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HomeMy WebLinkAbout01-24-89 IN THE COURT OF COMMON PLEAS FOR CUMBERLAND COUNTY BARBARA McK. MUMMA and LISA M. MORGAN, in their own right and as executrixes of the Estate of Robert M. Mumma, deceased, CIVIL ACTION EQUITY AND DECLARATORY JUDGMENT Plaintiffs, NO. ~ EQUITY 1988 vs. ROBERT M. MUMMA II Defendant. PLAINTIFFS' MEMORANDUM OF LAW IN OPPOSITION TO THE MOTION OF ROBERT M. MUMMA II FOR AN ORDER DISQUALIFYING MORGAN, LEWIS & BOCKIUS AS COUNSEL IN THIS ACTION Plaintiffs Barbara McK. Mumma and Lisa M. Morgan, individually and as executrixes of the Estate of Robert M. Mumma, deceased ("the Estate") submit this Memorandum of Law in opposition to the Motion of Robert M. Mumma II for an Order Disqualifying Morgan, Lewis & Bockius as Counsel in this Action. I. INTRODUCTION Defendant Robert M. Mumma II has filed a motion seeking the disqualification of plaintiffs' counsel, Morgan, Lewis & Bockius ("ML&B"). Mr. Mumma asserts that he is a former client of ML&B and that the prior representation is substantially related to the issues raised in this litigation and the companion d~ proceeding in Orphans' Court. Mr. Mumma seeks to invoke Rule 1.9 of the Rules of Professional Conduct as the basis for the disqualification of ML&B. Mr. Mumma's motion should be denied because it is factually inaccurate and legally meritless. Mr. Mumma's rendition of the facts relating to the disclaimer of his interest in the Estate and those relating to the liquidation of Kim Company and Pennsylvania Supply Company are inaccurate, and these inaccuracies lead Mr. Mumma to overstate the extent of ML&B's prior representation of him. In reality, ML&B's prior representation of Mr. Mumma was limited to advising him regarding (a) the disclaimer and (b) his personal estate plan. These limited areas of prior representation are not substantially related to the issues at stake in this litigation or the Orphans' Court proceeding. Consequently, no legal basis exists for ML&B's disqualification. The motion should also be denied because Mr. Mumma has waived any objection to ML&B's participation. This litigation is merely part of a broader effort by plaintiffs and the Estate to sell the family businesses. When Mr. Mumma first engaged the services of ML&B, ML&B disclosed to him its ongoing representation of the Estate and the potential for a conflict to arise over the sale of the family businesses. Mr. Mumma engaged the services of ML&B subject to the express understanding that should such a conflict arise, ML&B would continue to represent the Estate and ":2- ::'17 Mr. Mumma would obtain other counsel. Mr. Mumma, therefore, cannot be heard to object to ML&B's participation on behalf of the plaintiffs in this case. II. ARGUMENT A. Mr. Mumma has misstated the facts concerning ML&B's prior representation of him. Even before reaching the legal merits of Mr. Mumma's motion, the motion should be denied because it is factually inaccurate. Mr. Mumma inaccurately asserts that ML&B filed a disclaimer of Mr. Mumma's interest in the Estate without his knowledge or permission. Mr. Mumma also inaccurately asserts that ML&B is seeking to enforce certain agreements that Mr. Mumma allegedly refused to execute. The facts are to the contrary. The record will show that ML&B always advised Mr. Mumma that the disclaimer needed to be filed in the Cumberland county Courthouse in order to be effective. Indeed, in the letter in which ML&B transmitted the disclaimer to Mr. Mumma for his signature, Arthur L. Klein, an ML&B partner, stated "I will have . . a copy filed with the Court in Carlisle." (A copy of the transmittal letter is attached as Exhibit "A.") The record will also show that ML&B had the disclaimer filed with the Court only after obtaining Mr. Mumma's authorization on the final day when such a disclaimer could -3- ~)ti Y' (:\; ! (.' legally be made. Indeed, following receipt of the