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HomeMy WebLinkAbout05-16-13 (3) ROBERT M. MUMMA, II ,� 840 Marl��t Street, Suite 33333 � Q w � � LeMoyne, �A 17043 �, � �, �� �; 717-448-1127 r" � � �` " �� � �. r- � � ..,..i pro se ':� � c-� _ � .. w A\ �,: .... : In the Court of�o��rfon Pi�as of -�-� IN RE: : Cumberland Cc�unf�, Penn�lvartta �;;� Estate of Robert M. Mumma, Deceased : -�� �`' ���� � ;;-, � : No. 21-86-398� : Orphans' Court Division OBJECTIONS OF ROBERT M. MUMMA, II TO AUDITOR'S INTERIM REPORT OF APRIL 24,2013 Respondent Robert M. Mumma II ("Mumma II")hereby submits the following as his objections ("Objections")to the filing entitled"Auditor's Interim Report, Apri124, 2013 and Request for Order" (hereinafter, "April 24 Report"): BACKGROUND 1. Mumma II is one of four children of the decedent, Robert M. Mumma, Sr. ("Mumma I"), all residual beneficiaries of the Estate captioned above and Residuary Trust established under the May 19, 1982 Will of Mumma I ("Will"), as amended by Codicil dated October 12, 1984 ("Codicil"). 2. The other three children and beneficiaries are: Barbara M. Mumma ("Babs"), Linda M. Mumma("Linda") and Lisa M Morgan ("Lisa"). 3. Mumma I died on April 12, 1986, leaving and his Will and Codicil were accepted for probate by Decree of the Register of Wills dated June 6, 1986. 4. Lisa, along with the wife of Mumma I, Barbara McKimmie Mumma(now deceased), served as initial Co-Executrices of the Estate and Co-Trustees of the Martial Trust and Residuary Trust under the Will. 5. Barbara McKirnmie Mumma died on July 17, 2010, leaving Lisa as the sole Trustee of the Trusts. 6. In September, 2010,pursuant to Item FIFTEENTH of the Codicil ta the Will,Babs was appointed successor to Barbara McKimmie Mumma as Ca-Executrix of the Estate. The Estate Accounts,Objections and Appointment of Auditar 7. Interim and final accounts for the Estate, (callectively the"Estate Accounts")were filed by the fiduciaries. $. Mumma II and Babs filed objections ta the Estate Account. Murnma II's abjections are referred to collectively herein as the "Mumma II Objectians ta Accaunts." 9. The Mumma II Objections ta Accounts, as well as others,remain pending and undecided,and the Accounts are therefore uncanfirmed. 1 Q. The pendency of the Mumma II Objectians to Accounts is crztically relevant ta the instant Objections af Murr�ma II, set forth below,to the Liquidation Petition and Sale Petition as a common and fundamentally impartant theme o�the Qbjectians to Accounts is that a large portion af the assets claimed to be part of the Estate af Muxnrna I (and sometimes claimed by the Trusts as purpartec!successar to the Estate}, were not praperty af the Estate and/or had been unlawfully acquired by the Estate, in violation of the rights of Mumrna II and variaus carporate entities. 11. The assets at issue in the pending audits of the Estate Accounts{the "Dsiputed Assets"} inclucle assets that Mumma II cantends were property of the Estate of his grandfather, Walter M. IYlumma, left ta the Mumma children(Mumma II, Babs, Linda and Lisa)pursuant to Walter Mumma's Will and as decreed by the Order of the Dauphin County Orphans Court. 12. Mumma II's objections to the Mumma I Estate's claim to ownership of the Disputed Assets were made by way of objections to the Mumma I Estate Inventory pursuant to 20 Pa.C.S.A. §777, and were accompanied by a request for a jury trial on these basic issues of ownership. 13. The resolution of the Mumma II Objections to Accounts, including this issue of whether the Mumma I Estate's claim to these assets was invalid at the outset, by necessity and as a matter of law take precedence over any efforts by Lisa, as Trustee,to liquidate assets she can claim as Trustee. 14. Rather than being directed to complete the audit of the pending Accounts and address the fundamental and precedent issues of ownership raised by the Mumina II Objections to Accounts, the Auditor in this estate has been used repeatedly by Lisa to obtain interim relief concerning the use and disposition of not only the Disputed Assets, but(as described below) assets that are indisputably not property of the Estate or Trusts. 