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Home My WebLink About10-18-07 GOLDBERG KATZMAN, P.C. Neil E. Hendershot, Esq. 320 Market Street Post Office Box 1268 Harrisburg, Pennsylvania 17108-1268 (717) 234-4161 Attorneys for Respondents IN THE COURT OF COMMON PLEAS CUMBERLAND COUNTY, PENNSYL VANIA In Re: Estate of Camilla R. Westcott, Deceased. Orphans' Court Division No. 21-05-0491 REPLY TO OBJECTIONS~ WITH NEW MATTER Replies to Objections AND NOW comes Mellon Bank, N.A. ("Mellon Bank"), by and through its counsel, Neil E. Hendershot, Esq., of Goldberg Katzman P.C., for response to the averments of the "Objections to Statement of Proposed Distribution", previously filed by William W. Westcott ("William" or the "Objector") regarding the distribution of the Estate of Camilla R. Westcott, deceased (the "Estate"), and replies as follows: 1. Admitted. i. .. 2. Admitted. . ) , , 3. "I Admitted, with clarification. The Last Will and Testament; dated -J 11 February 17, 1978 (the "Will") of Camilla R. Westcott, deceased ("Camilla" or the "Decedent"), was probated with the Register of Wills of Cumberland County, Pennsylvania, under the above-referenced docket number. 1 4. Admitted. Specifically, a testamentary trust was created under Item Seventh of the Last Will and Testament of Camilla R. Westcott, now deceased, dated February 17,1978, for the benefit of William W. Westcott.l By way of further answer, Commonwealth National Bank became Mellon Bank, N.A., in 1991 by a merger and legal succession. Mellon Bank N.A. has consented to serve as trustee of the residuary trust established under Item Seventh of the Decedent's Will (the "Residuary Trust"), as evidenced by its executed "Consent to Serve as Trustee" (the "Consent"), attached as Exhibit "A". 5. Admitted. 6. Admitted. By way of further answer, Commonwealth National Bank, through its successor, Mellon Bank, continues to maintain a prominent presence III central Pennsylvania, and operates local offices, as set forth in Paragraph 8 hereof. 7. Admitted, with clarification. Commonwealth National Bank became Mellon Bank, N.A., in 1991 by single merger and legal succession, not "through a series of transactions" as averred. It is admitted that Commonwealth National Bank now is I Item Seventh of the Decedent's Will provided as follows: SEVENTH: In the event that my husband shall predecease me, I hereby give, devise and bequeath my residuary estate to the Commonwealth National Bank, IN TRUST NEVERTHELESS. The Trust Estate shall be invested in good and safe securities legal for trust fimds in the Commonwealth of Pennsylvania. The Trustee may retain such investments as I have made during my lifetime without liability for diminution in the value thereof or lack ofproductivety [sic]. The net income derived therefrom shall be paid in quarterly installments, or more frequently if desired, to and for the use and benefit of my said son, William W. Westcott, for and during the term of his natural life. The Trustee from time to time in its sole discretion may use so much of the principal as it deems necessary for the health, support, maintenance and general welfare of my said son, William W. Westcott, either by payment directly to him or for his benefit. Upon the death of my said son, the Trustee shall distribute Trust estate to the charities which I have designated by a written signed list given to the Trustee. My said son, is hereby restrained from and is or shall be without right, power and authority to sell, transfer, pledge, mortgage, hypothecate, alienaIe, anticipate, or in any other manner effect or impair his, beneficial and legal rights, titles, interests, claims and estates in and to the income or principal of the Trust Estate during the term hereof, nor shall his rights, titles, interests, claims and estaIes hereunder be subject to the rights or claims of his creditors nor subject nor liable to any process oflaw or court, and all of the income of principal of the Trust EstaIe shall be transferrable, payable and deliverable only, solely, exclusively and personally to or for my son as provided hereunder at the time entitled to take the same under the terms of this Trust. 2 Mellon Bank, N.A., as evidenced by a Secretary's Certificate regarding corporate succession, which was attached as an exhibit to the Consent. 