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HomeMy WebLinkAboutPETITIONERS HEARING MEMORANDUM(NO DATE) ~ IN RE: ESTATE OF ROBERT W. ROLAND, JR., CHRISTINA ANN ROLAND and DAVID G. ROLAND, All Minors Over the Age of 14 IN THE COURT OF COMMON PLEAS CUMBERLAND COUNTY, PENNSYLVANIA ORPHANS' COURT DIVISION , , ,/v....."" .I jL/! ! },I / I " i/f: /', ~ UpETITIONER'S HEARING 21l0~PHANS ' l,o-.. 'c' .1 .. ( 1 MEMORANDUM 1978 BACKGROUND AND FACTS: The Commonwealth National Bank is Administrator of the Estate of Robert W. Roland, Sr., deceased, and Guardian of the estate of three minor children of the decedent, namely Robert W. Roland, Jr., Christina Ann Roland and David G. Roland. As Administrator of the estate, Commonwealth National Bank filed a wrongful death and survival action against Hershey Foods Corporation to No. 2968 "S" 1978, Dauphin County. The case was tried before a jury, and on September 25, 1981, the Jury returned a verdict in the wrongful death action ln the amount of $127,083.63, and ln the survival action ln the amount of $475,870.42, for a total of $602,954.05. Defendant Hershey Foods has filed motions for a new trial and judgment n.o.v., which are currently pending before the Court of Common Pleas of Dauphin County. In the preparation and prosecution of this case, CLECKNER III FEAREN ATTORNEYSATLAW Plaintiff incurred substantial costs and expenses, the HARRISBURG. PENNSYLVANIA , . outstanding balance of which is $19,219.86. Plaintiff anticipates additional expenses in the approximate sum of $1,500 in the appeal proceedings. ~~he outstanding expenses are long overdue, and should be paid in an effort to avert proceedings against the estate for collection of same. The significant asset of the decedent's estate is a parcel of real estate located at 607 Magaro Road, East pennsboro Township, Cumberland County, which is the family home of the three minor children. The said real estate is subject to a mortgage having an approximate balance of $10,800.00. Essentially, the only alternative to reasonably prompt payment of the outstanding costs and expenses of $19,219.86 would be a forced sale of the real estate, which certainly would be contrary to the best interests of the three minor children. Petitioner, as Guardian of the estates of the minor children, holds total cash and short term investments in the amount of $48,000.00. This amount is not needed for support and maintenance of the children, and since the amount of worker's compensation benefits received by Petitioner each month exceeds the amount disbursed for maintenance expenses, the guardianship accounts are actually increasing each month. Peti tioner has explored virtually every conceivable CLECKNER 8l FEAREN source of funds for payment of these expenses, and has ATTORNEYS AT LAW HARRISBURG, PENNSYLVANIA been completely unsuccessful in these efforts. - 2 - Petitioner's desire is to preserve the only major estate asset, the home of the minor children, and to preserve the interests of the estate and minor children ln the substantial verdicts which have been handed down in the death action. DISCUSSION: (" , !. ~. ....' t"".,.,.t The assets which the Peti tioner cur"Eo~.2.!1X holds, both ln its capacity as administrator of the decedent's estate and in its capacity as guardian of the estates of the minor children, are being held for the benefit of these three minor children. Decedent was divorced at the time of his death, and he left no Will. The minor children are also the ultimate beneficiaries of the total verdict of $602,954.05 in the wrongful death and survival actions. Petitioner is requesting that the court approve, under such terms as the court deems appropriate, a proposal by which the Petitioner, as administrator of the estate, would borrow the sum of $20,719.86, from the guardianship accounts of the three minor children. Essentially, this involves a substitution of creditors of the estate; that is, those to whom the estate is currently obligated for the litigation costs and expenses would be paid, and the estate would become indebted to the three minor children. The security on the obligation is in the form of the equity in the real estate, and in the substantial