HomeMy WebLinkAbout04-30-14 (2) IN RE: ESTATE OF ROBERT : IN THE COURT OF COMMON PLEAS OF
M. MUMMA, Deceased : CUMBERLAND COUNTY, PENNSYLVANIA
: ORPHANS' COURT DIVISION
: NO. 2�1-86-398
IN RE: OBJECTIONS TO FINAL AUDITOR'S REPORT
ORDER OF COURT
AND NOW, this 30th day of April, 2014, upon consideration of the various
objections to the final auditor's report filed in the above-captioned estate, and for the
reasons stated in the accompanying opinion, it is ordered and directed as follows:
l. The objections are dismissed and the accou.nts to which
objections have been filed are confirmed;* and
2. In accordance with the auditor's recommendation, a hearing to
determine attorney's fees and costs is scheduled for Wednesday, June
25, 2014, at 9:30 a.m., in Courtroom No. 4, Cumberland County
Courthouse, Carlisle, Pennsylvania.
BY THE COURT,
��� " 6.
�! esley , Jr., S.J:
* At oral argument on the objections to the auditor's report, the parties indicated that it would be
premature at this time to approve a certain schedule of distribution.
N
4� �
Joseph D. Buckley, Esq. c � ,�°, �
1237 Holly Pike � � � �' °
Carlisle, PA 17013 �? � � w � °
Auditor �:� � ��' n �'' �''
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Anthony L. DeLuca, Esq. c� � �� � ��= ;
113 Front Street •`� � _" � �'
Boiling Springs, PA 17007 � � "' `-�'
Successor Auditor
1N RE: ESTATE OF ROBERT : IN THE COURT OF COMMON PLEAS OF
M. MUMMA, Deceased : CUMBERLAND COIJNTY, PENNSYLVANIA
: ORPHANS' COURT DIVISION
: NO. 21-86-398
IN RE: OBJECTIONS TO FINAL AUDITOR'S REPORT
OPINION and ORDER OF COURT
OLER, J., April 30, 2014.
In this long-delayed decedent's esta.te, the will of the decedent, Robert M.
Mumma, who died in April of 1986,1 was admitted to probate on June 5, 1986.2 After 27
yeazs of litigation, precipitated largely by one beneficiary,3 an auditor's report dealing
' Petition for Probate and Grant of Letters, filed June 5, 1986.
Z Decree of Probate and Grant of Letters, June 5, 1986.
3 The Superior Court has aptly characterized this beneficiary's conduct in the estate as "litigious."
Opinion, dated February 2012,No. 481 MDA 2011. With regard to the beneficiary's prior appeals in this
case alone, see, e.g., Notice of Appeal, filed by Robert M. Mumma, II, filed June 10, 2013, from Order
dated May 6, 2013 (relating to sale of"UPS Drive Properiy"), docketed in Superior Court at No. 1027
MDA 2013 (pending);Notice of Appeal, filed by Robert M. Mwruna, II, filed June 10, 2013, from Order
dated May 6, 2013 (relating to liquidaxion of real estate in marital and residuary trusts), docketed in
Superior Court at No. 1028 MDA 2013) (pending); Notice of Appeal, filed by Robert M. Mumma, II,
filed July 8, 2013, from Order da,ted June 5, 2013 (relating to motion to compel compliance with or vacate
order entered in 2012), docketed in Superior Court at No. 1222 MDA 2013 (pending); Notice of Appeal,
filed September 15, 2005 (appeal quashed by Superior Court by order dated October 28, 2005, at No.
1546 MDA 2005); Notice of Appeal, filed January 14, 2009 {appeal quashed by Superior Court by order
dated March 27, 2009, at No. 270 MDA 2009); Notice of Appeal, filed March 14, 2011 (order affirmed
by Superior Court by order da.ted February 22, 2012, at No. 481 MDA 2011); Notice of Appeal, filed
January 12, 2012, (appeal quashed by Superior Court by order dated October 19, 2012, at No. 97 MDA
2012). The beneficiary has also been involved in litigation against his recently deceased mother's estate in
Florida. See N.T. 88, Hearing, January 28, 2011; RMM E�ibit 1, Hearing, January 28, 2011 (objections
filed in mother's estate).
Not surprisingly, the said beneficiary's apparent reaction to the auditor's final report was to file a suit
against the auditor, attorneys for other parties, and prior counsel of his own. No. 2013-7096 Civil Term
(Cumberland Co.) (filed December Z, 2013). Having been ruled to file a complaint,the beneficiary filed a
praecipe to withdraw the action"without prejudice."See praecipe, filed February 6,2014.
In addition to numerous periods in which the beneficiary has proceeded pro se, he has variously been
represented by at least 15 different attorneys. His most recent counsel has withdrawn in this court as of
February 27, 2014 (see Order of Court, da.ted February 27, 2014) and in the Superior Court in estate-
related cases as of March 18, 2014 (see Order of Court, Nos. 1003 MDA 2013, 1027 MDA 2013, 1028
MDA 2013, [1222] MDA 2013, Pennsylvania Superior Court). The docket entries in this court in the
estate, which are recorded at two different docket numbers, now extend to 92 pages. See "Register of
1
with objections to fourteen accounts, has been filed.4 For disposirion at this time is a 114-
page document filed on behalf of the aforesaid beneficiary entitled "Supplemental and
Corrected Objections of Robert M. Mumma, II to August 7, 2013 Report of Auditor
Joseph D. Buckley, Esquire,"5 as well as objections �iled by another beneficiary6 and
objections filed by fiduciaries under the will.'
Oral argument has been held on the objections to the auditor's report before the
undersigned senior judge. For the reasons stated in this opinion, the objections will be
dismissed.
STATEMENT OF FACTS
Robert M. Mumma, an active businessman domiciled in Wormleysburg,
Cumberland County, Pennsylvania,g died on April 12, 1986,9 at the age of 71,10 survived
by his spouse, Barbara McK. Mumma, and four adult children,l l whose present names
Wills" Docket (entries from 1 to 185) and "Orphans' Court" Docket (entries from 1 to 760), Estate of
RobertM.Mumma, 1986-398.
It has been estimated by the auditor that litigation occasioned by this beneficiary in federal and stat�
courts has resulted in attorney's fees for the decedent's estate and its executrices/trustees in excess of five
million dollars.See Report of Auditor,¶444,filed August 7, 2013.
References in this opinion to "the said beneficiary" or "the aforesaid beneficiary" are to Robert M.
Mumma, II,unless otherwise indicated.
4 Report of Auditor, filed August 7, 2013.
5 Supplemental and Corrected Objections of Robert M. Mumma, II to August 7, 2013 Report of Auditor
Joseph D. Buckley, Esquire, filed September 19,2013.
6 Objections of Barbara M. Mumma to Report of Auditor pocketed August 7, 2013, filed September 16,
2013.
' Objections of Barbaza McK. Mumma (Deceased) and Lisa M. Morgan As Executrices of and Trustees
under the Will of Robert M. Mumma To Report of Auditor, filed September 16, 2013.
8 Petition for Probate and Grant of Letters, filed June 5, 1986.
9 Petition for Probate and Grant of Letters, filed June 5, 1986.
'o Petition for Probate and Grant of Letters, filed June 5, 1986.
" See Opinion and Order of Court,dated November 17, 1989,at 1 (Sheely, P.J.).
2
are Lisa M. Morgan (formerly Mumma), Robert M. Mumma, II, Barbara M. Mumma
(formerly McClure), and Linda M. Mumma(formerly Roth).12
The decedent's will, executed in 1982, was not complicated.13 A marital trust and
a residuary trust were provided for. The decedent's spouse was a life beneficiary and his
children the remaindermen of each trust.14 The funding of the marital trust was darected
to be in
an amount equal to fifty (50%)percent of my total gross estate as finally
determined for Federal Estate Tax purposes, taking into account and
including therein, for computation purposes, my undivided interest in the
value of all my interests in property which pass or have passed to my
wife under other provisions of this Will or otherwise than under this
Will. . . is
The decedent, in his will, appointed his spouse, Barbara McK. Mumma, and his
daughter Lisa M. Morgan (formerly Mumma), as co-executrices of the will and co-
trustees of the testamentary trusts.16 By a codicil dated October 12, 1984, the decedent
removed his son, the beneficiary referred to above who has proven litigious, from any
position as a successor fiduciary.l�
With respect to the marital trust, decedent's spouse was to receive (a) the annual
income therefrom, (b) such amount of the principal as deemed appropriate by the co-
trustee to maintain her accustomed standard of living, and (c) the greater of$5,000.00 or
five percent of the principal of the trust annually upon request, said invasion of principal
to be "noncumulative."18 With respect to the residuary trust, decedent's spouse was to
'2 See Petition To Authorize Plan of Liquidation¶2, filed Apri15, 2012.
13 See generally Last Will and Testament of Robert M. Mumma,dated May 19, 1982.
14 See Last Will and Testament of Robert M. Mumma, dated May 19, 1982,¶¶7-8.
15 Last Will and Testament of Robert M. Mumma, dated May 19, 1982, §7.
16 Last Will and Testament of Robert M. Mumma,dated May 19, 1982,¶15.
"First Codicil to Last Will and Testament of Robert M.Mumma, dated October 12, 1984.