15. Mumma II believes that this use of the Auditor and this Court to use, control, convert and control assets that are, in some cases, indisputably not Estate or Trust property and, in others, Disputed Assets that the ownership of which has never been properly determined and confirmed after audit, is part of a pattern of fraudulent and manipulative conduct by Lisa and fortner Co-Executor Barbara McKimmie Mumma, and others working for and with them, to divert assets to and for their benefit and to the detriment of the other beneficiaries of the Estate and third parties. 16. That conduct has, for the two years since the death of Co-Executor Barbara McKimmie Mumma, now been compounded by the unnecessary delay in distribution of remaining the assets af the Estate and Trusts despite the clear,mandatory and unambiguous temrs of Items SEVENTH and EIGHTH of the Will that all assets be distributed upon her death, share and share alike, and "as then consititued." 17. The relief sought in the L`zquidation Petition and Sale Petitian is,by its very nature, intended ta liquidate and convert assets that were, as of the death of Barbara McKimrnie Mumma,real estate, active corporations, shares of stock and insurance policies, inta cash. Such relief cannot be reconciled with the obligation ta distribute the assets"as then constitated" and is accordingly in direct violatian of the Will af Mumma I, the obligatians of Lisa as fiduciary and the limited jurisdiction of the Auditor and tl�is Court. The Petitions at Issue 18. On Apri15, 2012, Lisa, as Trustee, filed a Petitian to Autharize Plan af Liquidatian(the "Liquidatian Petition"}, seeking authorization to, inter alza, sell various assets purpartedly owned by the Trusts or by entities in which the Trusts claim an interest,to convert them ta cash to fund on-going adrninistration of the Trusts and distrihute ta the parties in interest. 19. The assets that Lisa, as Trustee,proposes to liquidate, include the fallowing: a. Real estate claimed to be owned by the Trusts. b. Real Estate claimed ta be owned by Mumrna Realty Associates("MRA."}, an association of tenants in comrnon including Mumma II, Babs, Linda, Lisa and the Estate; c. Real Estate claimed to be owned by L7E Distribution Corporation, {"DE") a Pennsylvania corporation that, according to Lisa, is owned as follows: Estate of Barbara McK. Mumma 16.93056Q%; Mumma II 14,03015°to; Linda 13.948925%; Babs 13.948925%; and Lisa 13.948925°/a d. GAT Distribution Corporation("GAT"�, a Fennsylvania carparation, in that, according to Lisa, is owned as follows: The Marital Trust 80.1296%; Estate of Barbara McK. Mumma 17.95652%; Mumma II 4.47847%; Linda Q.47$47%; Babs 0.47847%; Lisa 0.47847% e. Insurance policies cla�med to be owned by DE; and f, Other unspecified assets af the Trusts and the foregoing entities. (See,e.g. Liquidation Petition at�(¶38-40} 20. On May 30, 2012,Lisa Morgan, as Trustee, filed a Petition to Autharize Sale of Real Estate {"Sale Petitian"), seeking authorizatian ta sell two parcels af real property pursuant to a proposed Agreement of Sale attached thereto, 21. The real property Lisa seeks authqrizatian to sell pursuant to the Sale Petitian consists of two parcels owned of recard by MRA and known as 1801 and 1803 UFS Drive, Harrisburg, PA(together,the"UPS Property"). 22. Mumma II and Babs filed objections to the Liquidation Petition and the Sale Petitian, Mumma II's objectians being referred ta herein as the"Mu�runa II Objections to Petitions". 23. This Court referred the Liquidation Petition and the Sale Petition, and objections thereto, to the Auditor. Premature Issuance of Orders by this Court 24. The Auditor gave notice of his intention to file his Apri124 Report on Apri126, 2013, by email. 25. Ten(10) days later, on Apri126, this Court entered the Orders as proposed by the Auditor, granting all the relief requested and depriving Mumma II and other partie in interest the opportunity to file objections within twenty (20) days as allowed by Local Oprhans Court Rule 7.1. 