Court Opinion

ID: 2778555
Source: CourtListenerOpinion
Date Created: 2015-02-11 16:05:07.310108+00
Date Added: 2024-06-11T10:53:59.369353
License: Public Domain

ATTORNEY FOR APPELLANT                                    ATTORNEYS FOR APPELLEES
      Douglas M. Grimes                                         For Eva Willis and Charles Reagins
      Douglas M. Grimes, PC                                     Mark A. Bates
      Gary, Indiana                                             Schererville, Indiana
                                                                For Peoples Bank, SB
                                                                Benjamin T. Ballou
                                                                Bonnie C. Coleman           Feb 11 2015, 8:42 am
                                                                Hodges & Davis, P.C.
                                                                Merrillville, Indiana

                                                  IN THE
          COURT OF APPEALS OF INDIANA

      In the Matter of the                                      February 11, 2015
      Guardianship of N.R.,                                     Court of Appeals Case No.
                                                                45A05-1303-GU-150
      N.R.,
      Appellant-Protected Person,
                                                                Appeal from the Lake Superior Court
              v.                                                The Honorable Calvin Hawkins,
                                                                Judge

      Eva Willis and Charles Reagins,                           Cause No. 45D02-1206-GU-27
      Peoples Bank, SB,
      Appellees-Petitioners.

      Robb, Judge.

                                 Case Summary and Issue
[1]   N.R. was the subject of guardianship proceedings in 2012, as part of which the

      trial court approved requests for guardian fees, attorney fees, and costs from
      Court of Appeals of Indiana | Opinion 45A05-1303-GU-150 | February 11, 2015              Page 1 of 15
      former temporary guardians Eva Willis, Charles Reagins (“Charles”), and

      Peoples Bank, SB (the “Bank”). The trial court denied N.R.’s objection to its

      orders that the fees and costs of the former temporary guardians be paid out of

      his estate. N.R. now raises several issues for our review, which we consolidate

      and restate as: whether the trial court abused its discretion in awarding fees and

      costs to the former temporary guardians by excluding evidence N.R. wished to

      offer to show that Willis and Charles engaged in misconduct and that the

      temporary guardianship was improper.

[2]   Concluding the excluded evidence, if credited, would make the award of fees

      and costs unreasonable, we reverse and remand with instructions that the trial

      court hear N.R.’s evidence and reconsider the fee petitions.

                             Facts and Procedural History
[3]   On January 14, 2012, N.R., who was eighty-one years old, executed a general

      power of attorney appointing his daughter, Nelva Berry, as his attorney-in-fact.

      Berry had taken care of N.R., his business, and his bills for several years prior.

      As N.R.’s attorney-in-fact, Berry had “full power and authority to act” on

      N.R.’s behalf. Appendix of Appellant at 36. Berry was authorized “to manage

      and conduct all of [N.R.’s] affairs and to exercise all of [N.R.’s] legal rights and

      powers . . . .” Id.

[4]   On June 25, 2012, Willis (N.R.’s niece) and Charles (N.R.’s nephew) filed an

      emergency petition to be appointed temporary co-guardians over N.R. and his

      Court of Appeals of Indiana | Opinion 45A05-1303-GU-150 | February 11, 2015   Page 2 of 15
estate, alleging N.R. “is unable to maintain and care for his financial affairs and

person because he suffers the following incapacities: dementia with slight

memory loss.” Id. at 16. Attached to the petition was a physician’s report from

February 2012 in which the doctor reported that N.R. was not incapacitated

and was in good physical condition, although “he does have dementia with

slight memory loss but is able to speak and behave in an acceptable way.” Id. at

20. The doctor declared N.R. “partially” incapable of making personal and

financial decisions because he is “only slightly forgetful,” and posited that it

would be appropriate for N.R. to live in his own home “with the relatives

checking in on him every day. He only needs minimal assistance.” Id. at 21.

