Mary Lou Frazier Estate vs. Wells Fargo Bank No. 2014-01991

Civil Action-Law-Power of Attorney-Agent’s Authority-Conversion of Sole Account to Joint Account-Liability upon Refusal to Recognize Power of Agent-Motion for Summary Judgment-Limited Inter Vivos Gift-Language of the Power of Attorney-Good Faith for Refusal to Recognize Power of Agent

1. Mary Lou Frazier (“Decedent”), who had executed a Durable Power of Attorney designating her son as her agent and who was living in a nursing home, received medical assistance through the Pennsylvania Department of Public Welfare prior to her death, during which time she was the owner of a bank account with Defendant.

2. Prior to his Decedent’s death, Decedent’s son presented the Durable Power of Attorney to Defendant, instructing Defendant to add his name to Decedent’s account, as his counsel had advised him to do so in order to convert the asset to a nonprobate asset and to protect it from recovery by the Pennsylvania Department of Public Welfare.

3. Defendant refused to take such action on the basis that the Durable Power of Attorney did not afford Decedent’s son with the authority to convert Decedent’s account to a joint account. Counsel for Decedent’s son sent letters to Defendant explaining that Decedent’s son had the authority under the Durable Power of Attorney to convert the account into a joint account.

4. Following Decedent’s death, the Pennsylvania Department of Public Welfare asserted a claim against the Estate in the amount of $118,245.25, and the Estate was required to reimburse the Department of Public Welfare from the balance of the account of $8,121.94.

5. The Estate instituted an action pursuant to Title 20 Pa.C.S. § 5608.1, which imposes liability for a party’s refusal to accept a power of attorney. Both parties thereafter filed Motions for Summary Judgment.

6. Section 5608.1 provides that a party who fails to accept a power of attorney is required to request an opinion of counsel within seven (7) days of the presentation of the power of attorney. Once such an opinion is provided, a party is required to accept the power of attorney within five (5) business days unless the opinion raises further issues regarding the continuation of authority, the genuineness of the signatures or the scope of the agent’s authority. A party who refuses to accept a power of attorney in violation of § 5608.1 is subject to civil liability for pecuniary harm to the economic interests of the principal proximately caused by the refusal to comply with the instructions of the agent designated in the power of attorney.

7. Under § 5608.1(c)(1), a party is not required to accept a power of attorney if the party in good faith believes that the power of attorney is not valid or the agent does not have the authority to perform the act requested whether or not an opinion has been requested or provided.

8. An agent cannot make any gift under a power of attorney unless the power of attorney specifically states that the agent is authorized to do so.

9. Conversion of an account from sole ownership to joint ownership constitutes an inter vivos gift. A valid inter vivos gift requires donative intent, delivery and acceptance. Donative intent can be inferred from the relationship between the donor and the done.

10. When the Decedent’s son requested to add his name to Decedent’s account, he was making a gift of the Decedent’s property to himself.

11. Since the actions of the Decedent’s son seeking to convert the account occurred in June of 2014 prior to the repeal of § 5602.1, the prior version of that status therefore was deemed to be applicable. The applicable version of § 5602(a)(1) indicated that a principal may empower an agent to make limited gifts by the inclusion of the language, “To make limited gifts.” The class of permissible donees for a limited gift consists solely of the principal’s spouse, issue and a spouse of the principal’s issue. § 5603(a)(2)(i).

12. Since the Decedent’s son was Decedent’s issue and thereby qualified as a permissible done under the former version of the statute, the conversion of the account into joint names would have constituted a limited gift that could be authorized either by express language or language to that effect in the power of attorney. As the power of attorney did not contain specific language indicating that Decedent’s Son was empowered to make limited gifts, examination of the power of attorney document was necessary to determine whether it contained similar language granting such authority to the Decedent’s Son.

13. After comparing the provisions of the Decedent’s power of attorney, the language of Decedent’s power of attorney was broad in character and gave the Decedent’s son unfettered discretion to conduct her affairs as he thought best and the broadest authority in order to carry out decisions as to the Decedent’s property and affairs. The Son’s power encompassed the power to make a limited gift in order to protect the Decedent’s assets from confiscation by the Department of Public Welfare upon his determination that action was necessary. The request to convert the account to a joint account should have been honored by Defendant. Accordingly, the Court granted Plaintiff’s Motion for Summary Judgment in part.

