Loading...
HomeMy WebLinkAbout02-07-14 IN RE: FIRST AND FINAL ACCOUNT ) IN THE COURT OF COMMON PLEAS OF MANUFACTURERS AND TRADERS ) OF CUMBERLAND COUNTY, TRUST COMPANY, SUCCESSOR TO } PENNSYLVANIA KEYSTONE FINANCIAL BANK, NA, ) SUCCESSOR TO FINANCIAL TRUST ) NO. 21-2013-0563 SERVICES COMPANY, SUCCESSOR } TO FARMERS TRUST COMPANY, ) ORPHANS' COURT AGENT FOR THE ATTORNEY IN FACT ) UNDER POWER OF ATTORNEY } ; DATED 5/3/1997 F/B/O ALFRED McCREA CHAPMAN o — rn ::0 t c-J . an - rn can rlt = <-} Q W -V AUDITOR'S REPORT r.,° ?, r- -4 r- ;—._ M PROCEDURAL HISTORY - " -n " On May 16, 2013, Manufacturers' and Traders Trust Company("IvM&T-r")filed'&Fitt and c v> o Final Account and Petition for Adjudication/Statement of Proposed Distribution as Agent for Alfred McCrea Chapman. On May 3, 1977,Alfred McCrea Chapman executed a durable Power of Attorney appointing Farmers Trust Company as his Agent, a true and correct copy of which is attached hereto and marked as Exhibit A. M&T, as the successor to Keystone Financial Bank, NA, successor to Financial Trust Services Company, successor to Farmers Trust Company, succeeded as the Agent for Alfred McCrea Chapman under the Power of Attorney. The Accounting filed was for the period from February 18, 1976 to April 30, 2013. Exceptions to the Accounting were filed by Henry L. Chapman, both in his capacity as guardian of Alfred McCrea Chapman and Henry L. Chapman individually. The Exceptions raised both substantive claims as to the details of the Accounting but also raised improper jurisdiction and venue. On June 18, 2013, the Court entered an Order deferring appointing of an Auditor for a period of two weeks to afford the parties an opportunity to discuss alternative resolutions or 1 request the Court to take other action. By Order of July 3, 2013, Michael L. Bangs was appointed Auditor. A pre-hearing conference was held on October 10, 2013. Pursuant to the pre-hearing conference, the parties agreed that the Auditor would first make a recommendation as to the Exceptions that raised an issue as to the subject matter jurisdiction,personal jurisdiction and proper venue of the Court of Common Pleas of Cumberland County over the matter, The parties were instructed pursuant to the pre-hearing conference to provide the Auditor with legal briefs on the issues raised by December 2, 2013. Subsequently,the Auditor was notified by counsel that they had entered into a Stipulation that the Orphans' Court Division of the Court of Common Pleas has jurisdiction to hear the case leaving the issue as to the proper venue of the case as the only matter in dispute. The parties filed legal briefs with the Auditor on December 2,2013. Henry L. Chapman suggests that the proper venue for the Exceptions is in the Court of Common Pleas of Philadelphia County, Orphans' Court Division, as a result of a Final Decree dated 24 September 2009 wherein Alfred McCrea Chapman was adjudicated a totally incapacitated person and Henry L. Chapman was appointed his plenary guardian. Attached hereto and marked as Exhibit B is a true and correct copy of the Final Decree. M&T claims proper venue is in the Court of Common Pleas of Cumberland County. FINDINGS OF FACTS 1. On May 13, 1977, Alfred McCrea Chapman executed a durable Power of Attorney appointing Farmers Trust Company as his Agent, a copy of which is attached hereto and marked as Exhibit A. 2 2. Farmers Trust Company had a number of successors and ultimately it was succeeded by M&T, a New York corporation, with local offices in Carlisle, Cumberland County, Pennsylvania. 3. Farmers Trust Company and its successors, including M&T, served as Alfred McCrea Chapman's Agent under the Power of Attorney until September 24, 2009. 4. On September 24, 2009, the Honorable Anne Lazarus, of the Court of Common Pleas of Philadelphia County, issued a Final Decree adjudicating Alfred McCrea Chapman incapacitated and appointed Henry L. Chapman, his son, as plenary guardian of the person and the estate of his father,Alfred McCrea Chapman. (Previously identified as Exhibit B attached hereto). 