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HomeMy WebLinkAbout07-18-08 OR PETITIONERS Howard C. Gale, Jr. Alan Ceperich FOR RESPONDENTS Julia F. Gale Leisa J. Kercher INDEX TO WITNESSES DIRECT CROSS REDIRECT RECROSS 11 15 20 -- 22 31 33 35 DIRECT CROSS REDIRECT RECROSS 38 45 -- -- 54 65 -- -- INDEX TO EXHIBITS FOR RESPONDENT MARKED ADMITTED 2 - Deed 73 77 3 - Deed 73 77 4 - Deed 73 77 5 - Deed 73 77 6 - Articles of Incorporation 73 77 7 - Articles of Merger 73 77 2 June 18, 2008 2 Carlisle, Pennsylvania 3 (The following proceedings were held at 1:51 p.m.) 4 THE COURT: This is the time and place for a 5 resumption of the hearing in the matter of the Estate of Howard 6 C. Gale at No. 1998-629 Orphan's Court. Counsel are present 7 with their clients. Go ahead. 8 MR. KEISLING: Thank you, Your Honor, Bret Keisling 9 for the Petitioners again. Would the Court benefit or like a 10 summary of where we left off, sir? 11 THE COURT: Well, it wouldn't hurt. 12 MR. KEISLING: During the case-in-chief of 13 Petitioners, we have introduced 55 exhibits that support our 14 contention that the intention of Howard Gale, Sr., was that the 15 disputed properties in this matter should pass ultimately to 16 his grandchildren through Country Club Park Development 17 Company, Inc. 18 The evidence introduced so far included 32 separate 19 leases where Country Club Park Development Company, Inc., was 20 the landlord. It included Pennsylvania and U.S. tax returns 21 from 1994 through 2005, with the exception of 1999, which was 22 not available. These tax returns indicated that the properties 23 were owned by or at least treated as if they were owned by 24 Country Club Park Development Company, Inc. 25 We presented evidence that there were certificate 3 of registrations issued by East Pennsboro Township in 1981 2 showing that the township treated these properties as if owned 3 by Country Club Park Development Company, Inc.; and Howard 4 Gale, Jr., in testimony indicated that the certificate of 5 registrations were issued as a result of an application 6 submitted by Howard Gale, Sr. 7 The initial estate tax return was entered into 8 evidence which also showed the same properties specifically 9 were listed as being owned by Country Club Park Development 10 Company, Inc. 11 There is an amended tax return that shows these 12 properties for the very first time being treated as if owned by 13 a different entity, the Howard Gale Development Company, Inc. 14 We also had Cumberland County tax assessment 15 notices for the year 2000 which show that Cumberland County 16 treated these properties as if they were owned by Country Club I7 Park Development Company, Inc. 18 Finally, Your Honor, we introduced a last will and 19 testament of Julie Gale that showed that in her will she 20 treated the disputed properties as if they were owned by 21 Country Club Park Development Company, Inc., and would pass on 22 to the grandchildren in this matter. 23 We left off where we had just concluded our 24 examination of Mrs. Gale and we adjourned before the 25 Respondents could cross-examine Mrs. Gale. She was called as 4 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 of cross. However, before we pick up where we left off we have one, perhaps a housekeeping matter, Your Honor. During the examination of Mr. Gale I attempted to elicit testimony from him regarding his father's stated intentions for how the properties would pass on to the grandchildren or what he intended the properties would become. Mr. Seiferth objected based on hearsay, and the Court asked whether or not the Dead Man's Statute would prohibit Mr. Gale's testimony. There was some discussion that is in the transcript and ultimately the Court sustained Mr. Seiferth's objection but invited me to look during our break for additional case law and said that you would revisit the issue. Having found some, I would like to take just a moment and bring that case law to the Court's attention, and if you agree with us, we would like to bring Mr. Gale back to the stand for that testimony. THE COURT: Mr. Seiferth, did you want to make an opening statement as well? MR. SEIFERTH: Not really, Your Honor, I think that summarizes where we are. However, with regard to this last point, we argued that objection before you at the time. You sustained my objection at that time and the Petitioners gave you an offer of proof. I think the offer of proof is in the record, and at the conclusion of this hearing, I would make the suggestion or 5 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 the offer that we submit to Your Honor legal briefs to address any of the evidentiary issues, as well as the substantive legal issues at the conclusion of the evidence. That is my suggestion. If we want to argue your previous ruling on that previous objection, certainly that is up to you if you want to entertain it and I can continue to make my position in that regard. THE COURT: Mr. Keisling, you say you have some case law? MR. KEISLING: I do, Your Honor. Again, on page 47 of the transcript the Court specifically said if we could find additional case law, you will entertain it. I have a number of cases, and two of them address whether or not this is hearsay. The first case is Lupyan v. Lupyan, L-U-P-Y-A-N, 397 A.2d 1220. It is a Pennsylvania Superior Court case from 1979. This case holds that evidence of a decedent's declarations of intention is admissible in Pennsylvania as an exception to the hearsay rule where the intent itself is a material fact. What this case explained in its opinion is that the intention viewed as a state of mind is a factual matter, therefore, the only way to get to the fact of the matter is what the declarant would have said. That is the only way to 6 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 address the intention. THE COURT: Does that apply to an ambiguous document? MR. KEISLING: That implies just to hearsay regarding decedents. It doesn't even get to ambiguity, sir. The ambiguity nature, and we can re-visit that issue, that ultimately will be your threshold issue. But if an ambiguity is found in the weight of all of the evidence, then the Court can consider all of the evidence, and we suggest that the testimony should be available to the Court. We believe that you will find that an ambiguity exists, and we certainly believe that Mr. Gale, Sr.'s, spoken words will have great weight, particularly taken into account with all of these other matters. THE COURT: How does the Dead Man's Act relate to this? MR. KEISLING: The Dead Man's Act does not apply, and that is where we left at the last hearing. It doesn't apply for several reasons. First off, it doesn't apply because Mr. Gale, Jr., who would offer the testimony, doesn't have an interest in the outcome of the proceeding. It is an individual pecuniary interest that is at issue for the Dead Man's Act to apply. The fact of the matter that his children may have an interest or do have an interest, they are the Petitioners, does not apply to Mr. Gale, does not 7 2 3 4 5 6 7 8 9 10 11 i2 13 14 15 16 17 18 19 20 21 22 23 24 25 render him incompetent to testify. THE COURT: You have a case that says that? MR. KEISLING: I do, sir. In Re: Estate of Pavlinko, P-A-V-L-I-N-K-O, 160 A.2d, 554, it is on page 559 of that case. That is a Pennsylvania Supreme Court case from 1960. In that case, a daughter of the claimant was permitted to testify because the daughter's interests were not ultimately the same as the father's. We think it is very easy then to just reverse that and say that father should not be disqualified based on his children. A second case, sir, is an another Pennsylvania Supreme Court case, the estate of Grossman, which is 406 A.2d, 726. What Grossman did was strike down Bittner, previous seminal case that held spouses could not testify on behalf of a spouse with an interest because the spouse shared the interest. Grossman said, no, they are not the same people, this isn't the middle ages, spouses don't share the identica l interest, therefore, a spouse is riot disqualified from testifying just because of the relationship of the other party. Certainly, again, if the spouse is not prohibited from testifying, we don't believe Mr. Gale, Jr., would be either. Finally, the Dead Man's Act itself, Your Honor, has an exception, and I apologize, I will mispronounce it, and then 8 I will spell it. The Devisavit Velnon, D-E-V-I-S-A-V-I-T, 2 V-E-L-N-O-N, exception, which renders competent all witnesses 3 in disputes involving the testamentary disposition of property 4 regardless of any interest possessed by the particular 5 decedent's -- interests in the decedent's property. 6 Here, even if Mr. Gale were to be found by the 7 Court to have an interest., and we don't think he has an 8 interest, he doesn't get the properties regardless of how the 9 Court rules, this exception renders the testimony admissible. 10 The reason for it is simply in many cases such as 11 these, this testimony is all the testimony that the Court will 12 be able to get or all of the evidence. 13 Here we are in a unique situation where we just 14 think this buttresses a vast amount of written evidence, but 15 that doesn't change the fact that it should be admissible. 16 THE COURT: What was your offer of proof again as 17 to what the decedent said? 18 MR. KEISLING: The offer of proof would be that 19 Mr. Gale, Jr., will testify that on several occasions or many 20 occasions Mr. Gale, Sr., expressed the intent that the leased 21 properties, wh ich are comprised of the five disputed properties 22 at issue here on the list, were to pass on to the 23 grandchildren, and that it was his intention that he always 24 treated these properties as a definable unit that would pass to 25 the grandchildren. 9 THE COURT: Mr. Seiferth. 2 MR. SEIFERTH: Yes, very briefly, judge. This goes 3 back to what I raised in my initial opening statement at the 4 last hearing and during the argument we had on this issue 5 before. The pinnacle issue for Your Honor in the Respondent's 6 position is whether or not this will has one shred of ambiguity 7 in it. It is our position that it does not. 8 The will clearly identifies two separate corporate 9 entities, two separate corporate entities which we will be 10 providing evidence of that have certain assets. 11 I have not heard any evidence or any argument from 12 the Petitioners that there is something in existence in that 13 will which even gets us to the first hurdle of looking at all 14 this extrinsic evidence. I believe the case law says that you 15 can't take a will and find an ambiguity based on all these 16 other things that are going on outside of the document. 17 The first step is finding an ambiguity in the will. 18 If that exists, then you can, as the Court, go ahead and 19 consider this parol or extrinsic evidence. If this is the 20 case, then any will could be rewritten every time by ary 21 witness that wants to come in and say what he believes the 22 decedent had said. In a case where the will is ambiguous, 23 then, obviously, you need that evidence. 