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HomeMy WebLinkAbout09-20-04JOSEPH D. BRENNER, SR., JOSEPH D. : IN THE COURT OF COMMON PLEAS BRENNER, JR., and MARGARET B. BUSHEY, : OF CUMBERLAND COUNTY, : PENNSYLVANIA Petitioners, : : ORPHANS' COURT DIVISION V. : No. 2004-087 MANUFACTURERS AND TRADERS TRUST : COMPANY, a New York corporation, DAVID C. : JURY TRIAL DEMANDED GORITY, an individual, and CURT R. : L'3 © STAUFFER, an individual, : ~ :: Respondents. : :' PETITIONERS' RESPONSE TO ORDER TO SHOW CAUSE W}IY THE PRAECIPE SHOULD NOT BE STRICKEN:' Petitioners, by and through their counsel, state as follows to show cause why the praecipe listing this case for trial on October 25, 2004 should not be stricken: BACKGROUND 1. This is an action for breach of fiduciary duty, and aiding and abetting breach of fiduciary duty, in connection with four family trusts. 2. Petitioners originally filed this action as a complaint in the Civil Division on August 22, 2003, case number 03-4125. 3. Respondents filed preliminary objections to the complaint on September 15, 2003, including challenging the jurisdiction of the Civil Division and asserting that the complaint should be dismissed and refiled as a petition in the Orphans' Division. 4. Despite the pending litigation, on October 24, 2003, respondent M&T then filed "First and Final Accountings" in the Orphans' Division, seeking confirmation of M&T's accountings for the same four trusts at issue in this action. The accountings were assigned Orphans' Division case numbers 21-2003-879 (In re: Joseph D. and Jane W. Brenner Trust), 21- 2003-881 (In re: Jane W. Brenner Trust UWO "B"), 21-2003-881 (In re: Jane W. Brenner Trust UWO "C"), and 21-2003-883 (In re: Nancy B. Blakely Trust). 5. Petitioners filed objections to M&T's accountings on November 21, 2003. In their objections, Petitioners notified the Court that this matter was already pending when M&T filed its accountings, objected to confirmation of the accountings in light of the pending litigation, and urged the Court not to take any action on the accountings until this litigation was resolved. Petitioners attached and incorporated a copy of the complaint in their objections. 6. On November 25, 2003, the Court appointed Taylor P. Andrews as auditor with respect to the four accountings. The Court issued four separate orders appointing Mr. Andrews auditor with respect to each of the four trusts. 7. On December 19, 2003, the Court removed Mr. Andrews upon his request, and appointed James Bogar, Esq., as auditor with respect to the accountings. Again, the Court issued four separate orders appointing Mr. Bogar auditor with respect to each of the four trusts. 8. On January 7, 2004, Mr. Bogar contacted counsel for the parties to schedule a conference on the accountings. However, counsel for Petitioners was in trial in January and February, and Respondents' preliminary objections to the complaint were expected to be resolved shortly, so the parties and Mr. Bogar agreed to defer a conference for the time being. 9. On January 21, 2004, the Court ruled on Respondents' preliminary objections to the complaint. Concluding that the Orphans' Division had exclusive jurisdiction over the claims, the Court struck the complaint, transferred the matter from the Civil Division to the Orphans' Division, and gave Petitioners 20 days to file a petition in the Orphans' Division. The Court did not order, or even suggest, that the Petitioners could or should proceed with their claims through the existing accounting proceedings. 10. In accord with the Court's order, Petitioners filed a petition in the Orphans' PETITIONERS' RESPONSE TO ORDER TO SHOW CAUSE 2 Division on February 2, 2004, which was assigned case number 2004-087. The allegations in the petition are substantially similar, although not identical, to the allegations in the stricken complaint. 11. Respondents filed preliminary objections to the petition on March 9, 2004. In their objections, Respondents did not assert that Petitioners' claims should be litigated exclusively through the accounting proceedings filed by M&T. Indeed, Respondents made no reference to the accounting proceedings at all. Upon Petitioners' praecipe, the preliminary objections were argued on April 21, 2004. 12. Meanwhile, in April 2004, the parties began document discovery, and seven depositions were taken in May 2004. 13. The Court ruled on Respondents'preliminary objections to the petition on June 18, 2004, sustaining their objections to the punitive damages claims and to the form in which Petitioners stated their compensatory damages, but denying Respondents' objections to Petitioners' demand for a jury trial and to Petitioners' claims against Gority and Stauffer. The Court's order made no mention of the accounting proceedings filed by M&T. 14. Respondents filed an Answer and New Matter in this case on June 18, 2004. Again, neither the Answer nor the New Matter made reference to the accounting proceedings. 15. On July 8, 2004, Respondents' counsel sent a letter to Mr. Bogar, the Court- appointed auditor in the accounting actions, requesting a conference to discuss the scheduling of hearings. 