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Estate of Kurkowski

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    Bloomberg Law

    Citation. 486 Pa. 295

    Brief Fact Summary. Appellant Administratix, Ellen Kurkowski Simon (Appellant), appeals from a lower court decree, which dismissed her for improper administration of her Testator Husband’s (Testator) estate upon consideration of objections to the final account.

    Synopsis of Rule of Law. A testator’s personal representative is under a fiduciary duty to take custody of his estate and administer it with the highest degree of good faith in such a way as to preserve and protect the property for distribution to the proper persons within a reasonable time.

    Facts. Appellant was the wife of Testator, who prior to his death had been the president and sole shareholder of Monroe Cycle Center, Inc. which was in the business of selling and servicing motorcycles. After her husband’s death, Appellant was elected president, secretary, and treasurer of the business. Shortly after her election to these positions, the two other members of the business’s board of directors resigned. After this point, Appellant disregarded corporate policies in her business performances (including paying herself a large salary and paying her mechanic son a large amount for some vehicular repairs). Appellant operated the business at a loss for over 22 months. The lower court held that appellant should not have continued to operate the corporation without first securing the lower court’s authorization. The Appellant challenges this holding.

    Issue. Is a testator’s personal representative under a fiduciary duty to take custody of his estate and administer it with the highest degree of good faith in such a way as to preserve and protect the property for distribution to the proper persons within a reasonable time?

    Held. Yes. A testator’s personal representative is under a fiduciary duty to take custody of his estate and administer it with the highest degree of good faith in such a way as to preserve and protect the property for distribution to the proper persons within a reasonable time. Appellant should have not continued to operate the corporation without the consent of the lower court, in accord with state statutory law. Even if we concede that the statute requiring this authorization was not applicable in this situation, Appellant nevertheless breached her common law fiduciary duty by failing, without the consent of all interested parties, to liquidate the estate for purposes of distribution to Testator’s heirs. Appellant is personally chargeable for the losses incurred by the corporation since the time at which Testator died. The lower court holding is affirmed.

    Discussion. An individual charged with administering an estate and serving as a personal representative is required to act with the highest degree of fiduciary duty toward the estate and its interested parties. Courts are always suspect of administrators who act from self-interest and tend to find that these individuals have breached their fiduciary duties.


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