Court Opinion

ID: 4342314
Source: CourtListenerOpinion
Date Created: 2018-11-16 16:09:04.425366+00
Date Added: 2024-06-11T14:49:00.006673
License: Public Domain

FILED
                                                                   Nov 16 2018, 10:35 am

                                                                        CLERK
                                                                    Indiana Supreme Court
                                                                       Court of Appeals
                                                                         and Tax Court

ATTORNEYS FOR APPELLANT                                   ATTORNEY FOR APPELLEES
J. David Agnew                                            CHERYL CARRICO & CARLA
Gregory M. Reger                                          COOK
Maxwell W. McCrite                                        Robert W. Adams III
Lorch Naville Ward, LLC                                   Adams Law Group
New Albany, Indiana                                       Louisville, Kentucky
                                                          ATTORNEY FOR APPELLEE
                                                          RHONDA VANCE
                                                          John M. Plummer, Jr.
                                                          Bedford, Indiana

                                           IN THE
    COURT OF APPEALS OF INDIANA

Gerald F. Scott,                                          November 16, 2018
Appellant-Defendant,                                      Court of Appeals Case No.
                                                          59A01-1712-CT-2878
        v.                                                Appeal from the Orange Circuit
                                                          Court
Cheryl Carrico (Dillman), Carla                           The Honorable Joseph L.
Cook (Dillman), and Rhonda K.                             Claypool, Special Judge
Vance,                                                    Trial Court Cause No.
Appellees-Plaintiffs                                      59C01-1606-CT-161

May, Judge.

Court of Appeals of Indiana | Opinion 59A01-1712-CT-2878 | November 16, 2018                Page 1 of 13
[1]   Gerald F. Scott appeals the trial court’s denial of his motion to dismiss. 1 Gerald

      argues that, when an estate is open, tort claims related to that estate must be

      brought in probate court. Because the claims at issue herein were not known

      until after the probate court statute of limitations had passed, appellees have no

      recourse in probate court. As we hold their claims can be brought in civil court,

      we affirm the trial court’s denial of Gerald’s motion to dismiss.

                                Facts and Procedural History
[2]   Melvin Dillman and Rebecca Dillman were married for over thirty years.

      Rebecca had three sons: Gerald, Timothy, and Bradley (collectively, “Sons”)

      from a previous relationship. Melvin had three daughters: Cheryl, Carla, and

      Rhonda (collectively, “Daughters”) from a previous relationship. Melvin and

      Rebecca each executed wills with reciprocal provisions, stating, in pertinent

      part:

                 In the event my said (spouse) shall predecease me, or shall die
                 under circumstances making it difficult to determine the order of
                 our deaths, then in such event I give, bequeath and devise all of
                 said rest, residue and remainder of my estate, absolutely and in
                 fee, unto my children and my (spouse’s) children, namely
                 GERALD F. SCOTT, BRADLEY F. SCOTT, TIMOTHY E.
                 SCOTT, RHONDA KAY VANCE, CARLA ANN COOK and
                 CHERYL SUE CARRICO, and their issue per stirpes who shall
                 be living at the time of my death.

      1
          Gerald’s brothers, Timothy Scott and Bradley Scott, do not take part in this appeal.

      Court of Appeals of Indiana | Opinion 59A01-1712-CT-2878 | November 16, 2018               Page 2 of 13
                                                    *****

              The distributive provisions in this Will and in my
              husband’s/wife’s Will are to be considered a binding contract
              between us. In the event of the death of one of us, the surviving
              spouse shall be prohibited from revoking, amending, or changing
              their Will with regard to the distribution of assets as it pertains to
              any children named under this Will. Provisions that do not affect
              distribution of assets, may be changed by my surviving spouse.
              Any change with regard to the distribution of assets on the part of
              surviving spouse shall be considered breach of our agreed upon
              contract made during our respective lifetime as to the disposition
              of our estate upon the death of both of us.

      (Appellant’s App. Vol. II at 11, 12) (errors in original).

[3]   Melvin died on January 26, 2014. Following a diagnosis of Amyotrophic

      Lateral Sclerosis (ALS), Rebecca died on September 27, 2014. On October 17,

      2014, Rebecca’s probate estate was opened (“the Estate”). Gerald and Rhonda

      served as co-executors.

