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HomeMy WebLinkAbout91-0836 orphansIN RE: : IN THE COURT OF COMMON ESTATE OF : PLEAS OF CUMBERLAND JOHN W. FREY :COUNTY, PENNSYLVANIA : ORPHANS' COURT DIVISION Deceased. NO. 21-1991-0836 IN RE: ESTATE OF FREY Before HOFFER, P.J. ORDER OF COURT ~.., ! AND NOW,~JI~...[... , 2000, upon consideration of the briefs submitted by both parties, the facts of record, and the applicable law, the court directs distribution of the estate in accordance with the attached opinion. By the Court, ~ p.j. Frances H. Del Duca, Esquire 10 West High Street Carlisle, PA 17013 For the Administratrix Jacqueline M. Verney, Esquire 44 South Hanover Street Carlisle, PA 17013 For the Objectors : IN THE COURT OF COMMON IN RE ESTATE OF : PLEAS OF CUMBERLAND JOHN W. FREY : COUNTY, PENNSYLVANIA : ORPHANS' COURT DIVISION Deceased. NO. 21-1991-0836 IN RE: ESTATE OF FREY Before HOFFER, P.J. OPINION In this opinion, we address the final resolution of an ongoing estate dispute. On September 10, 1999, Ruth Frey-Lupfer petitioned the court for approval of proposed final distribution of the estate of her father, John W. Frey (hereinafter "decedent"), who died testate on November 25, 1991. The decedent's will named his second wife, Darlien Frey, and his son Michael Frey, co-executors of the estate. The estate consisted of three residential properties in the borough of West Fairview, Cumberland County (401 Front Street, 318 4th Street, 216/218 4th Street), bank accounts totaling approximately $15,885.18, and two vehicles. Darlien obtained a life interest in the property located at 401 Front Street, the balance of a joint checking account, and one-half of the residuary estate. The remainder of the estate was to be devised in equal shares to the six Frey children. A factual and procedural history of pertinent estate matters after decedent's death is as follows. In February of 1992, Michael had the 216/218 property appraised by a certified Dauphin County appraiser. At that time, the property was valued at $44,500. Over a year later, Michael and his brother Richard, desired to buy 216/218 and contacted a lending institution to obtain a mortgage. The lending institution valued the property at $75,000.00 after conducting an independent appraisal. The substantial difference between the two appraisals was due to repairs and improvements made by the two brothers. In June 1993, Michael and Darlien as co-executors sold 216/218 to Michael and Richard for $44,500.00. Michael and Richard received $5900 advancements against their interest in the estate to be used towards their purchase of 216/218. The co-executors neither sought nor received court approval for this sale. On July 29, 1993, the co-executors sold 318 Front Street for $16,000.00. On November 12, 1993, the co-executors of the decedent's estate, filed a first and final account with the court. Ruth Frey-Lupfer and Joseph Frey, two of the six Frey children, filed objections to the final accounting as a result of the general speculation that the decedent's estate was being mismanaged with questionable estate transfers. Based on this objection, the court appointed an independent auditor, Steven J. Hogg, to take testimony and make findings of fact and proposed conclusions of law. The auditor filed his report with the court on June 16, 1994. In the report, the auditor reached the following conclusions: 1. The DAFCU account no. 48869-00 containing $12,555.86, is for general distribution despite the agreement to deliver it to the surviving spouse, Darlien Frey, because it must offset the estate debts. 2. The amount of $2,477.72 shall not be charged to the estate for repairs and utilities of 216/218 but shall be charged instead against the share of Richard Frey. 3. There is no evidence that the personal representatives obtained either court approval or the consent of all the remaindermen to transfer title in fee simple to 401 Front Street to Darlien Frey; therefore, the transfer is revoked, and the life estate is distributed according to paragraph III of the will 4. The estate expense's were improperly charged against the children's share 5. The transfer of 216/218 to one of the personal representatives and a beneficiary without court approval was improper and self- dealing, and is therefore revoked. 6. The personal representatives are further ordered to obtain an appraisal of 216/218 by a reputable real estate appraiser within sixty (60) days of this order and submit such appraisal to the court for the further order. 7. It is further ordered that the personal representatives be surcharged for the appraised value of 216/218 over and above the previous purchase price of $44,500. 8. The personal representatives have impermissibly paid certain beneficiaries, Richard Frey and Michael Frey, prorated advancements which shall be returned to the estate for distribution. On April 5, 1995, through an opinion and order, this court denied objections that were filed to the auditor's report. On July 18, 1995, a citation was issued upon the co-executors to show cause why they had not complied with the auditors report and why they should not be removed as executors. Testimony on this issue was taken on December 5, 1995. The record of the hearing revealed the following. Co-executor, Michael Frey testified that he had not voided the property transfers as directed by the auditor's report. Michael Frey also stated that he did not open an estate checking account, that he and his co-executor paid estate expenses out of their own personal accounts expecting to be reimbursed, and that he was completely ignorant as to how to complete the administration of the estate. Co-executor, Darlien Frey, also testified at the December 5, 1995 