verdict in the survival action. CLECKNER a FEAREN ATTORNEYS AT LAW HARRISBURG. PENNSYLVANIA - 3 - ,jP PE~titioner believes there is ample authority upon which your Honorable Court may authorize the administrator to bor- row the necessary funds. Section 3353 of the Probate Code, 20 P.S. 3353, provides in pertinent part as follows: "When the personal representative is not authorized to do so by this Code or is denied the power to do so by the governing instrument, if any, . . . he may. . . pledge, mortgage, lease, or exchange any such property . . . under order of the orphans' court division of the county where letters testamentary or of administration were granted, upon such terms and upon such security and after such notice as the court shall direct, whenever the court n'!l~ I.Titll~F ~1 a 11 . .~_~D,~.,,~~9l:~.~~):~!. J? l~gS,~ ""~'~B1<J9.9,~~.",l,~e~',~J, ~~1.!~~,,,~,.,QJ,,,2I2.t192,,-,t9>R~,,9~~J,.t a,. e., Eor, "th~ plt:oper administration and distributiqu.o.f,the ~;tate;tr" ,,-, .' In Klingerman t s Estate, 81 D & C 397 (1953), the only significant asset in the estate was a parcel of real estate. The total of the other estate assets was insufficient to pay certain obligations of the estate and specific bequests. Upon petition, the court ordered that the personal representa- tive mortgage the real estate in an amount sufficient to raise the necessary funds. In Mustin's Estate, 188 Pa. 444 (1898), the Supreme Court held that the orphans' court had jurisdiction to authorize the personal representatives to borrow money to preserve an estate asset, namely decedent's business operation. Petitioner believes that your Honorable Court has the inherent power to grant any relief deemed necessary in the CLECKNER a FEAREN ATTORNEYS AT LAW preservation of the estate assets. HARRISBURG, PENNSYLVANIA 20 P.S. 3332. - 4 - 'rhe corresponding powers of the guardian of the estate of a minor are found in 20 P.S. 5155 (Sale, Pledge, Mortgage, Lease or Exchange of Proper ty), and 20 P. S. 5144 (15) (Inherent Powers and Duties). Petitioner believes there is authority in the Probate Code to support the making of a loan by the guardian. Sec- tion 5145 (20 P.S. 5145) permits the guardian to make any investments set forth in Chapter 73 of the Code. Section 7308 permits mortgages as an authorized investment. Further, section 7318 grants the court considerable latitude In authorizing investments. That section provides in pertinent part as follows: "A fiduciary appointed by the court and not acting under a trust instrument, in addition to or in place of the investments authorized by this chapter, may make and retain without lia- bility for resulting loss, such investments as the court, upon petition of the fiduciary or of any party in interest, . . . shall authorize or direct, subject only to such conditions and limitations as shall be fixed by the court in the decree authorizing or directing investment." The net assets of the estate and the investments in the guardianship accounts are all being held by Petitioner for the benefit of the minor children. Since the estate is obli- gated to pay the costs and expenses which have been reasonably and legitimately incurred in the litigation, these costs and expenses are actually being paid by the minor children, whether through the administration of the estate of by way CLECKNER a FEAREN ATTORNEYS AT LAW HARRISBURG. PENNSYLVANIA - 5 - ".. of disbursement, intitially in the form of a loan, from the guardianship accounts. The minor children have a substantial interest in avoiding the disruption which would occur if a sale of their residence becomes necessary. They also have a substantial interest in continuing to preserve the sub- stantial monetary verdicts which have been secured for their benef i t. Petitioner respectfully requests, therefore, that your Honorable Court approve, upon such terms and conditions as it shall deem reasonable and necessary, a loan by Petitioner as guardian of the estates of the minor children, to Petitioner as administrator of the decedent's estate. Respectfully submitted, rd North Second Street Harrisburg, PA 17101 (717)238-1731 CLECKNER III FEAREN ATTORNEYS AT LAW HARRISBURG. PENNSYLVANIA - 6 -