HomeMy WebLinkAbout02-07-92
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IN RE:
ESTATE OF
ROBERT M. MUMMA,
Late of Cumberland
County, Pennsylvania
IN THE COURT OF COMMON PLEAS OF
CUMBERLAND COUNTY, PENNSYLVANIA
No. 21-86-398
:
ORPHANS' COURT DIVISION
ANSWER TO NEW MATTER
Robert M. Mumma, II, individually, and Robert M. Mumma,
II and Gary M. Gilbert, Co-Guardians of the Estates of Susan Mann
Mumma and Marguerite Mann Mumma, by their attorneys, Charles E.
Shields, III of Mechanicsburg, William C. Costopoulos, of
Lemoyne, and Jon A. Baughman, of Philadelphia, file the following
Answer to certain New Matter raised by Barbara McK. Mumma and
Lisa M. Morgan ("Respondents") in their response to the Petition
For The Appointment Of A Temporary Fiduciary filed by Petitioners
herein:
19. The allegations of Paragraph 19 are denied. It is
specifically denied that the decision of this Honorable Court to
consider the appointment of a temporary fiduciary with respect to
the Estate's interest in Lebanon Rock, Inc. will interfere with
any ongoing litigation matters in Dauphin County. To the
contrary, the issues before this Honorable Court are clearly
separate and distinct from the issues being litigated in Dauphin
County, and the relief being sought herein is exclusively within
the province of this Honorable Court. The Honorable Herbert A.
Schaffner has, himself, so found as exemplified by his
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Memorandum, dated January 14, 1992, which is attached as Exhibit
E to Respondents' Answer herein. Given the fact that Respondents
were aware of Judge Schaffner's Memorandum when they filed their
Answer, and given the fact that Respondents, themselves, argue in
Paragraph 22 of their Answer that the action herein will not
impact upon the Dauphin County litigation, it is hard to fathom
how Respondents can allege that this Court's action will
interfere with the Dauphin County litigation.
20. The allegations of paragraph 20 are denied. It is
specifically denied that Robert M. Mumma, II is guilty of laches
in instituting the present proceeding. To the contrary, the
egregious extent of Respondents' conflict of interest with
respect to Lebanon Rock, Inc. has only recently been formally
documented by the Respondents on the record herein. In
particular, it wasn't until the Respondents were forced by
Robert M. Mumma, II to file court accountings with respect to
their administrations of the Decedent's Estate and testamentary
trusts that the Respondents formally disclosed their diversionary
scheme to gain personal ownership of the Decedent's family
business interests in contravention of the Decedent's will. In
addition, although Respondents have, in the past, consistently
acted to the financial detriment of Lebanon Rock, it wasn't until
Respondents sought to block Lebanon Rock's sale of dolomite to
outside third parties that their prior pretense of acting in the
best interests of the Decedent's Estate was conclusively exposed
-2-
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as a sham. In so acting, Respondents have provided the necessary
evidence that they have been acting to enhance their own
financial interests at the expense of the Estate's interest in
Lebanon Rock.
21. The allegations of Paragraph 21 are denied. It is
specifically denied that Robert M. Mumma, II has been in total
control of the operations and management of Lebanon Rock or has
precluded any involvement or participation therein by
Respondents. To the contrary, Robert M. Mumma, II has
consistently attempted to advance the financial interests of
Lebanon Rock, but he has been continually impeded in this
endeavor by Respondents who have sought to create a deadlock with
regard to the management and operation of Lebanon Rock by
refusing to attend any Board of Directors' meetings or to engage
in any discussions as to what ventures may be profitable for
Lebanon Rock. Respondents have sought this deadlock in order to
undermine Lebanon Rock's financial viability and to augment their
personal financial interests in Elco Concrete Products, Inc.
("Elco").
