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~ ~~ : IN THE COURT OF COMMON P~~AS O~ ~~ , ~=~~
:CUMBERLAND COUNTY, P
ESTATE OF FN~YLVAr`,~TIA ~ ~~ - ~~.~:
GEORGE F. DIXON, JR. :ORPHANS' COURT DIVISION
DECEASED No. 21-1994-0754
IN ~~ : IN THE COURT OF COMMON PLEAS OF
:CUMBERLAND COUNTY, PENNSYLVANIA
ESTATE OF
LOTTIE IVY DIXON :ORPHANS' COURT DIVISION
DECEASED NO. 21-07-0686
ANSWER IN OPPOSITION TO MOTION TO EXTEND DISCOVERY DEADLINE
FILED BY l~'IARSHALL DIXON, INDIVIDUALLY, AND
AS EXECUTOR OF THE ESTATE OF LOTTIE IVY DIXON
Marshall Dixon, Individually and as Executor of the Estate of Lottie Ivy Dixon
("Marshall Dixon" or "Executor"), states as follows for his answer in opposition to the Motion to
Extend Discovery Deadline filed by George Dixon, III and Richard Dixon:
INTRODUCTION
On October 9, 2009, George Dixon and Richard Dixon ("Movants") filed a
Motion to Extend the Discovery Deadline (the "Motion") in the above-referenced cases. The
Motion requests that the discovery deadline be extended by an unspecified period of time in
order to allow Movants to "to further investigate Marshall Dixon's finances." As set forth more
fully below, Movants have made no showing of good cause for extending the discovery deadline
established by the Court in the above-referenced cases. Movants provide no legitimate basis for
failing to undertake the discovery during the 14 months since the Estate Account was filed and
before the close of the discovery period established by this Court. Moreover, the information
that Movants now seek will not, under any circumstance, result in any increase in the amount
that Movants will receive from the Estate (the "Estate"). Therefore, the discovery is irrelevant
and sought only to burden Marshall Dixon. The discovery deadline should not be extended.
OPPOSITION TO MOTION
A. Movants Failed to Exercise Diligence in Comuletin~ Discovery.
3. Lottie Ivy Dixon died on June 28, 2007. Shortly thereafter, in September 2007,
counsel for the Movants requested that Executor respond to an informal discovery request
seeking information about the assets in the Estate. A true and correct copy of the September 7,
2007, letter from Movants' counsel is attached hereto as Exhibit A. Executor cooperated with
that request by providing account statements and other documents that were in his possession.
4. After several months of no action, in June 2008, Movants requested that Executor
provide written authorization for Movants to obtain account statements and cancelled checks
directly from the financial institutions with whom Mrs. Dixon had accounts during the last years
of her life. Executor promptly did so.
5. In August 2008, Movants filed objections to the Estate Account, alleging inter
alia, that "substantial assets includable in the Estate ... are not accounted for."
6. By September 2008, Movants_ had obtained the monthly account statements and
cancelled checks for Mrs. Dixon's checking account at M&T Bank for the period of 2001
forward. Attached hereto as Exhibit B is a true and correct copy of a September 26, 2008 letter
in which Movants' counsel state that they have the checking account documents. Those
documents reflected that Mrs. Dixon wrote checks directly to Marshall Dixon (and his siblings)
and that Mrs. Dixon wrote a significant number of checks to pay credit card accounts. The
2
documents also showed that Marshall Dixon (who had signature authority on Mrs. Dixon's
checking account) wrote and signed very few checks. Movants made no further inquiry about
the checks for several months.
7. At the Auditor's prompting, in a letter dated September 28, 2008, Movants
outlined the discovery that they intended to pursue in their investigation for evidence to support
their objections. In that letter, Movants stated that they expected to seek discovery of Marshall
Dixon's accounts, secure additional information about Mrs. Dixon's securities account, and
complete their discovery with a deposition of Marshall Dixon by January 2009. See, Ex B. In a
follow-up letter dated October 10, 2008, Movants stated that they would produce documentation
demonstrating the need for discovery of Marshall Dixon's personal accounts. A true and correct
copy of the October 10, 2008 letter is attached hereto as Exhibit C.
