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HomeMy WebLinkAbout03-26-10~ ~ IN RE: ~ ~ -~-~ ; IN THE COURT OF COMMONAS O~ 1`A: : ~ ~'. ~: `_~3 V IA ~ ,. ESTATE OF :CUMBERLAND COUNTY, PE'~,; __. ^ ~, N y _ , T ~~ .~ ~-_ ~ GEORGE F. DIXON, JR. :ORPHANS' COURT DIVISIONS^-~~`• ~~~ ~ ~ :- . ;_-~~" DECEASED No. 21-1994-0754 r _.; ,-.~ ~~ ~--~ ~,~ _ °~~~ ~-, °,- ~~.~ .. ;: ~ ~~ : IN THE COURT OF COMMON PLEAS OF :CUMBERLAND COUNTY, PENNSYLVANIA ESTATE OF LOTTIE IVY DIXON :ORPHANS' COURT DIVISION DECEASED NO. 21-07-0686 RESPONSE OF MARSHALL DIXON, EXECUTOR OF THE ESTATE OF LOTTIE IVY DIXON TO EXCEPTIONS TO ORDER OF COURT DATED FEBRUARY 23, 2010 DENYING PETITIONERS' PETITION FOR APPOINTMENT OF AN ADMINISTRATOR PRO TEM On March 15, 2010, George F. Dixon, III and Richard E. Dixon ("Petitioners") filed Exceptions (the "Exceptions") to the Order of Court dated February 23, 2010 denying the Petitioners' Petition for Appointment of Administrator Pro Tem Pursuant to 20 Pa.C.S. §4301 (the "Petition") in the above-referenced cases. The Exceptions include seven (7) enumerated grounds on which Petitioners claim that the Court erred in denying the Petition. Marshall Dixon, as Executor of the Estate of Lottie Ivy Dixon ("Marshall Dixon" or "Executor"), states the following in response to Petitioners' Exceptions . l . The Court did not err in entering an Order before an answer was filed. The Petition was filed on February 9, 2010. The Petition requested that an administrator pro tem be appointed to investigate whether assets includable in the estate were not accounted for by the Executor. At the time the Petition was filed, Petitioners were fully aware that an Auditor's hearing on their Objections to the Estate Account, including their objection asserting that substantial assets includable in the Estate had not been accounted for, was scheduled for February 24, 2010, a mere 15 days after the date the Petition was filed. Pa. Orphans' Court Rule 3.2(a) provides that a party opposing a petition has 20 days to file an answer admitting or denying the averments of fact in a petition. Because the Petition was filed only 15 days before the hearing date, the Executor's answer to the Petition was not due until after the hearing at which Petitioners' objection asserting that the Executor had not accounted for all of the assets was to be heard. Despite being aware of this timing, Petitioners did not request that the Court shorten the time for the Executor to file an answer, so that Petitioners could reply to it and have the Petition be decided before the date of the Auditor's hearing. In light of the short time between the date of the filing of the Petition and the Auditor's hearing, the Executor filed a Response in opposition to the Petition (the "Response") that specifically noted the following: In the event that the Court rules on the Petition prior to the February 24-26 hearing date, the Executor files this preliminary response without specifically admitting and denying the averments therein. ... 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 The Executor's Response was not based upon the truth or falsity of the averments in the Petition. Instead, the Response asserted legal arguments as to why the Petition should not be granted, based upon facts of record and known to the Auditor, including facts related to the following: the informal inquiries as to the decedent's assets that Petitioners undertook more than two and a half years before they filed the Petition; the discovery period of more than a year that Petitioners had to investigate the factual basis of their objections (including their objection asserting that assets includable in the estate had not been accounted for by the Executor); the complete financial account information obtained by Petitioners more than a year and half prior to the Petition; the impending hearing date; and Petitioners' standing as Co-Trustees of the Lottie Ivy Dixon Revocable Trust. Based upon those facts, the Response asserted, inter alia, that the Petition should be denied because it would cause unnecessary delay and expense. Moreover, the Response asserted, as a matter of law, that the egregious impropriety of the timing of the Petition and its clear purpose of attempting to relieve Petitioners of the burden of proving their central objection at the imminent hearing, were sufficient bases for denying the Petition, regardless of the truth or falsity of the Petition's allegations. 