18 Last Will and TesCament of Robert M. Mumma, dated May 19, 1982,¶7.
3
receive (a) the annual income therefrom and (b) such amount of the principal as deemed
appropriate by the co-trustees to mainta.in her accustomed standard of living.19
Each trust was to terminate upon the death of the decedent's spouse.20 Upon her
death, the principal of each trust, "as it [wasJ then consrituted," was to be paid over to the
rema.indermen, decedent's children.21
In their fiduciary capacities, the co-executrices/trustees were provided with very
broad powers under the decedent's will. In this regard, the following provisions of the
will are illustrative:
I give and grant unto my trustees, and the survivor thereof, and their successor or
successors, the following powers, which sha11 be construed broadly and which may be
exercised by them in either or both capacities, as in their discretion they deem advisable,
in addition to and not in limitation of their common law and statutory powers:
(1)To a11ot, assign, care for, collect, contract with respect to, convey, convert,
deal with, dispose of, enter into, exchange, hold, improve, invest, lease, manage,
mortgage,grant and exercise options with respect to, talce possession of, pledge, receive,
release, sell, sue for, and in general do any and every act and thing and to enter into and
carry out any and every agreement with respect to the property included in any trust
created in this Will which they could if they were the absolute owners thereof, without
being limited in any way by the specific grants of power hereinafter made.
(2)To retain for such tirne as in their judgment may seem advisable all or any
part of my property or assets which at any time shall constitute a part of the trusts herein
provided for.
(3)To sell or exchange, either privately or at public sale and without prior
approval of any court, at such time or times and at such price or prices and on such terms
and conditions as the trustees may consider advisable, a11 or any part of the trust property,
real,personal or mixed, and to execute, verify, acknowledge and deliver all deeds,bills of
sa1e, or other documents which may be necessary or proper in the exercise of such
powers without liability on the purchaser or purchasers to look to the application of the
purchase price.
(4)To mauage any real property held by them in such manner as they may
determine, including authority to alter, repair, maintain or improve such property as
hereinafter set forth, to mortgage such property on such amount, on such conditions and
at such rates of interest as they shall deem advisable;to abandon such property,to adjust
bound[a]ries, to erect or demolish buildings thereon, to convert for a different use, to
dedicate for public use without compensation, to grant easements and rights-of-way, to
waive payment for property taken by right of eminent domain and to claim and negotiate
19 Last Will and Testament of Robert M. Mumma, dated May 19, 1982,¶8.
20 Last Will and Testament of Robert M. Mumma, dated May 19, 1982,¶¶7, 8.
21 Last Will and Testament of Robert M. Mumma, dated May 19, 1982,¶¶7, 8.
4
for payment for property, to enter into party-wall contracts, to protect out of the general
funds of the Trusts created herein, to insure or perfect title and to charge the cost of any
action taken with regard to any such property to principal or income as they may
determine. To make all ordinary repairs to any real estate held by them and such
extraordinary repairs, alterations or improvements against the principal of the Trusts
herein created of which the property being repaired,altered or improved forms a part.
(5)To lease any real estate subject to the Trust herein created for such term[] or
terms,and for such rental or rentals,and under such covenants and agreements as may, in
the discretion of the trustees, be considered for the best interest of the trust estate. The
trustees shall recognize eausting leases, but still have the power to agree to modification
of, or amendment to, the terms of existing leases or to eartensions or renewals thereof.
The trustees sha11 have authority to acquire by purchase, gift or otherwise, and to resell,
receive, hold, manage and control real estate, and any other interest therein, subject to the
Trusts,and do all things necessary or proper in the performance of such functions.
(6)To invest, and from time to time to reinvest, to acquire, and to retain
temporarily or permanently the trust estates received or held by them in cash or in kind or
real or personal property, foreign or domestic, including by way of illustration, but not by
way of limitation,common or preferred stocks, investment bonds, mortgages,debentures,
notes, unsecured obligations, wasting assets, or investments which are unproductive,
overproductive or underproductive as in their discretion they ma.y deem advisable, and
the total trust funds or the relation it may bear to the type or character of other
investments in the trust estates, or to the effect in the trust estates and they shall not be
restricted in their choice under any present or future applicable law, it being my intention
to give my trustees power to act in such manner as they will believe to be for the best
interest of the Trusts created herein.
(7)To pay income tax on gains from the sale or other conversion of capital assets
out of the corpus thereof.
(8)To amortize,accelerate payment of, reduce,extend, modify, settle or liquidate
any lien, encumbrance, mortgage, or other charge against any real estate or other property
which may be subject to these Trusts.The trustees shall specifically keep a�d perform all
of the covenants, terms and conditions of any existing mortgage or mortgages upon said
real estate, on the part of the mortgagor required to be kept and performed and sha11 have
full power and authority with the consent of the mortgagee or mortgagees, to refund,
replace, erctend or otherwise amend the same, and to anticipate and accelerate any
periodical payments therein required.
(9)To subscribe for stock allotments and to exercise all rights and privileges
pertaining to securities which are available to the owner thereof.
(10)To receive or make distribution of any trust herein created, either in money
or in kind, or partly in money and partly in kind. The judgment of the trustees as to what
sha11 constitute an equitable distribution or apportionment sha11 be binding and
conclusive upon the beneficiaries hereof Nothing herein contained, however, shall
empower the trustees to make distribution before the time or times specified herein.
(11)To pay, collect, comprornise, sue for or contract any claim or other matter,
directly or indirectly, afFecting the Trusts.
(12)To use income and/or principal to maintain in force any policies of life
insurance which I ma.y own on the life or lives of other persons or to receive in gift or
5
purchase or maintain previously e�sting insurance or annuity contracts for the benefit of
any beneficiary, primary or contingent, if the trustees determine that the best interest of
my family would be served by purchasing said contracts or by continuing such insurance
in force,and to exercise all the powers given to the owner of such policies.
(13)To employ counsel, auditors, custodians, accountants, appraisers, engineers,
and other persons, professional or otherwise, as may be necessary for the proper
administration of the Trusts,and to pay their compensation�rom]trust funds.
(14)To bonow money and as security thereof, to execute bonds and mortgages
containing warrants of attorney,to confess judgment and to pledge personal property.
(15)To incorporate any unincorporated business received from my estate.
(16)To carry on and conduct any business enterprise in which I may be engaged
at my death.
(17 To hold, invest and account for the separate Trusts in one or more
consolidated funds, in whole or in part, as they may determine. As to each consolida,ted
fund,the division into the various shares comprising such fund need be made only on the
trustees' books of account, in which each Trust shall be allotted its proportiona.te part of
the principal and income of the fund and charged with its proportionate part of the
expenses thereof. No such holding shall, however, defer the vesting in possession of any
estate created herein.
(18)As to each Trust created herein,to exercise all the powers granted and all the
duties imposed herein until such time after the termination of that Trust as the property
included in that Trust has been fully distributed, and to do all other acts which, in their
judgment, may be necessary or appropriate for the proper or advantageous management,
investment or disposition of any property included in any Trust created herein.z2
* * * *
The Trustees shall be vested with reasonable discretionary powers and in all
matters not otherwise herein specifically provided, they shall exercise their sound
judgment and discretion in the performance of their duties hereunder. They sha11 not be
liable for any error of judgment provided that such error is honestly made.23
* * * *
I hereby give unto my Executrix, or her successors, hereinabove named, the
fullest power and authority in all matters or questions pertaining to the administration of
my estate, executing the provisions of this my Last Will and Testament, including, but
not by way of limitation, the power and authority to determine all doubtful questions
which may arise in the construction of this my Last Will and Testament and the trust
hereunder; I further hereby authorize and empower my Executrix, or her successors,
pending settlement of my esta#e,to sell, convey, mortgage, lease, exchange, encumber or
otherwise dispose of any and a11 of the property, real, personal or mixed, at any time
belonging to my estate, either at public or private sale, without prior approval of any
court,and at such times and for such price or prices and in any such case upon such terms
as she may think best in her discretion, and I authorize and empower my said Executrix