The petition further alleged “[t]hat there is no guardian of the person or estate

appointed for [N.R.] in this state or any other state . . . .” Id. Finally, the

petition alleged that the need exists for the appointment of a temporary and

permanent guardian for N.R. because:

        (a) he cannot handle his financial affairs, and his assets need to be
        preserved for his support, maintenance, care, and proper medical
        treatment;
        (b) his ex-wife of forty years has removed him from the State of
        Indiana and has taken him to Texas. She is attempting to convince
        him to withdraw cash from his accounts and remove other assets;
        (c) there is a need to protect his assets from his daughter who has
        previously removed assets from him;
        (d) his real estate taxes have not been paid; and
        (e) his income tax returns have not been filed.
Id. at 17-18.

Court of Appeals of Indiana | Opinion 45A05-1303-GU-150 | February 11, 2015     Page 3 of 15
[5]   Without providing N.R. or Berry notice or holding a hearing at which N.R.

      appeared, the trial court issued an order the same day the petition was filed:

              [T]he Court . . . now finds that the allegations contained in said
              petition are true, and that a temporary guardian of the person and
              estate of [N.R.] should be appointed.
              The Court further finds that [N.R.] is in need of a guardian to protect
              his assets and that it is in the best interests of said [N.R.] that a
              temporary guardian be appointed over his person and estate.
              The Court finds that a guardian has not previously been appointed for
              [N.R.]; that an emergency exists; that the welfare of [N.R.] requires
              immediate action; that no other person has the authority to act under
              the circumstances; and that immediate and irreparable loss of property
              . . . may result before notice and a hearing can be held . . . .
      [The Bank’s] App. at 1.1 Accordingly, the trial court appointed Willis and

      Charles as temporary co-guardians over N.R. and his estate for a period not to

      exceed sixty days; ordered them to take an oath but did not order them to post a

      bond; stated that they would have “powers and responsibilities without

      limitation”; and set a hearing to determine whether Willis and Charles should

      be appointed permanent co-guardians. Id.

[6]   On July 17, 2012, Berry and Monique Wilson (N.R.’s step-daughter) filed

      petitions to participate in the guardianship proceedings and objections to the

      petition for appointment of a guardian. The trial court held a hearing on

      August 7, 2012, at which Willis and Charles, Berry and Wilson, and N.R. all

      1
       The order states that the court heard evidence on the petition, but the Chronological Case Summary reflects
      no hearing, and in any event, the order also states that Willis and Charles appeared only by counsel.

      Court of Appeals of Indiana | Opinion 45A05-1303-GU-150 | February 11, 2015                     Page 4 of 15
      appeared. The parties entered into the following stipulated agreement: Willis

      and Charles resigned as temporary guardians in open court; the Bank was

      appointed temporary guardian over N.R.’s estate; and Berry and Wilson were

      appointed permanent co-guardians over N.R.’s person. The court approved the

      agreement and set a hearing regarding a permanent guardianship over N.R.’s

      estate.

[7]   Following a November 8, 2012, hearing at which the parties agreed a

      guardianship was in N.R.’s best interest “not because of incapacity but due to

      his age,” id. at 4, the court entered an order continuing Berry and Wilson as

      permanent co-guardians of N.R. and also appointing them permanent co-

      guardians of his estate. Berry and Wilson were ordered to post a $400,000

      bond, and all former temporary guardians were ordered to submit petitions for

      fees and costs within ten days. The court approved Willis’s and Charles’s

      petition for attorney fees of $15,030.00 and costs of $177.55 (totaling

      $15,207.55).2 In a separate order, the court also approved the Bank’s petition

      requesting temporary guardian fees for its services in the amount of $4,275.00,

      temporary guardian’s attorney fees of $3,454.25, and costs of $55.45 (totaling

      $7,784.70). N.R. then filed an objection to the court’s orders awarding fees

      without first allowing time for objection and a hearing.

      2
        The order approving the award of attorney fees to Willis’s and Charles’s attorneys noted that “the
      temporary co-guardians are not seeking a fee.” App. of the Appellees Eva Willis and Charles Reagins at 1.

