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HomeMy WebLinkAbout2004-6183 Civil ROBERT M. MUMMA II, HIGH-SPEC, INC., A Florida Corp. IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA v. THE ESTATE OF ROBERT M. NO. 2004 - 6183 CIVIL TERM MUMMA, THE EXECUTRIXES OF THE ESTATE OF ROBERT M. MUMMA, LISA M. MORGAN AND BARBARA McK.MUMMA, THE RESIDUARY TRUST UNDER: THE WILL OF ROBERT M. MUMMA, & THE TRUSTEES OF : THE RESIDUARY TRUST UNDER: THE WILL OF ROBERT M. MUMMA, LISA M. MORGAN & BARBARA McK.MUMMA CIVIL ACTION - LAW IN RE: DEFENDANTS' MOTION FOR SUMMARY JUDGMENT BEFORE GUIDO, J. OPINION AND ORDER OF COURT Currently before the court is the Motion for Summary Judgment filed by Defendants, the Estate of Robert M. Mumma, et al. Summary judgment should be granted if there is no genuine issue of material fact and the moving party is entitled to judgment as a matter oflaw, Williams v. Pilgrim Life Insurance Co.,306 Pa. Super 170, 452 A.2d 269,270 (1982). Since the moving party has the burden of proving that no genuine issues exist as to the material facts, the record must be examined in a light most favorable to the non-moving party; in doing so all well-pleaded facts in the non-moving party's pleadings are accepted as true and that party is given the benefit of all reasonable inferences to be drawn therefrom. NO. 2004 - 6183 CIVIL TERM Spain v. Vicente, 315 Pa Super. 135, 461A.2d 833, 835 (1983). Summary judgment should not be entered unless the case is free from doubt. Weiss v. Keystone Mack Sales, Inc. 310 Pa. Super 425,456 A.2d 1009, 1011 (1983). For the reasons hereinafter set forth, Defendants' Motion for Summary Judgment will be granted. Factual Background In 1985, Robert M. Mumma ("Mumma I") and his son, Robert M. Mumma II ("Mumma II") formed a Florida corporation known as High-Spec, Inc.1 They were the only two shareholders of the corporation.2 Mumma I died on April 12, 1986.3 Mumma II commenced the instant action in 2004. It seeks to enforce an alleged Share Restrictive Agreement ("agreement") between him and his father. 4 An unsigned copy of the agreement is attached to the amended complaint. 5 Mumma II alleges that the signed agreement "may have been stolen with other documents from a safe-deposit box at Dauphin Deposit Bank.,,6 The relevant sections of the unsigned agreement provide as follows: 4. TRANSFER OF SHARES UPON DEATH OF SHAREHOLDER. In the event of the death of any Shareholder, it is agreed that all of the shares of the Corporation held by such decedent at the time of his death shall be sold in the same manner as provided in Section 3 of this Agreement in that the personal representative of the decedent shall first offer, within sixty (60) days after his qualification as such personal representative, the shares owned by the decedent to the Corporation and if the Corporation does not purchase such shares as provided in Section 3 of this Agreement, then the personal representative shall thereupon offer such shares pro rata to the other Shareholder or Shareholders of this Corporation who hereby agree 1 See Amended Complaint, paragraph 10. 2 ld. at para. 11. 3 ld. at para. 17. 41d. at paragraphs 12, 13. 5 See Amended Complaint, Para. 13 Exhibit A. 61d. 2 NO. 2004 - 6183 CIVIL TERM individually to purchase such shares in the manner as provided in paragraph 3 thereof. In the event the offer is not made within said sixty (60) day period as herein provided, it shall be deemed ipso facto to be made at the end of said sixty (60) day period and if, within thirty days thereafter, the Corporation does not request delivery of the shares to it for purchase, the Shareholders shall enforce delivery of such shares of the deceased Shareholder pro rata to them, upon compliance of the Shareholders of the terms and conditions of this Agreement. (emphasis added).7 Mumma II asks us to require the Estate of Mumma I to sell its shares to him or the corporation in accordance with the terms of the agreement. Defendants' Motion for Summary Judgment rests upon their assertion that previous litigation in Florida precludes Mumma II from bringing the instant action. They also contend that the