Loading...
HomeMy WebLinkAbout11-06-92 IN RE: ESTATE OF ROBERT M. MUMMA, Deceased IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA : ORPHANS' COURT DIVISION : NO. 21-86-398 IN RE: PETITIONER'S EXCEPTIONS TO ORDER OF COURT DENYING PETITION TO APPOINT A TEMPORARY FIDUCIARY BEFORE SHEELY, P.J. AND HOFFER, J. AND NOW, this ORDER OF -.t; r}:f COURT day of l~ 6 v y-" ,_A'-L------- , 1992, the petitioner'S exceptions to order of court are hereby DENIED. This opinion shall be considered a FINAL DECREE. By the Court, k\c;~tv, \ \; ~/ Harold E. Sheely, P.J. Charles E. Shields, III, Esquire --'n1Cl_~f,<1 -- I J -Cs, -'1:1. William C. Costopoulos, Esquire -fY]a-~l.4l_- JJ-~q;;l. Jon A. Baughman, Esquire - fY1~1 -- 11- /", -'t:;), For the Petitioner Ronald M. Katzman, Esquire - fY7a~ - If - (., -q~ For the Estate :pbf 1882 ) IN RE: ESTATE OF ROBERT M. MUMMA, Deceased . . IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA ORPHANS' COURT DIVISION . . . . : NO. 21-86-398 IN RE: PETITIONER'S EXCEPTIONS TO ORDER OF COURT DENYING PETITION TO APPOINT A TEMPORARY FIDUCIARY BEFORE SHEELY. P.J. AND HOFFER. J. OPINION AND ORDER OF COURT This court, by opinion and order of court dated May 6, 1992, denied the petitioner'S (Robert M. Mumma, II) petition to appoint a temporary fiduciary. We are now asked to rule on the petitioner's exceptions to that opinion and order of court. DISCUSSION Robert M. Mumma, Sr. (Mr. Mumma) died testate on April 12, 1986. Mr. Mumma's will and the codicil thereto were probated on June 5, 1986. The will appointed the decedent's widow, Barbara McK. Mumma (Mrs. Mumma), and his daughter, Lisa M. Morgan (Mrs. Morgan), as executrices of Mr. Mumma's estate and trustees of a marital trust and a residuary trust created thereunder. Under the will, the remaindermen were Mr. Mumma's children: Mrs. Morgan, Robert M. Mumma, II (RMM II), Linda M. Roth, and Barbara McClure. The action before this court, which was initiated by RMM II, is yet another in a long line of unending litigation between RMM II and the executrices of the estate. The instant action involves two family corporations, Elco Concrete Products, 1883 NO. 21-86-398 Inc. (Elco) and Lebanon Rock, Inc. (LRI), and their officers, directors, and shareholders. Elco is a Pennsylvania Corporation that was formed in 1982 by Mr. Mumma, who served as its president until his death in 1986. Mr. Mumma was also the president of LRI, which he formed in 1985. The stock of LRI was held equally between Mr. Mumma and his son, RMM II. Accordingly, since Mr. Mumma's death, the estate now controls fifty percent of LRI stock. Originally, it was envisioned that the operation of these two corporations would be managed in such a manner that Elco would remove Dolomite from LRI's quarry site for its uses, and LRI would remove high calcium limestone for its corporate purposes. Elco's quarrying of the Dolomite was confined to the Sam's Knob area, and was subject to royalties to be paid to LRI for quarrying outside this area. Problems between the two corporations developed when RMM II decided LRI should be in the Dolomite business. To this end, RMM II refused to allow Elco access to the rental of LRI equipment necessary to extract its Dolomite. RMM II refused to discuss in any significant manner the operations of LRI and his treatment of Elco as, in essence, a trespasser on the quarry site. Additionally, RMM II has repeatedly refused to provide the executrices with documentation of LRI and has even barred his mother from the Board of Directors meetings, thus giving himself what amounts to 100 percent control of LRI. -2- 1881 NO. 21-86-398 RMM II has requested a temporary fiduciary be appointed with respect to the shares of LRI held by the estate until the end of the litigation between LRI and Elco in Dauphin County. RMM II bases this request on an alleged conflict of interest between the executrices and the best interests of the estate, i.e., putting the interests of Elco before those of LRI. Sitting in a reviewing capacity, we are ". . . limited to determining whether the findings of facts . . . rest on legally competent and sufficient evidence, and whether an error of law has been made or an abuse of discretion committed." Estate of Bankovich, 344 Pa. Super. 520, 522-523, 496 A.2d 1227, 1229 (1985) (citations omitted). Thus, the purpose of this review is limited to determining whether substantial evidence exists in the record to support the factual conclusions reached by the court in its opinion and order of court dated May 6, 1992. Additionally, we must determine whether the court committed an error of law or an abuse of discretion. We believe the evidence is supportive of the conclusions that were reached in that opinion and order. RMM II contends that the executrices are laboring under a conflict of interest that prohibits them from acting in the best interests of the estate. The only conflict supported by the record, however, is a personal conflict between RMM II and his mother and sister, not between the executrices and the best interest of the estate. This personal friction between family -3- 1885 NO. 21-86-398 members