Court Opinion

ID: 4028430
Source: CourtListenerOpinion
Date Created: 2016-08-25 15:05:50.844261+00
Date Added: 2024-06-11T14:49:48.781771
License: Public Domain

FILED
                                                               Aug 25 2016, 7:49 am

                                                                    CLERK
                                                                Indiana Supreme Court
                                                                   Court of Appeals
                                                                     and Tax Court

ATTORNEY FOR APPELLANT                                     ATTORNEYS FOR APPELLEE
Tricia Rose Tanoos                                         Kendra G. Gjerdingen
Modesitt Law Firm, P.C.                                    Kathryn M. Cimera
Terre Haute, Indiana                                       Mallor Grodner LLP
                                                           Bloomington, Indiana

                                            IN THE
    COURT OF APPEALS OF INDIANA

Estate of Kelly Ecker, by its                              August 25, 2016
Personal Representative, Patricia                          Court of Appeals Case No.
Ann Leturgez,                                              84A01-1602-ES-430
Appellant,                                                 Appeal from the Vigo Superior
                                                           Court
        v.                                                 The Honorable Lakshmi Reddy,
                                                           Judge
Estate of George Scott Samson,                             Trial Court Cause No.
Appellee                                                   84D02-1411-ES-8302

Bailey, Judge.

Court of Appeals of Indiana | Opinion 84A01-1602-ES-430 | August 25, 2016               Page 1 of 11
                                           Case Summary
[1]   The Estate of Kelly Ecker, by its Personal Representative, Patricia Ann

      Leturgez (“the Ecker Estate”), appeals a summary judgment order denying the

      Ecker Estate’s motion for summary judgment against the Estate of George Scott

      Samson (“the Samson Estate”) and granting the summary judgment motion of

      Intervenors Jennifer Samson, Maria Samson, and Katherine Samson (“the

      Samson Daughters”). The Ecker Estate presents the sole issue of whether the

      trial court erred as a matter of law in determining that the George S. Samson

      M.D. Profit Sharing Plan and Trust (“the Profit Sharing Plan”) was, pursuant

      to Indiana Code Section 32-17-13-1(b), property specifically excluded from the

      definition of a “nonprobate transfer” recoverable to pay estate claims. We

      affirm.

                             Facts and Procedural History
[2]   On October 5, 2014, George Samson (“George”) shot and killed his wife, Kelly

      Ecker, and then killed himself. In November of 2014, the Samson Estate was

      opened. Old National Wealth Management was appointed the Personal

      Representative of the then-unsupervised estate. At the request of the Ecker

      Estate, the Samson Estate was converted to supervised administration.

[3]   The Ecker Estate filed a claim against the Samson Estate in the amount of

      $5,000,000.00. Kathy Sturgeon, Guardian of Kelly Ecker’s minor child,

      L.O.E., filed a $2,000,000.00 claim. Samson’s ex-wife filed a claim in the

      Court of Appeals of Indiana | Opinion 84A01-1602-ES-430 | August 25, 2016   Page 2 of 11
      amount of $75,655.18 and each of the Samson Daughters filed a claim alleging

      entitlement to a one-third share of the probate assets and any non-probate assets

      recoverable by the Samson Estate.

[4]   On March 11, 2015, the Ecker Estate filed a wrongful death action, naming the

      Samson Estate as a defendant.1 On March 27, 2015, the Samson Estate filed an

      Inventory valuing estate assets at $289,117.02. On April 13, 2015, Old

      National Wealth Management filed a petition for a court order determining the

      distribution of the Profit Sharing Plan, an individual retirement account, and a

      Union Hospital 403(b) Retirement Plan.

[5]   After mediation, the parties agreed to payment of the claim of Samson’s ex-

      wife. The Ecker Estate and the Samson Daughters filed cross-motions for

      summary judgment. A hearing was conducted on January 5, 2016. The parties

      stipulated that the Union Hospital and individual retirement accounts were

      non-probate assets not recoverable by the personal representative for the

      payment of the Samson Estate creditors. One asset remained in dispute,

      specifically, the Profit Sharing Plan valued at approximately $567,065.00.

