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HomeMy WebLinkAbout01-16-13 C O 01 In re the Edith S. Rife Trust : IN THE COURT OF COMMOIPAS , CUMBERLAND COUNTY, PE TN'S~LVANIAK4, . ORPHANS' COURT DIVISION - :NO. 11-0325 ORHPANS' COURT t . :NO. 10-1006 ORPHANS' COURT NO. 83-0773 ORPHANS' COURT MOTIONS FOR JUDGMENTS ON THE PLEADINGS AND NOW COMES John W. Maxwell, a remainder beneficiary of the Edith S. Rife Revocable Trust, by and through his attorneys, James D. Cameron, Esq., and David A. Fitzsimons, Esq., and respectfully moves as follows: I. On March 8, 2011, Petitioner, John W. Maxwell, one of five remainder beneficiaries of the Edith S. Rife Trust ("the Trust"), commenced this litigation by filing his Petition for a Rule to Show Cause why, inter alia, Fred H. Junkins, Executor of the Estate of Charles J. Rife ("Decedent" or "the deceased Trustee") should not be required to file an Account of his administration of the Trust, which had been created by Decedent's mother, inter vivos. 2. Petitioner captioned his action in the name of the Trust, and filed it to the newly-created docket number for the matter of the Trust, No. 11-0325. The Clerk of the Orphans' Court directed him to file it also to the docket numbers for the Estate of Charles J. Rife, deceased, No. 10-1006, and the Estate of Edith S. Rife, deceased, No. 83-0773. 3. Subsequently, the Court issued the Rule Petitioner had requested, it held a hearing, and then it issued its Decree of June 17th, 2011, granting the relief requested in the Petition for a Rule to Show Cause. J 4. In its Decree, the Court, inter alia, ordered Mr. Junkins, the Executor, to file an Account of the administration of the Trust by the deceased Trustee. 5. Had the Account been filed, Petitioner could and would have proceeded upon objections to the Account of the deceased Trustee, as prepared by his Executor. 6. However, instead, the Executor for the deceased Trustee has asserted in various pleadings that the inadequacy of the records maintained by the deceased Trustee precluded the Executor from being able to prepare an Account. 7. Accordingly, on October 27, 2011, Petitioner filed a Motion for Rule to Show Cause, asking the Court to direct the Executor for the deceased Trustee to show what cause he may have why the Court should not find that the deceased Trustee had breached his fiduciary duty with regard to the Trust, and reserving the question of damages for further consideration by the Court. 8. On October 27th 2011, the Petition for Rule to Show Cause was served by regular mail upon counsel of record for Estate of Charles Rife, and upon Steven, Sherri, Douglas, and Barry Maxwell ("the other Trust beneficiaries"). 9. The other Trust beneficiaries, together with Mr. John Maxwell (Petitioner) constitute all of the remainder beneficiaries of the Edith S. Rife Trust. 10. On October 31, 2011, the Court issued the Rule to Show Cause requested by Petitioner in his Motion for Rule to Show Cause. 11. On or about November 21, 2011, the Executor filed his Preliminary Objections of Executor of the Estate of Charles J. Rife, in response to the Rule to Show Cause. 12. On December 9, 2011, Petitioner filed his Preliminary Objection to Preliminary Objections of Executor of the Estate of Charles J. Rife. 13. On December 15, 2011, the Executor filed an Answer of Executor to Mr. Maxwell's Preliminary Objection to the Executor's Preliminary Objections. 14. On February 7, 2012, the Executor filed his Brief in Support of the Preliminary Objections of the Executor and in Opposition to the Preliminary Objections of John W. Maxwell to the Preliminary Objections of the Executor of the Estate of Charles J. Rife. 15. On February 8, 2012, Craig A. Diehl, Esq., filed a Praecipe for Entry of Appearance on behalf of Steven A. Maxwell, Barry Maxwell, Douglas Maxwell, and Sheri Maxwell, the other Trust beneficiaries. 16. On February 13, 2012, Petitioner filed his Brief in Support of the Preliminary Objections of John W. Maxwell and in Opposition to the Preliminary Objections of the Executor of the Estate of Charles J. Rife. 17. On February 15, 2012, the Executor filed a Reply Brief of the Executor of the Estate of Charles J. Rife to Brief in Support of the Preliminary Objections of John W. Maxwell and in Opposition to the Preliminary Objections of the Executor of the Estate of Charles J. Rife. 18. The Court held oral argument on February 17, 2012. 