Court Opinion

ID: 4164373
Source: CourtListenerOpinion
Date Created: 2017-04-28 15:10:43.178828+00
Date Added: 2024-06-11T14:38:00.747307
License: Public Domain

FILED
                                                                   Apr 28 2017, 10:37 am

                                                                        CLERK
                                                                    Indiana Supreme Court
                                                                       Court of Appeals
                                                                         and Tax Court

      ATTORNEY FOR APPELLANT                                     ATTORNEY FOR APPELLEE
      Joseph R. McKinney                                         Robert G. Forbes
      Muncie, Indiana                                            Forcum & Forbes, LLP
                                                                 Hartford City, Indiana

                                                  IN THE
          COURT OF APPEALS OF INDIANA

      Nancy Richardson,                                          April 28, 2017
      Appellant,                                                 Court of Appeals Case No.
                                                                 05A02-1608-EU-1749
              v.                                                 Appeal from the Blackford Circuit
                                                                 Court
      Susan Thieme,                                              The Honorable Jeffrey Eggers,
      Appellee.                                                  Special Judge
                                                                 Trial Court Cause No.
                                                                 05C01-1407-EU-27

      Barnes, Judge.

                                              Case Summary
[1]   Nancy Richardson appeals the trial court’s order rejecting her objections to the

      closing of the Unsupervised Estate of Clayton Ford by the Estate’s personal

      representative, Susan Thieme. We affirm.

      Court of Appeals of Indiana | Opinion 05A02-1608-EU-1749| April 28, 2017               Page 1 of 15
                                                      Issues
      The issues before us are:

              I.       whether the trial court applied an incorrect standard of
                       proof in accepting Thieme’s closing of the Estate and final
                       accounting;

              II.      whether the trial court correctly found no improprieties in
                       the manner in which the Estate’s personal property was
                       distributed; and

              III.     whether Thieme breached her fiduciary duty to the Estate.

                                                       Facts
[2]   Ford died on June 30, 2014. Ford’s will directed that his estate be administered

      without supervision, by either his wife or by Thieme, one of his daughters. It

      further stated:

              Either of said representatives shall act without bond and without
              the intervention of any court to the extent that such bond and
              court intervention of any process may be waived by me under the
              laws of the State of lndiana. Each shall have full power to sell,
              convey, and encumber, without notice or confirmation, any
              assets of my estate, real, personal or mixed, at such prices and
              terms as to either may seem just.

      Appellee’s App. Vol. II p. 7. Because Ford’s wife pre-deceased him, Thieme

      was appointed personal representative. On November 7, 2014, Richardson,

      another of Ford’s daughters, filed a petition for supervised administration of the

      Estate. The petition claimed Thieme failed to respond to Richardson’s request

      Court of Appeals of Indiana | Opinion 05A02-1608-EU-1749| April 28, 2017       Page 2 of 15
      for an inventory of Estate assets and had sold or otherwise disposed of assets

      without any accounting. Thieme objected to Richardson’s request; the trial

      court allowed continued unsupervised administration of the Estate unless any

      party requested a hearing on the matter, and Richardson never did so.

[3]   On November 23, 2015, Thieme filed her closing statement and final

      accounting for the Estate. The accounting stated there were a total of

      $94,663.31 in Estate assets, leaving $89,973.31 in distributable assets after

      deducting $2,000.00 in fees for Thieme and $2,690.00 in attorney fees. Each of

      Ford’s five children received one-sixth of that amount, or $14,995.55, in cash

      and property-in-kind, with the remaining one-sixth divided between his three

      grandchildren.

[4]   On February 19, 2016, Richardson filed an objection to Thieme’s closing

      statement and final accounting. The objection listed several instances of alleged

      improprieties regarding deposits to and withdrawals from the Estate bank

      account opened after Ford’s death, which Richardson claimed were

      unsupported by adequate documentation. The objection also claimed that it

      was improper to pay Thieme $2,000 in fees based on her blanket statement that

      she had worked over 160 hours on Estate matters. The objection also alleged:

              It is extremely difficult to determine and reconcile the receipts
              and disbursements without a written Estate Account setting forth
              simple schedules of Receipts (inventoried assets and net value of
              property, receipts from sale of property, receipts from property
              not appraised, cancelled checks deposits to the Estate, etc. and a
              “Total” column regarding receipts). Similarly, there is no
              schedule of Disbursements. The PR did not provide the “totals”
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              for either the Receipts or Disbursements. Totals for Receipts and
              Disbursements and Assets on hand (if any) must be the same but
              this cannot be determined without a proper accounting and
              closing statement. The problem is that (assuming all of the
              unidentified amounts on the deposit slips are for the sale of
              items) the total adds up to far less (over $2500) than the “cash”
              that was deposited to the Estate account. Further, there were 92
              items that were not appraised by Ellenberger that are
              unaccounted for in the final accounting statement. Were those
              items sold for cash and the money (how much?) received and
              deposited? If not sold, what happened to the items? Were they
              distributed to the heirs? The insufficiency of the closing
              statement and lack of supporting documentation raises these
              questions and falls short of a full and understandable closing
              statement.

      Appellant’s App. Vol. II pp. 11-12.

[5]   The trial court held a hearing on Richardson’s objections on May 20, 2016.

      Richardson testified that she had difficulty communicating with Thieme

      regarding Estate matters throughout its administration and received “push

      back” when she attempted to get information. Tr. p. 8. Richardson also stated

      that other family members frequently met and distributed items of Ford’s

      personal property between themselves for months before she had an

      opportunity to review and request items and that Thieme allowed the heirs to

      charge items against the Estate rather than paying for them. During

      Richardson’s testimony there was discussion of an appraisal of personal

      property that amounted to approximately $5,200.00, but which allegedly failed

      to include about ninety items. Richardson also claimed that this amount was

      Court of Appeals of Indiana | Opinion 05A02-1608-EU-1749| April 28, 2017   Page 4 of 15
      not reflected in the final accounting or deposited into the Estate’s account. This

      appraisal list was not introduced into evidence nor is it in the record before us.

[6]   During her testimony, Thieme gave explanations for each of the Estate bank

      account withdrawals or deposits that Richardson had challenged in her written

      list of objections. Regarding the personal property, Thieme stated that it was

      difficult to distribute the personal property amongst the multiple heirs and their

      families but that she believed she had done so to the best of her ability. As for

      the appraisal list, Thieme testified generally that some of the items were paid for

      and some were charged to the Estate. She also testified that she deposited

      “pretty close” to $5,200.00 into the Estate account with respect to these items,

      although counsel for Richardson asserted that the deposits in that regard were

      approximately $2,000.00 short. Id. at 43.

[7]   On July 8, 2016, the trial court rejected all of Richardson’s objections to the

      closing of the Estate. It entered the following sua sponte findings with its order:

              1.       The initial inventory listed assets of $123,129.00.

              2.     The initial inventory was high as the real estate, appraised
              at $78,500.00, only netted at sale $65,732;00, a difference of
              negative $12,768.00.

              3.     In addition, the personal property appraisal was high as
              the personal property did not net $5,852.00.

              4.     Expenses incurred by the estate for administration of the
              estate, maintaining utilities, taxes, insurance, repairs to the
              home, court costs, publication fees, attorney fees and the
      Court of Appeals of Indiana | Opinion 05A02-1608-EU-1749| April 28, 2017      Page 5 of 15
         personal representative fees total approximately $15,141.00
         which the Court determines is a reasonable number.

         5.    The objections listed on the February 19, 2016, pleading
         were reasonably overcome by the evidence presented at the
         hearing on May 20, 2016.

         6.    Even assuming the personal property as listed in the initial
         inventory was worth $5,852.00, the distribution, at best, would
         have been as follows:

         A.       Initial inventory                                     ($123,129.00)

         B.       Reduction for net real estate                         ($12,768.00)

         C.       Cost, fees, etcetera                                  ($15,141.00)

         D.       Net estate for distribution                           $95,220.00

         E.       Net estate divided 6 shares for heirs                 $15,870.00

         7.     The $875.00 difference between what was received by the
         heirs 1/6th share is insignificant given the personal property
         value question and what was actually received by each heir.

Appellant’s App. Vol. II pp. 25-26.1 The trial court thus ordered the Estate

closed. Richardson now appeals.

