A TTORNEY S FOR A PPELLANT A TTORNEY S FOR A PPE L LEE

Jeffrey P. Smith William L. Wilson David K. Hawk Bernard E. Edwards Fort Wayne, Indiana South Bend, Indiana

_________________________________________________________________________ _____ 

# In the 

# Indiana Supreme Court

_________________________________ No. 71S03

- 0808

- CV

- 419

E STATE OF M ARGARET H. P RICKETT , D ECEASED , Appellant ( Defendant below) ,

v.
M ARILYN P RICKETT W OMERSLEY , Appellee ( Plaintiff below)

.

____________________________ _____ Appeal from the St. Joseph Probate Court, No. 71J01

- 0302

- ES

- 92

The Honorable Peter J. Nemeth , Judge

_________________________________ On Petition to Transfer from the Indiana Court of Appeals, No. 71A03

- 0710

- CV

- 488

_________________________________

May 13, 2009 Sullivan, Justice.

A woman seeks compensation for the value of her services while caring for her mother when the mother was subject to a guardianship. Indiana law presumes that services by a family member are rendered gratuitously. In th is case, the presumption cannot be rebutted by evidence that the mother wanted her daughter to be compensated because the mother was under a gua rdianship and the guardian did not consent.2 Background

In October, 1999, the St. Joseph County Probate Court fo und that Margaret H. Prickett was an incapacitated person who needed the protection of a guardianship

. The court appointed Real Services, Inc. , and a daughte r, M. Carolyn Prickett Gutman , as co
- guardians of M r s. Pric kett‟s person , and appointed 1st Sou rce Ba nk as guardian of her e state

. Real Services and Gutman were responsible for providing care for her personal needs, the costs for which were to be ove rseen and paid by 1st Source

. D uring the guardianship , Mrs. Prickett lived with another daughte r, M arilyn Prickett Womersley, who appeared by counsel in the guardianship procee d ings

.

Mrs. Prickett passed away i n Februar y , 2003 . H er e state was opened that same month in the same court in which the guardianship was pending

. In May , 2003 , Womersley filed a claim against the Estate for approximately $ 54 6,000. Womersley sought reimburseme nt for various expenses and perso nal services she rendered to her mother during the time they lived toget h er
. Womersley never sought reimbursement from the guardian ; the court eventually terminated the guardia n ship in 2004 after approving the guardian‟s final accounting.

I n 2006, the Estate sought summary judgment with respect to Womersley‟s claim on two grounds: (1) the expenses and personal services provided by Womers ley were, as a matter of law, “gratuitous , ” and therefore not compensable; 1 and (2) that any claims as serted by Womer sley were time

- barred because they were not filed in the guardianship

. In reply, Wormersley de signated certain evidence that the court con cluded created genuine issues of material fact as to whether the services were gratuitous as a matter of law. The probate court denied the Estate‟s summary judgment motion but did, at the Estate‟s request, certify its order for interlocutory a ppeal.

1 The parties do not distinguish between the expenses and personal services, and Indiana law appears to extend the presumption that s ervices are gratuitous to expenses as well. Smith v. Husted , 28 Ind. App. 168, 62 N.E. 454, 455 (1902).3

Th e Court of Appeals affirmed

. The E state sought, and we granted, transfer pursuant to Ind. Appellate Rule 58(A). Estate of Prickett v. Womersley , 885 N.E.2d 619, 628 (Ind. Ct. App. 20 08).

Discussion

I

“ Indiana law allows for the appointment of a guardi an to act in the best interests of a pe rson who is unable to care for [her] self or for [her] property

. See Ind. Code §§ 29

- 3

- 1 to

- 13 (2004). In genera l, t he guardian has power to conduct the protected person‟ s affairs

. ” In re Guardianship of E.N. , 877 N.E.2d 795, 798 (Ind. 2007)

. Indiana Code § 29

- 3

- 5

- 3 (a) provides that a court shall appoint a guardian upon two findings: “(1) the individual for whom the gua rdian is sought is an incapacitated person 2 or a minor; and (2) the appointment of a guardian is necessary as a means of providing care and supervision of the physical person or property of th e incapacitated person or minor . . . .” As a fiduciary, the guardian “is a p pointed by a court to be a guardian or conservator responsible as the court may dire ct for the person or the property of an incapaci tated person or a minor.” Id. § 29

- 3

- 1

- 6

.

