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HomeMy WebLinkAbout04-09-14 n1 b WILLIAMS COULSON, LLC W ;:a ZZ r Richard F. Rinaldo (I.D. No. 33222) n �' v 16'' Floor, One Gateway Center n co M o 420 Fort Duquesne Blvd. c7 C; 7< o C) n Pittsburgh, PA 15222 0 n _n 412-454-0259 (rrinaldo @williamscoulson.com) o m Attorneys for Defendant Barbara M. Mumma N °' IN RE: : IN THE COURT OF COMMON : PLEAS OF CUMBERLAND Estate of Robert M. Mumma, Deceased : COUNTY, PENNSYLVANIA No. 21-86-398 Orphans' Court Division RESPONSE OF BARBARA M. MUMMA IN OPPOSITION TO MOTION OF LISA M. MORGAN FOR AN ORDER CLARIFYING HER RIGHT TO VOTE SHARES OF BOBALI CORPORATION STOCK CURRENTLY HELD BY THE RESIDUARY TRUST CREATED UNDER THE WILL OF ROBERT M. MUMMA, SR. Barbara M. Mumma, by her attorneys, Williams Coulson, LLC, pursuant to the Order of Court dated March 19, 2014, hereby submits the following Response in Opposition to the Motion of Lisa M. Morgan For An Order Clarifying Her Right To Vote Shares Of Bobali Corporation Stock Currently Held By The Residuary Trust Created Under The Will Of Robert M. Mumma, Sr. (the "Morgan Motion"). Barbara Mumma respectfully requests that the Morgan Motion be denied, and states as follows: 1. The Morgan Motion addresses the identical issues which Barbara Mumma has raised before this Court in her Petition For Partial Immediate In-Kind V`� Distribution from Residuary Trust or, in the Alternative, to Declare and Determine Voting Rights in Certain Shares of Stock of Bobali Corporation Currently Held in the Residuary Trust Created Pursuant to the Last Will and Testament of Robert M. Mumma, Deceased (the `Bobali Stock Petition"), which verified petition was filed with this Court and served March 10, 2014. 2. The Bobali Stock Petition sets forth in detail the reasons why this Court should deny the Morgan Motion and grant the Bobali Stock Petition, either ordering an immediate partial in-kind distribution of the shares of stock in Bobali Corporation currently held in the Residuary Trust or, in the alternative, directing that, given the terms of the Will and the circumstances of this matter, the four Mumma siblings (Barbara M. Mumma, Linda M. Mumma, Lisa M. Morgan and Robert M. Mumma II) have the right to vote or to direct the votes of the Bobali Corporation shares currently held in the Residuary Trust. 3. By Order of this Court dated March 18, 2014, this Court entered a Rule to Show Cause why the Bobali Stock Petition filed by Barbara Mumma should not be granted. Counsel for Barbara Mumma has not yet received any response from Ms. Morgan to the Rule to Show Cause. The Bobali Stock Petition remains pending at this time. -2- 4. Rather than repeat the averments set forth therein, Barbara Mumma hereby incorporates herein by reference in its entirety the Bobali Stock Petition as the substantial portion of her response in opposition to the Morgan Motion. 5. Paragraphs 1 through 14 of the Morgan Motion simply state the background and the events which led up to orders entered by Judge Bratton in the Court of Common Pleas of Dauphin County and, in accordance with those orders, to the filing in this Court of the Bobali Stock Petition by Barbara Mumma and the Morgan Motion. 6. As to paragraph 15 of the Morgan Motion, Barbara Mumma responds that, prior to the issuance of the final Auditor's Report by former auditor Buckley, Barbara Mumma at no time presented a motion or asked this Court for an immediate distribution of the assets of the Residuary Trust. Barbara Mumma first made such argument to this Court in the context of her Objections to the Auditor's report, which has not yet been decided by this Court. See, e.g., Brief in Support of Objections of Barbara M. Mumma to the Report of Auditor Docketed August 7, 2013, at pp. 5-9. This issue is further addressed in the Bobali Stock Petition, which has been incorporated herein, at ¶¶ 9-14. As to footnote 3 of the Morgan Motion regarding the filing by Robert Mumma II of an action in Dauphin County in 2011, the decision by Judge Bratton in that matter (as to which Barbara Mumma was not a party, as conceded by the Morgan Motion) was that the action be -3- dismissed on preliminary objections because this Court, and not the Court of Common Pleas of Dauphin County, should decide questions of will interpretation in an estate matter pending in the Orphans' Court of this county. Accordingly, that decision is irrelevant to the issues before this Court. 