22. The allegations of Paragraph 22 are admitted in
part and denied in part. It is admitted that the quotation cited
in such Paragraph represents an excerpt from Judge Schaffner's
Memorandum of January 14, 1992. This Memorandum, being in
writing, speaks for itself and the entire document, not just
selected excerpts therefrom, should be reviewed by this Honorable
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Court. Again, the fact that Respondents, knowing of the
aforesaid Memorandum, would attempt to represent that this
Honorable Court's decision to hear the present action somehow
interferes with the Dauphin County litigation demonstrates the
extent to which they will misrepresent the record to shield their
actions from judicial scrutiny. It is obviously Respondents'
intention to forestall any attempt that would preclude them from
continuing to further their personal financial interests in Elco.
The remaining averments of Paragraph 22 are denied for the
reasons set forth in the preceding Paragraph 3 of this Answer to
New Matter.
23. The allegations of Paragraph 23 are denied. It is
specifically denied that the relief being sought herein should be
conditioned upon Robert M. Mumma's removal from the management of
Lebanon Rock. To the contrary, it is only through Mr. Mumma's
efforts that Lebanon Rock has remained financially viable, and it
is only through his efforts that the Respondents have encountered
objection to their plans to undermine the profitability of
Lebanon Rock, an Estate asset.
Mr. Mumma had to go so far as to personally extend
credit to Lebanon Rock because in 1988 the Respondents froze
Lebanon Rock's line of credit from Dauphin Deposit Bank. The
Respondents notified the bank in writing that the Estate would
not be responsible for any additional borrowings under the line
of credit unless specifically approved by them in writing. See
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1512
Exhibit A. This left Lebanon Rock with an outstanding balance of
$343,000 on a $1,000,000 line of credit, with absolutely no
access to any additional funds. Thus, in order to maintain the
financial viability of Lebanon Rock, Mr. Mumma extended credit to
Lebanon Rock, both personally and through his own companies. The
amounts of those revolving credit lines, from 1988 until the
present, are shown below:
(1) R. M. Mumma, II, personally
Total Payments: $170,000
Total Repayments: $90,000
outstanding Balance as of 1/1/92: $80,000
(2) Kimbob, Inc.
Total Payments: $1,010,967
Total Repayments: $1,006,156
outstanding Balance as of 1/1/92: $4811
(3) Gemini Corp.
Total Payments: $951,918.71
Total Repayments: $787,468.71
outstanding Balance as of 1/1/92: $164,450
(4) Adams county Asphalt, Inc.
Total Payments: $95,789
Total Repayments: $93,289
outstanding Balance as of 1/1/92: $2500
By way of further answer, all issues relating to the
internal operation and management of Lebanon Rock are presently
before the Dauphin County Court and, despite Respondents'
incessant, unfounded allegations of mismanagement and self-
aggrandizement, Judge Schaffner has found no basis for removing
Mr. Mumma from his management position with Lebanon Rock. The
issue before this Court is the conflict of interest of
Respondents, not the actions of Petitioner.
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24. The allegations of Paragraph 24 are denied. It is
specifically denied that the statute authorizing Respondents'
removal herein contains any exception for conflicts of interest
created by decedents. To the contrary, the statutory language
contains no such exception. By way of further answer, even if
such an exception was engrafted upon the statute in question, it
would be inapplicable since the nature of the conflict herein is
such that it could not have been waived by the Decedent,
Robert M. Mumma, even if he had known of it. This point of law
has been specifically acknowledged by the pennsylvania Superior
Court in its opinion dealing with the issues raised in the
Dauphin County litigation. Additionally, it was the Respondents,
not the Decedent, who have enhanced their personal interests in
Elco, thereby giving rise to the conflict upon which this action
is predicated. It was the Respondents who sought to undermine
the Decedent's testamentary intent by implementing their scheme
of personally diverting family stock to their own devices, and it
was the Respondents who blocked Lebanon Rock's attempt to market
dolomite to outside parties. Thus, the Respondents, not the
Decedent, bear responsibility for the conflict herein.
