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HomeMy WebLinkAbout02-12-10 ~ N ~ O ' ' _.) }'~I-_ C7 ( l + 1 Q3 .~. ? -y. s-" ~` _~>~ N --~ f_.3 -r! ~ c' j ~'. " ~ N - -1 ~ ~' : IN THE COURT OF COMMON PLEAS OF '~'`~ CUMBERLAND COUNTY PENNSYLVANIA , ESTATE OF . GEORGE F. DIXON, JR. :ORPHANS' COURT DIVISION DECEASED No.21-1994-0754 IN RE: : IN THE COURT OF COMMON PLEAS OF :CUMBERLAND COUNTY, PENNSYLVANIA ESTATE OF LOTTIE IVY DIXON :ORPHANS' COURT DIVISION DECEASED No.21-07-0686 RESPONSE IN OPPOSITION TO PETITION TO APPOINT ADMINISTRATOR PRO TEM FILED BY MARSHALL DIXON, AS EXECUTOR OF THE ESTATE OF LOTTIE IVY DIXON Marshall Dixon, as Executor of the Estate of Lottie Ivy Dixon ("Marshall Dixon" or "Executor"), states as follows for his response in opposition to the Petition For Appointment of Administrator Pro Tem filed by George F. Dixon, III and Richard E. Dixon: INTRODUCTION On February 9, 2010, George Dixon and Richard Dixon ("Petitioners") filed a Petition for Appointment of Administrator Pro Tem Pursuant to 20 Pa.C.S. §4301 (the "Petition") in the above-referenced cases. The Petition requests that the Court indefinitely ~~•~ ~, ~~ ~ .! 1 _7 8 t `l 1 <:~7 (` ' C.'7 _7 :,> ~!~ t 7 -~, t continue the Audit of the Account of the Executor of the Estate of Lottie Ivy Dixon and appoint an individual as administrator pro tem for the Estate of Lottie Ivy Dixon for the purpose of "determining what, if any, assets were wrongfully obtained from the decedent" by her son, Marshall L. Dixon, Executor of the Estate, "engaging in such discovery and retaining such experts ... as deemed necessary to assist in that assignment," and taking action to recover any such assets. As set forth more fully below, Petitioners have not established good cause for such an appointment, and they have failed to justify their request to derail the ongoing audit of the Estate account just two weeks before the scheduled hearing dates. Petitioners have engaged in informal and formal discovery over the past two and one-half years (since the decedent's death), and the primary focus of that investigation was to determine whether the Executor diminished assets that should be returned to the Estate. Petitioners do not explain why the appointment of an administrator pro tem would yield information that was available to them over the last two and one-half years. Petitioners do not explain why, (if there is any additional relevant information) they themselves did not seek it during the past two and one-half years. In short, Petitioners cannot justify their last-minute request to circumvent the audit process and to cause unnecessary delay and expense. The audit should not be continued and an administrator pro tem should not be appointed.' ' In the event that the Court n-les on the Petition prior to the February 24-26 hearing dates, the Executor files this preliminary response without specifically admitting and denying averments therein. The Petition is filled with ad hominem attacks on the Executor, statements that have no basis in fact, and assertions that are entirely unsupported by the documents in the possession of Petitioners. If the Court does not summarily deny the Petition, the Executor will, within twenty days of the date of service, file a detailed answer to the Petition, as required by Orphans' Court Rule 3.2. It is the Executor's position that, unless there is a contrary ruling by the Court, the Petitioners' objections will proceed to hearing before the Auditor on February 24-26 and Petitioners will be required to present their case in support of their objections at that time. 2 A. The Petition Should Be Denied Because It Represents A Blatant Last-Minute Attempt By Petitioners To Circumvent Their Burden of Proving Their Objections At The Hearing Set by the Court. 2. Lottie Ivy Dixon died on June 28, 2007. Since that time, Petitioners have sporadically engaged in informal and formal discovery directly related to their allegations that Marshall failed to account for all of the assets in the estate. In the course of their investigation, Petitioners have received all of Mrs. Dixon's bank statements, her brokerage account statements, copies of cancelled checks for her accounts, her federal and state income tax returns and gift tax returns, her entire estate planning file from her longtime estate counsel, and Marshall Dixon's brokerage account statements. 3. Specifically, in September 2007, less than three months after his mother's death, at the request of Petitioners' counsel, the Executor provided bank and brokerage account statements, income and gift tax returns and other documents related to her finances that were in his possession. 4. In June 2008, again at the request of Petitioners' counsel, the Executor provided written authorizations to permit Petitioners to obtain Mrs. Dixon's account information directly from the three financial institutions where Mrs. Dixon had accounts from 1993 to her death. Those written authorizations were very broad, allowing Petitioners to obtain "copies of documents ... that reflect or refer to any financial transaction(s) in any account(s) of the Decedent, Lottie Ivy Dixon, that occurred after August 28, 1993, including but not limited to any written correspondence or notes, monthly statements, checking or financial records." Using the written authorizations, in the Fall of 2008, Petitioners obtained every available document pertaining to Mrs. Dixon's accounts directly from the financial institutions. In July of 2008, when the administration of the Estate was substantially complete, the Executor filed a First and Intermediate Account to which