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HomeMy WebLinkAbout06-20-14 (2) . IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA N In re: ESTATE OF ROBERT M. : � s -R' � MUMMA, Deceased. . ORPHANS' COUR� �IVIS�N��' � ;�:�t3 -T3 Z ii7 ..".7 . . f�1 -c- �"? _.,...t <.,3 � _ ;:._� .T_d f'- (�) _ t !rI • No. 21-86-398 ' � ' ; ° � `-' . - , ,. ; _:f, a ;:_> � --�� CONCISE STATEMENT OF ERRORS COMPLAIN�D OF �> . � ON APPEAL BY APPELLANT BARBARA M. MU�VII�A ~ ` � `�' � �� ° .Y � 1. This Concise Statement of Errors Complained of on Appeal is filed in compliance with Pa. R.A.P. 1925(b)(4) and served pursuant to the Order of Court dated May 30, 2014 but docketed June 2, 2014. 2. Pursuant to Pa. R.A.P. 1925(b)(4), Appellant Barbara M. Mumma hereby prefaces this Statement with the following: The Order from which Ms. Mumma appeals was dated and entered on the docket April 30, 2014 (Docket No. 836)(hereinafter "the Order"). The Order entered by the Court dismissed the objections to a final Auditor's Report and confirmed accounts filed for the periods prior to July 17, 2010. The Order was accompanied by an Opinion also dated Apri130, 2014 setting forth the bases of the Court's order. 3. Pursuant to Pa. R.A.P. 1925(b)(4), the errors complained of on appeal by Appellant Barbara M. Mumma are as follows: {wcasss9z.� } � � a. Whether the Trial Court erred in failing to rule at all on certain timely objections to the Auditor's Report filed by Barbara M. Mumma on September 16, 2013 (Docket No. 780 — hereinafter "Barbara Mumma's Objections"). See, e.g., Barbara Mumma's Objections, § 6, at pp. 27-39, including but not limited to Barbara Mumma's objection that the Trustees breached their fiduciary duty by improperly allocating substantial expenses between the Marital and the Residuary Trusts, to the detriment of the residuary beneficiaries.l These Objections include cramming expenses into the Residuary Trust, then making loans from the Marital Trust to the Residuary Trust, improperly inflating the values of the marital 1 The April 30, 2014 Opinion contains a passing reference suggesting that given the number of objections, only certain objections would be addressed in the opinion with "the less significant or less comprehensible ones being relegated to the auditor's discussion." April 30, 2014 Opinion, at p. 12. Part of the difficulty is that the April 30, 2014 Opinion lumps the multiple objections filed by a different residuary beneficiary, Robert M. Mumma, II, in with the considerably fewer objections filed on behalf of Barbara M. Mumma, to the detriment of Barbara M. Mumma. In fact, as Barbara Mumma's Objections rather clearly point out, the Auditor's report contains no discussion at all of certain of Barbara Mumma's Objections, so there is nothing to which to "relegate" the discussion. Moreover, to the extent that the Opinion suggests that the Objections set forth on pages 27-39 of Barbara Mumma's Objections are either insignificant or incomprehensible, the undersigned respectfully disagrees with the Court and states that the Court's failure to consider these objections constitutes reversible error. The unresolved objections amount to — at a minimum — hundreds of thousands of dollars or even more, and are hardly difficult to comprehend. - 2 - � trust and charging interest on the loans between the two trusts created by the same estate. See, e.g., Barbara Mumma's Objections at pp. 27-28. The Objections also include misallocating both accounting and legal fees between the Marital and the Residuary Trusts to the detriment of the Residuary beneficiaries. See, e.g., Barbara Mumma's Objections, at pp. 29-36. Moreover, to the extent that the Apri130, 2014 Opinion and Order asserts that it validates the Auditor's Report with respect to either the outrageously and grossly excessive, unreasonable and unwarranted legal fees claimed as due by Lisa Morgan as Trustee to the Trusts, see April 30, 2014 Opinion at pp. 20-22, the April 30, 2014 Order 2 is error. b. Whether the Trial Court erred