is the only ground that we have found in support of RMM II's position. Standing alone, this is an insufficient basis upon which to order the removal of the executrices. On the other hand, the record provides an abundance of evidence in support of the executrices in their efforts to prudently and reasonably administer the assets of the estate. The record indicates that the executrices and RMM II disagree over certain business decisions regarding estate assets. Whereas the executrices have attempted to gain knowledge about LRI and follow Mr. Mumma's vision of Elco and LRI working together for the profitability of both corporations, RMM II has isolated LRI from the executrices in an attempt to gain total control over the corporation. RMM II has repeatedly withheld LRI documentation from the executrices and has gone as far to bar his mother from Board of Directors meetings. In the one instance where RMM II did provide the executrices with proper documentation and information, the executrices secured another mortgage for LRI. This act demonstrates the good will of the executrices with respect to all the estate assets. The executrices do not want to see LRI fail, but rather they want to see it flourish in conjunction with Elco to provide the best possible scenario for the growth of the estate. The executrices have a duty to maximize the economic benefit to the estate. In order to meet this duty, it may -4- 1886 NO. 21-86-398 sometimes be necessary to act in a manner that, while leading to growth of the estate, constricts the benefit to RMM II as an individual owner of LRI. Elco is a subsidiary corporation of pennsy Supply, Inc., which in turn is a subsidiary of 999. When 999 pays dividends, RMM II and the estate receive a larger share than do Mrs. Mumma and Mrs. Morgan. Thus, it must be concluded that any action taken by the executrices is not done in an attempt to harm LRI or benefit only themselves, but rather to benefit the estate. RMM II contends that the executrices realize an immediate benefit when Elco's value increases, whereas it is the estate which realizes the benefit when LRI's value increases. However, the executrices testified that neither of them receives a financial gain from Elco. (N.T. 104). Furthermore, Mrs. Morgan testified that Elco has never pushed money up to Pennsy Supply and 999 while she and her mother have been in place as executrices. (N.T. 115-116). Thus, a credibility issue exists between the executrices and RMM II; an issue which the court obviously resolved by granting more credibility to the executrices than to RMM II. Additionally, RMM II contends that there is no dispute over the fact that Mrs. Mumma and Mrs. Morgan are paid substantial salaries by Elco. Mrs. Morgan testified, however, that neither she nor her mother received a salary from Elco. (N.T. 104). It is apparent that the court gave more credibility -5- ~887 NO. 21-86-398 to Mrs. Morgan's testimony than it did to RMM II's. It is not the job of this reviewing court to try the case anew, or to question the findings of fact predicated upon the credibility of witnesses who the court had the opportunity to hear and observe, and upon the weight given to their testimony. See Bankovich, supra, 344 Pa. Super. at 523, 496 A.2d at 1229. We believe that the executrices are managing the assets of the estate for the best interest of the estate. The executrices realize the detrimental effects that mining Dolomite could have on LRI and the estate should LRI begin mining Dolomite. Whereas Elco and Pennsy Supply are protected under corporate shields, LRI is not protected and any liabilities incurred by LRI will be the direct responsibility of the shareholders, the estate included. (N.T. 106-107). Additionally, Mrs. Morgan testified that under the present circumstances she believes it is in the best interest of the estate to follow Mr. Mumma's original plan. (N.T. 114). This testimony indicates her openness to change should the circumstances surrounding Elco and LRI change substantially. It is evident that the court weighed Mrs. Morgan's testimony heavily in coming to its conclusions. It is not our position to question findings of credibility where the court had the opportunity to hear and observe the witnesses. Bankovich, supra. After a thorough review of the record, it is evident that if anyone is acting in a detrimental fashion in regard to -6- 1888 . . NO. 21-86-398 the estate, it is RMM II. He initiated this action in an attempt to illustrate a conflict between the executrices and the estate, but has only managed to show a conflict between himself and the estate. We do not believe that an error of law or an abuse of discretion was committed by the court in dismissing RMM II's petition for appointment of a temporary fiduciary. ORDER OF COURT AND NOW, this A/ ,::;> H '--7 day of /Z.i~L;-)(--t:.e.~' , 1992, the petitioner's exceptions to order of court are hereby DENIED. By the Court, /s/ Harold E. Sheely Harold E. Sheely, P.J. Charles E. Shields, III, Esquire William C. Costopoulos, Esquire Jon A. Baughman, Esquire For the Petitioner Ronald M. Katzman, Esquire For the Estate :pbf -7- 1889