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HomeMy WebLinkAbout03-08-89 BARBARA McK. MUMMA AND LISA M. MORGAN, individually and as executrixes of the ESTATE OF ROBERT M. MUMMA, Deceased IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA ORPHANS' COURT DIVISION : Plaintiffs : V : ROBERT M. MUMMA, II, BARBARA M. McCLURE, AND LINDA M. ROTH, Defendants NO. 21-86-398 IN RE: DEFENDAN'l' ROBERT M. MOMMA, II'S PRELIMINARY OBJECTIONS TO PLAIN'l'IFFS' PETITION FOR DECLARATORY JUDGMENT BEFORE SHEELY, P.J. AND NOW, this ORDER OF COURT 15& day of March, 1989, in accordance with the opinion filed this date, defendant Robert M. Mumma, II's preliminary objections to the court's jurisdiction to hear plaintiffs' petition for declaratory judgment are DENtED. Moreover, we hold that under Article THIRTEENTH of decedent's Will, the petitioners may sell Mumma family company stock to non- family members once the petitioners unanimously agree in writing. Therefore, the language contained in the second sentence Ot Article THIRTEENTH is merely precatory and not mandatory. By the Court, (~ ~lkx ? ~. ,......'-. ,,-,~: c::! ~"~' ~~~ to. '-'-\..> 0< '" e~ ~'0. 0<':> ~~ a:J 9- t"'\ 0- a:J , ~ i' -~~i "':;6 V'(.j 7::0 "'<.,.;. "'d. ~~ 0,"", , '" ~% .., Thomas M. Kittredge, Esquire - mo.;.Ll" .3-9'.-(j'"7 John F. Stillmun, II, Esquire William F. Martson, Esquire J;l2hoi For the Plaintiffs )'d~ James R. Ledwith, Esquire 11)a&J: ;3-'1-li><1 Anthony Vale, Esquire Jon A. Baughman, Esquire John B. Fowler, III, Esquire For the Defendants :pbf ," \I' ~ , ' {I~, "'I BARBARA McK. MUMMA AND LISA M. MORGAN, individually and as executrixes of the ESTATE OF ROBERT M. MUMMA, Deceased : IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA ORPHANS' COURT DIVISION : Plaintiffs : V : ROBERT M. MUMMA, II, BARBARA M. McCLURE, AND LINDA M. ROTH, Defendants . . NO. 21-86-398 : IN RE: DEFENDANT ROBERT M. MOMMA, II'S PRELIMINARY OBJECTIONS TO PLAINTIFFS' PETITION FOR DECLARATORY JUDGMENT BEFORE SHEELY. P.J. OPINION AND ORDER OF COURT Robert M. Mumma (the decedent) died on April 12, 1986, a resident of Cumberland County, Pennsylvania. Letters Testamentary on decedent's estate were granted to Barbara McK. Mumma (Mrs. Mumma) and Lisa M. Morgan (Mrs. Morgan) on June 5, 1986, by the Register of Wills of Cumberland County. Under the decedent's Will, dated May 19, 1982, and First Codicil, dated October 12, 1984, the bulk of decedent's Estate goes into a Marital Trust and a Residuary Trust under which the income is to be paid to Mrs. Mumma for life. At her death, the principal is paid to the decedent's children with substitution of issue in the case of a deceased child's share. The decedent is survived by four children: Robert M. Mumma, II (Mr. Mumma), Barbara M. McClure, Linda M. Roth. and Mrs. Morgan. Mrs. Mumma and Mrs. Morgan are co-executrixes under the NO. 21-86-398 decedent's Will and codicil, and are also co-Trustees of the Marital Trust and the Residuary Trust. Under subparagraph (3) of Article NINTH of decedent's Will, the Trustees are empowered: to sell or exchange, either privately or at public sale without prior approval of any court, at such times and at such price or prices and on such terms and conditions as the trustees may consider advisable, all or any part of the trust property, real, personal or mixed. . . . Moreover, Article THIRTEENTH of decedent's will provides: Notwithstanding the powers herein otherwise given, I direct that my stock in privately held corporations, supervised and administered by me as Executive or operating officer prior to my decease or my stock in privately held corporations which otherwise is owned by me at my decease be not sold unless all of my trustees, and particularly my individual trustee or trustees, shall agree in writing that such stock shall be sold. It is my desire that if expedient and possible, the businesses which I have personally directed during my lifetime and of which I have had an interest be continued for the benefit of and under the management and control of my immediate family. Mrs. Mumma and Mrs. Morgan, as decedent's Executrixes and Trustees, have petitioned this court for declaratory judgment with respect to Article THIRTEENTH of the Will. The petitioners, as decedent's executrixes and trustees, are the largest shareholders in Nine Ninety Nine, Inc. (999) and Hummelstown