in entering the April 30, 2014 Order because the Auditor's Report and the Apri130, 2014 Opinion made 2 Paragraph Two of the April 30, 2014 Order sets a hearing "[i]n accordance with the auditor's recommendation," to "determine attorney's fees and costs" for June 25, 2014. To the extent that it may be determined that it is necessary to include in this Rule 1925 Statement the issues relating to the allocation of attorney's fees and costs between the Residuary Trust and the Marital Trust, to the amount of attorney's fees charged to and paid by the trustees, or to the recommendation by the Auditor that Robert M. Mumma II be assessed one half of the fees and costs, to prevent waiver of those issues, then those issues which the Court may or may not address at the June 25, 2014 hearing also are herein raised as error for the purposes of preserving the right to appellate review. - 3 - � recommendations which violate the intent of the testator with respect to the distribution of assets to the beneficiaries of the trusts. The Will of Robert M. Mumma provides, in pertinent part, that upon the death of his widow, Barbara McK. Mumma, who died on July 17, 2010, the principal of the trust, as it was then constituted, was to be paid over to his four children, "share and share alike, per stirpes and not per capita." See, e.g., In re McKinney, 67 A.3d 824, 831 (Pa. Super. 2013) In re Hirt, 832 A.2d 438, 448 (Pa. Super. 2003)("the polestar in every trust is the settlor's intent and that intent must prevail"); Restatement (Third) of Trusts, § 79 (2007). Included in this issue raised as error is the Court's determination that directly contrary and specific language in the Will was "precatory." See April 30, 2014 Opinion, at pp. 13-14. The cases cited by the Court for its determination [e.g., In re Lindsey's Estate, 311 Pa. 536, 166 A. 848 (1933)] have been criticized and distinguished by more recent authority and are at best a small minority view. See, e.g., In re Hand's Estate, 315 Pa. 238, 244, 172 A. 666, 669 (1934)("It is uniformly held that words of recommendation, request, wish or expectation addressed to the executor and used in respect to the direct disposition of the - 4 - � testator's property, are prima facie testamentary and imperative, rather than precatory, in effect, on the ground that, the testator having a right to make such a disposition of his property as he thinks proper, the expression of his wishes is deemed to be the expression of his will, and the request is the equivalent of a command."); In re Rzedzianowski's Estate, 148 Pa. Super. 361, 367-368, 25 A.2d 600, 603 (Pa. Super 1942). See generally Hunter, et al., Pennsylvania Orphans' Court Commonplace Book, Vol. V, at pp. 155-157 (Second Edition — Revised 1990 & 2013 Cumulative Supp.). Also included in this issue as error is the Court's determination that the testator's intent was only contingent and the Court's apparent conclusion that the fact that the Will contained general language giving broad powers to the Trustees somehow took precedence over the specific expression of the intent of the Testator concerning the distribution of the assets of the Trusts. c. Whether the Trial Court erred in failing to address questions as to how certain of the assets actually were poured into the estates and the trusts created under the Will, including certain assets which apparently were not assets owned by the Testator at the time of his - 5 - � death. There was no determination made by the Auditor that certain of the assets (such as shares of stock in certain corporations) were actually owned by the Testator at the time of his death, and the evidence at the hearing was to the contrary. d. Whether the Trial Court erred in purportedly authorizing actions by the Trustee which exceed the trial court's jurisdiction because they involve corporations and assets of corporations not party to the probate matter, including but not limited to Bobali Corporation, D-E Distribution Corporation, and others. e. Whether the Trial Court erred in