1
 The initial inventory and property appraisals the trial court referred to are not in the record before us.
Neither party asserts that our viewing of those documents is necessary to resolve this appeal. Also, we note

Court of Appeals of Indiana | Opinion 05A02-1608-EU-1749| April 28, 2017                         Page 6 of 15
                                                     Analysis
[8]   The trial court here entered some limited findings without either party having

      requested them under Indiana Trial Rule 52(A). “In such a case, the specific

      findings control only with respect to issues they cover, and a general judgment

      standard applies to issues outside the findings.” Montgomery v. Montgomery, 59
N.E.3d 343, 349 (Ind. Ct. App. 2016), trans. denied. We will set aside the trial

      court’s findings or judgment only if they are clearly erroneous. Id. “A finding

      is clearly erroneous only if there are no facts or inferences drawn therefrom to

      support it.” Id. Additionally, “[w]e may affirm a general judgment with sua

      sponte findings upon any legal theory supported by the evidence introduced at

      trial.” Stone v. Stone, 991 N.E.2d 992, 998 (Ind. Ct. App. 2013). Sua sponte

      findings control as to the issues upon which the court has found, but they do

      not otherwise affect our general judgment standard of review, “and we may

      look both to other findings and beyond the findings to the evidence of record to

      determine if the result is against the facts and circumstances before the court.”

      Id.

                                       I. Burden of Proof/Accounting

[9]   The first claim Richardson makes is that the trial court applied an incorrect

      burden of proof in deciding whether to reject her objections to the Estate

      closing. She notes that it has been held, at least within the context of supervised

      the discrepancy between the trial testimony that the personal property originally appraised for $5,200.00 and
      the trial court’s finding that it appraised for $5,852.00, but we are not able to resolve that discrepancy.

      Court of Appeals of Indiana | Opinion 05A02-1608-EU-1749| April 28, 2017                          Page 7 of 15
       estates, that a personal representative faced with objections to a final estate

       accounting and closing bears the burden of establishing the correctness of the

       accounting. Matter of Estate of Saylors, 671 N.E.2d 905, 907 (Ind. Ct. App.

       1996). She contends that the trial court’s statement in its findings that Thieme

       had “reasonably overcome” Richardon’s objections was inconsistent with this

       burden of proof.

[10]   We disagree. Even if we were to assume that the same standard of proof

       applies to objections to the closing of an unsupervised estate as a supervised

       one, the trial court’s statement is not inconsistent with that standard. It clearly

       indicates the trial court placed the burden of proof upon Thieme to rebut

       Richardson’s objections to the closing of the Estate and found that Thieme had

       met that burden.

[11]   Richardson also suggests that the Estate should not have been closed because

       Thieme failed to adequately keep records and receipts related to disposition of

       Estate assets. She asserts, “When filing the accounting, the personal

       representative must also ‘file receipts for disbursements of assets made during

       the period covered by the account.’” Appellant’s Br. p. 6. For this proposition,

       Richardson cites Saylors. However, the quoted language actually comes from

       Indiana Code Section 29-1-16-4, which states:

               Accounts rendered to the court by a personal representative shall
               be for a period distinctly stated and shall consist of three (3)
               schedules, of which the first shall show the amount of the
               property chargeable to the personal representative; the second
               shall show payments, charges, losses and distributions; the third

       Court of Appeals of Indiana | Opinion 05A02-1608-EU-1749| April 28, 2017   Page 8 of 15
                shall show the property on hand constituting the balance of such
                account, if any. When an account is filed, the personal
                representative shall also file receipts for disbursements of assets
                made during the period covered by the account. Whenever the
                personal representative is unable to file receipts for any
                disbursements, the court may permit him to substantiate them by
                other proof. The court may provide for an inspection of the
                balance of assets on hand. The court may, upon its own motion,
                or upon petition, provide that verification of accounts or credits
                thereon may be made by the unqualified certificate of a certified
                public accountant in lieu of receipts or other proof.

       Richardson also contends that the final accounting Thieme prepared did not

       comply with the three-schedule format required by the statute. Thieme argues

       that this and other statutory provisions governing final estate accountings found

       in Indiana Code Chapter 29-1-16 do not apply to unsupervised estates. We

       agree.

[12]   Indiana Code Section 29-1-7.5-4(a) provides that a personal representative may

       close an unsupervised estate by filing a verified statement with the court

       relaying that the personal representative has done the following:

                (1) Published notice to creditors as provided in IC 29-1-7-7(b),
                and that the first publication occurred more than three (3)
                months prior to the date of the statement.

                (2) Provided notice to creditors as required under IC 29-1-7-7(c)
                and IC 29-1-7-7(d).