14. The record was insufficient to determine whether Defendant is not subject to liability due to its good faith belief that the power of attorney did not afford such power upon Decedent’s son to convert the account to joint ownership. Defendant’s Motion for summary Judgment was denied in part, and an evidentiary hearing was directed on the issue of whether Defendant exercised good faith in its refusal to accept the power of attorney at issue.

L.C.C.C.P. No. 2014-01991, Opinion by John C. Tylwalk, President Judge, July 17, 2015.

Daryl J. Gerber, Esquire, for Plaintiff

Andrew J. Soven, Esquire, for Defendant

IN THE COURT OF COMMON PLEAS OF LEBANON COUNTY

PENNSYLVANIA

ORPHANS’ COURT DIVISION NO. 2014-01991

MARY LOU FRAZIER ESTATE, Plaintiff

v.

WELLS FARGO BANK, Defendant

ORDER OF COURT

AND NOW, this 17th day of July, 2015, upon consideration of Plaintiff’s Motion for Summary Judgment, Defendant’s Motion for Summary Judgment, the responses thereto, and the Briefs submitted by the parties, it is hereby Ordered as follows:

On the issue of the scope of the agent’s power under the Power of Attorney of Mary Lou Frazier,

(i.) Plaintiff’s Motion for Summary Judgment is GRANTED, in part; and

Defendant’s Motion for Summary Judgment is DENIED, in part.

An evidentiary hearing will be scheduled to determine the issue of Defendant’s exercise of good faith in its refusal to accept the Power of Attorney at issue in this action and to comply with the directions of the agent of Mary Lou Frazier upon the application of either party. In the alternative, the parties may request the Court to resolve this issue upon a stipulation of facts to be submitted to the Court.

BY THE COURT:

JOHN C. TYLWALK, P.J.

APPEARANCES:

DARYL J. GERBER, ESQUIRE FOR PLAINTIFFS

ANREW J. SOVEN, ESQUIRE FOR DEFENDANTS

REED SMITH LLP

OPINION, TYLWALK, P.J., JULY 17, 2015.

Before us are Motions for Summary Judgment filed by both parties. The pleadings and exhibits reveal the following facts relevant to our resolution of these matters.

Mary Lou Frazier (‘Mary”) executed a Durable Power of Attorney (“POA”) on September 8, 2008 in which she designated her son, Edward M. Frazier (“Edward”), as her agent. With regard to the powers conferred to Edward, the POA contained the following pertinent language:

I … do hereby appoint my son, Edward M. Frazier, as my agent … with full power of substitution, for me and in my name to transact all my business and to manage all my property and affairs as I might do if personally present, including but not limited to exercising the following powers:

Cash Accounts: To collect and receive any money and assets to which I may be entitled; to deposit cash and checks in any of my accounts; to endorse for deposit, transfer or collection, in my name and for my account any checks payable to my order; and to draw and sign checks for me and in my name, including any accounts opened by my agent in my name at any bank or banks, savings society or elsewhere; and to receive and apply the proceeds of such checks as my agent deems best; and to act as my representative payee for all Social Security, Medicare, and other federal state benefits.

12. General Authority. To do all other things which my agent shall deem necessary and proper in order to carry out the foregoing powers which shall be construed as broadly as possible.

