Loading...
HomeMy WebLinkAbout06-22-11 (2)IN RE: ESTATE OF ROBERT M. : IN THE COURT OF COMMON PLEAS OF ,,,, MUMMA, deceased :CUMBERLAND COUNTY, PE LVANi"~1 ~; ' ~ ; c~ ORPHANS' COURT DIVISION ~ ~ ` i ` . ~ i N0.21-86-398 ~ -' ~"~'"~' _ ~~ r ~~' Q r7 N -r1 . ~ iTt ~ '~ ~n Cj ; AUDITOR'S INTERIM REPORT, Juae 21, 2011 AND REQUEST FOR ORDERS ~,,, To the Honorable J. Wesley Oler, Jr.: Your Honor has appointed me Auditor in the above captioned matter and charged me with reviewing the most recent and final account and proposed distribution in the above matter and holding a hearing on the most recent accounting and proposed distribution. I had held thirty- three (33) days of hearings on the objected accounts of this Estate and Trusts created thereunder. These various accounts represented the period beginning at the establishment of the Estate following the decedent's passing in 1986 through December 31, 2003. The current accounting is for the time period January 1, 2004 until the filing of the account and proposed final distribution in 2010. Hearings were held from May 2 through May 5, 2011 and those hearings have been continued for five more days of hearings, two in May and three in June, 2011. Two issues had previously arisen which your Honor has referred to me for an interim report. Objector Robert M. Mumma, II had issued a subpoena to Jeffrey Boswell, Esquire, who represents and is the custodian of the corporate records of Union Quarries. Union Quarries is owned fifty percent owned by the Hempt family and fifty percent owned by the Mumma family. The Mumma family shares are currently owned by the Trust established under the Will of Robert M. Mumma deceased. Mr. Boswell filed an Emergency Motion for a Protective Order to Quash a subpoena to appear and testify. The subpoena also required Attorney Boswell to appear with certain corporate books and records of Union Quarries. Attorney Boswell contended that Mr. 1 Mumma was on a fishing expedition, that Mr. Mumma is a direct competitor of Union Quarries, that Union Quarries internal records have no bearing on the Auditor's Hearing, and other arguments. Attorney Boswell had filed a similar Motion relating to a deposition Mr. Mumma had Noticed. The undersigned had formerly opined that the first Motion of Attorney Boswell be granted and you granted that Emergency Motion and quashed the subpoena. I attempted to question Mr. Mumma during the course of the first hearing. Mr. Mumma desired to have Attorney Boswell provide him documents and testimony relative to how the Trust established under the Will of his father became the owner of the Union Quarry stock. Mr. Mumma was able to more fully and less emotionally articulate his reasons for the need of Attorney Boswell's testimony, together with his need for certain records. After discussions with all the parties, it was agreed that the undersigned would telephone Attorney Boswell and direct him to bring the records to the hearing. It was further agreed that I would, in camera, review certain minutes of Union Quarries: specifically during the time period the stocks were transferred to the Estate of Robert M. Mumma to the present. It was further agreed that if there was any information in the minutes relating to the Estate, the Trust, the Executrices or the Trustees, I would permit such to be introduced. Mr. Boswell appeared with the records requested including stock books, registers and minute books. I did review the minute books and found no mention of the matters raised by the Objector, Mr. Mumma and stated so on the record. No minutes of Union Quarries were given to the Objector. The Objector, Mr. Mumma was granted access to the original stock book and the stock register and given copies of those records. The Objector was permitted to question Attorney Boswell at length and to introduce evidence through Attorney Boswell. Thus the Motion of Attorney Boswell has been rendered moot. 2 The second issue involves a filing entitled Robert M. Mumma II Application under 20 Pa. C.S. Section 767 to Join Additional Parties in Interest. Mr. Mumma has requested your Honor to join the Internal Revenue Service, the Pennsylvania Department of Revenue and the Pennsylvania Attorney General's Office as interested parties alleging fraud and undervaluation of assets on the part of the Executrices/Trustees. Your Honor issued a Rule to Show Cause in this matter. Lisa M. Morgan, an Executrice and a Trustee, responded and argued in part "... Mr. Mumma, II's conclusory allegations offer absolutely no basis upon which to conclude that any decision in these proceedings might adversely affect the interest of any taxing authority. No tax authority has expressed that view or otherwise expressed an interest in any matter alleged in the application, and the application does not suggest otherwise. Nor could it, as the federal and state tax authorities concluded their reviews of the Estate's tax returns more than 20 years ago." The Pennsylvania Attorney General's Office responded through its Charitable Trusts & Organizations Section requesting your Honor direct Mr. Mumma to provide documentation or evidence that a charitable interest is involved in this matter and in the absence of such evidence, relieve the Attorney General, in his capacity as parens patriae, of any obligation to participate in this matter." No other parties, persons or government authorities or entities responded. Mr. Mumma was requested to submit a legal memorandum in support of his application and a copy of his memo is attached. Mr. Mumma has alleged the Executrices/Trustees and the Estate's counsel misrepresented the fair market value of certain Estate assets which were allocated to one of the two trusts established under his father's will. His application alleges that as of early 1988 the 3 Estate was negotiating the sale of these assets for more money than the amounts allocated to the date of death values of those same assets. The Late Mr. Mumma died in 1986, the Estate filed federal estate tax returns and Pennsylvania inheritance tax returns in 1987. In 1987 the Internal Revenue Service conducted its own audit of the Estate Tax return and following that audit increased certain values of the assets and increased the federal estate tax liability owed. The Estate did not dispute the audit's findings and paid the additional tax. The Estate was also required to pay additional inheritance tax to the Pennsylvania Department of Revenue based on the IRS audit. In his application Mr. Mumma is not alleging the Estate undervalued the date of death value of the Estate's assets. The IRS conducted its own audit and made its own findings as to the date of death values of the Estates assets and if it was not satisfied with those values it would have been incumbent upon the IRS to raise issues at that time. Likewise it appears the Pennsylvania Department of Revenue relied upon the IRS audit and the values established therein. Mr. Mumma's application alleged that certain assets were more valuable in 1988 than in 1986 and the new values may not have been taken into account when the assets were divided and placed in to the two trusts has no relevance to the taxing issues. The undersigned surmises the taxing authorizes likewise agree, thus their silence. I do not believe Mr. Mumma has shown how any taxing authorities may be adversely affected either directly or indirectly. As to Attorney Jeffrey Boswell's Emergency Motion for a Protective Order, I recommend the motion dismissed as moot. As to Objector Robert M. Mumma II Application under 20 Pa. C.S. Section 767 to Join Additional Parties in Interest I recommend the application be denied and that you relieve all requested parties any obligation to participate. 4 I further recommend that if your Honor agrees with my recommendations, you enter Orders accordingly and I have attached recommended orders to accomplish the same. Respectfully submitted, i lj ~ hotly rixe Carlisle, PA 17013 (717)249-2448 JoeBLaw(a~aol.com