22 Last Will and Testament of Robert M.Mumma,dated May 19, 1982,¶9.
23 Last Will and Testament of Robert M. Mumma, dated May 19, 1982,¶8.
6
to execute, acknowledge and deliver to the purchasers, grantees, mortgagees, vendees,
assignees or other persons, such contracts, deeds, mortgages, bills of sale, and all other
instniments of writing necessary or proper without obligation upon the latter to see to the
proper application of the proceeds. She shall also have the power to compromise or
otherwise to settle or adjust any and all claims, charges, debts and demands whatsoever
against or in favor of my estate, as fully as I could do if living. She shall further be
empowered to carry on and conduct any business enterprise [in] which I may be engaged
at my death, to retain any assets, including stocks or securities which I may own at the
time of my death, pending settlement of my esta.te, without regard as to whether or not
such assets or securities are legal investments for fiduciaries, and may make distribution
in kind to my trustees. Pending settlement of my estate, she shall also have the authority
in her discretion to convert, sell, exchange or dispose of such assets and securities either
for cash of for terms satisfactory to her and to acquire other assets without limitation to
securities or investments as may be declared legal for investment for fiduciaries. She
shall further be empowered to borrow money, and to pledge assets of my Estate as
security therefor,for the purpose of paying taxes which may be levied upon or payable by
my estate, in accordance with this Will in the event that funds in the hands of my
Executrix, or her successors, sha11 be insufficient to pay such taxes, and if, in the opinion
of my Executrix, or her successors, it appears that conversion of securities and other
assets,real and personal,would then be made at a sacrifice. �`
The will also contai.ned this language:
. . . It is my desire that if eacpedient and possible, the businesses which I have
personally directed during my lifetime and of which I have had an urterest be continued
for the benefit of and under the management and control of my immediate family.25
In 1986, given the prospect of liquidations of corporations in which the estate held
large majority interests, and in order to avoid the double taxation that would have
resulted, pursuant to then-recent federal legislation, from a delay, the shareholders
entered into two agreements whereby various assets of the dissolved corporations were to
be held as tenants-in-common.26 These agreements were known as MRA I and MRA II
[MRA standing for Mumma Realty Associates27], and management of the tenancies-in-
common was assigned to a corporation known as MRA, Inc., of which the co-
24 Last Will and Testament of Robert M. Mumma, dated May 19, 1982,¶14.
25 Last Will and Testament of Robert M. Mumma, dated May 19, 1982,¶13.
Z6 Opinion and Order of Court, dated March 24, 1992, Mumma u Mumma, No. 66 Equity 1988
(Cumberland Co.) (Sheely, P.J.), aff d, 433 Pa. Super. 660, 639 A.2d 846 (1993), adlocatur denred, 539
Pa. 679, 652 A.2d 1324 (1994).
27 See Petition To Authorize Plan of Liquidation, at 2-3,filed Apri15, 2012.
7
executors/co-trustees were the officers and directors.28 Contrary to positions taken by the
above-referenced beneficiary in subsequent litigation, (a) these agreements were valid
and binding upon him and (b) he did not have a right of first refusal regardi.ng the sale of
a business being conducted pursuant to the agreements.29
In 1987, the above-referenced beneficiary, Robert M. Mumma, II, disclaimed his
interest in the trusts.30 However, he later changed his mind,31 his petition to revoke the
disclaimer was granted by the Honorable Harold E. Sheely of this court,32 and an appeal
on behalf of the minor children was dismissed by the Superior Court as having been
taken by their guardian ad litem without authority to do so under the guardian's assigned
respansibilities.33
On July 17, 2010, the decedent's widow, Barbara McK. Mumma, died.34 The
efforts of the surviving co-trustee of the marital and residuary trusts to distxibute the trust
assets to the remainderman, in kind or in money, have been approved by the
Pennsylvania Superior Court in the context of the latest of several attempts by the
aforesaid beneficiary to have her removed:
With respect to the distribution of assets to the four sibling beneficiaries, the trial court
determined that Morgan's testimony established that she is completing the process of
obtaining valuations of the estate and trust assets and has asked the beneficiaries if they
have any preferences regarding the receipt of particular assets or cash, and that she
intends to make a.n equitable distribution of the assets to the beneficiaries after collecting
this information. We agree with the trial court that this approach does not constitute any
breach of fiduciary duty. Mumma, Sr. specifically provides Morgan in her role as his
28 Opinion and Order of Court, dated March 24, 1992, Mumma u Mumma, No. 66 Equity 1988
(Cumberland Co.) (Sheely, P.J.), af.j`''d, 433 Pa. Super.660, 639 A.2d 846 (1993), allocatur denied, 539
Pa. 679, 652 A.2d 1324(1994).
29 Opinion and Order of Court, dated March 24, 1992, Mumma v. Mumma, No. 66 Equity 1988
(Cumberland Co.) (Sheely, P.J.), afJ"d, 433 Pa. Super. 660, 639 A.2d 846 (1993j,allocatur denied, S39
Pa. 679, 652 A.2d 1324 (1994).
3o Disclaimer by Robert M. Mumma, II,filed January 12, 1987.
31 Petition of Robert M. Mumma, II,To Revoke Disclaimer,filed June 20, 1989.
32 See Opinion and Decree Nisi,dated May 21, 1991.
33 Memorandum Opinion, filed July 18, 1994,No. 561 Harrisburg 1993 (Pa. Super. Ct.).
�See In re Estate of RobertM.Mumma, 2012 PA Super 41,43,41 A.3d 41,43.
8
personal representative when making an equal distribution among the four sibling
beneficiaries, with the power to decide how to "make distribution of any trust herein
created, either in money or in kind, or partly in money and pa.rtly in kind" . . . Mumma,
Sr. further indicated that the "judgment of the trustees as to what sha11 constitute an
equitable distribution or apportionment sha11 be binding and conclusive upon the
beneficiaries hereof." . 35
Numerous accounts have been filed during the course of the administration of the
estate and trusts,36 including a Fourth and Fina1 Account for the esta.te,37 a 2010
Accounting of Lisa Morgan and Barbara McK. Mumma, deceased, as Trustees of Marital
Trust under the Will of Robert M. Mumma,38 and a 2010 Accounting of Lisa Mumma
Morgan and Barbaza McK. Mumma, deceased, as Trustees of Residual Trust under the
3s In re Estate ofRobertM.Mumma, 2012 PA Super 41,50,41 A.2d 41, 50.
36 First and Interim Account for the Estate of Robert M. Mumma (April 12, 1986, through March 31,
1991), filed August 15, 1991; Second and Interim Account for the Estate of Robert M. Mumma(April 1,
1991, through March 31, 1996), filed June 1, 2000); Third and Interim Account for the Estate of Robert
M.Mumma(April 1, 1996,through March 31, 1999),filed January 8, 2004;First and Interim Account for
the Marital Trust Established under the Last Will and Testament of Robert M. Mumma (November 19,
1986), filed August 15, 1991; Second and Interim Account for the Ma.rital Trust Established under the
Last Will and Testament of Robert M. Mumma (April 1, 1991, through March 31, 1996), filed May 15,
2000; Third and Interim Account for the Marital Trust Established under the Last Will and Testament of
Robert M. Mumma (April 1, 1996, through March 31, 1999), filed May 15, 2000; Fourth and Interim
Account for the Marital Trust Esta.blished under the Last Will and Testament of Robert M. Mumma,
(April 1, 1999, through December 31, 2003), filed Mazch 9, 2004; Fifth and Interim Account and
Proposed Distribution of Assets for the Marital Trust Established under the Last Will and Testame�t of
Robert M. Mumma (January 1, 2004, through July 17, 2010), filed September 10, 2010; Account of the
Mazital Trust under the Will of Robert M. Mumma, Deceased (July 18, 2010, through December 31,
2012), filed Septernber 6, 2013; First and Interim Account for the Residual Trust Esta.blished under the
Last Will and Testament of Robert M. Mumma (November 24, 1986, through March 31, 1991), filed
August 15, 1991; Second and Interim Account for the Residual Trust Established under the Last Will and
Testament of Robert M. Mumma(April l, 1991,through March 31, 1996), filed June 1, 2000; Third and
Interim Account for the Residual Trust Established under the Last Will and Testament of Robert M.
Mumma (April 1, 1996, through March 31, 1999), filed May 15, 2000; Fourth and Interim Account for
the Residual Trust established under the Last Will and Testament of Robert M. Mumma (April 1, 1999,
through December 31, 2003), filed March 9, 2004; Fifth and Interim Account and Proposed Distribution
of Assets for the Residual Trust Established under the Last Will and Testament of Robert M. Mumma
(Janua.ry 1, 2004, through July 17, 2010, filed September 10, 2010; Account of the Residual Trust under
the Will of Robert M. Mumma, Deceased (July 18, 2010, through December 31, 2012), filed September
6, 2013.
37 Fourth and Final Account for the Estate of Robert M. Mumma (April l, 1999, through September 20,
2003), filed January 1, 2004.
38 Accounting of Lisa Morgan and Barbaza McK. Mumma, deceased, as Trustees of Marital Trust under
the Will of Robert M. Mumma, (January 1,2004,through July 17, 2010), filed September 10, 2010.
9
Will of Robert M. Mumma.39 A multitude of objections have been filed in response to the
accounts.4° The initial auditor appointed by the court in the case ultimately found himself
unable to reconcile the workload occasioned by the assignment with his other
responsibilities as a practicing attorney41 and was replaced by Cumberland County
attorney Joseph D. Buckley.42 Mr. Buckley conducted approrumately 40 days of
hearing,43 issued numerous interim reports,� and ultimately produced a 130-page fmal
39 Accounting of Lisa Mumma Morgan and Barbara McK. Mumma, deceased, as Trustees of Residual
Trust under the Will of Robert M. Murnma(January 1, 2004,through July 17, 2010), filed September 10,
2010. Most recently, an Account of the M�rital Trust under the Will of Robert M. Mutnma, Deceased
(July 18, 2010, through December 31, 2012 (filed September 6, 2013) and an Account of the Residual
Trust under the Will of Robert M. Mumma, Deceased (July 18, 2010, tlu�ough December 31, 2012 (filed
September 6, 2013)have been filed,and objections to these accounts have been�led on October 8, 2013.