Quarries, Inc. (Hummelstown). The petitioners allege that an offer to purchase 999, Hummelstown, and other related assets (collectively pennsy Supply) has been made by an overseas company. Because there has been an offer to purchase the above corporations, there is a question concerning the petitioners' -2- NO. 21-86-398 authority to go through with such a sale or whether such assets are to remain within the Mumma family under Article THIRTEENTH. Mr. Mumma has responded to this petition by filing preliminary objections challenging the court's jurisdiction to render a declaratory judgment. First. Mr. Mumma argues that the petition for declaratory judgment must be dismissed because petitioners have failed to include indispensable parties and therefore this court lacks jurisdiction. Second, Mr. Mumma argues that the declaration sought by the petitioner is not ripe for decision because it merely asks the court for an advisory opinion for a matter which is presently too remote and too speculative. Third, Mr. Mumma argues that this court may not address the issues raised in the petition until there has been an accounting by the Executrixes of the Estate and the trust. We will address Mr. Mumma's preliminary objections in like order. The Pennsylvania Declaratory Judgment Statute, 42 Pa. C.S.A. S753l to S754l, specifies that the following persons must be included as parties in order for a declaratory judgment to be valid: (a) General rule -- When declaratory relief is sought, all persons shall be made parties who have or claim any interest which would be affected by the declaration, and no declaration shall prejudice the rights of persons not parties to the proceeding. . . . 42 Pa. C.S.A. S7540(a). Mr. Mumma contends that the petitioners have failed to join certain parties who are "indispensable" to this litigation. More specifically, Mr. Mumma contends that the minor children and unascertained beneficiaries of decedent's children are not -3- ....;(;0 "'jl. ........ -',,- NO. 21-86-398 adequately represented by their parents and that a guardian ad litem must be appointed before this court has jurisdiction concerning the petition for declaratory judgment. This claim, if true, would mean our court lacks jurisdiction to act upon the pending petition. Columbia Gas Transmission Corp. v. Diamond Fuel Co., 464 Pa. 377, 346 A.2d 788 (1975). However, we do not agree with Mr. Mumma's contention, nor are we persuaded by his argument. From the start we realize, as the Supreme Court did in Kenna Estate, 348 Pa. 214, 34 A.2d 617 (1943), that under many wills where a contingent remainder is involved, persons unborn may be affected by Orphans' Court proceedings. However,: [a]t times, there may exist a fine line of demarcation as to whether or not independent representation is required. It should always be borne in mind by the court that the principal purpose of the creation of the Orphans' Court was to supply a legal tribunal which would function directly and effectively, with minimum of legalistic procedure and at small expense. Extreme care should be exercised to avoid unnecessary appointments. Id., Pa. at 219. In the present case, the declaratory judgment sought by petitioners does not concern a judicial declaration determining heirs or beneficiaries under decedent's will. Rather, petitioners seek judicial determination of certain language in the Will; that is, they seek a determination of whether the language used in the Will is merely precatory or mandatory. The cases which Mr. Mumma cite in support of his argument concerning indispensable parties are, therefore, -4- :; ~i ~I c ;(, f NO. 21-86-398 factually distinguishable from the present case. In Roqers v. The First Bank & Trust Co., 36 Cumbo 707, 708 (O.C. 1986), Judge Hoffer sustained a preliminary objection against a petition for declaratory judgment for an interpretation of a Will. The facts of that case involved beneficiaries under a trust who had a life estate in the trust's income. However, they also argued that they had a remainder interest in the corpus and therefore sought an interpretation of the Will accordingly. Ultimately, this court refused jurisdiction because the beneficiaries failed to join the estate's heirs who, arguably, had a reversion interest in the trust. Under those facts, it was obvious that declaratory relief could not be properly sought or granted without the presence of the Estate's heirs. In Smith Estate, 52 D.