Loading...
HomeMy WebLinkAbout08-19-03 O~18'~FrL ~ -' -- West Long LLC 105 North Front Street Suite 205 Harrisburg, P A 17101 (717) 233-5051 .C:: 1 'I ".': 7 IN RE: ESTATE OF ROBERT M. MUMMA, DECEASED : COURT OF COMMON PLEAS : CUMBERLAND COUNTY, PENNSYLVANIA : No. 21-86-0398 : ORPHAN'S COURT DIVISION ANSWER TO NEW MATTER AND NOW, comes Robert M. Mumma, II, by and through his counsel, James J. West, Esquire, and files the following Answer to New Matter in the above-captioned case: I. The allegations of paragraph I are denied as stated. There has been great animosity that has built up in the Mumma family due to misrepresentations and false statements begin continually made by the Executrixes. For example, the sale of the Pennsy Supply assets was kept secret and Robert M, Mumma, II was specifically lied to by the Executrixes concerning such sale. Moreover, evidence was developed that at an early stage improper actions were being taken, corporations were being improperly formed, records were being misrepresented and misconstrued and that the Executrixes were acting in an improper fashion, Based on that belief, Robert M, Mumma, II has resisted many of the actions taken by the Executrixes with a degree of success and has attempted to expose many improprieties and irregularities. Robert M, Mumma, II has not gone out to needlessly hamper the Estate, but rather, to have the Estate act with honesty, truthfulness and integrity and fully disclose the way the Estate is being handled. 2. The allegations of paragraph 2 are denied as stated. After the animosity between the Executrixes and the other heirs of the Estate arose and after Robert M. Mumma, II became suspicious that he was being lied to concerning the Estate's intentions regarding implementing his father's wishes about the company staying in the family, one of Robert M. Mumma, II's companies, named Gemini Equipment Company, brought a suit against Pennsy Supply, Inc. for the possession of an automobile that was purchased by Gemini Equipment Company and being leased to Pennsy Supply, Inc. It is clear that Gemini Equipment Company had purchased the vehicle, was actually making payments on the vehicle and was the rightful owner of the vehicle and that Pennsy Supply, Inc. had no rights to the vehicle and the Court so ruled. It is unfortunate that the Court referred to the case as a suit between a son and a mother when it was really a suit between two companies over the ownership of a vehicle. 3. The allegations of paragraph 3 are denied as stated. Robert M. Mumma, II owned fifty percent of a quarry known as Lebanon Rock Quarry. The Estate began taking dolomite, a valuable mineral, from the Quarry and not paying any royalties to Robert M. Mumma, II as fifty percent owner. The situation went on for a period of years and suit was brought and prosecuted to a successful conclusion and settlement based on the improper removal of the mineral dolomite from the Lebanon Rock Quarry. 4. The allegations of paragraph 4 are denied as stated. At one point, pursuant to the grant of a preliminary injunction, Judge Sheeley did rule that there was a right of first refusal held by Robert M. Mumma, II. It was during this period the summer of 1989 that Robert M. Mumma, II informed the buyer of his right of first refusal. Mr. Mumma is without knowledge as to why the buyer withdrew from negotiations and subsequently dropped the sales price but subsequent developments have shown significant and profound defects in numerous corporate documents that 2 would have shown up during due diligence examinations and which could well explain the drop in sales price. For example, attached to the Petition for Removal as Exhibit F is a February, 1990 letter to Pennsy Supply's long-time attorney, William Boswell, from the Stradley law firm who was doing the due diligence and while this letter was redacted in many particulars, it lays out numerous defects that the Executrixes felt "may cause serious economic harm". This letter was kept secret and hidden from Robert M. Mumma, II but is a good example of the type of material damaging to the Executrixes' position that they would keep secret, hide from other heirs and that would be discovered during their attempts to sell the Pennsy Supply businesses resulting in a diminution in purchase price. In addition, Robert M. Mumma, II believes that the Stradley Ronon firm advised the Estate that the position the Estate was taking was not supported by the due diligence the Stradley firm had done. 5. The allegations of paragraph 5 are denied as stated. It is admitted that Mrs. Mumma and Mrs. Morgan commenced litigation in this matter and it is denied that Judge Sheeley "consistently held" that Robert M. Mumma, II did not possess a right of first refusal. In fact, Judge Sheeley initially issued an injunction indicating that such a right of first refusal did in fact exist. He subsequently changed his ruling, withdrew the injunction and ruled in favor ofthe Executrixes. At the time of that ruling, Judge Sheeley did not have any knowledge about the break-in to Robert M. Mumma, II's safe deposit box, nor did he have knowledge about the defects in the corporate records and other facts that were then being intentionally hidden by the Executrixes. These are facts that may well have resulted in a different decision by Judge Sheeley and have only been developed by years of subsequent litigation. 