(Exhibit “A” to Defendant’s Motion for Summary Judgment at ¶¶1, 12)

For some time prior to her death, Mary was in a nursing home and receiving Medical Assistance. During that time she was the owner of a bank account with Defendant Wells Fargo Bank (“Wells Fargo”). Mary passed away on June 17, 2014. Prior to that date, Edward had presented the POA to the Wells Fargo branch located in Palmyra and instructed that his name should be added to his mother’s account. Edward had been instructed to take this action upon the advice of counsel so as to convert the account into a non-probate asset and protect it from recovery of the amount of Mary’s benefits by the Pennsylvania Department of Public Welfare (“DPW”) upon her death. Wells Fargo refused to comply with this request on the basis that the POA did not give Edward the authority to convert Mary’s account into a joint account. By letter dated June 16, 2014, Edward’s counsel opined to Wells Fargo that the POA authorized Edward to take this action. (Exhibit “B” to Wells Fargo’s Motion for Summary Judgment; Exhibit “A’ to Complaint) Edward’s counsel sent another letter to Wells Fargo on July 17, 2014 requesting a response to the June 16 letter. Although Mary had passed away on June 17, 2014, the Estate explains that its counsel did not immediately inform Wells Fargo of her death. The Estate’s Brief states that Wells Fargo was “not made aware of the death of Mary Lou Frazier for the specific reason that her son and legal counsel wanted to ascertain how long it would take Wells Fargo to respond.” (Estate’s Brief at p. 3, ¶ 2)

After Mary passed away on June 17, 2014, DPW did assert a claim in the amount of $118,245.25 (Exhibit “D” to Complaint) and the Estate was required to reimburse DPW in accordance with 42 U.S.C. §1396p(b)(1) and 62 P.S. §1412. The $8,121.94 balance of Mary’s Wells Fargo account was used to reimburse DPW in accordance with this demand.

The Estate instituted this action pursuant to 20 Pa.C.S.A. §5608.1 of the

Powers of Attorney Act, at 20 Pa.C.S.A. §§5601-5611 (“the Act”), which imposes liability for a party’s refusal to accept a power of attorney. Under that provision, a party who fails to accept a power of attorney is required to request an opinion of counsel within seven days of the presentation of the POA. 20 Pa.C.S.A. §5608.1(a)(1)(B). Once an opinion is provided, a party is required to accept the POA within five business days unless the opinion raises further issues regarding the continuation of the agent’s authority under Section 5606 or the genuineness of signatures, or the scope of the agent’s authority under Section 5608. 20 Pa.C.S.A. §5608.1(a)(ii)(B)(2).

A party is not required to accept a POA if the party “in good faith believes that the power of attorney is not valid or the agent does not have the authority to perform the act requested, whether or not a certification, a translation, an affidavit under section 5606 or an opinion of counsel under section 5608(e) has been requested or provided.” 20 Pa.C.S.A. §5608.1(b)(6). A party who refuses to accept a POA in violation of Section 5608.1 is subject to “[c]ivil liability for pecuniary harm to the economic interests of the principal proximately caused by the person’s refusal to comply with the instructions of the agent designated in the power of attorney.” 20 Pa.C.S.A. §5608.1(c)(1).

The Estate claims that the loss of the $8,121.94 balance of the bank account was directly caused by Wells Fargo’s refusal to put Edward’s name on the account as co-owner. The Estate claims that it has incurred attorney’s fees and costs in association with recovering these funds and demands reimbursement for those items as well as the sum of $8,121.94. Wells Fargo argues that the request exceeded the scope of authority given to Edward under the POA. Wells Fargo filed its Motion for Summary Judgment on January 22, 2014 and the Estate filed its Motion for Summary Judgment on February 11, 2015.

Pursuant to Pa.R.C.P. No. 1035.2, a party may move for summary judgment when the evidentiary record reveals that the moving party is entitled to judgment as a matter of law:

Rule 1035.2. Motion

After the relevant pleadings are closed, but within such time as not to unreasonably delay trial, any party may move for summary judgment in whole or in part as a matter of law

(1) whenever there is no genuine issue of any material fact as to a necessary element of the cause of action or defense which could be established by additional discovery or expert report, or

(2) if, after the completion of discovery relevant to the motion, including the production of expert reports, an adverse party who will bear the burden of proof at trial has failed to produce evidence of facts essential to the cause of action or defense which in a jury trial would require the issues to be submitted to a jury.

Pa.R.C.P. No. 1035.2. The Note to Rule 1035.2 provides, in part that:

The evidentiary record may be one of two types. Under subparagraph (1), the record shows that the material facts are undisputed and, therefore, there is no issue to be submitted to a jury.

