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HomeMy WebLinkAbout21-2007-686 IN RE: ESTATE OF : IN THE COURT OF COMMON PLEAS OF GEORGE F. DIXON, JR., : CUMBERLAND COUNTY, PENNSYLVANIA DECEASED : ORPHANS’ COURT DIVISION : NO. 21-94-0754 ORPHANS’ COURT IN RE: ESTATE OF : IN THE COURT OF COMMON PLEAS OF LOTTIE IVY DIXON, : CUMBERLAND COUNTY, PENNSYLVANIA DECEASED : ORPHANS’ COURT DIVISION : NO. 21-07-0686 ORPHANS’ COURT IN RE: OPINION PURSUANT TO PA. R.A.P. 1925 OLER, J., August 19, 2010. In the Estate of Lottie Ivy Dixon, which has been consolidated with the Estate of George F. Dixon, Jr., for purposes of an auditor’s hearing and disposition 1 of numerous objections to accounts filed in each, two children of the decedents filed a petition to substitute a court-appointed administrator for a third child as personal representative of their mother’s estate and stay the proceedings before the 2 auditor as to the personal representative’s account. The petition to substitute a court-appointee for the named executor in the mother’s will was referred to the 3 auditor for an interim report and recommendation as to its disposition, and ultimately denied by the court pursuant to the report and recommendation of the 45 auditor. Exceptions to the denial were subsequently also denied, pursuant to a 6 further interim report and recommendation of the auditor. 1 Order of Court, June 17, 2009. 2 Petition for Appointment of Administrator pro Tem Pursuant to 20 PA. C.S. §4301, filed February 12, 2010. 3 Order of Court, February 16, 2010. 4 Order of Court, February 23, 2010. 5 Exceptions to Order of Court Dated February 23, 2010, Denying Petitioners’ Petition for Appointment of an Administrator pro Tem, filed March 15, 2010. 6 Order of Court, April 7, 2010; see Order of Court, March 29, 2010. Although issued on April 7, 2010, the order of court denying the exceptions was not docketed by the Orphans’ Court Clerk until April 12, 2010. From the denial of the exceptions, Petitioners have filed an appeal to the 7 Pennsylvania Superior Court. The bases for the appeal have been expressed in a 8 six-page statement of errors complained of on appeal as follows: 1. The Court erred in denying appellants’ Petition for Appointment of Administrator Pro Tem Pursuant to 20 Pa.C.S. § 4301 (“Petition”) before the pleadings were closed, without proper answer(s) to the Petition having been filed and without a hearing or argument: The Petition was filed on February 12, 2010, alleging inter alia that Marshall Dixon had wrongfully used and/or transferred assets of the decedent during her lifetime to or for his benefit without the decedent’s knowledge and permission. The Petition was based on Marshall Dixon’s conflict of interest as Executor and the need for an objective third party to investigate and determine what assets were wrongfully obtained from the decedent by Marshall Dixon in his individual capacity and, if necessary, to recover those assets. Under the Pennsylvania Rules of Civil Procedure and Pennsylvania Orphans’ Court Rules, an answer admitting or denying the averments of the Petition was due within 20 days. See Pa. O.C. Rule 3.2(a). Counsel for Marshall Dixon filed a “Response in Opposition to Petition to Appoint Administrator Pro Tem filed by Marshall Dixon, as Executor of the Estate of Lottie Ivy Dixon” on or about February 12, 2010. (“Response in Opposition” or “Response”). The Response in Opposition was not styled as an Answer, did not specifically answer the paragraphs of the Petition as it was required to do and was not verified. Appellants intended to file a Reply or Preliminary Objections to the Response, including a motion to strike the Response, and had 20 days or until March 4, 2010 to do so. See Pa. O.C. Rule 3.2(b). The Court entered its Order denying the Petition on February 23, 2010, prior to the time that the Reply or Preliminary Objections were due to be filed. Therefore, the Order was entered before the pleadings were closed. 2. The Court erred in dismissing the Petition while relying upon the Response in Opposition, an improper pleading filed by Estate counsel. 7 Petitioners’ Notice of Appeal, filed May 12, 2010. 8 Whether this six-page statement of errors complained of on appeal comports with the conciseness requirement of Pennsylvania Rule of Appellate Procedure 1925(b)(4)(ii) is beyond the scope of this opinion. But see Tucker v. R.M. Tows, 2007 PA Super 352, 939 A.2d 343; Kanter v. Epstein, 2004 PA Super 470, 866 A.2d 394. 2 a. Pennsylvania Orphans’ Court Rule 3.2(a) states that within twenty days “a party opposing the granting of the prayer of the petition shall file an answer admitting or denying the averments of fact of the petition and specifically stating his objections thereto and averring the facts relied upon by him.” (emphasis added). Marshall Dixon as Executor failed to comply with Rule 3.2(a) as the Response is not an answer as required. The Response does not admit or deny any of the allegations in the Petition. Marshall Dixon in his individual capacity did not file an answer or otherwise respond to the Petition. Since a proper answer was not filed, all averments of fact in the Petition should have been deemed admitted. b. The Response was further defective in that it is not verified. Pennsylvania Rule of Civil Procedure 1024(a) requires that “every pleading containing an averment of fact not appearing of record in the action or containing a denial of fact shall state that the averment or denial is true upon the signer’s personal knowledge or information and belief and shall be verified.” The Response contained averments that required verification. Thus, the Court erred in relying upon an improper pleading, the Response, in denying the Petition. 