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Home My WebLink About02-27-09 (3)IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PA ORPHANS COURT DIVISION NO. 21-1994-0754 TRUST UNDER AGREEMENT (QTIP) DATED MAY 16, 1985 AMENDED AUGUST 16, 1985 WITH GEORGE F. DIXON, JR. OBJECTIONS OF MARSHALL L. DIXON, INDIVIDUALLY, TO FIRST AND FINAL ACCOUNT cQ ~, _.,_ ;== AND STATEMENT OF PROPOSED DISTRIBUTION OF ~ ~' ~`' ~ ` =' MANUFACTURERS AND TRADERS TRUST COMPANY ~~n ~ : ~ , ~' , SUCCESSOR TO ALLFIRST TRUST COMPANY OF ~ ~,.., ~, ~ ' ~ N ~~ ._ _ ' PA, N.A., SUCCESSOR TO DAUPHIN DEPOSIT ~~t7 ~. s~~:-; ` -L BANK AND TRUST COMPANY, RICHARD E ~ ~.- ~ ~ ~ ~, ~ _ = - ' . DIXON AND GEORGE F. DIXON, III, CO-TRUSTEES ~~ ~ .~ ; ~J_~ ~' ` o _ ~_: -~ AND NOW comes Objector, Marshall L. Dixon, in his individual capacity, through his attorneys, Saidis, Flower & Lindsay, and hereby objects as follows to the above-identified Account and accompanying Statement of Proposed Distribution: BACKGROUND Marshall L. Dixon (referred to at times herein as "Marshall") is a son of the Settlor, George F. Dixon, Jr., and is a beneficiary of the above-identified Trust (the "QTIP Trust") 2. The Co-Trustees of the QTIP Trust are the corporate fiduciary, Manufacturers and Traders Trust Company (as successor to Allfirst Trust Company of PA, successor to Dauphin Deposit Bank and Trust Company) ("M&T"), and two of Marshall's siblings, Richard E. Dixon ("Richard") and George F. Dixon, III ("George"). 3. Marshall, Richard and George, together with their sister, Charlotte Dixon, are the four equal beneficiaries of the QTIP Trust. 4. The only trustee appointed by Settlor to serve during his lifetime was M&T's predecessor, Dauphin Deposit Bank and Trust Company. 5. The Trust provided in Article XVII as follows: Upon the death of the Settlor, the Settlor's sons, GEORGE F. DIXON, III, and RICHARD E. DIXON, shall serve with the corporate Trustee as Co-Trustees of each trust hereunder. If either of them should fail or cease to serve as Co-Trustee hereunder, the survivor of them (or the corporate trustee, in the event that both should fail or cease to serve) shall continue to serve with all of the powers granted to the Trustee hereunder. 6. The Settlor, George F. Dixon, Jr., died on August 28, 1993. 7. The QTIP Trust further provided in Article VI (B), "Upon the death of the survivor of the Settlor and the Settlor's Wife, the Trustee shall distribute the principal of [the QTIP Trust]" (emphasis supplied). 8. The "Settlor's Wife," Lottie Dixon, died on June 28, 2007, thus triggering final distribution and termination of the QTIP Trust. 9. Instead of proposing distribution of all of the Trust principal according to the terms of the QTIP Trust, the Co-Trustees propose to retain and hold in the QTIP Trust the following: (a) a 1/6 tenant-in-common interest in the "Frey Farm," valued at $374,000; (b) the "Sheaffer farm," valued at $1,850,000, and (c) $250,000 in cash. The value of the proposed retained assets comprise approximately 46% of the total trust assets, as calculated by the Co-Trustees. 10. The corporate fiduciary, M&T, has submitted its resignation as Trustee as part of these proceedings, subject to Court approval. The Co-Trustees have failed to propose the appointment of a substitute corporate fiduciary, and instead propose that the QTIP Trust continue with only Richard and George serving as Co-Trustees. 11. The Account reflects a history of making various loans to, inter alia, George and Richard. In fact, the Co-Trustees propose distribution to George as part of these proceedings trust assets identified as "George & Kimberly Dixon 3`d Mortgage, 3302 County Rd, 7.5% due 6/30/25," valued at $98,443.42, and "George & Kimberly Dixon Note dtd 5/16/95, 8.125% due 6/30/10" valued at $242,460.74. 12. The Account reveals a sporadic and inadequate payment history for George's and Richard's repayments of various loans made to them, discloses no payments of interest or penalties by George since April 25, 2008, and fails to reflect any efforts made by the Co-Trustees to enforce George's and Richard's payment obligations over a period of years. 13. Through the effective date of the Account, August 20, 2008, the Account reveals that Trustee fees have been paid as follows: Corporate Trustees $507,895.66 (since 8/2/94) Richard F. Dixon $228,750.95 (since 11/3/94) George F. Dixon, III $228,750.95 (since 11/3/94) OBJECTIONS 14 follows: Marshall hereby objects to the Account and proposed distribution, as A. Objection is made to the Co-Trustees' proposed retention of real estate and cash assets, or any other assets, in the QTIP Trust. Pursuant to the trust terms, the principal shall be distributed upon the death of Lottie Dixon, with no exception or contingency identified. All of the trust assets should be distributed to the beneficiaries and the QTIP Trust should be terminated. B. In the event it would be adjudicated that the trust assets should not all be distributed and that the QTIP Trust should continue -despite Marshall's objections -objection is made to the continued status of Richard and George as Co-Trustees for, inter alia, the following reasons: (i) the service of Richard and George as Co-Trustees without a corporate Co-Trustee is contrary to the intentions of the Settlor; (ii) Richard and George have demonstrated hostility and antagonism toward Marshall to a degree sufficient to warrant their removal; (iii) Richard and George are also two (2) of the four (4) beneficiaries of the QTIP Trust, and their service as Co-Trustees with respect to the administration of real estate assets, and with respect to their expected continued receipt of Trustee compensation, represents a conflict of interest; (iv) both Richard and George reside out-of--state (Florida and Colorado, respectively) and are not suited to serve as Co- Trustees for the administration of valuable real estate holdings located wholly in Cumberland County, Pennsylvania; (v) Richard and George have demonstrated an unwillingness and failure to pursue collection of the money owed by them to the QTIP Trust, to the detriment of the trust beneficiaries; and (vi) the nature of the remaining trust assets and the identities of the proposed co-trustees going forward represent a substantial change of circumstances warranting their removal. C. Objection is made to those portions of the Account which purport to report and account for a series of loans over the years to the individual Co- Trustees, Richard and George. The Co-Trustees have failed to identify and describe applicable loan documents, notes, mortgages, amortization schedules, payment histories and calculations sufficient to enable Marshall to determine whether these loans have been properly administered and paid. In particular, it appears on the basis of the limited information set forth in the Account that loan repayments from George are incomplete, untimely and inadequate. The Account and proposed distribution should not be approved until appropriate supporting information, documentation and calculations are provided regarding the loans to George and Richard, and the propriety of the loans and payments can be evaluated. If payment or account deficiencies appear, the Co-Trustees should be surcharged in an appropriate amount to make the QTIP Trust whole. D. In the event it would be adjudicated that the trust assets should not be distributed and that the QTIP Trust should continue -despite Marshall's objection -objection is made to any designation or implication that this is a "Final Account" since a continuing obligation would remain going forward for the trustees to account for trust administration. WHEREFORE, Marshall L. Dixon respectfully requests the following relief: (1) That after adjudication of all other matters raised in objections by any party, the Co-Trustees be ordered to take all necessary action to distribute fully all assets of the QTIP Trust according to its terms, specifically including (a) the 1 /6 interest as tenants-in-common in the Frey Farm, (b) the Shaeffer farm, and (c) all cash. (2) That the Co-Trustees be ordered to provide full documentation, information, payment schedules and supporting calculations with respect to any loans from the QTIP Trust to George F. Dixon, III or to Richard E. Dixon, whether made to them individually or to either of them together with spouses or others, and that Marshall L. Dixon be permitted to raise further, specific objections and seek surcharge if appropriate within a reasonable time after full production. If it is ultimately determined that the QTIP Trust should continue and should retain Trust assets, then Marshall L. Dixon further requests that Richard E. Dixon and George F. Dixon, III be removed as Trustees and that a new corporate trustee be appointed, and that the instant Account be considered a Partial Account, not Final Account. Respectfully submitted, SAIDIS, FLOWER & LINDSAY Daniel L. Sullivan, Esquire Attorney LD. 3448 Thomas E. Flower, Esquire Attorney LD. 83993 2109 Market Street Camp Hill, PA 17011 Phone (717) 737-3405 Attorneys for Marshall L. Dixon, in his individual capacity VERIFICATION I, Marshall L. Dixon hereby verify that the facts set forth in the foregoing document are true and correct to the best of my information, knowledge and belief. I understand that false statements herein are made subject to the penalties of 18 Pa. C.S. Section 4904, relating to unsworn falsification to authorities. J`_ Dated;~l~~ ~_, 2009 ~~ M shall L. Dixon CERTIFICATE OF SERVICE I certify that I am this date serving the foregoing document upon the person(s) indicated below by U.S. Mail, postage prepaid, addressed to: Stanley A. Smith, Esquire Rhoads & Sinon LLP 1 South Market Street Harrisburg, PA 17108-1146 SAIDIS, FLOWER & LINDSAY Date: , -~-~~y 3'~ , ao ~ `~ By: d~ ~~-4--- Daniel L. Sullivan, Esquire Attorney I.D. 34548 Thomas E. Flower, Esquire Attorney LU. 83993 2109 Market Street Camp Hill, PA 17011 Phone (717) 737-3405 Attorneys for Marshall L. Dixon, in his individual. capacity