24 This is a clearly written will, unambiguous, 25 frankly, the reason for several objections during the last 10 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 hearing, I don't think the Court even needs to consider that in the first instance. That is essentially our position, Your Honor. I would tend to agree with the Petitioners that the Bead Man's Act isn't really at play here. I do believe that there are several Supreme Court cases, and I will just reference one: In re: The estate of Kelly, K-E-L-L-Y, 373 A.2d, 744 1977, which essentially in summary holds that the ambiguity in a will must be found without reliance on extrinsic evidence. Extrinsic evidence is admissible only to resolve, not create an ambiguity. That is essentially our whole theme, Your Honor. THE COURT: All right. I will permit the testimony without foreclosing the argument at the end of the case that the Court may not go beyond the four corners of the will in interpreting it. Go ahead, Mr. Keisling. MR. KEISLING: Thank you, Your Honor, we recall Howard Gale, Jr., to the stand. HOWARD C, GALE, JR., having been duly sworn, testified as follows: DIRECT EXAMINATION BY THE COURT: Q For. the record, would you state your name ar.d 11 2 3 4 5 6 7 8 9 10 Il 12 i3 14 15 16 17 18 19 20 21 22 23 24 25 address again, please. A I am Howard C. Gale, Jr., 1440 Waterford Drive, Camp Hill, PA, 17011. THE COURT: Thank you. BY MR. KEISLING: Q Mr. Gale, we spent a good bit of time together some months ago here in the courtroom, and your testimony is already of record, so we won't review that, obviously. But just to remind the Court, if you would, you worked for your father during his lifetime? A Yes, sir. Q For how long of a period did you work for your father? A Approximately 30 years. THE COURT: I think that is already in the record, and we are starting to run short on time already. MR. KEISLING: Thank you, Your Honor. BY MR. KEISLING: Q During the course of your employment with your father, you had occasion to have discussions with him about the leased properties in dispute here today? A Yes, sir. Q Did your father ever indicate to you what his intentions were with regard to the disposition of these properties? 12 A He always wanted to take care of the grandchildren, 2 as well as the rest of the family, including his children and 3 his wife. As far as the grandchildren go, he always wanted 4 them to get the apartments for their use. 5 Q The apartments, again, comprise the disputed 6 properties as we have referred to them here? 7 A The disputed properties, income producing 8 properties. 9 Q When you say that he wanted the grandchildren to 10 get the properties, what did you mean by that? 11 THE COURT: Well, I am not so much interested in 12 the witness's opinion as to what his father wanted, but what 13 the father said, if anything. 14 MR. KEISLING: Thank you, Your Honor. 15 BY MR. KEISLING: 16 Q Do you have specific recollections of conversations 17 with your father where he stated his intentions? 18 A I do, yes. 19 Q What did your father say in those conversations? 20 A Again, I worked with him every day for 30 years, so 21 every now and then we always had a discussion about the future. 22 We would go over things pertaining to the land and the 23 apartments and his will and he always wanted the grandchildren 24 to have the apartments. 25 MR. SEIFERTH: Your Honor, I am going to obect and 13 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 move to have that stricken. I still don't think I have heard a statement as to what it is that Howard Gale, Sr., said to Howard Gale, Jr. I think that is what we are trying to sort out here. THE COURT: The objection is sustained. Do you want to ask that question again, Mr. Keisling. BY MR. KEISLING: Q What did your father say to you regarding these properties? A My father said to me that he wants these rental apartments to go to his grandchildren. Q Did he say this on more than one occasion? A On more than one occasion, yes. Q On the more than one occasion, it was during the course of your working for your father? A That is correct. Q Finally, Mr. Gale, when he wanted the properties to go to your grandchildren, did he express to you in what time period or how they would go to the grandchildren? A He said upon his death he would specify in his will how he would want them to get to the grandchildren. THE COURT: Mr. Seiferth. CROSS-EXAMINATION BY MR. SEIFERTH: 14 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Q When was the last time, Mr. Gale, that you worked for your father? A Last time was in 1990. Q Your father died, if I remember correctly, in 1998? A Yes. Q It looks like, and I have a copy of Petitioner's Exhibit 1, which I believe you previously identified as your father's last will and testament, that looks like it was executed on January 2, 1998, is that consist with your recollection? A Yes. Q So the last time you worked with him, between that time and the time that this will was executed by your father, a period of eight years had passed? A Yes. Q Mr. Gale, were you ever involved in a bankruptcy proceeding? A Yes. MR. KEISLING: Your Honor, I am going to object tc the relevance. THE COURT: Mr. Seiferth. MR. SEIFERTH: Credibility, Your Honor. MR. KEISLING: Your Honor, bankruptcy doesn't speak to credibility of a witness. THE COURT: Are you going to impeach something that 15 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 2l 22 23 24 25 he said earlier by this testimony? MR. SEIFERTH: I simply want to get into the relationship between Mr. Gale, Jr., and Mr. Gale, Sr. THE COURT: Do you have an offer of proof? MR. SEIFERTH: Your Honor, my understanding is that Mr. Gale, Jr., at one point sued his father and was involved in a bankruptcy proceeding, and I believe that occurred in that period between 1990 when Mr. Gale, Jr., last worked for the decedent and when this will was executed in 1998. THE COURT: So are you saying that the witness is biased? MR. SEIFERTH: Yes, and credibility as well as to this statement. THE COURT: As to what statement? MR. SEIFERTH: The statement he has offered that his father expressed to him during the period of time he worked for his father. THE COURT: Okay. Mr. Keisling. MR. KEISLING: Your Honor, Mr. Gale hasn't indicated that any of these conversations took place during the time period that Mr. Seiferth is addressing. Mr. Gale indicates that these took place during the time he worked for his father. As far as the litigation that may exist between Mr. Gale, Sr., and Jr., and the bankruptcy, we are frankly not prepared to address it. We don't see the 16 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 relevance. I suppose Mr. Gale has already admitted that he filed bankruptcy previously. We would stipulate if it is accurate and Mr. Gale agrees, that there was litigation between his father and his son. But in terms of the details with our goal of wrapping up this morning, I don't know that this is relevant or helpful to the Court. THE COURT: All right. This is actually the afternoon. You may ask the question, Mr. Seiferth. MR. SEIFERTH: I apologize because I roughly forget what my question was. BY MR. SEIFERTH: Q I think you said, Mr. Gale, there was a period cf time where you were involved in bankruptcy litigation? A That has nothing to do with -- THE COURT: No, that is not for you to say. You should answer the question. BY MR. SEIFERTH: Q Mr. Gale, was there a period of time where you were involved in bankruptcy litigation? A Yes. Q Was there a period of time, sir, after 1990, when you actually sued your father? A Yes. Q What was the reason you sued your father? 17 A Because he had stock that he had given me in the 2 company an d he withheld it for evidence. 3 Q Are you familiar with your father's last will and 4 testament? 5 A As I have stated, yes. 6 Q Are you aware in paragraph fifth of the will, I am 7 going to s ummarize it. May I approach, Your Honor? 8 THE COURT: Certainly. 9 BY MR. SEI FERTH: 10 Q Mr. Gale, I am going to give you, again, this is 11 Petitioner Exhibit No. 1, your father's last will and 12 testament. I would like you to take a moment to review 13 paragraph fifth which begins on the top of the second page. 14 Did you have an opportunity to look at that, sir? 15 A Yes. 16 Q I am going to summarize. If you don't like my 17 summary, p lease correct me if I am wrong, but essentially that 18 paragraph bequeaths to you a half a million dollars, unless the 19 bankruptcy court determines that you own any interest in Howard 20 Gale Devel opment Company, in which case that bequest of a half 21 a million dollars becomes null and void. Is that a fair 22 summary of that paragraph? 23 A Yes. 24 Q Were you aware of that paragraph? 25 A Yes. 18 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Q Before your father's death, did he routinely provide your grandchildren with monetary gifts? A I don't recall. THE COURT: I didn't hear your answer. THE WITNESS: I don't recall. MR. KEISLING: Your Honor, we also want to be sparse with our objection, but we would object because he is asking if Mr. Gale had knowledge between the two parties. Again, the second part of this objection would be that whether or not Howard Gale, Sr., gave money to any of the grandchildren, certainly can't be used to impeach Mr. Gale, Jr. THE COURT: We are using this for impeachment? MR. SEIFERTH: I am just asking the question, Your Honor. It goes to the credibility of this statement that Mr. Gale, Sr., said all of these rental properties I want to go to your grandchildren to treat your grandchildren appropriately. I am asking him what the decedent gave to his grandchildren during his lifetime and the answer is he doesn't remember. THE COURT: I will permit the question. BY MR. SEIFERTH: Q So the record is clear, I am correct, Mr. Gale, that you don't remember of any specific monetary gifts that your father gave to any of your children, is that correct? A He might have given it to the children, I don't 19 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 know about it. Q In other words, he would have told you that one way or the another? A Not after 1990, no. Q Why wouldn't he have told you that after 1990? A Because that is when I left the company. MR. SEIFERTH: Again, just so I am clear, Your Honor, the purpose of this is just to clarify something from the previous record. BY MR. SEIFERTH: Q I think I believe four of the beneficiaries of the Country Club Park Trust are, in fact, your children? A Yes. Q None of them have been here for any of the proceedings, correct? A That is correct. MR. SEIFERTH: That is all I have, Your Honor. THE COURT: Mr. Keisling. MR. KEISLING: Just one possible follow-up question. REDIRECT EXAMINATION BY MR. KEISLING: Q Mr. Gale, the fifth paragraph of the will that was read, could you explain to the Court what happened? Did you 20 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 receive any money under that will or was it declared null and void as a result of the bankruptcy court? A No, I did receive money through that. Q Did you receive all or part of the $500,000? A All of the money, yes. Q As you sit here today, is it your belief that you are somehow entitled to anything more from the estate of Howard Gale, Sr.? A As of right now? Q Yes, as we sit here today? A No. Q So the will as it relates to you has been satisfied? A That is correct. MR. KEISLING: Thank you, sir. That is all, Your Honor. MR. SEIFERTH: I have nothing further. THE COURT: Okay, you may step down, thank you. MR. KEISLING: Your Honor, we have today under subpoena Alan Ceperich, who is the accountant who prepared many of the tax returns that have been issued and we would call Alan Ceperich to the stand. 