&C.2d 363 (O.C. Bucks, 1971), a court was asked to determine whether property passed to residuary takers or to intestate heirs. There, however, the court refused to appoint a guardian ad litem to represent the interests of minors as intestate heirs where their grandfather, who was a party to the action, also had an interest as an intestate heir. Judge Satterwaite explained that. "the court, therefore, believing that the interests of such parties are otherwise adequately represented, exercises its discretion for lack of any reasonable occasion therefor, not to appoint a guardian or trustee ad litem. Id. at 371. The court noted that there was no "necessity or even realistic purpose to be served by [the] useless additional expense and involvement" which would be occasioned by the appointment of a guardian ad litem. Id. -5- .;/It NO. 21-86-398 The Pennsylvania Appellate cases cited by Mr. Mumma are also factually distinguishable from our facts. In those cases, minor beneficiaries' interests were clearly being inadequately protected and therefore an appointment of a guardian ad litem was needed. In Kenna Estate, 348 Pa. 214, 34 A.2d 617 (1943), the Pennsylvania Supreme Court ruled that an aUditing judge was correct in appointing a trustee ad litem to represent the interests of unborn beneficiaries under a trust even though a testamentary trustee was present at the audit. There, however, the court's decision was influenced both by the testamentary trustee's previous failure to adequately protect the interests of the unborn beneficiaries (the testamentary trustee was not forcing along probating of the estate by petitioning for an accounting; and all witnesses in the case as well as the testamentary trustee were friends of the claimant) and the trustee's obvious conflict as a beneficiary, trustee, and friend of claimant. Id. Pa. at 218. In instances where Orphans' Courts do appoint trustees or guardian ad litems, it is apparent that courts are given great discretion in deciding whether or not to grant such appointments. For instance, in 20 Pa. C.S.A. S3504: Representation of Parties in Interest Persons interested in the estate as beneficiary, heir, or next of kin, if minors[,] . . . and possible unborn or unascertained persons, when not already represented by a fiduciary, may be represented in an accounting by a guardian or trustee ad litem, if the court deems it necessary. The court may dispense with the appointment of a quardian or trustee ad litem for a person leqally incompetent, unborn, or -6- ,:l)(./ NO. 21-86-398 unascertained, when there is a livinq person sui iuris havinq a similar interest or when such a person is or would be issue of a livinq ancestor sui juris and interested in the estate whose interest is not adverse to his. Id. (Emphas is added). Similarly, in 20 Pa. C.S.A. S5165 we note that: Nothing shall be construed to require the appointment of a guardian ad litem to represent the interest of a minor in an estate unless the court, upon petition or on its own motion, shall consider such appointment to be advisable. The court may dispense with the appointment of a quardian ad litem when there is a livinq ancestor sui juris interested in the estate whose interests are not adverse to that of the minor. Id. (Emphasis added). Although we note that the above sections concern virtual representation with respect to the filing of an account, 20 Pa. C.S.A. S3504, and virtual representation with respect to an audit, 20 Pa. C.S.A. S5l65, we do not believe, as Mr. Mumma asserts, that virtual representation is a concept foreign to probate practice in this Commonwealth. ~ Neafie Estate, 74 D.&C.2d 380 (o.C. Philadelphia, 1976). In the present case, it is clear to this court that at this time it would be a waste of time, energy, and resources to appoint guardian ad litems when the parents of the minor contingent remainders as well as the unascertained contingent remainders are before the court. We do not believe that the parents, sui juris, have present interests which directly conflict with their children's contingent future interests. The interests of both the present beneficiaries (the parents) and the possible contingent future beneficiaries (the -7- / ",.