…

Under subparagraph (2), the record contains insufficient evidence of facts to make out a prima facie cause of action or defense and, therefore, there is no issue to be submitted to a jury. The motion in this instance is made by a party who does not have the burden of proof at trial and who does not have access to the evidence to make a record which affirmatively supports the motion. To defeat this motion, the adverse party must come forth with evidence showing the existence of the facts essential to the cause of action or defense.

Pa.R.C.P. No. 1035.2 – Note.

Summary judgment may be granted only in cases where the right is clear and free from doubt. Marks v. Tasman, 589 A.2d 205 (Pa. 1991). The moving party has the burden of proving the nonexistence of any genuine issue of material fact. Thompson Coal Co. v. Pike Coal Co., 412 A.2d 466 (Pa. 1979). The court is required to view the record in the light most favorable to the nonmoving party and all doubts as to the existence of a genuine issue of material fact must be resolved against the moving party. Davis v. Pennzoil, 264 A.2d 597 (Pa. 1970).

Where the non-moving party bears the burden of proof on an issue, he may not merely rely on his pleadings or answers in order to survive summary judgment; rather, he must present depositions, affidavits, or other acceptable documents that show the existence of factual issues for the jury’s consideration. (Pa. Super.1993)

Pennsylvania law with regard to powers of attorney is codified in the Act; these instruments are strictly construed and the grant of special powers is not to be enlarged unless clearly intended. Estate of Cambest, 756 A.2d 45 (Pa. Super. 2000). Wells Fargo argues that neither the POA here, nor the powers conferred by the Act, contemplate an agent’s power to make himself a co-owner of the principal’s assets without express authorization. In addition, it argues that even if Mary’s POA is construed to provide for such authority, it is excepted from liability by the “good faith” provision of Section 5608.1. The Estate argues that the language of the POA was sufficiently broad so as to include the authority to add Edward’s name to Mary’s bank account.

Conversion from sole ownership of a bank account into a joint bank account constitutes an inter vivos gift. See, Estate of Moskowitz, ___ A.3d ___, 2015 WL 2146258 (Pa. Super. 2015); Estate of Keiper, 454 A.2d 31 (Pa. Super. 1982); Estate of Hernandez, 16 D. & C. 5^th 89 (C.C.P. Berks Cnty. 2010). When Edward attempted to have his name added onto Mary’s account, he was, in essence, making a gift of Mary’s property to himself. A similar situation was considered in the Moskowitz case. In that case, the decedent had made his girlfriend’s son his agent (“agent”) under a New Jersey POA. The POA gave to the agent “[i]n connection with any property or any other interest whatsoever” held by the decedent, “full power to control or dispose of property, to execute contracts or other obligations which shall be binding upon [decedent], and to take any action, in [decedent’s] name and on [his] behalf, which [decedent] could take in [his] own name and on [his] own behalf.” The agent used the POA to transfer various accounts and real estate into an account which the decedent held jointly with the decedent’s girlfriend. The girlfriend then transferred the assets into an account which she held jointly with the agent, her son. Upon the decedent’s death, the estate sought, in part, the return of the assets and the imposition of a constructive trust for the assets. In addressing the propriety of the agent’s actions, the court noted that the matter should be considered under the version of Section 5601.2 which was repealed by Act 95 as the agent’s actions took place prior to the effective date of the repeal.

That version of Section 5601.2 provided, in part, as follows:

General rule.—A principal may empower an agent to make a gift in a power of attorney only as provided in this section.

(b) Limited gifts.—A principal may authorize an agent to make a limited gift as defined under section 5603(a)(2) (relating to implementation of power of attorney) by the inclusion of:

(1) The language quoted in section 5602(a)(1) (relating to form of power of attorney); or

(2) Other language showing a similar intent on the part of the principal to empower the agent to make a limited gift.

(c)Unlimited gifts.—A principal may authorize an agent to make any other gift only by specifically providing for and defining the agent’s authority in the power of attorney.