8. Admitted in Part; Denied in Part. It is admitted that Mellon Bank does not have a bank branch office in Carlisle. However, it is denied that absence of such a branch bank in Carlisle would limit or compromise the ability of Mellon Bank to serve effectively as trustee of the Residuary Trust. Mellon Bank operates regional offices in Camp Hill (Cumberland County, P A), Harrisburg (Dauphin County, P A), York (York County, P A), and Lancaster (Lancaster County, P A), Pennsylvania. The Camp Hill and Harrisburg offices are located approximately 20 miles from Carlisle. The York office of Mellon Bank is located approximately 40 miles from Carlisle; and its Lancaster office is located approximately 60 miles from Carlisle. All such offices are easily accessible by modem highways, are staffed by qualified personnel, and are equipped with telephone, fax, email, and other modem communications facilities. Personnel working in those locations routinely drive to the homes and offices of clients in Central Pennsylvania for personal meetings, so that absence of an office in a particular town or borough is not necessary; and maintenance of such a specific location is not relevant to its potential service as a trustee. Listed below are the addresses for these local offices: A. Camp Hill Office: 214 Senate Avenue, West Shore Office Center, Suite 100, Camp Hill, PA 17101-2325 B. Harrisburg Office: 2 North 2nd Street, 12th Floor, Harrisburg, PA 17101 C. D. PAl 7401 Lancaster Office: 28 Penn Square, Lancaster, P A 17603 York Office: 204 North George Street, Suite 290, York, By way of further answer, it is noted that William, the life beneficiary of the Residuary Trust, does not live in Cumberland County, but has resided in or around Montreal, Canada, since 1979. 3 9. Denied. The answer in Paragraph 8, above, is incorporated herein by reference. Mellon Bank capably serves its clients and customers in the Cumberland County area through its local offices listed above. Mellon Bank is highly qualified and capable of serving the interests of both William, as a life tenant, and also the charitable remainder beneficiaries of thie Residuary Trust. William is not a resident of Cumberland County, Pennsylvania, and has lived in or around Montreal, Canada, since 1979. 10. Denied. No evidence of acceptance by any alternative trustee is found in the record; and proof thereof is demanded at hearing. 11. The averments in Paragraph 11 state conclusions of law to which no response is required. To the extent that a response is deemed necessary, the averments of Paragraph 11 are Denied. The concept of "substantial change in circumstances" is found in Section 7766 of the Pennsylvania Uniform Trust Act2 (the "P A UTA") as relates to the "removal" of a currently serving trustee. That principle and procedure is not applicable to a nominated trustee, which is willing to serve, but which has not yet been offered the opportunity to perform. Furthermore, the P A UTA does not contain a prOViSion whereby "qualified beneficiaries" of a trust can remove a trustee? In any case, the model "Uniform Trust Code" (2005 version) proposed by the National Conference on Commissioners on Uniform State Laws, in the Comment to Section 706 (upon 2 Section 7766 is found in the Pennsylvania Probate, Estates & Fiduciaries Code, Title 20, Pa. Consolidated Statutes, in Chapter 77, which is designated as the "Pennsylvania Uniform Trust Act". 3 The "Pennsylvania Comment" to Section 7766 of the PA UTA notes as follows: UTC S 706 is reorganized and largely adopted in substance. The grounds for removal assume an active inquiry and findings by the court as to the three elements set forth in the introduction to subsection (b). NOTE: UTC S 706(b)(4) provided that the court could under certain circumstances remove a trustee if removal was requested by all the qualified beneficiaries. The Joint State Government Commission Advisory Committee on Decedents' Estates Laws included that concept in its original S 7766(b)(5), replicated in its November 2003 report. That provision was also included in Senate Bill 978 of2003 (Printer's No. 1329). However, on March 30, 2004, the Senate Judiciary Committee voted to remove paragraph (5). This version of S 7766(b) does not include paragraph (5). 