25. The allegations of paragraph 25 are denied. It is
specifically denied that the Petitioners lack standing to request
the relief being sought herein. To the contrary, this Honorable
Court's order permitting the revocation of Robert M. Mumma, II's
purported disclaimer expressly provides that Robert M. Mumma, II
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1511
has a beneficial interest in his father's estate and, until such
decision is overturned, it is controlling herein. In addition,
Robert M. Mumma, II and Gary M. Gilbert, as the duly appointed
Guardians of the Estates of Susan Mann Mumma and Marguerite Mann
Mumma, have authority to act on their behalf in all jurisdictions
in the united States. The aforesaid appointment was made by the
York county Orphans' Court after a full and complete disclosure
of all facts concerning the estate administration in Cumberland
County, including the purported disclaimer of Robert M. Mumma,
II, as well as the appointment of Attorney Frey as Guardian Ad
Litem. For Respondents to even intimate that this was not the
case either constitutes an intentional misrepresentation of the
record in York County, or it reflects an irresponsible failure on
Respondents' part to read the record therein prior to making such
spurious allegations. Finally, at the hearing before this
Honorable Court on December 18, 1991, Attorney Robert G. Frey, on
behalf of his father, Robert M. Frey, and their firm,
aCknowledged that the appointment of Guardian Ad Litem did not
extend to all estate administration matters but was, instead,
designed to serve a limited function not relevant to the
proceedings now before the Court. Had Respondents either
attended that hearing or read the transcript therefrom, they
would have been cognizant of this fact.
26. The allegations of Paragraph 26 are denied. It is
specifically denied that there is any clear evidence of an
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agreement which prescribes the relationship between Lebanon Rock
and Elco. To the contrary, although the issue is before the
Dauphin County Court, Judge Schaffner has made no such finding
to-date and, as expressly noted by the Superior court, even if
such an agreement existed, it may well be invalid due to the
Decedent's conflicting interests in both companies. By way of
further answer, the conflict of interest that warrants the
Respondents' removal is their personal financial interest in
Elco. This conflict has caused them to violate their fiduciary
obligation to maximize the value of the Estate's interest in
Lebanon Rock.
Additionally, this conflict has caused the Respondents
to seek not only the enforcement of the purported agreement
between Lebanon Rock and Elco, but to expand that agreement to
matters which even Respondents acknowledge were not within the
purview of such purported agreement. Consequently, in
furtherance of their own financial interests, Respondents have
attempted to block Lebanon Rock's sale of dolomite to outside
third parties situated both within and without Elco's present
market. Respondents have undertaken such actions notwithstanding
the fact that sales by Lebanon Rock to customers both inside and
outside of Elco's service area would be highly profitable for the
Estate of Robert M. Mumma, Deceased. The remaining allegations
of Paragraph 26 are denied for the reasons previously set forth
in Paragraph 21 of this Answer to New Matter.
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27. The allegations of paragraph 27 are denied. It is
specifically denied that Robert M. Mumma, II has operated or
managed Lebanon Rock in the manner described by Respondents in
such Paragraph. Respondents' unfounded, incessant ramblings on
this subject, although irrelevant to any of the issues before
this Court, reflect the animosity that Respondents have shown
towards Mr. Mumma ever since he took steps to rectify
Respondents' actions to advance their personal interests at the
expense of the Estate's interest in Lebanon Rock. As noted
heretofore, Respondents have raised a similar smokescreen of
false accusations in Dauphin County only to find that this ploy
has proven unsuccessful in that county.
28. The allegations of paragraph 28 are denied. It is
specifically denied that granting the relief sought herein will
complicate or aggravate the proceedings in Dauphin County.
Respondents have previously raised this same spurious argument
before JUdge Schaffner in Dauphin County only to have him
correctly deny their request for an injunction against the
present proceedings. Petitioners are seeking the appointment of
a temporary fiduciary herein solely to eliminate Respondents'
conflict of interest with regard to Lebanon Rock and not because
of any tangential impact on the Dauphin County litigation. If
the appointment of a temporary fiduciary does have any impact on
the Dauphin County proceedings, it will be the product of the
temporary fiduciary's independent, objective judgment and and not
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the Respondents' efforts to advance their own personal financial
interests.