16. On July 23, 2004, Petitioners replied to Respondents' New Matter in this ease. 17. On July 26, 2004, Mr. Bogar proposed that the parties hold a conference on August 25. The "re" line in his letter cited only the four trusts for which accountings had been filed, not the caption or case number of this action. PETITIONERS' RESPONSE TO ORDER TO SHOW CAUSE 3 18. On July 29, 2004, Petitioners filed a praecipe listing this case for trial on October 25, 2004. Petitioners believed at the time, and still believe, that the case is ready for trial. 19. On July 30, 2004, Respondents' counsel sent a letter to Mr. Bogar, referring to the praecipe and questioning whether it was appropriate given Mr. Bogar's appointment as auditor in the accounting proceedings. 20. On August 2, 2004, Petitioners' counsel sent a letter to Mr. Bogar, advising him that discovery was substantially underway in this case, notifying him that Petitioners had filed a praecipe listing this case for trial on October 25, 2004, and requesting that Mr. Bogar defer scheduling a conference on the accounting proceedings until resolution of this litigation. 21. On August 19, 2004, Mr. Bogar notified the parties that he would hold a conference on the accounting proceedings on August 25. Again, the "re" line in his letter cited only the four trusts for which accountings had been filed, not the caption or case number of this action. 22. On August 25, 2004, Mr. Bogar held a teleconference with the parties. The parties offered their respective views regarding the scope of Mr. Bogar's authority. In the end, Respondents' counsel agreed to file a motion in the immediate future seeking clarification of the scope of the auditor's authority. 23. During the conference, the parties also set hearing dates for the four accounting proceedings. The auditor's hearings on the accountings will be held on November 2, continuing as necessary through November 5, 2004, which was the first week that all parties were available. 24. As recognized by both counsel during the teleconference, the length and scope of the hearings on the accountings will depend on whether Petitioners' claims are tried to the Court during tho week of October 25. If so, then the hearings on the accountings will be fairly PETITIONERS' RESPONSE TO ORDER TO SHOW CAUSE 4 straightforward, limited to the financial accuracy of the accountings, and likely take only one day. If not, and if the Court determines that Petitioners' claims and Respondents' New Matter are to be heard by the auditor, then a full fledged trial on the breach of fiduciary duty issues will be held before Mr. Bogar during the week of November 2. PETITIONERS' RESPONSE TO ORDER TO SHOW CAUSE 25. Petitioners believe that this ease should be tried before the Orphans' Division, with an advisory jury, on October 25, 2004, as praeciped. This case has been pending for over a year, it was the first case filed in this dispute, it is separate from the accounting proceedings, no auditor has been appointed, discovery will be completed within two weeks, and there is no reason the parties cannot be ready for trial on October 25. 26. This case was filed in August 2003. Petitioner Joseph Brenner, Sr., is currently 87 years old and in declining physical and mental health. His physical and mental capacity is a key issue in this case. 27. M&T filed its four accountings a full two months after Petitioners filed this case, with no regard for the pending litigation. To the extent Respondents insist it is somehow unfair to hold the trial in this case before the hearings in the accounting proceedings, there is little equity in that argument given that Petitioners filed this case first. 28. This case is separate from the accounting proceedings. When the Court transferred this case to the Orphans' Division, it specifically granted Petitioners 20 days to file a new petition, upon the filing of which this case was given its own caption and assigned its own case number. The Court did not dismiss the case and order Petitioners to pursue their claims in the existing accounting proceedings. Nor did the Court order the case consolidated with the accounting proceedings. Rather, the Court transferred the case to the Orphans' Division and gave time and leave to file this petition. PETITIONERS' RESPONSE TO ORDER TO SHOW CAUSE 5 29. Respondents argue that Petitioners inadvertently caused the consolidation of this case with the accounting proceedings when Petitioners attached and incorporated a copy of the pending complaint to their objections to M&T's accountings. Petitioners were simply notifying the Court of the pending litigation (in support of their arguments that the accountings should not be decided until the litigation was resolved) while preserving their objections to M&T's conduct in case the accountings were ruled upon before the litigation was completed. Doing so did not "consolidate" the cases, legally or equitably. Moreover, in the seven months since the petition was filed, this is the first time that Respondents have asserted that the cases are somehow already consolidated. Respondents made no mention of this issue in their preliminary objections to the petition. 