21 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 ALAN CEPERICH, having been duly sworn, testified as follows: DIRECT EXAMINATION BY MR. KEISLING: Q Sir, would you state your name and spell it for the Court, please? A Alan, A-L-A-N, last name is Ceperich, C-E-P-E-R-I-C-H. Q What is your current address, sir? A Home address is 7241 Red Fox Court, Hummelstown, 17036. Q Where are you employed, sir? A I am self-employed, my office is at 33 North Second Street in Harrisburg. Q What do you do for a living, sir? A Certified Public Accountant. Q What is your educational background? A I have a bachelor's degree from Penn State, and my CPA certificate, and also an enrolled agent. Q How long have you been practicing accounting? A 20 years. Q How long have you been a certified public accountant? A About 18 years. Q Have you ever been retained as a CPA by, and I am 22 going to list the entities that have been discussed in this 2 case, Howard C. Gale Development, Inc., or Country Club Park 3 Development Company, Inc., or the estate of Howard C. Gale? 4 A Yes. 5 Q By all of these entities or just portions? 6 A Howard C. Gale Development and Country Club Park 7 Development. 8 Q What services did you perform for these entities? 9 A Basically preparation of the corporate tax returns, 10 payroll tax returns, that is basically it. 11 Q I provided you prior to our meeting this afternoon 12 with Petitioner's Exhibit 35 through 53? 13 A Yes. 14 Q Are you familiar with those documents? 15 A Yes. 16 Q I would like to direct your attention to Exhibit 42 17 which is a U.S. income tax return for the year 2002. 18 A Okay. 19 MR. KEISLING: Your Honor, I have another copy if 20 you would like it, sir. 21 THE COURT: No, that is all right. Go ahead. 22 BY MR. KEISLING: 23 Q Do you have the document, Mr. Ceperich? 24 A Yes, I do. 25 Q Were you involved in the preparation of this 23 document? 2 A Yes, I was. 3 Q Did Country Club Park Development Company, Inc., 4 show income for the tax year 2002? 5 A Yes, it did. 6 Q How much income? 7 A The gross income was -- the rent, gross rental 8 income was $88,117. 9 Q Do you know the source of this income, by rental 10 income? 11 A Rental income was the rents collected from tenants. 12 Q How did you obtain the figures that you used in 13 preparing t he tax documents? 14 A There was a register of deposits that were made 15 into the Co untry Club Park bank account, and we used the bank 16 deposits as our rental income. 17 Q Does the tax return for the year 2002 show 18 depreciatio n expense? 19 A Yes, it does. 20 Q How much depreciation expenses? 21 A $7,471. 22 Q Very broadly, how is depreciation expense 23 calculated? 24 A Depreciation is an ongoing amount that when assets 25 are initial ly accumulated they are pro-rated expense over a 24 number of years. You take a portion every year as an expense. 2 Q When you filled out the tax returns in this case, 3 did you follow generally accepted accounting principles as it 4 regards reporting income and depreciation? 5 A Yes, I would say it is more tax IRS rule as opposed 6 to general accepted accounting principles because it is more 7 geared to what is deducted for income tax purposes. 8 Q Would it be accurate to say that you follow 9 accepted standards -- 10 A Yes. 11 Q -- in your profession? 12 A Yes. 13 Q Did you follow those guidelines in preparing the 14 tax returns for Country Club Park Development Company, Inc.? 15 A Yes, I did. 16 Q Look if you would, sir, to the last page of that 17 tax return? 18 A Yes. 19 Q I believe it shows a depreciation schedule? 20 A Yes. 21 Q Could you explain what the depreciation schedule 22 is, please? 23 A It is a summary of the assets that have been 24 acquired over time and their cost basis, in other words, what 25 they originally paid for them and their depreciation over. the 25 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 years, the accumulated amounts and what the current depreciation was for that year. Q So this is a form in each of the years, a schedule similar to this in preparing the depreciation -- A Yes. Q -- entry on the tax return? A Yes. Q Can you identify from that schedule what properties are included for depreciation purposes? A No, I can not. Q Can you identify how many properties or parcels are included for depreciation? A No, I cannot. Q We currently have five disputed properties and four undisputed properties according to testimony prior to your appearing on the stand. Two of the undisputed properties have buildings upon them and the other two are just lots. Are you able to discern whether the number of properties included on that list exceed what is on the undisputed property list? MR. SEIFERTH: Objection, Your Honor, he already answered that he can't identify which properties are which based on that list. MR. KEISLING: Withdraw the question, Your Honor. THE COURT: It is up to you. All right, the 26 question is withdrawn. 2 BY MR. KEISLING: 3 Q Mr. Ceperich, I don't want to go individually 4 through each of the tax returns that you prepared, but the tax 5 returns that are already in evidence for the year 2000, 2001, 6 2003, 2004, and 2005 -- and so that we are all clear, that is 7 Exhibits 40, 41, 43, 44, and 45 -- do all of these federal tax 8 returns show income from rents of properties? 9 A Yes. 10 Q Do all of these tax returns show depreciation 11 listed on th e tax returns? 12 A Yes, they do. 13 Q Each of these tax returns would have been prepared 14 according to the same acting standards you discussed for the 15 year 2002? 16 A Yes. 17 Q It was suggested by Mr. Seiferth in March that 18 there is a d ifference between a landlord and an owner. Is 19 there anythi ng on these tax returns that would give you an 20 indication t hat Country Club Park Development Company, Inc., 21 was acting a s an agent or otherwise on behalf of some other 22 entity that owned the properties? 23 A No. 24 Q So based on your knowledge, and you are the one who 25 prepared the tax returns, is it fair to say that you did so 27 with the understanding that Country Club Park Development 2 Company, Inc., was the owner of these properties? 3 A Yes. 4 Q With depreciation, can any entity, broadly 5 speaking, n ot related just to these, can any entity otter than 6 an owner de clare depreciation of property on the tax returns? 7 A No. 8 Q So if an entity is declaring income and 9 depreciatio n, it is reasonable to conclude that they are the 10 owner, at l east they are holding themselves out that way, to 11 the Federal government for tax purposes? 12 A Yes. 13 Q Where did you get the data for each of the years in 14 preparing t he tax returns? 15 A I would get the bank statements, check stubs, from 16 Mrs. Gale. 17 Q That is Julie Gale, the Respondent? 18 A Yes. 19 Q The check stubs and bank statements, just to be 20 clear, were for Country Club Park Development Company, Inc.? 21 A Yes. 22 Q That is why you applied them to these tax returns? 23 A Yes. 24 Q Did you during the course of your career know 25 personally or professionally a CPA by the name of Bob Clouser? 28 A Yes, I did. 2 Q How did you know Mr. Clouser? 3 A When I first got out of college, I worked for Mr. 4 Clouser for 7 years, and then on my own; but we kept in touch 5 professionally. Then as he became ill, roughly in the year 6 2000, he brought me in to help with some items and tax issues. 7 Then right before he passed away, he agreed that I would take 8 over his practice. 9 Q Part of the practice at that point was Country Club 10 Park Development Company, Inc.? 11 A Yes, they were a client. 12 Q And Howard Gale Development, Inc., as well? 13 A Yes. 14 Q Did you receive the accounting files from Mr. 15 Clouser's office, from his practice, for Country Club Park 16 Development Company, Inc.? 17 A Yes. 18 Q So just to be clear, the previous files that he had 19 created came into your possession? 20 A Yes. 21 Q Did you have an opportunity at that time or since 22 then to generally familiarize yourself with these files? 23 A Yes. 24 Q Did anything in these files give you reason to 25 question whether Mr. Clouser followed accepted standards in the 29 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 accounting industry for treatment of income or depreciation? A I think he did follow accounting practices typical for this type of business. Q You mentioned that you previously had the tax returns, and now I am talking for the years 1994 through the year 1998, you had a chance to review those tax returns? A Yes. Q Those tax returns also indicated income and depreciation? A Yes. Q Would it be your belief based on your knowledge of Mr. Clouser professionally and personally, as well as your access to the files, that he prepared these in the same way that you discussed preparing the tax returns you were responsible for? MR. SEIFERTH: I am going to object to that question, Your Honor. I don't think there is any foundation for that question. I don't think there is any testimony that he knew, other than looking at these particular forms, how anything was done, let alone the fact that these forms weren't even completed by Mr. Ceperich. THE COURT: Mr. Keisling. MR. KEISLING: The answer, Your Honor, is first of all, Mr. Ceperich mentions that he is familiar with Mr. Clouser by being employed with him for 7 years; but Mr. Ceperich also 30 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 testified that he took over Mr. Clouser's practice, therefore, we would submit that Mr. Ceperich as the principal of that practice is the custodian of those files, had them in his custody. Further he testified that he did have a chance to review them and familiarize himself with them. So he, as Mr. Clouser's successor, is perfectly qualified to discuss the tax returns. THE COURT: I think you are asking him for an expert opinion and I will sustain the objection. MR. KEISLING: Yes, sir. BY MR. KEISLING: Q In the Pennsylvania tax returns that you reviewed, was there anything inconsistent in the handling of income or depreciation between the Pennsylvania tax returns and the Federal tax returns? A No, they all tied together. MR. KEISLING: That is all we have, Your Honor. THE COURT: Mr. Seiferth. MR. SEIFERTH: Thank you, Your Honor. CROSS-EXAMINATION BY MR. SEIFERTH: Q Mr. Ceperich, my name is Adam Seiferth, I represent the Respondent, Julie Gale, in this matter. I just have a few very brief questions for you. First of all, your role, if I 31 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 understand correctly, was simply to prepare the various tax returns? A Yes. Q You weren't involved specifically with the company in