5. Judge Lazarus made a specific finding that Alfred McCrea Chapman was domiciled in Philadelphia, Pennsylvania. 6. On the same date, September 24, 2009, Judge Lazarus also entered a Decree requiring that M&T and John McCrea, III, Co-Trustees,file an accounting of the Charitable Remainder Uni-Trust established under the will of Alfred McCrea Chapman's mother, Sarah Jones, within forty-five (45) days in the Court of Common Pleas of Philadelphia County. Attached hereto and marked as Exhibit C is a true and correct copy of the Decree. 7. Alfred McCrea Chapman has resided in Philadelphia since at least the creation of the Power of Attorney on May 13, 1977. 8. Alfred McCrea Chapman's mother established a Charitable Remainder Uni-Trust ("CRUT") in Cumberland County which has remained the situs of the trust ever since. 9. The Power of Attorney account was comprised of distributions from Sarah Jones, Alfred McCrea Chapman's mother, while she was alive and from her estate after her death. This 3 included distributions from the Trust to the Power of Attorney account all of which essentially paid for Alfred McCrea Chapman's care. 10. The majority if not all of the assets which have funded the account during its thirty- six (36) year existence originated in Cumberland County and were managed in Cumberland County. DISCUSSION The Pennsylvania Probate Estates and Fiduciaries Code ("PEF Code"), provides explicit instruction as to the appropriate venue in matters involving the issues raised and are subject to the disposition of this matter. Section 721 is entitled"Venue of decedents', minors' and incapacitated persons' Estates" while Section 722 is entitled "Venue of trust estates." The question is which Section applies to the facts in this case. Henry L. Chapman argues that Section 721 is controlling while M&T argues that Section 722 is controlling. The Auditor agrees with Henry L. Chapman that Section 721 controls the disposition of this matter and that venue is proper in Philadelphia County and as such the matters raised in this dispute should be transferred to Philadelphia County, Section 721 initially says, in pertinent part: When a Pennsylvania court has jurisdiction of a decedent's, a minor's, or an incapacitated person's estate, except as otherwise provided by law, venue for all purposes shall (emphasis added)be as follows: (1) Decedent's estate — ... (2) Minors' and incapacitated persons' estates. —In the case of a guardian of a minor or incapacitated person appointed by the court, in the county whose court appointed the guardian [emphasis added]. In the case of a guardian of a 4 minor or incapacitated person not appointed by the court, or when there is a minor's or incapacitated person's estate but no guardian, in the county whose court at the time proceedings are first initiated would have jurisdiction to appoint a guardian of the estate. 20 Pa. C.S.A. Section 721, Judge Lazarus, in her Final Decree dated September 24, 2009, specifically ordered and decreed that Alfred McCrea Chapman was adjudged totally incapacitated requiring a plenary guardian of his person and estate for the foreseeable future. She then appointed Henry L. Chapman, his son, as the plenary guardian of the person and the estate of Alfred McCrea Chapman. As such, all matters involving the incapacitated person, Alfred McCrea Chapman, or his estate, are under the jurisdiction of the Orphans' Court in Philadelphia County per that Order. Concurrently, Judge Lazarus, on the same date,entered an Order requiring M&T to provide an accounting for the CRUT of which M&T was a Co-Trustee. While that is not the subject of this current dispute, it is certainly is another indication that the Court of Common Pleas of Philadelphia County assumed jurisdiction over all matters involving the incapacitated person, Alfred McCrea Chapman. M&T's reasoning is that since the matters raised in the Exceptions to the Accounting implicate the operation of the trust, then those matters are under the exclusive jurisdiction and venue of the Court of Common Pleas of Cumberland County under Section 722 of the PEF Code. M&T's argument in this regard is misplaced. M&T cannot ignore the