A court in its discretion may limit the scope of a guardianship by restricting the respons ibilities and powers a guardian would otherwise have under the G uardians hip C ode. See I.C. § 29

- 3

- 5

- 3(b) ( recognizing that an incapacitated person‟s welfare may be best served by limiting the guardianship). In order to do so, however, the “limitations must be endorsed on the gua rdian‟s letters.” Id. §§ 29

- 3

- 8

- 8(b), 29

- 3

- 7

- 3 7

- 3. Moreover, letters of guardianship “are ev i dence

2 Indiana Code § 29

- 3

- 1

- 7.5 defines an “ “i ncapacitated person” as an individual who: (1) cannot be located upon reasonable inquiry; (2) is unable: (A) t o manage in whole or in part the individual‟s property; (B) to provide self

- care; or (C) both; b ecause of insanity, mental illness, mental deficiency, physical illness, infirmity, habitual dru n kenness, excessive use of drugs, incarceration, confinement, detention, duress, fraud, undue infl u ence of others on the individual, or other incapacity; or (3) has a developmental disability (as defined in IC 12

- 7

- 2

- 61).4

that the guardian has all, and the protected person does not have any, rights to possess and di spose of the guardianship property.” Id. § 29

- 3

- 7

- 6 (a)

. However, it is well established that a guardiansh ip does not preclude a ward from executing a will. See Harrison v. Bishop , 131 Ind. 161 , 30 N.E. 1069, 1071 ( 1892).

A guardianship terminates by reason of the death of the i n capaci tated person , I.C. § 29

- 3

- 12

- 1(b) , and when it does , the guardian is dir ected to take specific actions

. Id. § 29

- 3

- 12

- 1(e)

. Al though its powers cease upon the incapacitated person‟s death , “the guardian may pay the claimant expenses of administration that are approved by the court and exercise other powers that are necessary to complete the performance of the guardian‟s trust

. . . .” Id. In addition, the guardian “may deliver the remaining property for which the guardian is responsible to the pr otected pe r son‟s personal representative . . . .” Id. Finally, the guardian m ay pay certain expenses that have been approved by the court, including illness and funeral expenses; taxes; statutory a llowances to a surviving spouse or children; and any other obligations of the protected person. Id.

Here, t he c ourt determined that Mrs. Prickett was an incapac itated per son after finding that she “[was] unable to manage in whole or in part her property and [was] un able to provide self care.” ( App

. 37. ) Consequently, the court established a guardianship to care for both her
per son an d property , and ordered one limitation on the letters for the co

- guardians of her pe r son pur suant to I.C. § 29

- 3

- 5

- 3(b) . However, the court imposed no limitations on the power of the guardian of her e state

. Conversely, the court did not direct that Mrs. Prickett, an incapacitated person, reserved any such powers over her e state . Therefore, we conclude that 1st Source Bank , as guardian of Mrs. Prickett ‟s e state, held all the power to possess and dispose of Mrs. Prickett‟s property pursuant to I .C. § 29

- 3

- 7

- 6 , incl uding the power to compensate care
- providers , and that Mrs. Prickett retained no such power once the guardianship was esta b lished

.

II

The first basis on which the Estate sought summary judgment on Womersley‟s rei mbursement claim was that because Womersley had not filed her c laim against the guardianship , she was time

- barred from pursuing her claim against the Estate

. The Estate points to several5

provisions of the Guardianship Code 3 concerning a court ‟s authority to order the payment of claims ag ainst a protected person or the protected person's property from which the Estate re asons that for a court to entertain Womersley‟s claim, it would have had to have been filed in the guardia n ship.