20 Pa.C.S.A. §5601.2 (repealed by P.L. 855, No. 95, §2, effective 2015). A “limited gift” is defined as one made to a restricted class of permissible donees (spouses, issue and spouses of issue) for a value which is limited to the annual exclusion from the federal gift tax permitted under the Internal Revenue Code at 26 U.S.C. §2502(b). Metcalf v. Pesock, 885 A.2d 539 (Pa. Super. 2005); 20 Pa.C.S.A. §5603.2(a)(2) (repealed).

In Moskowitz, the court found that the various transactions which resulted in the gift were not a valid exercise of the agent’s authority under the POA, explaining that

… Section 5602 of the statute, inter alia, enumerates various powers a principal may confer on an agent, “by inclusion of the language quoted in any of the following paragraphs or by inclusion of other language showing a similar intent on the part of the principal.” 20 Pa.C.S.A. § 5602. “The Powers of Attorney statute does not confine the way powers given in a power of attorney may be defined…. [G]eneral language may be used to show the ‘similar intent on the part of the principal,’ if such general language, according to its common usage, encompasses such power or powers.” In re Weidner, 595 Pa. 263, 273, 938 A.2d 354, 360 (2007) (holding attorney-in-fact lawfully exercised POA to change beneficiaries of decedent’s life insurance policy, where POA was executed before 1999 amendments to statute and incorporated by reference “powers enumerated in statute,” which included authority to engage in insurance transactions, and POA specifically stated that grant of specific powers was not intended to limit general powers conferred).

The applicable version of Section 5602 stated a principal may empower an agent to make limited gifts by inclusion of the language, “To make limited gifts.” 20 Pa.C.S.A. § 5602(a)(1). The class of permissible donees for a limited gift consists solely of the “principal’s spouse, issue and a spouse of the principal’s issue.” 20 Pa.C.S.A. § 5603(a)(2)(i). An agent cannot make any gift under power of attorney unless the power of attorney specifically states the agent is authorized to do so. Metcalf v. Pesock, 885 A.2d 539 (Pa.Super.2005) (holding broad language in power of attorney authorizing agent to purchase, sell, or “otherwise dispose” of principal’s real property interests was insufficient to empower agent to make gift of property).

…

A valid inter vivos gift requires donative intent, delivery, and acceptance. In re Sipe’s Estate, 492 Pa. 125, 422 A.2d 826 (1980); Estate of Korn, 332 Pa.Super. 154, 480 A.2d 1233 (1984). “[T]here must be evidence of an intention to make a [g]ift accompanied by [d]elivery, actual or constructive, of a nature sufficient not only to divest the donor of all dominion over the property, but to invest the donee with complete control.” In re Tippins’ Estate, 487 Pa. 107, 114, 408 A.2d 1377, 1381 (1979). “All of the circumstances must be considered in determining whether a gift was made….” Sipe’s Estate, supra at 129, 422 A.2d at 827. Donative intent can be inferred from the relationship between the donor and donee. Estate of Korn, supra at 1237.

In the present case, Appellant Mr. Fein’s POA gave him, “[i]n connection with any property or any other interest whatsoever” held by Decedent, “full power to control or dispose of [Decedent’s] property, to execute contracts or other obligations which shall be binding upon [Decedent], and to take any action, in [Decedent’s] name and on [his] behalf, which [Decedent] could take in [his] own name and on [his] own behalf.” … In early 2009, Appellant Mr. Fein exercised his POA to transfer securities held in Decedent’s sole name into a joint account titled in the names of Decedent and Appellant Ms. Fein. Appellant Mr. Fein used his POA to give Appellant Ms. Fein control over Decedent’s solely owned securities. Shortly thereafter and less than one month before Decedent’s death, Appellant Ms. Fein transferred these securities into a joint account held by Appellants only. Regardless of who performed the last transaction, Appellant Mr. Fein used the POA to orchestrate the complete transfer of the securities from Decedent to Appellants during Decedent’s lifetime. These combined transactions, made possible only through Appellant Mr. Fein’s initial exercise of his POA, divested Decedent of all control over the securities during Decedent’s lifetime. Therefore, on behalf of Decedent, Appellant Mr. Fein initiated an inter vivos gift to Appellant Ms. Fein and ultimately to both Appellants. See Sipe’s Estate, supra; Tippins’ Estate, supra. Likewise, when Appellant Mr. Fein used the POA to retitle the Philadelphia property from Decedent’s name only to Decedent and Appellant Ms. Fein as tenants by the entireties, Appellant Mr. Fein purportedly gave Appellant Ms. Fein an interest in the property. To the extent this title was lawful, given that Decedent and Appellant Ms. Fein were not married to each other, the act also constituted an inter vivos gift. See id. See also Estate of Reigle, 438 Pa.Super. 361, 652 A.2d 853, 855 (1995), appeal denied, 542 Pa. 672, 668 A.2d 1135 (1995) (holding that where deed purports to create tenancy by entireties between two people who are not husband and wife, joint tenancy with right of survivorship is created).