mandates of Section 721. Section 721 specifically provides that venue is proper and shall be placed in the Court of Common Pleas where the court appointed the guardian of the incapacitated person and his estate. This is in Philadelphia County. While the 5 trust arguably is located in Cumberland County and the Power of Attorney account apparently has been handled exclusively in Cumberland County, that cannot cause us to ignore that the Court of Common Pleas of Philadelphia County entered a specific Decree on September 24, 2009 assuming control over the incapacitated person and his estate. Clearly it is in the best interest of this matter that one court determine all issues in dispute between the parties as it relates to Alfred McCrea Chapman. The Court of Common Pleas of Philadelphia County by virtue of its Order of September 24, 2009 assumed control over all matters involving Alfred McCrea Chapman and his estate. By Order of the same date, it assumed control of the accounting by M&T of the CRUT. Not only does the PEF Code then require that the proper venue for the resolution of all matters occur in Philadelphia County, it makes sense for that to occur. CONCLUSIONS OF LAW 1. Alfred McCrea Chapman is domiciled in Philadelphia County. 2. The Court of Common Pleas of Philadelphia County assumed jurisdiction of all matters involving Alfred McCrea Chapman as a result of its Order of September 24, 2009 appointing Henry L. Chapman, his son, as plenary guardian of the person and the estate of his father, Alfred McCrea Chapman. 3. Pursuant to the Probate Estates and Fiduciaries Code, 20 Pa. C.S.A. Section 721, the proper venue for all matters involving Alfred McCrea Chapman, including but not limited to the matters raised in the First and Final Account and Petition for Adjudication filed by M&T, properly lies in Philadelphia County. It also should be noted that the incapacitated person,Alfred McCrea Chapman,who is the subject of this dispute, has been domiciled and resided in Philadelphia County in excess of thirty years. 6 RECOMMENDATION The Auditor recommends that the proper venue is in the Court of Common Pleas of Philadelphia County and that the Court enter an Order transferring the matter to the Court of Common Pleas of Philadelphia County docketed to O.C. No. 1061 of 2009, Control No. 091893. Respectfully submitted, BANGS LAW OFFICE, LLC L MIC AEL L. BANGS 429 South 18th Street Camp Hill, PA 17011 (717) 730-7310 Supreme Court ID #41263 7 CERTIFICATE OF SERVICE I HEREBY CERTIFY that I have this day served the foregoing Auditor's Report by depositing a copy of the same in the United States mail, postage prepaid, at Camp Hill, Pennsylvania, addressed to the following: Rosemary R. Ferrino, Esquire 1501 Lower State Road, Suite 205 North Wales, PA 19454-1216 Seth T. Mosebey, Esquire Martson Deardorff Williams Otto Gilroy & Faller 10 East High Street Carlisle,PA 17013 DATE: — /7 WENDY K. 8 UB Paralegal 8 k.•' POWER OF ATTORNEY KNOW ALL MEN BY TFIESE-PRESENTS, That' i, ALFRED McCREA CHAPMAN, have made, constituted and appointed, and by 'these, presents du make, constitute and appoint FARMERS TRUST COIFPA?Tf, of the Borough of Carlisle, Cumberland County, Penrsylvania, ,my true and lawful .attorney, for me and in my name and on my Behalf: 1. To ask, demand, recover and rr,ceive all and any sums of money, debts and rents due or payable, coming or belonging, or which may at any time be due and payable and belonging to me, from any person, firm, corporation or legal. entity whatsoever, including the Commonwealth of Pennsylvania, the United States of America, the Social Security Administration and any.other agency of the State of Pennsylvania or of the United States.of America; 2. To enter any safe deposit box of,which I am renter in my own right or jointly with others; - - 3. To deposit funds in and withdraw funds from any account that I-may have in any bank, trust 'company, tual savings bank vr savings and ioen associatiori,"includi " so unts I may hold 5ointly with other persons; or to de fund n and withdraw ,funds from any account in any fin el atitution which.my..said attorney may create for that p 4.