6. The allegations of paragraph 6 are denied as stated. It is admitted that Mrs. Mumma and Mrs. Morgan went against the provisions ofthe will and attempted to and ultimately disposed 3 of the family business assets over Robert M. Mumma, II's strenuous objections. It is denied that the purchase price was lower because of a decline in economic and market factors and the purchase price may well have been lower because of the defects in the due diligence examination that were not disclosed to the other officers of the corporation and heirs under the will. (See answer to paragraph 4 above). 7. It is admitted that Robert M. Mumma, II attempted to enjoin the transaction and that Judge Sheeley, in his opinion, implied that the attempt to enforce the father's desire that the business stay in the family had cost the family "approximately $20 million". At that point in time, relevant records had not been produced, the production of records had been successfully resisted by the Executrixes, and Judge Sheeley was totally without knowledge that has since been developed showing significant defects in corporate documents, documents that were stolen, documents that were critical but appear missing, i.e., the books and records of Pennsylvania Supply Company and subsidiaries Kim Company and Pennsy Supply Inc. If these documents had been available at the time of Judge Sheeley's ruling and had not been intentionally suppressed by the Executrixes, Judge Sheeley's opinion may would been different on the cause of the diminution in price. (See answer to paragraph 4 above.) 8. The allegations of paragraph 8 are denied as stated. Robert M. Mumma, II resisted the sale of the business, the action was terminated after the Executrixes threatened to escheat his share of the sale to the Commonwealth of Pennsylvania and the consent andjoinder document that was ultimately signed speaks for itself and clearly dealt with the sale of stock for a company known as Kodie Acquisition which Robert M. Mumma, II never had any interest in and which was a company formed to facilitate the sale as opposed to one of the active Mumma businesses at the time of his father's death referred to in the father's will. Robert M. Mumma, II believes that Kodie 4 Acquisition was created to allow CRH to buy stock in a corporation where there would be no interest of Robert M. Mumma, II. Robert M. Mumma, II believes that CRH insisted that there be no such relationship in order to consummate the deal and this is further described in the subscription agreement prepared for the acquisition of Kodie Acquisition by CRH. 9. The allegations of paragraph 9 are denied as stated. This appears to be a reference to the Lebanon Rock Quarry litigation. In that case, Robert M. Mumma, II was a fifty percent owner of Lebanon Rock Quarry and the Estate was selling the other fifty percent. There was a shareholders agreement covering Lebanon Rock Quarry that Robert M. Mumma, II had actually signed and delivered to a Pennsy Supply employee to be provided to his father for signature. This document disappeared and Robert M. Mumma, II was unable to prove that his father had, in fact, signed it. It should be noted that notwithstanding the mysterious disappearance of the Lebanon Rock Quarry shareholders agreement (which is extremely relevant in this case in which Robert M. Mumma, II has been attempting to get documents showing the corporation structure and whether any other shareholders agreements existed for seventeen years) the Lebanon Rock Quarry litigation was ultimately settled and clearly this litigation was necessitated by overreaching and callousness on the part of the Executrixes to the rights of other heirs. 10. The allegations of paragraph 10 are denied as stated. Much of the litigation initiated by Robert M. Mumma, II has been, in fact, successful in that it has exposed the conduct of the Executrixes. Moreover, documents have been discovered and produced which call into question the basis and legality of many of the actions taken by the Executrixes. For example, a very valuable piece of property known as Hummelstown Quarry was supposedly made part of a corporation in 1986. Testimony from Equity 66 in 1989 shows that no incorporation in fact occurred as set forth in the books and records of the company and relied upon by the Executrixes. These and the other 5 issues raised were good faith attempts either to have the Executrixes comply with his father's last wishes concerning the family businesses or to determine whether information being presented by the Executrixes had integrity and truthfully represented what the Executrixes contended. 11. Admitted. These actions were unsuccessful attempts to obtain corporate books and records at a very early stage in this protracted litigation. Three actions were non prosed for lack of prosecution and in several of the actions the Executrixes advanced the argument that since Robert M. Mumma, II was in the aggregate and concrete business, he was a competitor with Pennsy Supply and they could not reveal records to him notwithstanding the fact that Robert M. Mumma, II and his father had worked side by side harmoniously in their respective businesses for decades. The motive was not to protect the Estate from competition but a callous squeeze-out of a shareholderlheir that the Executrixes wanted to keep in the dark. 12. It is admitted that Robert M. Mumma, II did provide information to the Disciplinary Counsel of the Supreme Court of Pennsylvania and the District Attorney of Dauphin County. It is believed that the information provided was truthful, accurate and, while never formally acted upon, was of a type and character that appropriately merited reporting. 