26. As a result, it is submitted those May 6 Orders must be vacated and the following objections to the Auditor's Apri124, 2013 Report ruled upon. OBJECTIONS TO APRIL 24 REPORT Objection 1: To Premature Issuance of Orders 27. This Court's May 6 Orders were entered in violation of Local Orphans' Court Rule 7.1 allowing 20 days for objections. Objection 2: To Authority of Order to Recommend Interim Relief Prior to Confirmation of Audit 28. The Auditor's "interim report and recommendation" of relief prior to or apart from confirmation of an account and proposed distribution exceeds the authority granted an auditor and violates applicable rules. 29. An auditor's report shall include a statement of the questions involved, findings of fact, conclusions of law, and, if the account is approved by the auditor, it shall also expressly confirm the account and shall specify, or indicate by reference to the statement of proposed distribution, the names of the persons to whom the balance availaBle for distrihution is awarded and the amount or share awarded to each of such persons. O.C,R. Rule $.3. 34. By comparison, a master's report shall state the number,times, dates and duratian of th�hearings before him,the number, extent and causes of any delays or continuances, and the hasis vf the court`s jurisdictivn, and shall include a statement and discussion of the questions involved, findings of fact and conclusions af law, and specific recommendations. O.C.R. Rule 8.�t 31. No account shall be confirmed, or statement of propased distribution approved, until an adjudication or a decree vf distribution is filed in cvnformity with Cocal rules by the caurt or by the cCerk vf the court, expressly confarming the accvunf ar approving the statement of proposed distributran and specifying vr indicating by reference to the statement of propvsed drstri6utian the names of the persvr�s tv whom the balance avuilable fvr distribution is awarded and the atnvunt vr share awarded tv each. 24 Pa. Cons. Stat. Ann. � 3514. 32. The idea of an auditor's recammendation being the basis of interim relief is cantrary ta the intentian of the foregoing rules and statutary autharity af an auditor. 33. It is noted that a master,who is referred specific issues for determination and recommended relief, is required tn sfate the basis of the cvurt's jurisdictivn. Implicit in this is the understanding that an auditars jurisdiction is as clear as it is limited. An auditor is to audit an account and either canfirm it and a propased distribution af estate property, or not. A master might go beyand that limited jurisdiction and recommend other relief—in which case the Rules mandate that the jurisdiction of the court to grant that relief be specifically examined and expressly addressed. 34. Here, the auditor exceeded his power by acting as a master, and(without even addressing the issue of jurisdiction)recommended relief patently beyond the jurisdiction of this Court(addressed below). Objection 3: The Relief Recommended by The Auditor is Contrary to the Unresolved Mumma II Objections to the Estate Accounts 35. The auditor erred as a matter of law in granting relief contrary to the MUmma II Objections to Accounts. 36. As noted above the Mumma II Objections to Accounts raise fundamental a precedent issues relating to ownership of assets that the Petition to Liquidate and Sale Petition now seek to liquidate. 37. Logic and common sense, as well as the legal requirements stated in the previous objection that an auditor not be used to address interim relief apart from confirmation of an account and distribution, require that the issues raised in the Mumma II Objections to Accounts be addressed first, before any liquidation of Disputed Assets is allowed. 38. Allowing the wholesale liquidation of assets by the Trustee before the Mumma II Objections to Accounts are resolved will render the relief sought in those Objections futile and deprive Mumma II of his right to a jury trial on those issues. 