signed disclaimer, ML&B sent the disclaimer to local counsel for filing "following confirmation by phone from me that Bob Mumma wishes to follow through with the disclaimer." (A copy of this transmittal letter is attached hereto as Exhibit "B.") A copy of the letter to local counsel was sent to Mr. Mumma. During a lengthy telephone conference on January 12, 1987, the final day for filing the disclaimer, Mr. Mumma authorized ML&B to file the disclaimer. After receiving this authorization, ML&B sent the disclaimer to the executrixes and filed it with the Court. In a letter dated January 12, 1987, Mr. Klein stated: In accordance with the requirements of the Pennsylvania Probate, Estates and Fiduciaries Code, Bill Martson in Carlisle is filing a signed copy of the Disclaimer with the Clerk of the Orphans' Court division of Cumberland County. (A copy of Mr. Klein's letter is attached hereto as Exhibit "C.") A copy of Mr. Klein's letter was sent to Mr. Mumma. Based upon this clear documentary record, there is no factual basis for Mr. Mumma to imply that he did not authorize the filing of the disclaimer and that he only recently ascertained that the disclaimer had been filed. Mr. Mumma is similarly inaccurate in stating the facts relating to the liquidation of Kim Co. and Pennsylvania -4- ( Supply Co. and the formation of the tenancies in common known as Mumma Realty Associates I ("MRA I") and Mumma Realty Associates II ("MRA II"). with respect to these matters, Mr. Mumma overstates his relationship with ML&B in order to create a disqualification issue that simply does not exist. ML&B represented the Estate, and not Mr. Mumma, in the liquidation of Kim Co. and Pennsylvania Supply Co. and in drafting the MRA I and MRA II agreements. On the advice of ML&B, the Estate desired to liquidate Kim Co. and Pennsylvania Supply Co. before the end of 1986 in order to take advantage of the favorable tax treatment of such a liquidation before the new tax law took effect. In its capacity as attorney for the Estate, ML&B informed the other shareholders of Kim Co. and Pennsylvania Supply Co. of the tax advantages associated with such a liquidation, but did not purport to represent the other shareholders. The liquidation of Kim Co. and Pennsylvania Supply Co. would result in a distribution of the real estate owned by these companies to the shareholders as tenants in common. Because of the administrative nightmare that would be created in trying to manage the various parcels as tenancies in common, ML&B, acting on behalf of the Estate, informed the other shareholders that the liquidations would not be accomplished unless management agreements were in place. ML&B undertook to draft such agreements, known as the MRA I and MRA II agreements. -5- 0~O Mr. Mumma concedes that he objected to certain provisions in the MRA I and MRA II agreements and that he attempted to negotiate changes. This conduct is consistent with that of a person whose interests were adverse to those of the Estate, not that of a person who was allegedly represented by counsel for the Estate. ML&B did not advise or purport to advise Mr. Mumma regarding these matters. Instead, ML&B, as counsel for the Estate, negotiated with Mr. Mumma. When such negotiations could not produce a satisfactory resolution, ML&B confronted Mr. Mumma with the alternatives of insisting on the changes being made and possibly losing the tax benefits or entering into the agreements as drafted. Mr. Mumma chose to execute the agreements as drafted. Plaintiffs do not deny that Mr. Mumma met with ML&B and had discussions with ML&B regarding the liquidation during the period before they were completed. These discussions, however, were not undertaken pursuant to an attorney-client relationship. Rather, ML&B was acting as counsel to the Estate in informing another shareholder (Mr. Mumma) and negotiating with him regarding actions the Estate, which owned over 81% of Kim