[4]   During the probate proceedings, Daughters came to believe Sons had induced

      Rebecca to transfer assets to Sons at below fair market value. Daughters

      believed the transferred assets included “real estate holdings, a thriving

      hardware business, a funeral home and adjoining land, a farm with eighty-three

      acres, two boats, two trailers, automobiles, and jewelry.” (Br. of Appellees at

      9.) At some point, Rebecca had granted Sons powers of attorney, which would

      have aided Sons in their ability to transfer ownership of the assets. These

      Court of Appeals of Indiana | Opinion 59A01-1712-CT-2878 | November 16, 2018   Page 3 of 13
      actions, if true, reduced the assets available to be distributed to the six children

      following Rebecca’s death.

[5]   On April 19, 2016, Gerald filed a final accounting in the Estate. The probate

      court set May 4, 2016, as the final filing date for any objections to that

      accounting. On May 2, 2016, Cheryl filed an objection to the Estate’s final

      accounting. On May 31, 2016, the probate court noted the “estate should not

      remain open infinitum [sic],” and ordered Cheryl had until “June 24, 2016, to

      file suit in said estate.” (Appellant’s App. Vol. II at 86.) On June 20, 2016,

      Rhonda resigned as co-executrix of the Estate. On June 21, 2016, Rhonda also

      filed an objection to the final accounting.

[6]   On June 22, 2016, Cheryl and Carla filed suit in civil court (hereinafter, “trial

      court”) against Gerald, individually, for tortious interference with inheritance

      and tortious interference with contract. On June 23, 2016, Rhonda filed suit

      against Gerald, individually and in his role as Executor of the Rebecca’s Estate,

      and against Bradley and Timothy. Sons all filed answers to the complaints. On

      November 7, 2016, Gerald requested the two cases be consolidated, and the

      trial court granted Gerald’s motion. On February 24, 2017, Cheryl and Carla

      filed a motion for leave to amend wherein they included the allegations made

      by Rhonda and included the other two brothers (collectively, “Tort Claims”).

      Sons all filed amended answers.

[7]   Through a series of recusals and requests for change of venue, Special Judge

      Joseph L. Claypool became the sitting judge in both the Estate and the Tort

      Court of Appeals of Indiana | Opinion 59A01-1712-CT-2878 | November 16, 2018   Page 4 of 13
      Claims. On August 28, 2017, the trial court held a hearing “on all outstanding

      motions [in the consolidated cases.]” 2 (Appealed Order at 4.) The trial court

      entered findings of fact and conclusions of law. Therein, it denied Gerald’s

      motion to reconsider its approval of Cheryl and Carla’s amended complaint;

      dismissed Gerald, in his capacity as Executor, as a defendant in the Tort

      Claims; and denied Gerald’s motions to dismiss the consolidated Tort Claims.

[8]   The trial court supported its denial of Gerald’s motion for dismissal of the Tort

      Claims by concluding that, although there was an open Estate in probate court,

      Daughters’ allegations did not sound exclusively in probate. Additionally, the

      trial court concluded the probate court’s permission for Cheryl to “file suit”

      permitted Cheryl to file a complaint outside the Estate. (Appellant’s App. Vol.

      II at 86.) Conspicuously, the trial court noted “[l]imitations provided by the

      Probate Code have been addressed recently which call into question the efficacy

      of the protection provided by said limitations regarding fraud on the part of

      those owing a fiduciary duty [to] the aggrieved party.” 3 (Appealed Order at 6.)

      2
        Daughters suggest this hearing was “on all outstanding motions from the now-consolidated trial court
      actions and the probate case.” (Br. of Appellees at 7.) As support for that assertion, they cite the copy of the
      appealed order in the Appendix. However, the appealed order designates the Estate with the appellation
      “ES-36,” (Appellant’s App. Vol. II at 12, ¶ 4), and the consolidated Tort Claims as “Cns-CT-161,” (id. at 13,
      ¶ 24), and indicates: “The Court held a hearing and heard arguement [sic] on all outstanding motions of Cns
      CT-161 on August 28, 2017[.]” (Id. at 13, ¶ 28.) Thus, Daughters’ assertion that the August 28, 2017,
      hearing was to consider motions brought in the Estate is not supported by the record.
      3
        The trial court cites Gittings v. Deal, 84 N.E.3d 749 (Ind. Ct. App. 2017), trans. granted. Because transfer was
      granted, that Court of Appeals opinion was vacated. See Ind. Appellate Rule 58(A). It also cites Matter of
      Guardianship of Hurst v. Hurst, 84 N.E.3d 1222 (Ind. Ct. App. 2017), opinion vacated on reh’g, 93 N.E.3d 790
      (Ind. Ct. App. 2018, withdrawn from bound volume (Feb. 2, 2018). Therefore, neither opinion is now pertinent