3. The appellants were denied a full and fair opportunity to be heard when the Petition was denied: (a) before the pleadings were closed; (b) before an answer was filed by Marshall Dixon either in his capacity as executor or in his individual capacity; (c) before a reply to an answer or response was due; and (d) without a hearing or argument. 4. The Orders of the Court denying the Petition and dismissing the exceptions without a sufficient and proper opportunity to be heard constitute a violation of the applicable procedural rules, including the Orphans’ Court Rules, and a denial of the right to due process. 5. The Court erred in denying the Petition without receiving any testimony or evidence on the issues presented in the Petition and without making any factual findings. 6. The Court erred in denying the Petition on the basis of delay in filing when the Court failed to make any finding that a party suffered material prejudice by changing his position to his detriment as a result of delay. 7. The Court erred in suggesting that delay was a basis to deny the Petition when the Petition was filed on February 12, 2010 and discovery had not even concluded by the discovery deadline of September 30, 2009. Very recently, the Superior Court of Pennsylvania rejected an executor’s claim that a twenty year delay in a petition for an estate accounting bars relief where the beneficiary alleged self-dealing and breach of fiduciary duty. See, In re Estate of Aiello, 2010 WL 1208464 (Pa. Super. March 30, 2010) (“Although [beneficiary] waited approximately twenty years to 3 bring this matter before the court, [executor’s] actions in this case require that he not be allowed to benefit from the delay.”) 8. The Court erred in relying upon the Auditor’s recommendation which failed to address the substance of the Petition, suggesting instead that granting the Petition would cause delay and expense. There is no prejudice or harm to the parties in allowing for a neutral’s evaluation regarding whether all of the decedent’s assets were collected and accounted for. The alleged delay that would be caused by appointing an administrator pro tem is far outweighed by the prejudice to the estate if a full examination and accounting of assets transferred to or taken by Marshall Dixon is not ordered. The need for an additional period of time for such an accounting is not reason enough for a court of equity to deny the Petition. 9. The Court erred in adopting the Auditor’s recommendation that the Petition be dismissed on the basis of delay, suggesting that the evidence regarding the allegations in the Petition was available at the time of the filing of objections to the first intermediate accounting for the Estate. The Auditor, however, failed to acknowledge allegations of the Petition that demonstrate that appellants did not have the complete facts and information sufficient to raise all allegations of misappropriation of assets at the time the objections were filed in August 2008. See, e.g., Petition, paragraphs 26-27. Formal discovery had not yet commenced. There were additional documents, records and areas of inquiry that appellants could not have known and were not available at the time of the filing of their objections. Appellants only discovered upon production of documents and, further, at the deposition of Marshall Dixon in September 2009 that discovery was still not complete—certain records and documents were deficient and additional financial records of Lottie Ivy Dixon and Marshall Dixon and his business ventures were required in order to trace and track substantial and numerous transfers of funds and assets. Missing information included credit card statements and brokerage account statements for both Lottie Ivy Dixon and Marshall Dixon and his business ventures and cancelled checks for each from both banking and brokerage accounts. All of this information is essential for a proper, complete and objective examination of decedent’s assets and the extent to which there was misappropriation of those assets. 10. The Court erred in adopting the Auditor’s Second Interim Report and Recommendation (“Auditor’s Report”) in denying the Petition and dismissing the exceptions, including: (a) Contrary to the Auditor’s Report at ¶ 6, present counsel for appellants did not “concede”, expressly or otherwise, at the final pre-hearing conference that they would not be able to prove that the decedent was subject to incapacity or undue influence. Rather, counsel was specifically told by the Auditor that incapacity and undue influence had been conceded by appellants’ prior counsel. (b) Contrary to the Auditor’s Report at ¶ 7, there was no argument at the final pre-hearing conference 4 concerning the merits of the Petition. The Petition was only filed of record the very day of the conference. (c) Contrary to the Auditor’s Report at ¶¶ 8-9, one check in the amount of $4,629.76 (that may or may not have been signed by decedent) is not dispositive of any aspect of the case and should not dictate a ruling on the Petition. There were hundreds of checks, withdrawals, and transfers involving a variety of bank and brokerage and credit card accounts for both decedent and Marshall Dixon and his business ventures that need to be examined and traced to evaluate the lifetime depletion of estate assets— which is why an administrator pro tem is necessary. 