7. As to paragraph 16 of the Morgan Motion, Barbara Mumma, as set forth in the Bobali Stock Petition, respectfully states that Ms. Morgan is required, under the terms of the Will, to distribute 1/4 of the Bobali stock to each of the four Mumma siblings, who are the beneficiaries of the Residuary Trust. Any other action by Ms. Morgan would violate the express and specific terms of the Will. 8. As to paragraph 17 of the Morgan Motion, Barbara Mumma responds that, pursuant to the Bobali Stock Petition, this is the first time that Barbara Mumma has requested a distribution of assets from the Residuary Trust. Although Barbara Mumma is aware that Robert Mumma II has sought to have Ms. Morgan removed as trustee previously, Barbara Mumma is unaware of any prior effort by Robert Mumma II to require the distribution of Bobali Corporation stock. 9. The Morgan Motion in paragraph 18 references an opinion of the Superior Court in In re Estate of Robert M. Mumma, 41 A.3d 41, 2012 Pa. Super. 41 (February 22, 2012) and quotes a portion of the opinion in alleged support of 1 The Morgan Motion at footnote 4 cites to the slip opinion of the Superior Court. The opinion is a published opinion found at 41 A.3d 41 (Pa. Super. 2012), the references cited herein. -4- the Morgan Motion. The Superior Court opinion is not material here for several reasons: First, Barbara Mumma was not a party to that appeal. See id. at *43. Second, the single sentence from the opinion quoted in paragraph 18 of the Motion Motion is the third sentence of a paragraph of the opinion. See id. at *49. A review of the Opinion itself clearly demonstrates why the single sentence quoted in the Morgan Motion was merely dicta and is not dispositive here. According to the Superior Court: "While listed as six distinct issues, Mumma II essentially presents a single issue for our consideration, namely whether Morgan's dual roles in connection with the estates of Mumma, Sr. and Mrs. Mumma [Ms. Morgan is the executrix of her mother's estate, pending in Florida] constitute a conflict of interest requiring her disqualification and removal." Id. at *49.Z Thus, the comment by Judge Donahue with respect to the possible interpretation of Item Ninth (10) "to receive or make distribution of any trust herein created" somehow should take precedence over the very specific direction of Items Seventh and Eighth of the Will, is clearly not binding on this Court. As set forth in the Bobali 2 Moreover, it is telling that the Superior Court apparently also relied on Ms. Morgan's testimony before this Court in early 2011, more than three years ago, that Ms. Morgan was collecting information and "intends to make an equitable distribution of the assets after collecting this information." Id. at *49. It is now April 2014, and there has been no such distribution. -5- Stock Petition, Items Seventh and Eighth both require the distribution of the principal of the Trust "as it is then constituted" upon the death of Barbara McK. Mumma, which occurred on July 17, 2010, "share and share alike, per stirpes and not per capita." See, e.g., Bobali Stock Petition, at 4, Exhibit A (the Will) at Items Seventh & Eighth. It is axiomatic that the specific expressions of intent set forth in the Will in these paragraphs should take precedence over the general grant of discretion to the trustee. In short, the holding of the Superior Court in the 2012 Opinion was only that Robert Mumma 11 had failed to present clear and convincing evidence of an intractable conflict of interest that required Ms. Morgan's removal as trustee. Nothing more. See, e.g., 41 A.3d at *51-52 ("we will not disturb the trial court's decision to deny Mumma II's Motion for Disqualification."). 10. As to paragraph 19 of the Morgan Motion, this Court's Rule 1925 Opinion with respect to the pending appeal to the Superior Court by Barbara Mumma with respect to certain objections that were filed to one of the former Auditor's interim reports has no application here. The straightforward issue presented by the Bobali Stock Petition filed by Barbara Mumma and by the Morgan Motion relates specifically to the immediate distribution of the Bobali shares currently held in the Residuary Trust to the four beneficiaries of the trust — the four Mumma siblings — or, in the alternative for a determination as to who has -6- the right to vote those shares at a Bobali Corporation shareholders' meeting. As set forth in the Bobali Stock Petition, there is no risk to Ms. Morgan from distributing the shares, for several reasons. First, the total value of those shares as set forth in the most recent accounting filed by Ms. Morgan, is only $32,971.64. See Bobali Stock Petition, at ¶ 10. Second, Robert M. Mumma II has agreed with Barbara Mumma and has stated that he does not object to an immediate in-kind distribution of the Bobali Corporation shares. See Bobali Stock Petition, at ¶ 30. There is no obstacle to either the distribution of the Bobali stock or to a determination that the four siblings have the right to vote or to direct the vote of the shares. 