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HomeMy WebLinkAbout06-08-10IN RE: :IN THE COURT OF COMMON PLEAS OF ESTATE OF LOTTIE IVY DIXON :CUMBERLAND COUNTY, PENNSYLVANIA Deceased :ORPHANS' COURT DIVISION :NO. 21-07-0686 IN RE: :IN THE COURT OF COMMON PLEAS OF ESTATE OF GEORGE F. DIXON, JR. :CUMBERLAND COUNTY, PENNSYLVANIA Deceased ORPHANS' COURT DIVISION : 21-1994-0754 NO W~ c m~ : . ~ x ~ n -~ ~ 7"C ~:3 f~ ~ Cyr C_"} CONCISE STATEMENT OF ERRORS COMPLAINED OF Ol ~i PEAL` :"= ~~~ ~ Pursuant to the Order of this Court entered on May 18, 2010 and Pennsylvania Rule of Appellate Procedure 1925(b), Appellants, George F. Dixon, III and Richard E. Dixon, by and through their undersigned counsel, Obermayer Rebmann Maxwell & Hippel LLP, file their Concise Statement of Errors Complained of on Appeal, as follows: The Court erred in denying appellants' Petition for Appointment of Administrator Pro Tem Pursuant to 20 Pa.C.S. § 4301 ("Petition") before the pleadings were closed, without proper answer(s) to the Petition having been filed and without a hearing or argument: The Petition was filed on February 12, 2010, alleging inter alia that Marshall Dixon had wrongfully used and/or transferred assets of the decedent during her lifetime to or for his benefit without the decedent's knowledge and permission. 'The Petition was based on Marshall Dixon's conflict of interest as Executor and the need for an objective third party to investigate and determine what assets were wrongfully obtained from the decedent by Marshall Dixon in his individual capacity and, if necessary, to recover those assets. Under the Pennsylvania Rules of Civil Procedure and Pennsylvania 4474003 1 ~ ~j Orphans' Court Rules, an answer admitting or denying the averments of the Petition was due within 20 days. See Pa. O.C. Rule 3.2 (a). Counsel for Marshall Dixon filed a "Response in Opposition to Petition to Appoint Administrator Pro Tem filed by Marshall Dixon, as Executor of the Estate of Lottie Ivy Dixon" on or about February 12, 2010. ("Response in Opposition" or "Response"). The Response in Opposition was not styled as an Answer, did not specifically answer the paragraphs of the Petition as it was required to do and was not verified. Appellants intended to file a Reply or Preliminary Objections to the Response, including a motion to strike the Response, and had 20 days or until March 4, 2010 to do so. See Pa. O.C. Rule 3.2 (b). The Court entered its Order denying the Petition on February 23, 2010, prior to the time that the Reply or Preliminary Objections were due to be filed. Therefore, the Order was entered before the pleadings were closed. 2. The Court erred in dismissing the Petition while relying upon the Response in Opposition, an improper pleading filed by Estate counsel. a. Pennsylvania Orphans' Court Rule 3.2 (a) states that within twenty days "a party opposing the granting of the prayer of the petition shall file an answer admittine or denying the averments of fact of the petition and specifically stating his objections thereto and averring the facts relied upon by him." (emphasis added). Marshall Dixon as Executor failed to comply with Rule 3.2 (a) as the Response is not an answer as required. The Response does not admit or deny any of the allegations in the Petition. Marshall Dixon in his individual capacity did not file an answer or otherwise respond to the Petition. Since a proper answer was not filed, all averments of fact in the Petition should have been deemed admitted. b. The Response was further defective in that it is not verified. Pennsylvania Rule of Civil Procedure 1024(a) requires that "every pleading containing an averment of fact not appearing of record in the action or containing a denial of fact shall state that the averment or denial is true upon the signer's personal knowledge or information and belief and shall be verified." The Response contained averments that required verification. Thus, the Court erred in relying upon an improper pleading, the Response, in denying the Petition. 4474003 2 3. The appellants were denied a full and fair opportunity to be heard when the Petition was denied: (a) before the pleadings were closed; (b) before an answer was filed by Marshall Dixon either in his capacity as executor or in his individual capacity; (c) before a reply to an answer or response was due; and (d) without a hearing or argument. 