4 which Section 7766 of the P A UTA was based), states that "A corporate reorganization of an institutional trustee is not itself a change of circumstances if it does not affect the service provided the individual trust account." Mellon Bank believes and avers that the service that it will provide to this individual trust account will be as good, or better, than any other suggested alternative trustee; and it demands the opportunity to try. 12. Admitted in part, Denied in part. It is admitted upon belief that M&T Bank currently has some form of fiduciary relationship with Objector, but any details about it are unknown; and proof as to the relevancy and nature of such a relationship is demanded at hearing. By way of further answer, the Decedent's Will, in Item Seventh, specifically denies to William any ability to affect matters involving the Residuary Trust, which would include nomination of an alternative trustee.4 13. Denied. By way of further answer, the Residuary Trust is a separate trust, governed by its own terms, and subject to procedures mandated by the P A UTA. Any commingling or coordination of trusts based upon the interests of a life tenant, as opposed to the charitable remainder beneficiaries, is inappropriate and improper. Mellon Bank is willing and able to successfully invest and manage the trust assets, without preference for either the life tenant or the charitable remainder parties, which is required under the duty of impartiality mandated by the P A UTA. Also, Mellon Bank is willing to communicate - and has attempted to do so - with Manufactures and Traders Trust Company ("M&T Bank") or any other institutions involved in William's personal financial affairs, if specifically granted permission to do so by William. 4 The last paragraph ofItem Seventh of the Decedent's Will provides: My said son, is hereby restrained from and is or shaD be without right, power and authority to sell, transfer, pledge, mortgage, hypothecate, alienate, anticipate, or in any other manner effect or impair his, beneficial and legal rights, titles, interests, claims and estates in and to the income or principal of the Trust Estate during the term hereof, nor shall his rights, titles, interests, claims and estates hereunder be subject to the rights or claims of his creditors nor subject nor liable to any process oflaw or court, and all of the income of principal of the Trust Estate shall be transferrable, payable and deliverable only, solely, exclusively and personalIy to or for my son as provided hereunder at the time entitled to take the same under the tenns of this Trust. 5 14. Admitted in part, with clarification; Denied in part. It is admitted that William suffers from various medical conditions, including impaired sight. It is also admitted that, for whatever reason or motivation, William believes that M&T Bank can better serve his interests. However, William's personal motivation does not take into account the best interests of the charitable remainder beneficiaries; and his interests, alone, should not prevail in the appointment of a trustee for the Residuary Trust. It is denied that M&T Bank would administer the Residuary Trust more effectively than Mellon Bank, for any reason. It is further denied that William has any right or ability, under the Decedent's Will, to make or enforce such a request, being specifically prohibited by express language from doing so. 15. Admitted. New Matter 16. In both in the Accounting and in the Petition for Adjudication filed for the Estate, M&T Bank, as Administrator of the Estate, had identified Mellon Bank, as successor to Commonwealth National Bank, to serve as trustee of the Residuary Trust (Accounting, pages 42-43); and such nomination should be honored. 17. By way of its Consent, Mellon Bank has accepted nomination under the Decedent's Will, and pursuant to the Schedule of Proposed Distribution in the Accounting, to serve as trustee of the Residuary Trust, and opposes any attempt at its removal as trustee of the Residuary Trust.s 18. Mellon Bank is required, as a matter of fiduciary duty, to defend the Residuary Trust for which it is the nominated trustee. 5 This Consent is considered by Mellon Bank to be an acceptance of trusteeship, pursuant to Section 7761(a)(2) of the PA UTA. The Consent, as filed with the Court's Clerk, satisfies the requirement of "acceptance of an appointment ofa trustee" pursuant to Section 7764((f) of the PA UTA. Thus, no vacancy has occurred in the trusteeship; and the only basis for the Objectant's requested remedy is a "removal" of a trustee, not a pre-emptory replacement of it. This is confirmed by the Objectant's use of the word "removal" in Paragraph 9 of his Objections. 6 Dated: 19. Mellon Bank is incurring counsel fees in defending the Residuary Trust and the nomination as its trustee, which, absent the Objections, would not have been incurred. 20. Mellon Bank seeks authorization for reimbursement from the Residuary Trust for counsel fees so expended, or committed to be expended, and also any other unusual, out-of-pocket expenses, incurred pursuant to P A UTA Section 7769 in such defense of the Residuary Trust, as appropriate expenses of the Residuary Trust. 