sanctioning the Trustee's intended liquidation of real property assets held by various corporations not party to the Orphans' Court proceedings and by two different tenancies-in-common both without regard for the rights of other shareholders and other members of the tenancies and based on the confirmation of accounts which only covered periods prior to July 17, 2010 and which do not account for the most recent four years of activity. If such real property assets are liquidated, before final accounts are confirmed and the Trust assets completely distributed, the damage and harm to the interests of the residuary beneficiaries will be permanent and irreparable. - 6 - f. Whether the Trial Court erred in adopting the Auditor's recommendations concerning the overfunding of the Marital Trust to benefit both the Testator's spouse and one of the beneficiaries, Lisa Morgan, to the detriment of the remaining beneficiaries, thereby breaching their fiduciary duty. See Apri130, 2014 Opinion, at pp. 17-20. Included in this issue as error is the Court's comment that "Ms. Morgan could have had as much to lose as the other remainderman from the putative overfunding." See April 3 0, 2014 Opinion, at p. 18. The Opinion fails to note that Ms. Morgan is the executrix of her mother's will and, for all practical purposes, the sole (or single largest) beneficiary of her mother's estate. In fact, she had much to �ain from the overfunding of the trust. Partiality with respect to beneficiaries, particularly by the Trustees themselves, is improper under Pennsylvania law. See, e.g., 20 Pa. C.S. § 7773; In re Holmes Trust, 139 A.2d 548, 552 (Pa. 1958); In re Estate of Hamill, 410 A.2d 770, 773 (Pa. 1980). See also In re Estate of Warden, 2 A.3d 565, 574 (Pa. Super. 2010)("the conscious doing of a wrong because of. . . moral obliquity"). The overfunding of the Marital Trust actually operated to the substantial financial benefit of Ms. Morgan, who until July 17, - 7 - � 2010 was co-executrix with her mother of the estates, and following the death of her mother on July 17, 2010, has been the sole Trustee.3 Dated: June 19, 2014 � � Richard F. Rinaldo Williams Coulson, LLC 16th Floor, One Gateway Center Pittsburgh, PA 15222 412-454-0200 Attorneys for Barbara M. Mumma 3 Following the death of Barbara McK. Mumma on July 17, 2010, her daughter Barbara M. Mumma, was appointed as co-executrix. Since that time, however, Lisa Morgan has taken the position that she may completely ignore her sister's appointment as co-executrix because Ms. Morgan claims that there are no longer any assets whatsoever in the Mumma estates to administer, because they have all been duly distributed either to the Residuary Trust or to the Marital Trust, of which 1VIs. Morgan is the sole surviving Trustee, although it is not at all apparent from the record how any such assets were transferred into the trusts. - 8 - CERTIFICATE OF SERVICE I hereby certify that a true and correct copy of the foregoing Concise Statement of Errors Complained of on Appeal has been served pursuant to Pa. R.A.P. 906(a) by either Federal Express or by first-class United States mail, postage prepaid, as shown below, this 19th day of June 2014, to the following: Hon. J. Wesley Oler, Jr., Senior Judge Court of Common Pleas of Cumberland County One Courthouse Square Carlisle, PA 17013 (via Federal Express) Melissa H. Calvanelli, District Court Administrator Court of Common Pleas of Cumberland County One Courthouse Square Carlisle, PA 17013 (via Federal Express) Joseph D. Buckley, Esquire 1237 Holly Pike Carlisle, PA 17013 Ivo V. Otto, IV, Esquire George B. Faller, Esquire Jennifer L. Spears, Esquire Martson Law Offices 10 East High Street Carlisle, PA 17013 - 9 - (Certificate of service continued) Brady L. Green, Esquire Wilbraham Lawler & Buba 31 St Floor 1818 Market Street Philadelphia, PA 19103 Shaun O'Toole, Esquire 220 Pine Street Harrisburg, PA 17101 Ms. Linda M. Mumma, P.O. Box 30436 Bethesda, MD 20824 � � Richard F. Rinaldo Counsel for Barbara M. Mumma - 10 -