      Court of Appeals of Indiana | Opinion 59A01-1712-CT-2878 | November 16, 2018                         Page 5 of 13
                                   Discussion and Decision
[9]    Gerald argues the trial court erred when it denied his motion to dismiss

       pursuant to Indiana Trial Rule 12(B)(6) because Daughters failed to state a

       claim that can be addressed in the trial court. A motion to dismiss for failure to

       state a claim tests the legal sufficiency of the claim, not the facts supporting it.

       Babes Showclub, Jaba, Inc. v. Lair, 918 N.E.2d 308, 310 (Ind. 2009). Review of a

       grant or denial of a motion based on Ind. Trial Rule 12(B)(6) is therefore de

       novo. Id. When reviewing a motion to dismiss, we view the pleadings in the

       light most favorable to the nonmoving party, with every reasonable inference

       construed in the nonmovant’s favor. Id. We may affirm the judgment of the

       trial court on any legal theory supported by the evidence of record. Meyer v.

       Meyer, 756 N.E.2d 1049, 1051 n.4 (Ind. Ct. App. 2001).

[10]   Gerald asserts Daughters’ claims are either against the Estate or on behalf of the

       Estate; therefore, he argues, Daughters’ claims must be brought in the Estate in

       probate court and not as separate Tort Claims in trial court. Daughters argue

       they are suing Sons and not the Estate; therefore, their claims sound in tort and

       are not required to be brought within the Estate.

[11]   In Minton v. Sackett, 671 N.E.2d 160 (Ind. Ct. App. 1996), Dorothea Sackett and

       her husband Henry had executed a joint and mutual will. Id. at 161. This

       nor precedential. However, it seems the trial court was influenced by these opinions in some fashion that
       called into doubt whether the probate court time limits accounted for instances of possible fraud.

       Court of Appeals of Indiana | Opinion 59A01-1712-CT-2878 | November 16, 2018                     Page 6 of 13
       mutual will split the estate evenly between their two children, James and

       Susanne. Id. Henry died, and Dorothea subsequently executed three other

       wills that left the bulk of the estate to James alone. Id. The last will, dated

       August 8, 1992, was executed two days after Dorothea granted James durable

       power of attorney and irrevocable power of appointment. Id.

[12]   Dorothea died on March 2, 1994, and her last will was offered for probate. Id.

       On April 13, 1994, in the probate court, Susanne filed a claim alleging breach of

       contract and a complaint to resist probate, alleging Dorothea was of unsound

       mind, amongst other things. Id. Later in April, still in the probate court,

       Susanne filed a complaint against James “alleging that certain transfers of

       property by Dorothea constituted a breach of the contracts to devise contained

       in the joint and mutual wills of Dorothea and Henry.” Id.

[13]   On December 29, 1994, Susanne filed a tort complaint alleging James had

       interfered with her expectancy of inheritance “through the use of fraud (both

       constructive and actual), duress, undue influence, and conversion and that

       James was unjustly enriched by his actions.” Id. James moved, pursuant to

       Indiana Trial Rule 12(B)(6), to dismiss Susanne’s tort claim, arguing the court

       could not grant Susanne’s requested relief because Indiana did not recognize

       the tort of intentional interference with inheritance. Id. The trial court, treating

       the motion as one for summary judgment, entered summary judgment for

       James. Id.

       Court of Appeals of Indiana | Opinion 59A01-1712-CT-2878 | November 16, 2018   Page 7 of 13
[14]   As a matter of first impression, our court looked for guidance from other

       jurisdictions and the Restatement (Second) of Torts § 774B (1979). Id. at 162.

       Our court noted other jurisdictions that had adopted this tort achieved balance

       by prohibiting the tort if remedy is available via a will contest. Id. Our court

       decided the best course of action was to balance the “competing goals of

       providing a remedy to injured parties and honoring the strictures of our probate

       court, which provides that a will contest is the exclusive means of challenging

       the validity of a will.” Id. Applying that rationale to Susanne’s claim, our court

       held that although the tort was available in Indiana, Susanne’s will contest

       provided an adequate remedy, and we therefore affirmed the trial court’s grant

       of summary judgment. Id. at 163.