      Court of Appeals of Indiana | Opinion 45A05-1303-GU-150 | February 11, 2015                    Page 5 of 15
[8]   The court held a hearing on N.R.’s objection to its orders allowing fees on

      March 19, 2013. At the hearing, N.R. attempted to present evidence showing

      that Willis’s and Charles’s misconduct before and during the guardianship

      proceedings made the court’s order appointing Willis and Charles as temporary

      co-guardians improper and the award of fees and costs unreasonable. The

      court, however, refused to hear the evidence and denied N.R.’s objection,

      issuing an order that the fees and costs were reasonable and were to be paid out

      of the guardianship estate within ten days. N.R. now appeals the court’s

      awards of fees and costs.3

                                   Discussion and Decision
                                        I. Standard of Review
[9]   In guardianship proceedings, all findings and orders are within the trial court’s

      discretion. Ind. Code § 29-3-2-4(a); In re Guardianship of Hollenga, 852 N.E.2d
933, 936 (Ind. Ct. App. 2006). We review only for an abuse of discretion,

      which occurs if the decision is against the logic and effect of the facts and

      circumstances before the court or if the court has misinterpreted the law.

      Hollenga, 852 N.E.2d at 937. The right to compensation from the estate “should

      3
        The timeliness of N.R.’s appeal was the subject of a motion to dismiss prior to this case being fully briefed,
      and this court dismissed the appeal. See Order dated July 26, 2013. The Indiana Supreme Court thereafter
      granted N.R.’s petition to transfer, vacated the order dismissing the appeal, and remanded to this court for
      consideration on the merits. See Order dated April 10, 2014. Each of the appellees has raised the timeliness
      issue again in its brief; however, the issue was decided by the Indiana Supreme Court and we will not
      entertain it further.

      Court of Appeals of Indiana | Opinion 45A05-1303-GU-150 | February 11, 2015                          Page 6 of 15
       not depend upon the result of the litigation but rather upon the reasonable

       necessity for such litigation.” Malachowski v. Bank One, Indianapolis, N.A., 682
N.E.2d 530, 533 (Ind. 1997) (quotation omitted). Thus, when ruling on an

       attorney fee petition in a guardianship proceeding, the trial court should

       consider not only the outcome of the proceedings but also “(1) whether the

       parties acted reasonably and in good faith in incurring the fees, (2) whether the

       facts were in dispute, (3) whether the legal issues were complex, and (4)

       whether any party’s misconduct caused the proceedings.” In re Guardianship of

       Shaffer, 711 N.E.2d 37, 41 (Ind. Ct. App. 1999), trans. denied. “A trial court may

       not award fees to a party whose misconduct necessitated the proceedings.” Id.

                                 II. Award of Fees and Costs
[10]   “A guardian is entitled to reasonable compensation for services as guardian and

       to reimbursement for reasonable expenditures made in good faith on behalf of

       the protected person.” Ind. Code § 29-3-9-3. Further:

               If not otherwise compensated for services rendered, any guardian,
               attorney, physician, or other person whose services are provided in
               good faith and are beneficial to the protected person or the protected
               person’s property is entitled to reasonable compensation and
               reimbursement for reasonable expenditures made on behalf of the
               protected person. These amounts may be paid from the property of
               the protected person as ordered by the court.
       Ind. Code § 29-3-4-4.

[11]   N.R. contends the trial court abused its discretion in awarding fees and costs to

       the former temporary guardians because it refused to hear evidence relevant to

       the determination of whether they were incurred in good faith. The trial court
       Court of Appeals of Indiana | Opinion 45A05-1303-GU-150 | February 11, 2015      Page 7 of 15
       was only willing to entertain evidence regarding whether the amount of the fees

       was unreasonable; whereas N.R. sought to show that the fees were

       unreasonable because they were incurred unnecessarily. We review the trial

       court’s exclusion of evidence for an abuse of discretion. In re Des.B., 2 N.E.3d
828, 834 (Ind. Ct. App. 2014).