19. On March 7, 2012, the Court issued a Memorandum Opinion and Order of Court sustaining the Preliminary Objection of Petitioner, and dismissing the Executor's Preliminary Objections. Further, the Court directed the Executor to file a response to the Rule to Show Cause. The Motion and its averments having become the functional equivalent of the Complaint in the Trust case 20. On March 19, 2012, the Executor filed his Answer with New Matter to Motion of John W. Maxwell for Rule to Show Cause. 21. In his Answer, the Executor reiterated his claim that he was unable to file an accounting because of the unavailability of records. 22. On April 10, 2012, John W. Maxwell filed his Reply to New Matter. 23. On April 18, 2012, the other remainder beneficiaries of the Trust filed a Petition for Rule to Show Cause, asking the Court to require the Executor to show why the other beneficiaries of the Trust should not be allowed to file a late claim in the matter of the Estate of Charles J. Rife. 24. On April 25, 2012, the Executor filed an Answer to Petition for Rule to Show Cause, containing New Matter, prior to the issuance of the Rule to Show Cause requested by the other remainder beneficiaries. 25. On May 1, 2012, the Court issued the Rule to Show Cause requested by the other beneficiaries of the Trust, directing the Decedent's Executor to file his answer as to whether the other beneficiaries should be permitted to file a "late" claim in the matter of the Estate of Charles J. Rife. 26. Decedent's Executor has not responded to the Rule to Show Cause issued by the Court, resting, it must be assumed upon his April 25 filing. 27. The Court has not ruled upon this question. 28. Nevertheless, on May 30, 2012, the other remainder beneficiaries of the Trust filed an Answer to the original Motion that had become the Complaint in the Trust matter, and to the New Matter raised by the Executor in his Answer with New Matter to Motion of John W. Maxwell for Rule to Show Cause. 29. As to the dispute concerning any claims Petitioner or the remainder beneficiaries of the Trust may have against the deceased Trustee (represented by his Executor) for breaches of his fiduciary duty by the Decedent as Trustee of the Edith S. Rife Trust, it is respectfully suggested that the pleadings have now closed. 30. The principal pleadings are: the Motion for Rule to Show Cause, filed by Petitioner on October 27, 2011; the Answer with New Matter to Motion of John W. Maxwell for Rule to Show Cause, filed by the Executor on March 19, 2012; the Reply to New Matter of John W. Maxwell, filed April 10, 2012; and the Answer, filed by the other remainder beneficiaries of the Trust on May 30, 2012. 31. Petitioner makes the following motions for judgment on the pleadings. 1. PETITION OF THE OTHER BENEFICIARIES TO FILE "A LATE CLAIM"IN THE ESTATE OF CHARLES I RIFE 32. Nothing in the law precludes the other Trust beneficiaries in their capacities as beneficiaries of the Estate of Charles J. Rife from filing claims against the Executor for breach of his fiduciary duties or other valid claim against the Estate of the Decedent in the context of an Accounting or other proper proceeding regarding the matter to the Estate of Decedent. 33. However, in order to be entitled to relief with regard to a claim based upon breach of fiduciary duties owed to them by the deceased Trustee, the other remainder beneficiaries of the Edith S. Rife Trust would need to plead in the Trust matter, in the ordinary course, that Decedent breached one or more of his fiduciary duties to them while he was serving as Trustee of the Trust, during his lifetime. 34. Petitioner (John W. Maxwell) pleaded various breaches of fiduciary duty by Decedent, as Trustee of the Edith S. Rife Trust, during his lifetime, in paragraphs 12.a. through 12.d. of his Motion for Rule to Show Cause, filed October 27, 2011, which are incorporated and reasserted by reference. 