hearing. She stated that she did not execute any documents for the sale of 216/218. She also stated that she did not know whether there was an estate checking account and that she was not involved in the estate finances. Based on this testimony, Judge Sheely issued an order on May 2, 1996, which contained an order to remove Michael and Darlien as co- executors of the estate. Additionally, calculating the difference between the first and second appraisals, the court directed Michael and Richard to pay a surcharge of $30,000 to the estate. Judge Sheely also ordered that any money advanced to the beneficiaries by the estate against their shares may be deducted from the ultimate share of those beneficiaries at the time of final distribution. Richard subsequently filed a petition to open and/or strike the judgement and Darlien filed a notice of appeal to this court. Thereafter, on June 3, 1996, Judge Sheely issued an amended order to correct errors and ambiguities present in his original order. As to the $30,000 surcharge assessed against Michael and Richard, the court amended both the amount and the payees to reflect a $30,500 ($75,000- $44,500) surcharge against Michael and Darlien, as co-executors. The Superior Court affirmed the order of the trial court. On May 8, 1997, the Superior Court held that the trial court did not abuse its discretion in removing Michael and Darlien Frey as co-executors of the estate and in assessing a $30,500 surcharge against the former co- executors.~ On June 12, 1997, the executor filed a Petition for Allowance of Appeal with the Supreme Court of Pa. On October 17, 1997, the Supreme Court denied the appeal. On February 4, 1999, Letters of Administration D.B.N.C.T.A. were granted to Ruth-Frey Lupfer by Register of Wills. Pursuant to her appointment as administratrix, she received funds held by the prior attorney for the estate in the amount of $34,075.69 on March 19, 1999. On April 6, 1999, the Administratrix received the surcharge of $30,500 See Matter of Estate of Frey, 693 A.2d 1349 (Pa. Super. 1997). 5 from the former executors which had been ordered by the court on May 2, 1996. Discussion At issue is the distribution of $65,323.28 among the six Frey children. There were objections to the proposed accounting raised by attorney Jacqueline M. Verney, on behalf of Michael Frey, Darlien Frey, Richard Frey, Tracey Frey Hoffman and Barry Frey. They object to the estate fees and commission charged by estate lawyer, Frances Del Duca. Attorney Del Duca performed considerable services in causing the original co-executors to be removed and obtaining the $30,500.00 surcharge. Because of the original executors appealled, attorney Del Duca had to defend the decision ordered by Judge Sheely. Hubert Gilroy, an expert of attorney's fees, gave testimony before this court as to the reasonableness of Del Duca's fees. Gilroy stated that Del Duca's fees were reasonable and even below the local rate. Therefore, it is found that Del Duca's fees are appropriate. From $65,323.28, Del Duca's attorney fee of $11,920.00 is to be paid prior to any distribution to the six Frey children. It is also the belief of this court that the attorney's fees of $3,000.00 claimed for by the attorney of the estate, and the administrator's fees of $3,000.00 are not excessive or unreasonable. Therefore, it is found that the Administratrix and attorney for the estate are entitled to fees of $3,000.00 each. As previously noted, Richard and Michael received preliminary $5,900.00 advancements against their interest in the estate. Therefore, it is found that Joseph Frey and Ruth Frey-Lupfer are entitled to a $5,900 priority distributions. On December 27, 1993, Tracy Ann Frey assigned all of her right, title or interest in the amount of $5,900.00 to Darlien Frey. On January 31, 1994 Barry Frey assigned all of his right, title, or interest in the amount of $5,900.00 to Darlien Frey. Therefore, this court finds that Tracy and Barry are not entitled to $5,900.00 priority distributions, but that Darlien Frey is the beneficiary of a $11,800.00 priority distribution through the assignment of interest from Tracy and Barry. As of March 26, 2000, the estate was valued at $65,323.28. Following various expenses and priority distributions, this court finds $22,706.70 is available for distribution. Divided six ways, each beneficiary would receive $3,784.45, but based upon a prior order from Judge Sheely, the amount of $2,447.72 shall be charged against the share of Richard Frey. Thus $2,447.72 will be subtracted from Richard's $3,784.45 share and divided equally among the five other beneficiaries. Therefore, $489.54 will be added to the shares of the five other beneficiaries. After years of mismanagement and malfeasance on behalf of the first attorney of the Frey estate, the final distribution is as follows: Received by accountant as of March 26 - $65,323.28 Payment of taxes for 98-99 93.60 Cost for Letters to Register of Wills 37.00 Filing cost to Register of Wills 43.00 Costs for defending Superior Court appeal 198.22 Cost for filing exceptions to First & Final Account 722.76 Attorney fee for filing exceptions and obtaining surcharge 11,922.00 Priority distribution to Ruth Frey-Lupfer 5,900.00 Priority distribution to Joseph Frey 5,900.00 Priority distribution to Darlien Frey 11,800.00 (pursuant to $5900 assignment of interest from both Tracy Ann Frey and Barry L. Frey dated Dec. 27, 1993 and January 31, 1994 respectively) Ruth Frey-Lupfer, Administratrix 3,000.00 Frances H. Del Duca, attorney for Estate 3,000.00 $42,616.58 For distribution to Beneficiaries - $22,706.70 Richard Frey 1336.73 Michael Frey 4273.99 Barry Frey 4273.99 Tracey Frey 4273.99 Joseph Frey 4273.99 Ruth Frey Lupfer 4273.99