In Brodsky Estate. (O.C. Div. Montg), 29 Fiduc. Rep. 2d 57, December 11, 2008, objections were made to an account of the agent, Brent Brodsky,after the principal’s, Cecilia Brodsky’s, death.  The agent was surcharged $210,000 for transferring funds to himself from an account in joint names between agent and principal.  The funds had been contributed solely by the principal.

This is an excerpt from the opinion written by Judge Ott:

"The accountant does not deny that the account from which he paid himself the $210,000 contained funds contributed only by his mother. That account was titled jointly between him and his mother. From this, he argues, because the money would have become his at her death by operation of law, his having taken the money during her lifetime is not a problem. He is wrong. Cecelia Brodsky was never adjudicated an incapacitated person. In the eyes of the law, she retained authority and control over her assets even after she gave her son a general durable power of attorney. Until the day she died, she could have emptied out the joint account and used the money for any purposes she wished. Her agent breached his fiduciary duty when he made the improper gifts to himself. Had he not exceeded his authority under the gift provisions of the power of attorney, he would, indeed, have been entitled to any balance that remained at his mother’s death pursuant to 20 Pa. C.S.A. §6304(a). However, when he removed the $210,000 from the joint account during her lifetime, he severed the joint tenancy and thereby lost any right he would have had to the money as the surviving party on a multiple-party account. Accordingly, the accountant is hereby surcharged for this entire amount he paid himself plus interest at the rate of 6% per annum from December 15, 2000."

This agent did everything wrong. 

  • Judge Ott also, in a separate proceeding, found that the accountant exercised undue influence over his mother, the principal, and this resulted in her executing a will leaving everything to him.   That will was invalidated and the principal’s earlier will where the accountant would share equally in the estate with the children of his sister who predeceased their mother was valid.  One of these grandchildren, Steven Lichtenstein, is the administrator of the estate of the deceased principal and the objectant to the agents’ accounting.
  • At the hearing on the objections to the agent’s account, the agent testified that he made gifts of $200,000 to himself, and four gifts of $10,000 each to himself, his wife, and his two sons. He made it clear that the purpose of these transfers was to spend down his mother’s money so the government could "pick up the tab" for his mother’s care.

  • Judge Ott said "The accountant and his counsel seem to view this litigation as much ado about nothing. " 

  • The final paragraph:  "Throughout the proceedings involving the instant account and the prior will contest, the accountant and his counsel have exhibited a pattern of obstreperous and dilatory behavior. As just the most recent examples of this conduct, we point to the filing of frivolous preliminary objections to the instant objections and a refusal to cooperate with discovery, including the failure to produce certain requested documents until the very day of the hearing. In light of such tactics, we find it necessary to take the unusual step of assessing counsel fees, under 42 Pa. C.S.A. §2503(7), against the accountant and/or his counsel, Philip J. Berg, Esquire. We will therefore schedule a hearing forthwith, limited to the reasonable fees incurred"