These gifts must be deemed “unlimited” because neither Appellant fell within the class of permissible donees for “limited” gifts under the statute. See 20 Pa.C.S.A. §§ 5601.2, 5603(a)(2). The POA, however, did not specifically provide Appellant Mr. Fein with the power to make unlimited gifts. Thus, Appellant Mr. Fein had no power to make these transfers as gifts on Decedent’s behalf. See 20 Pa.C.S.A. § 5601.2; Metcalf, supra. The broad discretion otherwise afforded Appellant Mr. Fein in the POA to control and dispose of Decedent’s property was insufficient to endow Appellant Mr. Fein with the power to make unlimited gifts, absent an express and specific grant of this power. See id. Accordingly, Appellant Mr. Fein acted outside the authority conferred in the POA when he performed the transfers in question. Regardless of whether New Jersey law allowed Mr. Fein to make gifts under the POA, his transactions were inconsistent with Pennsylvania law, rendering them void under the version of the statute in place at the time of the transfers. See 20 Pa.C.S.A. § 5611.

___ A.3d at ___, 2015 WL 2146258 at 15-17.

The current version of the Act now includes various provisions regarding an agent’s authority with regard to gifts. See, 20 Pa.C.A.S. §5601.4. However, Edward’s actions occurred in June of 2014, prior to the repeal of Section 5602.1, and the prior version of the statute is therefore applicable to this matter pursuant to Section 9(1) of Act 95, as in Moskowitz. This case presents a different scenario from Moskowitz. Because the gift in that case was “unlimited,” it was necessary that the agent’s power be specifically stated. Here, Edward was Mary’s “issue” and thereby qualified as a permissible donee, so that the conversion of Mary’s account into joint names would have constituted a “limited gift”. Mary’s POA could authorize a limited gift by express language or by language to that effect. Mary’s POA did not contain the specific language that Edward was empowered “[t]o make limited gifts.” Thus, we must examine the document to determine whether it contained some similar language granting such authority to Edward.

The Estate argues that the language of the POA is sufficiently broad to encompass the power to make this type of gift. Mary’s POA gave Edward “full power of substitution, for me and in my name to transact all my business and to manage all my property and affairs as I might do if personally present, including but not limited to exercising the following powers: … .” With regard to her banking, the section of the POA entitled “Cash Accounts” empowered Edward to “receive and apply the proceeds of … checks as my agent deems best … .” (POA, ¶ 1) Under the paragraph entitled “General Authority,” the POA provides that Edward is authorized “[t]o do all other things which my agent shall deem necessary and proper in order to carry out the foregoing powers which shall be construed as broadly as possible.” (POA, ¶ 12)

Wells Fargo also points to the language of Paragraph 1 regarding “Cash Accounts.” It argues that because that provision empowers Edward to deposit cash and checks in “any of my accounts,” “to endorse for deposit, transfer or collection, in my name and for my account any checks,” to accounts opened by the agent “in my name,” that he is excluded from making himself a co-owner of those accounts. It argues that when Mary authorized Edward to “transact all my business and to manage all my property and affairs as I might do if personally present,” she did not grant him authority to make gifts of those account to himself or any other donee.