11. The Court erred in failing to address material allegations made in the Petition against Marshall Dixon. Those allegations include that Marshall Dixon may have defrauded the decedent of approximately $1.5 million between 1994 and the date of her death in June 2007 (See, Petition, paragraph 9), and that Marshall Dixon used decedent’s charge cards and funds in decedent’s brokerage and bank accounts to or for his benefit without the decedent’s knowledge and permission (See, Petition, paragraphs 19-22). These allegations were apparently dismissed on the basis that granting the Petition would cause delay and expense. However, no material prejudice to the parties was identified. Any “delay and expense” involved in appointing an administrator pro tem pales in comparison to the amount of decedent’s assets that may have been wrongfully transferred and withheld from the estate. 12. The Court erred in denying the Petition in the face of an inherent conflict of interest on the part of the executor where the Petition alleged the executor as an individual had misappropriated assets of the decedent during her lifetime. When the personal representative faces an inherent conflict of interest, 20 Pa.C.S. § 4301 provides for the appointment of an administrator pro tem. It was an obvious conflict of interest for Marshall Dixon as executor to independently investigate and pursue allegations that he, himself, misappropriated or failed to account for assets of the decedent. See, Petition, ¶ 46. An administrator pro tem would be empowered to take all necessary steps to insure full compliance with requests for information and records. The appointment of an administrator pro tem pursuant to 20 2 Pa. C.S. § 4301 has been recognized and ordered as appropriate and necessary for the limited purpose of discharging an executor’s duties, or a portion thereof, when and to the extent the executor is in a conflict of interest position. See, Smith Estate, 29 Fiduc. Rep. 175 (O.C. Div. Montg. 9 1979); Francis Estate, 11 Fiduc. Rep. 2d 52 (O.C. Div. Allegh. 1985). This opinion in support of the court’s refusal to substitute a court-appointee for the executor in the midst of the auditor’s proceedings is written pursuant to Pennsylvania Rule of Appellate Procedure 1925(a). 9 Petitioners’ Concise Statement of Errors Complained of on Appeal, filed June 8, 2010. 5 STATEMENT OF FACTS George F. Dixon, Jr., and Lottie Ivy Dixon, husband and wife, were the parents of four children: George F. Dixon, III, Richard E. Dixon, Marshall L. 10 Dixon and Charlotte I. Dixon. George F. Dixon, Jr., died testate on August 28, 1112 1993. Under his will, part of his estate was given to an existing trust, which was presumably established, at least in part, to take advantage of the federal estate tax marital deduction, provide income to his spouse if she survived him, and 13 control the eventual beneficiaries. Under the trust, the co-trustees were a corporate fiduciary and the aforesaid two children (Petitioners herein, Richard E. 14 Dixon and George F. Dixon, III). 15 Lottie Ivy Dixon died testate on June 28, 2007. Under her will, she 16 nominated the aforesaid third child (Marshall L. Dixon) as her executor. On July 25, 2008, the executor filed a First and Intermediate Accounting and Petition for 17 Adjudication in the estate. An Objection to the intermediate account was filed by the two individual co-trustees of their father’s trust (Petitioners herein, Richard E. 10 See Last Will and Testament of George F. Dixon, Jr., Notice of Nonresident Inheritance Tax Appraisement, filed August 26, 1994, No. 21-94-0754 Orphans’ Court, Cumberland County, Pennsylvania; Last Will and Testament of Lottie Ivy Dixon, filed July 25, 2007, No. 21-07-0686 Orphans’ Court, Cumberland County, Pennsylvania. 11 First and Final Account of Manufacturers and Traders Trust Company, Richard E. Dixon and George F. Dixon, III, Co-Trustees, filed January 30, 2009, at No. 21-94-0754 Orphans’ Court, Cumberland County, Pennsylvania. 12 Last Will and Testament of George F. Dixon, Jr., Item IV. 13 See Nichols Cyc. Legal Forms §217:340 (types of marital deduction trusts) (2009). George F. Dixon, Jr., had established a so-called QTIP trust. See Petition for Adjudication/Statement of Proposed Distribution Pursuant to Pa. O.C. Rule 6.9, filed January 30, 2009, No. 21-94-754 Orphans’ Court, Cumberland County, Pennsylvania. 14 See Petition for Adjudication/Statement of Proposed Distribution Pursuant to Pa. O.C. Rule 6.9 (attachment), filed January 30, 2009. 15 See Petition for Adjudication/Statement of Proposed Distribution Pursuant to Pa. O.C. Rule 6.9, at 2, filed July 25, 2008. 