8. Despite their representations that their discovery would be completed by January
2009, Movants initiated no written discovery from September 2008 through June 18, 2009, and
Movants noticed no depositions until July 24, 2009.
9. In Apri12009, counsel for Executor, observing that Movants had not made any
effort to complete their discovery, moved for the entry of an order establishing July 31, 2009 as
the discovery deadline and setting a schedule for pre-hearing matters and the hearing. Movants
response to the Motion suggested that the discovery period should end on August 31, 2009.
10. On June 17, 2009, the Court entered an order stating that all discovery must be
concluded by August 31, 2009. The Court's Order also adopted a Directive of the Auditor which
required pre-hearing filings to be completed by early November, and the hearing to be completed
by December 4, 2009. This schedule was the one suggested by Movants.
3
11. On June 18, 2009, (six months after the date that Movants has suggested their
discovery would be complete), Movants finally initiated formal discovery by serving
interrogatories upon Marshall Dixon in his capacity as Executor (the "Interrogatories"). Marshall
Dixon served timely responses to the Interrogatories on July 20, 2009. Movants never
complained that Marshall Dixon's Interrogatory responses were incomplete or that any of the
objections asserted by Marshall Dixon were improper.
12. In late July, Movants noticed Marshall Dixon's deposition for August 26, 2009,
just 5 days before the date that discovery was set to close. The deposition of an agent of M&T
Bank (M&T) was scheduled for the same date.
13. Shortly before the depositions, counsel for M&T determined that it was unable to
continue to represent M&T due to a conflict of interest, so new counsel was retained to represent
M&T. After discussions. among counsel for all of the parties, it was agreed that, in order to
allow M&T's counsel to become familiar with the case, the discovery deadline and the deadlines
set forth in the Auditor's Directive would be continued 30 days, and the depositions would be
postponed for approximately one month.
14. Movants deposed Marshall Dixon on September 23, 2009.
15. In summary, Movants have had over two years to complete their investigation
into matters involving the Estate. Movants failed to move forward with their investigation and
discovery diligently. Movants failed to take prompt steps to complete their discovery, as
demonstrated by the fact that Movants seek an extension of the discovery period in order to
complete discovery that Movants suggested would be completed by January 2009. Moreover,
the delay in Movants' failure to complete discovery is due solely to Movants' delay in acting.
4
Under these circumstances, Movants have not shown good cause for extending the discovery
deadline.
B. Movants', Suggestion that Additional Time for Discovery Is Needed Because New
Information Was Obtained at Marshall Dixon's Deuosition Is Inaccurate.
16. The Motion states that "It was not until Marshall Dixon supplemented his
answers to Interrogatories at his deposition that Movants had any reason be believe that their
discovery was not complete." This statement is completely unfounded.
17. Movants' Interrogatories requested that Marshall Dixon identify any calendar year
in which Mrs. Dixon made transfers to Marshall that, in the aggregate, exceeded $10,000, and
the Interrogatories requested that Marshall Dixon identify all such transfers. See, Ex. A to
Movant's Motion, p. 2.
18. In response to those Interrogatories, Marshall Dixon stated:
...Objectors [Movants] have the records reflecting transfers made
from Mrs. Dixon's checking account to, for the benefit of, or on behalf of
her children, including Marshall Dixon, during the time period of May
2001 until Mrs. Dixon's death. The attached summary reflects transfers
made from Mrs. Dixon's checking account to Marshall Dixon and the sum
of the transfers for each calendar year. Marshall Dixon further answers,
however, that not all of the transfers were gratuitous; some reflect
reimbursement from Mrs. Dixon to him for expenditures made by
him on Mrs. Dixon's behalf.
Ex. A to Movant's Motion, p. 2 (emphasis added).