13. Admitted. Robert M. Mumma, II has filed lis pens in the good faith belief that the assets of the Estate are being improperly dissipated and sold by the Executrixes and it is believed that when records are finally obtained and destroyed records recreated, it will be clear that the Executrixes have hidden material facts going to the integrity and unlawfulness of their conduct in disposing of the Estate's assets. There are legal vehicles available for the Executrixes to challenge the lis pens if the Executrixes would so choose. 14. The allegations of paragraph 14 are so vague and incapable of proper response. Robert M. Mumma, II does admit that he has engaged in litigation arising out of the administration 6 of his father's Estate but that litigation has been undertaken in good faith with factual basis and in many instances has been successful. In other instances, the Estate itself has frustrated the litigation by refusing to provide appropriate documents. 15. Denied. Robert M. Mumma, II had previously filed a petition to remove the Executrixes fourteen years ago. Their conduct in the last fourteen years is believed to be tantamount to "looting the estate" for their own personal advantage. It is clear that that is what is occurring and the petition should be considered on its present merits based on information that has been developed over the last fourteen years showing duplicity and misrepresentation on the part of the Executrixes. 16. The allegations of paragraph 16 are denied as stated for the reasons set forth in paragraph 15 above, i.e., Judge Sheeley's rulings over a dozen years ago were based on a different set of facts than exist today. Judge Sheeley was without knowledge that the Executrixes had misrepresented corporate records, that other records were lost and that, in one instance, corporate documents were actually illegally taken from Robert M. Mumma, II's safe deposit box. Ifhe would have known these facts, he well may have ruled differently. 17. The allegations of paragraph 17 are denied as stated. This appears to be a reassertion of the claim that Robert M. Mumma, II is not entitled to records because he operates competing businesses. Over the years the nature of his business has changed and, moreover, actual information has been developed from other sources showing that fear of competition was not the motive for keeping records from Robert M. Mumma, II, but rather, the fact that those records were inaccurate, inadequate and did not support positions being advanced by the Estate now appear to be the basis for the withholding of records not fear of competition. Mr. Mumma at all times had the right to 7 inspect the stock book, stock transfer ledger and minute book ofthese corporations even if he was a competitor. 18. The allegations of paragraph 18 are denied as stated. Robert M. Mumma, II was a shareholder, officer, director in almost all of the family businesses involved in this case and it is his belief that Mrs. Mumma and Mrs. Morgan have both claimed positions in the various companies in order to sell properties when they in fact did not hold those positions and have never been legally elected to those positions and were not entitled to claim these titles. For example, Mrs. Mumma has claimed to be the Chief Executive Officer of Pennsylvania Supply Company and has even caused the records of the Department of State to so reflect and no records have ever been produced for Robert M. Mumma, II showing that such position existed or is being rightfully claimed or its power to sell property being legally exercised. 19. The allegations of paragraph 19 are conclusions to which no answer is required. Insofar as these allegations may be considered allegations of fact, it is denied that Robert M. Mumma, II has in any way attempted to frustrate the orderly administration of the Estate and the trust, but rather, he has only attempted to assert rights that he had a lawful right and obligation to assert. Moreover, after years of effort in obtaining records, it is clear that during the Executrixes' tenure records have been stolen, destroyed, altered and misrepresented all to the advantage of the Executrixes under facts and circumstances which would indicate that they are responsible for this conduct. The theft of many of these records from the safety deposit box at the Dauphin Deposit Bank by the Executrixes confirms that they will take any steps necessary to prevent exposure of their fraudulent acts. 20. The allegations of paragraph 20 are denied as stated. It is admitted that Robert M. Mumma, II has communicated with property managers, but always in good faith in an attempt to 8 determine whether illegal actions were being taken and whether the assets, in which he was a tenant in common with the Estate were being dissipated given the hostile environment that exists between the respective heirs and the Executrixes. 