2. In the exceptions, Petitioners assert that the Executor's Response was "not a proper pleading" and argue that it should not have been considered by the Auditor and the Court. Notably, Petitioners cite no law in support of this argument. There was no reason for the Auditor and Court to disregard the relevant legal arguments presented in the Executor's Response, especially where the Response was filed under exigent circumstances created by Petitioners themselves. Moreover, as the Auditor's Directive notes, both parties had the opportunity to present legal argument on the Petition to the Auditor orally during one of the pre-hearing 3 conferences. Thus, Executor's counsel orally made essentially the same arguments as were written in the Response, and Petitioners' counsel had the opportunity to respond to those arguments. Finally, although Petitioners now complain that the Response was an improper pleading, it is notable that they did not object to the Response or seek to strike it. 3. The Court did not deny Petitioners a full and fair opportunity to be heard. On February 16, 2010, the Court entered an order directing the Auditor to make a recommendation with respect to the Petition. After considering the Petition and Response and hearing oral argument on the Petition, the Auditor recommended in his Directive of February 22, 2010, that the Petition be denied. The Court adopted that recommendation and issued an Order in accordance therewith. This process provided Petitioners with an opportunity to be heard. Additionally, as noted above, the short timeline for resolving the Petition was dictated by the fact that Petitioners' filed the Petition just 15 days before the hearing. The Executor did not file an answer to the Petition, because the Petition was denied prior to the time date that any answer was due. Because no answer was filed, Petitioners had no right (and, indeed, they needed no opportunity) to file a reply in support of the Petition. The Petition was denied on the basis of legal arguments which were presented to the Auditor orally with both counsel present and with Petitioners' counsel having a full and fair opportunity to respond to the Executor's legal arguments. Therefore, the fact that Petitioners did not have the opportunity to file a written reply to the legal arguments asserted in the Executor's Response is of no consequence. 4. The Court did not err in entering its Order relying upon the Directive submitted by the Auditor. Petitioners assert that the Court should not have relied upon the Auditor's directive because it did not address the substance of the Petition. To the contrary, the Auditor's 4 directive did address the substance of the Petition by noting that the Petition sought to have an administrator pro tem investigate the very same allegations that Petitioners had had the opportunity to pursue in the audit process. The Auditor's Directive quite properly concluded that, regardless of the truth or falsity of the factual allegations set forth in the Petition, Petitioners failed to demonstrate why, at this very late stage of the proceedings, they should be afforded an alternate process in which to develop facts that they apparently had not developed, or had not been able to develop, through the discovery process afforded to them in the audit process. The Auditor had no need to make findings regarding the truth or falsity of the factual allegations of the Petition, because the Auditor, who was familiar with the procedural posture of the case, recognized that the Petition was an effort to "end-run" the audit process just two weeks of the hearing date. The Court's adoption of the Directive under these circumstances was completely proper. 5. Petitioners also complain that the Directive recommended that the Petition be denied on the basis of Petitioners' delay in filing the Petition "where the Auditor sees nothing in the Petition that could not have been raised as the time of the filing of their objections to the first intermediate accounting of the Estate." In support of their exception in this regard, Petitioners state that the Auditor failed to acknowledge certain allegations in the Petition that demonstrate that at the time they filed objections to the Estate Account, Petitioners did not have all of the facts and information sufficient to raise all of the allegations of misappropriation of assets. Petitioners' argument ignores the fact that they did, in fact, assert an objection alleging that assets includable in the estate had not been accounted for and the fact that, following the filing of their objections, Petitioners had more than twelve (12) months to pursue formal 5 discovery regarding disposition of the decedent's assets. They disregard the fact that they had all of the documents from decedent's checking and brokerage accounts (including those showing payments for credit card bills and transfers to the Executor) for more than a year and a half prior to the filing of the Petition; they ignore the fact that they received the account statements for Marshall Dixon's brokerage account that they requested, along with his affidavit that he had no other brokerage account; they fail to acknowledge that the Executor fully and timely answered their interrogatories (the only formal discovery they