These objections have been referred to a successor auditor, in the person of Anthony L. DeLuca, Esq. See
Order of Court,dated November 7, 2013.
40 Statement of General Objections to the First and Interim Account for the Estate of Robert M. Mumma,
Deceased and the First and Irrterim Accounts for the Marital and Residuary Trusts under Will of Robert
M. Mumma, filed by Robert M. Mumma, II, October 4, 1991; Supplemental Statement of Objections to
the Account of Barbara K. McK. Mumma and Lisa M. Morgan As Co-Executors of the Estate of Robert
M. Mumma, Deceased, filed by Robert M. Mumma, II, May 27, 2004; Supplemental Statement of
Objections to the First, Second, Third and Fourth Interim Accountings of Barbara K. McK. Mumma and
Lisa M. Morgan As Co-Trustees of the Marital Trust under Will The Will [sic] of Robert M. Mumma,
Decea.sed, filed by Robert M. Mumma, II, May 27, 2004; Supplemental Objections, filed by Robert M.
Mumma, II, January 31, 2008; Statement of General Objections to Petition of Adjudication/Statement of
Proposed Distribution of the Residuary Trust under Will of Robert M. Mumma, Deceased, filed by
Robert M. Mumma, II, November 22, 2010; Statement of General Objections to Petition of
Adjudication/Statement of Proposed Distribution of the Residuary Tn�st under Will of Robert M.
Mumma, Deceased, filed by Robert M. Mumma, II, November 22, 2010; Objections of Robert M.
Mumma, II to the Account of the Marital Trust July 18, 2010 to December 31, 2012, filed October 7,
2013, stricken, Order of Court dated October 10, 2013; Objections of Robert M. Mumma, II to the
Account of the Residual Trust July 18, 2010 to December 31, 2012,filed October 7, 2013,stricken, Order
of Court, October 10, 2013; Objections of Robert M. Mumma, II to Account of Residuary Trust for
Period July 18, 2010 to December 31, 2012, and Accompanying Petition for Adjudica,tion Filed by Lisa
M. Morgran [sic), Trustee, on September 6, 2013, filed October 8, 2013; Objections of Robert M,
Mumma, II to Account of Marital Trust for Period July 18, 2010 to December 31, 2012, and
Accompanying Petition for Adjudication Filed by Lisa M. Morgran [sic], Trustee, on September 6, 2013,
filed October 8, 2013; Objections of Barbara Mann Mumma, filed September 15, 2008; Objections to the
Account of the Marital Trust under the Will of Robert M. Mumma, Deceased, filed by Barbara Mann
Mumma,November 22, 2010; Objections to Account of the Residuary Trust under the Will of Robert M.
Mumma, Deceased, filed by Barbara Mann Mumma,November 22,2010.
4' See Order of Court, da.ted September 19, 2008.
42 See Order of Court, dated September 19, 2008.
a3 See Report of Auditor, filed August 7, 2013,at 2.
10
auditor's report.45 Following the filing of his final report, the aforesaid beneficiary filed
suit aga.inst him.46
In his fmal report, the auditor recommended that the objections to the accounts be
overruled, that the initial auditor be recompensed by the esta.te and trusts in the amount of
$11,856.46 for his services, and that the aforesaid beneficiary be responsible for one-half
the auditor's charges and one-half the estate's attorney's fees.47
DISCUSSION
Given the dozens upon dozens of pages of objections to the auditor's report that
have been filed in this estate, it is difficult to avoid a reference to the oft-quoted
observation of the Honorable Ruggero J. Aldisert of the United States Court of Appeals
for the Third Circuit:
When I read an appellant's brief that contains ten or twelve points, a presumption arises
that there is no merit to any of them. I do not say that it is an irrebuttable presumption,
but it is a presumption that reduces the effectiveness of appellate advocacy. . . .48
Many of the objections are in a rambling, nanative form or so unspecific as to be difficult
to address. For instance, a typical objecrion of the aforesaid beneficiary reads:
The following "findings" of fact axe objected to as contrary to the evidence presented to
the Auditor: 188, 201, 212, 218, 232, 235, 240, 254, 288, 270, 282, 292, 293, 294, 295,
303, 306, 307, 310, 313, 319, 320, 321, 322, 324, 326, 327, 333, 334, 353, 355, 358, 359,
364, 365, 369, 370, 372, 373, 393,399,424, 427,435,465, 466 a9
Another reads: "This matter is subject to another forum."so
�See, e.g., Auditor's Interim Reports, Orphans' Court Docket Entries 437, 457,507, 603, 640,and 708.
as See Report of Auditor, filed August 7, 2013.
�See note 3 supra.
47 See Report of Auditor, filed August 7,2013,at 122, 124-25, 128-30.
48 Aldisert, The Appellate Bar: Professional Competence and professional Responsibilit,�--A View from
the Jaundiced Eye of One Appellate Judge, 11 Cap. U.L. Rev. 445,458 (1982).
a9 Supplemental and Corrected Objections of Robert M. Mumma, II to August 7, 2013 Report of Auditor
Joseph D. Buckley, Esquire,at 18, filed September 19,2013.
so Supplemental and Corrected Objections of Robert M. Mumma, II to August 7, 2013 Report of Auditor
Joseph D. Buckley, Esquire, Exhibit C, filed September 19,2013.
11
In this opinion, in the interest of disposing of the objections to the auditor's report
within the lifetime of the undersigned judge, the most significant objections will be
addressed, with the less significant or less comprehensible ones being relegated to the
auditor's discussion.
Principles applicable to objections to accounts and judicial review of auditors'
reports. Pxeliminarily, it may be noted that, as a general rule, objectants to accounts filed
in the Orphans' Court bear the burden of proving the merits of their objections. See
generally In re Estate of Westin, 874 A.2d 139 (Pa. Super. Ct. 2005); Estate of Geniviva,
450 Pa. Super. 54, 675 A.2d 206 (1996); In re Estate of D'Alessio, 2004 WL 3186286
(Phila. Co. 2004); Kubitsky Estate, 1991 WL 40$53 (Bucks Co. 1991). The merits, in this
context, include proof of causation of loss from any purported dereliction of duty on the
part of a fiduciary. In re Mendenhall, 484 Pa. 77, 398 A.2d 851 (1979),
With respect to judicial review of auditors' reports, it has often been observed that:
[b]ecause of his better opportunity to judge of the intelligence and credibility of witnesses
and their knowledge of the subject under investigation, an auditor's finding of fact from
disputed testimony is entitled to great[weight] and should not be set aside except for very
substantial reasons . . . .
Dingee v. Wood, 228 Pa. 250, 251, 77 A. 440 (1910); see In re Nixon's Estate, 104 Pa.
Super. 506, 159 A. 172 (1932); In re Elgin's Estate, 17 Pa. D & C.2d 31
(Northumberland Co. 1958). In this regard, however, the court is unable to agree with the
contention of one of the parties' briefs51 that the fmdings of an auditor have the force of a
jury verdict. In re Nixon's Estate, 104 Pa. Super. 506, 159 A. 172 (1932) (fmdings of
auditor said entitled to great weight, but not to have effect of jury verdict).
Proposed liquidation of some assets in terminated tt usts in course of distribution.
It appears to be a major objection to the auditor's report that the trustee's proposal to
liquidate some assets of the terminated trusts in the course of distribution was deemed
51 See Brief of Barbara McK. Mumma (Deceased) and Lisa M. Morgan in Opposition to Objections of
Robert M. Mumma, II to Auditor's Report,at 3.
12
acceptable by the auditor.52 In this regard, it is said to have been the testator's intent that,
upon the teimination of the trusts incident to the death of the testator's spouse, the
rema.indermen would each receive a share of the trusts' principal in precisely the sta.te the
principal e�sted when the termination event occurred, including a proportional share of
each operating business, regardless of the practicality of such a strictly in-kind
distribution of assets.53 In support of this position, language in the will directing payment
of the principal of each trust, "as it [was] then constituted,"54 to the remaindermen is
cited, as is the testator's expressed "desire" that, "if expedient and possible, the
businesses which I have personally directed during my lifetime a.nd of which I have an
interest be continued under the management and control of my i.mmediate family."55 The
aforesaid beneficiary also (a) invites an examination of the will of the father of the
testator to support the proposition that the said beneficiary's own father intended that
ownership of the businesses be retained by the remaindermen,56 and (b) faults the auditor
for declining to credit the beneficiary's conjecture that someone must have removed
documents from the testator's safe deposit box following his death that would have
conoborated the beneficiary's position.s'
Several factors militate aga.inst the contention that the auditor was in error on this
point. First, the language respecting the testator's desire that his businesses remain in the
52 See, e.g., Supplemental and Corrected Objections of Robert M. Mumma, II to August 7, 2013 Report of
Auditor Joseph D. Buckley, Esquire, filed September 19, 2013,at¶¶76(c), 77, 144.
s3 See, e.g., Supplemental and Corrected Objections of Robert M. Mumma,, II to August 7, 2013 Report of
Auditor Joseph D. Buckley, Esquire, filed September 19, 2013,at¶¶76(c), 77, 144.