Both parties cite Estate of Cambest, 756 A.2d 45 (Pa. Super. 2000) in support of their respective positions. In that case, the husband was the sole owner of three bank accounts. He had two adult children from a prior marriage. Shortly after his marriage to his second wife, he added her name to the three accounts which had previously been titled in his name alone. He also executed a POA naming his wife as his attorney-in-fact. In addition to granting his wife the power to conduct his banking transactions, the POA provided that “[i]n addition to the powers and discretion herein specially given and conferred upon him and notwithstanding any usage or custom to the contrary, to have the full powers, right and authority to do, perform and to cause to be done and perform all such acts, deeds, matters and things in connection with my property and estate as she in her sole discretion, shall deem reasonable, necessary and proper, as fully, effectually and absolutely as if he were the absolute owner and possessor thereof.”

When the wife executed her will, she was advised that the funds held in joint names with her husband would not pass under her will if she predeceased him. She then had her agent under her own POA withdraw funds which were held jointly with her husband and deposit them into an account into her name alone. The court found that the husband had given the wife virtually “unfettered power to dispose of his estate in any manner and for any purpose as she saw fit, including the power to withdraw money from bank accounts and deposit it into accounts in her name alone.” However, it further found that the instrument did not give her authority to delegate to a third party the power to engage in banking transactions on his behalf.

In Metcalf v. Pesock, 885 A.2d 539 (Pa. Super. 2005), an agent (who was the principal’s husband) under a POA had gifted real property from the principal to himself. In determining that the POA did not grant the agent the authority to make gifts of any kind under repealed Section 5601.2(b)(2), the court first noted that the POA did not contain language which specifically empowered the agent to make a gift. In deciding whether there was “other language showing a similar intent on the part of the principal to empower the agent to make a limited gift,” to satisfy Section 5601.2, it examined the following language:

Power with Respect to Real Property. To purchase real property, to manage, maintain and alter all real property belonging to me, and to lease, sell, mortgage, encumber or otherwise dispose of all interests in real property belonging to me, upon such terms and conditions as my Attorney(s)-in-Fact deems appropriate …

The agent pointed to the “otherwise dispose” language and argued that because the power was not restricted to real estate transactions for value, that language could also be construed to empower an agent to make limited gifts. The court rejected this argument, noting that

The statute requires a showing of intent to empower the agent to make a limited gift. A limited gift, by statutory definition, is one made to a restricted class of permissible donees for a value limited to the annual esclusion from the federal gift tax permitted under the Internal Revenue Code. 20 Pa.C.S.A. §5603(a)(2). It would be more than speculative to find from “otherwise dispose,” sufficiently specific evidence of an intent on the part of the decedent to empower Appellant to make a gift of real estate, but only with a limited value and to a limited class of donees. We decline to do so.

Further, Appellant’s sole substantive citation to caselaw is to In re Estate of Augustine, 695 A.2d 836 (Pa.Super.1997), for the proposition that the general discretionary powers of the attorney-in-fact can support the power to make a gift. Augustine was a direct product of Estate of Reifsneider, 531 Pa. 19, 610 A.2d 958 (1992), which the legislature specifically overruled by the enactment of the above-cited statute. See 20 Pa.C.S.A. § 5601.2 Official Comment-1999 (“It is the intent of subsections (a), (b) and (c) to overrule [ Reifsneider ] to the extent that [it] would permit an agent to make a gift under a power of attorney which does not specifically provide for that power. The purpose of these subsections is to provide that when the principal intends to authorize the agent to make a gift under the power of attorney, that authorization is specifically stated in the power of attorney.”)

Metcalf v. Pesock, 885 A.2d at 541. We believe the language in Mary’s POA granted broader power to Edward.