19. Thus, although Movants already had all of the checking account
statements and copies of the cancelled checksl, Marshall Dixon provided a summary of
In fact, per Movant's letter attached as Exhibit B, Movants had possession of the checking
account statements and cancelled checks since September 2008.
5
transfers to him from Mrs. Dixon's checking account from 2001 forward,2 based upon the
information he had available.
20. Marshall Dixon's answers to the Interrogatories also made very clear that
not all of the transfers to him were gifts and that some of the transfers reflected
reimbursement for items he purchased for Mrs. Dixon. Ex. A to Movant's Motion, p. 2.
21. As Movants concede, at his deposition, Marshall Dixon testified that the
transfers listed in his Interrogatory answers were either gifts or reimbursement for items
he purchased for Mrs. Dixon.
22. Thus, Marshall Dixon's deposition testimony was precisely consistent with
his Interrogatory answers. His testimony that the checking account transfers to him were
either gifts or reimbursement was not new information and did not "supplement" his
Interrogatory answers; it was exactly the same information provided in Marshall Dixon's
Interrogatory answers.
23. Furthermore, over a year ago, Movants suggested a need to investigate
Marshall Dixon's personal accounts.3 Therefore, it is disingenuous for Movants now to
assert that Marshall Dixon's deposition gave them new information that has prompted
their desire to investigate Marshall Dixon's personal finances.
` To the extent that Movants intend to imply that Marshall Dixon's objection to providing
information about transfers prior to 2001 was improper, it is notable that Movants took the identical
position in their own discovery responses. In response to an interrogatory requesting information about
transfers from Mrs. Dixon to them, Movants objected to the interrogatory to the extent that requested
information from years preceding 2001.
Marshall Dixon does not concede that any such investigation would have been proper. For the
reasons set forth below, the investigation of Marshall Dixon's personal accounts is not appropriate in this
action.
6
24. Accordingly, Movants' purported reason for extending the discovery
deadline has no merit.
C. The Discovery That Movants Intend to Take During Any Extension of the
Discovery Period is Irrelevant and Sought in Bad Faith.
25. Movants request the extension of the discovery deadline in order to investigate
Marshall Dixon's personal finances because Marshall Dixon is unable to state whether the
transfers to him from Mrs. Dixon's checking account were gifts or reimbursements.
26. Whether the checks that Mrs. Dixon wrote were gifts to Marshall Dixon or were
reimbursements for expenses that Marshall Dixon incurred on Mrs. Dixon's behalf is irrelevant
in the present case. If the checks represented gifts, there is no legal theory upon which those
funds can be recovered by the Estate or distributed as part of the Estate assets. If the checks
represented reimbursements of Mrs. Dixon's expenses, there is also no legal theory upon which
those funds can be recovered by the Estate or distributed as part of the Estate assets.
27. Thus, regardless of what Movants might discover by investigating Marshall
Dixon's personal finances, Movants will not increase the estate assets that are available for
distribution.4 Therefore, the discovery that Movants now seek to take is not relevant to Movants'
objections.
28. Upon information and belief, Movants seek to obtain Marshall Dixon's personal
financial information for no other purpose than to unreasonably burden, embarrass, or harass
a While the Estate taxes would be increased if the checks represented gifts, Movants have not
objected to the account on the basis that the Estate taxes were improperly calculated, so that issue is not
presently before the Court.
7
him, or to delay the ultimate resolution of the issues presented in this proceedings The
discovery deadline should not be extended in order to allow Movants to seek discovery in bad
faith.
D. Extending the Discovery Deadline Will Unnecessarily Postpone the Ultimate
Resolution of this Proceedin .
29. As noted above, the Auditor has issued a Directive, adopted by Court Order,
setting a schedule for pre-hearing memoranda, completion of the hearing, and submission of
post-hearing findings of fact and conclusions of law.
30. The schedule (as amended by agreement of all parties -see paragraph 13 above)
requires the parties to submit their first pre-hearing briefs by October 21, with additional pre-
hearing memoranda due in November, and the hearing to be completed before January 7, 2010.
