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HomeMy WebLinkAbout12-15-06 - - -'---.- ---..-- ---.,..",-- '.--' ,---..------".------...- - -. IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYL VANIA ORPHANS COURT DIVISION INRE: o (';0 . -:0 :''''u ji[;P ~~~ )~ :::'.:j EST A TE OF WILLIE C. BENNER LA TE OF MIDDLESEX TOWNSHIP NO. 21-05-0789 REPORT OF AUDITOR c.n AND Now this 13th day of December, 2006 comes Joseph D. Buckley, Esquire, the auditor appointed by the Orphan's Court and reports the following: On November 29, 2006, pursuant to a Notice to all parties in interest a hearing was held relative to Objections to the First and Final Account of Joshua C. Benner, Administrator of the Estate of Willie C. Benner, Deceased filed by Bryan Thomas. Prior to the hearing the parties, through their respective counsel, agreed to the only issue to be determined was whether the Administrator failed to account for the one half ownership interest Bryan Thomas alleged to have in a 1968 Rally Sport Chevrolet Camaro Tube Chassis Drag Car. The parties stipulated that issues relating to attorney fees and Administrator's commissions were no longer at issue and were withdrawn. After discussions with all parties and counsel, the parties agreed to the following stipulation of fact and the Auditor accepts the same: STIPULA TED FACTS 1. On August 23, 2005, decedent Willie C. Benner died. l'-..., <:::3 = """ o l"'"I1 ("") c.n -0 ::JL: ~~:(J rn c-) o ~""J ?i~!' C:J (:.) =R (-) t::'ri ,----) --I: 2. At the time of his death, Mr. Brenner had in his possession a 1968 Rally Sport Chevrolet Camaro Tube Chassis Drag Car. 3. In 1994, the decedent and Bryan Thomas ("Thomas") verbally agreed to jointly build, customize and race a competition drag car for the purpose of making a profit. 4. From 1994-2002 the decedent and Thomas purchased and rebuilt motors, purchased frame, parts and a 1968 Camaro chassis and worked together building and fabricating a drag car. 5. The parties also jointly and individually expended funds III excess of $30,000.00 in the building of the drag car. 6. The parties shared in the expenses associated in building the drag car and the time in the rebuilding of parts and motors. 7. The parties shared in the cost of the customized Camaro body which was partially fabricated and painted by a third party. 8. Beginning in 2000 through 2001, the parties began showing their project drag car at various car shows. 9. The parties purchased a car trailer for the drag car which was titled and licensed by the Pennsylvania Department of Transportation in the joint names of the parties. 10. In 2002 and 2003, the decedent and Thomas raced the drag car the entire race season at different regional drag strips. 11. The decedent and Thomas sought and obtained sponsors for their drag car and all profits and expenses associated with their racing of the drag car were equally shared. 12. In 2004, the decedent and Thomas had major disagreements, ended their partnership in the drag car and began the process of attempting to resolve the value of the drag car so that the decedent could purchase Thomas's interest. 13. The drag car was raced a few times in 2004, but following their agreement to end their partnership in the drag car, the parties the drag car and its motors were left in a state of disrepair. 14. In the latter part of 2004, the decedent, without informing Thomas, applied for and later obtained a title from the Pennsylvania Department of Transportation, Motor Vehicle Division for a 1968 Camaro, which was latter claimed to be for the parties' drag car which had a 1968 Camaro chassis. 15. The decedent, during his lifetime, never informed Thomas that the decedent had applied for and obtained a title for the drag car. 16. In early 2005, the decedent and Thomas sold their car trailer and divided the proceeds equally or used the proceeds to pay for loans used in their racing venture. 17. At the time of his death, the decedent was attempting to procure enough funding to buy Thomas's interest in the drag car. 18. At the time of the death of the decedent, the partnership had no debt. 19. After the establishment of the decedent's estate, no debt attributed to decedent involved a debt associated with the partnership. 20. Following the establishment of the decedent's estate, Thomas notified the estate of his one half interest in the drag car. 21. Thomas telephoned the Administrator and the estate's attorney relating to Thomas's interest in the drag car and requested that he be permitted to purchase the drag car. 22. The estate did not offer to sell the drag car to Thomas and sold it to a third party for $10,000.00. 