We agree with the both the probate court and the Court of Appeals that the Guardianship Code “ does not require a claim for personal services rendered in a non

- fiduciary capacity to a protected person to be filed in the guardianship estate rather than in the subsequent probate estate of the deceased protected pers on.” Estate of Prickett , 885 N.E.2d at 624 . In particular, we agree that I.C. § 29

- 3

- 10

- 1(d) “does not require a claim to be filed against the guardianship estate in light of the provision that a claim „may‟ be filed „with the court . . . .‟” Id. Thes e conclusions

are supported by our holding in a somewhat older case, Peters v. Hanlin , 220 Ind. 175 , 41 N.E.2d 604, 605 (1942) . In Peters , we allowed the ward‟s sis ter, who was not the guardian , to file a claim against the estate for services she provided to the ward: “[The court‟s] approval need not be obtained nor the debt paid prior to the ward‟s death. If the obligation then remains unsati sfied, it may be enforced against the ward‟s estate in the hands of an administra tor.” Id.

We acknowledge that the role and purpose of the guardian of an estate endows the gua rdian with a competence, if not expertise, when passing on the compensability of claims. But in the absence of legislative direction mandating a guardian‟s approval, we are apprehensive of th e administrative and other practical consequences of ordering a guardian‟s review of all claims filed in a probate estate that accrue during a decedent‟s guardianship.

3 The Estate contends that the following provisions of the Guardianship Code establish , as a matter of law , that W o mersley was required to file her claim in the guardianship: (b) Upon order of the court, a guardian shall pay from the protected person's property for which the guardian is responsible any claim against the protected person or the p rotected person's property, that the court determines has merit.

. . . (d) Any person having a claim against the protected person or the protected person's property or against the guardian as such may file the claim with the court at any time before the c laim is barred by the statute of limitations and, upon proof of the claim, procure an order for its allo wance and payment from the guardia n ship property.
I.C. § 29

- 3

- 10

- 1.6

Womersley was not required to pursue her claim in the guardianship proceeding ; she
pro perly filed her claim against her mother‟s e state

. The refore, the Estate was not entitled to summary judgment on this issue.

III

The second basis on which the Estate sought summary judgment on Womersley‟s rei mbursement claim was that because Womersley h ad gratuitously served her mother , she was not entitled to compensation for her services.

We recognize that in general, “[w]here one accepts valuable services from another the law implies a promise to pay for them.” Schwartz v. Schwartz , 773 N.E.2d 348, 354 (Ind. Ct. App. 2002) ( quoting Estate of Hann v. Hann , 614 N.E.2d 973, 979 (Ind. Ct. App. 1993)). I ndeed, this principle appropriately applies to general creditors. “However, where the parties are family members living together, and the services are r endered in the family context, no implic ation of a promise to pay by the recipient arises.” Id. at 355. Instead, in these circumstances, the rebuttable presumption is that services are gratuitous. See Hill v. Hill , 121 Ind. 255 , 23 N.E. 87, 88

- 89 ( 1889) ; Cole v. Cole , 517 N.E.2d 1248, 1250 (Ind. Ct. App. 1988) ( citing Schroeder v. Schroeder , 117 Ind. App. 410 , 70 N.E.2d 764, 765 (1947)). The public policy advanced by this presumption is that family members “have reciprocal, natural, and moral duties to support and care for each other.” Cole , 517 N.E.2d at 1250.

To rebut the presumption that her services we re rendered gratuitously , Womersley r e lied on the typed and signed “Statem ent of Margaret H. Prickett.” The statement expressed Mrs. Prickett‟s de si re that the guardian of her e state compensate Womersley for her servic es. W omersley submitted affidavits of two people who witnessed Mrs. Prickett‟s execution of the statement and opined that Mrs. Prickett had been “well aware of what she was doing and he r i ntentions when she executed the [statement].” ( App. at 66, 69. )