company and over 98% of pennsylvania Supply company, intended to accomplish. Because they were not part of an attorney-client relationship, any such discussions or negotiations cannot be the basis for ML&B's disqualification in this litigation. -6- ~S/ When the factual inaccuracies contained in Mr. Mumma's motion are corrected, it is apparent that ML&B is neither taking actions inconsistent with its prior advice nor attempting to "foist" anything upon Mr. Mumma. In reality, the facts pertaining to ML&B's prior representation of Mr. Mumma demonstrate that the scope of such representation was limited and the subject matter of such representation was not "substantially related" to the areas at issue in this case. B. ML&B's prior representation of Mr. Mumma was not "substantially related" to the issues raised in this litiqation. Mr. Mumma's motion should be denied on its merits. Although plaintiffs admit that Mr. Mumma was a client of ML&B's in the past, that prior representation was limited to: (a) advising Mr. Mumma with respect to the disclaimer, and (b) advising Mr. Mumma with respect to his own estate plan. These limited areas of prior representation are not at issue in either the present litigation or the Orphans' Court proceeding. Mr. Mumma relies on Rule 1.9 of the Rules of Professional Conduct in seeing ML&B's disqualification. Rule 1.9 provides: A lawyer who has formerly represented a client in a matter shall not thereafter: (a) represent another person in the same or a substantially related matter in which that person's interests are materially adverse to -7- ~~ the interests of the former client unless the former client consents after a full disclosure of the circumstances and consultation; or (b) use information relating to the representation to the disadvantage of the former client except as Rule 1.6 would permit with respect to a client or when the information has become generally known. The relevant inquiry, therefore, is whether ML&B's prior representation of Mr. Mumma can be characterized as "substantially related" to the present litigation. This is essentially a factual inquiry. "What is required is an evaluation of the substance of the prior representation as compared with the substance of the present adverse representation." INA Underwriters Ins. Co. v. Nalibotskv, 594 F.Supp. 1199, 1206 (E.D. Pa. 1984). The burden of establishing the "substantial relationship" rests with the party seeking disqualification. Richardson v. Hamilton International Corp., 469 F.2d 1382, 1385 (3d Cir. 1972); INA Underwriters, 594 F.Supp, at 1207. In reviewing the nature and scope of the prior representation, "the focus should be on the reasons for the retention of counsel and the tasks which the attorney was employed to perform." INA Underwriters, 594 F.Supp. at 1206. Mr. Mumma retained ML&B for two limited purposes: (a) to prepare the disclaimer and (b) to advise him regarding his own estate plan. The disclaimer issue arose during the course of ML&B's -8- r~ r._~ representation of the Estate. In its role as counsel for the Estate, ML&B gave notice to each of the beneficiaries of their right to disclaim and the potential tax benefits of doing so. Only Mr. Mumma pursued this possibility, and retained ML&B to advise him concerning the disclaimer. ML&B prepared and filed the disclaimer pursuant to Mr. Mumma's instructions. ML&B also prepared documents relative to Mr. Mumma's own estate plan. In comparing the scope of the prior representation with the nature of the present lawsuit, "[aJII that is necessary is an evaluation of the issues raised in the present litigation and the general facts upon which the legal claims asserted in the present action are based." Id. Analysis of the present lawsuits reveals that they are not related to ML&B's prior representation of Mr. Mumma. The Orphans' Court litigation focuses on two issues: (a) the interpretation of the decedent's will, and (b) the