~., NO. 21-86-398 children, both born and unborn) are the same; that is, to receive the largest financial benefit possible under the decedent's Will. Therefore, although under the Declaratory Judgment Act all persons who have an interest in the present matter must be represented in order for this court to have jurisdiction, we find that the Act coupled with the concept of virtual representation, stands for the proposition that, currently, all persons with an immediate interest in the Mumma Estate are adequately represented and are now before the court. See Mid-Centre County Authoritv v. Boqqs Township, 34 Pa. Comm. 494, 389 A.2d 1008 (1978). We specifically note, however, that because Mr. Mumma disclaimed his interest under his father's Will in favor of his children, it became necessary to appoint a guardian ad litem to represent his children's interests.l These interests, obviously, could not be adequately protected by Mr. Mumma. Therefore, although we found it necessary to appoint a guardian ad litem for Mr. Mumma's childrens' interests, we find it clearly unnecessary to also do so for the interests of the other minor and unascertained contingent beneficiaries. The next challenge to our jurisdiction raised by Mr. Mumma is that petitioners have fashioned a prayer for relief IBy Decree, dated December 29, 1988, this court appointed Robert M. Frey, Esquire, guardian ad litem for the interests of the minor children of Robert M. Mumma, II pertaining to the Estate of Robert M. Mumma, deceased. -8- \..c,J.,.'j / NO. 21-86-398 which seeks an "advisory opinion" for an "unripe" dispute. Mr. Mumma contends that since no contract of sale has been executed by the estate and the potential purchaser, this court may not grant declaratory relief in anticipation of events which may not occur. We do not agree. Under the Declaratory Judgment Statute, it specifically states that: Any person interested, as or through an executor . . . in the estate of a decedent . . . may have a declaration of rights or legal obligations in respect thereto: . . . (3) To determine any question arising in the administration of the estate or trust, includinq construction of wills and other writinqs. 42 Pa. C.S.A. S7535 (emphasis added). Moreover, the power of the Orphans' Court to determine questions of Will construction by declaratory judgment is without question. In re Cryan's Estate, 301 Pa. 386, 152 A. 675 (1930); Thompson's Estate, 64 D.& C. 77 (1947). Any limitation on a court's authority in issuing declaratory relief under prior laws and case authority was removed by the 1978 reenactment of the Declaratory Judgment Act. Cf. 42 Pa. C.S.A. S7540. Therefore, we find that the facts as alleged by the petitioners give rise to a factual scenario for which the Declaratory Judgment Act was envisioned. See Fidelity Bank v. Pennsylvania Turnpike Comm., 498 Pa. 80, 444 A.2d 1154 (1982). The cases which Mr. Mumma cite for the proposition that for declaratory relief to be justiciable, the petitioners' -9- '"' ""' :i"<o" NO. 21-86-398 interest must not be too remote or speculative, are cases which are distinguishable from the present facts of this petition. In the present case, unlike Chester Upland School Dist. v. Commonwealth of Pennsylvania, 90 Pa. Comm. 464, 495 A.2d 981 (1985) or Alleqheny County Constables Association v. O'Malley, 108 Pa. Comm. 1, 528 A.2d 716 (1987), the petitioners aver that not only are they currently seeking to sell estate assets to a non-Mumma family purchaser, but they aver that they have received an offer to purchase the assets by an overseas entity. (Paragraph 11 of petition: Paragraph 15 of Complaint at 21-86-398 of the Orphans' Court). As such, this is factually sufficient to make the contested dispute more than merely speculative or remote: these facts callout for the statutory remedy of declaratory relief. The allegations are legally sufficient to support an action for declaratory relief because the court will resolve an actual and imminent controversy concerning the meaning of decedent's Will at Article THIRTEENTH therein. See also 42 Pa. C.S.A. ~7536. The next challenge to our jurisdiction raised by Mr. Mumma is that petitioners are seeking declaratory relief at a premature point in the administration of the estate. Mr. Mumma contends that the petition raises issues which this court cannot address without first having before it an Account of the Executors of the Estate