Our state has traditionally re c ognized only one way to rebut the presumption that services

were rendered gratuitously , which requires evidence of an express or implied contract. Schroe d-7

er , 117 Ind. App. at 412, 70 N.E.2d at 765. Rebutting the presumption in this manner requires
t he family member to demonstrate two specific ele ments: “ an intention on the part of recipient of the services to pay or compens ate therefor, and an expectation of pay or compensation on the part of the one rendering the services. ” Grout v. Solon , 131 Ind. App. 650 , 174 N.E.2d 593, 594 ( 1 961). I n the present case the Court of Appeals sug gested two additional ways to rebut the pr esumption that services rendered by a family member are gratuitous: “Where a claimant has paid bills and debts on the decedent‟s behalf,” Estate of Prickett , 885 N.E.2d at 627 ( citing Forker v. Berkes , 111 Ind. App. 92, 38 N.E.2d 296 (1941) ) ; 4 and “when the ward had requested services

a nd the services were necessary,” Estate of Prickett , 885 N.E.2d at 627

- 28 ( citing Wyneken v. Long , 400 N.E.2d 1147, 1148 (Ind. Ct. App. 1980) ) . Based on the second of these two points and relying on Wyneken , the Court of Appeals concluded that Mrs. Pricke tt‟s desire for W omer s ley to be paid expressed in her written statement rebutted the presumption that Womersley had acted gratuitously

. Id.

A

Traditionally, the so le method of rebutting the presumption requires evidence of either an implied or express c ontract formed by both intention and expecta tion. Grout , 131 Ind. App. at 655, 174 N.E.2d at 594. Mrs. Prickett, however, could not enter into contracts at the time she executed the statement because she had already been adjudicated an incapacitated pers on under the Guardianship Code

. See I.C. § 29

- 3

- 8

- 5(b) (“Every contract, sale , or conveyance executed by a protected person is void . . . .”)

. Womersley maintains that the Court of Appeals in Schwartz “recognized well

- established law holding that an impl ied contract can exist between the protected person and provider of ser vices.” (Resp‟t Pet. Trans fer 3. ) See Schwartz v. Schwartz , 773 N.E.2d at 355. Though this contention may be true for general creditors or non
family members, when the provider is a family member, the implied contract must exist between th at person and the incapacitated person‟s guardian

.

4 Contrary to our colleagues, we do not find a claimant having paid bills and deb ts on a decedent‟s behalf to be a recognized exception to the presumption that a family member‟s services are rendered gratuitou sly. The Forker case does not stand for this proposition.8

This was in fact the situation in Schwartz

. The Schwartz court recounted the providing family member‟s conversation with the guardian, not the i ncapacitated person , regarding co mpensation. Schwartz , 773 N.E.2d at 355

- 56 (“ [ D ] id you ever have any conversations with the e state gua r dian about compensation for her coming in there? . . . Yes. ”). The court then con cluded that the guardian and family m ember had “established the existence of an implied contract for services rendered on [the incapacitated person‟ s] behalf.” Id. at 356. In this case, Womersley f ailed to produce evidence that she had an express or implied contract with her mother‟s gua rdi an . Ther e fore, she failed to rebut the presumption under the traditional analysis

.

B

As noted supra , the Court of Appeals relied on its decision in Wyneken v. Long , 400 N.E.2d 1147 , to hold that the presumption that family services are provided gratui tously may be rebutted by evidence that the “ward had requested services and the services were necessary.” E state of Prickett , 885 N.E.2d at 627

- 28. It is true that Wyneken said that “[a]lthough the law will not enforce an express contract against an inc ompetent , the law will a l low a recovery against the incompetent‟s estate for the reasonable value of necessary services rendered at the r e quest of the incompetent.” 400 N.E.2d at 1148 ( citing Rautenkranz v. Plummer , 75 Ind. App. 269 , 130 N.E. 435 ( 1921))

. But the Court of Appeals was wrong to rely on Wyneken without examining its factual context.