16 Last Will and Testament of Lottie Ivy Dixon, filed July 25, 2007, No. 21-07-0686 Orphans’ Court, Cumberland County, Pennsylvania. 17 First and Intermediate Accounting and Petition for Adjudication, filed July 25, 2008, No. 21- 07-0686 Orphans’ Court, Cumberland County, Pennsylvania. 6 Dixon and George F. Dixon, III) in their capacities as trustees, on August 22, 18 2008. On the same date, Objections to the intermediate account were filed by 19 these two persons in their individual capacities. On the same date, Objections to 20 the intermediate account were filed by all three trustees under the trust. On the same date, additional Objections to the intermediate account were filed by all three 21 trustees under the trust. In view of the objections, an auditor was appointed on August 26, 2008, in the person of the distinguished Cumberland County attorney 22 Wayne F. Shade, Esq. On January 30, 2009, the trustees of the aforesaid trust of George F. Dixon, Jr., filed a First and Final Account and a Statement of Proposed Distribution with 23 respect to the trust, in the Estate of George F. Dixon, Jr. Objections to the First 18 Objection to the First Intermediate Accounting of the Estate of Lottie Ivy Dixon, filed August 22, 2008, at No. 21-07-0686 Orphans’ Court, Cumberland County, Pennsylvania. 19 Objections of Richard E. Dixon and George F. Dixon III to the First Intermediate Accounting of Marshall L. Dixon, Executor, filed August 22, 2008, at No. 21-07-0686 Orphans’ Court, Cumberland County, Pennsylvania.. 20 Objections to the First Intermediate Accounting of the Estate of Lottie Ivy Dixon, filed August 22, 2008, at No. 21-07-0686 Orphans’ Court, Cumberland County, Pennsylvania.. 21 Objections of M&T Bank, Richard E. Dixon and George F. Dixon III to the First Intermediate Accounting of Marshall L. Dixon, Executor, filed August 22, 2008, at No. 21-07-0686 Orphans’ Court, Cumberland County, Pennsylvania.. 22 Order of Court, dated August 26, 2008, at No. 21-07-0686 Orphans’ Court, Cumberland County, Pennsylvania. 23 First and Final Account [of] Manufacturers and Traders Trust Company, Successor to Allfirst Trust Company of PA, N.A., Successor to Dauphin Deposit Bank and Trust Company, Richard E. Dixon and George F. Dixon, III, Co-Trustees, filed January 30, 2009, No. 21-94-0754 Orphans’ Court, Cumberland County, Pennsylvania; Petition for Adjudication/Statement of Proposed Distribution Pursuant to Pa. O.C. Rule 6.9, filed January 30, 2009, No. 21-94-0754 Orphans’ Court, Cumberland County, Pennsylvania. The Estate of George F. Dixon, Jr., who was domiciled in Florida at the time of his death (unlike his spouse, Lottie Ivy Dixon, who was domiciled in Pennsylvania at the time of her death) appears to have been opened in this court as a non-resident decedent’s estate by his personal representatives in his Florida decedent’s estate. See Notice of Nonresident Inheritance Tax Appointment, filed August 26, 1994, No. 21-94-0754 Orphans’ Court, Cumberland County, Pennsylvania. However, this decedent’s estate now appears to have evolved into a trust estate by virtue of the filing of his trustees’ First and Final Account and Statement of Proposed Distribution referred to in the text, at the same Orphans’ Court Docket (No. 21-94-0754 Orphans’ Court, Cumberland County, Pennsylvania). 7 and Final Account and to the Statement of Proposed Distribution were filed by 24 Marshall L. Dixon in his individual capacity on February 27, 2009. On the same date, Objections to the first and final account were filed by Marshall L. Dixon in 25 his capacity as executor of his mother’s estate. On the same date, Objections to their own Statement of Proposed Distribution were filed by the non-corporate co- 26 trustees (Petitioners herein, Richard E. Dixon and George F. Dixon, III). One of the issues raised in the accountants’ response to the objections was whether their decision not to distribute income from the trust to the decedent’s estate was justified by misconduct of the estate’s executor, Marshall L. Dixon, with respect to 27 “the financial affairs of his mother, Lottie Dixon, prior to her death.” In view of the objections, Attorney Shade was appointed auditor in this trust estate as well, 28 on March 3, 2009. Upon agreement of the parties, the cases were consolidated for purposes of 29 the auditor’s task by order of court dated June 17, 2009. The auditor has thus been engaged in the performance of his duties in these bitterly contested and inextricably-related estates for well over a year. He has indicated that the alleged 24 Objections of Marshall L. Dixon, Individually, to First and Final Account and Statement of Proposed Distribution of Manufacturers and Traders Trust Company, Successor to Allfirst Trust Company of PA, N.A., Successor to Dauphin Deposit Bank and Trust Company, Richard E. Dixon and George F. Dixon, III, Co-Trustees, filed February 27, 2009, No. 21-94-0754 Orphans’ Court, Cumberland County, Pennsylvania. 25 Objections by Marshall L. Dixon, Executor of the Estate of Lottie Ivy Dixon, to First and Final Account, filed February 27, 2009, No. 21-94-0754 Orphans’ Court, Cumberland County, Pennsylvania. 