Agent Under Power of Attorney is Surcharged For Failing to Act With Caution and Prudence
In the Orphans’ Court estate litigation case of In the Matter of Antonio Onorato, PICS Case No. 14-1144. C.P. Philadelphia County, July 1, 2014, the account filed by an agent under power of attorney raised the issue of whether the agent should be surcharged for breach of his fiduciary duty. The Honorable John W. Herron surcharged the agent $283,055.
Mary Green executed a general power of attorney dated April 5, 2006 to appoint Antonio Onorato as her agent. Six years later, Green filed a petition to obtain an accounting from Onorato after she learned that her residence in Philadelphia had been subject to a lien due to nonpayment of real estate taxes. After consulting an attorney, she revoked the power of attorney.
Although Onorato, as agent, had initially received $551,556.14 in principal, by the end of his agency there was nothing left. Mary Green filed numerous objections to the account. A hearing was held on the objections.
Onorato testified that prior to retiring; he had been a handyman and tailor. In 2000, he was introduced to Mary Green for whom he had done home repairs. From 2000 to 2006, he and Green became friends who saw each other often. According to Onorato, Green told him that she did not want to go into a nursing home as some of her relatives advised. She asked him to fix up a house she owned but he concluded it was impossible to repair that house. He testified that Green then told him to build a new house and also told him that she wanted to do something for him by naming him power of attorney. Green contacted an attorney on her own, who prepared several documents. She executed the general power of attorney appointing Antonio Onorato as her agent; she signed the will appointing Onorato as executor and primary beneficiary of her residuary estate; and she appointed Onorato to act on her behalf under a medical power of attorney.
The court found that both the account and the agent’s testimony reveal that he failed to exercise the powers for the benefit of the principal; he failed to keep a full and accurate record of all actions; and he did not exercise reasonable caution and prudence when he expended the principal’s assets to benefit himself and his family.
Onorato mistakenly believed that Green had appointed him as her agent as an act of gratitude for past kindness and with permission to use her assets as he wished. In fact, a person appoints a power of attorney to protect his of her interests. This certainly was Mary Green’s intent as set forth in power of attorney and her testimony.
Onorato breached his fiduciary duty to Green by failing to use his powers for her benefit; by failing to keep her assets separate from his assets; by failing to keep full and complete records of all actions; by failing to act with caution and prudence. The court examined each of Mary Green’s objections to determine their individual merit and the total surcharge properly assessed against Onorato was in the amount of $283,055 which he was ordered to return to his principal, Mary Green as set forth in a contemporaneously issued decree.
Reference: Digest of Recent Opinions, Pennsylvania Law Weekly, 37 P.L.W. 709 (July 29, 2014)
Filed Under: Estate Law; Estate Litigation; Surcharge of Agent Fiduciary
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