and Trust. We find such a contention legally meritless. We find no such time limitation specified in the Act or in the caselaw concerning declaratory relief for Will construction. There is -10- NO. 21-86-398 no better time than the present in which to resolve this controversy concerning Will construction. See Lifter Estate, 377 Pa. 227, 103 A.2d 670 (1954)1 Hassel Estate, 66 Berks 44 (1973). We now move onto the substantive analysis of petitioners' action for declaratory relief after having disposed of Mr. Mumma's preliminary objections concerning this court's jurisdiction on the matter. Initially, we note that our opinion is limited to the narrow issue pertaining to the meaning of Article THIRTEENTH of decedent's Will which provides: Notwithstanding the powers herein otherwise given, I direct that my stock in privately held corporations, supervised and administered by me as Executive or operating officer prior to my decease or my stock in privately held corporations which otherwise is owned by me at my decease be not sold unless all of my trustees, and particularly my individual trustee or trustees, shall agree in writing that such stock shall be sold. It is my desire that if expedient and possible, the businesses which I have personally directed durinq my lifetime and of which I have had an interest be continued for the benefit of and under the manaqement and control of my immediate family. (Emphasis added) . The arguments presented by the petitioners and Mr. Mumma are easily enunciated. The petitioners contend that the language of the emphasized portion of Article THIRTEENTH is merely precatory language, not mandatory language. Conversely, Mr. Mumma contends that the language is mandatory, not merely precatory. Because petitioners seek to sell estate assets to a non-Mumma family member who currently desires to purchase these same assets, this court is called upon to determine what the language of Article THIRTEENTH means with regard to petitioners' authority to sell estate assets. ,?f0<l -11- NO. 21-86-398 In any inquiry into the meaning of particular language in a Will, it is well-settled that the testator's intent is the polestar and must prevail. Burleiqh's Estate, 405 Pa. 373, 175 A.2d 838 (1961); Estate of Taylor, 480 Pa. 488, 391 A.2d 991 (1977). Moreover, a testator's intent must be discerned from the language employed in the will. Britt's Estate, 369 Pa. 450, 87 A.2d 243 (1952). In that instance, every word and sentence in the Will is to be considered in interpretation thereof if reasonably possible. In re Benedum's Estate, 427 Pa. 408, 235 A.2d 129 (1967). However, the court may not ignore the text of the Will in favor of extrinsic evidence or rewrite the Will for the testator. Bloom v. Selfon, 366 Pa. Super. 283, 531 A.2d 12; alloc. qranted 517 Pa. 613, 538 A.2d 496 (1988); In re Kelly's Estate, 473 Pa. 48, 373 A.2d 744 (1977). Therefore, only if the language of Will is ambiguous on its face may the court look to extrinsic evidence for assistance in interpretation thereof. In re Macfarlane's Estate, 313 Pa. Super. 397, 459 A.2d 1289 (1983) . Precatory words are defined as "words of entreaty, request, desire, wish, or recommendation, employed in wills, as distinguished from direct and imperative terms" (embody a recommendation or advice or the expression of a wish, but not a positive command or direction). Black's Law Dictionary 1340 (4th Ed. 1968). In determining whether the words are precatory, the test is whether the precatory expression was used in a mandatory sense, though couched in a mild, polite, courteous command, or only as suggestion or wish, falling short of binding and :;;) -.4' ,.,:1" "'~ ..,.' ,...; -12- NO. 21-86-398 compulsory direction. Pearson Estate, 442 Pa. 172, 275 A.2d 336 (1971). We note that although the words "wish," "desire," "suggest," "want" are generally precatory, they may be mandatory when expressive of the intent of the testator to be carried out without intervention of another's will. Calder's Estate, 343 Pa. 30, 21 A.2d 907 (1941). In the present case, we are satisfied that the language, "It is my desire that if expedient and possible, the businesses which I have personally directed during any lifetime -- and of which I have had an interest be continued for the benefit of and under the management and control of my immediate family" (Article