Pennsylvania's highest court holds that a third party that relies on a power of attorney is not immune from liability if the power of attorney is not valid. The decision calls into question third parties' future acceptance of powers of attorney in the state. Vine v. SERS Board (Pa., No. 49 MAP 2009, Dec. 21, 2010).
Teresa Vine worked for the state until she was in a car accident and suffered a stroke. Four days after the stroke, Mrs. Vine executed a power of attorney, naming her husband, Robert Vine, as attorney-in-fact. Mr. Vine used the power of attorney to choose a retirement plan option from the State Employees Retirement System (SERS). Several years later, Mrs. Vine discovered she was not receiving a disability retirement and wrote to SERS, asking to change her plan option. SERS denied the request.
Mrs. Vine asked for a hearing, arguing she had been incapacitated when she signed the power of attorney, so SERS could not validly rely on it. The SERS board found that because Mr. Vine had the apparent authority to act for Mrs. Vine, it was immune from liability. State law provides that anyone who acts on a power of attorney in good faith will incur no liability as a result of acting in accordance with the agent's instructions. The trial court agreed, and Mrs. Vine appealed.
The Pennsylvania Supreme Court reverses, holding that a third party who relies on a power of attorney is not immune from liability if the power of attorney is not valid. The court finds that state law does not apply "where a person who is not an agent, but purports to be one or erroneously believes he is one, provides instructions pursuant to a document that is not a valid power of attorney, but appears to be one." According to the court, because Mrs. Vine was incapacitated at the execution of the power of attorney, the power of attorney relied upon by SERS was invalid. Two justices dissent.
Note: Thank you to Pennsylvania Elder Law Answers member attorney Jeffrey Marshall for alerting us to this decision. For more on the importance of the decision, click here.
For the full text of this decision, go to: https://attorney.elderlawanswers.com/vine-v-sers-board-pa-no-49-map-2009-dec-21-2010-8870
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