4. The Orders of the Court denying the Petition and dismissing the exceptions without a sufficient and proper opportunity to be heard constitute a violation of the applicable procedural rules, including the Orphans' Court Rules, and a denial of the right to due process. 5. The Court erred in denying the Petition without receiving any testimony or evidence on the issues presented in the Petition and without making any factual findings. 6. The Court erred in denying the Petition on the basis of delay in filing when the Court failed to make any finding that a party suffered material prejudice by changing his position to his detriment as a result of delay. 7. The Court erred in suggesting that delay was a basis to deny the Petition when the Petition was filed on February 12, 2010 and discovery had not even concluded by the discovery deadline of September 30, 2009. Very recently, the Superior Court of Pennsylvania rejected an executor's claim that a twenty ~ delay in a petition for an estate accounting bars relief where the beneficiary alleged self-dealing and breach of fiduciary duty. See, In re Estate of Aiello, 2010 WL 1208464 (Pa. Super. March 30, 2010) ("Although [beneficiary] waited approximately twenty years to bring this matter before the court, [executor's) actions in this case require that he not be allowed to benefit from the delay.") 4474003 3 8. The Court erred in relying upon the Auditor's recommendation which failed to address the substance of the Petition, suggesting instead that granting the Petition would cause delay and expense. There is no prejudice or harm to the parties in allowing for a neutral's evaluation regarding whether all of the decedent's assets were collected and accounted for. The alleged delay that would be caused by appointing an administrator pro tem is far outweighed by the prejudice to the estate if a full examination and accounting of assets transferred to or taken by Marshall Dixon is not ordered. The need for an additional period of time for such an accounting is not reason enough for a court of equity to deny the Petition. 9. The Court erred in adopting the Auditor's recommendation that the Petition be dismissed on the basis of delay, suggesting that the evidence regarding the allegations in the Petition was available at the time of the filing of objections to the first intermediate accounting for the Estate. The Auditor, however, failed to acknowledge allegations of the Petition that demonstrate that appellants did not have the complete facts and information sufficient to raise all allegations of misappropriation of assets at the time the objections were filed in August 2008. See, e.g., Petition, paragraphs 26-27. Formal discovery had not yet commenced. There were additional documents, records and areas of inquiry that appellants could not have known and were not available at the time of the filing of their objections. Appellants only discovered upon production of documents and, further, at the deposition of Marshall Dixon in September 2009 that discovery was still not complete - certain records and documents were deficient and additional financial records of Lottie Ivy Dixon and Marshall Dixon and his business ventures were required in order to trace and track substantial and numerous transfers of funds and assets. Missing information included 4474003 4 credit card statements and brokerage account statements for both Lottie Ivy Dixon and Marshall Dixon and his business ventures and cancelled checks for each from both banking and brokerage accounts. All of this information is essential for a proper, complete and objective examination of decedent's assets and the extent to which there was misappropriation of those assets. 