26 Objections to the Statement of Proposed Distribution of the QTIP Trust under Agreement of George F. Dixon, Jr., filed February 27, 2009, No. 21-94-0754 Orphans’ Court, Cumberland County, Pennsylvania. 27 Answer and New Matter to Executor’s Objections to First and Final Account, filed March 20, 2009, No. 21-94-0754 Orphans’ Court, Cumberland County, Pennsylvania (emphasis added). 28 Order of Court, dated March 3, 2009. 29 Order of Court, June 17, 2009. 8 misconduct of Marshall L. Dixon with respect to the financial affairs of his mother 30 is a factual issue which he is considering. With this background, in the midst of the Auditor’s proceedings Petitioners 31 herein (Richard E. Dixon and George F. Dixon, III) changed counsel and then filed a Petition for Appointment of Administrator pro Tem Pursuant to 20 PA. C.S. §4301, seeking the substitution of a court-appointed administrator for Marshall L. 32 Dixon as personal representative of their mother’s estate. The 57-paragraph petition alleged that “Marshall may have defrauded decedent” during her 33 lifetime, and noted inter alia that “[a]lthough Marshall effects a slovenly appearance on occasion, during the Period [in question] he purchased and filled 34 the rooms of decedent’s house with expensive clothes, sportswear and shoes,” 35 that the decedent “customarily had at least two glasses of wine daily,” and that 36 the decedent had been a “sweet and spiritual woman.” The petition sought the substitution of a court-appointed administrator of the estate of the parties’ mother, with a duty to determine “what, if any, assets were wrongfully obtained from the decedent of the estate, Marshall L. Dixon, in his individual capacity form 1994 to the decedent’s death in June 2007,” and to 30 N.T. 6, Auditor’s Hearing, February 24, 2010. 31 Praecipe for Entry of Appearance, filed January 25, 2010, No. 21-94-0754 Orphans’ Court, Cumberland County, Pennsylvania; Praecipe for Entry of Appearance, filed January 25, 2010, No. 21-07-0686 Orphans’ Court, Cumberland County, Pennsylvania. 32 Petition for Appointment of Administrator pro Tem Pursuant to 20 PA. C.S. §4301, filed February 12, 2010. 33 Petition for Appointment of Administrator pro Tem Pursuant to 20 PA C.S. §4301, ¶9, filed February 12, 2010. 34 Petition for Appointment of Administrator pro Tem Pursuant to 20 PA C.S. §4301, ¶15, filed February 12, 2010. 35 Petition for Appointment of Administrator pro Tem Pursuant to 20 PA C.S. §4301, ¶32, filed February 12, 2010. 36 Petition for Appointment of Administrator pro Tem Pursuant to 20 PA C.S. §4301, ¶ 33, filed February 12, 2010. 9 37 employ a “handwriting expert.” Petitioners asserted, inexplicably in the court’s 38 view, that they had no standing to pursue such issues themselves. In response to the petition, the executor of the estate of the parties’ mother, Marshall L. Dixon, filed an answer which maintained that the petition was a “blatant last-minute attempt by petitioners to circumvent their burden of proving 39 their objections at the [auditor’s hearing],” that the discovery which they now suggested the court-appointed administrator should conduct could have been 40 sought over a year ago, that “[t]he audit process [had] afforded Petitioners an opportunity to investigate virtually any aspect of Mrs. Dixon’s financial life following the death of her husband” and that “Petitioners had every opportunity to investigate whether assets were wrongfully taken by Marshall and should be 41 recovered and included in the Estate,” that Petitioners’ contention that they had no standing to pursue the information sought was obviously wrong and disingenuous in view of their status as trustees of the residuary beneficiary under 42 her will, that three days of pre-scheduled auditor’s hearings were pending in the 43 immediate future, and that a granting of the petition would, “derail the audit 44 process in its entirety just as it nears its end.” 37 Petition for Appointment of Administrator pro Tem Pursuant to 20 PA. C.S. §4301, claim for relief, filed February 12, 2010 (emphasis added). 38 Petition for Appointment of Administrator pro Tem Pursuant to 20 PA. C.S. §4301, ¶49, filed February 12, 2010. 39 Response in Opposition To Petition To Appoint Administrator pro Tem Filed by Marshall Dixon, As Executor of the Estate of Lottie Ivy Dixon, at 3, filed February 12, 2010. 40 Response in Opposition To Petition To Appoint Administrator pro Tem Filed by Marshall Dixon, As Executor of the Estate of Lottie Ivy Dixon, at 5, filed February 12, 2010. 41 Response in Opposition To Petition To Appoint Administrator pro Tem Filed by Marshall Dixon, As Executor of the Estate of Lottie Ivy Dixon, at 4, filed February 12, 2010. 42 Response in Opposition To Petition To Appoint Administrator pro Tem Filed by Marshall Dixon, As Executor of the Estate of Lottie Ivy Dixon, at 8, filed February 12, 2010. 43 Response in Opposition To Petition To Appoint Administrator pro Tem Filed by Marshall Dixon, As Executor of the Estate of Lottie Ivy Dixon, at 5, 8, filed February 12, 2010. 44 Response in Opposition To Petition To Appoint Administrator pro Tem Filed by Marshall Dixon, As Executor of the Estate of Lottie Ivy Dixon, at 8, filed February 12, 2010. 