21. Efforts by Mellon Bank to preserve its trusteeship in response to the Objections are unusual and extraordinary for a fiduciary, and therefore, under Section 7768 of the P A UTA, should warrant additional compensation, depending upon the extent and length of the proceedings required, and the outcome attained. Respectfully submitted, Ocf:' If 0<00 r ) r- N Hendershot, Esq (PA SC ID #23316) Goldberg Katzman P.C 320 Market St., P.O. Box 1268 Harrisburg, P A 17108 Attorneys for Respondents 7 VERIFICATION I verify that the statements made in the foregoing "Reply to Objections, with New Matter" are true and correct. I understand that false statements herein are made subject to the penalties of 18 Pa. C.S.A. ~ 4904 relatin~ f~~ion to authorities. Date: /8!1/07 ~_ I David S. Rowe Vice President & Senior Fiduciary Officer Mellon Bank, N.A. 7 EXHIBIT A INRE: TRUST UNDER WILL OF CAMILLA R. WESTCOTT, DECEASED IN THE COURT OF COMMON PLEAS CUMBERLAND COUNTY, PENNSYLVANIA ORPHANS' COURT DIVISION NO. 21-05-0491 CONSENT TO SERVE AS TRUSTEE This "Consent to Serve as Trustee" is executed by Mellon Bank, N.A. (the "Bank"), through its authorized representatives, to evidence the Bank's desire and intention to serve as trustee of the residuary trust created under the Last Will and Testament of Camilla R. Westcott, deceased. The Bank agrees to serve as the nominated trustee of the testamentary trust created under Item Seven of the Last Will and Testament of Camilla R. Westcott, now deceased, dated February 17, 1978, for the benefit of William W. Westcott, et al. Originally nominated by the testatrix was Commonwealth National Bank, which in 1991 became, by merger, Mellon Bank, N.A., as evidenced by a certificate of succession attached hereto as Exhibit "A". MELLON BANK, N.A.: By:~~iJ Authorized Representative - ATTEST: Dated: lDl"\DI MELLON BANK, N.A. SECRET ARY'S CERTIFICATE I, RITA M. BOLOGNESE, hereby certify that I am an Assistant Secretary of Mellon Bank, N.A., and that I have been duly appointed and am presently serving in that capacity in accordance with the By-Laws of said Bank. I further certify that attached to this Secretary's Certificate is a true and correct copy of the Certificate issued by the Comptroller of the Currency, which evidences the merger of The Commonwealth National Bank with and into Mellon Bank, N.A. effective October 1, 1991. IN WITNESS WHEREOF, I have hereunto set my hand this 24th day of September, 2007. ~s7J!::::~ (SEAL) ~()b 0252 0583 M~ltlnatlonaj BankIng COmptrOller ot the Currency 250 E Street. S.W. Washington. a.c. 20219 September 26, 1991 I Cerii~~ :l:.~.: ::. x:~ent To Be Rscc:.~ci:~:~ ~~'.r;:. County. Pa Mr. Mi~~el E. Bleier Deputy General Counsel Mellon Bank, N.A. One Mellon Bank Center Pittsburgh, Pennsylvania ~~~~.:~~~~'~~~~~~ :..~, ,: ., >' )t. . .... ,. ./~gifW .'~ -/.:;.t.' ,.-- ! I V~a(DeedI. 15258-0001 :.:...{..~ .: E ..j:'" ., ~ ~.' ". f'~ .... .... . " . .......~; >i./: :':~ '. ~.,' "~';'..IJ-:''' Dear Mr. Bleier: This letter is the official certification of the Office of the Comptroller of the Currency for the merger of The Commonwealth National Bank, Harrisburg, Pennsylvania, Charter Nr. 580, into anc under the charter and title of Mellon Bank, National Association, ?1ttsburgh, Pennsylvania, Charter Nr. 6301, effective Oc~ober 1, 1991. This letter also serves as the official authorization for Mellon Bank, National Association, Charter Nr. 6301, the receiving institu~ion, to opera~e as branches the former head office and branch~~ of The Commonwealth National Bank, Char~er Nr. 580. Sincere~y, ~ ). ~"- Jimmy F. Bar~on Deputy Comptroller Charter Nr. 6301 ace Control Nr. 90-ML-02-025 RECE~;!ED DEe - 9 1991 ME!..l()N SANK, N.A. M _ = _ BLE!.ER _.. -1 ** TOTAL PAGE.02 ** CERTIFICATE OF SERVICE I hereby certify that I served a copy of the foregoing document upon the person(s) indicated below by depositing a copy of the same in the United States mail, postage prepaid, at Harrisburg, Pennsylvania and addressed as follows: Stephen D. Tiley, Esquire 5 South Hanover Street Carlisle, P A 17013 Roger M. Morgenthal, Esquire 2515 North Front Street Harrisburg, P A 17110-1150 Seth T. Mosebey, Esquire 10 East High Street Carlisle, P A 17013 Joanne Book Coles, Esquire Deputy Attorney General Revocable Trust Organizations Section 14th Floor, Strawberry Square Harrisburg, P A 17120 GOLDBERG KATZMAN, P.C Date: OcY:.lf: ~8 T By:~CLLdar-- Neil E. Hendershot, Esquire 151012.1 9