offering of appraisal rights to Mr. MUmma. The will interpretation issue is clearly unrelated to ML&B's representation of Mr. Mumma. Indeed, the will was drafted and read prior to any representation of Mr. Mumma by ML&B. Similarly, the reasonableness of the proposed corporate restructuring and the propriety of offering appraisal rights to Mr. Mumma are also sUbjects that are unrelated to ML&B's representation of Mr. Mumma. -9- dS1 Mr. Mumma's objection regarding ML&B's participation in the Orphans' Court proceeding seems to revolve around the use of the disclaimer and appointment of a guardian ad litem to represent Mr. Mumma's children. As set forth above, Mr. Mumma's recollection regarding his instructions to ML&B is inaccurate. Nonetheless, given the fact that the disclaimer had been filed, the appointment of a guardian ad litem was merely a procedural step to insure that all proper parties are represented in the Orphans' Court proceeding. The question of the validity disclaimer is irrelevant to the issues in that case and is relevant to the Estate only insofar as the Estate may in the future be required to take action with respect to the beneficiaries. Because plaintiffs have joined Mr. Mumma in the Orphans' Court proceeding, he cannot be heard to complain that ML&B is attempting to invoke the disclaimer somehow to prevent him from participating. The issues in the present litigation are (a) the validity of Mr. Mumma's claimed right of first refusal; (b) the validity of the MRA agreements and (c) the validity of Mr. Mumma's power of attorney. With respect to the claimed right of first refusal, the right did not allegedly arise until a meeting in June, 1987. Mr. Mumma concedes in his motion that he discharged ML&B as his counsel in March, 1987. Consequently, ML&B's -10- ~U representation cannot conceivably be related to the claimed right of first refusal. In addition, ML&B was advising the Estate, and not Mr. Mumma relative to the MRA agreements and the power of attorney. Although ML&B participated in drafting these documents, it did not do so on Mr. Mumma's behalf. Indeed, Mr. Mumma's objection to these documents seems to be that ML&B did not act on his behalf and did not include any of the suggested provisions that he wanted to have included. This objection is entirely consistent with ML&B's position that it represented the Estate, not Mr. Mumma, with respect to the liquidation. The remaining inquiry under the "substantial relationship" test is whether in the course of the representation, Mr. Mumma may have disclosed confidential information that is now relevant to the issues in the present lawsuit. Id. In undertaking this inquiry, "the court should not allow its imagination to run free with a view to hypothesizing conceivable but unlikely situations in which confidential information 'might' have been disclosed which is relevant to the present suit." Id. Mr. Mumma has not and cannot suggest what type of information would have been disclosed with respect to the disclaimer or the drafting of his estate plan that is now relevant to the present lawsuits. The size of Mr. Mumma's personal assets and the size of the tax benefits he stood to gain under the disclosure are not -11- ~ ~S~ relevant to the present lawsuits, and therefore would not provide a basis for disqualification. Finally, Mr. Mumma suggests that ML&B should be disqualified because its attorneys may have to testify. Mr. Mumma concedes, however, that the relevant consideration is whether "there is a substantial conflict between the testimony of the [present] client and that of the lawyer . " Comment to Rule 3.7 of the Rules of Professional Conduct. No such conflict is apparent. Moreover, the proscription in Rule 3.7 is for the benefit of the present client, and therefore is not a basis for a former client seeking disqualification of counsel. Because Mr. Mumma cannot meet his burden of establishing that ML&B's