� See Supplemental and Corrected Objections of Robert M. Mumma, II to August 7, 2013 Report of
Auditor Joseph D. Buckley, Esquire, filed September 19, 2013,at¶19.
ss Supplemental and Conected Objections of Robert M. Mumma, II to August 7, 2013 Report of Auditor
Joseph D. Buckley, Esquire, filed September 19,2013,at¶¶31-34.
s6 See Supplemental and Corrected Objections of Robert M. Mumma, II to August 7, 2013 Report of
Auditor Joseph D. Buckley, Esquire, filed September 19, 2013,at¶¶34-35.
57 See Supplemental and Conected Objections of Robert M. Mumma, II to August 7, 2013 Report of
Auditor Joseph D. Buckley, Esquire, filed September 19, 2013,at¶27.
13
family was precatory as opposed to mandatory. See In re Lindsay's Estate, 311 Pa. 536,
166 A. 848 (1933) ("wish" of testator that certain asset of trust not be sold by trustee held
precatory and not mandatory); In re Dickinson's Estate, 209 Pa. 59, 58 A. 120 (1904)
("Where the words `wish' and `desire' are used in expressing a desire for an act to be
done by some person named by the testator, they are generally precatory merely . . . .");
see also Estate of Baselice, 2005 WL 3739297 (Phila. Co. Aug. 22, 2005) ("wish and
desire" of testator that certain person be given right of first refusal with respect to
purchase of estate asset held precatory), af�''d, 903 A.2d 56 (Pa. Super. Ct. 2006). Second,
the precatory language was itself contingent upon expedience and possibilitysg—neither
of which, given the dysfunctional nature of the relationship that has developed among the
remaindermen, has materialized as the testator had hoped.
Third, the will expressly gave the trustee the discretion to distribute assets of the
trusts otherwise than in kind.59 Fourth, the Superior Court has recognized this authority in
ruling upon an earlier attempt by the aforesaid beneficiary to disqualify the trastee.60 See
Commomvealth v. Starr, 541 Pa. 564, 574, 664 A.2d 1326, 1331 (1995) ("law of case"
doctrine explained to stand for proposition that, upon remand for fuxther proceedings trial
court may not alter resolution of legal question previously decided by appellate court in
matter}. Fina.11y, a fact-finder is entitled to believe a11, part or none of the evidence
presented in a case. See Boro Const., Inc. u Ridley School Dist., 992 A.2d 208, 218 (pa,
Commw. Ct. 2010). There was no requirement that the auditor, nor is there a requirement
that the court, fmd persuasive the beneficiary's uncorroborated testimony that a document
or documents that would have helped his case must have been illegally removed from the
testator's safe deposit box after he died.
Relitigation ofpreviously decided matters. It is strenuously argued that the auditor
erred in accepting various fmdings in previous litigation. For instance, in "miscellaneous
58 See Last Will and Testament of Robert M. Mumma,dated May 19, 1982,at¶13.
s9 See Last Will and Testament of Robert M. Mumma,dated May 19, 1982,at¶9,subparagra,ph 10.
60 See In re Estate ofRobertM.Mumma, 2012 Pa. Super 41, 50,41 A.3d 41, 50.
14
objections to fmdings of fact,"61 the aforesaid beneficiary disputes the auditor's recitation
of 30 findings by the Honorable Harold E. Sheely of this court in a declaratory judgment
action in 1992, wherein the executrices succeeded in obtaining the following
determination:
1)The two tenancy-in-common agreements MRA I and MRA II signed by [the
said beneficiary] on December 19, 1986, are binding upon him and grant him no right of
first refusal as to any transfers by the executrices, Barbara McK. Mumma and Lisa M.
Morgan, of the real estate held by the MRA tenants-in-common when there is approval
by a majority in interest;
2)The MRA general power of attorney which [the said beneficiary] executed on
December 19, 1986, is valid and irrevocable, and pursuant to Section 14 of the MRA
agreements, empowers Mrs. Mumma and Lisa to transfer properties held by the MRA
tenancies-in-common;and
3) [The said beneficiary] was never given an oral right of first refusal to purchase
Pennsy Supply, Inc., in June, 1987, in exchange for his promise to execute a power of
attorney for Lot 1-B in Lemoyne.
Barbara McK. Mumma, Lisa M. Morgan, and Linda M. Roth v. Robert M. Mumma, II
and Barbara M. McClure, No. 66 Equity 1988 (Cumberland Co.) (Nov. 24, 1992)
(November 5, 1992), a,f'f'd, Order of Court, Nov. 5, 1993, No. 56 Harrisburg 1993 (Pa.
Super. Ct.). In rejecting the position of the said beneficiary in the litigation, President
Judge Sheely, in an extensive opinion, made 120 findings of fact,62 no fewer than a
quarter of which the beneficiary seeks to relitigate.
It also appears that the said beneficiary seeks to relitigate the issue of restrictions
on the transfer of an asset in which the estate held a large interest.63 In Robert M.
61 See Supplemental and Conected Objections of Robert M. Mumma, II to August 7, 2013 Report of
Auditor Joseph D. Buckley, Esquire, filed September 19, 2013,at¶62(a).
62 Opinion and Order of Court, dated March 24, 1992,Mumma v. Mumma, 66 Equity 1988 (Cumberland
Co.) (Sheely, P.J.).
63 According to the beneficiary, "[c]ontrary to the findings and conclusions of the Auditor, there is
substantial evidence of the existence of shareholder agreements . . .prohibiting the transfers of stock of
Mumma family entities, such as Pennsy Supply." Supplemental and Conected Objections of Robert M.
Mumma, II to August 7, 2013 Report of Auditor Joseph D. Buckley, Esquire, at 8, filed September 19,
2013.
15
Mumma, II u Penrrsy Supply, Inc.,64 the undersigned judge rejected, inter alia, the
beneficiary's position that such restrictions continued to be in effect. The afffrming
opinion of the Superior Court described the declaratory judgment action brought by the
beneficiary succinctly:
Appellant brought this declaratory judgment action in 1999 against Appellee.
The action involves a construction and quarrying company that was founded by
Appellant's grandfather and eventually, after various corporate actions, operated under
the name Pennsy Supply, Inc. In 1982, Pennsy Supply, Inc. changed its name to Nine
Ninety-Nine, Inc.,canceled a11 of its outstanding shares, and issued replacement shares in
the new corporate name. Pennsy Supply, Inc. became a wholly-owned subsidiary of Nine
Ninety-Nine Inc. The assets that were held in the name Nine Ninety-Nine, Inc., as well as
other construction and quarrying assets owned by the Mumma family were sold in 1993
to an Irish corporation for $34,000,000. Appellant initially opposed the sale but
ultimately joined in it, receiving$3,000,000.
Appellant brought this declaratory judgment action requesting a declaration that
he retained an ownership interest in a corporation known as Pennsy Supply Inc. (no
comma) which, according to Appellant, operated as a separate and distinct �ntity from
Pennsy Supply, Inc. (with a comma). He produced a stock certificate issued in 1963
showing that he owns 314 shares of Pennsy Supply Inc. (no comma) and claims in this
action that the entity with no comma owns the quarry assets formerly owned by the
Mumma family,among other business interests.
In other words, Appellant claims to own the assets sold for$34 miilion in 1993.
Appellant's position is that two corporations simultaneously existed from 1958 to 1993,
one with a comma and the other without a comma. The Irish corporation paid
$34,000,000 for the company with a comma, which owns nothing, while Appellant, who
received$3,000,000 of that purchase price, owns the company without a comma,and tha,t
company owns a11 of the assets. Altematively, Appellant requested a decla.ration that a
1961 shareholder's agreement gave Appellant an option to purchase substantial assets
operated by Pennsy Supply, Inc.6s
The doctrine of collateral estoppel prevents relirigation of issues previously
decided in a competent forum. Commonwealth v. Teagarden, 696 A.2d 169 (Pa. Super.
Ct.. 1997). "[T]he only requirements to the doctrine of collateral estoppel are (1) that the
issue or issues of fact determined in a prior action be the same as those appearing in a
subsequent action , , , [and] (2) that the party against whom the defense is invoked is
`�Opinion and Order of Court, dated May 17, 2002,RobertM.Mumma,II v. Pennsy Supply, Inc., No. 99-
2765 Equity(Cumberland Co.) (Oler, J.).
6s Memorandum Opinion, dated July 8, 2013,Mumma v. Pennsy Supply, Inc.,No. 1352 MDA 2002 (Pa.
Super. Ct.)(footnote omitted).
16
identical to or in privity to the party in the first action." Thompson u Karastan RugMills,
228 Pa. Super. 260, 265, 323 A.2d 341, 344 (1974).
There was no reason for the auditor in this estate to disregard, or propose
altematives to, facts previously decided in a competent forum and pertinent to the current
litigation.
