Court Opinion

ID: 7073837
Source: CourtListenerOpinion
Date Created: 2022-07-24 08:01:27.784126+00
Date Added: 2024-06-11T16:12:41.449284
License: Public Domain

SULLIVAN, Judge,
dissenting.
As the majority herein notes, the opinion of our Third District in Lake County Trust Co. v. Gainer Bank N.A. (1990) 3d Dist. Ind.App., 555 N.E.2d 1856, held that by acquiescing in Betty Isay's management of the partnership, following the death of the managing partner, the other beneficiaries could not complain of her purposeful failure to disclose that a foreclosure action had been filed and that a sheriffs sale was imminent.
This "reckless failure of the Beneficiaries to properly protect their interests",1 however, should not serve to insulate the trustee from carrying out its own obligations. Pursuant to I.C. 30-4-3-7(d), the trustee is charged with the knowledge that the property sold at foreclosure was being placed in Trust No. P-6121 even though Sohacki was the actual foreclosure purchaser rather than Gainer Bank. Even though Gainer Bank may have been an innocent participant, the subtle manipulations utilized should not absolve it for failing to notify and disclose all material facts "to the beneficiaries [plural] of both trusts...." IC. 80-4-8-7(d) (Burns Code Ed.Supp.1983).
The beneficiaries of the trusts numbered P-5982 and P-5992 have suffered the foreclosure and sale as a result of their "reckless" trust of Betty Isay. Gainer Bank should not be permitted to take refuge in a similar confidence that when the summonses and complaints were mailed from Gainer Bank to Betty Isay she would carry out the Bank's duty to notify the other beneficiaries.
I would reverse the summary judgment entered in favor of Gainer Bank and remand for further proceedings to resolve the factual question whether Gainer violated I.C. 30-4-3-7(d), and, if so, whether that violation of duty proximately resulted in any compensa-ble loss to the beneficiaries.

. Although the decision of the 3d District is the law of the case, I have great difficulty in understanding how one can be estopped by failure to protect one's interest against independent criminal conduct and a subsequent cover-up of that conduct. The fact that one beneficiary entrusts another to act in matters of mutual interest should not constitute acquiescence in criminal activity which violates that relationship of confidence and trust.