10. The Court erred in adopting the Auditor's Second Interim Report and Recommendation ("Auditor's Report") in denying the Petition and dismissing the exceptions, including: (a) Contrary to the Auditor's Report at ¶ 6, present counsel for appellants did not "concede", expressly or otherwise, at the final pre- hearing conference that they would not be able to prove that the decedent was subject to incapacity or undue influence. Rather, counsel was specifically told by the Auditor that incapacity and undue influence had been conceded by appellants' prior counsel. (b) Contrary to the Auditor's Report at ¶ 7, there was no argument at the final pre-hearing conference concerning the merits of the Petition. The Petition was only filed of record the very day of the conference. (c) Contrary to the Auditor's Report at ¶¶ 8-9, one check in the amount of $4,629.76 (that may or may not have been signed by decedent) is not dispositive of any aspect of the case and should not dictate a ruling on the Petition. There were hundreds of checks, withdrawals, and transfers involving a variety of bank and brokerage and credit card accounts for both decedent and Marshall Dixon and his business ventures that need to be examined and traced to evaluate the lifetime depletion of estate assets - which is why an administrator pro tem is necessary. 11. The Court erred in failing to address material allegations made in the Petition against Marshall Dixon. Those allegations include that Marshall Dixon may have defrauded the decedent of approximately $1.5 million between 1994 and the date of her death in June 2007 (See, Petition, paragraph 9), and that Marshall Dixon used decedent's 4474003 5 charge cards and funds in decedent's brokerage and bank accounts to or for his benefit without the decedent's knowledge and permission (See, Petition, paragraphs 19-22). These allegations were apparently dismissed on the basis that granting the Petition would cause delay and expense. However, no material prejudice to the parties was identified. Any "delay and expense" involved in appointing an administrator pro tem pales in comparison to the amount of decedent's assets that may have been wrongfully transfen ed and withheld from the estate. 12. The Court erred in denying the Petition in the face of an inherent conflict of interest on the part of the executor where the Petition alleged the executor as an individual had misappropriated assets of the decedent during her lifetime. When the personal representative faces an inherent conflict of interest, 20 Pa.C.S. § 4301 provides for the appointment of an administrator pro tem. It was an obvious conflict of interest for Marshall Dixon as executor to independently investigate and pursue allegations that he, himself, misappropriated or failed to account for assets of the decedent. See, Petition, ¶ 46. An administrator pro tem would be empowered to take all necessary steps to insure full compliance with requests for information and records. The appointment of an administrator pro tem pursuant to 20 Pa. C.S. § 4301 has been recognized and ordered as appropriate and necessary for the limited purpose of discharging an executor's duties, or a portion thereof, when and to the extent the executor is in a conflict of interest position. See, Smith Estate, 29 Fiduc. Rep. 175 (O.C. Div. Montg. 1979); Francis Estate, 11 Fiduc. Rep. 2d 52 (O.C. Div. Allegh. 1985). 4474003 6 Respectfully submitted, Date: June 8, 2010 OBERMAYER REBMANN MAXWELL & HIPPEL LLP By: -~ alter .Cohen, Esq. Attorney ID #12097 Kevin J. Kehner, Esq. Attorney ID # 33539 200 Locust Street, Suite 400 Hamsburg, PA 17101 717-234-9730 717-234-9734 (fax) Paul C. Heintz, Esq. Attorney ID #02906 Nina B. Stryker, Esq. Attorney ID #36531 Erin E. McQuiggan, Esq. Attorney ID #205673 One Penn Center, 19~' Floor 1617 JFK Boulevard Philadelphia, PA 19103 215-665-3212 215-665-3165 (fax) Attorneys for George F. Dixon, Ili and Richard E. Dixon 4474003 ,7 CERTIFICATE OF SERVICE I, KEVIN J. KEHNER, ESQUIRE, certify that on this date, I have served a true and correct copy of the foregoing Concise Statement of Errors Complained of on Appeal on behalf of George F. Dixon, III and Richard E. Dixon upon the following by: (a) Hand Delivery, addressed as follows: Honorable Judge J. Wesley Oler, Jr. Cumberland County Courthouse 1 Courthouse Square Carlisle, PA 17013 (b) First Class Mail, addressed as follows: Daniel L. Sullivan, Esq. Saidis Flower & Lindsay 2109 Market Street Camp Hill, PA 17011 Elizabeth P. Mullaugh, Esq. Kimberly M. Colonna, Esq. McNees Wallace & Nurick 100 Pine Street, P.O. Box 1166 Harrisburg, PA 17108 Mark D. Bradshaw, Esq. Stevens & Lee Harrisburg Market Square 17 North Second Street, 16~' Floor Hamsburg, PA 17101 Wayne F. Shade, Esq. 53 West Pomfret Street Carlisle, PA 17013 Charlotte Dixon 323 Bayview Street Camden, ME 04843 Date: June 8, 2010 Kevin J. Kehner, Esq. 4474003 8