[15]   Here, Daughters noted, at the hearing in August, that because of the nine-

       month time limitation for bringing a claim under the probate code, see Ind.

       Code § 29-1-14-1(d) (“[a]ll claims barrable under subsection (a) shall be barred if

       not filed within nine (9) months after the death of the decedent”), they did not

       have a remedy in the Estate. Unlike Susanne Minton, who had an active will

       contest claim in probate court, Daughters’ objections were noted and served to

       object to the accounting but did not preserve their claims as to the assets

       transferred from Rebecca to Sons prior to Rebecca’s death. Additionally,

       Daughters do not argue they are contesting the will—merely Sons’

       appropriation of property Daughters had expected to be included in the assets

       of the Estate. As Daughters are not contesting the will, but rather Sons’

       interference with inheritance, Daughters’ claims are barred within the Estate

       Court of Appeals of Indiana | Opinion 59A01-1712-CT-2878 | November 16, 2018   Page 8 of 13
       because they were not filed within nine months of the death of Rebecca.

       Therefore, Daughters do not have a remedy in the Estate. This is just the type

       of situation wherein Indiana has recognized the claim of tortious interference

       with inheritance ought to exist. See Minton, 671 N.E.2d at 162.

[16]   As to the claim of interference with contract, Gerald relies on Markey v. Estate of

       Markey, 38 N.E.3d 1003 (Ind. 2015), and argues Daughters must prove breach

       of contract. Gerald notes that such a breach would have had to have been

       made by Rebecca; therefore, Gerald argues, this claim, too, had to be brought

       within the Estate. Daughters argue Markey is inapposite because they are not

       claiming breach of contract; rather, Daughters have filed a tort of interference

       with contract. 4

[17]   In Markey, David Markey brought a claim of breach of contract against the

       estate of his step-mother Frances when he discovered Frances had changed her

       will to disinherit him. Frances and David’s father had executed mutual wills

       agreeing to not alter their wills for any reason. Id. at 1005. The recipients of

       equal amounts of the assets were to be David and Frances’ granddaughter,

       Gillian. Id. However, after David’s father died, David and Frances grew apart,

       and Frances changed the terms of her will. Id. Because of the distance between

       4
        The elements of tortious interference with a contract are: “existence of a valid and enforceable contract,
       defendant’s knowledge of that contract, defendant’s intentional inducement to breach that contract, the
       absence of justification, and damages resulting from the breach.” Nat’l City Bank, Indiana v. Shortridge, 689
N.E.2d 1248, 1252 (Ind. 1997), supplemented sub nom. Nat’l City Bank, Ind. v. Shortridge, 691 N.E.2d 1210 (Ind.
       1998).

       Court of Appeals of Indiana | Opinion 59A01-1712-CT-2878 | November 16, 2018                       Page 9 of 13
       David and Frances’ family, David was not notified of Frances’ death in person.

       Id. Frances’ family merely published the notice in the paper. Id. As David was

       unaware of Frances’ death, he did not make a claim against the estate within

       three months. Id.

[18]   When he discovered Frances had died and had changed her will, David filed a

       claim of breach of contract within the estate. Id. at 1006. His claim was

       brought within nine months of Frances’ death. Id. David argued his claim was

       as an “ascertainable creditor of the estate entitled to actual notice” but as notice

       was not provided, he was entitled to have nine months to make his claim. Id.

       The trial court found David’s claim was not one recognized by the Probate

       Code; therefore, as a “non-claim” must be brought within three months of

       death, David has missed the time limit. Id. The Indiana Court of Appeals

       agreed. Id.

[19]   On transfer, our Indiana Supreme Court disagreed. The Court noted for David

       “to be eligible for filing up until the nine-month bar, [David] must (1) have a

       ‘claim’ and (2) be a reasonably ascertainable creditor.” Id. at 1008. The Court

       held the Probate Code defined a claim to include liabilities arising in contract

       and tort; therefore, David had a claim for purposes of the Probate Code because

       he was claiming a breach of contract. Id. However, the Court held the probate

       court had not heard sufficient evidence to determine whether David was a

       reasonably ascertainable creditor and remanded to the court to conduct a

       hearing “to determine whether David’s claim in probate should proceed as

       timely filed.” Id. at 1009.