21. The allegations of paragraph 21 are conclusions to which no answer is required. Insofar as they may be considered allegations of fact, it is clear that there has been much litigation but it has been caused by the refusal ofthe Executrixes to cooperate with former stockholders and officers of the corporations and present heirs attempting to find out and discover information concerning the legitimacy of actions being taken by the Executrixes. This has been the real cause of any litigation expenses and the evidence will verify that the Executrixes' administration needed to be rightfully exposed, i.e., breaking into safe deposit boxes, misrepresenting corporate records, not disclosing the results of significant impediments developed during the due diligence and lying concerning the intentions of the Executrixes in selling the Pennsy Supply businesses in violation of Robert M. Mumma's last wishes. 22. The allegations of paragraph 22 are denied as stated. Robert M. Mumma, II denies that he has developed any tactic to frustrate the Executrixes. To the contrary, the Executrixes have engaged in tactics which were clearly designed to frustrate his efforts to find out how the Estate was being administered while misusing the Estate as the primary vehicle to squeeze-out a minority shareholder and to use their position as Executrixes to bring about such ouster resulting in the conversion of Estate property to their own use and the looting of the Estate for personal gain. Based on information and belief it is alleged that this looting included the Executrixes accepting salary for various positions and such exploitation of their positions as Executrixes was undertaken for improper personal self-enrichment. 9 23. The allegations of paragraph 23 are denied as stated. It has taken literally decades to obtain access to relevant information. Part of this process is set forth in the Motion for Commission to Take Deposition and Produce Documents filed January 18, 2002 and attached to the Petition for Removal as Exhibit B. That over fifteen years after their father's death, such a motion was necessary to get basic and elementary Estate documents, shows the lengths to which the Executrixes have been willing to go in order to obfuscate and prevent discovery of their conduct. 24. The allegations of paragraph 24 are denied as stated. They represent conclusions of law to which no answer is required. Insofar as they represent statements of fact, it is specifically alleged that the Executrixes have not acted to fulfill their fiduciary duties and responsibilities in an appropriate fashion, their conduct has initiated and caused unnecessary litigation, they have attempted to obfuscate their true intentions through lies and misrepresentations, they have withheld records for decades and it is not known even at the present time whether all shareholder agreements and relevant Estate documents have been discovered because numerous vital records are now missing and presumed destroyed including records stolen from Robert M. Mumma, II's safe deposit box sometime shortly after his father's death in 1986 and the stock book and other corporate records of Pennsylvania Supply Company. 25. The allegations of paragraph 25 are denied for the reasons set forth above in paragraph 24 above which is incorporated herein. 26. The allegations of paragraph 26 are denied. This Court has refused to appoint a guardian ad litem. This issue was fully litigated in Cumberland County and York County Courts have formally appointed Robert M. Mumma, II guardian ad litem for his children. This is an attempt by the Executrixes to again raise technicalities and obfuscate the true facts of this case and to again stop Robert M. Mumma, II from discovering how they are administering his father's Estate. 10 WHEREFORE, it is respectfully requested that the Executrixes be removed, that an independent party be appointed to conduct an audit of this Estate and to independently and impartially determine whether the Executrixes have properly fulfilled their responsibility and, moreover, to determine how much of the Estate is left after their seventeen year administration. Respectfully Submitted, WEST LONG LLC Dated: August 18,2003 Counsel for Robert M. Mumma, II 11 VERIFICATION I. Robert M. Mumma. II. henlby verify that the facts set forth in the foregoing Answer are true and correct to the best of my knowledge, information and belief. I understand lhallhls verification is made subject to the penalties of 18 Pa. C.S.S4904 relating to unsworn falsification to authorities. ~rr .- " ' Date: _ ft/lg . M~ma, II CERTIFICATE OF SERVICE I hereby certify that on this 18'h day of August, 2003, a true and correct copy of the foregoing Answer to New Matter was served upon the parties named below by depositing same in the United States Mail, First Class postage prepaid, and addressed as follows: Ivo V. Otto, III, Esquire Martson Deardorff Williams & Otto Ten East High Street Carlisle, P A 17013 and Joseph A. O'Connor, Jr., Esquire Brady 1. Green, Esquire Morgan, Lewis & Bockius, LLP 1701 Market Street Philadelphia, PA 19103-2921 ~/yq'RLI~..~/J{~ ne M. Bennett Paralegal