Petitioners filed objections, alleging inter alia, that "substantial assets includable in the Estate ... are not accounted for." 6. Between the appointment of the Auditor by this Honorable Court in August 2008 and close of Discovery (which has been extended on several occasions to accommodate the Petitioners) on September 30, 2009, the Petitioners had more than a year to pursue formal discovery related to Estate assets that were allegedly not accounted for. 7. During that time, Petitioners engaged in formal discovery, sending interrogatories to Marshall Dixon in his capacity as Executor and in his individual capacity. Petitioners also deposed Marshall Dixon, who answered each and every question posed to him at the deposition. The audit process afforded Petitioners an opportunity to investigate virtually any aspect of Mrs. Dixon's financial life following the death of her husband. Thus, Petitioners had every opportunity to investigate whether assets were wrongfully taken by Marshall and should be recovered and included in the Estate. 9. Moreover, Petitioners chose to use the audit process to question whether there were assets missing from the Estate, and they have used that process to investigate whether assets were transferred (wrongfully or otherwise) from Mrs. Dixon to the Executor. They should not be permitted to abandon that process at the final moment before their objections are to be heard, and take a "second bite of the apple" by seeking to have an administrator pro tem appointed. 10. Notably, Petitioners' pre-hearing memoranda submitted to the Auditor indicate that Petitioners intend to present no exhibits and no witnesses in support of their objections. 4 That position unambiguously_demonstrates that, despite pursuing their objections for over a year, and despite the informal investigation that Petitioners undertook before that, Petitioners have no evidence to support their objections at the upcoming hearing. 11. The Petition suggests that Petitioners now believe that there is some (unidentified) additional, relevant information that would show that Marshall Dixon dissipated assets that should have been included in the Estate. Notably, however, the Petitioner does not address the fact that Petitioners were fully capable of obtaining that same information (whatever it might be) during the year-long discovery period in the audit process. 12. Thus, the asserted basis for Petitioners' request for appointment of an administrator pro tern is to undertake discovery that they could have sought over a year ago based upon the information available to them. The remedy sought in the Petitioner appears to be solely for the purpose of avoiding the imminent hearing at which the Petitioners will be required to put forth their case based on the evidence they have obtained to date. 13. Although Petitioners may now regret failing to undertake some investigation during the discovery period, their regret does not justify an end-run around the current procedural posture of these matters. 14. Pursuant to the Court's Order of June 17, 2009, (as extended by agreement of the parties to accommodate a change of coilnsel for M&T Bank), the period for discovery ended September 30, 2009. 15. Pursuant to the Court's Order of December 14, 2009, the objections will be heard by the Auditor on February 24, 25, and 26. At that time, Petitioners should be required to appear at that hearing, present their evidence in support of their objection that assets are missing from the estate, and abide by the result of that hearing. 16. Notably, the Petition identifies absolutely no reason why Petitioners should be excused from their obligation to prove their objection at the upcoming hearing. In fact, given that Petitioners have had more than two and one-half years to investigate their assertion that Marshall Dixon wrongfully took Mrs. Dixon's assets, there is no justification for Petitioners' last- minute request to be excused from their burden of proving their objection at the hearing. 17. Under these circumstances, the Petition represents nothing more than an attempt by Petitioners to avoid having their objection decided on the facts that they have obtained through discovery, and to extend their fishing expedition at great cost to Marshall Dixon and the estate. 18. Petitioners' attempt to avoid their responsibility to prove the allegations of their objection, by filing alast-minute petition seeking the appointment of a temporary administrator of the estate should be rejected. B. The Information Sought by Petitioners was available to them in Discovery and Appointment of an Administrator Pro Teen would not yield any new Information. 19. As is obvious from the Petition, the proposed administrator pro tem would be tasked with pursuing the very same discovery that Petitioners pursued and/or could have pursued since Mrs. Dixon's death, in an effort to identify assets that should be made a part of the Estate. 20. Petitioners had over two years to complete their investigation into Mrs. Dixon's finances. The Executor has promptly complied- with each and every informal and formal discovery request made of him. The Petitioners are (and have been since September 2008) in 6 possession of complete banking, brokerage, and tax return information for Mrs. Dixon from the period from 1994 tinti] her death. Petitioners have taken the Executor's deposition and issued Interrogatories to which they received timely responses. Petitioners have also received Marshall Dixon's brokerage account statements, even though those account statements were requested, for the first time, after the close of discovery. 