action is time barred. The Florida action at issue was commenced by the executrices of the Estate of Mumma I against Mumma II in 1989. It took 17 years, several hearings and as many appeals, before a final judgment was entered. The factual and procedural history was summarized in the Amended Final Judgment filed in the Circuit Court of the Nineteenth Judicial Circuit in and for Martin County, Florida by Judge Robert Makemson on February 17, 2006. Judge Makemson's summarized the "History of the Litigation" as follows: 1. On July 26, 1993, this court, through Judge Marc Cianca, entered a Final Judgment which dissolved the Defendant Florida Corporation, High-Spec, Inc. and determined among other things that Defendant Robert Mumma, II caused the illegal distribution of certain real property to himself and is liable to High-Spec, Inc. . . . 2. The Court also required the directors of High-Spec to prepare a final accounting and wind up and liquidate the corporation. 7 See Plaintiff's Amended Complaint, Exhibit A 3 NO. 2004 - 6183 CIVIL TERM 6. By an opinion dated June 9, 1999 entered by the Fourth District Court of Appeal of the State of Florida in Mumma v. Mumma, 734 So. 2d 571 (Fla. 4th DCA 1999) the appellate court. . . determined that the 1993 partial Final Judgment remains in force and need not be revisited on remand. The appellate court also determined that the only issues left to be decided concerned the final accounting and winding up of the corporation as well as attorneys' fees and costs. 8. Following remand, a trial was held on the remaining issues identified by the appellate court in its opinion. During this time, the trial transcript shows that Defendant Robert Mumma's counsel raised, for the first time the existence of a shareholder's agreement which Judge Bryan refused to entertain because it had not been raised in the 1993 trial. (2000 Trial Transcript, p. 126). 9. The trial resulted in a Final Judgment entered by Judge Bryan of this Court on March 15, 2000. The Final Judgment recited the entry of the Final Judgment of Judge Cianca in 1993 and adopted previous findings of the Court. 12. Defendants filed an appeal from this Final Judgment, and Plaintiffs filed a cross-appeal. In their brief, Defendants did not assign as error Judge Bryan's refusal to consider the alleged shareholder's agreement in determining ownership by Mumma Sr's estate of 50% of the shares of High-Spec, Inc. stock. 13. By an opinion dated March 28,2001 entered by the Fourth District Court of Appeal for the State of Florida in Mumma v. Mumma, 780 So. 2d 1001 (Fla. 4t DCA 2001), rev. den. 797 So. 2d 587 (Fla. 2001), the appellate court modified that portion of the March 15, 2000 Final Judgment which suspended interest after the 1993 Final Judgment. . . 17. Plaintiffs' Motion for Entry of Amended Final Judgment Following Appellate Review seeks the entry of an Amended Final Judgment consistent with the appellate decisions of the Fourth District Court of Appeal and Supreme Court of Florida in 2001. 20. On June 6, 2003, Defendant Mumma II filed his Motion to Dismiss or in the Alternative for a New Trial Due to Recently Discovered Evidence of Lack of Jurisdiction and Fraud upon the Court. In his motion Defendant claimed that the Plaintiffs are not shareholders of High-Spec, Inc. and alleged in paragraph 14 under "newly discovered evidence" that a shareholder's agreement existed. By order entered January 16,2004, Judge Angelos denied this motion. Defendants Mumma and High-Spec, Inc. timely appealed. Their brief did not raise the shareholder's agreement but instead argued on other grounds that the circuit court erred in denying the motion. The Fourth District Court of Appeal affirmed the January 16,2004 order per curium on May 11,2005, and issued a mandate on July 8, 2005. 