[6]   On January 28, 2016, the trial court entered an order on the cross-motions for

      summary judgment, concluding that the Profit Sharing Plan was not a

      recoverable asset. This appeal ensued.

      1
          The Guardian of L.O.E. filed a separate complaint for damages against Old National Wealth Management.

      Court of Appeals of Indiana | Opinion 84A01-1602-ES-430 | August 25, 2016                    Page 3 of 11
                                  Discussion and Decision
                                         Standard of Review
[7]   A trial court’s grant of summary judgment on appeal to this Court is “clothed

      with a presumption of validity,” and an appellant has the burden of

      demonstrating that the grant of summary judgment was erroneous. Williams v.

      Tharp, 914 N.E.2d 756, 762 (Ind. 2009). Our standard of review is well

      established:

              When reviewing a grant of summary judgment, our standard of
              review is the same as that of the trial court. Considering only
              those facts that the parties designated to the trial court, we must
              determine whether there is a “genuine issue as to any material
              fact” and whether “the moving party is entitled to judgment as a
              matter of law.” In answering these questions, the reviewing
              court construes all factual inferences in the non-moving party’s
              favor and resolves all doubts as to the existence of a material
              issue against the moving party. The moving party bears the
              burden of making a prima facie showing that there are no
              genuine issues of material fact and that the movant is entitled to
              judgment as a matter of law; and once the movant satisfies the
              burden, the burden then shifts to the non-moving party to
              designate and produce evidence of facts showing the existence of
              a genuine issue of material fact.

      Dreaded, Inc. v. St. Paul Guardian Ins. Co., 904 N.E.2d 1267, 1269-70 (Ind. 2009)

      (internal citations omitted). Our standard of review is not altered by the fact

      that the parties made cross-motions for summary judgment. Indiana Farmers

      Mut. Ins. Grp. v. Blaskie, 727 N.E.2d 13, 15 (Ind. Ct. App. 2000). Instead, we

      Court of Appeals of Indiana | Opinion 84A01-1602-ES-430 | August 25, 2016   Page 4 of 11
       consider each motion separately to determine whether the moving party is

       entitled to judgment as a matter of law. Id.

[8]    Pure questions of law, such as issues of statutory construction, are particularly

       appropriate for summary resolution. Evansville Courier & Press v. Vanderburgh Co.

       Health Dep’t, 17 N.E.3d 922, 927-28 (Ind. 2014). Our review is de novo. Id.

       Likewise, the interpretation of a contract presents a pure question of law to be

       reviewed de novo. Specialty Foods of Ind., Inc. v. City of South Bend, 997 N.E.2d
23, 26 (Ind. Ct. App. 2013).

                                                    Analysis
[9]    The Profit Sharing Plan had a single employee-participant, George, and he was

       also the named trustee and administrator. According to the terms of the Profit

       Sharing Plan, the beneficiaries of the $567,065.00 fund were the Samson

       Daughters, and they sought distribution to themselves. However, because the

       Samson Estate was insolvent, the Ecker Estate sought to have the personal

       representative of the Samson Estate recover funds from the Profit Sharing Plan

       and pay those funds to the Samson Estate claimants.

[10]   Pursuant to Indiana Code Section 32-17-13-2(a), proceeds from a nonprobate

       transfer may be used to pay allowed claims against a decedent’s estate:

               Except as otherwise provided by statute, a transferee of a
               nonprobate transfer is subject to liability to a decedent’s probate
               estate for:

               (1) allowed claims against the decedent’s probate estate; and

       Court of Appeals of Indiana | Opinion 84A01-1602-ES-430 | August 25, 2016     Page 5 of 11
               (2) statutory allowances to the decedent’s spouse and children

               to the extent the decedent’s probate estate is insufficient to satisfy those

               claims and allowances.