       Court of Appeals of Indiana | Opinion 59A01-1712-CT-2878 | November 16, 2018   Page 10 of 13
[20]   Tort claim statutes of limitation have been extended in situations wherein no

       reasonable person could have known a claim could or should be made. See, e.g.,

       Umolu v. Rosolik, 666 N.E.2d 450, 454 (Ind. Ct. App. 1996) (doctrine of

       fraudulent concealment tolls the statute of limitations), reh’g denied. However,

       “one of the basic tenets of public policy governing our Probate Code is the

       uniform and expeditious distribution of property of a decedent.” Kuzma v.

       Peoples Tr. & Sav. Bank, Boonville, 132 Ind. App. 176, 183, 176 N.E.2d 134, 138

       (1961), reh’g denied. Because of this basic tenet, claims against the decedent or

       the estate must be brought within the probate administration in order to ensure

       efficient distribution. Inlow v. Henderson, Daily, Withrow & DeVoe, 787 N.E.2d
385, 395 (Ind. Ct. App. 2003), reh’g denied, trans. denied. Those claims are

       further controlled by the probate code time limits wherein all claims must be

       brought to the notice of the personal representative in a timely manner so

       distribution may occur. See Ind. Code § 29-1-14-1 (claims against an estate

       must be brought within certain time limits or “shall be forever barred”).

[21]   Unlike Markey or Minton, Rebecca did not change her will and disinherit

       Daughters. In Markey and Minton, as soon as the will was submitted for

       probate, the expectant heirs could discern the contract, in the form of a will,

       had been changed and were on notice to object. Here, Daughters knew

       Rebecca died, they knew the mutual wills had been executed, and they knew

       that will was the will submitted for probate. The fact the assets were no longer

       in Rebecca’s Estate to be distributed as the will specified was not apparent until

       the accounting was filed, which occurred after the probate time limits had

       Court of Appeals of Indiana | Opinion 59A01-1712-CT-2878 | November 16, 2018   Page 11 of 13
       lapsed. With the probate code public policy concerns in mind, it is

       unreasonable to extend the probate court time limits; rather, as both claims are

       viable Indiana torts, it is reasonable to permit Daughters’ Tort Claims to

       proceed in the trial court.

                                                   Conclusion
[22]   As it pertains to inheritance, we have acknowledged that Indiana recognizes a

       party may make a separate tort claim, provided they cannot acquire adequate

       relief in the probate court. Minton, 671 N.E.2d at 162. Here, we have just that

       situation—Daughters cannot obtain adequate relief within the Estate because

       they were unaware of the loss of assets until after the probate code time limits

       had lapsed. It is against public policy to extend the probate court time limits.

       Therefore, Daughters have rightfully filed their claims as a separate tort action

       and the trial court did not err when it denied Gerald’s motion to dismiss

       Daughters’ Tort Claims. 5 Accordingly, we affirm.

[23]   Affirmed.

       5
        Gerald also argues the Tort Claims should be dismissed for improper venue pursuant to Trial Rule 12(B)(3).
       However, the reasoning underlying this argument is duplicative of Gerald’s argument under Trial Rule
       12(B)(6), and it fails for the same reasons.
       Additionally, Gerald argues permitting Daughters to file this claim in trial court is a misinterpretation of the
       probate court’s order to “file suit in said estate[.]” (Appellant’s App. Vol. II at 86.) “When construing the
       language of a judgment the Court will attempt to read the provisions of the judgment so as to render all of
       them effective and not mere su[r]plusage.” Flynn v. Barker, 450 N.E.2d 1008, 1009 (Ind. Ct. App. 1983), cert.
       denied 469 U.S. 934 (1984). As Daughters do not have a viable claim in the Estate, the probate court’s order
       must be interpreted to mean Cheryl was allowed to file a separate cause of action by the specified date.

       Court of Appeals of Indiana | Opinion 59A01-1712-CT-2878 | November 16, 2018                       Page 12 of 13
Riley, J., and Mathias, J., concur.

Court of Appeals of Indiana | Opinion 59A01-1712-CT-2878 | November 16, 2018   Page 13 of 13