21. If the Petitioners required any additional information in support of their objection that assets were not included in the estate, they had until September 30, 2009 to obtain it. 22• For example, to the extent the Petitioners felt that they needed to review credit card records for accounts held by Mrs. Dixon, they had every opporttmity to subpoena such records or demand them in requests for production. The Petitioners took no such action and made no such request, despite being aware since at least September of 2008 that Mrs. Dixon wrote checks for various credit card payments during the last several years of her life. 23. An Administrator pro tem would have no greater ability to investigate Mrs. Dixon's finances than the Petitioners had during the discovery period that was part of the audit proceedings. An administrator's authority, like that of the Executor, would encompass the ability to request the decedent's financial information from banks, investment institutions and taxing authorities. The Petitioners had the right and opportunity to obtain all of that information in the context of discovery during the audit process, and much of it they did obtain with the Executor's voluntary cooperation. The Petitioners also posit that an administrator would be able to hire a handwriting analyst, forensic accountant, and other professionals to analyze the information regarding Mrs. Dixon's accounts; likewise, the Petitioners have had the right and opportunity to engage such professionals as a part of discovery during the audit process. In fact, as noted 7 above, Petitioners have been in possession of copies of the checks from Mrs. Dixon's account since the fall of 2008. 24. In short, there is nothing that a temporary administrator could accomplish that the Petitioners could not accomplished during the period allowed for discovery in the audit process. C. Petitioners' Suggestion that they have no Standing to Pursue the Information they now seek is Inaccurate. 25. The suggestion by Petitioners that they have no standing to pursue the remedies that they now seek is inaccurate and, indeed, laughable. Contrary to their assertion that they are not beneficiaries of the estate and thus lack standing, the Petitioners are, in fact, Co-Trustees of the Lottie Ivy Dixon Revocable Trust which is the residuary beneficiar~of Mrs. Dixon's Estate. Their position as Co-Trustees of that Trust gives them not only standing, but imposes a fiduciary duty on them, to seek the relevant information if they believed that the Executor was not accounting for all of the assets of the Estate. 26. In fact, as Co-Trustees of the Lottie Ivy Dixon Revocable Trust, as well as in their individual capacities, Petitioners lodged Objections to the Estate Account in the first place. In the ensuing process, no one has challenged their right to do so. For them to now plead a lack of standing is not only disingenuous, but absurd. D. Appointment of an Administrator Pro Tex Wilt Result in Unnecessary Delay and Expense. 27. As noted above, Petitioners' Objections to the Estate Account are set to be heard in less than two weeks. Petitioners seek to have those proceedings continued indefinitely while the proposed administrator completes an investigation of assets allegedly missing from the estate. Thus, Petitioners seek to derail the audit process in its entirety just as it nears its end. 8 28. Granting Petitioners' request to appoint a temporary administrator will unnecessarily and indefinitely interfere with the ongoing audit process and delay the ultimate resolution of the issues presented in that proceeding. 29. Moreover, granting the Petition, would result in additional fees and expenses for the Estate (which Petitioners say should pay the administrator's expenses) and the Executor (who would be the subject of the administrator's inquiries), while Petitioners would bear no additional expense. Thus, in effect, Petitioners would be rewarded for failing to pttrstte their objection in the audit process. On the other hand, the Executor, who has borne great expense in complying with Petitioners' every informal and formal request for information in the audit process, would suffer substantial additional fees and expenses. 30. Because Petitioners have had two and one-half years to complete their investigation into Mrs. Dixon's assets and to take formal discovery in support of their Objections, the completion of the audit process should not be delayed by the appointment of an administrator pro tern, and the Executor and Estate should not be forced to bear the additional expense that any administrator's investigation will inevitably cause. Therefore, the Petition should be denied. 9 WHEREFORE, Marshall Dixon, as Executor of the Estate of Lottie Ivy Dixon, requests that the Petition for Appointment of an Administrator Pro Tem be denied. McNEES WALLACE & NURICK LLC B y: ~~,~---- liz P. Mullaugh I.D. 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 Date: February 12, 2010 10 CERTIFICATE OF SERVICE The undersigned hereby certifies that on this date a tnle and correct co of t documents were served by handin a co py he forgoing g py to the below listed counsel at the pre-hearing conference on Febniary 12, 2010: Paul C. Heintz, Esquire Walter W. Cohen, Esquire Nina B. Stryker, Esquire Erin E. McQuiggan, Esquire Obermayer Rebmann Maxwell & Hippel LLP One Penn Center, 19`h Floor 1617 JFK Boulevard Philadelphia, PA 19103 Mark Bradshaw, Esquire Stevens & Lee, P.C. 17 N. Second St., 16`h Floor Harrisburg, PA 17101 Wayne F. Shade, Esquire 53 W. Pomfret St. Carlisle, PA 17013 v Kim er y- , Colonna Dated: February 12, 2010