[11]   Indiana Code Section 32-17-13-1(a) defines a “nonprobate transfer” as “a valid

       transfer effective at death” made by a transferor whose last domicile was in

       Indiana and who, “immediately before death had the power, acting alone, to

       prevent transfer of the property by revocation or withdrawal” and use the

       property for the transferor’s benefit or apply the property to discharge claims

       against the transferor’s probate estate.

[12]   Subsection (b) specifically excludes a transfer at death (other than a transfer to

       or from the decedent’s probate estate) of:

               (1) a survivorship interest in a tenancy by the entireties real
                   estate;

               (2) a life insurance policy or annuity;

               (3) the death proceeds of a life insurance policy or annuity;

               (4) an individual retirement account or a similar account or plan;
                   or

               (5) benefits under an employee benefit plan.

       I.C. § 32-17-13-1(b).

       Court of Appeals of Indiana | Opinion 84A01-1602-ES-430 | August 25, 2016    Page 6 of 11
[13]   If the legislature has spoken clearly and unambiguously on the point in

       question, there exists no room for judicial construction. Siwinski v. Town of

       Ogden Dunes, 949 N.E.2d 825, 828 (Ind. 2011). We do not construe a facially

       unambiguous statute, but rather give effect to the ordinary and plain meaning of

       the language used. Id. at 829. Here, the exclusions of the nonprobate statute

       are clearly set forth, and we are required to determine whether a contract falls

       within its purview.

[14]   The objective of a court when it interprets a contract is to determine the intent

       of the parties at the time the contract was made by examining the language used

       in the contract. Specialty Foods, 997 N.E.2d at 26. In determining the intention

       of the parties, a contract is to be considered in light of the circumstances

       existing at the time it was made. Id. For example, the court is to consider the

       nature of the agreement, the facts and circumstances leading up to the

       execution of the contract, the relationship of the parties, the nature and

       situation of the subject matter, and the apparent purpose of making the

       contract. Id.

[15]   Initially, the parties dispute whether George, under the terms of the Profit

       Sharing Plan, “immediately before death had the power, acting alone, to

       prevent transfer of the property by revocation or withdrawal,” consistent with

       Indiana Code Section 32-17-13-1(a). The Samson Daughters point out that the

       plan was designed to provide for withdrawals only upon disability, death, or

       retirement (with a “Normal Retirement Age” of 60), and that there would have

       been tax consequences associated with early revocation. The Ecker Estate

       Court of Appeals of Indiana | Opinion 84A01-1602-ES-430 | August 25, 2016    Page 7 of 11
       argues that George was in total control of the Profit Sharing Fund and thus

       satisfied the statutory criteria of having the power of revocation.

[16]   Our review of the Profit Sharing Plan supports the latter contention. The Profit

       Sharing Plan was structured so that George was the employer, the employee,

       the trustee, and the administrator. It provided that the “employer shall have the

       right to terminate by delivering notice to the Trustee.” (App. at 37.) George

       was thus in sole control and empowered to revoke the plan and direct

       distribution of the funds. Although there may well have been adverse tax

       consequences had he decided to terminate the plan, George had the power to

       do so.

[17]   However, this is not the end of the inquiry, in light of the exclusions of

       subsection (b) of Indiana Code Section 32-17-13-1. Even where the requisite

       transferor control is present, the statute provides that certain categories of

       property are sheltered from recovery and distribution to probate claimants.

       These include an individual retirement account, a similar account or plan, and

       benefits under an employee benefit plan.

[18]   The designated materials show that the Profit Sharing Plan conferred a right to

       receive payment on account of age, and contemplated distribution of the funds

       beginning at the Normal Retirement Age. This comports with the common

       understanding of a retirement plan. The plan language includes a reference to

       rollover “from another eligible retirement plan.” (App. at 20.) The

       administrator annually filed an Internal Revenue Service form 5500-EZ, a form

       Court of Appeals of Indiana | Opinion 84A01-1602-ES-430 | August 25, 2016    Page 8 of 11
       for tax-deferred retirement plans for a single participant (inclusive of an owner

       and a spouse). Clearly, the plan was intended to provide tax-deferred

       retirement benefits. A contract of this type is encompassed by the clear

       exclusionary language in the relevant probate statute.

