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HomeMy WebLinkAbout05-02-11WIX, WENGER & WEIDNER Stephen J. Dzuranin, I.D. # 52653 sdzuranin(c~wwwpalaw.com Robert C. Spitzer, I.D. #6264 rspitzer(c~wwwpalaw. com 508 North Second Street P.O. Box 845 Harrisburg, PA 17108-0845 (717) 234-4182 IN RE: ESTATE OF WENDELL B. STOCKDALE, JR., Deceased ~ J /'`~ :- ~~ ~ J ~ _ ~-I ~ Y: ...i7 - „ -p ~ c ~ _~ ~ r .; `..~ ., , _ -i7 __r -,_ - --~ _ .__ ~.,~ a ~. --,, COURT OF COMMON PLEAS CUMBERLAND COUNTY, PENNSYLVANIA ORPHAN'S COURT DIVISION File No. 2009-01040 CO-EXECUTORS' ANSWER TO PETITION FOR CITATION TO SHOW CAUSE WHY CO-EXECUTORS SHOULD NOT BE COMPELLED TO PARTIALLY FUND TESTAMENTARY TRUSTS PRIOR TO SETTLEMENT OF FINAL ACCOUNT Respondents, the Co-Executors of the Estate of Wendell B. Stockdale, Jr., by and through their attorneys, Wix Wenger & Weidner, submit the following Answer to The Petition of Mid Penn Bank, as follows: 1. Admitted. 2. Admitted. 3. Admitted. 4. Admitted. 5. Admitted 6. Admitted. 7. Admitted in part and denied in part. tt is admitted that the currently held net assets approximate $370,000; but it is specifically denied that the assets are not being preserved properly and prudently. To the contrary, the bulk of the assets are held in interest bearing accounts that pose little or no risk to the Estate, pursuant to the Co- Executors' duty to preserve the assets, not engage in investments with risks of loss. 8. Admitted with clarification. It is admitted that such fees have been paid to date, as an approximation. However, it is further averred that the legal fees have been pursuant to an agreed-upon written fee agreement with the Co-Executors, which was approved by the beneficiaries of the trusts; that the fees were reasonable, based upon the amount of work, and time involved, difficulty of the issues faced, amounts of money involved, and the degree of responsibility involved, as documented by billing statements describing on a daily basis the activities, the time involved, the person performing the services, the nature of services, and supplemented at the request of Petitioner, with greater detail than the original statements contained; and which legal services generated among other results, the addition of approximately $484,000 of assets the Estate pursued and obtained for the benefit of the Trusts and their beneficiaries and which may not have been obtained but for the efforts of the Co-Executors and their counsel. 9. Denied. After reasonable investigation Respondents are without sufficient knowledge or information to form an opinion as to the truth of the averments in Petitioner's paragraph 9, and, accordingly, these averments are denied. It is further averred that Respondents have made available to the beneficiaries of the Trusts funds, by way of loans from the Estate (note: the beneficiaries of the Trusts are not beneficiaries of the Estate), funds for the purpose of their pursuing their education, and for living expenses, when requested, and allowed the said beneficiaries to live rent free and expense free in the decedent's home until it was sold to raise funds for the Estate, and took back notes in exchange for assets of the Estate the beneficiaries did not want sold, providing them with vehicles. It is further averred that, when requested for additional funds in about September of 2010, the Co-Executors were ready, willing and able to make some such funds available, in one form or another, and if the beneficiaries would provide a receipt and release and refunding agreement to the Co-Executors. This was in light of the claims they had made against the Co-Executors, who have served without compensation, and undertook extraordinary efforts in connection with the Estate to collect hard to value assets, and to preserve and enhance the value and salability of the decedent's home, as to "excessive" legal fees claimed through the beneficiaries' separate counsel (whom they engaged at a rate significantly higher than the rate of the primary counsel of the Co-Executors, and who represented them since January of 2010, but remained silent as to any resolution or clarification of issues the Co-Executors faced), and indemnifying the Co-Executors from claims of the Internal Revenue Service and the named payee of the life insurance and employee benefits, to whom a 1099 had been rendered by the payor (such indemnification by the Estate was required to obtain the cooperation of the named beneficiary to pay over the funds to the Estate). Co-Executors are without knowledge or information sufficient to form a belief as to the truth of the averment that James Stockdale dropped out of college for the reason alleged, and strict proof thereof is demanded. 10. Denied. The Will is a writing that speaks for itself. Any averments to the contrary are specifically denied. 