10 Given the auditor’s long-standing familiarity with these interrelated estates, the court referred the petition to him with a request that he file an interim report and recommendation as to its disposition. The resultant directive, approved by an 45 order of court, followed a conference with counsel conducted by the auditor and disposed of a number of intermediate matters in addition to the petition for appointment of an administrator pro tem: 1. The objections of Richard E. Dixon and George F. Dixon, III (hereinafter “the brothers”) to the allocation of the unified credit are withdrawn. 2. The objections of the brothers to the estate’s retention of a portion of the federal estate tax refund are withdrawn. 3. The objections of the brothers to the estate’s valuation of jewelry and other property are withdrawn. 4. The objection of the brothers that the estate failed to include a stock brokerage account with an approximate value of $500,000 is withdrawn. 5. The estate acknowledges, and Charlotte Dixon and Marshall L. Dixon (hereinafter “Marshall”) do not dispute, that Charlotte must reimburse the estate for disbursements in the amount of $5,402.26 for her Florida condominium and that Marshall must reimburse the estate for disbursements in the amount of $5,402.27 for his Florida Condominium. 6. The brothers’ objection to the estate’s payment of $8,553.52 for the maintenance of Rose Balcony after Lottie’s death is withdrawn on the basis of the estate’s explanation that that sum was offset by funds that Marshall advanced to the estate for administration. 7. The executor will withdraw the claim for unpaid expense of interest for funds loaned to the estate as stated on page 26 of the first and intermediate account. 8. Marshall will reimburse the estate in the amount of $9,933.96 for loss of value of marketable securities during administration of the estate. 9. After review of the brothers’ petition for appointment of an administrator pro tem and the response of the estate thereto and after argument at the pre-hearing conference, the auditor recommends to the court that the petition be dismissed on the basis that the delay of the brothers in advancing this request would prejudice the other parties in terms of delay and expense where the auditor sees nothing in the petition that the brothers could not have raised at the time of the filing of their objections to the first intermediate accounting in the estate. 45 Order of Court, February 23, 2010. 11 10. After review of the brothers’ petition for a continuance filed at 3:37 P.M. on February 19, 2010, and after consideration of opposition to the petition by the estate and by Marshall, individually, the auditor recommends to the court that the petition be dismissed for the same reasons as dismissal of the petition for appointment of an administrator pro tem is recommended. 11. After review of the brothers’ addendum to their supplemental pre- hearing memorandum and the response of the estate thereto, the auditor directs that, at the hearing, the brothers will need to establish the relevance of the evidence of checks drawn against the joint checking account where Marshall was a joint owner of the account, where there is no suggestion that the brothers will be able to prove that Lottie was subject to incapacity or undue influence during her lifetime, and where the brothers have withdrawn their objection to the allocation of death taxes among the beneficiaries. 12. Any contentions that the estate did not have adequate notice of the brothers’ witnesses and exhibits, and any contentions that the estate did not have adequate notice of the factual and legal bases of the brothers’ objection that assets were improperly not included in the estate will be addressed at the hearing. 13. All objections to the proposed schedule of distribution of the QTIP trust are withdrawn, and all parties are in agreement with termination of the trust and distribution in accordance with the provisions of the trust agreement. 14. Manufacturers and Traders Trust Company (hereinafter “the bank”) will file a revised schedule of distribution, including distribution of the real estate in kind. 15. Marshall’s objections to the fees of the corporate and individual trustees of the QTIP trust are withdrawn. 16. With the exception of contentions with respect to counsel fees and the fees of the auditor, the bank will not be pursuing any objections or introducing any testimonial or documentary evidence. 17. The brothers will then proceed with their evidence as to the allegations in their addendum to their supplemental pre-hearing memorandum, followed by any response thereto. 18. After the brothers’ presentation of their evidence as to the allegations in their addendum to their supplemental pre-hearing memorandum, the estate may request a continuance of the hearing as to the evidence offered pursuant to the allegations in the brothers’ addendum to their supplemental pre-hearing memorandum, only, on the basis that the failure of the brothers to comply with pre-hearing directives denied the estate a reasonable opportunity to prepare a defense to the allegations in the brothers’ addendum to their supplemental pre-hearing memorandum. 