Pufported overfunding of marital trust to benefit testator's spouse. It is also
vigorously azgued in objections to the auditor's report that the auditor erred in decluting
to accept the proposition that the executrices overfunded the marital trust and
u.nderfunded the residual trust in order to benefit the testator's spouse through the vehicle
of annual withdrawals of principal for her benefit.66 In this regard, reference is made to
the distinction in the will between permitted withdrawals from the two trusts: with
respect to the marital trust, decedent's spouse was to receive (a) the annual income
therefrom, (b) such a.mount of the principal as deemed appropriate by the co-trustee to
maintain her accustomed standard of living, and (c) the greater of $5,000.00 or five
percent of the principal of the trust annually upon request, said invasion of principal to be
"noncumulative";67 with respect to the residual trust, decedent's spouse was to receive (a)
the annual income therefrom and (b) such amount of the principal as deemed appropriate
by the co-trustee to maintain her accustomed standard of living.68 The amount to be
allocated to the marital trust has been previously described.69
For several reasons, the court fmds itself in agreement with the auditor on this
point. First, the issue of the propriety of the funding of the two trusts involved a "battle of
experts" in terms of opinion testimony.'° In such a case, it is the responsibility and
`� See Supplemental and Corrected Objections of Robert M. M
Auditor Joseph D. Buckley, Esquire, filed September 19, 2013,at¶�¶79 lp3,t113-2�Z.�st 7, 2013 Report of
67 Last Will and Testament of Robert M. Mumma,dated May 19, 1982,¶7.
68 Last Will and Testament of Robert M. Mumma, dated May 19, 1982,¶8.
69 See text accompanying note 15,supra.
70 See Testimony of Jonathan M. Crist,Transcript of Auditor's Hearing dated Apri121, 2009, at 164, 202;
Testimony of George Hadley, Transcripts of Auditor's Hearing ciated December 14, 2009, December 15,
17
prerogative of the trier-of-fact to act "as the ultimate referee based upon [his or her]
assessment of the credibility of the experts." Commonwealth u Puksar, 597 Pa. 240, 255,
951 A.2d 267, 276 (2008). "[A] trier of fact is not bound by the testunony of[a certain]
expert witness and is under no obligation to accept the conclusions of an expert witness.
George v. Ellis, 820 A.Zd 815, 817 (2003).
Second, the objection presupposes a fraudulent scheme on the part of (a) Ms.
Morgan, who is a member of the Pennsylvania bar in good standing, and(b) the testator's
spouse and mother of the remaindermen, in concert with others. Nothing in tlieir nature,
as exemplified by the patience with which each endured the interrogation of offspring
and siblings during the many da.ys of auditor's hearings, suggests such a malevolent trait
in either executrix/trustee. Indeed, the refusal of the testator's spouse to accept
remuneration for her services as executri�c/trustee u.nder the will�l and her preference that
the fees of the co-executri�trustee be withdrawn from trust income, to which the spouse
would have been entitled, rather than trust principa1,72 are hazdly indicative of a person
desirous of appropriating her children's inheritance. Furthermore, Ms. Morgan could
have had as much to lose as the other remaindermen from the putative overfunding.
Third, the principal of either trust could have been invaded for the benefit of the
testator's spouse had the trustees desired to do so, without resort to the problematic
device of trying to overfund the marital trust.73 And, fourth, it appears that ultimately the
Internal Revenue Service and estate agreed upon the valuations arixibuted to trust assets.74
The auditor well summarized his view of the record on this issue as follows:
2009, December 17, 2009 and December 18, 2009; Testimony of Daniel Johnson, Transcript of Auditor's
Hearing dated October 26, 2009, at 2400-2409; Testimony of Joseph D.C. Wilson, Transcript of
Auditor's Hearing dated October 26, 2009,at 2461-2484, 2495-2520.
" See Testimony of George Hadley, Transcript of Auditor's Hearing dated December 17, 2009,at 4169.
72 See Testimony of George Hadley, Transcript of Auditor's Hearing dated December 17, 2009, at 4168-
4169.
73 See Last Will and Testament of Robert M. Mumma, clated May 19, 1982,at¶¶7-g,
'4 See Testimony of Joseph A. O'Connor, Jr., Transcript of Auditor's Hearing dated August 3, 2009, at
1645-1647.
18
. . . The Objector has not met his burden of proving that [the executrices] did
something imprudent or improper. In retrospect it is easy to state a parry might have
campleted a task in a differing manner. Here the executrices sought the advice and
counsel of numerous professionals. Mr. Hadley[, a certified public accountant long
utilized by the Mumma enterprises in his professional capacity,] the individual with the
most independent knowledge and the person most familiar with the businesses worked to
calculate values. Many scenarios were reviewed . . . . Their actions were proper under the
terms of the decedent's last Will and Testament and were properly administered in
accordance with their duties as Executrices.75
To the extent that a purely legal issue is involved in the contention regarding
overfunding of the marital trust, the court is unable to improve upon the analysis
contained in the Appendix to the brief of the co-executrices/trustees on the subject:
Objectors claimed that Mrs. Mumma, Mrs. Morgan and their advisors
misinterpreted the will with respect to the value of the Marital Trust. They claim that the
result was an overfunding of the Marital Trust by hundreds of thousands of dollars. Their
proffered reading of the will in this regard is incorrect.
All the parties and their experts agree that the Marital Trust bequest described in
Mr. Mumma, Sr.'s will is a `pecuniary formula marital'—i.e., the bequest is of a specific
amount which is described in the will—as contrasted with a so-called `fractional share'
formula,which ca11s for a marital bequest of a fraction of a portion of the estate.
The specific amount described in Mr. Mumma, Sr.'s will and payable to the
Marital Trust is plainly set forth in Article SEVENT'�I:
an amount equal to fifly (50%)percent of my total gross estate as finally
determined for Federal Esta.te Tax purposes, taking into account and
including therein, for computa,tion purposes, my undivided interest in the
value of all my interests in property which pass or have passed to my
wife under other provisions of this Will or otherwise than under this
Will. . . . ,
(E�ch A-4). Under this provision, property passing to Mrs. Mumma outside the will is
nonetheless part of the amount to which the 50% calculation is applied. The clause
containing the language regarding inclusion of assets passing outside the will directly
follows "my total gross estate as finally determined for Federal Estaxe Tax purposes,"and
therefore clearly was intended to modify that language. Because the total gross estate as
finally determined by the IRS was $17,296.337(Exh.A-3),the pecuniary amount yielded
by the calculation prescribed in Article SEVENTH is $8,648,169. Both Mrs. Morgan's
and Mrs. Mumma's expert, David Cleaver, and Mr. Mumma, II's expert, Jonathon Crist,
agreed that Mrs. Mumma's and Mrs. Morgan's interpretation is correct. (Cleaver 3788-
91; Crist 154, 202, 222).
However, Daniel Johnson, called as an expert by Babs [Barbaza M.] Mumma,
testified that he believed the words "talcing into account and including therein, for
computation purposes, my undivided interest in the value of all my interests in property
which pass or have passed to my wife under other provisions of this Will or otherwise
75 Report of Auditor, filed August 7, 2013,at 85.
19
than under this Will" required that the arnount bequeathed to the marital trust must be
reduced by the value of specific legacies to Mrs. Mumma made in other parts of the will
and also by the value of property(such as insurance)includa,ble in Mr. Mumma's ta,�ble
estate but passing to Mrs. Mumxna outside the will. Based on his interpretation, Babs
Mumma's expert, Joseph Wilson, calculated that Mrs. Mumma and Mrs. Morgan
overstated the pecuniary amount owed to the Marital Trust by$861,018. (Wilson Johnson
2493-94).
Mr. Johnson thus apparently interprets the words "taking into account and
including therein"as equivalent to language commonly found in wills drafted before the
enactment in 1981 of the unlimited estate tax marital deduction. The standard formula
clause in those wills reduced the marital deduction bequest by amourrts passing to the
spouse under other will provisions or outside the Will to avoid overfunding the marita.l
bequest which at that time was limited to one-half of a decedent's gross taxable estate.
Such old clauses typically read"fifty percent of my gross estate, excluding therefrom the
value of all property passing to my wife under other Will provisions or outside my Will."
Mr. Mumma, Sr., of course, adopted an altemative formulation: "taking into account and
including therein." The change of language from "excluding therefrom" to "including
therein," reflected Mr. Mumma, Sr.'s abvious intention and clear specification that the
marital Trust, which was certain to pass estate tax free and which would be Mrs.