39. In further support of this Objection to the instant Petitions, Mumma II hereby incorporates by reference the Mumma II Objections to Accounts as if set forth in full herein. Objection 4: The Relief Recommended by the Auditor is not within the Subject Matter Jurisdictian of this Caurt. 40. The relief recornmended by Auditor includes authorizing Lisa, as Trustee, to sell and liquidate assets owned by persons and entities other than the Estate and, accordingly,beyond the jurisdictian of this Court. 41. "Before a court may determine a legal actian, it must passess both subject- matter jurisdiction and jurisdiction of the persan."Slez�n�er v. Bischakt 224 Pa. Super. 552, 307 A.2d 40S (19�3�. "When a court is without jurisdictian, its praceedings are a nullity, and its judgment is without effect on either the person or property.... A caurt withaut jurisdiction over the subject matter is without the power ta adjudicate the issue before it. Collier Township v. Robinsan Townshi,p, Appellant, 25 Pa. Cammw. 227, 364 A.2d 839 (1976�. 42. Lack of jurisdiction of the subject matter is fatal at any stage of the proceedings.°' {footnates omitted} 1 Standard Pennsylvania Practice 2d §2.53.Necessity of jurisdiction,pages 110 and 11 l. 43. The Pennsylvania Supreme Court said In Re Keyser's Estate, 329 Pa. 514, 198 A. 125, 127: The Orphans' Court"may assume jurisdictian to compel a third party to restore praperty to the estate of a decedent where it was, at one time, in the hands of the administrator or executor, ar in the passession of the decedent at the time of his death; and that `where money or praperty was not possessed by a decedent at the time of his death or subsec}uently by his representative, and where possession is in, and title is claimed by,another who is in na way connected with the administration of the estate,' that court has na jurisdiction to determine the fact of ownership or title as against the third party in possession of tl�e money or property under a claim of right. 44. In Re Crisswell's Estate, 33� Pa. 266, S A.2d 57�,the Court reiterated the rule laid down in Re Keyser's Estate, Supra; In re McGovern's Estate, 322 Pa. 379, 1$6 A. 89; and In re Cutler's Estate, 225 Pa. 167, '73 A. 111 l, and held that where there was a dispute as to the title of property which was not in decedent's possession at the time of his death,the executor must bring an action in equity in the Court of Comrnon Fleas against the party in possession. In re Fatterson's Estate, 341 Fa. 177, 19 A.2d 165. 45. The jurisdictian of the Orphans' Court is limited and is statutory in origin as set farth in 20 Pa.C.S.§§711 and 712. Pursuant to §711(17}The Orphans' Court has mandatory jurisdiction over"the adjudication of the title to persanal property in the possession af the persanal representative, or registered in the name of the decedent or his nominee, or alleged by the personal representative to have been in the possessian of the decedent at the time of his death." This paragraph was intended to obviate,whenever possible,a dispute as ta whether the orphans' court had jurisdictian to determine title to the disputed property. The Orphans' Court would therefare have jurisdiction to order a distribution af the stock af DE, GAT that was deterrnined ta be owned by the Estate or Trusts,ar af the Estate's or Trust's interest in MRA pursuant to 2Q Pa.C.S.§§71 l. 46. However there is na pravision in §711 ar §712 which pravides the 4rphans' Court with jurisdiction to distribute the praperty or income of these separate entities or persons, as this is property autside the grasp of the Orphans' Court and the court lacks subject matter jurisdictian to order any such distribution, Objection 5: GAT,DE and MRA were nat Made Parties to these Praceedings 47. GAT, DE, MR.A and tenants of MRA other than Estate have never been named or jained by issuance of citation ar rule to show cause in the praceedings before the Auditor on the instant Petitions. 48. The relief sought—the liquidation of assets of these persons and entities-- cannot be granted withaut praperly naming and joining them. Objection 6: Lisa, as Trustee,Lacks Standing to Seek the Relief in the Fetitions 49. As set farth in the Stipulation of Facts subrnitted ta the Auditor(and incorporated into his Report)the assets of MRA not owned by the beneficiaries of the Estate are owned by the Estate of Robert Mumma,not the Trusts. 