19. All evidence and all authorities regarding liability for the fees and expenses of the auditor will be addressed at this time. Any parties offering 12 evidence on this issue will proceed in the order of the brothers, the bank, the estate, and Marshall, individually. 20. All issues and all evidence regarding liability for attorney fees incurred by the parties in addressing the various objections will be deferred and preserved for later disposition. 21. The bank will advance the expenses for the court stenographer from the corpus of the QTIP trust, subject to recommendations of the auditor for reimbursement. 46 22. Formal notice of the hearings is waived. The aforesaid order of court pursuant to the auditor’s recommendation denying the petition for appointment of an administrator pro tem at this stage of 47 the proceedings was dated February 23, 2010. The order also denied Petitioners’ 48 request for a continuance of the auditor’s proceedings. Exceptions to the denial of the petition were filed by Petitioners on March 49 15, 2010, basically requesting the court to reconsider its order. A response in opposition to the exceptions was filed by the executor, Marshall Dixon, on March 50 26, 2010. In response to a referral of these exceptions to the auditor for a brief 51 interim report and recommendation, the auditor filed a Second Interim Report and Recommendations, reading as follows: AND NOW, this 6th day of April, 2010, upon consideration of the exceptions to the Order of Court dated February 23, 2010, denying the petition for appointment of an administrator pro tem, in the nature of a motion for reconsideration and treated as such, the auditor finds, recommends, and directs, as follows: 1. Richard E. Dixon, George F. Dixon, III (hereinafter “the brothers”) are two of the children of the decedent. 46 Directive, filed February 22, 2010. 47 Order of Court, February 23, 2010. 48 Order of Court, February 23, 2010. 49 Exceptions to Order of Court Dated February 23, 2010, Denying Petitioners’ Petition for Appointment of an Administrator pro Tem, filed March 15, 2010. 50 Response of Marshall Dixon, Executor of the Estate of Lottie Ivy Dixon to Exceptions to Order of Court Dated February 23, 2010 Denying Petitioners’ Petition for Appointment of an Administrator pro Tem, filed March 26, 2010. 51 Order of Court, dated February 29, 2010; [Amending] Order of Court, March 31, 2010 (amending Order of Court dated February 29, 2010, to reflect correct date of March 29, 2010). 13 2. The executor of the estate of the decedent, Marshall L. Dixon, is their brother. 3. The evidence in the allegations in the brothers’ petition for appointment of an administrator pro tem would have been available to them at the time that they filed their objections to the first and intermediate accounting of Marshall L. Dixon as executor of the Estate of Lottie Ivy Dixon on August 22, 2008, more than a year after the date of death of the decedent on June 28, 2007. 4. The brothers could have and should have advanced those allegations at that time. 5. The allegations of the brothers, in their petition for appointment of an administrator pro tem, of improper conduct of the executor toward the decedent go back as far as 1999, but there are no allegations that they were not aware of those facts in 1999 or that they took any action to address their concerns in those respects during the lifetime of their mother, the decedent. 6. In addition to the fact that the brothers did not advance the allegations in their petition for appointment of an administrator pro tem until fifteen days before the scheduled hearing, they expressly conceded at the pre-hearing conference on February 12, 2010, that they would not be able to prove that the decedent was subject to incapacity or undue influence during her lifetime. 7. The brothers also had an opportunity to be heard where they were permitted to argue and did argue the merits of their petition for appointment of an administrator pro tem at the pre-hearing conference on February 12, 2010. 8. At a hearing on the merits of the objections of the brothers that was held on February 24, 2010, the undisputed evidence, on page 96 of the transcript of testimony, developed by the brothers in their cross- examination of the executor, was that, in September of 2005, nearly two priors prior to her date of death, the decedent signed check number 4554 on her account in the amount of $4,629.76 to pay off the credit card account of the executor. 9. Where the brothers conceded at the pre-hearing conference on February 12, 2010, that they would not be able to prove that the decedent was subject to incapacity or undue influence during her lifetime and where there are no allegations that the brothers took any action to address their concerns in those respects during the lifetime of the decedent, the auditor finds the decedent’s gift of $4,629.76 to the executor to show a lack of evidence of improper conduct on the part of the executor, in general. 