29. The allegations of Paragraph 29 are denied. It is
specifically denied that Robert M. Mumma, II is seeking to
involve this Court in operational matters presently before the
Dauphin County Court or that Robert M. Mumma has executed any
waiver as to where such matters may be heard. To the contrary,
the only issue that Petitioners seek to address in the present
action is the removal of Respondents from their fiduciary
position over Lebanon Rock and to continue such removal as long
as Respondents' personal financial interest in Elco precludes
them from acting in the Estate's best interests.
The fact that the Respondents are objecting so
vehemently to the appointment of a temporary fiduciary in and of
itself shows that they must have personal interests at stake.
When the Respondents alleged that Mr. Mumma had a conflict of
interest in handling the estate interests of his minor children,
he did not object to the appointment of Robert M. Frey as
Guardian Ad Litem for his children's estate interests. It is
obvious that the Respondents are objecting to the appointment of
a temporary fiduciary, in spite of such a clear conflict of
interest, because they want to control the operations of Lebanon
Rock for Elco's, and therefore their own, benefit. If this were
not the case, the Respondents would acknowledge the obvious
conflict of interest and submit to the appointment of a temporary
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fiduciary just as Mr. Mumma submitted to the appointment of a
Guardian Ad Litem.
By way of further answer, although Respondents'
allegation of waiver is a conclusion of law to which no response
is necessary, such allegation is hereby denied as being
inconsistent with the current state of the law and with the
factual context in which the cited testimony was rendered.
30. The allegations of paragraph 30 are hereby denied.
It is specifically denied that Respondents have acted reasonably
and faithfully in discharging their fiduciary duties with respect
to Lebanon Rock or that their actions have been for the overall
benefit of the Estate and all of its beneficiaries. To the
contrary, the Respondents have acted to undermine the
profitability of Lebanon Rock and to further their own individual
financial interests in Elco. Far from being in the best
interests of the Estate, Respondents' actions have financially
damaged the Estate since the Estate's 21.6% profits interest in
Elco is small in comparison to its 50% interest in Lebanon Rock.
The only interests being advanced by Respondents' actions are
their own individual financial interests.
31. The allegations of paragraph 31 are hereby denied.
It is specifically denied that Petitioners have made no averment
that Respondents are "incapable" of acting as fiduciaries with
respect to Lebanon Rock. To the contrary, it is because of
Respondents' conflict of interest in advancing their personal
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financial interests in Elco at the expense of the Estate's
interest in Lebanon Rock that they are, by definition and by law,
incapable of acting as fiduciaries. The statute under which the
present action is being maintained was expressly designed to
rectify situations like the one present herein. It is true that
Petitioners have made no averment that Respondents are
"unwilling" to continue to serve as fiduciaries over Lebanon
Rock. Regrettably, the Respondents have been, and continue to
be, all too willing to continue to exploit their fiduciary power
over Lebanon Rock for their own personal gain.
32. The allegations of paragraph 32 are denied.
Respondents have obviously missed the entire thrust of
Petitioners' action herein. The pleadings and testimony herein
clearly manifest that an egregious conflict of interest currently
shrouds Respondents' action with respect to Lebanon Rock.
33. The allegations of paragraph 33 are denied.
Respondents' deliberate and shameful effort to use their absolute
veto authority over Lebanon Rock to enhance their own financial
interests constitutes an egregious example of bad faith and a
blatant violation of their fiduciary duties to the Estate heirs.
The Respondents have even gone so far as to have Elco pay all of
their personal legal fees in the Dauphin County litigation. Both
Mrs. Morgan and Mrs. Mumma have admitted this under oath. See
Exhibit B. This evidence demonstrates the extent to which the
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Respondents will go to serve their own interests in violation of
the fiduciary duties to the Estate.