35. In their Answer to Motion for Rule to Show Cause (which answers also the New Matter raised by the Executor), the other trust beneficiaries deny, in paragraphs 12.a. through 12.d. of their Answer, that Decedent breached his fiduciary duty during his lifetime. 36. Such lifetime breach of fiduciary duty by the deceased Trustee is the only basis upon which the other Trust beneficiaries can recover damages from the Estate of Decedent as a consequence of their status as remainder beneficiaries of the Edith S. Rife Trust. 37. Thus, while it would still be timely for these same individuals acting in their capacities as beneficiaries of the Estate of Decedent to file any such claims as they may have against the Executor for breach by him of his fiduciary duties to them in their separate capacities as beneficiaries under the Decedent's Last Will and Testament, these same individuals as beneficiaries of the Trust cannot, having denied the breach of fiduciary duty by Decedent during his lifetime as Trustee, be permitted to file a claim in the Trust case or the Estate case for these same defalcations of duty by the late Trustee. 38. Rather, these parties but not the Petitioner, John W. Maxwell, have denied the existence of liability to them for breach of fiduciary duty by Decedent in paragraphs 12.a. through 12.d. of their Answer. WHEREFORE, Petitioner, respectfully requests the Court to enter judgment against the other beneficiaries of the Trust with regard to the matter of breach of fiduciary duty by Decedent during his lifetime in his capacity as Trustee of the Trust in the Trust case (although Petitioner would urge that these individuals as beneficiaries under Decedent's Last Will and Testament retain their rights to file, at an appropriate time, such claims as the may have against the Executor for breach of fiduciary duty by him in his capacity as such in the Estate case). II. THE NEW MATTER OF THE EXECUTOR WITH REGARD TO NECESSARY PARTIES 39. In the second section of New Matter contained in the Executor's Answer With New Matter to Motion of John W. Maxwell for Rule to Show Cause, filed March 19, 2012, the Executor raises, again, the issue of indispensable parties. 40. As described in the answer to paragraphs 29. through 32. of the Reply to New Matter of John W. Maxwell, this issue was briefed and decided by the Court previously in a manner favorable to Petitioner. 41. This legally correct determination of the Court has become the law of the case. 42. Moreover, and in the alternative, under the circumstances of Petitioner John W. Maxwell's claim against Decedent for his (unrefuted) lifetime breach of fiduciary duty regarding the retention of Edith Rife Trust assets, such claim is a surcharge action with regard to the Trust and not an attack upon the Estate per se, thereby not requiring the joinder of charitable remainder beneficiaries. WHEREFORE, Petitioner respectfully requests this Honorable Court to issue an Order dismissing paragraphs 26. through 32 of the New Matter of the Executor. Respectfully Submitted, MARTSON LAW OFFICES By David A. Fitzsimons, Esquire Attorney I.D. No. 41722 10 East High Street Carlisle, PA 17013 (717) 243-3341 James D. Cameron Attorney I.D. No. 58998 1325 North Front Street Harrisburg, PA 17102 (717) 236-3755 Attorneys for Petitioner, John W. Maxwell CERTIFICATE OF SERVICE I, Tricia D. Eckenroad, an authorized agent for Martson Deardorff Williams Otto Gilroy & Faller, hereby certify that a copy of the foregoing Motions for Judgments on the Pleadings was served this date by depositing same in the Post Office at Carlisle, PA, first class mail, postage prepaid, addressed as follows: Craig A. Diehl, Esquire 3464 Trindle Road Camp Hill, PA 17011 (Attorney for Mr. Steven Maxwell, Ms. Sheri Maxwell, Mr. Douglas Maxwell and Mr. Barry Maxwell) Michael W. Foerster, Sr. Deputy Attorney General Office of Attorney General Charitable Trusts & Organzations Section 14th Floor, Strawberry Square Harrisburg, PA 17120 Wayne F. Shade, Esquire 53 West Pomfret Street Carlisle, PA 17013 (Attorney for Fred H. Junkins, Executor) Murrell R. Walters, Esquire. 54 East Main Street Mechanicsburg, PA 17055 (Attorney for Fred H. Junkins, Executor) MARTSON LAW OFFICES ly *DAe a d Ten East igh Street Carlisle, PA 17013 (717) 243-3341 Dated: January 16, 2013