Mumma's primary source of support (the Residuary Trust would bear any taxes and
estate settlement costs), and over which he granted Mrs. Mumma a right to withdraw
annually 5% of the principal, equa150% of the value of all his taxable assets—whether
they be other probate assets or property passing outside his will. (O'Connor 5150-51;
Cleaver 3789-91). Thus, both the language of Mr. Mumma, Sr.'s will and the
circumstances sunounding its drafting fully support Mrs. Mumma and Mrs. Morgan's
in#erpretation.76
Purportedly unreasonable legal expenses incurred by co-executrices/trustees. It is
argued that the executrices/trustees have spent too much on legal fees.�� By way of
exa.mple, it is argued that the successful pursuit of litigation in Florida by the co-
executrices/trustees against the aforesaid beneficiary arising out af his misappropriation
of property of a corporation in the residuary trust constituted a breach of their fiduciary
duties, inasmuch as the legal fees associated with the lirigation were disproportionate to
its benefit.78 It appears from the Florida records that the property found to have been
misappropriated by the said beneficiary had a value of hundreds of thousands of dollars;
it also appears that the pla.intiffs were found, pursuant to a Florida statute, to be entitled to
76 Appendix to Brief of Barbara McK. Mumma, (Deceased) and Lisa M. Morgan in Opposition to
Objections of Barbara Mumma to Auditor's Report,at 8-10(footnote omitted).
"See Objections of Barbara M. Mumma to Report of Auditor pocketed August 7, 2013, filed September
16, 2013,at 36-38.
78 Objections of Barbara M. Mumma to Report of Auditor pocketed August 7,2013,at 27.
20
an award of attorney's fees at a11 levels of the litigation, and that they were entitled to
interest.79
First, to the extent that a finding of an improper expenditure by the fiduciaries for
purswing this litigation would benefit the aforesaid beneficiary—which it would, through
the vehicle of a surcharge—it would represent a repudiation of the legal maxim nemo ex
suo delicto meliorem suan conditionem facere potest—no man should profit from his own
wrong. Second, where the auditor has estimated that unsuccessfullegal machinations by
the said beneficiary have cost the estate $5,000,000 in legal fees,SO and where it is said
that the estate lost another $10,000,000 due to the effect of his conduct upon the sale of a
major esta.te asset,81 the fiduciaries had, in the court's view, an obligation not to
encourage his acrivities by permitting the outright misappropriation of a trust asset, even
though the cost of doing so might be far from nominal. Finally, the success of the
litigarion from the fiduciaries' standpoint as described above has fully demonstrated the
financial wisdom of their course of action.
It is also argued that "[t)he evidence presented to Auditor Buckley provided no
justification for having two dif�erent major law firtns represent Lisa Morga.n and, before
her death, Barbara McK. Mumma, as co-executors and co-trustees throughout the long
litigation of this case. Lisa Morga.n claimed that this somehow reduced the totallegal fees
� because the Marston [correctly, Martson] firm's hourly rates were less than those charged
by Morgan Lewis & Bockius."82
In this case, involving a multi-million dollar estate, with major challenges to the
inexperienced fiduciaries in terms of (a) continuing to operate numerous business that
were vulnerable to the will of on-demand creditors83 and (b) fending off unparalleled and,
'�See Mumma v. Mumma, 780 So. 2d 1001, 1003,F1a.App. 4 Dist., 2001.
80 See Report of Auditor, filed August 7, 2013, at 75, ¶444.
$' See Report of Auditor, filed August 7, 2013,at 106.
gZ Objections of Barbara M. Mumma to Report of Auditor pocketed August 7,2013,at 36.
83 See Testimony of Bazbara McK. Mumma, Transcript of Auditor's Hearing dated April 23, 2009, at
716-23.
21
in the court's view, unprincipled legal attacks on the part of a seemingly ine�chaustible
beneficiary,� it is hardly surprising that the fiduciaries chose to avail the esta.te and trusts
of highly qualified professional counsel in order to conserve, preserve and grow their
assets. The charges of these professionals were fully accounted for and justified in
testimony before the auditor.85
Purportedly inaccurate valuations of estate assets. Objections are made to the
auditor's acceptance of the fiduciaries' valuations of various assets.86 The strength of
these contentions is typified by the assertion that the auditor erred in declining to fault the
accountants for valuing a certa,in asset on the basis of its recent purchase price rather than
incurring the expense of an appraisal.g� Valuation of an asset on the basis of the price it
commanded at a recent sale is one of the most, if not the most, reliable of inethods of
valuation sanctioned by the courts. Glen Alden Coal Co. u Schuylkill County, 345 Pa.
159, 27 A.2d 239 (1942). It may also be noted that other valuations employed by the
fiduciaries were fully supported by competent witness testimony88 and that valuations
were ultimately agreed upon between the estate and Internal Revenue Service.89
Purportedly improper fiduciary crccounting for a certain tractor. In this multi_
million dollar estate, objection is made to the auditor's report that "[t]he word `tractor'
�See note 3 supra.
85 See Testimony of Lisa M. Morgan, Transcript of Auditor's�Hearing dated Apri128, 2010, at 5971-73;
see, e.g., Y estimopy of Ivo V. Otto, III, Transcn�'pt of Auditor s Hearing dated June 14, 2010, at 6843-48;
Testimon of Jose h A. O Connor, Jr., Transcri t of Auditor s Hearing da,ted April 22, 2010,at 5226-27.
86 See Supplemental and Corrected Objections of Robert M. Mumma, II to August 7, 2013 Report of
Auditor Joseph D. Buckley, Esquire, filed September 19, 2013,at 23-27.
87 See Supplemental and Corrected Objections of Robert M. Mumma, II, to August 7, 2013 Report of
A;ditor Joseph D. Buckley, Esquire, filed September 19, 2013, at 33-34, ¶¶128-30 (noting that the
ob'ection referred to the Auditor s finding that the Bender property was valued at the purchase price,paid
four months prior to the decedent's passing. See Report of Auditor, filed August 7,2013,at 88-89).
8S See, e.g., Testimony of George Hadley, Transcript of Auditor's Hea,ring dated December 14, 2009, at
3601-03, 3624-26; Testimony of Harry I,a1ce, Transcript of Auditor's Hearing dated June 19, 2009, at
1444-46; Testimony of George Hadley, Transcript of Auditor's Hea,ring dated April 20, 2010,at 5075-77.
S9 See tTestimony of Joseph A. O'Connor, Jr., Transcript of Auditor's Hearing da,ted August 3, 2009, at
1646-47.
22
does not appear anywhere in the Auditor's Report," notwithstanding that an objection in
2010 to an account pertaining to the residuary trust contended that "[t)he Trustee
identifies the purchase of a $26,772 tractor as an administrative expense and does not
identify the tractor as an asset of the [residuary] trust nor identify the tractor as being
sald.i90 The response to this on behalf of the co-executrices/trustees is satisfact
court:
ory to the
In response to $abs [Barbara M.] Mumma's questions [at the auditor's hearing],
Mrs• Mumma explained the background of the purchase of the tractor. The purpose of the
tractor was for use in mowing of the Amity Ha11 Horse Farm, an asset owned by Mumma
Realty Associates and governed by the MRA-II Agreement (Morgan (1595-96). Due to
MRA-II's shorta,ge of cash, the Residual Trust, which owned more than 8p% of the
MRA-II assets, loaned funds to Mumma Realty Associates to purchase the tractor.
(Morgan 1596). The tractor became an asset of Mumma Realty Associates, and the
receivable from Mumma Realty Associates was reflected in the Account for the Residua,l
Trust. (Acct of Residual Trust, Jan 1, 2004-July 17, 2010, Sch F at 22; Morgan 1596-99).
Babs Mumma offered no evidence to show either any impropriety with the 1
the Residual Trust somehow was deprived of the value of the loaned funds�fact,�of
course, as the overwhelming majority owner of the Amity Ha,ll Horse Farm under the
MRA-II Agreement, the Residual Trust derived value from the maintenance and upkeep
of the property, which the appraisals obtained by Mrs. Mumma and Mrs. Morgan showed
appreciated in market value from $1 million at the date of Mr. Mumma, Sr.'s death (Ex1i
T-8)to$5 million when Mrs. Mumma passed away. (Exh T-8,A02-1002).
In any event, because the cost of the tractor was charged against income, the
principal beneficiaries were not adversely affected . . . because Mrs. Mumma was entitled
to all of the income from the Residual Trust. (Acct of Residual Trust, Jan 1, 2004-July
17, 2010, Sch C-2 at 40). The expenditure thus simply reduced the amourrt of money she
�'aas owed as income, while all of the principal beneficiaries derived the benefit of the
tractor as an asset of Mumma Realty Associates.91
Failure of auditor to note that fiduciary Lisa M. Morgan ultimately moved from
Harrisburg area. Barbara M. Mumma, axnong her objections to the auditor's report, notes
that the auditor correctly found that Ms. Morgan "and her husband, then a practicing
attomey lumself, moved to Harnsburg in 19g7,"92 Thereupon, according to the auditor,
90 Objections of Barbara M. Mumma to Report of Auditor pocketed August 7, 2013, filed September 16,
2013, at 6.
91 Supplemental Post-Hearing Brief of Barbara McK. Mumma (Deceased) and Lisa M. Morgan As
Executrices of and Trustees under the Will of Robert M. Mumma,at 20-21.
92 Objections of Barbaza M. Mumma to Report of Auditor pocketed August 7, 2013, filed September 16,
2013,at 41;see Report of Auditor, filed August 7,2013,at 52.