23. The estate did not pay over to Thomas one half of the amount received for the drag car. STATEMENT OF THE LAW "Written articles of agreement are not necessary to establish a partnership. The relationship can and often does exist by virtue of a verbal agreement and may be either express or, . . . implied from a consideration of all the attending facts and circumstances." Pappas v. Klutinoty, 383 Pa. 184, 187 (1955). Also see, Estate of Pent rack, 486 Pa. 237, 405 A.2d 879 (1979). Dissolution of a partnership is statutorily defined as "the change in the relation of the partners caused by any partner ceasing to be associated in the carrying on, as distinguished from the winding up, of the business." Uniform Partnership Act ~ 29." Girard Bank v. Haley, 460 Pa. 237, 332 A.2d 443 (1975) The Uniform Partnership Act, in varying forms has been a part of Pennsylvania law since 1910. Its current form and that applicable to the present matter may be found at 15 Pa.C.S. ~ 8301 et. seq. The current Uniform Partnership Act provides in relevant part, the following: "~8313. Partnership property (a) GENERAL RULE.-- All property originally brought into the partnership stock or subsequently acquired, by purchase or otherwise, on account of the partnership is partnership property. '" ~ 8351. "Dissolution" defined The dissolution of a partnership is the change in the relation of the partners caused by any partner ceasing to be associated in the carrying on, as distinguished from the winding up, of the business. '" ~ 8352. Partnership continued for winding up affairs On dissolution, the partnership is not terminated but continues until the winding up of partnership affairs is completed. '" ~ 8353. Causes of dissolution Dissolution is caused: (1) Without violation of the agreement between the partners: (ii) By the express will of any partner when no definite term or particular undertaking is specified. '" ~ 8360. Rights of partners to application of partnership property. (a) GENERAL RULE.-- When dissolution is caused in any way, '" each partner, as against his copartners and all persons claiming through them in respect of their interests in the partnership, unless otherwise agreed, may have the partnership property applied to discharge its liabilities and the surplus applied to pay in cash the net amount owing to the respective partners. ..." Language of the Uniform Partnership Act, former 59 Pa. Cons. Stat. ~ 360(a) (see now 15 Pa. Cons. Stat. & 8360) and the general rule favor a liquidation and cash distribution in the absence of an agreement to do otherwise. See, I-Iankin v. Hankin, 302 Pa. Super. 295, 448 A.2d 1049 (1981). DISCUSSION The verbal agreement between decedent and Thomas to build and race a drag car was a fifty-fifty partnership and subject to the provisions Uniform Partnership Act. In 2004, when the parties agreed to end their relation, dissolution occurred and the parties began to wind-up the partnership. They sold partnership assets and paid off their creditors. At the time of his death, the 1968 Carmaro Chassis drag car was not an asset of the decedent, but an asset of the partnership subject to the rights and interest of both partners. Even though the decedent had obtain a certificate of title from PENNDOT, such could not divest Thomas of his interest. The parties stipulated that the value of the drag car was $10,000.00, based on its neglected condition. Such a value is proper; however, when the drag car was sold by the Estate, the proceeds received by the estate should have been equally divided $5,000.00 to Thomas and $5,000.00 to the estate. I Therefore, because it failed to account to Thomas and pay over to him the value of his interest in the drag car, the Estate is direct to immediately pay to Thomas the sum I The Auditor strongly suggests that the Estate and Thomas sign an independent Bill of Sale in favor of the purchaser of the drag car of $5,000,00, The attorney for the Estate has agree to reduce the amount of his fees from $6,000.00, to the amount received by the attorney for the estate, to wi~ $ 3,000.00. Also the Estate shall pay for the cost of this audit in the amount of$275.00. The Account and Statement of proposed Schedule shall and is hereby corrected to reflect these changes which will result in an estate having no assets available for distribution to the listed creditors. The creditors shall receive notice of these changes and shall have the oPportunity to challenge the same.