By placing their personal 28% interest in Elco above the
Estate's 50% interest in Lebanon Rock, the Respondents have
jeopardized and endangered the interests of the Estate
beneficiaries. Respondents have consistently, but erroneously,
confused the interests of the individual shareholders of Nine
Ninety-Nine, Inc. with the interests of the Estate. In point of
fact, by advancing the personal interests of such individual
shareholders, Respondents do not advance the interests of the
Estate. For example, Barbara McK. Mumma's personal interest as a
shareholder of Nine Ninety-Nine vests her with greater beneficial
rights in such corporation than does her standing as a mere
income beneficiary of the Estate. Thus, by advancing her own
shareholder interest, she diverts assets from the remaindermen of
the Estate to herself. Similarly, the direct individual
shareholder interests in Nine Ninety-Nine of the children of the
Decedent cannot be equated with their interests in the Decedent's
Estate. These latter interests are subject to divestment upon
failure to survive the Decedent's spouse and such interests do
not entitle the children to an immediate right to corporate
income. If a child of the Decedent should fail to survive the
Decedent's spouse, then any funds diverted to such child by
reason of the child's individual interest in Nine Ninety-Nine
constitutes an improper diversion of estate assets to such child
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at the expense of such issue. Thus, the interests of the
individual shareholders of Nine Ninety-Nine are both
quantitatively and qualitatively different from the interests of
the Estate in such corporation. Under no circumstances can
advancement of the former interests be construed as advancement
of the latter. While the legal principles underlying these
estate matters and relationships are complex and may seem
somewhat obscure, they are principles that this Honorable Court
is nevertheless duty bound to protect.
By way of further answer, although both the elements of
bad faith and jeopardized interest are present herein, the
presence of such elements are not a precondition to the
implementation of the statute in question.
34. The allegations of paragraph 34 are admitted in
part and denied in part. It is admitted that fiduciaries may be
required to exercise a balance between the interests of various
estate assets, but any such balance must be designed to maximize
the overall return to the estate beneficiaries. It is denied,
however, that Respondents have maintained any such balance in the
present case and, instead, Respondents have uniformally advanced
their own personal interests at the expense of the Estate's
interest in Lebanon Rock.
35. The allegations of paragraph 35 are denied. The
conflict of interest detailed by Petitioners herein not only
warrants the replacement of Respondents, it mandates it.
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WHEREFORE, Petitioners respectfully request this
Honorable Court to appoint an objective, independent temporary
fiduciary to oversee the Estate's interest in Lebanon Rock until
such time as Respondents conclusively eliminate their conflict of
interest with respect thereto.
Respectfully submitted,
C1 V f ~~
0. ^ OLL -
Charles E. Shields, III, Esquire
Commonwealth National Bank Building
2 West Main Street
Mechanicsburg, PA 17055
On Behalf Of:
William C. Costopoulos, Esquire
831 Market Street
Lemoyne, PA 17043
Jon A. Baughman, Esquire
Pepper, Hamilton & Scheetz
3000 Two Logan square
18th and Arch Streets
Philadelphia, PA 19103-2799
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1553
, ,
IN RE:
ESTATE OF
ROBERT M. MUMMA,
Late of Cumberland
County, Pennsylvania
IN THE COURT OF COMMON PLEAS OF
CUMBERLAND COUNTY, PENNSYLVANIA
No. 21-86-398
.
.
ORPHANS' COURT DIVISION
AFFIDAVIT
COMMONWEALTH OF PENNSYLVANIA :
SS.
COUNTY OF DAUPHIN
Before me,
the
undersigned
authority, personally
appeared ROBERT M. MUMMA, II, who, being first duly sworn
according to law, deposes and says that all of the allegations
set forth in the foregoing Answer to New Matter are true and
correct according to the best of his knowledge or as he is
informed and believes.
'W~b~-rt
obert M. Mumma, II ':;JJ
Sworn
before
day of
and Subscribed to
me this ! p tc..
f=;}nL":<'-I'~ ' 1992.