23
she "worked full rime on Real Estate matters and was general counsel for a11 the Mumma
companies and �liated business[es] handling contract, personnel a.nd labor issues"93
while "[the decedent's spouse] worked as the chief executive officer for a11 the Mu.mma
businesses."94 The fiduciaries then "hired a full time ro e
p p rty manager and appraisers,"
according to the auditor.95 However, the objector complains that the auditor failed to also
state that Ms. Morgan ultimately moved from the Harrisburg area.
At oral argument counsel for this objector, Barbara M. Mumma, urged that the
court endeavor to separate the wheat from the chaff with respect to the multitude of
objections filed to the auditor's report. With this in rnind, the court has found itself
unable to place this objection in the category of wheat.
Assessment of Attorney's Fees and Costs. The auditor is faulted by the aforesaid
beneficiary, Robert 11✓1. Mumma, II, for his recommenda.tion that the beneficiary bear
responsibility for one-half of the estate's attorney's fees and for half of the costs of the
auditor's proceedings.96 The aud.itor's observation that the beneficiary had proven
"obdurate" and "unprofessional toward the Court, [the auditor's] position, the other
attomeys and opposing paxties" is dismissed by the objector as "conclusory."97
In this regard, it may be pointed out that the assessment of attorney's fees in esta.te
contests following auditors' hearings is common practice in the Commonwealth. See,
e.g., Estate ofBruner, 456 Pa. Super. 705, 691 A.2d 530 (1997). It has also long been the
rule that costs of auditors' proceedings may be appropriately apportioned aznong the
parties. Clauser's Estate, 84 Pa. 51 (1877).
93 Report of Auditor, filed August 7, 2013, at 52.
�Report of Auditor, filed August 7, 2013,at 52.
9s Objections of Barbara M. Mumma to Report of Auditor pocketed August 7, 2013, filed September 16,
2013,at 52.
� See Supplementa,l and Corrected Objections of Robert M. Mumma, II, to August 7, 2013 Report of
Auditor Joseph D. Buckley, Esquire, filed September 19, 2013,at 35-36,¶¶135-41.
97 See Supplemental and Corrected Objections of Robert M. Mumma, II to August 7, 2013 Report of
Auditor Joseph D. Buckley, Esquire, filed September 19, 2013, at 35-36, ¶¶135-41.
24
Given the beneficiary's conduct in this case, the court is in full agreement with the
recommendations of the auditor on this point. Accordingly, a hearing will be scheduled to
determine the amounts to be assessed.
Surcharge. It follows from the foregoing that the court does not believe that the
various objections to the accounts of the fiduciaries demonstrate that they fiduciaries
should be subjected to surchargs for wrongdoing. In this regard, it is well settled that the
initial burden of proving the propriety of such a sanction is upon the objectors. In re
Dobson's Estate, 490 Pa. 4?6, 417 A.2d 138 (1980). It may also be pointed out that the
testator's will specifically provided that the fiduciaries "sha11 not be liable for any error of
judgment provided that such error is honestly made."98 No dishonesty on the part of the
fiduciaries has been perceptible to the court.
Benficiary's renewal of motion for extension of time to file objections to auditor's
report. Immediately following an "Introduction" to his 114-page compilation of
objections to the auditor's report, in which the aforesaid beneficiary decries the delay in
resolution of the testator's estate, is a secrion entitled "Renewal of Motion for Extension
of Time to File Objections."99 In this section, the said beneficiary complains that the
court erred in granting him an extension of only 30 days beyond the period provided in
the local orphans' court rulesloo to file objections to the report, when he had requested a
55-day etrtension.lol He adds that "[i]t is expected that further supplementation will
9S Last Will and Testament of Robert M. Mumma, dated May 19, 1982,at¶8.
�Supplemental and Corrected Objections of Robert M. Mumma, II to August 7, 2013 Report of Auditor
Joseph D. Buckley,Esquire, filed September 19,2013,at 4-5.
�oo See C.C.O.C.R. 8.7-2 (20-da,y period provided for filing abjections to auditor's reports).
'o' Motion of Robert M. Mumma, II for Extension of Time To File Objections to August 7, 2013 Report
of Auditor Joseph D. Buckley, Esqulire, filed August 14, 2013. It may be nated that the court
subsequently also granted the beneficiary an eartension of time within which to file his brief on the
objections. Order of Court, da,ted August 20, 2013.
25
_ , _._ � ,
consist primarily of providing more specific citations to hearing transcripts and evidence
in the record . . . ,"1°2
Continuances in judicial proceedings are generally relegated to the sound
discretion of the court. Birdsall u Carbon County Bd. of Assessment, 168 Pa. Commw.
266, 649 A.2d 740 (1994). In this instance, given the background of delays occasioned
by the said beneficiary and his intimate familiarity with the case, the court was of the
view that an extension that more than doubled the time allotted in the ruie for the filing of
objections was sufficient.
CONCLUSION
As President Judge Hess of this court wrote many yea,rs ago in the context of
another case in which he perceived that a party "ha[d] attempted to ga.in [a favorable
result] by simple attrition of the court system":'o3
"The motions go on and on, but we will not."loa
'02 Supplemeirtal and Corrected Objections of Robert M. Mumma, II to August 7, 2p13 Report of Auditor
Joseph D. Buckley,Esquire, filed September 19,2013,at 5,¶17.
'03 Commonwealth v. Appel, 43 Cumb. L.J. 277(1994).
104 Commonwealth u Ap�el, 43 Cumb. L.J. 277,2$3 (1994).
As noted in the introduction to this opinion, objections have also been filed to final auditor's report by
the accountants. Objections of Barbara McK. Mumma (Deceased) and Lisa Morgan As Executrices of
and Trustees under the Will of Robert M, Mumma to Report of Auditor, filed September 16, 2013, A
review of these objections reveals that they are either to the style of the report, to obvious typographical
errors, or to findings that do not rise to the level of determinative factors. For instance, while conceding
that the report"represents . . . a herculea,n effort to grapple with the highly-contested administration of the
Estate and the Trusts by Mrs. Mumma and Lisa from �April 1986 until July 2010" (id.,at 2), the
accountants argue that occasional "inconsistent terminology with reference to various persons or entities
"poses the potential for confusion in the mind of any court that might review the Report in the context of
an appeal , . . ."Id., at 2. Indeed, the accountants have appended to their objections a 128-page revised
version of the auditor's report for the court's signature, with consistent terminolo
McK. Mumma being invariably identified as "Mrs. Mumma."Id., at 17-150. gy—e'g'' �th Barbara
Examples of other objections of the accountants relate to (a) the correct identity of an attorney who,
when the aforesaid beneficiary attempted to abscond with various corporate recorc}s during a discovery
session, chased him down the street and managed to retrieve the documents(id., at 12-13), (b)the state in
which a certain corporate entity was incorporated (id., at 8-9
form of an omission of "not" preceding the word ro r >� �c� an obvious typographical error in the
typographical error in reference to the aforesaid beneficiary's'record of failu e)prior�litigationr d vil�s
and so forth. ( )�
26
ORDER OF COURT
AND NOW, this 30th day of April, 2014, upon consideration of the various
objecrions to the final auditor's report filed in the above-captioned esta.te, and for the
reasons stated in the accompanying opinion, it is ordered and directed as follows:
1. The objections aze dismissed and the accounts to which
objections have been filed are confirmed;los �d
2. In accordance with the auditor's recommendation, a hearing to
determine attorney's fees and costs is scheduled for Wednesday, Ju.ne
25, 2014, at 9:30 a.m., in Courtroom No. 4, Cumberland County
Courthouse, Carlisle, Pennsylvania.
BY THE COURT,
/s/J. Weslev Oler Jr
J. Wesley Oler, Jr., S.J.
Joseph D. Buckley, Esq.
1237 Holly Pike
Carlisle, PA 17013
Auditor
Anthony L. DeLuca, Esq.
113 Front Street
Boiling Springs, PA 17007
Successor Auditor
The final auditor's report in this case is, in the court's view, a monument to juridicai perseverance
under highly adverse conditions and a model of clarity given the complexity of the circumstances. The
report would not be improved by standardizing its nomenclature. The rema,ining objections of the
accountants,while not technically ina,ccurate, will also be dismissed on de minimis grounds.
�os At oral argumerrt on the objections to the auditor's report the parties indicated that it would be
premature at this time to approve a certain schedule of distribution.
27
Taylor P. Andrews, Esq.
Andrews & Johnson
78 VV. Pomfret St.
Carlisle, PA 17013
Former Auditor
Ivo V. Otto, III, Esq.
George B. Faller, Jr., Esq.
Martson Law Offices
10 East High Street
Carlisle, PA 17013
Brady L. Green, Esq.
Wilbraham, Lawler& Buba
31 st Floor
1818 Market Street
Philadelphia, PA 19103
Robert M. Mumma, II
Box F
Crrantham, PA 17027
Richard F. Rinaldo, Esq.
Williams Coulson LLC
16th Floor
One Gateway Center
Pittsburgh, PA 15222
Ms. Linda M. Mumma
P.O. Box 30436
Bethesda, MD 20824
28