The court in Moskowitz determined that the broad language involved there was insufficient in the context of the agent’s power to make unlimited gifts, but alluded that the language would have been sufficient to authorize the agent to make a limited gift of the principal’s property. After comparing the provisions of Mary’s POA to those at issue in the various cases cited by the parties, we believe that the language involved here is broader than that involved in Metcalf and more similar to that in Cambest and Moskowitz. Mary’s POA gave Edward the “full power of substitution, for me and in my name to transact all my business and to manage all my property affairs as I might do if personally present.” The POA listed a number of powers, but specifically stated that Edward’s authority was not limited to that list. In addition, Mary gave Edward the power to “do all other things which my agent shall deem necessary and proper in order to carry out the foregoing powers which shall be construed as broadly as possible.” As in Cambest, we read this language to give unfettered discretion to Edward to conduct Mary’s affairs as he thought best and the broadest authority in order to carry out his decisions as to her property and affairs. We believe this encompassed the power to make a limited gift in order to protect Mary’s assets from confiscation by the DPW upon Edward’s determination that such action was necessary and that his request to add his name to Mary’s account should have been honored.

This determination does not end our inquiry, however, as Wells Fargo argues that, even if the POA provided this power to Edward, it is not subject to liability due to its “good faith” belief that the instrument did not give him such authority. From the pleadings and motions presently before us, it appears that once Estate counsel provided a letter opining that Edward did, in fact, possess this authority by virtue of the POA, Wells Fargo continued to have doubts as to the scope of his authority in this regard. The Estate indicates that Wells Fargo failed to respond to that letter in a timely manner and that there appeared to be some miscommunications regarding this matter within the various divisions of Wells Fargo after that point. We believe without more information, we are unable to render a reasoned determination on this argument. Therefore, we will direct the parties to either request a hearing on this matter or provide the Court with a stipulated statement of facts to aid us in our resolution.

1) The exact date the POA was presented to Wells Fargo is not indicated in the Complaint or either parties’ Motion for Summary Judgment.

2) 42 U.S.C. §1396p, entitled “Liens, adjustments and recoveries, and transfers of assets” provides for liens and recovery regarding medical assistance paid under State plans. 62 P.S. §1412, entitled “Repayment from probate estates” provides for satisfaction of such a lien from the recipient’s estate.

3) Section 9 of 2014, July 2, P.L. 855, No. 95, provides that

“The following shall apply:

 “(1) Except as provided by this section, the provisions of this act apply to powers of attorney created before, on or after the respective effective dates of such provisions, but do not apply to the acts or omissions of agents, or third parties presented with instructions by agents, that occur before such respective effective dates.

“(2) Except as provided by this section, the provisions of this act apply to judicial proceedings concerning a power of attorney commenced before, on or after the respective effective dates of such provisions, unless the court finds that application of a provision of this act would substantially interfere with the effective conduct of the judicial proceeding or prejudice the rights of a party, in which case that provision does not apply and the superseded law applies

“(3) The amendment, addition or repeal of 20 Pa.C.S. §§ 5601(b), (c), (d) and (e.2), 5601.2, 5601.4, 5602(a)(5) and (17) and 5603 apply only to powers of attorney created on or after the effective dates of those provisions.

 “(4) The amendment of 20 Pa.C.S. §§ 5601(f) and 5608 shall apply retroactively to acts performed after December 15, 1992, and to judicial proceedings commenced prior to the effective dates of those provisions.

 “(5) In interpreting and applying the amendment or addition of 20 Pa.C.S. §§ 5601(f), 5608, 5608.1, 5608.2 and 5611, a court shall give due consideration of the intent of the General Assembly to reverse the interpretation of 20 Pa.C.S. § 5608 as set forth in Teresa M. Vine v. Commonwealth of Pennsylvania, State Employees’ Retirement Board, 9 A.3d 1150 (Pa. 2010).”

4) The court noted that Section 5601.2, repealed effective January 1, 2015, governed the agent’s actions under the POA at the time the transfers were made. Although the POA was executed in New Jersey, Pennsylvania law was applied as the decedent was determined to be a Pennsylvania resident at the time of his death and the Act provided that foreign POAs would be given effect as long as the result was not inconsistent with Pennsylvania law. 20 Pa.C.S.A. §5611.

5) Our decision is limited to the issue of whether Edward had the power to take this action under Mary’s POA. We make no determination as to what part of the account balance would have been protected from recovery by the DPW had this directive been followed by Wells Fargo.