11. Admitted in part and denied in part. It is admitted that the letter was sent. The characterization of the fees is strictly denied. To the contrary, the fees incurred are reasonable and earned, and contributed to the Estate being as substantial as it is by virtue of the Go-Executors, with their counsel, having pursued claims for employee benefits and life insurance, despite not being the named beneficiary thereof, and not clearly entitled to such funds, and by reason of having administered the Estate prudently and efficiently for the benefit of the Estate. By way of further answer, the letter is a writing that speaks for itself and any averments to the contrary are specifically denied. 12. Denied. Petitioner's letter is a writing which speaks for itself and any averments to the contrary are specifically denied. Moreover, the "request" for partial funding ignores the Co-Executors' discretionary authority as specified in the Will and under Pennsylvania law, to manage the Estate, and preserve assets required to meet the potential obligations of the Estate (such as IRS claims and indemnification obligations) as well as to defend the claims of Petitioner. The Co-Executors' conclusion that the Estate fund must remain intact until risks of income tax and related indemnification and other potential claims are fully resolved, to their satisfaction, should not be thwarted. The Will provides in paragraph FIRST: "I direct that all of my legally binding debts, expenses of my last illness and funeral expenses shall be paid by my Executrix hereinafter named, from my Estate as soon after my decease as shall be found convenient." (emphasis added). Such a "risk" distribution should not be made because of the risks of such income tax claims and other claims including those under an indemnification agreement the Co-Executors entered into to facilitate the collection of the benefits that comprise the bulk of the Estate and the risk of still further claims by Petitioner for surcharge of the Co-Executors for their administration of the Estate, such as the claim, referenced above and below concerning improper investment of Estate funds. 13. Denied. The letter is a writing that speaks for itself and any averments to the contract are specifically denied. 14. Denied. It is specifically denied that the financial needs of one or more of the Trusts beneficiaries mandate the funding requested, and on the contrary, it is averred that such funding should and must await the resolution of the income tax claims, the indemnification claims, and the Court's approval of a final accounting, foreclosing further claims of Petitioner. 15. Denied. To the contrary, the Co-Executors recognize the unique and unsettling state of markets, and believe that their investment of funds preserves such funds for the ultimate administration by the trustee, rather than speculating and assuming risks of market losses. 16. Denied. To the contrary, the funds should not be subject to a risk distribution, without final resolution of the potential claims recited above; when funded, the trustee can exercise its powers and authorities to invest for the beneficiaries, but the Co-Executors' duty is to preserve the fund. WHEREFORE, Respondents, Co-Executors, respectfully request that the Petition be dismissed, and that the Co-Executors continue to exercise their discretionary authority in the administration of the Estate and that this Honorable Court grant such further relief as it deems just and appropriate. Respectfully submitted, Wix, r.~ ¢r & Wgidner, P.C. ~~ ~r; i\ J. Dz ' ariin, D. # 52653 Robept C. Spit er, I.D. #6264 508 North Sec nd Street P.O. Box 845 Harrisburg, PA 17108-0845 Telephone No.: (717) 234-4182 Attorneys for Respondents VERIFICATION Wu, Wendell B. Stockdale, and Jane Stockdale, co-executors, of the Estate of Wendell B. Stockdale, Jr., have read the foregoing Rep1J~/Answer to the Petition of Mid Penn Bank, and verii}- that the facts set forth therein are true and concct to the best of m}~/our knowledge, information and belief. To the extent that the foregoing document and/or its language are that of counsel, Ihve have relied upon counsel in making this Verification. I understand that an~ false statements made herein are subject to the provisions of 18 Pa. C.S.A. §49904 relating to unsworn falsification to authorities. ~ ,~~ ~ ' ~ Wendell .~~tockdale, and ;-3 a -,- ~ ~ , J Jane Stockdale Dated: April; ~ 2011 IN RE: ESTATE OF WENDELL B. STOCKDALE, JR., Deceased ORPHAN'S COURT DIVISION COURT OF COMMON PLEAS CUMBERLAND COUNTY, PENNSYLVANIA File No. 2009-01040 CERTIFICATE OF SERVICE I, Stephen J. Dzuranin, Esquire, hereby certify that I am serving a copy of the foregoing document upon the person and in the manner indicated below, which service satisfies the requirements of the Pennsylvania Civil Rules of Procedure, by depositing a copy of the same in the United States Mail with first class postage, prepaid to the following: Matthew E. Hamlin, Esquire Persun & Heim, P.C. P.O. Box 659 1700 Bent Creek Boulevard, Suite 160 Mechanicsburg, PA. 17055-0659 Wix, We jer & Weidner ~~ s Step n J. Dz rarnn, I.D. # 52653 508 North Second Street P.O. Box 845 Harrisburg, PA 17108-0845 Telephone No.: (717) 234-4182 Attorneys for Respondents Date: May 2, 2011