NOTARIAL SEAL -.-
KIMBERLY A CROSTLEY. NOlalY Public
City of J:ia~rrsbu(g, Da.uphin Co.
My CommIsSIon Expires Jan. 4, 1993
" ...-.....1
..LoJoJ'
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CERTIFICATE OF SERVICE
I, Charles E. Shield, III, certify that a copy of the
attached ANSWER TO NEW MATTER and letter to Judge Sheely was
served by first class mail on February 7, 1992 upon the
following:
Richard w. stevenson, Esquire
McNees, Wallace & Nurick
P.O. Box 1166
Harrisburg, PA 17108-1166, for
Barbara M. McClure
129 S. Lewisberry Road
Mechanicsburg, PA 17055
Thomas M. Kittredge, Esquire
Morgan, Lewis & Bockius
2000 One Logan Square
Philadelphia, PA 19103-6993, for
Barbara McK. Mumma and
Lisa M. Morgan
John Hardin Young, Esquire
Porter, Wright, Morris & Arthur
1233 20th Street, N.W.
Washington, D.C. 20036-2395, for
Linda M. Roth
5104 Wessling Lane
Bethesda, MD 20814
William F. Martson, Esquire
Martson, Deardorff, Williams & Otto
10 East High Street
Carlisle, PA 17013, for
Barbara McK. Mumma and
Lisa M. Morgan
Attorney General
commonwealth of Pennsylvania
Strawberry Square
Harrisburg, PA 17120
(Courtesy Copy)
Robert M. Frey, Esquire
5 South Hanover Street
CarliSle, PA 17013
Ronald M. Katzman
Goldberg, Katzman & Shipman, P.C.
320E Market Street
Strawberry Square
P.O. Box 1268
HarriSburg, PA 17108-1268
.
~c4J ?JL
Charles E. Shields, III, Esquire
~r
,
1.555
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LXTXGATION XNVOLVXNG
ELCO CONCRETE PRODUCTS,:
ROBERT M. MUMMA, II, I
LISA MUMMA MORGAN, :
BARBARA MCK.. MUMMA.. :
THE ESTATE OF :
ROBERT M. MUMMA, e~ &1.;
IN 'l'HE cotmT OF COMMON PLEAS
DAUPHIN COUNTY, PENNSYLVANIA
No. 4678 Equit.y
No. 4722 Equity
No. 3210 S 1988
NO. 4744 Equity
TRANSCRIPT OF PROCEEDINGS
BEFORE:
THE HONORABLE HERBERT A. sCHAFFNER
DATE:
TnURSDAY, OE~MBER 12, 1991
COURTROOM NO. 4
DAUPHIN COUNTY COURTHOUSE
HARRrSBURG, PENNSYLVANIA
14
PLACE:
15
115
17
18
1"
20 COUNSEL PKESENT:
21
22
JON A. BAUGHMAN, Esquire
23
FOR - Robert M. Mumma, II
24
RONALD M. KATZMM, Esquire
FOR - Eleo Concrete ProdUct.
25
DAUPHIN COUNTY COURT REPORTERS
1557
S~Hd WdL9:Z:1 Z:6-6Z:-IO
, '.
2
1. INDEX TO WITNESSES
.'
f 2
3 !'ORELCO DIIlBcr Ga~~ REDIR!CT RECROSS
4
-- " 37 42
U
6 L:l..a Mumma Morqlln 45 88 127 139
7
8
9
10
11
12 .FOR ROBERT M. HtJMMA f II DIRECT CROSS REDIRECT RECROSS
13
14 william D. Boswell 149 163 175 178
15 Brue.. J _ Brown 183 186
16 Joseph N. Loomis 195 199 ---
17 St.even Cook 205 212 ---
18
19
20
21
22
23
24
25
DAUPHIN COUNTY COURT REPORTERS
:1558
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S7Hd WdLS:21 26-62-10
!
