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HomeMy WebLinkAbout11-01-04 (2)IN RE: ESTATE OF JOSEPH D. BR :~NNER, 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. 21-2004-087 MANUFACTUi .ERS AND TRADERS TRUST COMPANY, a ~ Iew York corporation, DAVID C. GORITY, an im ividual, and CURT R. STAUFFER, an individual, Respondents. PETITIONERS' SUPPLEMENTAL MEMORANDUM IN SUPPO} [' OF THE COURT TRYING THIS CASE WITH AN ADVISORY JURY ,'titioners Joseph D. Brenner, Sr. ("Brenner Sr."), Joseph D. Brenner, Jr. ("Brenner Jr.") nd Margaret Bushey submit this supplemental memorandum in support of their argument that th :ir claims against M&T for breach of fiduciary duty and against Gority and Stauffer, individ ~ally, for aiding and abetting M&T's breach of fiduciary duty, should be tried to the Court with o: t advisory jury. I. No Auditor Has Been Appointed in This Case. T ne procedural histoI¢' of this case is described in detail in Petitioners' Response to Order to Shov' Cause Why the Praecipe Should Not Be Stricken. In short, Petitioners filed their claims agai ~st M&T and against Gority and Stauffer in the Civil Division in August 2003. That complaint /as subsequently dismissed with leave to file a Petition in the Orphans' Court Division instea~ which Petitioners timely filed in February 2004. Contrary to M&T's assertion, no auditor has ex er been appointed in the instant action. Nor has the Court previously determined that ~uch an appointment was appropriate.~ Two months after Petitioners See p. 3 of Res ~ondents' October 1, 2004 memo. commenced the5 r action against M&T, Gority and Stauffer, M&T filed four separate accounting proceedings. Et ch has a different case name and number than this case. Neither Gority nor Stauffer is a par to M&T's accounting proceedings. The Court did appoint Mr. Bogar as auditor in those ~ur separate proceedings. t neither their Preliminary Objections to the Complaint, nor their Preliminary Objections to tl ~ Petition, did Respondents ever suggest that Petitioners could only pursue their claims in M&T':. accounting proceedings. Indeed, in their Preliminary Objections to the Complaint, Rest .ondents specifically argued that Petitioners should refile their claims as a Petition in Orph tns' Court. The Court did precisely as Respondents asked, and ordered Petitioners to fil: a Petition in Orphans Court. A petition was filed. Ail parties then proceeded with discovery, :tot in M&T's accounting proceedings, but in the case commenced by Petitioners. Ten depositions were taken, and requests for production and interrogatories were served. Petitioners respe :tfully submit that Respondents should not be heard to argue that at this late date the Court's origi aal order should be modified to require Petitioners to proceed solely against M&T and agaim t Gority and Stauffer individually through the accounting proceedings filed by M&T. I] Petitioners also have Claims against Two Individuals. Ir 'its latest brief, M&T seeks to gloss over the fact that Petitioners have asserted claims not just ainst M&T, but also against Gority and Stauffer individually. Section 751 permits the app ntment of an auditor "to examine and audit an account and to determine distribution." M &T does not explain how Section 751 xvould authorize an auditor to hear claims for aiding and ale etting breach of fiduciary duty against individuals. Petitioners have stated such claims against R :spondents Gority and Stauffer. i] I. The Court and an Empaneled Jury should Decide Petitioners' Claims. T ns case is not a technical accounting matter. It is not about whether M&T properly recorde transactions. Rather, this case involves counnon law claims for breach of 2 fiduciary duty aI ainst M&T and for aiding and abetting breach of fiduciary duty against Gority and Stauffer. TI ere are significant matters of witness credibility to be resolved. The principal actors have give ~ and will give testimony which differs dramatically over what happened and why. Witness, edibility is best judged in the context of all of the evidence. For that reason alone, we urge ~e Court to reject M&T's suggestion that an auditor can "winnow [ ]" the issues and that a "supp emental" evidentiary hearing could be held after the auditor makes his findings and recommen, ttions. At the end of the day, Petitioners' claims must be decided by the Court. We respectfully urge the Court to accept the task of personally vie~ving all of the evidence because the first and perhaps most important decision to be made is exactly ~vhat happened. That decision ~vill tur on weighing witness credibility. )ntrary to M&T's assertion, we acknowledge that whether to empanel a jury is a matter within tl ~. sound discretion of the Court. We respectfully urge the Court to do so because: a) witness credi fility is such an important part of the case; and b) the question of whether M&T's conduct :omported with fiduciary standards is a matter of significant public interest. Such matters sh{ ,uld not be heard behind the closed doors of an auditor's private office, but in a courtroom open :o the public. Moreover, a jury of the parties' peers should be given the opportunity to p', [ss on the questions raised in this case - Whether M&T's conduct comported with its fiduciar obligations; if not, whether Gority and Stauffer wrongly aided and abetted M&T, and how ~etitioners have been damaged. R :spondents assert that trial by jury is time-consuming, cumbersome, and expensive. We ubmit that a single proceeding is quicker and far cheaper than the multistaged proceeding pro[ ~sed by M&T. M&T would have the parties try their case to an auditor, take exceptions to his findings, and then possibly hold supplemental evidentiary proceedings before this Court. It is simply not correct to say that Mr. Bogar is sufficiently "familiar" with the 3 issues in this ca: such that he could resolve the disputes more efficiently than the Court. Nor is it correct to sugl :st that Petitioners have in some way already acquiesced in having their claims heard by Mr. Bt ar. The parties have had only one conference call with Mr. Bogar. It related solely to schedu ng. The parties disagreed over the scope of Mr. Bogar's authority andthe scope of the issues to decided by him. M&T informed Petitioners and Mr. Bogar that it intended to raise those issu~ with the Court. ar the foregoing reasons, Respondents respectfully request that Petitioners' claims be tried t the Court with an advisory jury at the Court's earliest convenience. a~TED this 6~ day of October, 2004. By ' liarr~F. Martson, Jr., OSB No.\72163 Robyn E. Ridler, OSB No. 00016 ~ Attorneys for Petitioners ~ CERTIFICATE OF SERVICE hereby certify that I served the foregoing PETITIONERS' SUPPLEMENTAL MEMORAND M 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 ea attorney's last-known address and depositing in the U.S. mail at Portland, Oregon on the d. rte set forth beloxv; ] by causing a copy thereof to be hand-delivered to said attorneys at each attorney's last-I town office address on the date set forth below; ] by sending a copy thereof via overnight courier in a sealed, prepaid envelope, addressed to ea . attorney's last-known address on the date set forth below; or ~ I by faxing a copy thereof to each attorney at each attorney's last-known facsimile numb : on the date set forth below. I~ ATED this 6th day of October, 2004. T O N ~ O~N~ T O ~1~ ~i, xL ptx~ //~ YVilh' '~am-F .X~ar~so~, 'Jr.,~ OSB No~72163 Robyn E. Ridler, OSB No. 00016\ Attorneys for Petitioners ~ 031590100001/593000 V001 ~ 5