- TO endorse notes, c cks, d Sts and bills of exchange, which may require my an me deposit, ,for cashing or for collection; 5. To sell, transf assign any personal property, stock, bond or other security or evidence of debt which I am now possessed or in which I may have or hereafter acquire an interest ^.d to 9X0.L`.i'.e ery anj .:'.''l ins tr, r,ta, nogessary tu. make such - . sale, transfer or assignment; 6. To mortgage, sell, transfer, and convey any and all real estate which I may now own or in which I may have any interest and may hereafter acquire or have any interest wheresoever situate, ..—....and to execute and acknowledge on my behalf any such mortgage, deed, release or assignment whatsoever to exercise the authority herein given; 7. To.borrow money for my account and upon the security of my estate and to pledge and hypothecate as security for such loan or loans any or all of my property and estate, and to execute, acknowledge and deliver to the lender or lenders such notes, bonds,. and assignments as my said attorney may deem necessary or _advisable for such.purposes; 8. To invest any funds received by said attorney as may be deemed proper for such investment, in the exercise of prudent. - judgment, in said attorney's absolute and .sole discretion; 9. In the absolute discretion of said- attorney, to apply any principal and income to the payment of the cost of my maintenance .. and care, in any hospital, nursing home, public or private institution, or at my residence, and to the. paymertof any medical, surgical, dental, or nurs.ing. care which-may or is required 10. This Power of Attorney shall t acted by. my disability or incapacity, physical me . al,. but.the authority hereby conferred shall be.exerc aid attorney notwithstanding. _ my disability or incapacity. - 11. I grant to my a a e power and authority to make and substitute in and ncerni the premises an attorney: or _ attorneys under it and as .to. revoke. - 12. I give and grant unto my said attorney, or any substitute or substitutes, full power and authority to do. and perform all and every act and thing whatsoever requisite and necessary to be done in and'about the premises, as fully to all intents and purposes as I - might or could do if personally present; :hereby ratifying and confirming all that the said attorney, or any substitute or. - substitutes, shall lawfully door cause to be done therein by "virtue of these presents. IN WITEESS WN.EREOF, I have hereunto sat my hand and seal this .� / day of (SEAL) . Al pd McCrea Chapman COMMONWEALTH OF PENNSYLVANIA) - - COUNTY OF On this, the day of r..{, ���,G , before me, the undersigned officer, persona 1 ; appeared ALFRED MCCREA CHAPMAN,. . known tome (or satisfactorily proven) to be the person whose name' is subscribed to the within Power of Attorney, and acknowledge that he executed the same.for the.purposes .therein contained. .. . - .. . IN WITNESS WF.EREOF, I hereunto set my hand and j1 ficial seal. � I_ (SEAL) lPM[5 PRICE hh Co.Nalatl.Public PNlbt,.clPbie,Pmwelp . MY'n'a�laian Nnim,ReCunl ai l9.1911 IN THE COURT OF COMMON PLEAS OF PHILADELPHIA COUNTY ORPHANS, COURT DIVISION O.C. No.1061 of 2009 Control No.091893 Estate of ALFRED MCCREA CHAPMAN, an Alleged Incapacitated Person FINAL DECREE AND NOW,this ,2q 0 day of SEPTEMBER,2009, upon consideration of the annexed petition and after hearing held following due notice,this Court finds by clear and convincing evidence that: 1. Alfred McCrea Champman- is 73 years of age and is domiciled in Philadeiphia,Pennsylvania. 2. He suffers from Paranoid Schizophrenia and hernia which Impairs his capacity to receive and evaluate information effectively and to make decisions regarding management of his financial affairs. 3. He is so severely mentally impaired that he is unable to make, communicate or participate in any decision relating to his estate or person. 