10. In paragraph 52 of their petition for appointment of an administrator pro tem, the brothers did not aver that they could not have advanced their allegations in a timely manner, but, rather, that they did not previously advance their allegations against the executor of the estate because their prior counsel did not advise them to do so. 14 11. Where the petition for appointment of an administrator pro tem was not filed until fifteen days prior to the scheduled hearing and where the auditor had full knowledge of the background of the case from the pleadings and two pre-hearing conferences, the objections of the brothers to the failure to strictly observe the rules of procedure in disposition of the petition is unavailing. 12. Any departure from the strict requirements of the rules was the result of the failure of the brothers to proceed in a timely manner and was necessary in order to avoid material prejudice to the other parties in the avoidance of further expense and delay in completion of administration of the estate. 13. Appointment of an administrator pro tem, after the failure of the brothers to timely advance their petition therefor, would prejudice the other parties in terms of delay and expense where there are no material allegations in the petition that the brothers could not have raised at the time of the filing of their objections to the first intermediate accounting in the estate. 14. The auditor recommends that the exceptions to the Order of Court dated February 23, 2010, denying the petition for appointment of an administrator pro tem, in the nature of a motion for reconsideration and 52 treated as such, be dismissed. Upon review of the report, the court approved the recommendation of the auditor and by order of court dated April 7, 2010, dismissed the exceptions to the order which had declined to substitute an administrator pro tem at this stage of the 53 proceedings for the named executor in the estate of the parties’ mother. From this order, Petitioners have filed an appeal to the Pennsylvania 54 Superior Court. DISCUSSION Under Section 4301 of the Probate, Estates and Fiduciaries Code, it is provided as follows: Whenever and for so long as any fiduciary is in military service, in other government service, in a position of conflicting interest or in any situation where his functioning as a fiduciary for a temporary period may not be in the best interests of the estate, the court having jurisdiction over such fiduciary shall have the power in its discretion: 52 Second Interim Report and Recommendations, filed April 6, 2010. 53 Order of Court, April 7, 2010. 54 Notice of Appeal, filed May 12, 2010. 15 (1) to authorize the cofiduciary or cofiduciaries, if any, to exercise all or specified powers of the incapacitated fiduciary, whether discretionary or ministerial; or (2) to appoint a substituted fiduciary pro tem to act in place of the incapacitated fiduciary and to authorize the substituted fiduciary pro tem to exercise all or specified powers and discretion of the incapacitated 55 fiduciary. Under the Code, the “incapacitated” fiduciary loses his or her authority to act 56 when a substituted fiduciary is appointed. The bitter dispute between three of the children of George F. Dixon, Jr., and Lottie Ivy Dixon was first assigned to an auditor by this court two years ago, and the issue of whether one of the children, Marshall L. Dixon, had committed improprieties with respect to his mother’s financial affairs during her lifetime was raised by Petitioners well over a year ago. At this stage of the proceedings, in the court’s view, the substitution of a court-appointed fiduciary for the mother’s named executor would have altered the adversarial structure upon which the auditor’s consideration of the issues has been thus far facilitated, redirected the fact-finding process on interconnected issues into two channels conducted by separate fact-finders (the auditor and the court), delayed indefinitely the auditor’s completion of his duties and the resolution of the estates, one dating to 1994, at this court’s level, and rewarded an unwarranted dilatoriness on the part of the Petitioners. In the exercise of its discretion in declining to accede to Petitioners’ demand that the executor in the estate of the parties’ mother be replaced by a court-appointed administrator pro tem and to interfere with the auditor’s hearings, the court did not, as suggested by Petitioners, treat the matter peremptorily, but rather subjected the request to four reviews—two by the auditor, and two by the court. 55 Act of December 10, 1974, P.L. 896, §1, 20 Pa. C.S. §4301. 56 Act of December 10, 1974, P.L. 896, §1, 20 Pa. C.S. §4305. 16 For the foregoing reasons, it is believed that the court’s refusal to grant Petitioner’s exceptions to the order of court dated February 23, 2010, was proper. BY THE COURT, _________________ J. Wesley Oler, Jr., J. Wayne F. Shade, Esq. Auditor Walter W. Cohen, Esq. Kevin J. Kehner, Esq. Obermayer Rebmann Maxwell & Hippel, L.L. P. Suite 400 200 Locust St. Harrisburg, PA 17101 Attorneys for Petitioners/Appellants Elizabeth P. Mullaugh, Esq. Kimberly Marie Colonna, Esq. McNees, Wallace & Nurick, LLC 200 Pine St. P.O. Box 1166 Harrisburg, PA 17108-1166 Attorneys for Respondent/Appellee Marshall L. Dixon, Executor, Estate of Lottie Ivy Dixon Mark David Bradshaw, Esq. Stevens & Lee, P.C. 16th Floor 17 N. Second St. Harrisburg, PA 17101 Attorney for M & T Bank, Trustee Daniel Lawrence Sullivan Saidis, Flower & Lindsay 2109 Market St. Camp Hill, PA 17011 Attorney for Marshall L. Dixon 17