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`(N.T. 71-72.) He stated that the investment strategy group members have regular contacts in
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`person and by phone with the investment advisors. He explained that the investment adviser
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`research group is responsible for the due diligence as to individual investments, i.e., interviewing
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`fund managers, checking their backgrounds, going on-site to the operations centers, etc. (N.T.
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`74.) He echoed Mr. O'Grady's testimony that a 65/35 asset allocation is an appropriate balance
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`when there are both a current income beneficiary and charitable remaindermen. He added that
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`approximately 40 percent of the equity portion of the portfolio is invested in the S &P 500 index
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`fund and generates above-average dividends, and almost 9 percent is invested in iShares Select
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`Dividend ETF (DVY) which is dividend-focused. (N.T. 77.)
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`The witness also reviewed a chart that ranked the major asset classes and their returns
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`during each year from 2008 through 2018. (Exh. A-4.) He noted:
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`In hindsight, it would be very easy to say, well, we should have picked this asset class or
`that asset class. As you see, as you go year by year, it's almost a completely random
`smattering of what is the best and what is the worst and in between. We need to build
`portfolios with the realization .that we can't predict the future with perfect foresight. And
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`6
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`1977-X0448.105.3 Adjudication, Page;
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`understanding the historical behavior of asset classes. We know that we need prudent
`exposure to many, if not all, of these in order to build a portfolio that manages risk and
`tries to maximize the amount of utility, whether it's income or return, for the given
`amount of risk taken.
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`(N.T. 87-88.) He reviewed a chart comparing the annual returns from 2014 through 2018 for the
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`Russell 3000 and the S & P 500 (representative indices for the U.S. stock market) to the returns
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`for the Barclays Aggregate Bond Index (a representative index for the U.S. bond market) and to
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`those of mixed portfolios. (Exh. A-5.) He explained that the chart demonstrated that an
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`investment in bonds only would result in a dramatic decrease in principal and very little gain in
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`the way of income. (N.T. 89-90.) On the subject of converting to all bonds, he noted that, if
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`gains were realized from seJJing off equities to purchase bonds, there would be capital gains
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`taxes lo pay. (N.T. 92.) Mr. Mi11s opined within a reasonable degree of professional certainty
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`that the trustee was prudent and followed an appropriate investment strategy for this trust. (N .T.
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`95.)
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`In response to the objectant's questions, Mr. Mills rejected the suggestion that he would
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`advise the 65/35 mix to all clients if he were an investment manager. (N.T. 106.) He also
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`rejected the objectant's suggestion that income should be emphasized if the income beneficiary
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`is 82 years old (as is the objectant.) Mr. Mills stated:
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`The trusts have always been and will always continue to be invested with the interest of
`both the current income beneficiary was well as the remaindermen in mind. Therefore,
`the 65/35 we feel like takes into account both current income and provides stable income,
`but we also need to be in a position where we're continuing to grow the principal for as
`long as that trust is around. So for us, regardless of age, we feel like this is the
`appropriate allocation.
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`(N.T. 107-08.) He reiterated that maximizing the income of the portfolio is not the objective.
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`7
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`1977-X0448.105.3 Adjudication, Page ·
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`In response to a question from the Senior Deputy Attorney General, Mr. Mills stated the
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`current allocation of the assets being held by the trust is the same as it was during the last
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`accounting period, (N.T.112.)
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`The objectant then questioned William Cotter, a vice president at PNC who has been trust
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`administrator of this trust and the companion trust since 2017 (and is also an attorney). Mr.
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`Cotter demurred to the objectant's postulation that providing income to the income beneficiary
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`was "really the only purpose of setting up the trust." (N .T. 121.) He disputed the objectant' s
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`proposition that the trustee's primary directive should be to achieve the unitrust percent (6% as
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`per the amendment to the instant trust) and stated:
`TI1e way I read [the trust] is that the trustee should invest the trusts reasonably. Then if
`there is 6 percent ... of income, [it] should be given out to you. If there is more than
`that, it should be capped at 6 percent and held and converted to principal and then left for
`the remainder beneficiaries. So it seems that you are qualifying it as a target whereas it
`seems to me to be more of a cap.
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`(N.T. 135.) The witness testified that, in response to the objectant's request in April of2018