terms of the day-to-day accounting, is that correct? A That is correct. Q You never reviewed any deeds to confirm which properties may have belonged with which corporation, is that a fair statement? A That is correct. Q In fact, you just relied upon whatever information was given to you which I believe you said included cheek stubs and various banking account statements, correct? A That is correct. Q In preparing the returns that you did, in fact, prepare, basically, the information you put on those returns was the result of whatever information was given to you, correct? A Yes. Q You said, you indicated that based on those returns, at least specifically with regard to Country Club Park Development Company, Inc., you have no way to identify which properties are which, is that a fair statement? A That is correct. Q Did you prepare any of the tax returns for Country 32 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Club Park Development Company for the tax year 1998 or before? A No, I did not. Q Did you ever have any discussions with Howard Gale, Sr., about the tax returns or the way that the corporate assets should be divided up? A No. Q Did you have any conversations directly with Julie Gale about the nuts and bolts of preparing each of these tax returns? A No. MR. SEIFERTH: That is all I have, Your Honor. THE COURT: All right. Mr. Keisling. MR. KEISLING: Briefly, Your Honor. REDIRECT EXAMINATION BY MR. KEISLING: Q The tax returns that have been entered into evidence, they have been stipulated by opposing counsel as authentic, however, they are not signed, they are marked copied at the bottom of each, is that correct? A Yes, it is. Q The tax returns that actually would have been filed to the Federal Government, first of all, are these true copies of those tax returns? A Yes, they are. 33 Q Who would sign those tax returns? 2 A I signed them as the preparer, Ms. Gale would sign 3 them as the officer. 4 Q Is there language that we see at the signature 5 space of the tax payer regarding above the signature line that 6 starts with under penalties of perjury? 7 A Yes. 8 Q It is just two sentences, could you just read that 9 sentence, sir? 10 A Under penalties of perjury, I declare that I have 11 examined this return, including accompanying schedules and 12 statements, and to the best of my knowledge and belief, it is 13 true, correct, and complete. Declaration of preparer other 14 than taxpayer is based on all information of which preparer has 15 any knowledge. 16 Q With your experience, Mr. Ceperich, as it relates 17 to these returns and your testimony that it would be the owner 18 of the properties that declares particularly depreciation, but 19 also presumably the rental income, that it would be perjury if 20 somebody signs this tax return taking depreciation expenses if 21 they were not the owners of the property? 22 A Yes. 23 Q So to give someone the benefit of the doubt, to the 24 best of their knowledge and belief, Mrs. Gale signed that 25 Country Club Park Development Company, Inc., and she as its 34 president was taking depreciation on these properties? 2 A Yes. 3 MR. KEISLING: Thank you, sir. 4 5 RECROSS-EXAMINATION 6 BY MR. SEIFERTH: 7 Q Mr. Ceperich, if you prepared these tax returns and 8 then I assume you would give them to Julie Gale to sign? 9 A Yes. 10 Q Is it a fair statement that Julie Gale would rely 11 on your expertise in preparing these tax returns as accurate as i2 possible? 13 A Yes, she would. 14 Q In fact, I am sure she is paying you a fairly 15 decent amount of money to do that to the best that you can? 16 A Yes. 17 Q Again, just one brief follow-up question. At least 18 from the 2002 time period forward, did you have any 19 conversations with one Robert Trace in terms of getting 20 information or discussing these particular tax returns? 21 A Yes. 22 Q Is it possible he may have signed some of these tax 23 returns? 24 A I don't think he did. 25 Q Is it possible he may have signed some on behalf of ~5 any returns he prepared for the Howard Gale Development 2 Company? 3 A It is possible. 4 MR. KEISLING: Your Honor, I would like to object 5 to the extent that these tax returns were provided by the 6 Respondent. If Mr. Seiferth has knowledge that they weren't 7 signed by Julie Gale, I think that should be definitively 8 introduced. 9 I don't think they should be able to provide in 10 response to a subpoena information and then say, well, it may 11 not be what we think it says. The assumption I believe is that 12 Julie F. Gale would sign as the president of the corporation, 13 she signed other documents as the president of the corporation, 14 and it is not appropriate to insinuate that maybe Mr. Trace 15 signed it. If he knows Mr. Trace signed it, that should be 16 introduced. 17 THE COURT: The objection is overruled. Any other 18 questions? 19 MR. SEIFERTH: A few more, Your Honor. 20 THE COURT: Go ahead. 21 BY MR. SEIFERTH: 22 Q Mr. Ceperich, did you ever have any conversations 23 with Robert Trace in terms of what assets belonged to Country 24 Club Park Development Company and what assets belonged to 25 Howard Gale Development Company? J A No. 2 Q Again, so I am clear, I apologize if I asked this 3 in one form or another, do you believe that it is possible that 4 some of the information you may have been provided in 5 completing these tax returns may have actually come from or 6 been delivered to you by Robert Trace? 7 A Not the documents, not bank statements and check 8 stubs, no. 9 MR. SEIFERTH: That is all I have, Your Honor. 10 THE COURT: Mr. Keisling. 11 MR. KEISLING: No further questions, Your Honor. 12 THE COURT: You may step down. May this witness be 13 excused? 14 MR. KEISLING: We are done with Mr. Ceperich. Yes, 15 sir. 16 THE COURT: Mr. Seiferth. 17 MR. SEIFERTH: Your Honor, I am prepared to move 18 ahead with our defense. 19 THE COURT: Do you have any objection to his 20 leaving? 21 MR. SEIFERTH: No objection. 22 THE COURT: You may stay or leave as you choose, 23 thank you. 24 MR. KEISLING: Your Honor, when we concluded during 25 the initial session Mr. Seiferth was prepared to cross-examine 37 Julie Gale. He indicated in a conversation this week that he 2 was going to do that under his case-in-chief. So with the 3 reminder to the Court that we reserved the right t.o recall 4 Mr. Gale at some point, we are done I believe with the 5 case-in-chi ef for our side. 6 THE COURT: In other words, you might recall him on 7 rebuttal. 8 MR. KEISLING: Yes, sir. 9 THE COURT: You always have that opportunity. 10 MR. SEIFERTH: Your Honor, I would like to call as 11 on direct m y client, Julie F. Gale. 12 THE COURT: All right. 13 14 JULIA F. GALE, 15 having been duly sworn, testified as follows: 16 DIRECT EXAMINATION 17 BY MR. SEIF ERTH: 18 Q Julia, just so it is clear, could you tell us your 19 full name, please? 20 A Julie F. Gale. 21 Q Julie, can you hear me okay? 22 A Pardon me? 23 Q Can you hear me okay? 24 A Yes. 25 MR. SEIFERTH: Your Honor, I want to make sure the 38 witness can hear me. 2 THE COURT: Certainly. 3 BY MR. SEIFERTH: 4 Q Julie, how old are you currently? 5 A How old am I? 6 Q Yes. 7 A I will be 87 in August. 8 Q I apologize for asking you that question. 9 A Okay. 10 Q I just have a few questions for you, so bear with 11 me. How long were you married to Howard Gale, Sr.? 12 A 32 years and very happily. 13 Q Were you married to Howard at the time of his death 14 in 1998? 15 A Yes. 16 Q How would you describe your marriage with Howard? 17 A Excellent. 18 Q Was that true at the time of his death in 1998? 19 A Excellent, yes. 20 Q During the course of your marriage with Howard, did 21 he involve you in his business, his business affairs at all? 22 A Well, I added a telephone in the office for the 23 business and I decorated some of the houses. 24 Q Were you ever privy to any of the books that Howard 25 kept? 39 A No. 2 Q Did he ever explain to you the difference between 3 Howard Gale Development Company and Country Club Park 4 Development Company? 5 A Not really, no. 6 Q Are you familiar with Robert Trace? ~ A Yes. 8 Q Do you know, can you tell the Court who Robert 9 Trace is? 10 A He was our attorney. 11 Q Was Robert Trace the executor of your late 12 husband's e state? 13 A I believe he was, yes. 14 Q If I showed you the will that said that Robert 15 Trace was, in fact, the executor, you would have no argument 16 with that? 17 A I don't think so. 18 Q After your husband died, is it fair to say that you 19 began to ta ke on some of the day-to-day business matters that 20 your husban d had left behind? 21 A Yes, I think I did. 22 Q Was Robert Trace involved in any of that? 23 A Yes, yes. 24 Q Was your daughter, Leisa, involved in any of that? 25 A Absolutely. 40 Q To the extent Robert Trace was involved in the 2 business end of things, did you rely on his advice? 3 A I did, yes. 4 Q To the extent Robert Trace was involved in working 5 with the estate and acting as the executor of the estate -- 6 A Yes. 7 Q -- did you rely on his advice? 8 A Yes. 9 Q At any time did you serve as the executrix of the 10 estate? 11 A Not to my knowledge. 12 Q Julie, I am going to grab an exhibit, I will be 13 right back. 14 A Good. 15 Q Julie, I am going to show you a document which has i6 been admitted as Petitioner's Exhibit 54, which indicates as 17 its title Last Will and Testament of Julie F. Gale. Would you 18 just take a look at that. 19 A Okay. 20 Q Do you recall seeing that document at the last 21 hearing? 22 A Yes. At the last hearing? 23 Q Yes. 24 A I don't think I did. I don't think I saw this at 25 the last hearing, no, I don't think T did. 41 Q Assume with me. 2 A Yeah. 3 Q Let me ask you this, have you seen this before? 4 A Yes. 5 Q Who prepared this for you? 6 A Bob prepared this. 7 Q Did you rely on Bob Trace in the preparation of 8 that will? 9 A Very much so, yes. 10 Q Do you have any understanding in Item 6 in the 11 second paragraph where it says: The real estate in Country 12 Club Park, Howard C. Gale Development Company, Inc., that is 13 held in tru st for other grandchildren of Howard C. Gale, Sr., 14 is not included in this Item 6 and is specifically noted as 15 follows, and there is a series of properties listed. Do you 16 have any reason why that was included in your will? 17 A I don't believe it was, I am not familiar with it. 18 Q That was a bad question. Do you have any 19 understanding of why that was included in there? 20 A No, I don't. Let me see that again. 21 Q Sure. 22 A That is not familiar. 23 Q Okay, that is all I am asking. 24 I want to show you just a couple more things. This 25 will be quick, keep your glasses handy. I want to show you 42 Petitioner's Exhibit 34 which I will represent to you is an 2 initial inheritance tax return. I want to show you the 3 signature at the bottom of the first page. Do you recognize 4 that signatu re? 5 A Robert J. Trace. 6 Q Is that whose signature that is? 7 A Yes. 8 Q I want to show you Petitioner's Exhibit 53, which 9 is a subsequ ent inheritance tax return. I am referring to a 10 second page of that exhibit where it says: Signature of person 11 responsible for filing return. Do you recognize that 12 signature? 