7
8
9
10
11
12
13
14
~!:
16
17
18
191
20
21
22
23
~ '>
24
25
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2
1 and aave it to somebodY oth@r than Labanon Rook?
2.
II
No, I never said that, but it could happen.
3
YoU said that it could happen. I just want to
Q
4 eetablish that you have no histo~ o~ it having happened?
5
A
Not to lilY knoWledge.
.___ .._.__ a__a_ __
quarries. There a'C'e, are th-. DOt, three quarri.. that lIine
dol-o.ite in Lebanon countYJ na.aly AnnvillCl. Eloo. and the
Smith quarry?
A There's Whimpy which I illaqine --
Q That'. Annville, what I call Annv!lle.
A Annvill., th@ Smith quarry, and I believe that
there is another ~arry, but I'm not eure it'e in Lebanon
county and I can't tell you the name.
': ~:::':'-".. :.:..~ ~~~=-.. ~~...~:.;.;...;. :'":.._---:...:..:-
A I beli@ve there are fourteen quarries within a
certain radius.
Q But you are aware of thos@ three anyway?
A YliIS.
Q Oll...y. Ami.i.. it correct mat E100 has unC1er
contract to buy the Smith quarry?
^ Yea.
Q Thank you. Now, as far as the legal fees which
have be.n paid in this litigation for ths representation of
you and Hrs. Morqan and Hr. Lake peraonally, for the .state,
DAUPHIN cOUN'r't COURT REPORnRS
1.559
S~Hd WdS9:21 26-62-10
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1
( 2
:3
4
5
6
7
8
9
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11
12
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15
lei
17
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24
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and tor Elco, isn't it true that Elco has paid all of tho..
ltt'il'z>1 fees?
A NO, I don't think it i. true. And I feel that Mr.
Lake, Lis.. and lIly..lf are her_ on behalf of 21eo. Whon t:he
invoices are all done -- we pay"Our bills promptly. Elco i.
paying thelll. When this is over, the invoices will ba
reviewed.. If there's re111l1)UJ:'Ifeaent to be lIade, it will be
lIade. I do not feel, and this was IIY decision, no one
else's, that this is a responsibility of anything but Elco.
Q And tnat's my point. ileo at least thus far has
paid all of the invoices?
A To illY knOwledc;e. yes.
Q Thank you. Now, 5inoo Sopt.~.r 1990, 21eo has
be.n operating pursuant to an order of the Court in lIining of
dolomite and has been payinq a forty cent par ton royalty to
uabanon ROCK, is that correct1
A Yes, I believe they receiVed over $100,000 in
royal tie...
Q I think we saw tor the four months the end of 1990
they receiv.a 38,000 for th~t four month period?
A Yes, but there's been quite a bit 1I0re.
Q ~d is i~ aorrec~. as I ~.~iov. yo~ stata4 in your
deposition, that you are not willinq at this point to co..it
to perform any reclamation work that lIliqht be necessary .a a
result of that mining that'. talcing place?
DAUPHIN COUNTY COURT REPORTERS
1.560
S7Hd WdB9:2T 26-62-TO
10
11
12
.1. ,I. /fi ri T
1
INDEX TO WI'1'NESSBS
2
"I I'"U~ !5L'-_:t}
~
nTJiII1i!~ I ,-.gnqQ nn,'nTV'C''''''
----- \........--.._-~ .---.--...
..
5 Barbara KOlS. M\UilDI8
..."...,. .. --....--...
Liaa Mumma Morgan
..
37
44
1.:27
--
45
88
7
8
9
.FOR ROBERT K. MUMMA. II
DIRECT
REDIlU:CT
CROSS
13
.--... _.. _........
14
Willi~ O. Boswell
149
175
163
:1.5
Bruce J. BroWl'l
183
UG
16
JOlileph N. Loomis
---
199
195
:l.1
StQVCltl Cook
205
212
18
19
;ao
21 I
22
23
24
25
a I
I
'D1i'I"'DI"'\GO I
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Mrs. Morqan. you ..14 Uat: t:haorat:ically your
.other i. the life tenant ancS 'let. .,11 the :l.no_. Are you
aayinq that aotuallY she doaan't?