                                         A. Willis and Charles
[12]   The trial court allowed Willis’s and Charles’s petition for attorney fees and

       costs in the total amount of $15,207.55 and denied N.R.’s objection to the

       same. N.R.’s objection to the trial court’s order alleged many facts which the

       trial court refused to allow into evidence at the hearing. For purposes of

       determining whether the trial court abused its discretion in this matter, we

       assume the following facts are true.

[13]   In January 2012, Willis, Charles, and Freo Reagins (“Freo”) (N.R.’s brother),

       without N.R.’s or Berry’s consent or knowledge, acted unilaterally in: changing

       the locks and the burglar alarm code on N.R.’s home; deactivating the garage

       door opener on the home; switching N.R.’s mailing address from Berry’s home

       address to an unknown P.O. Box location without providing Berry or N.R. a

       key; and adding their names as joint owners, beneficiaries, and account

       managers to several of N.R.’s bank accounts, credit cards, and investments.

       Because Willis, Charles, and Freo refused to communicate with N.R. or Berry,

       the changed mailing address resulted in months of unpaid bills, damaging

       N.R.’s credit and causing his insurance coverage to lapse.

       Court of Appeals of Indiana | Opinion 45A05-1303-GU-150 | February 11, 2015   Page 8 of 15
[14]   At some point in early 2012, Willis, Charles, and Freo took N.R. to see David

       Mears, the attorney who represented Willis and Charles during the

       guardianship proceedings and in whose favor the attorney fee award was

       ultimately entered. N.R. gave Mears $5,000 during the meeting, but at the

       hearing on N.R.’s objection, Willis could not recall what the money was for.

       Mears stipulated at the hearing that $5,000 was paid to him, that it was in his

       trust account, and that it was not reflected on the statement of account

       submitted in support of his fee request. Mears also conceded that some of the

       fees reflected on the statement were incurred prior to the filing of the

       guardianship petition. Virtually all of the fees were incurred prior to the agreed

       guardianship in November 2012.4

[15]   This issue arises because Willis and Charles filed an emergency petition for

       appointment as temporary co-guardians over N.R.’s person and estate. Indiana

       Code section 29-3-3-4 governs the emergency appointment of a temporary

       guardian:

               (a) If:
                      (1) a guardian has not been appointed for an incapacitated
               person . . .;
                         (2) an emergency exists;
                    (3) the welfare of the incapacitated person . . . requires
               immediate action; and

       4
        Mears’s statement shows 66.80 hours billed at $225.00 per hour for work performed beginning on February
       1, 2012 and ending on November 21, 2012.

       Court of Appeals of Indiana | Opinion 45A05-1303-GU-150 | February 11, 2015                  Page 9 of 15
               (4) no other person appears to have authority to act in the
        circumstances;
        the court, on petition by any person or on its own motion, may
        appoint a temporary guardian for the incapacitated person . . . for a
        specified period not to exceed ninety (90) days. No such appointment
        shall be made except after notice and hearing unless it is alleged and found by
        the court that immediate and irreparable injury to the person or injury, loss, or
        damage to the property of the alleged incapacitated person . . . may result before
        the alleged incapacitated person . . . can be heard in response to the petition. If
        a temporary guardian is appointed without advance notice and the
        alleged incapacitated person . . . files a petition that the guardianship
        be terminated or the court order modified, the court shall hear and
        determine the petition at the earliest possible time.
        (b) If:
              (1) a petition is filed under this section for the appointment of a
        temporary guardian; and
               (2) each person required to receive notice under IC 29-3-6-1(a)
        has not:
                          (A) received a complete copy of the petition and notice
                          required by IC 29-3-6-2 before the court considers and
                          acts on the petition; or
                          (B) received actual notice of the filing of the petition and
                          specifically waived in writing the necessity for service of
                          the notice required under IC 29-3-6-2 before the court
                          considers and acts on the petition;
        the petitioner shall, on the earlier of the date the court enters an order
        scheduling a hearing on the petition or the date the court enters an
        order appointing a temporary guardian, serve complete copies of the
        petition, the court’s order, and the notice required by IC 29-3-6-2 on
        every person entitled to receive notice . . . . The requirements of this
        subsection are in addition to the petitioner’s obligations under Rule 65
        of the Indiana Rules of Trial Procedure to make a specific showing of
        the petitioner’s efforts to provide advance notice to all interested
        persons or the reasons why advance notice cannot or should not be
        given.
        ***