13 A Robert J. Trace. It looks familiar. 14 Q Does that look to be Robert Trace's signature to 15 you? 16 A Yes. 17 Q Julie, do you recall ever signing either of these 18 inheritance tax returns? 19 A Not to my knowledge. 20 Q Let me just go back quickly to your Last Will and 21 Testament. Are you currently in the process of redoing your 22 Last Will and Testament? 23 A We are. 24 Q Julie, in the last 10 years of your late husband's 25 life, how would you describe the relationship between him and 43 Howard Gale, Jr.? 2 A Well, to be frank with you, it wasn't too good. 3 MR. KEISLING: Your Honor, I would like to object. 4 She can describe her opinion but she can't describe the 5 relationship between Howard C. Gale, Sr., and Jr. 6 THE WITNESS: They didn't get along that good back ~ then to my honest opinion. 8 THE COURT: Mr. Seiferth, do you have a response to 9 the objection? 10 MR. SEIFERTH: Essentially, Your Honor, that is 11 what she is testifying to. I am just asking for her personal 12 opinion and observation of that relationship. 13 THE COURT: All right. You may ask it. 14 BY MR. SEIFERTH: 15 Q I believe you said, Julie, that the relationship 16 was not that great? 17 A Yes. 18 Q Do you care to comment any more on that? 19 A I would not like to do that now. 20 Q When was the last time Howard, Jr., spoke to you 21 other than the two hearings we have had here today and back in 22 March? 23 A I would think since the death of my husband. 24 Q When was the last time you spoke with any of Howard 25 Gale, Jr.'s, grandchildren? 44 A I haven't seen them since they closed the casket. 2 Q Did Howard, your husband, Howard Gale, Sr., ever 3 discuss with you how he wanted to divide up and handle his 4 estate? 5 A No, he has not. 6 Q Just one more question for you, Julie. Is Robert 7 Trace now deceased as well? 8 A Yes. 9 MR. SEIFERTH: That is all I have, Your Honor. 10 THE COURT: Okay. 11 MR. KEISLING: Your Honor, I will also move closer, 12 if I may. 13 THE COURT: Certainly. 14 15 CROSS-EXAMINATION 16 BY MR. KE ISLING: 17 Q Mrs. Gale, you testified moments ago that you don't 18 remember whether your Last Will and Testament from 2002 was 19 raised at our last hearing, is that correct? 20 A What was the question again, sorry. 21 Q You don't remember discussing your Last Will and 22 Testament at our previous hearing? 23 A No. 24 Q You dont have a recollection of that? 25 A I don't think so. 45 Q You don't recall signing any tax returns on behalf 2 of the estate? 3 A Absolutely. 4 THE COURT: Wait. You don't recall signing any tax 5 returns or you do recall? 6 THE WITNESS: I don't recall. ~ MR. SEIFERTH: Your Honor, I hate to interject. I 8 think we should be clear. Are we talking about income tax 9 returns or inheritance tax returns? 10 THE COURT: Which returns are you talking about? 11 MR. KEISLING: Your Honor, any tax returns. 12 BY MR. KEISLING: 13 Q Do you recall ever signing a tax return either on 14 behalf of the estate or as president of Country Club Park 15 Development Company, Inc.? 16 A Not to my knowledge. 17 Q You don't recall having any conversations with 18 Mr. Gale, Jr.'s, children since the passing of your husband? 19 A Absolutely not. We have not been friends. 20 Q That is a two-way street, you haven't called them 21 either? 22 A I was very (inaudible) but they never bothered with 23 me, that is the point. 24 Q The question was, when is the last time you called 25 any of the four grandchildren who are children of Mr. Gale, 46 Jr.? 2 A We just were not a happy family, put it that way. 3 Not on my part, I wasn't (inaudible). 4 Q Is it fair to say you haven't called them and they 5 haven't call ed you? 6 A They haven't called me, really. 7 Q When is the last time you spoke with Mr. 8 Rossignoli? 9 A Anthony, my grandson? 10 Q Yes, ma'am. 11 A Just a few weeks ago. 12 Q You have had regular contact with him? 13 A Well, occasionally. He travels a lot with his 14 friends. 15 Q But you have a positive relationship with Mr. 16 Rossignoli? 17 A Pardon me? 18 Q Do you have a positive relationship -- 19 A Yes. 20 Q -- with your grandson? 21 A Yes, yes. 22 Q He is your natural grandson -- 23 A Yes, he is. 24 Q -- by birth? 25 A Yes. 47 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Q Mr. Gale's children are step grandchildren -- A Yes. Q But are not your natural grandchildren? A Exactly. I love them all. Q But you haven't had contact with four of them? A With the four Gale children, absolutely not. Q If your side prevails in this matter, all of the rental properties, at least according to the will that is in evidence at the moment, will pass ultimately to Mr. Rossignoli and not to the Gale, Jr., grandchildren, is that correct? MR. SEIFERTH: I am going to object to that, Your Honor. THE COURT: On what ground are you objecting on? MR. SEIFERTH: I am objecting because, first of all, that will, it is in evidence, but it is not notarized, it is not witnessed. Mrs. Gale testified that she is in the process of planning her estate, and, frankly, this is one of the elements at issue. THE COURT: Were you asking about her will or about MR. KEISLING: In this particular instance, Your Honor, I was asking about her will. We are trying -- Mr. Seiferth raised the issue of her relationship with the step grandchildren, I think it is clearly relevant to discuss the close relationship with her blood grandchild, and I apologize 48 for the phraseology but. 2 MR. SEIFERTH: Well, I will withdraw the objection. 3 I will try t o listen to the question better. 4 THE COURT: All right, go ahead. 5 BY MR. KEISLING: 6 Q Mrs. Gale, you don't particularly like Mr. Gale, 7 Jr., do you? 8 A Pardon me? 9 Q You don't particularly like Mr. Gale, Jr., do you? 10 A I like everybody. I don't understand your 11 question. 12 Q Fair enough. We will move on. 13 Did Robert Trace represent your husband for the 14 entire time you were married? 15 A Yes. 16 Q That was 30 years? 17 A Yes. 18 Q Was Mr. Gale, Sr. -- 19 A What do you mean by 3C years. 32 years. 20 Q 32 years? 21 A 32 years. 22 Q That entire time Mr. Trace represented your 23 husband? 24 A Yes. 25 Q Was your husband in your opinion the type of man 49 who could be easily dominated by others? 2 A No. 3 Q Your husband, was he the type of man that if 4 somebody worked for him, he expected the services that he 5 expected? 6 A Oh, yes . 7 Q If Mr. Trace didn't perform his services to your 8 husband, according to your husband's satisfaction, do you think 9 your husband would have continued the relationship? 10 A No, he would not. 11 Q You testified that you relied on Robert Trace for 12 legal matters? 13 A Yes. 14 Q Did your husband rely on Mr. Trace? 15 A Absolutely. 16 Q Would it be your view that if Mr. Trace performed 17 legal services for your husband that those services furthered 18 the intentions of your husband? 19 MR. SEIFERTH: I am going to object to that. I 20 don't know that there is any foundation for Julie to comment ors 21 that one way or another. 22 THE COURT: The objection is sustained. 23 BY MR. KEISLING: 24 Q I believe you testified that Mr. Trace wrote, we 25 call it scribbler, but wrote your husband's will, is that 5C correct? 2 A Yes. 3 Q You also testified that Mr. Trace wrote your will 4 from 2002 that is entered into evidence, is that correct? 5 A Yes. 6 Q You relied on Mr. Trace and him writing that will? ~ A Yes. 8 Q When you got that will in 2002 and signed it -- 9 first of a ll, you did sign it, your signature is on that will, 10 correct? 11 A Yes. 12 Q You had not agreed with what was in the will, you 13 could have refused to sign it, is that correct? 14 A Well, I guess so, yes. 15 Q If you didn't agree with that which was in the 16 will, you could have directed Mr. Trace to create another copy 17 of the wil l? 18 A I don't understand your question, really. 19 Q If you didn't like this will -- 20 A Yes. 21 Q -- you could have called up Mr. Trace and said, 22 Mr. Trace, I don't like this will, do another one? 23 A Yes, I would say that. 24 Q And Mr. Trace would have done another one if you 25 would have told him to? 51 A I would think so, yes. 2 Q Mrs. Gale, when you dealt with Mr. Trace 3 personally, either before or after your husband's passing, was 4 there any difference in who Mr. Trace was doing the work for? 5 In other words, did you ever call him up and say, Bob, I am 6 calling on behalf of Country Club Park Development Company, 7 Inc.? 8 A Never. 9 Q Did you ever call up and say I am calling on behalf 10 of Howard Gale Development Company, Inc.? 11 A Yes. 12 Q Specifically? 13 A Yes, yes. 14 Q So there was a difference between the entities and 15 who Mr. Trace did the work for? 16 A Yes. 17 Q So Mr. Trace understood what entity he was working 18 for at any given time? 19 MR. SEIFERTH: I am going to object to that. She 20 is not competent to testify as to what Mr. Trace understood or 21 didn't understand. 22 THE COURT: Sustained. 23 BY MR. KEISLING: 24 Q If you called up Mr. Trace and said I am calling on 25 behalf of Howard Gale Development Company, Inc., did you expect 52 Mr. Trace would work on behalf of Howard Gale Development 2 Company, Inc.? 3 A Oh, yes. 4 Q You testified today of a limited involvement with 5 your husband's businesses, a few -- 6 A Yes. 7 Q -- things that you did? 8 A Yes. 9 Q Are you aware of your husband treating any of his 10 business operations different from one another? If I could 11 explain, M r. Gale, Jr., testified that your husband treated 12 everything as if it were his own, that he owned all of the 13 properties and buildings and whatnot? 14 A That he owned it? 15 Q That's right. 16 A Yes, absolutely. 17 Q He was the owner regardless of what business might 18 have been listed somewhere? 19 A Exactly. 2~ Q They were his? 21 A Yes . 22 Q And he treated them like they were his? 23 A Yes. 24 Q And you knew they were his? I mean, you were his 25 wife, but you knew -- 53 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 A Yes. Q -- they were his? A Yes. Q You were not concerned with what business might have owned what, they were your husband's? A Right, yes. MR. KEISLING: Mrs. Gale, thank you very much. MR. SEIFERTH: Your Honor, I have no further questions far this witness. THE COURT: You may step down. Thank you. MR. SEIFERTH: Your Honor, I would like to call Leisa Kercher. THE COURT: We will take a brief recess and then we will resume. (Recess.) THE COURT: Mr. Seiferth. MR. SEIFERTH: I would like to call Leisa Kercher to the stand. THE COURT: All right. LEISA J. KERCHER, having been duly sworn, testified as follows: DIRECT EXP,MINATION BY MR. SEIFERTH: Q Leisa, could you state your full name and spell it 54 for us, please? 2 A Yes, my name is Leisa, L-E-I-S-A, Kercher, 3 K-E-R -C-H-E-R. 4 Q What is your address? 5 A 138 Kathleen, K-A-T-H-L-E-E-N, Lane, Wyomissing, 6 W-Y-O -M-I-S-S-I-N-G, Pennsylvania, 19610. 7 Q Leisa, what is your relationship to the Respondent 8 in th is case, Julie Gale? 9 A Julie Gale is my mother. LO Q What is your relationship with the decedent, Howard 11 Gale, Sr.? 12 A He was my stepfather. 