                (3) Fully administered the estate of the decedent by making
                payment, settlement, or other disposition of all claims which
                were presented, expenses of administration and estate,
       Court of Appeals of Indiana | Opinion 05A02-1608-EU-1749| April 28, 2017     Page 9 of 15
               inheritance, and other death taxes, except as specified in the
               statement. If any claims remain undischarged, the statement
               shall:

                        (A) state whether the personal representative has
                        distributed the estate, subject to possible liability, with the
                        agreement of the distributees; or

                        (B) detail other arrangements which have been made to
                        accommodate outstanding liabilities.

               (4) Executed and recorded a personal representative’s deed for
               any real estate owned by the decedent.

               (5) Distributed all the assets of the estate to the persons entitled to
               receive the assets.

               (6) Sent a copy of the statement to all distributees of the estate
               and to all creditors or other claimants of whom the personal
               representative has actual knowledge whose claims are neither
               paid nor barred and has furnished a full account in writing of the
               personal representative’s administration to the distributees whose
               interests are affected.

               (7) Provided the court with the names and addresses of all
               distributees, creditors, and claimants to whom the personal
               representative has sent a copy of the statement under subdivision
               (6).

[13]   Absent from this detailed list is any requirement that the personal representative

       for an unsupervised estate file a final accounting with the trial court or that it be

       in any particular format, whereas such an accounting is expressly required in

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       supervised estates by Indiana Code Section 29-1-16-3. It also appears to be the

       general understanding of probate practitioners that no such accounting is

       required for unsupervised estates unless local rules require them. See 25 IND.

       PRACTICE, ANDERSON’S PROBATE FORMS § 4:12 (2016-17 ed.) (“Since the

       accounting does not have to be filed with the court, you can establish whatever

       format for the estate accounting that you prefer.”). The express provisions

       governing unsupervised estates are found in Indiana Code Chapter 29-1-7.5.

       There are many other statutes in other chapters of the Indiana Probate Code

       governing estate administration, but there is no explicit statutory language as to

       whether these other statutes also govern unsupervised estates. When

       interpreting statutes, we must bear in mind how multiple statutory provisions

       interact, and consider the act as a whole and its general purpose. Murray v.

       Conseco, Inc., 795 N.E.2d 454, 460 (Ind. 2003).

[14]   We conclude that, to the extent a statute governing unsupervised estates

       conflicts with another statute in the Probate Code, the other statute does not

       apply to unsupervised estate administration. Here, the detailed statutes

       governing final estate accountings are inconsistent with the express, limited

       requirements for closing an unsupervised estate. As such, Thieme had no

       obligation to file a formal three-schedule accounting with the trial court, and

       neither did the statutory requirement of keeping detailed receipts apply here.

       Indeed, requiring such detailed accountings and filing of receipts would seem to

       contravene the notion and purpose of having an unsupervised estate. It likewise

       would contravene the clearly-stated intent of Ford in his will that the personal

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       representative of his Estate should have broad, unsupervised discretion to

       dispose of Estate assets as she saw fit.

[15]   Richardson did take steps to convert administration of the Estate into a

       supervised one, as was her right under Indiana Code Section 29-1-7.5-2(d), in

       which case Thieme would have been required to keep more detailed records

       regarding the Estate administration and to file a detailed final accounting.

       However, the trial court was not required to grant Richardson’s request; the

       statute provides that a trial court “may” grant such a request “if the court finds

       that such a revocation is in the best interests of the estate, creditors, taxing

       authorities, heirs, legatees, or devisees.” The trial court did leave open the

       possibility that Richardson could request a hearing to further argue for

       revocation of unsupervised administration, but she did not pursue that

       possibility and the Estate remained unsupervised, to her peril. See In re Estate of

       McNabb, 744 N.E.2d 569, 573 (Ind. Ct. App. 2001). In effect, Richardson

       through her objections to the Estate closing wished to retroactively impose

       supervised estate requirements upon Thieme. We believe it is neither

       appropriate nor advisable to do so. The trial court did not err in not requiring

       more detailed filings or documentation from Thieme regarding the

       administration of the Estate.

                                     II. Personal Property Distribution

[16]   Next, Richardson contends the trial court erred in finding no improprieties with

       respect to Thieme’s distribution of Ford’s personal property. She takes

       particular issue with the trial court’s finding that, even if the personal property
       Court of Appeals of Indiana | Opinion 05A02-1608-EU-1749| April 28, 2017    Page 12 of 15
       had fetched the amount it was originally appraised at, “[t]he $875.00 difference

       between what was received by the heirs 1/6th share is insignificant given the

       personal property value question and what was actually received by each heir.”