[19]   The Ecker Estate takes the position that a profit sharing plan and trust “not

       protected by Federal law from creditors” should not be protected from creditors

       under Indiana probate law. Appellants’ Brief at 3. The Ecker Estate directs our

       attention to Yates v. Hendon, 541 U.S. 1 (2004), which concerned close-to-

       bankruptcy loan repayments to a profit sharing plan, made by the sole

       shareholder/president of the professional corporation that maintained the plan.

[20]   In Yates, the Supreme Court was presented with a “question on which federal

       courts have divided: Does the working owner of a business (here, the sole

       shareholder and president of a professional corporation) qualify as a

       ‘participant’ in a pension plan covered by the Employee Retirement Income

       Security Act of 1974 (ERISA or Act), 88 Stat. 832, as amended, 29 U.S.C. §

       1001 et seq.” Id. at 6. The Court answered that question in the affirmative,

       finding the text of ERISA “adequately informative” to conclude that Congress

       intended working owners to qualify as plan participants. Id. at 16. The Court

       recognized: “[u]nder ERISA, a working owner may have dual status, i.e., he

       can be an employee entitled to participate in a plan and, at the same time, the

       employer (or owner or member of the employer) who established the plan.” Id.

       Court of Appeals of Indiana | Opinion 84A01-1602-ES-430 | August 25, 2016   Page 9 of 11
[21]   The Court explained its holding that a working owner may qualify as a

       participant in an ERISA-protected plan, when the plan covers one or more

       employees other than the owner and spouse:

               If the plan covers one or more employees other than the business
               owner and his or her spouse, the working owner may participate
               on equal terms with other plan participants. Such a working
               owner, in common with other employees, qualifies for the
               protections ERISA affords plan participants and is governed by
               the rights and remedies ERISA specifies. In so ruling, we reject
               the position, taken by the lower courts in this case, that a
               business owner may rank only as an “employer” and not also as
               an “employee” for purposes of ERISA-sheltered plan
               participation.

       Id. at 6.2

[22]   According to the Ecker Estate, the requirement of more than one employee

       should likewise be imposed here. The Ecker Estate urges that the Profit Sharing

       Plan should not be protected by Indiana probate law because it “has no

       employee other than Dr. Samson himself” and thus “there are no innocent

       employee participants in the plan.” Appellants’ Brief at 8. However, Yates is

       not directly on point. It is undisputed that the Profit Sharing Plan is not an

       2
         The case was remanded for consideration of unresolved questions, specifically, whether the close–to-
       bankruptcy repayments became a portion of Yates’s interest in a qualified retirement plan excluded from the
       bankruptcy estate and, if so, were the repayments beyond the reach of the Bankruptcy Trustee’s power to
       recover preferential transfers. Yates, 541 U.S. at 24.

       Court of Appeals of Indiana | Opinion 84A01-1602-ES-430 | August 25, 2016                      Page 10 of 11
       ERISA-sheltered plan. We are not concerned with a federal statute, but rather

       with an Indiana probate statute.

[23]   Ultimately, the Ecker Estate asks that we provide restrictions upon the broad

       exclusionary language of Indiana Code Section 32-17-13-1(b). However, courts

       may not engraft new words onto a statute or add restrictions where none exist.

       Kitchell v. Franklin, 997 N.E.2d 1020, 1026 (Ind. 2013). The Profit Sharing Plan

       falls within the exclusionary language of 32-17-13-1(b) and is not recoverable by

       the personal representative of the Samson Estate for the payment of allowable

       probate claims. Although we are mindful of the tragic circumstances preceding

       this litigation, the law compels this result.

                                                Conclusion
[24]   The trial court did not err in denying the Ecker Estate’s summary judgment

       motion and granting the summary judgment motion of the Samson Daughters.

[25]   Affirmed.

[26]   Riley, J., and Barnes, J., concur.

       Court of Appeals of Indiana | Opinion 84A01-1602-ES-430 | August 25, 2016   Page 11 of 11