13 Q What is the relationship between you and Howard 14 Gale, Jr.? 15 A I guess he would be my stepbrother. 16 Q Did you have the opportunity to get to know Howard 17 Gale, Sr., during your lifetime? 18 A Howard Gale, Sr., absolutely. 19 Q Who is Anthony Rossignoli? 20 A Anthony Rossignoli is my son. 21 Q He is one of the Petitioners and beneficiaries of 22 this Country Club -- 23 A Correct. 24 Q Can you describe Howard, Sr.'s, relationship with 25 your son for us? 55 A Howard, Sr., and my son had a very special 2 relationship. Anthony would have been the youngest out of all 3 of the grandchildren. Anthony, I would say, he had a true 4 grandfather relationship, even though that my father was alive 5 for most of the time. 6 We went on cruises together. My kid cruised with 7 Howard and Julie there since he has been eight-years old. He 8 would work with pop pop out at the jeep and, you know, building 9 the houses, what he thought was building the houses. 10 As my son got older, we continued to cruise with 11 them. My son also went to Dickinson. I know Howard wanted the 12 grandchildren to go. And my son did go to Dickinson, and 13 Howard was very proud that he did graduate from there, four 14 years. 15 Every birthday Howard and my mother would come to 16 Reading and celebrate with us. They had a very good 17 relationship I would say. 18 Q You heard some testimony earlier from your mother 19 regarding her relationship with your son, Anthony? 2Q A Yes. 21 Q Do you agree with that testimony? 22 A No, I don't. 23 Q Could you tell us why? 24 A Well, I figure in Julia's mind she thinks she has a 25 good relationship with her grandson at this point. Up until 56 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Howard passed away and we both came to work at Gale Development, we have had some tremendous issues with Julie that were very deep and very hurtful for us. No, Julie and her grandson do not have a good relationship at this point. Q You mentioned going tc work for the business? A Yes. Q Let me, just in terms of background, prior to Howard, Sr.'s, death, did you have any involvement in any of his business affairs? A Absolutely not. Q Did you become involved subsequent to his death? A Yes. Q Could you tell us how you became involved? A Well, my mother called and said Howard passed away, I think it was the 19th of January, '98. We did the whole funeral thing. Then my mother had called one day and said she needs our help. The 28th of January, I think it was around the 28th of January of 1998. My son and I showed up to see what -- she needed help. And I guess Bob Trace had bestowed everything upon her. The only thing I know is Bob Trace came to her and said everything is yours. He produced no will, it made me suspicious. I want to tell you, my mother loved and trusted Trace to no end. I was a little leery, he said, everything is 57 yours, Julie. 2 So I walk into the office when I agreed to take on 3 the job, but they were still building at the time. My son 4 wanted to go to work to learn the business, that was difficult 5 with a doting grandmother. 6 But I walked in the office one day, and I have only 7 seen one office worse, and that was Bob Clouser's, the old 8 accountant. I mean, Howard had stacks and stacks of loose 9 paper, notes written on luggage tags, airline ticket folders. 10 The office was a chaotic nightmare. Money was laying around. 11 I literally took months, and I sat there until, I 12 would stay up until 2:00, 3:00, 4:00 in the morning t.o sort 13 everything out to make sense, get inside Howard's head to get 14 inside the business to organize it, because my mother knew l5 absolutely nothing. 16 Trace ran my mother and ran the company. They just 17 let me organize it and pay the bills. 18 Q Were you able to organize it? 19 A Yeah. You know what, very proud of myself. It 20 took me months, because I was kind of passionate about it. It 21 kind of became my baby. I wanted to see that I could do this, 22 and tried to move the company forward. I think I got it on the 23 right track, I do. 24 Q Were you able with the situation that you came 25 across, that you described, at the end of the day, were you 58 able to make any distinction between Country Club Park 2 Development Company and Howard Gale Development Company? 3 A Well, the tricky part of this, and this is a tricky 4 question, because what you thought you knew about Gale 5 Development and Country Club Park really did not turn out to be 6 that way. 7 There were a few key players that I will call them 8 at the time. Of course, one was Trace; one was Clouser, the 9 accountant. Howard had a bookkeeper who did payroll. She 10 guided me through, she told me how to do the books, how to 11 subtract, how to write the checks out. I would go to her for 12 awhile, and then subsequently she quit. Don Wallace 13 (phonetic), who was the foreman. 14 There is one common denominator in everything that 15 -- everybody that I had talked to, and they all said, and I 16 can't tell you how many times, right up to when Trace died, and 17 just like Howie, Jr., would say, Howard had it all in his head. 18 MR. KEISLING: Your Honor, we will take this moment 19 of pause to object. Fascinating as it is, she testified that 20 she had absolutely no involvement until after Mr. Gale's 21 passing, and it is an interesting story, but I don't see how it 22 relates at all to discerning the intent of Howard Gale, Sr., 23 which is what we are trying to do here today. 24 MR. SEIFERTH: Your Honor, I raised that objection 25 numerous times about the tax returns, the lease agreements, any 59 other of the documents that postdate 19 January, 18th or 19th, 2 1998, in terms that were offered by the Petitioner and that 3 were let in over an objection in an effort to discern intent. 4 What I am trying to show through this witness is 5 maybe the intent isn't just as clear as everyone may think it 6 is, and I think where the witness left off is she was going to 7 say that things were done in Howard's head and what may be 8 lying around, frankly, nobody knows and nobody can really say 9 for certain what exactly that is. 10 THE COURT: You can ask the question. 11 BY MR. SEIFERTH: 12 Q Do you remember where you left off? 13 A No. 14 Q You were describing, if I recall correctly, that 15 you believe given all the players involved that it was the 16 general belief that Howard did things in his head? 17 A Correct. 18 Q What did you mean by that? 19 A Well, it means that nobody was sure, as I said, 20 this was a mess. Something might have been written here; 21 something, a tag over there on the other side. $1700 and a 22 lease laying about. 23 As I said, I might have to sit and read for months 24 to make -- so that we could go forward in this company. They 25 left this all on me. Again, I reiterate that the more I found 60 out, if I would question Trace, he would get mad, he would hang 2 up on me. 3 He came to her, Julie, and said, this is all yours. 4 For 6 months. I apologize, I didn't know that. We would just 5 take the money from the leasing and put it into Julie's 6 account. 7 One day I called up Clouser and I said, Hey, 8 shouldn't she be paying taxes on this. Well, we ought to go 9 through and do all the math and we have to straighten 10 everything out. 11 They just left this company -- the man died and the 12 company died with it. To move forward, because there were 13 leases. Again, they were still building. They had payroll. 14 They had work, 3 or 4 weeks work at that time. We had to go 15 through, we had to finish a house that Howard had taken a 16 deposit for. 17 I had to learn a lot very quickly. But I was kind 18 of like the key person, because Julie knew nothing, nothing 19 about this. 20 Q Within the 5 years before Howard, Sr.'s, death, did 21 you have the opportunity to observe or gain an understanding of 22 the relationship between Howard, Sr., and Howard, Jr.? 23 A Yes, yes, I have. I resided, as I said, I was in 24 the Greater Reading area. Like Mrs. Gale said, this wasn't the 25 happiest of groups, so I kind of kept my distance. 61 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Of course, I came to town, especially when my son went to Dickinson, I spent a lot of time in the area. Howard would pick up my son on a Friday night and drag him back to the house, well, anyway I spent some time. Howard and I would periodically go out, just the two of us, for breakfast or something like that. And yes, occasionally, he did mention relationships with his son and with his one grandson, Craig, Jr. Q What was your thoughts, what was your observation on how Howard, Sr., felt about those two individuals you mentioned? A You know, I have heard from Trace that Howard loved his son and his family. But I have never seen Howard Gale, Sr., cry until one Sunday, I don't know what day it was, but at the dining room table in the morning and Howard, Sr., started to cry because he was very upset that his son was in bankruptcy and that everything that he worked his life to produce, to build, he was afraid that he was ruining the Gale name. Then I do know prior to his death that he discussed, and very briefly, we got to breakfast, and he would like ask me a question. Howard, sometimes we gat to breakfast and he wouldn't even talk to me. He wasn't the ideal companion. But every once in awhile he would ask me pertinent questions and I know he was very upset that his son had sued him. 62 I know he was really upset that Craigi owed him 2 money and did not pay him back. Howard was a stickler for 3 that. He liked to do business a certain way. He didn't care 4 who you were, if you owed him money, you paid it. 5 MR. KEISLING: Your Honor, I would like to object. 6 I am trying to give a wide birth here. When we started this 7 proceeding today -- 8 THE COURT: What is the objection? 9 MR. KEISLING: The objection is hearsay and 10 relevance. We have had third-hand hearsay, double hearsay, we 11 are now talking about debts that the grandson who isn't here 12 may or may not have owed. 13 I don't know that it is relevant regarding 14 Mr. Gale's intent to the will, but there is no foundation for 15 it, there is no basis for it and it doesn't fit any of the 16 exceptions we talked about regarding the Dead Man's Act or li hearsay exceptions because this has nothing to do with the 18 disposition of the property. This is anecdotal. 19 THE COURT: Mr. Seiferth. 20 MR. SEIFERTH: Your Honor, this is clear relevance. 21 This has to do with Howard, Sr.'s, state of mind within the 22 five-year period before that last will and testament was signed 23 by the decedent. 