prior representation of him was substantially related to the issues in the present case, Mr. Mumma's motion should be denied. C. Mr. Mumma has waived any objection to ML&B's participation. Even assuming arquendo that the advice rendered by ML&B to Mr. Mumma can somehow be characterized as "substantially related" to the present litigation or the Orphans' Court proceeding, Mr. Mumma has waived any right to object to ML&B's participation. Rule 1.9 envisions that a client can waive its provisions if the client "consents after full disclosure of the circumstances of consultation." Mr. Mumma provided such consent -12- d{$"7 by agreeing to ML&B's representation of the Estate in connection with the sale of the family business. Before even entering into an attorney-client relationship with Mr. Mumma, ML&B had represented and rendered substantial advice to the Estate. When Mr. Mumma requested that ML&B represent him with respect to the disclaimer and his estate plan, ML&B conditioned such representation on Mr. Mumma's agreement that ML&B would remain as counsel to the Estate on matters relating to the sale of family businesses. The engagement letter sent by Mr. Klein to Mr. Mumma expressly provides as follows: One matter we discussed which I did not note in the memorandum is that if you or any of your companies were to become involved in negotiations with your father's Estate to buy the operating company (or anything else for that matter), Morgan, Lewis & Bockius would represent the Estate and you would obtain other counsel. I know that Lisa and your mother are satisfied with that understanding and you indicated that you were also. (A copy of the engagement letter is attached as Exhibit "D.") At the time Mr. Mumma engaged the services of ML&B, therefore, ML&B had disclosed to Mr. Mumma its ongoing representation of the Estate (a fact that Mr. Mumma undoubtedly was aware of) and the potential for a conflict to arise concerning the sale of the family businesses. Mr. Mumma engaged ML&B subject to the express understanding that should such a conflict arise, -13- ~8 ML&B would continue to represent the Estate and Mr. Mumma would obtain other counsel. Plaintiffs have commenced this litigation in order to obtain relief necessary to permit the unencumbered sale of the family businesses and related real estate. This litigation, therefore, falls squarely within the scope of Mr. Mumma's consent, because it is merely one aspect of the Estate's broader efforts to sell the family businesses. Because Mr. Mumma has consented to ML&B's representation of the Estate in its efforts to sell the businesses, Mr. Mumma has waived any objection to ML&B's participation in this litigation. -14- ~cCl. C~~ III. Conclusion For the reasons stated above, this Court should deny the Motion of Robert M. Mumma II for an Order Disqualifying Morgan, Lewis & Bockius as Counsel in this Action. ~6o h THOMAS M. JOHN F. ST LLMUN III, 1.0.# Morgan, Lewis & 2000 One Logan quare Philadelphia, PA 19103 (215) 963-5367, -5636, -5771 WILLIAM F. MARTS ON Martson, Deardorff, Williams & otto 10 East High Street Carlisle, PA 17013 (717) 243-3341 Attorneys for Plaintiffs -15- 1 ~ MORGAN. LEWIS &. BOCKIUS WASHINGTON NEW YORK Los ANGE.LES COUNSEL-OAS AT LAW 2000 ONE LOGAN SQUAAE PHILADEL.PHIA,PENNSYLVANIA 19103 TtU:~110"E:(i!15l 963-5000 CAeLt ADOAUS: MORL.EBOCK MIAMI HAFtRISBUAG LONOON Tt~t}<.: 83.