30. No auditor has been appointed in this case. The Court issued orders in each of the four accounting proceedings appointing Mr. Andrews, and subsequently Mr. Bogar, auditor as to the accountings. The Court has never issued an order appointing an auditor in this case. 31. Discovery is nearly complete. Most of the depositions were done in May, and the last three depositions are scheduled for the week of September 27. Document discovery is complete except for a few requested documents about which the parties are negotiating. 32. Petitioners will be ready for trial on October 25. 33. Petitioners understand that Respondents will be ready to try this case on November 2 before the auditor in the accounting proceedings (in the event the motion to strike the praecipe is granted and the matter is tried before the auditor instead). Petitioners see no reason why Respondents cannot be ready to try it to the Court one week earlier on October 25. 34. Petitioners have requested a jury trial. The issues in this case are well suited to consideration by a jury, and Petitioners would like the perspective of members of their community as to whether Respondents~ actions in connection with their family trusts fell below the applicable standard of conduct for a co-trustee and fiduciary. Respondents offer no reason PETITIONERS' RESPONSE TO ORDER TO SHOW CAUSE 6 that this case should not be tried before a jury as requested by the claimants. 35. Petitioners have followed the appropriate procedures for requesting a jury trial in this case. Petitioners "demanded" a jury trial in their petition as required by 20 Pa.C.S.A. § 771 (d), to which Respondents objected, but which the Court ruled was the appropriate procedure and denied Petitioners' objection. Respondents now object to Petitioners listing the case for a "jury trial" on their praecipe. However, the only other option on the required praecipe form is "without jury." There is no procedural reason to deny Petitioners' request for a jury. 36. Petitioners are also unaware of any authority for Respondents' assertion that the Court may not yet decide whether to impanel a jury. Petitioners understand the Court to have the authority to make this decision any time prior to trial. 37. It is a fiction to suggest that there will be issues left for the Orphans' Division to decide, with or without a jury, after Mr. Bogar's hearings in the accounting proceedings. If the praecipe listing this case for trial in the Orphans' Division on October 25 is stricken, then the parties will try their claims to Mr. Bogar during the week of November 2. Otherwise, Petitioners understand that confirmation of M&T's accountings will relieve M&T of liability for its actions under 20 Pa. C.S.A. § 3533. Once the auditor has confirmed the accountings, it is neither efficient nor practical to try the same facts to the Orphans' Division, even assuming the Court would allow it. Respondents' counsel acknowledged this reality during the August 25 teleconference with Mr. Bogar, although he now suggests that the matter may be tried fully twice, in both forums. 38. In conclusion, this case is ready for trial and there is no reason not to try it on October 25, as praeciped. Respondents' objections to the praecipe really come down to one thing, which is that Petitioners want this case tried to the Court, preferably with a jury, while Respondents want this case tried to the auditor for the accountings. Petitioners came to this Court for relief over a year ago, have prepared for trial, and are now ready for and deserve to be PETITIONERS' RESPONSE TO ORDER TO SHOW CAUSE 7 heard before the Court. The fact that M&T decided to file accountings for the same trusts two months after Petitioners filed suit does not preempt their right to trial. 39. To the extent oral argument on this motion may assist the Court, Petitioners respectfully request that it be held at the call of the trial on September 28, at which time Petitioners' counsel (from Oregon) will be present in Pennsylvania. WHEREFORE, Petitioners respectfully request that Respondents' Motion to Strike Petitioners' Praecipe to List Case for Jury Thai be denied, so that the case may proceed to trial on October 25. DATED this 17th day of September, 2004. TONKON TORP LLP William Fffvlartson, Jr., OSB No. 72163 Robyn E. Ridler, OSB No. 00016 888 SW Fifth Ave., Suite 1600 Portland, OR 97204 503-221-1440 Attorneys for Petitioners PETITIONERS' RESPONSE TO ORDER TO SHOW CAUSE 8 CERTIFICATE OF SERVICE I hereby certify that I served the foregoing PETITIONERS' RESPONSE TO ORDER TO SHOW CAUSE WHY THE PRAECIPE SHOULD NOT BE STRICKEN on: Mark D. Bradshaw Stevens & Lee P. O. Box 11670 Harrisburg, PA 17108-1670 Of Attorneys for Respondents ~by mailing a copy thereof in a sealed, first-class postage prepaid envelope, addressed to each attorney's last-known address and depositing in the U.S. mail at Portland, Oregon on the date set forth below; [] by causing a copy thereof to be hand-delivered to said attorneys at each attorney's last-known office address on the date set forth below; [] by sending a copy thereof via overnight courier in a sealed, prepaid envelope, addressed to each attorney's last-known address on the date set forth below; or [] by faxing a copy thereof to each attorney at each attorney's last-known facsimile number on the date set forth below. DATED this ,14 ~day of September, 2004. SNELBAKER, BRENNEMAN & SPARE, P.C. By /~//~ Keith O. Brenneman Richard C. Snelbaker Of Attorneys for Petitioners PETITIONERS' RESPONSE TO ORDER TO SHOW CAUSE 9