21. On December 16, 2004, Defendant Mumma, acting pro se at the time, filed his Motion to Dismiss or Stay in which he contended that this action should be dismissed because. . . the shares of stock in High-Spec, Inc. which were distributed from his father's Pennsylvania estate to his Residuary Trust on 4 NO. 2004 - 6183 CIVIL TERM January 1, 2002, were subject to a shareholder's agreement, an unsigned copy of which he attached to his motion. Defendant Mumma II had previously raised this shareholder's agreement in the 2000 trial before Judge Bryan and again in his June 6, 2003 Motion to Dismiss. He asked that this action be stayed pending the outcome of a related Pennsylvania court action he had filed to determine the enforceability of this shareholder's agreement. (emphasis added).8 The restrictive share agreement referred to in the Florida action is the same one upon which the instant action is based. In the "Amended Final Judgment" Judge Makemson held in relevant part as follows: Defendant's continued attempts to relitigate the shareholder status of the Plaintiffs based on allegations of an existing shareholder's agreement are barred by res judicata, estoppel by judgment, and judicial waiver by failing to raise on appeal this Court's refusal to consider the alleged shareholder's agreement in the 2000 Final Judgment and the January 16, 2004 Order on Defendant Mumma's Motion to Dismiss or for New Trial. Plaintiffs' Motion for Entry of Amended Final Judgment Following Appellate Review, as amended, is granted. High- Spec Inc. is hereby dissolved as a result of the shareholders being deadlocked and the illegal distribution of a major corporate asset to Robert M. Mumma, II. (emphasis added).9 Discussion Article IV, Section 1 of the United States Constitution states that "[fJull faith and credit shall be given in each state to the public acts, records, and judicial proceedings of every other state." This Full Faith and Credit Clause has the function of avoiding relitigation in one state of adjudicated issues from another. Venezia Trucking v. W C.A.B. (Inservco Ins. Services), 694 A.2d 1172 (Pa.Commw.Ct. 1997). So, "a final judgment in one State, if rendered by a court with adjudicatory authority over the subject matter and 8 See "Amended Final Judgment Following Appellate Review" attached to Defendants' Motion for Summary Judgment Part 1. 9 See "Amended Final Judgment Following Appellate Review" attached to Defendants' Motion for Summary Judgment Part 2. 5 NO. 2004 - 6183 CIVIL TERM persons governed by the judgment, qualifies for recognition throughout the land. For claim and issue preclusion purposes, in other words, the judgment of the rendering State gains nationwide force." Ferrelli v. Com., 783 A.2d 891, 895 (Pa.Commw.Ct. 2001). In the Amended Final Judgment Following Appellate Review, the Circuit Court of the Nineteenth Judicial Circuit in and for Martin County, Florida made several specific rulings with regard to High Spec Inc. First, it ordered the dissolution of High Spec. Second, it determined that 50% of the shares of High Spec were owned by the Estate of Mumma I. Finally, Judge Makemson found that Mumma II's attempt to relitigate the shareholder status of these defendants based upon the alleged agreement was barred by "res judicata, estoppel by judgment and judicial waiver." Since we must acknowledge and accept the ruling of the Florida court, the grant of summary judgment is appropriate. We are also satisfied that the Plaintiff s claim is barred by the statute of limitations.1o Under the express terms of the alleged agreement, Mumma II was required to "enforce delivery" of the shares to himself within 90 days after his father's estate was opened. 11 The instant action was commenced more than 18 years after his father's death and at least 15 years after the cause of action accrued. 12 It is clearly time barred. 10 The statute oflimitations for an action upon a contract is four years. 42 Pa. C.S.A. ~ 5525. 11 See paragraph 4 quoted above. 12 The record is not clear as to when the estate was open. However, we do know that the Florida action was commenced by the estate in 1989. 6 NO. 2004 - 6183 CIVIL TERM ORDER OF COURT AND NOW, this 6TH day of DECEMBER, 2006, Defendants' Motion for Summary Judgment is GRANTED and the bench trial scheduled for December 20, 2006, is canceled. By the Court, Isl Edward E. Guido Edward E. Guido, J. Robert M. Mumma, II Brady L. Green, Esquire Ivo V. Otto, III, Esquire George B. Faller, Esquire :sld 7