\3\~ ARTHUR L. Kt..EIN OI...L OIlUCT (215)963-50444 January 6, 1987 FEDERAL EXPRESS Mr. Robert M. Mumma, II 26 Stanton Lane Snowmass Village, COlorado 81615 Re: Qualified Disclaimer of Interest in Estate of Robert M. Muw~a Dear Bob: Enclosed please find five copies of a Disclaimer document which you may use to make a "qualified disclaimer" of your interest in your dad's estate. As we have discussed, if you make a disclaimer of your interest in your dad's estate, then upon your mother's death the share of your dad's.estate which would otherwise pass to you will pass to your issue. By making a "qualified disclaimer" under IRC S2518, you will not be making a taxable gift. Furthermore, since your dad died before enactment of the Tax Reform Act of 1986, the new generation skipping tax imposed by the Act will not apply when distribution is made to your issue. Accordingly, a qualified disclaimer of your interest in your dad's estate will result in the share of his estate which would have passed to you passing to your issue without any further wealth transfer taxation (other than the estate tax on your mother's death). Section 2518 of the Internal Revenue Code provides that the term "qualified disclaimer" means with respect to an interest under a Will an "irrevocable and unqualified refusal" to accept the interest but only if ~- (i) such refusal is in writing, (iil -., ,> cJ.ci.c MORGAN. LEWIS 0. BOCKIUS Mr. Robert M. Mumma, II January 5, 1987 Page 2 the writing is received by the executors within nine months of the date of death, (iiil the person making the disclaimer has not accepted the interest or any of its benefits and (iv) as a result of such refusal the interest passes without any direction on the part of the person making the disclaimer to a beneficiary or beneficiaries other than him. In addition, as a matter of Pennsylvania law, the disclaimer to be effective must be filed with the Clerk of the Orphans' Court division of the county where the decedent was domiciled. You and I have discussed that any of your children born after your mother's death would not participate in the distribution of your disclaimed share of your father's estate. And there may even be an argument that a child of yours born after your father's death before your mother's should not participate. You plan to deal with the possible inequality in benefits among your children by providing an equalization gift in a trust you will create in the near future over a substantial portion of your Gemini stock. To follow through with a timely "qualified disclaimer" of your interest in your father's estate, sign four of the copies of the Disclaimer (keep the fifth), and return them to me, Federal Express, in the prepaid envelope provided. There is a Federal Express office at 209 Ventnor Avenue in Aspen, where a drop off can be made until 7:00 p.m. I will have copies delivered to your moth~r and Lisa, as Executors, and a copy filed with the Court in Carlisle. If you have any question, please call. My home telephone number is (215-667-2844). Sincerely yours, !\1v Arthur L. Klein Irkb Enclosures c;.: to. .3 18/ MORGAN, LEWIS g. BOCKIUS W....SHINGTON NEW YOF\:K Los ANGEL.ES COUNSELO!qS AT LAW 2000 ONE LOGA.N SQUARE. PHIl...AOE....PHIA.PENNSYLVANIA. 19103 MIAMI HARRISBUAG LONOON TtLEPHONE.(2IS) 96.3-5000 C....IlLE: "'00111:55: MORle:eOCK TELEx: lSJH.3IS ARTHUR LKLEIN 01"'" OIIlECT (2151963-54A4 January 9, 1987 FEDERAL EXPRESS William F. Martson, Esquire Martson, Deardorff, Willi~ms & Otto Ten East High Street Carlisle, PA 17013 Re: Estate of Robert M. Mumma, Deceased Disclaimer by Robert M. Mumma, II Dear Bill: Enclosed please find two signed copies of Bob Mumma's Disclaimer with respect to his remainder interest in the two trusts under his father's Will. As we discussed, following confirmation by phone from me that Bob Mumma wishes to follow through with the diSClaimer, you will file one of the signed copies of the Disclaimer with the Clerk of the Orphans' Court division on Monday, January 12, 1987, the last day on which a timely "qualified disclaimer" can be made by a beneficiary under the Will of Robert M. Mumma. You will, of course, obtain proof of filing. I will have copies of the Disclaimer delivered to the Executors, Kim Mumma and Lisa Morgan, on Monday. Thank you again for all of your help. Sincerely yours, Av-- Arthur L. Klein Irkb Enclosures cc: Robert M. Mumma, II Barbara McK. Mumma Lisa M. Morgan, Esq. ~, ' r......CJ..5 COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA ORPHANS' COURT DIVISION Estate of Robert M. Mumma, Deceased No. 21-86-398 DISCLAIMER BY ROBERT M. MUMMA, II WHEREAS, ROBERT M. MUMMA ("the Testator"), of the Borough of Wormleysburg, County of Cumberland and Commonwealth of Pennsylvania, died on April 12, 1986, leaving a last will and Testament dated May 19, 1982 with a Codicil thereto dated October 12, 1984 (hereinafter "the Will"): and WHEREAS, the Testator was survived by his wife, BARBARA McK. MUMMA, and all four of his children, ROBERT M. MUMMA, II, BARBARA M. McCLURE, LINDA M. ROSS and LISA MUMMA MORGAN: and WHEREAS, under Article SEVENTH of the Will, the Testator bequeathed to his testamentary trustees an amount equal to fifty percent (50%) of his total gross estate to be held in trust exclusively for the benefit of his said wife during her lifetime: and ~mEREAS, in the fifth paragraph of said Article SEVENTH, the Testator directed that upon the death of his said wife, "the principal of this Trust, as it is then constituted, shall be paid over by my surviving trustee unto my children, ROBERT M. MUMMA, II, BARBARA M. McCLURE, LINDA M. ROSS and LISA M. MUMMA, free of trust, share and share alike, per stirpes and not per capita": and WHEREAS, under Article EIGHTH of the Will, the Testator gave his residuary estate to his testamentary trustees to be held in trust exclusively for the benefit of his said wife during her lifetime: and WHEREAS, under the second paragraph of Article EIGHTH, the testator directed that upon the death of his said wife, "the principal of this [residuary] trust, as it is then constituted, ...shall be paid over by my surviving trustee...unto my children, ROBERT M. MUMMA, II, BARBARA M. McCLURE, LINDA M. ROSS and LISA M. MUMMA, share and share alike, per stirpes and not per capita": and WHEREAS, the undersigned, ROBERT M. MUMMA, II, wishes to make a qualified disclaimer, within the meaning of Section 2518 of the Internal Revenue Code, of his entire interest in both such trusts: and ~~~ WHEREAS, ROBERT M. MUMMA, II has not accepted an interest in either of such trusts nor any benefits therefrom; NOW, THEREFORE, ROBERT M. MUMMA, II, for himself, his successors and assigns, intending to be legally bound, does hereby, pursuant to Section 6201 of the Pennsylvania Probate, Estates and Fiduciary Code, absolutely, irrevocably and unqualifiedly renounce and disclaim all right, title and interest in and to the principal of the trust under Article SEVENTH of the Will and the principal of the trust under Article EIGHTH of the Will and refuses to accept any benefits whatever under said Articles of the Will. Dated: 1@7 It~~ OB RT M. MU MA, II , . ~("7 J MORGAN, Le:wIS & BOCKIUS WASHINGTON NEW YOR.K Los ANa ELE.S COUNSELOFtS AT LAW 2000 ONE LOGAN SQUARE. PHILAOELPl-I\A,PENNSYLVANIA 19103 TE:\.t.PHO/'llf;,(ZIS) 963-5000 C....L(. Aoolltus; MORL-EaOCK MI...."". HARRISBURG LONDON TELEX;' 83-1.315 ARTHUR L.KI..EIN DtAl.. O""~c.' (215) 963-!;444 January 12, 1987 Mrs. Barbara McK. Mumma Mrs. Lisa M. Morgan, Executrixes, Estate of Robert M. Mumma P.O. Box 3331 Harrisburg, PA 17105 Re: Disclaimer by Robert M. Mumma, II Dear Kim and Lisa: Enclosed is a copy signed by Bob of his irrevocable and unqualified disclaimer of his entire interest in both trusts under the Will of Robert M. Mumma. In accordance with the requirements of the Pennsylvania Probate, Estates and Fiduciaries Code, Bill Martson in Carlisle is filing a signed eopy of the Disclaimer with the Clerk of the Orphans' Court divi~ion of Cumberland County. Another signed copy of the Disclaimer is also being delivered, by hand, today to Lisa in Philadelphia. Sincerely yours, Arthur L. Klein jrkb Enclosure ec: Robert M. Mumma, II William F. Martscn, Esq. bee: W. Wesley Nagle, Esq. Joseph A. O'Connor, Jr., Esq. Francis J. Mirabello, Esq. ",;;:(~'l G Fo,"' 3800, Jono 1985 l/:-='~, ? /'~ -" ~ , " \' " t. ' c ,,'~ t' ___:'J,' AL K1einDlumma . U.S.G.P.Q. 1965.480.794 :-i c, > ;::4:: \"tI ,~-'. '.,' '0 :~i len-- t;j :tt: 0 Co X ~, Ii cO w ,.., iw ',W'. '" f-' :>; ~ ;:. , , ~~ ~...... -' f-' '0 <Jl -, I t;j ~ ., 0- ~ jli ,~ I;;:: (l i~ " '" () --~ i, ~~ ~ " c.c " ~ ~ ~ ~_-?