       Appellant’s App. p. 26. Thieme asserts Richardson has waived consideration of

       this issue by failing to cite any authority in support of it. See Kentucky Nat’l Ins.

       Co. v. Empire Fire & Marine Ins. Co., 919 N.E.2d 565, 586 (Ind. Ct. App. 2010);

       Ind. Appellate Rule 46(A)(8)(a).

[17]   Waiver notwithstanding, we see no reversible error on this point. Standing

       alone, the trial court’s statement that a difference of $875.00 per heir is an

       “insignificant” amount might be incorrect; it is not a de minimis amount of

       money to most individuals. However, in the context of the trial court’s other

       findings and the record as a whole, this statement is not troublesome. First, we

       note that property appraisals are not a perfect science; they are only an estimate

       of value, not a perfect guarantee of an item’s worth, and values can fluctuate

       over time. See Wagler v. W. Boggs Sewer Dist., Inc., 898 N.E.2d 815, 820 (Ind.

       2008). That the personal property ultimately was disposed for less than it was

       initially appraised for is not by itself an indication that Thieme acted improperly

       in any way. Also, when Thieme was questioned on this topic at the hearing,

       counsel for Richardson suggested that approximately $2,000.00 less than the

       personal property’s appraised value had been deposited into the Estate account

       for sales of that property. Thus, the only possible “gap” regarding the personal

       property is $2,000.00, not $5,200.00 to $5,852.00. Richardson also claims that

       eighty to ninety items of personal property were never appraised; however, she

       Court of Appeals of Indiana | Opinion 05A02-1608-EU-1749| April 28, 2017    Page 13 of 15
       failed to indicate whether these items were relatively worthless trinkets or items

       that could be more valuable, nor did she herself place an estimate on these

       items’ total value. Finally, once again Richardson’s main complaint seems to

       be that Thieme did not adequately keep records of how each and every one of

       Ford’s items of personal property were disposed. Given the relative informality

       of an unsupervised estate administration, we cannot say that a slight

       discrepancy between an initial appraisal of an estate’s personal property and the

       records of what those items ultimately sold for is sufficient reason to prevent the

       closing of such an estate.

                                       III. Breach of Fiduciary Duty

[18]   Richardon’s last argument is that Thieme breached her fiduciary duty to the

       Estate by taking items of Ford’s personal property into her possession and

       keeping them. A personal representative of an estate is equivalent to a trustee

       appointed by law for the benefit of and the protection of creditors and

       distributees of that estate. In re Bender, 844 N.E.2d 170, 178 (Ind. Ct. App.

       2006). Generally, a personal representative is barred from purchasing estate

       assets, unless there is a family settlement or agreement approving such

       transactions. Id. at 179.

[19]   However, Richardson failed to allege improper self-dealing by Thieme in her

       written objections to the closing of the Estate, nor was that claim made during

       the objections hearing. Indiana Code Section 29-1-1-10, which is a general

       provision apparently applicable to both unsupervised and supervised estates,

       states that any objections to estate filings or answers thereto “must be filed in
       Court of Appeals of Indiana | Opinion 05A02-1608-EU-1749| April 28, 2017   Page 14 of 15
       writing as a prerequisite of being heard by the court.” More generally, a party

       waives appellate review of an issue or argument unless the issue or argument

       was raised before the trial court. Akiwumi v. Akiwumi, 23 N.E.3d 734, 741 (Ind.

       Ct. App. 2014). By failing to raise this issue before the trial court, Richardson

       did not permit Thieme an opportunity to rebut a claim of improper self-dealing.

       Richardson has waived appellate review of this claim.

                                                  Conclusion
[20]   The trial court did not apply an incorrect standard of proof in considering

       Richardson’s objections to Thieme’s closing of the Estate, and Thieme’s final

       accounting did not have to comply with the requirements for final accountings

       in supervised estates. Richardson also has failed to establish reversible error in

       the distribution of the Estate’s personal property, either with respect to the

       property’s valuation or Thieme’s alleged self-dealing. We affirm the trial

       court’s order closing the Estate.

[21]   Affirmed.

       Kirsch, J., and Robb, J., concur.

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