A B111s to pay, Mr. Bauqha&n.
Q Of courlle. Inoo.. 1s what one has left: over after
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yo", had all th... oonver.ationa w11:11 everybody. You were
present when your mother te.tified --
A UlIl-lnIIm.
Q -- at her deposition?
A NO, I don't think I was. I think I -- I can't
remember. 1 think I naa lert tor parts of that.
Q Well. let me just tell you that your mother
t..tified that aha ~ade the final deci.icn on what dividends
should be paid. Would you diaagre. with that?
A No.
Q Now, you talked a little bit about the payment of
&11 the bill. of M~4 Kftt.~m~n_ ~. ~"~~"m l{~A ~. ~h~~ ~,~~
has paid out in ruponse to the }.lills all the pAyaents macie
to date?
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Q Mr. K.~~m.n h.s sUbmitt.a ~ills ~-
DAUPHIN COUNTY COURT JlEPOR'l'ERS
:1562
S'Hd Wd69 21 26-62-10
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A Yes.
Q -- in connection wi~ ~ie li~i9a~ion?
A Yes.
Q Taklnq all tho.. bills tog~.r, the only party
that has _~. payments to Hr. KIlt.un has been Ilco to date?
A I'm not sure of that.
Q Do you knQW gf anytKllly e188 who's _de lIny
payments?
L.__
A I MoW th.. eeta1:e haa .acie payment.. t.o Mr.
Katzman's firm, but I can't .s I sit here tell you if it was
in relationship to that or to somethinq else that he may have
handled.
Q Any amount that you are aware of in connection with
the litiqation that was paid by anybOdy else?
A Not as I sit here.
Q Now, you testified about the directors meeting in
December of 1988 of Nine Ninety Nine, and you said your
brother wa. not. viven notice of the directors me.tinv because
h. 101.. not a director at that point in time?
A correct.
Q First of all, I take it that at the directors
meeting that was held in December he was elected a direotor,
r19nt1
A No, we wouldn't elect directors at a directors
meeting.
DAUPHIN COUNT'l COURT REPORTERS
1.563
S~Hd Wd6g:Z1 Z6-62-IO
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D
Dauphin Deposit Bank
and Trust Company
213 MARKET STREET. HARRISBURG. PENNSYLVANIA 17105
717 2!5!5-23B8
MICHAEL D. ZARCONE
SENIOR VICE PRESIDENT
September 28, 1988
Mrs. Barbara McK. Mumma
Executrix of the Estate of Robert M. Mumma
P.O. Box 331
Harrisburg, Pennsylvania 17105
Re: Lebanon Rock, Inc.
Dear Mrs. Mumma:
Please be advised that as of August 30, 1988, the balance on
the term loan to Lebanon Rock, Inc. was $757,500.00, with all
interest and principal current. The line of credit in the amount
of $1,000,000.00 expired on March 31, 1988. No advances can be
made on that line at this time. The balance outstanding is
$343,000.00, with the interest paid monthly and current.
We have been advised in writing by you that the Estate will
_., . .not be responsible for any additional borrowings under the line
-:--'~-utiless specifically approved by you' in writing. We have not'
released any owner from their obligation to guarantee the
outstanding debt of Lebanon Rock, Inc., nor do we intend to do
so. These obligations are guaranteed by the Estate of Robert M.
Mumma and Robert M. Mumma, II in the amount of $1,020,000.00
each.
There is also a Stand-By Letter of Credit opened up for the
benefit of Lebanon Rock, Inc. in the amount of $144,200.00, and
it expires on 12/31/88 with an automatic renewal feature.
If I can be of further assistance, please feel free to call
me.
Sincerely,
A-c~
MiChael D. Zarcone
Senior vice President
MDZ/mlf
cc: Robert M. Mumma, II
:1565
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