31. Granting Movants' request to extend the discovery deadline will unnecessarily
and indefinitely postpone these dates, and delay the ultimate resolution of the issues presented in
this proceeding.
32. Movants have not shown good cause for extending the discovery deadline in this
matter. Over the past two years, Movants have had more than sufficient time to complete their
investigation into the Estate's assets and to take formal discovery in support of their Objections.
Their failure to do so results solely from their own lack of diligence. Marshall Dixon has, at
every turn, promptly and reasonably responded to Movants' formal and informal requests for
information.
It is notable that Movants do not make any attempt to specify exactly what discovery of Marshall
Dixon's finances that they intend to take.
8
33. The asserted basis for Movants' request to extend to the discovery deadline is for
Movants to undertake discovery that they could have sought over a year ago based upon their
own review of the checking account statements and cancelled checks. Moreover, the discovery
sought will produce no information relevant to Movants' objections and appears to be sought
solely for the purposes of burdening Marshall Dixon and/or delaying the resolution of this
proceeding.
WHEREFORE, Marshall Dixon, Individually, and as Executor of the Estate of Lottie Ivy
Dixon, requests that the Motion to Extend Discovery Deadline be denied.
McNEES WALLACE & NURICK LLC
By:
liza th P. Mullaugh
LD. No. 76397
Kimberly M. Colonna
I.D. No. 80362
100 Pine Street, P.O. Box 1166
Harrisburg, PA 17108-1166
717- 232-8000
Counsel for Marshall Dixon as Executor of
the Estate of Lottie Ivy Dixon
SAIDIS, FLOWER & LINDSAY
By:
Daniel L. Sullivan, Esq.
I.D. No. 34548
2109 Market St.
Camp Hill, PS 17011
717-737-3405
Counsel for Marshall Dixon, Individually
Date: October 19, 2009
9
MARTSON DEARDORFF WILLIAMS QTTU GILROY & FALLER
MARTSON
LAW OFFICES
WLL.I.IAM F. MARTSON
~OHN B. FOWLER III
DANIEL. K DEARDORFF
THOMAS j. WLLLLni-.rs*
No V. OTro III
HUBERT X. GLLLtOY
GEORGE B: FALi.FR ~R,*
DAVID A. FITZ$IMONS
CHRIS'POPHER E. RLCE
jENNLFER L SPEARS
SETH T. MOSELiEY
TRUDY E. FEHLINGER
10 EAST HIGH STREET
CARLISLE, PENNSYLVANIA 17013
TAT EPHONE (717) 243-3341
FACSLMILB (717) 243-1850
INTERNET wwwmattsorllavKCOm
September 7, 2007
Elite ~etr~ I'. 1`.~•allaugll., Esquire
McNEES WALLACE & NURICK LLC
100 Pine Street
P~.O. Box 1166
Harrisburg, PA 17108-1166
RE: Estate of Lottie Ivy Dixon
Our File No. 12690.1
Dear Ms. Mullaugh:
'Ba~aa Cexnrlan Cmi Twu. Srecwasr
As you know, our firm has been retained by George F. Dixon, III, and Richard E. Dixon to
act for them in respect of matters dealing with their mother's estate.
As we have discussed on the telephone, Messrs. Dixon are surprised by the paucity of assets
in their mother's estate and have asked that we gather certain information so that they can satisfy
themselves as to the reasons for this turn of events.
To that end, we would appreciate your and your client's cooperation in this informal
discovery rPq~se3t..
In particular, we would appreciate your providing, or directing us to the source for, as the
case maybe, the following information with respect to Mrs. Dixon:
1. Federal and State Income Tax Returns from tax years 1994 through 1997 (excluding
2005, which we have);
2. Banking and Brokerage Account Statements from 1994 through 2007;
3. Individual Retirement Account Statements 1994 through 2007; and
4. Gii~ Tax Returns -tax years 1995 through 2007.
Lastly, we would appreciate being provided with copies of any Powers of Attorney that were
effective during Mrs. Dixon's lifetime.