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`that the trustee exercise its power of adjustment to create more income, the objectant was told
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`that PNC did not recognize any duty to adjust between the income and principal to produce the
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`income equal to the uni trust amount. (N. T. 145.) He added that, in his experience, the power of
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`adjustment is not exercised by PNC in trusts with charitable remaindermen, When asked if he
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`saw any appropriate way to produce more income for the income beneficiary, Mr. Cotter said no,
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`"other than perhaps manipulating investments into different vehicles which might lead to a
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`minimal increase." (N. T. 149.)
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`8
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`1977-X0448.105.3 Adjudication, Page i
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`The objectant's questions to the witness then focused on the fees paid to the trustee's
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`counsel and whether the trust had paid duplicate bills. Mr. Cotter stated he authorized payment
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`of $106,344.50 from this trust through August of 2017 in accordance with the Court's 2016
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`adjudication4 of the prior accounts". (N.T. 156.) Mr. Cotter gave his opinion that the legal fee of
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`$91,000 incurred by the trustee for work in connection with the objectant's appeal? to the
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`Superior Court from the 2016 adjudications was reasonable and necessary. (N.T. 162.)
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`Jn response to questions from PNC's counsel, Mr. Cotter explained the various
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`adjustments, disbursements (including counsel fees) and distributions made by the trustee in
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`accordance with this Court's February 24, 2016 adjudication and May 4, 2016 order sur
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`exceptions. A chart was introduced into evidence to demonstrate the actions taken by the trustee
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`in the period between July 31, 2017 and September 1, 20J7. (Exh, A-12.) The witness
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`explained that the firm of Duane Morris LLP was paid $95,933.51 from the principal of this
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`trust.
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`The objectant's next witness was Thomas Davidson who has been head of the HSBC
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`Trust Company in Delaware since 2018. He stated he has worked as a trust administrator and
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`fiduciary adviser at various institutions since 1997. Regarding the trust sub Judice, Mr. Davidson
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`4 In the order sur exceptions, the Court en bane denied all 12 of the objectant's complaints and sustained the
`trustees' exception regarding the source of payment of counsel fees and expenses.
`:i The 20 I 6 adjudication of the administration of trust no. 6 covered both the trustee's third and fourth accounts.
`6 The Superior Court affirmed the adjudication issued by this Court at 161 A.3d 392 (Table) (2017).
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`9
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`1977-X0448.105.3 Adjudication, Page 11
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`stated it is what is commonly known as a NIMCRUT (net income makeup charitable remainder
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`uni trust) and described the origin of this type of trust as follows:
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`You had this problem with the regular uni trust of depleting principal. The idea of the net
`income trust was to try to preserve the principal so you had that available for the
`remaindermen -- in these particular cases, charities -- but you were still providing
`income. And the net income makeup allowed you, basically -- in those years where you
`[ eamed) over the percentage you could pay out in addition to that percentage.
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`(N.T. 187.) When asked ways to generate additional income. Mr. Davidson suggested the trust
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`language could be modified to define post-contribution capital gains as income. (N.T. 190.)
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`When asked about changing the allocation of assets to benefit an income beneficiary, Mr.
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`Davidson testified:
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`[W]hether you are 65/35, whether you're 60/40, 70/30-- l mean pick your range -- within
`that range you' re still balanced, per se, and you' re not changing the income generation
`versus the growth that much. But sometimes just a small tweak, even though you might
`free up only a couple hundred dollars, sometimes that makes a difference to an income
`beneficiary. So you can do those tweakings. It doesn't get you a whole lot of difference
`normally on the smaller trusts ... My understanding is that we're looking at trusts that
`collectively are between a million and $1. l million. And so you are looking at a little
`over a half a million apiece, which doesn't give you a lot of room to play.
`
`(N.T. 192-93). He commented that the present allocation of assets in this trust is in "a safe zone"
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`and added: .. 1 think you will find that most trust companies will consider that to be a good total
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`allocation for total return." (N.T. 194.)
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`During cross examination by counsel for the trustee, Mr. Davidson suggested a trustee
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`might change a 65/3 5 allocation to 70/30 "to ease some of the pressure that the trustee is under
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`because of the income beneficiary." (N.T. 197.) Mr. Davidson acknowledged that he reviewed
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`neither this Court's adjudications of the prior accounts filed for this trust nor the Superior
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`10
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`