THIRTEENTH) is merely expressive of a wish of the decedent and, as such, is not binding and mandatory upon the trustees, but is merely precatory in nature. In reaching our decision, we have reviewed in detail decedent's will and find that there is no ambiguity on the face of the Will which would require the use of extrinsic evidence to assist in its interpretation. It is clear by the language of the first sentence of Article THIRTEENTH of the Will that decedent granted expansive powers to the petitioners as trustees with regard to stock owned by decedent at his death. Article THIRTEENTH did limit, however, the authority of the trustees in one regard. Specifically, the trustees must unanimously agree to the sale of such stock and that agreement must be in writing. (First sentence of Article THIRTEENTH). That is the only restriction we find decedent placed on the trustees (aside from the normal fiduciary duties of a trustee). -13- I" NO. 21-86-398 We have reviewed the caselaw suggested by the petitioners and Mr. Mumma. In Lindsay's Estate, 311 Pa. 536, 166 A. 848 (1930), the Pennsylvania Supreme Court considered whether the following language limited the trustee's power to sell certain bank stock: It is my wish that my said trustee shall not sell my stock in the Carbondale Miners and Mechanics Savings Bank, but hold the same during the continuance of this trust, so that the same may go to may daughter, or her children; and I further direct that my said trustee shall not sell my real estate during the said trust, unless there is good and substantial reason therefor. Id., 311 Pa. at 538, 166 A. at 848. In that case, the trustee sold the stock at a profit, however the testator's daughter sought to surcharge the trustee for having acted beyond the scope of its powers. The Supreme Court concluded that the above-quoted language did not limit the trustee's power. The Court reasoned (1) that there was a presumption that language couched as a ftwishft is precatory and (2) that the testator used mandatory language elsewhere in the Will when he desired a mandatory effect. Therefore, when the testator used presumptively precatory language when it is obvious he knew to use mandatory language elsewhere, the court concluded that there was a precatory intent to such language. Id., 311 Pa. at 539, 166 A. at 548-549. Similarly, in our facts, the decedent used mandatory language throughout his Will and thus we are satisfied that the decedent knew how and when to use mandatory language if he so intended. Therefore, the use of presumptively precatory ';Iq '/ t.J I I -14- NO. 21-86-398 language, i.e., "it is my desire," after a mandatory direction to his trustees clearly indicated that decedent's intent was merely hopeful that if expedient, the trustee should retain the family company stock within the Mumma family. We believe it would be a distortion of decedent's intent and the clear language of Article THIRTEENTH to require of the trustees more than to unanimously agree in writing before the sale of family company stock may be made. To do so would cause an imposition on their decision- making ability which the decedent obviously did not intend nor mandate. For this court to therefore do otherwise and impose additional requirements on the trustees, is a path we choose not to take. We are confident that under the applicable caselaw, the language of the second sentence in Article THIRTEENTH of decedent's Will is merely precatory and not mandatory. ORDER OF COURT AND NOW, this day of March, 1989, in accordance with the opinion filed this date, defendant Robert M. Mumma, II's preliminary objections to the court's jurisdiction to hear plaintiffs' petition for declaratory judgment are DENIED. Moreover, we hold that under Article THIRTEENTH of decedent's Will, the petitioners may sell Mumma family company stock to non- family members once the petitioners unanimously agree in writing. Therefore, the language contained in the second sentence of Article THIRTEENTH is merely precatory and not mandatory. By the Court, /s/ Harold E. Sheely P.J. "'....,,1. "5 '7 <J ,~- ID -15- NO. 21-86-398 Thomas M. Kittredge, Esquire John F. Stillmun, II, Esquire William F. Martson, Esquire For the Plaintiffs James R. Ledwith, Esquire Anthony Vale, Esquire Jon A. Baughman, Esquire John B. Fowler, III, Esquire For the Defendants :pbf ':<qq '-' ' , -16-