Court of Appeals of Indiana | Opinion 45A05-1303-GU-150 | February 11, 2015             Page 10 of 15
               (d) A temporary guardian appointed under this section has only the
               responsibilities and powers that are ordered by the court. The court
               shall order only the powers that are necessary to prevent immediate and
               substantial injury or loss to the person or property of the alleged incapacitated
               person . . . in an appointment made under this section.
       (Emphasis added.)

[16]   As N.R.’s power of attorney, Berry had the authority to act on N.R.’s behalf,

       especially with regard to his finances, which seems to be the main focus of the

       guardianship petition. However, Willis’s and Charles’s petition failed to inform

       the trial court of the existence of the power of attorney. If they were aware of it,

       then the omission of that information from their petition was misleading. And

       whether or not they were aware of it, proper notice and a hearing would have

       brought it to the court’s attention. Moreover, although the petition alleged an

       emergency existed, it did not allege that immediate and irreparable injury might

       occur if N.R. were allowed an opportunity to respond, and it is clear from the

       language of the statute that those are two separate conditions. Although the

       trial court found that immediate and irreparable injury might occur, the statute

       requires that such be “alleged and found” before dispensing with notice and a

       hearing. Ind. Code § 29-3-3-4(a) (emphasis added).

[17]   The petition also fails to specifically allege that efforts had been made to

       provide notice of the filing of the petition to the appropriate people—despite

       listing therein the names and addresses of those people—or to state reasons why

       advance notice could not or should not be given. Ind. Code § 29-3-3-4(b). Had

       such notice been given and a hearing held before the appointment of Willis and

       Charles as temporary co-guardians, N.R. would have had the opportunity to
       Court of Appeals of Indiana | Opinion 45A05-1303-GU-150 | February 11, 2015                 Page 11 of 15
       present evidence about the power of attorney, which would have impacted who

       should be appointed as temporary guardian. See Ind. Code § 30-5-3-4(a) (“A

       principal may nominate a guardian for consideration by the court if protective

       proceedings for the principal’s person or estate are commenced. The court shall

       make an appointment in accordance with the principal’s most recent

       nomination in a power of attorney except for good cause or disqualification.”).

       Further, N.R. would have been able to present evidence about Willis’s and

       Charles’s actions which, in fact, may have caused the emergency they alleged

       existed and which the trial court later refused to hear. Finally, we note that the

       trial court did not limit the temporary co-guardians powers as required by the

       statute to only those powers necessary to prevent immediate loss. See Ind. Code

       § 29-3-3-4(d).

[18]   In short, the order appointing Willis and Charles temporary co-guardians over

       N.R.’s person and estate should not have been entered without notice and a

       hearing. Proceeding as it did on Willis’s and Charles’s emergency petition,

       there is a legitimate concern that the trial court did not scrutinize whether a

       temporary guardianship was needed at all, nor did it scrutinize whether Willis

       and Charles were the appropriate people to be appointed as co-guardians. That

       the ultimate outcome of the proceedings was a guardianship to which N.R.

       agreed does not mean that the original order appointing Willis and Charles was

       necessarily appropriate in retrospect.

[19]   Further compounding the problem, even if the emergency order was

       appropriate, the guardianship petition alleged that a guardianship was

       Court of Appeals of Indiana | Opinion 45A05-1303-GU-150 | February 11, 2015   Page 12 of 15
       necessary, in part, because N.R. was unable to handle his financial affairs, his

       real estate taxes had not been paid, and his income tax returns had not been

       filed. If N.R. had been allowed to introduce evidence to develop the facts

       alleged in his objection, the facts supporting the petition would have been in

       dispute, raising questions as to whether Willis and Charles acted reasonably

       and in good faith in incurring fees to petition for guardianship and whether

       their misconduct—especially in changing N.R.’s mailing address and interfering

       with his financial accounts—contributed in whole or in part to the deficiencies

       they alleged necessitated these proceedings.