`

`1977-X0448.105.3 Adjudication, Page 1 ·
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`Court's opinion on this objectant's unsuccessful appeal from the last adjudication. He agreed
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`there is no language in the trust document giving the trustee the discretion to invade principal for
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`the income beneficiary. (N.T. 199.) He agreed that the trustee could not make a unilateral
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`change to the trust to allow for principal invasions for the income beneficiary. (N.T. 202.)
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`Counsel for the trustee then presented the testimony of Neil Cass, a partner at the law
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`firm of Duane Morris. He testified that he served as co-trustee of this trust through the
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`adjudication of the last accounts, at which point his resignation became effective. Mr. Cass
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`tallied the surcharges that the objectant had sought in connection with the prior accounts of this
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`and the companion trust, and which were denied by this Court and the Superior Court, at
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`$897,408.93. He identified three Duane Morris invoices showing the fees incurred by and
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`services rendered to the trustee for this trust and the companion trust through the appeal period.
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`(Exh. A-14.) He stated that the amount being sought has been reduced to $447,635.40. He
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`explained the extensive filings and proceedings that were required in the surcharge litigation.
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`(N.T. 224-226.) He explained that the firm performed the services in the most cost-effective way
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`possible based on the experience and billing rate of the lawyers involved. (N.T. 227-29.)
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`The witness also testified in detail about the fees of $303,881 that the trustee had paid
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`during the previous accounting period and the Court approved in the 2016 adjudications, and
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`about the additional fees of $212,689 that were approved in the 2016 adjudications and paid
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`during the present accounting period. He stated there was no duplication of fees paid to the firm,
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`(N.T. 230-33.) He stated the trustee was not seeking approval of any fees for work related to the
`11
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`1977-X0448.105.3 Adjudication, Page 1�
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`justifying fees. (N.T. 237.) As for the compensation Mr. Cass himself received, he explained, "I
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`received a commission for my services as a trustee, and I received legal fees for my work as an
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`attorney. But I did not receive legal fees for my work as a trustee." (N.T. 239.)
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`Mr. Cass was asked on cross why time was spent preparing for the hearing on objections
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`to the prior account before both the initially scheduled date and the date the proceeding actually
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`took place. He explained that counsel had to review the issues and witnesses had to refresh their
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`recollections. (N.T. 263.)
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`After careful consideration of the testimony and evidence and the parties' post-hearing
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`memoranda, we must dismiss all of the objections (nos. I through 5) that relate to the objectant's
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`pursuit of additional income. The testimony of the trustee's witnesses established that the
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`allocation of assets is prudent, appropriate, and fair to both the income beneficiary and the
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`charities. The objectant's own witness, Mr. Davidson, said as much. Mr. Davidson testified
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`that, while it might be reasonable to increase the investment in bonds slightly, the increase in
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`income would be minimal. His testimony that the trustee could -- not is obligated to -- seek to
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`reform the trust so principal could be paid to the income beneficiary is problematic. Reformation
`would require Court approval and such a petition would surely be resisted by the Attorney
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`General and the charities. The litigation would result in additional legal fees and would further
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`deplete the trust. Furthermore, we note that the present allocation of assets is the same as during
`
`the previous accounting period) and the Superior Court affirmed our decision in the 2016
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`12
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`

`

`1977·X0448.105.3 Adjudication, Page 13
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`adjudications that the trustee did not violate its fiduciary duty by pursuing this investment
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`strategy.
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`In objections nos. 6, 7 and 8, it is contended that trust counsel has been paid to date more
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`than this Court previously authorized. In the 2016 adjudication of the fourth account, this Court
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`approved fees of $110,563 .83 from principal as shown in the account on page 16 and fees of
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`$43,874.00 from income as shown on page 34, for a total of $154,437.83. In the 2016
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`adjudication, the Court also approved the payment of additional fees and costs of $106,344.50, as
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`requested in part D of the rider to question 13 of the petition for adjudication. Mr. Cass testified
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`that these additional fees and costs were paid from the trust in three installments ($364.99 on
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`June 24, 201 S, $9,986.00 on December 31, 2015, and $95,993.51 on August 9, 2017). He
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`demonstrated clearly and methodically that the firm was paid the proper amounts. The
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`objections alleging overpayment are therefore dismissed.
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`The remaining objections can be summarized as follows. Objections nos. 9 and 11
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`contend the additional fees and expenses now being sought are not fair and reasonable in relation
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`to the work that was needed. No. 10 claims that these fees were covered at the hearing on the
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`objections to the prior account. Nos. 12 and 13 suggest the law firm seeks to be paid foes for its
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`time pursuing fees and filed the account solely for the purpose of obtaining additional fees. No.
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`14 objects to counsel fees attributed to Neil Cass who was a witness at the prior heating,
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`contending his role was that of trustee, not of counsel. No. 15 asks the Court to exercise its
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`13
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`

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`1977-X0448.105.3 Adjudication. Page 1
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`equitable power and deny any additional compensation because the trustee has not acted with
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`"clean hands."
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`On the subject of determining the reasonableness of fees, as we stated in our 2016
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`adjudication of the prior account for this trust:
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`The well-established factors set forth in Lakocca Estate, guide the court in its
`determination of what is "just and reasonable" compensation given the specific
`circumstances. Lakocca Estate, 431 Pa. 542, 246 A.2d 337 (1968). The LaRocca factors
`include:
`(1) the amount of work performed; (2) the character of the services
`rendered; (3) the difficulty of the problems invo