INFORMATION ' ADVICE • ADVOCACY SM
Elizabeth P. Mullaugh, Esquire
McNEES WALLACE & NURICK LLC
September 7, 2007
Page 2
We understand that the assembly of this information may prove burdensome but, .in. any
event, may be necessary, to some extent, for the preparation of the necessary filings incident to Mrs.
~ixon's estate. VVe are sensitive to the fact that this information may take some time to assemble;
but nevertheless would request that it be provided to us, if at all possible, at least 60 days in advance
of the required filing dates for the Death Tax Returns for the estate.
In any event, we would appreciate a prompt preliminary response as to whether and which
of these items of information will be provided within the time frame we suggest.
Thank you for your anticipated cooperation in this matter.
Very truly yours,
MARTSON LAW OFFICES
No V. Otto III
IVO/j ad
cc: Mr. George F. Dixon, III (via electronic mail)
Mr. Richard E. Dixon (via electronic mail)
F:IFILES~CIients112690112690.1. epm I
INFORMATION ADVICE ADVOCACY sna
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LAW OFFICES
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)OHN B. FOVi7.ER III
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HI:BEitT X. GII.ROY
GFnRG~ B. FALLER)R.*
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CHRISTOPHER ~. R](:1;
JE[h:VIFER I.. SPE.~RS
SETI-t T. ~IosrBEY
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September 26, 2008
VIA HAND DELIVERY
Wayne Shade, Esquire
53 West Pomfret Street
Carlisle, PA 17013
Re: Estate of Lottie Ivy Dixon
Objectors' Discovery
Our File # 12690.1
Dear Wayne:
'BoaRn Ce~~rtry~o CmL Taut Srecuurr
In response to your letter of September 16th requesting an outline of what discovery we will
be pursuing and how much time it will take us to complete it, we provide the following:
To date, we have been able to secure a good deal of information with the Executor's
cooperation. We have received Mrs. Dixon's monthly statements and canceled checks associated
with the checking account at M&T Bank.
In addition, we have requested and are soon expecting the same sort of information
associated with her brokcrag~• accounts with Smith Barney, W'achovia, and Legg 1Vlason. W"e expect
to receive these documents by the middle of October, and would hope to be able to complete our
review of them by the end of that month.
As a follow up to the abor°e information, we believe it will be necessary to secure the account
statements for any and all of Marshall Dixon's savings, checking, and brokerage accounts. With the
appropriate cooperation from the Executor, we would hope to secure these materials sometime in
No~~ember, and complete our review of them before the holidays.
r
Also essential to o~Ir inquiry will be to get the accounting of the QTIP Trust from M&"I',
which is preparing the same on behalf oi'all ofthe "I'rtistees. It is expectation that the accounting for
the QTIP Trust ~~-ill be available to us by the end of the year.
As vas stated in our Objections, eve question the appraisals that ~ti~ere conducted on the
decedent's personal property and jewelry to the extent that they grossly understated their ~•altte.
INFORMATION • ADYI C E • ADVOCACY S:~I
Wayne Shade, Esquire
September 26, 2008
Page Two
To that end, we are prepared to move forward with our own appraisals on the real property,
and the personalty. We believe that these appraisals could be conducted in a similar time frame as
those other discovery requests outlined above.
We will also need to secure from the Executor the details of Mrs. Dixon's portfolio, and more
particularly when and for how much the individual securities were sold.
Finally, once all of these materials are reviewed, we expect to take Marshall Dixon's
deposition. As this can happen only after we have received all ol~the other discovery, we anticipate
that the earliest that we would be able to schedule Mr. Dixon's deposition will be sometime in
January. As a result, we anticipate being able to provide you and counsel for the estate with apre-
hearingmemorandum setting forth what we were able to reveal through the discovery process by the
end of January.
At this time, we believe that this is all of the discovery that will be necessary, but reserve the
right to pursue other requests as may necessarily come up during the course of the above-mentioned
discovery.