[20]   As noted above, in ruling on an attorney fee petition, the trial court is to

       consider whether the parties acted reasonably and in good faith, whether there

       are disputed facts, and whether any party’s misconduct caused the proceedings.

       In re Shaffer, 711 N.E.2d at 41. It is clear from those factors that in ruling on a

       fee petition, a trial court is to look not just to whether the amount of the fees is

       reasonable, but also to whether incurring the fees was necessary. N.R.’s counsel

       stated several times at the hearing on N.R.’s objection to the fees that the fees

       were being challenged as unnecessary because of misconduct. See, e.g.,

       Transcript at 76, 78-79. The trial court repeatedly refused to hear evidence of

       misconduct, relying on an earlier determination that the fees were incurred in

       good faith – a finding also made without the benefit of hearing relevant

       evidence.

[21]   The trial court’s order denying N.R.’s objection to the fees indicates that N.R.

       failed to present any admissible evidence to support his objection. On the

       Court of Appeals of Indiana | Opinion 45A05-1303-GU-150 | February 11, 2015   Page 13 of 15
       contrary, N.R.’s evidence was admissible as relevant to the determination of

       whether the temporary guardianship was proper and ultimately, whether the

       fees incurred in seeking the guardianship were necessary. The trial court

       abused its discretion in excluding that evidence and therefore abused its

       discretion in ordering Willis’s and Charles’s fees to be paid without giving

       proper consideration to the factors. N.R. has a right to show that the original

       guardianship was improper, and if it was, Willis and Charles are not entitled to

       an award of fees from the guardianship estate. We therefore reverse the trial

       court’s order denying N.R.’s objection to Willis’s and Charles’s petition for fees

       and remand to the trial court to hear N.R.’s evidence regarding whether those

       fees were necessary and, if so, whether the amount is reasonable.5

                                                 B. The Bank
[22]   The trial court also allowed the Bank’s petition for guardian and attorney fees

       in the sum of $7,784.70. The Bank acted as substitute temporary guardian of

       N.R.’s estate from August 7, 2012, until Berry and Wilson were appointed

       permanent guardians of N.R.’s estate on November 8, 2012.

[23]   Those who provide services in good faith and for the benefit of the protected

       person are entitled to reasonable compensation and reimbursement for their

       5
         Despite evidence being introduced at the objection hearing that Mears had already been paid $5,000 by
       N.R. which was not reflected on Mears’s statement of fees, the trial court found that the amount of fees
       requested by Mears was reasonable and ordered that they be paid in total. Although it is unclear what that
       fee was for, the trial court made no effort to find out and made no provision for it to be deducted from the
       fees if appropriate. This payment should also be considered on remand.

       Court of Appeals of Indiana | Opinion 45A05-1303-GU-150 | February 11, 2015                      Page 14 of 15
       reasonable expenses. See Ind. Code § 29-3-9-3 (guardian fee); Ind. Code § 29-3-

       4-4 (attorney fee). It is unclear how the Bank came to be involved in this matter,

       but before undertaking the position, it was incumbent upon the Bank to

       investigate and determine whether its guardianship services were necessary and

       appropriate. There is no evidence that the Bank did so and therefore no

       evidence that it provided its services to N.R. in good faith. The Bank is entitled

       to payment for its services, but it may not be entitled to payment from N.R.’s

       estate. If it is determined on remand that Willis and Charles did not act in good

       faith and that the temporary guardianship was improper, the burden of

       compensating the Bank should be theirs. We therefore reverse the trial court’s

       award of fees to the Bank from the guardianship estate and remand for

       reconsideration of the Banks’ fee petition consistent with this opinion.

                                                Conclusion
[24]   The trial court abused its discretion in excluding evidence relevant to the

       determination of whether the fees and costs sought to be paid from the

       guardianship estate were reasonable. The trial court’s orders are reversed, and

       this case is remanded for further proceedings.

[25]   Reversed and remanded.

       Baker, J., and Kirsch, J., concur.

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