11. As to paragraph 20 of the Morgan Motion, it is true that there are unresolved objections to the accounts. The pendency of the objections, as set forth above and in the Bobali Stock Petition, is completely irrelevant to the issue raised by the Bobali Stock Petition or by the Morgan Motion. 12. As to paragraph 21 of the Morgan Motion, Barbara Mumma cannot determine what steps Ms. Morgan is taking, if any, "to permit the ultimate distribution of assets from the Residuary Trust." As set forth in the Bobali Stock Petition, although Barbara Mumma, following the death of her mother on July 17, 2010, was properly appointed as a co-executrix of this estate pursuant to the First Codicil to the Will, for the past nearly four years Ms. Morgan has completely ignored Barbara Mumma's requests for information and has completely ignored -7- her appointment as co-executrix, proving no information or communication at all, and has taken the position that the estate is closed and that Ms. Morgan has no duty to cooperate with Barbara Mumma. See, e.g., Bobali Stock Petition at ¶T 6-7. However, as set forth above, Ms. Morgan's self-serving allegation as to her unspecified activities is completely irrelevant to the issue presented by the Bobali Stock Petition and by the Morgan Motion, which is the distribution and voting authority of 1.4044 shares of Bobali Corporation stock currently held by the Residuary Trust. 13. As to paragraph 22 of the Morgan Motion, the allegation that this Court has not yet approved a plan of distribution is accurate, but is completely irrelevant to the issue presented by the Bobali Stock Petition and by the Morgan Motion. 14. As to paragraph 23 of the Morgan Motion, Barbara Mumma denies the allegation that Ms. Morgan has the right to vote the shares in her unbridled discretion.3 At this time, as set forth in more detail in the Bobali Stock Petition 3 It is correct that Ms. Morgan as trustee has fiduciary duties under the law. This is not the time or the occasion to comment further on Ms. Morgan's breach of those fiduciary duties. However, it is curious that Ms. Morgan somehow thinks that arrogating to herself the right to vote the 1.4044 shares of Bobali stock currently held in the Residuary Trust, thereby claiming the right to vote 'a majority of the shares, over the objections of her siblings, who are the beneficial owners of the stock, is somehow in the best interests of the Residuary Trust — which assets Ms. Morgan asserts that she is allegedly preparing to distribute and terminate the trust. -8- w which has been incorporated herein by reference in its entirety, the Residuary Trust has nothing more than a bare possessory interest in the Bobali Corporation shares, and the four Mumma siblings are the beneficial owners of the stock. To the contrary, this Court either should order the immediate in-kind distribution of the 1.4044 shares of Bobali stock to the beneficiaries of the trust, the four Mumma siblings, in equal shares or, in the alternative, should enter an order declaring that each of the four Mumma siblings has the right to vote or to dierect the vote of /4 of the shares of Bobali Corporation stock currently held in the Residuary Trust. WHEREFORE, Barbara Mumma respectfully requests that the Morgan Motion be denied and that the Bobali Stock Petition filed by Barbara Mumma be granted. Respectfully submitted, WILLIAMS COULSON JOHNSON LLOYD PARKER& TEDESCO, LLC Dated: April 7, 2014 Ri and F. Rinaldo (I.D. No. 33222) 16th Floor, One Gateway Center 420 Fort Duquesne Blvd. Pittsburgh, PA 15222 412-454-0259 (rrinaldo @will iamscoulson.com) Attorneys for Defendant Barbara M. Mumma -9- CERTIFICATE OF SERVICE I hereby certify that on April 7, 2014, a true and correct copy of the foregoing Response of Barbara M. Mumma in Opposition to Motion of Lisa M. Morgan for an Order Clarifying her Right to Vote Shares of Bobali Corporation Stock Currently Held by the Residuary Trust Created Under the Will of Robert M. Mumma, Sr., was served by first-class United States mail, postage prepaid, to the following persons: No V. Otto, 111, Esquire Brady L. Green, Esquire George B. Faller, Jr., Esquire Wilbraham, Lawler & Buba Martson Law Offices 31s`Floor 10 East High Street 1818 Market Street Carlisle, PA 17013 Philadelphia, PA 19103 Robert M. Mumma 11 Box F Grantham, PA 17027 Linda M. Mumma P.O. Box 30436 Bethesda. MD 20824 \z chard F. Rinal o -10- �