_:O Ln :~ - ~ ~ -f;'m .,. - c 0 ~ ;:. UJ .. ..., i" 1J ru 0- nJ i i~ . . ,,"'ill: .. ,:~";,,.. ~'~~ ....,.."............,. .or ne ON . ..) for eddltlOIIII_I.1 ~. ." 0 .d0t8 ~.dd. ...... 2. Reotrtc*DeIMry. 4.AItIoIe~ P 202 553 337 ,. of Selvlae: ~ R~'III -.l '~dW e,...MaII AIwayw abIaln 1ignItU.. of ~'lll _ one! DATE DEUVERED. 8.~'AddrW ,."...,04...., tre 1.0Ill.-to""""" I. ~ ......: .... Barba:tacJ~cK ~ :t~ P.O. >>OX 33~1 ,'! Harrisburg, PA 17105 , . ..8lpture-~ . , 81ft1Ut'1d COD lor ~}~~.~~~.~'!" ~:.~, ....." DOIIL I nc lIeTUllN RECIlpt' --.,.:..::C..<".,~ . __._:~ ~--" _' --,_' ~,~...~~,.;. ,......:.:.:~, , -...., ri ,. ~ / I~) , . MORGAN. LEWIS &. BOCKIUS WASHINGTON NEW YORK Los ANGELES COUNSELORS ....T LAW 2000 ONE LOGAN SQUARE PHILAOELPHIA,F'ENNSYLVANIA 19103 TItLItPIolO"'It;(215} 963-5000 C"'.LIt ACDIUSS: MORLEBOCK MIAMI HARRISBURG LONOON TEl.E:w., 83-1315 ARTHUR L. KLEIN O'AL DIIlU:CT (215) liJ63-S.44 September 5, 1986 PERSONAL AND CONFIDENTIAL Mr. Robert M. Mumma, II Kimbob, Inc. P.O. Box 2255 Harrisburg, PA 17105 Dear Bob: Thank you for coming down to meet with me. I have begun work on your Will, insurance trust and the trust for the Gemini stock and should have first drafts to discuss with you in a few days. Enclosed is a copy of a file memorandum I made after our meeting on August 21st. One matter we discussed which I did not note in the memorandum is that if you or any of your companies were to become involved in negotiations with your father's Estate to buy the operating company (or anything else for that matter), Morgan, Lewis & Bockius would represent the Estate and you would obtain other counsel. I know that Lisa and your mother are satisfied with that understanding and you indicated that you were also. I do not believe we discussed fees. Ordinarily fees are based mainly on the time involved. Other factors may enter into the determination of the fee on any particular matter, such as the novelty or difficulty of the questions involved, the amount involved and the results obtained, the special experience or ability of the lawyer performing the services and any special time limitations imposed. With respect to your estate planning and related matters, however, I find no indication for a departure from standard hourly rates. Sam Andes sent me a copy of your antenuptial agreement. I have reviewed it with Pam Wilford, my colleague we had lunch with. Pam and I believe that the agreement will protect the assets set forth in the April, 1985 financial statement mentioned in the agreement in the event of a divorce or ~ ~,::;, , , , . , . M,ORGAN, LE:wIS & BOCKIUS Mr. Robert M. Mumma, II September 5, 1986 Page 2 upon your death. However, it is not clear to us what effect it would have as to other assets. If the specified assets represented two-thirds of your estate, could your wife claim the entire other third if she survived you, or only a third of the other third, or nothing? To the extent your wealth is built up inside the existing corporations, you should be protected. But to the extent you invest outside them, the assets you acquire might not be protected, although there is language which could be interpreted to protect all your assets. The agreement could be "tightened up" but I am not sure it would be worthwhile to do so if there would be any discomfort in raising the subject with your wife. This is something we should discuss. I will be calling you in a few days to arrange for a meeting to review the draft trust agreements and Will. In the meantime, if you have any question or comment, please do not hesitate to call. Sincerely yours, ku- Arthur L. Klein /rkb cc: Pamela F. Wilford, Esq. ...,:,) "';3 ' ., to, " r' -,.,.. ~ ~ ~ ~ ~