50. Accordingly, Lisa, as Trustee, lacks standing to seek relief concerning the Estate's interest in MRA. S 1. To the extent that the Auditor purports to find otherwise—that the MR.A interests are owned by the Trusts—this finding is clearly erroneous as it is cantrary ta the explicit language of the 5tipulatian of Facts accepted by him. 52. In any event,to the extent any of the assets at issue in the Petitions were ar can now be claimed by the Trusts or the Estate,pursuant to the clear and unambiguous terms of Items SEVENTH and EIGHTH of the Will of Mutnma I, all beneficial and equitable interest in such assets vested in the faur Mumma children as beneficiaries two years ago,when their mother, Barbara McKimrnie Mumma died, and the interests and authority af the executors and Trustees ta control ar manage thase interests for any purpase other than distribution, expired. 53. Iterns SEVENTH and EIC7HTH of the Will af Mumma I expressly and unambiguously provide for the distribution of all rernaining principal of to the faur children,"as it is then constituted...share and share alike,per stirpes...." 54. Neither Item SEVENTH of the Will (Marital Trust}nor Item EIGHTH (Residuary Trust)provides far any discretion or delay in the distribution af such praperty. 55. The Auditors reference ta ather provisions of the Will providing the Trustees with discretion is an erroneaus interpretation of the Will. These are general and subordinate provisions concerning fiduciary powers and responsibilities and cannat take precedence over the express, specific and mandatary provisions of Items SEVENTH and EIGHTH. 56, The Auditar in his findings t�the extent he suggested othercvise, as there is na evidence of an intention of Mumma I, in the Will or otherwise, to grant his Trustees' authority to continue the Trust after the date af$aarbara McKimmie Mumma's death and such intentian is cantrary ta the terms of the Wi11. Objection 1: The Relief Sought in the Petiiton Violates the Express Terms of Items SEVENTH and EIGHTH af the Will 57. Items SEVENTH and EIGHTH of the Will fizrther mandate that the assets af the Estate and Trusts be distributed to the beneficiaries upon the death of Barbara McKirnmie Mumrna, "as it is then constituted..." 58. If Lisa, as Trustee, has any authority tt�continue the Trust after the death of Barbaza McKimmie Mumma,that authority is now strictly limited to effectuating the distribution of the assets"as...then constitit�zed..." 59. The Liquidation Petitian and Sale Petition are plainly contrary to this mandate in that they seek explicitly ta canvert the assets frorn real estate and stack interests inta cash. b0. The Auditor erred as a matter af law in authorizing relief that changes the constitution ofthe assets in violation af these provisions. 61. Lisa, as Trustee, is a naked fiduciary whose interests and autharity are equitably subordinate ta the superior,beneficiai interests of the four beneficiaries. 62. The relief recommended by the auditar vialates the superior equitable and beneficial rights and interests of the beneficiaries in the assets held nominally by the Estate and Trusts. Objection 8: The Relief Sought in the Petitians Violates the Express Terrns of the MRA Agreernents 63. The relief recamrnended re the assets of MRA is in violation of the express provisions of the applicable MR.A Agreements: 64. Paragraph 3 (d) of the MRA agreements is key as it provides that i4Upan the death of an Owner, the other Owners shall have the right to purchase the entire interest of the deceased Owner in the Premises for fair market value(as defined below) within six rnanths of the death of such deceased Owner. It is a bit strange that there is na provision for what is to happen if no Owner elects to purchase the interest af the deceased Owner given the great lengths taken in 3(b)to keep the property in the farnily and to make sure all Owners agreed on a sale or transfer in order for it to take effect. 