24 We heard testimony today about what Howard, Sr., 25 said to his son that had to have been 1990 or before. I am 63 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 trying to give the Court a picture of the circumstances surrounding Howard, Sr.'s, life within the time period much closer to his last will and testament and ultimately his death. That I believe is entirely relevant in light of all the extrinsic evidence that the Petitioners have been permitted to introduce in this case. Secondly, if there was a hearsay objection, I think the window for that opportunity came and went. Thirdly, to the extent that she is talking about understandings or statements of Howard, Jr.'s, son, that is a grandson that is one of the Petitioners in this case and I believe that is admissible as a party opponent. I think those address the three areas. THE COURT: All right, you can ask the question. BY MR. SEIFERTH: Q I actually don't think I have any more on that, Your Honor, other than you mentioned a Craigi? A Howard Craig Gale, III. Q That is one of Howard, Jr.'s -- A Yes, it is. THE COURT: Howard, Jr.'s, what? The witness is answering before you finish the question. THE WITNESS: Howard Craig Gale, III, is Howard Jr.'s, son, one son, and Howard, Sr.'s, natural grandson. MR. SEIFERTH: That is all the questions I have. 64 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 THE COURT: Okay. Mr. Keisling. CROSS-EXAMINATION BY MR. KEISLING: Q Ms. Kercher? A Yes, it is. Q My name is Bret Keisling, as you know, and I represent the Petitioners. How is your relationship with your son? A That is spectacular. Q Does he reside with you? A Yes, he does. Q So you are in regular communication with him? A Yes. Q Do you have any relationship whatsoever with Mr. Gale, Jr.'s, children? A No, I don't. Q When is the last time you had any contact with any of his grandchildren? A When Howard passed away, I think within a year. It might have been the summer of either '98 or '99, we took a cruise to Canada and New England and we made it a point to stop and see Missy, Melissa Gale, at her bakery stand in Boston. And we took her out and had lunch with her. On the way back on the cruise we did the same stop, we saw Missy again. E5 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Then my son, when he would go to Boston to hang out with his attorney buddies, he would look up Missy. I remember being in town one time on a vacation and we were -- Boo took Missy to a Red Sox game. Then Missy came back to the home where I was staying, and I had a conversation. I was probably closer to Melissa and nobody else. Q Ms. Kercher, let me just clarify so we are clear. Did you say Boo took her? A That is my son's name, Boo, everybody knows him as Boo. Q Okay, so we are talking about -- A (Inaudible). THE COURT: There are two people talking at once. There is no way the stenographer can take down the notes of testimony when. that happens. Start again with your question. BY MR. KEISLING: Q If you could identify for the record -- A Boo is my son, it is his nickname. His name is Anthony Rossignoli. Everybody from little on up refers to him as Boo, B-O-O. Favorite holiday is Halloween. Q Did you say, again, just for clarity, that when you visited his attorney brothers, did you say? A Fraternity brothers. Q Fraternity brothers. A Right. 66 2 3 4 5 6 7 8 9 10 11 12 13 14 15 i6 17 18 19 20 21 22 23 24 25 Q So they are -- A That is how he would get to Boston, and then he would look up Missy. Because Missy and Boo were the closest in age. Q I just was wondering -- A Okay. Q -- if there were any other children involved? A No. Q Did Howard Gale, Sr., give your son any gifts during Mr. Gale's lifetime? A Well, he always gave him birthday gifts, Christmas gifts. Yeah, sure. Q Did he help with college expenses? A No, he did not. Q Did you have any sense that Mr. Gale, Sr., treated any of his five grandchildren, either the four natural grandchildren or the step-grandchild, with any more favor or disfavor than the others? A Wasn't around that much. All I can tell you is I knew that he -- we did, my son did a lot more with Howard than what I think his grandkids did. That is my opinion. We are the ones who cruised with Howard. We did things with Howard. We went to festivals and all sorts of things. They would come to Reading constantly. I don't know, you are going to have to ask Howie 67 that, that he would know what his father did with his children. 2 All I am saying is he did a lot with mine. 3 Q During the period of time where you started working 4 for the businesses -- 5 A Yes. 6 Q -- for which business did you work? 7 A At first we didn't know. I didn't know. 8 I came in, and as I said, everything was in 9 disarray. The first time that we got taxed, like we had to pay 10 the taxes in I guess March and July, I had to ask this 11 bookkeeper how I go about this. 12 Q Ms. Kercher, I am going t o ask, because I think we 13 are interested in wrapping up today - - 14 A Right. There were three corporations. 15 Q Okay. My request to you, and again, I mean this 16 very respectfully -- 17 A Yes. 18 Q -- because quite frankly I find your testimony 19 fascinating -- 20 A I am sure. 21 Q However, if we could narrow your answers to just 22 the questions being asked because I t hink none of us want to 23 continue this for another session and -- 24 A Right. 25 Q And I know for -- 68 A I understand. But I don't think it is black and 2 white, but I understand. Go ahead. 3 Q So where we were specifically, you didn't come to 4 work for any particular entity as opposed to another? 5 A Not at the beginning, no, no. We didn't know what 6 was going on -- I didn't know what was going on when I walked 7 in the door. I knew that Howard had corporations. 8 Q It has been characterized by Mr. Gale, Jr., and by 9 Julie Gale that, and these aren't exact words, but essentially 10 Howard, Sr., ran his own show, would you agree with that 11 characterization? 12 A Not a truer statement to be said. He ran his own 13 show. 14 Q Do you think Howard Gale, Sr., cared what formal 15 entity owned what property? 16 MR. SEIFERTH: I object to that question. 17 THE COURT: Sustained. 18 BY MR. KEISLING: 19 Q Do you have any reason to know based on what you 20 came across in the office that formal corporate structures were 21 adhered to prior to your coming on board? 22 MR. SEIFERTH: I am going to object to that. I 23 don't know that she has been qualified as an accounting expert 24 or some other type of expert to make that determination. 25 THE COURT: The objection is overruled. 69 2 3 4 J 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 THE WITNESS: Do I answer that? BY MR. KEISLING: Q Yes, ma'am. A It was -- what I told you before, whatever you thought that it could have been, it wasn't. Everything was commingled. The escrows, he had things in there from Howard, Jr.'s, sister to his own properties, to corporate properties. The insurances are to this day still a mess. They are still under a corporation that has been defunct. Everything was commingled. It was very difficult to tell what was what. Q You were involved in the operations of the entities during the years after his death through 2005? A Correct. Q Are you still involved in the entities? A Yes, I am. Q We have testimony that tax returns were prepared that treated properties as if they were owned by one particular entity. Prior to 2004, did you in whatever role you might have had with the company, have any reason to think that the entities didn't belong to County Club Park Development Company, Tnc.? A In the beginning, because Trace told my mother everything is yours, Julie, everything. The last day that you could produce a will, which must have been like the last week 70 that -- he died January 19th. I guess August 19th, I think he 2 had what, 6 months to produce a will. There was no will. 3 Tr:at day he met me and Julie there, he met us on 4 the street because we were building this house, and he handed 5 us Howard's will. And only at that point did we hear anything 6 about Country Club Park going to the grandchildren. 7 Q Ms. Kercher, that is not what I am asking. Let me 8 ask you this: Just to clarify, Mr. Seiferth has stipulated 9 that this is the Last Will and Testament of Mr. Howard Gale, 10 Sr. -- 11 A Back to the tax -- 12 Q Well -- 13 THE COURT: Sorry, but you must let the attorney 14 finish the question. 15 THE WITNESS: I am sorry. 16 THE COURT: That is okay. Go ahead. 17 BY MR. KEISLING: 18 Q Mr. Seiferth stipulated that this is this last will 19 and testament of Howard Gale, Sr., that which we marked as 20 Petitioner's Exhibit 1. Mr. Gale, Jr., has testified that that 21 was the last will and testament. And I believe Julie Gale, 22 your mother, testified that that is the last will and 23 testament. 24 Are you suggesting in some way to the Court that 25 that is not the Last Will and Testament or it is a forged 71 document? 2 A You know what, I have said from day one that I 3 never thought that this was Howard's will and testament. 4 Q So your testimony contradicts both your mother and 5 what was -- 6 A I can see, of course, we are presented a legal 7 document and we have to abide by that -- 8 Q Ms. Kercher, I apologize -- 9 A I am -- 10 Q I just want to finish the question -- 11 A I got you. 12 Q -- and we are doing several things. We are 13 eliciting testimony but we are also trying to provide a record. 14 MR. SEIFERTH: Your Honor, if I may. There is no 15 doubt it has been stipulated, it is in evidence, the will is 16 the will. Could we maybe move on to a different area. 17 THE COURT: What difference does it make whether 18 she thinks it is the last will and testament or not? 19 MR. KEISLING: Because, Your Honor, Mr. Seiferth 20 has presented two witness. I will get to this as the next 21 phase. We now have the second witness who is the hands-on 22 operator of the company, however she described herself, who is 23 I think about to suggest that she thinks the will is 24 fraudulent. 25 She has already brought into question her own 72 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 mother's credibility regarding the testimony regarding the grandson. Mrs. Gale testified that she and the grandson had a great relationship, the daughter has already said they don't. I think it is very fair and relevant to bring out the contradictions between the Respondent's only two witnesses. THE COURT: All right, the objection is sustained. MR. KEISLING: Okay. Your Honor, we are done with this witness, thank you. THE COURT: All right. Mr. Seiferth. MR. SEIFERTH: I have nothing further for this witness, Your Honor. THE COURT: You may step down, thank you. MR. SEIFERTH: Your Honor, I have no further witnesses, but I do have some exhibits. I don't anticipate any issues with the admissibility of them. I think we can move through these very quickly. (Respondent's Exhibits 2, 3, 4, 5, 6, and 7 were marked for identification.) MR. SEIFERTH: Respondent's 2, 3, 4, 5, 6, and were marked for identification. Your Honor, I think we can go through these, I want to describe what each one is for the record to make it clear. THE COURT: Mr. Keisling, do you have an objection before we start? 73 MR. KEISLING: Your Honor, we don't have an 2 objection to the authenticity of the documents. We would like 3 to take a moment and put on the record -- perhaps we should 4 wait until he has introduced them. 5 THE COURT: All right. 6 MR. SEIFERTH: Your Honor, starting with 7 Respondent's Exhibit 2, because there was already an Exhibit 1 8 which was a lease agreement that has already been admitted. 9 Respondent's 2 is a deed for 6 Fargreen Road. 10 MR. NUDEL: What is the recording reference of the 11 deed? 12 MR. SEIFERTH: Book 017, page 258. 