4. His physical and mental health is such that his presence at the hearing would be possibly harmful to his health and as a result he was not present and was not represented. Accordingly, it Is hereby ORDERED and DECREED that Alfred McCrea Champman Is adjudged totally incapacitated and he requires a plenary guardian of his person and estate for the foreseeable future. Henry L.Chapman is appointed plenary guardian of the person and the estate of Alfred McCrea Chapman, an incapacitated person. Bond is waived. The Guardian shall file an inventory and report in compliance with 20 Pa.C.S.§5521(c) within ninety(90) days of this Decree and annually thereafter. The Court, upon the filing of the inventory, may order security to be posted by the Guardian. The said guardian shall not enter into any settlement of any claim or cause of action without prior approval of this Court. In the event of a settlement of any claim or cause of action, this Court reserves the right to remove the guardian and appoint a corporate guardian. If the incapacitated person has a safe deposit box,an official Examiner of this Court shall attend the opening of the safe deposit box. The Certificate of the Official Examiner of his examination of the assets of the safe deposit box shall be submitted to this Court and,when approved by the hearing judge,shall be filed with the record in this case. The amount and manner of the compensation for the services of the Official Examiner shall be determined by the hearing judge. Within sixty(60) days after the death of the incapacitated person or an adjudication of capacity, the guardian shall file a Final Report with the Court pursuant to 20 Pa.C.S.A. §5521(c)(2). The Guardian of the Person shall have the authority and responsibility to decide where Alfred McCrea Chapman shall live and how meals, personal care, transportation and recreation will be provided. The Guardian of the Person shall also have authority to authorize and consent to medical treatment and surgical procedures necessary for the well being of the incapacitated person. The Guardian of the Estate shall have the authority and responsibility to manage and use Alfred McCrea Chapman's property primarily for his benefit and -- secondarily for the benefit of his legal dependents in accordance with 20 Pa.C.S.A. Section 5536(a),which authorizes the Guardian of the Estate to spend income for the aforesaid purposes without the court's written approval. The Guardian of the Estate may not spend principal assets for the care and maintenance of Alfred McCrea Chapman without Court approval. The Guardian shall establish an appropriate burial reserve, If one does not exist. Accordingly,counsel far Petitioner shall cause to be served upon and read to Alfred McCrea Chapman a copy of this Decree and the Statement of Rights attached hereto as Exhibit"A", and file proof of same with the Court within ten(10) days from the date hereof. Alfred McCrea Chapman has twenty (20) days from the date of this decree to file exceptions. Failure to file exceptions within that time will result in this decree becoming final. Alfred McCrea Chapman has been advised of his right to appeal and to petition to modify or terminate the guardianship by copy of this decree and by the Statement of Rights attached hereto. Lazarus, J. Rosemary Ferrino, Esquire COPIES SENT PURSUANTTO Pa.R.C.P.236(b) SEP24209 FIRSTJUOICI STRI OFr.. USER I.D.: IN THE COURT OF COMMON PLEAS OF PHILADELPHIA ORPHANS' COURT DIVISION O. C No. 1061 IC of 2009 Estate of ALFRED MCCREA CHAPMAN, An Incapacitated Person DECREE AND NOW, this oZ (� day of SEPTEMBER, 2009, after a hearing on the Petition for Adjudication of Incapacity, it appearing that the Trustees of the two Charitable Remainder Trusts under which the Incapacitated Person is a lifetime beneficiary have not filed an accounting since the inception of the trusts,it is hereby ORDERED and DECREED that Manufacturers&Traders Trust Co and John McCrea, III,Co-Trustees,shall file an account of the Charitable Remainder Trusts established under the will of the Incapacitated Person's mother in the Cumberland County Orphans' Court within forty-five (45) days of service of this order upon them by counsel for petitioner. Lazarus J. Rosemary R. Ferrino, Esquire COPIES SENT PURSUANT TO P&R.C.P.236(b) SEP 2 4 2009 FIRSTJUOICIAL TOF A USER I.D.