issued) and that they scheduled the deposition of the Executor in the last two weeks of the discovery period. Thus, while Petitioners assert that there are "additional records", "missing information", and "other areas of inquiry" that they only recently became aware of, those arguments are simply not tenable, given that they had more than a year to complete their discovery and that they received all of the information they sought. Even if there were specific information that Petitioners had not obtained in the audit process, the fault for that lies with Petitioners' failure to pursue the information diligently during the course of the discovery period. In short, Petitioners failed to show any credible basis for the Court to conclude that the audit process was inadequate to allow Petitioners the opportunity to pursue a full inquiry into the disposition of the decedent's assets. Under these circumstances, the denial of the Petition was proper and must be upheld. 6. Petitioners complain that the Auditor's Directive failed to address allegations made in the Petition against Marshall Dixon, and suggest that the seriousness of those allegations outweighs the delay and expense that would have resulted from the granting of the Petition. In fact, however, as the Auditor recognized, the "serious" allegations asserted in the Petition were essentially the same allegations that Petitioners had asserted throughout the audit process. As 6 noted above, those allegations, however serious, were able to be resolved through the audit process -- the process chosen by Petitioners to pursue those allegations, the process in which Petitioners and the Executor had been engaged for over a year, and the process which was soon to be concluded with a hearing. Stated bluntly, the time for mere allegations had passed; Petitioners were facing a hearing at which they would be required to prove their allegations based upon the information they obtained through informal inquiries and formal discovery. The Auditor and the Court saw through Petitioners attempt to "get a second bite of the apple" by having an administrator pro tem investigate the same allegations that Petitioners had been pursuing in the audit process. 7. Petitioners assert that the Auditor failed to acknowledge or opine regarding Marshall Dixon's inherent conflict of interest position as Executor of the Estate, but they fail to acknowledge that that issue is not relevant to the decision to deny the Petition where the audit process itself afforded Petitioners the opportunity to investigate every aspect of Mrs. Dixon's financial life. Petitioners had every opportunity to investigate whether assets were wrongfully taken by Marshall and should be recovered and included in the Estate. In fact, the Executor complied with every informal request to provide information, every request for releases to allow Petitioners to obtain financial information directly from the financial institutions where the decedent had accounts, all discovery obligations, and the request for the Executor's personal brokerage statements. Granting the Petition to appoint an administrator pro tem would have simply allowed Petitioners to have another party conduct the very same investigation that Petitioners engaged in since the time of Mrs. Dixon's death. Because the Petition failed to allege 7 any credible reason that Petitioners had been denied the opportunity to conduct that investigation themselves, the Petition was properly denied. WHEREFORE, Marshall Dixon, as Executor of the Estate of Lottie Ivy Dixon, requests that the Order of February 23, 2010 denying the Petition for Appointment of an Administrator Pro Tem be upheld. McNEES WALLACE & NURICK LLC By: Elizabeth h I.D. No. 76 97 . 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: March 25, 2010 8 FROM FAX N0. 5240469 Mar. 25 2010 12:55PM F~2 VERIFICATION Subject to i 8 Pa.C;.S. Scetion 4904, relating to unsworn fa)sifcation to authorities I, 1Viarslaa~l ~.. Dixon, verify that the facts set forth in the foregoing docux~aex~t are ~ruE and correct to the best of my knowledge ar information azad belief. Dam: ~orv ~•--- ar all ixon 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 prepaid, addressed as follows: Walter W. Cohen, Esquire Kevin J. Kehner, Esquire Obermayer Rebmann Maxwell &Hippel LLP 200 Locust Street, Suite 400 Harrisburg, PA 17101 Paul C. Heintz, Esquire Nina B. Stryker, Esquire Erin E. McQuiggan, Esquire Obermayer Rebmann Maxwell &Hippel LLP One Penn Center, 19th Floor 1617 JFK Boulevard Philadelphia, PA 19103 Mark Bradshaw, Esquire Stevens & Lee, P.C. 17 N. Second St., 16th Floor Harrisburg, PA 17101 Daniel L. Sullivan, Esq. Sadis Flower & Lindsay 2109 Market Street Camp Hill, PA 17011 Wayne F. Shade, Esquire 53 W. Pomfret St. Carlisle, PA 17013 Charlotte Ivy Dixon 323 Bayview Street Camden, ME 04843 Elizabe ugh Dated: March 25, 2010