13 MR. NUDEL: What property address is that? 14 MR. SEIFERTH: 6 Fargreen Road. 15 Respondent's No. 3 is a deed, Book No. R17, page 16 294. That addresses two properties, 49 and 55 Circle Drive. 17 Respondent's Exhibit 4 is also a deed. The book 18 number is somewhat difficult for me to read. It looks like it 19 could be a handwritten 6 or a 4. But the typewritten book 20 number is 16, page 205. That is the deed for 22 Country Club. 21 Respondent's Exhibit No. 5 is a deed, book R22, 22 page 307, noted at the bottom. That is the deed for 530 23 Fairway. 24 Respondent's Exhibit No. 6 is the Articles of 25 Incorporation, with a cover letter from the Commonwealth of 74 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Pennsylvania for Howard C. Gale Development Company, Inc. Respondent's Exhibit No. 7, again from the Commonwealth of Pennsylvania, is the Articles of Merger, and I will just represent that that merger is Country Club Park, Inc., into Howard C. Gale Development Company. Your Honor, I would move for the admission of Respondent's Exhibits 2 through 7. THE COURT: Mr. Keisling. MR. KEISLING: Your Honor, just a formal objection for the record in that we stipulate to the authenticity of the deeds, however, these deeds are all from the 1950s and there is nothing to indicate that there hasn't been additicnal activity on any of these properties since then. So to the extent that they are authentic deeds, we agree. To the extent that they are diapositive of anything, we would object to their admission. MR. SEIFERTH: Your Honor, if I could respond to that. THE COURT: All right. MR. SEIFERTH: Although you haven't seen the deeds yet, it is stamped from the Recorder of Deeds Office in Cumberland County on each deed, and I believe the date consistently with all of them, stamped per the Recorder of Deeds Office, is June 22, 2006. If it would satisfy the Court further, I do have 75 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 I9 20 21 22 23 24 25 the copies from the actual Office of Deeds with that date and the actual seal that you can feel. What I am offering is merely the copies of those. THE COURT: I think the problem is that Mr. Keisling is saying that doesn't mean that there weren't subsequent deeds to those properties. I will leave the record open and if there is some question about it, you can do an abstract on these titles to the properties. MR. SEIFERTH: Okay. I will offer them according to the actual -- if there is an issue, maybe there is, I think the actual Petition from the Petitioners acknowledges and alleges that all the properties were, in fact, deeded to Country Club Park, Inc., which has become by merger Howard Gale Development Company, Inc. I don't necessarily need the deeds to prove that, but I thought it was strong evidence of the case. So if there is an issue with that, then I need to request the record to be left open. THE COURT: Are you contesting that these are not the most recent deeds? MR. KEISLING: I am saying I don't know, Your Honor. THE COURT: All right, we will leave the record open. I am not going to have the case turn on that basis if there is some question about it. 76 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24~ 25 MR. SEIFERTH: If you can or can't, let me know. Can we stipulate that the five properties at issue were deeded to County Club Park, Inc.? MR. KEISLING: I think I already have, we don't dispute those deeds are accurate. MR. SEIFERTH: Okay, I think that satisfies us. THE COURT: It doesn't, because on appeal, there is going to be an issue and I am not going to be able to say those properties are owned by the entities you say they are because we don't have anything except one deed. MR. SEIFERTH: Okay. MR. KEISLING: Your Honor, to the extent that you are willing to leave the record open, I don't believe it is incumbent on the Petitioners to have to present evidence in refutation. We made the objection, the objection is noted. Your Honor has explained the problem perhaps that Respondent might run into, therefore, Respondent can either do the survey as has been suggested, or not. But I think Mr. Seiferth is attempting to put an onus on us that we don't believe is proper -- MR. SEIFERTH: I am not, Your Honor. I perfectly. understand your position. I am .requesting on behalf of the Respondent that the record be left open. THE COURT: Okay, Respondent's Exhibits 2, 3, 4, 5, 6, and 7 are admitted. 77 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 MR. KEISLING: Your Honor, I apologize, if we could just take one step back. I focused on the deeds, I didn't realize that we were looking at No. 6 and 7. Again, it is the nature of the same objection. We stipulated to the authenticity of these documents. We do find it notable, however, that Exhibit 6 is dated December 19, 2006. Exhibit 7 is dated July 11, 2006. We certainly agree that these documents are what they say they are as of this date, but we are some 18 months later, and to that extent, we object just based on the fact that these are not current documents. THE COURT: That objection is overruled. I think you are saying that you are going to challenge whether these are all current documents, and that is probably a pretty good challenge. Do you have anything else you wanted to say? MR. SEIFERTH: Your Honor, with regard to the last two exhibits, I will grant you, they are dated from 2006. It is simply per request to the Commonwealth of Pennsylvania, the corporate documents pertaining to Howard Gale Development Company. I have the original seals I am willing to present to you. At this point the exhibit, the Petitioners' offer with regard to Country Club Park Development Company, Inc., from the state of Pennsylvania is now three months out of date. I don't see the relevance of that I guess is what I 78 am saying. These are the exhibits. It is what it is, nothing 2 has changed in that regard. 3 All of the documents date back I believe, at least 4 the corporate documents, Your Honor, without looking at it, 5 from the 1950s or '60s and the Articles of Merger from the 6 1970s, and nothing has changed. 7 THE COURT: I don't know whether anything changed 8 or not. 9 MR. SEIFERTH: Okay. Very good, Your Honor. 10 THE COURT: All right. Other than that, you have 11 no further evidence I take it, Mr. Seiferth? 12 MR. SEIFERTH: That is correct, Your Honor. 13 THE COURT: Okay, we will enter this order: And 14 now, this 18th day of June, 2008, upon consideration of the 15 Petition for Declaratory Judgment filed in the above-captioned 16 matter and following a second day of hearing, and it appearing 17 that the Respondent wishes to present further evidence with 18 respect to certain deeds and articles of incorporation and 19 merger, and the Petitioner having not conceded that the 20 Respondent's Exhibit Nos. 2, 3, 4, 5, 6, and 7 represent the 21 current state of the record to which the state of the 22 properties and other matters to which these relate, the record 23 shall remain open, and counsel are requested to contact the 24 Court's secretary for purposes of scheduling a further period 25 of hearing. 79 It is noted that as of the time of adjournment on 2 today's date Petitioner had secured the admission of 3 Petitioner's Exhibits 1 through 55 and Respondent had secured 4 the admission of Respondent's Exhibits 1 through 7. 5 Do counsel wish copies of the transcript from 6 today's proceeding? 7 MR. KEISLING: Your Honor, just to clarify the 8 Court's intention if we may. If Mr. Seiferth were able to 9 obtain documentation regarding the deeds, would we be in a 10 position to stipulate to that? And specifically, I guess it 11 would please the Court if we gave concluding statements today 12 and looked to resolve the evidentiary matter if it is able to 13 be resolved by stipulation to avoid us all coming back again. 14 THE COURT: I don't want to take concluding 15 statements before the case is over. If you can stipulate that 16 the record should be closed, that it should be supplemented in 17 some way, I would be glad to accept that. 18 If you want a short period to submit briefs with 19 your positions, I will be glad to provide for that also. If 20 you want to submit requested findings of facts and conclusions 21 of law, I would be glad to provide a period for that. 22 MR. KEISLING: One moment, sir. 23 THE COURT: Certainly. 24 MR. KEISLING: Your Honor, if Mr. Seiferth were in 25 agreement, we would actually be willing to switch the onus as 80 regards the evidence of the deeds. We acknowledge that they 2 are legitimate. Again, we don't have any knowledge that they 3 not the most current. 4 So we would be willing to leave the record open for 5 a reasonable period where we would submit updated deeds if our 6 surveys determined that there was relevant information, 7 otherwise, the record would close based on that. 8 I think what that does is put Mr. Seiferth in the 9 position that unless we present evidence otherwise, that his 10 deeds would go in un-contested, if you will. That is one way 11 to handle the evidentiary issue. 12 THE COURT: How would you submit that as evidence 13 without a hearing? 14 MR. KEISLING: By leaving the record open, we would 15 like to see, if Mr. Seiferth at some time is willing to 16 stipulate to that admission, the stipulation would include a 17 request from both of us that no hearing is required. 18 THE COURT: I will leave it as I ended it. If you 19 can enter a stipulation, if you want the record deemed closed 20 or if you want to supplement the record, I will be glad to take 21 a stipulation as to the supplement. 22 Do you want a period of time in which to submit 23 briefs and to file requested findings of facts and conclusions 24 of law? 25 MR. SEIFERTH: I would request that, Your Honor. 81 MR. KEISLING: We would join him. Your Honor, we 2 would also request a very brief period if we may today to 3 summarize and conclude. 4 THE COURT: By the time I get back to this, I am 5 not going to remember your arguments given today. So we will 6 leave the order the way it is. If you can stipulate to all of 7 those points, I will be glad to have the record closed. 8 Be sure to put in your stipulation what period you 9 want to provide for submission of briefs and points for law, 10 findings of fact and conclusions of law. 11 MR. KEISLING: Then just as follow-up, you asked if 12 we would like transcripts, and we would. Is there some time 13 frame when they would be available? 14 THE COURT: I don't know, that is up to the 15 stenographer. i6 We will enter this second paragraph: It is noted 17 that both counsel have requested that a transcript of today's 18 proceeding be prepared and filed by the stenographer. 19 Court is adjourned. 20 (Court adjourned at 4:14 p.m.) 21 22 23 24 25 82 ERTIFICATION I hereby certify that the proceedings are contained fully and accurately in the notes taken by me on the above cause and that this is a correct transcript of same. Patricia C. Ba re t Official Stenographer The foregoing record of the proceedings on the hearing of the within matter is hereby approved and directed to be filed. Date 83