65. b6. Paragraph 3 (a} states"Na Clwner shall seek to have the Premises partitioned. 67. 68. No Owner can sell transfer or even gift their interest without first providing the ather CJwners with the first right to purchase the portion of the interest of such Owner in the Premises sought to be canveyed. t9. 70. Even more restrictive and representative of the intent of this agreement is the language that provides that the Owner seeking to transfer his interest("Offeror") shall provide the other Owners ("Offerees"}with natice and they shall have 60 days within which to accept or reject the same by notice in writing to the offerar; and failure to give notice of acceptance or rejection shall be deemed a rejection of the offer reflected by the Transfer Notice. So without approval of the other Owners na Owner can transfer their interest in the property. 71. 72. Paragraph 6 is the arbitration clause and it pravides , "If there is any dispute with respect to the Premises or any other znatter concerning the Premises or the proper relationships and obligations among the Owners as ca-tenants or parties to this Agreement, such dispute at the option of any Owner shall be conclusively resolved by arbitration befare a single arbitration in I7auphin County,Pennsylvania in accordance with the rules of the American Arbitration Association. The decision resulting from the arbitration shall be binding on all the Owners with no rights af appeal to a court or any other tribunal,and any (Jwner may enforce the decision of the arbitratar in a court af competent jurisdiction." its the interests af the Estate and Trust are naminal only and only for the purpose of distributian under the Will, and all be, 73. The findings of the auditar that go beyond the Stipulation af Facts are unsupported by any campetent evidence af record. Even if the auditor can, contrary ta the abave rules,be relied upon to recommend and grant interim, piecerneal relief, he cannot do so by so generally and reckiessly citing evidence in prior, unspecified hearings and proceedings. This violates O.C.R. 8.5: ("The transcript af testimany taken befare an auditor or master shall be filed with his report."} and the requirement of reasonable explanation of the support far findings implicit in Rule 8. 74. The relief recommended is arbitrary and unsupported by evidence ar goad cause. The auditor cites anly one reasan for the relief(the need to fund administration expenses} but elsewhere acknawledges that need na longer exists (the expenses were met by the DE policy proceeds}. There is no accounting or evidence concerning the dispasition of the proceeds of those policies paid to the Trust and no accounting of current expenses. Respectfully Submitted, �"�-' ��+C'���-- obert . Mumrna,II,pr0 Se �ERIFICATICMN I, Rabert M. Mumma, II, verify that that the staternents made in the forgoing Petition to Extend Time far Discovery are true and correct to the best of my knowledge, infarmation and belief. I understand that false statements herein are made subject to the penalties af 1$ Pa. Cons. Stat. Ann. Sec. 4904, relating to unsworn falsificatian to authorities. Date: ll�, ,�L��.�j .� � obert M. Mum.ma, II CERTIFICATE OF SERVICE I, Rabert M. Mumma, II,hereby certify that a capy of the foregoing Petitian to Extend Time for Discovery was served on this date, to the following, as indicated below: Jeffrey G. Braoks, Esquire Richard F. Rinalda, Esquire Minto Law Group,LLC Williams Coulson Johnson Llayd Two Gateway Center Parker& Tedesco,LLC 6(�3 Stanwix Street, Suite 2025 One Gateway Center, 16th Floor Pittsburgh, PA 15222 Pittsburgh,PA 15222 jbrooks(aimintolaw coni rrinaldo(a�wi_l.liamscc�ulsc�n.cc�m Ms. Linda M. Mumma P.O. Box 30436 Joseph D. Buckley, Esquire Bethesda, IViaryland 2pg24 1237 Holly Pike Carlisle PA 17p l 3 Lznann333(a�gmail.�t�n� � Ivo V. 4tto, III, Esquire Martson Law Offices Bra�Y Green, Esquire 10 East High Street Morgan Lewis & Backius Carlisle, PA 17013 17 N. Secand Street, 14th Floor lotto rz7martsc�iliaw.coni Harrisburg, PA 17101 ._ _ _.. b�,r�en�u3morganlewis.cc�n� t ROBERT M. MUMMA, II DATE: ��'