Grout and Schwartz each bear s a close factual resemblance to this case. The family member seeking reimbursement in Grout was the ward's son; in Schwartz , the w ard's daughter and granddaughter sought reimbursement. The factual context for Wyneken (and the Raute nkranz case on which Wyneken relies) is markedly different. In Wyneken , the ward requested a lawyer‟s services to challenge the “existence or the proprie ty of the guardianship.” Wyneken , 400 N.E.2d at 1148. (In Rautenkranz , too, the ward had requested legal services to challenge the guardianship and remove the guardian. 75 Ind. App. 269, 130 N.E. at 436. ) Neither Wyneken

nor Raute n kranz involved family members seeking to rebut the presumption that family services are rendered gratuitously; they involved claims that services rendered to a ward were compens able even if not approved by the guardian. We can readily see that claims not honored by a gua r-9

dian might well be approved on the facts of Wyneken and Rautenkranz where, to quote the Ra utenkranz court, lawyers should be able to “ recover compensation for services rendered in such an action, as for necessaries, if such services are faithfully and intellig ently performed.” Id. at 436. But these cases suggest no grounds for rebutting the presumption that family services are re ndered gratuitously.

We acknowledge that Wyneken also suggests that exigent circumstances may warrant compensation for necessary se rvices th at were performed without approval of the guardian. 400 N.E.2d at 1148. But in the absence of the exigent circumstances, the guardian‟s approval is r equired in order to secure compensation for those ser vices. Like implied contracts under Grout and Schwartz , the exigent circumstances exception straightforwardly appli es when the provid er is a non

- family member or general creditor . When the provider is a family member, however, f urther evidence is needed to rebut the presumption that the services were gratuitous

. An exce ption on a showing of no more than exigent circumstances would co n sume the presumption‟ s rule

.
In any event, Womersley presented no evidence of any exigent circumstance s to justify the failure to o b tain the guardian‟s approval of her compensation

. As such, there is no question of whether her services were “ necessaries ,” to use the Wyneken formulation

. That is, even under Wyneken , 1st Source Bank‟s ap proval would have been required to secure payment for her se rvices

.

C

Finally , Womersley relies on a statutory change and other Indiana cases to argue that “when a court determines that a person is incapacitated, no presumption or inference arises that the person is not mentally competent.” (Resp‟t Pet. Transfer 6. ) She points to t he fact, which we acknowledge, that the word “incompetent” in Guardianship Code was replaced with “incapac itated” in 1989. In re G uardianship of Hickman , 805 N.E.2d 808, 819 (Ind. Ct. App. 2004). We have defined "incompetent" as “ one „ who is under the ag e of eighteen years or is incapable by reason of insanity, mental illness, or other incapacity of either managing his property or caring for himself or both.‟” Polick v. Ind. Dep ‟t of Highways , 668 N.E.2d 682, 684 (Ind. 1996) ( quo t-10

ing Ind. Code Ann. § 34

- 4

- 16.5

- 2(3) (West 1986) )

. On the other hand, we have observed that “incapacity . . . u nder its statutory definition exists

– regardless of the person‟ s mental comp etence

– when a person is unable to provide self

- care because of physical illness or infirmi ty. ” Polick , 668 N.E.2d at 684 ( citing I.C. §§ 29

- 3

- 1

- 7.5, 34

- 4

- 16.5

- 8 )

.

We do n ot see the distinction between “incompetency” and “incapacity” as affecting the outcome of this case. Indeed, Wom ersley‟s assertion runs counter to both the facts of this case and the overall purpose of a guardian of an estate

. If the probate court had found that although physically incapacitated, Mrs. Pricket t was still able to manage her e state, it would have either designated a guardian over only her person , placed limi tations on the letters of the guardian of her e state , or directed that she reserved certain powers. In the absence of such limitations or d irection, we must conclude that the court appointed a guar dian over Prickett‟s e state because she was unable to mana ge her property. T he ap pointment of a guardian of her e state deprived Mrs. Prickett of the power to dispose of her property. The Court of Appeals was thus incorrect to say that “the Estate presented no evidence establishing that Prickett was incapacitate d to the extent that she could not make a legally significant request.” Estate of Prickett , 885 N.E.2d at 628. The

ver y fact that a guardian for her e state had been appointed established, as a matter of law, that she could not make a legally significant request.

Conclusion

The evidence Womersley designated does not as a matter of law rebut the presumption that she gratuitously served her mother. We reverse the trial court‟s denial of summary judgme nt and remand for proceedings consis tent with this op inion.

Shepard, C.J., and Dickson and Boehm, JJ., concur.

Rucker, J., concurs in result without separate opinion.