Very truly yours,
MARTSON LAW OFFICES
No V. Otto, lII
IVO/man
cc: Elizabeth Y. I/iullaugh, Esquire
Stanley A. Smith, Esquire
Mr. George Dixon
Mr. Richard Dixon
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October 10, 2008
'CIA HAND DELIVER
Wayne F. Shade, Esquire
53 West Pomfret Street
Carlisle, PA 17013
RE: Our Fiie No. 12690.1
Dear Wayne:
`HU.-as~ C.EIITIF(ED I.MLTuLL SPHt:tulsr
This letter is in response to your request for follow-up information after Ms. Mullaugh's
letter of October 7, 2008.
Ms. Mullaugh is correct to the extent that the Estate did provide us with financial records for
Mrs. Dixon at the end of September 2007. However, the Objectors were provided only with the end
of month account statements for both Mrs. Dixon's brokerage accounts and personal checking
accounts. It is worth noting further that there were several month's account statements that were
missing and required us to request from these institutions the account statements in full. More
importantly, at no point did we receive from the Estate copies of checks drawn against these
accounts, or letters of authorization permitting transfers of money from these accounts. The Estate
did provide us with authorization forms in June of this year to allow us access to this information.
Since that time, we have been in communication with each of these financial institutions in an
attempt to collect all that information. While we have made signifcant progress, each of these
institutions has merged or been bought out several times during the course ofMrs. Dixon's financial
involvement with them, and, accordingly, it has been, and continues to be, quite time consuming to
track down the relevant information.
As we stated in our letter to you on September 26, we believe it will be necessary to secure
the account statet><~ents ,for any and all of Marshall Dixon's financial accounts. We have already seen
through our preliminary investigation large sums of money being either withdrawn or transferred
from Mrs. Dixon's accounts to Marshall Dixon prior to Mrs. Dixon's death, in respect of which
transfers no gift tax returns were filed, and further in respect of which no disclosure was made on
the Federal Estate Tax return. As we complete our investigation, we expect to provide you and Ms.
Mullaugh wfth the appropriate documentation with respect to these transfers demonstrating the need
for information concerning the Executor's accounts.
1 ti 1=0R1~t~'TION' • 1~DVIGE • ~`lU Vi)C?~(:, Y ~~~
Wayne F. Shade, Esquire
October l o, Zoos
Page 2
With respect to the value of Mrs. Dixon's j ewelry and personal property, while it is true that
the Objectors may have no interest in the outcome of any further appraisals, we believe that these
appraisals may prove useful in demonstrating our clients' belief of an ongoing pattern of
misrepresentation and/or concealing of Estate assets and value thereof.
Ms. Mullaugh is correct with respect to her observation in regard to further appraisals of real
property.
In summary, our clients are of the belief that the substantial resources available to Mrs. Dixon
prior to her death were significantly depleted as part of a pattern of conduct engaged in by the
Executor to benefit himself to the exclusion of his siblings. Our discovery seeks, on the one hand,
to define such resources, and, on the other hand, to determine the disposition thereof.
We have no doubt that the Executor would like to conclude the administration of the Estate
and distribution thereof free of these inquiries, but our clients have a legitimate interest as residuary
beneficiaries in resolving these very substantial and important questions.
Very truly yours,
MARTSON LAW OFFICES
~T
No V. Otto III
NO/mmp
cc: Elizabeth P. Mullaugh, Esquire
F:IFILES1Clirnls112690 Dixon112690. l .w~_drall. ] 0.10.0E
INFORMATIO N • ADVICE • ADVOCACY '~I
CERTIFICATE OF SERVICE
The undersigned hereby certifies that on this date a true and correct copy of the forgoing
documents were served by first-class mail, postage prepared, upon the following:
No V. Otto, Esquire
Martson Law Offices
10 E. High Street
Carlisle, PA 17013
Mark Bradshaw, Esquire
Stevens & Lee, P.C.
17 N. Second St., 16th Floor
Harrisburg, PA 17101
Wayne F. Shade, Esquire
53 W. Pomfret St.
Carlisle, PA 17013
Kimber . Colonna
Dated: October 19, 2009