Court Opinion

ID: 4400881
Source: CourtListenerOpinion
Date Created: 2019-05-28 15:04:07.59893+00
Date Added: 2024-06-11T14:27:45.398858
License: Public Domain

MEMORANDUM DECISION
Pursuant to Ind. Appellate Rule 65(D),
this Memorandum Decision shall not be
regarded as precedent or cited before any                                         FILED
court except for the purpose of establishing                                 May 28 2019, 9:14 am
the defense of res judicata, collateral                                           CLERK
estoppel, or the law of the case.                                             Indiana Supreme Court
                                                                                 Court of Appeals
                                                                                   and Tax Court

ATTORNEYS FOR                                           ATTORNEY FOR
APPELLANT/CROSS-APPELLEE                                APPELLEE/CROSS-APPELLANT
James M. Lewis                                          Timothy J. Maher
Michael J. Hays                                         Barnes & Thornburg LLP
Tuesley Hall Konopa LLP                                 South Bend, Indiana
South Bend, Indiana

                                          IN THE
    COURT OF APPEALS OF INDIANA

In Re the Estate of James E.                            May 28, 2019
                                                        Court of Appeals Case No.
Hurwich,
                                                        19A-EU-38
Scott D. Hurwich,                                       Appeal from the St. Joseph Probate
                                                        Court
Appellant/Cross-Appellee/Plaintiff,
                                                        The Honorable Jeffrey Sanford,
        v.                                              Special Judge
                                                        Trial Court Cause No.
Stacey MacDonald,                                       71J01-0412-EU-56

Appellee/Cross-Appellant/Defendant.

Bradford, Judge.

Court of Appeals of Indiana | Memorandum Decision 19A-EU-38 | May 28, 2019                            Page 1 of 11
                                          Case Summary
[1]   James Hurwich was the father of Scott Hurwich (“Hurwich”) and Stacey

      MacDonald (“MacDonald”). Following his death in 2004, the Estate of James

      Hurwich (“the Estate”) was administered by MacDonald and closed in 2007. In

      2013, Hurwich moved to reopen the Estate, which motion the probate court

      granted. In 2014, Hurwich filed a complaint against MacDonald, alleging that

      she had breached her fiduciary duties as the Estate’s personal representative and

      mismanaged its assets. MacDonald moved to dismiss Hurwich’s complaint,

      which motion the probate court granted. Hurwich then moved for leave to

      amend his complaint, which motion was denied by the probate court. In 2018,

      we affirmed that denial and remanded for reasons that are not relevant to this

      appeal. On remand, MacDonald requested that she be awarded attorney’s fees.

      The probate court awarded MacDonald $44,444.00 in attorney’s fees. Hurwich

      appeals, contending that because his claims were not frivolous, unreasonable,

      or groundless, the probate court erroneously awarded MacDonald attorney’s

      fees. MacDonald cross-appeals, contending that the probate court should have

      awarded her approximately $40,306.50 more in attorney’s fees and requesting

      that we award her appellate attorney’s fees and costs. Because we disagree with

      both Hurwich’s and MacDonald’s contentions, we affirm.

                            Facts and Procedural History
[2]   We stated the underlying facts of this case in a prior appeal as follows:

      Court of Appeals of Indiana | Memorandum Decision 19A-EU-38 | May 28, 2019   Page 2 of 11
        The Estate was opened in 2004. MacDonald was appointed
        administrator of the Estate, and she administered it unsupervised
        until it was closed in 2007. Apparently, MacDonald failed to
        distribute approximately 600 items and assets belonging to her
        father before the Estate was closed. On March 6, 2013, Hurwich
        petitioned to reopen the Estate; the probate court granted
        Hurwich’s petition. On June 18, 2013, the probate court
        appointed Paul Cholis as successor personal representative for
        the Estate. On October 3, 2014, Hurwich filed a complaint
        against MacDonald, under the Estate cause number EU–56,
        alleging that she had mismanaged the Estate’s assets and
        breached her fiduciary duties. On November 14, 2014,
        MacDonald filed a motion to dismiss Hurwich’s complaint
        under Indiana Trial Rule 12(B)(6), alleging that it had been
        untimely filed after the applicable statute of limitations had run.
        On June 12, 2015, the probate court granted MacDonald’s
        motion and dismissed Hurwich’s complaint with prejudice.

        On June 22, 2015, Hurwich filed a motion to reconsider. On July
        27, 2015, a hearing on the motion to reconsider took place, and
        the probate court took the issue under advisement. Then, on
        February 9, 2016, while the motion to reconsider was still
        pending, Hurwich filed a motion for leave to amend his
        complaint. In his proposed amended complaint, he alleged that
        MacDonald had committed fraud when, in closing the Estate,
        she represented that she had fully administered the Estate and
        properly distributed all assets; he also alleged that she had taken
        personal property from the Estate for her own use.

        On May 6, 2016, Cholis filed a petition for instructions for
        “recovery of assets formerly owned by the decedent or in his
        possession at the time of his death.” Appellant’s App. Vol. II p.
        42. In this petition, Cholis:

                • Stated that MacDonald testified at her deposition that
                she had received gifts, including paintings, necklaces,
Court of Appeals of Indiana | Memorandum Decision 19A-EU-38 | May 28, 2019   Page 3 of 11
                diamond rings, and liquor bottles, from her father within
                five years of his death.

                • Stated that MacDonald “testified that she, as the former
                Personal Representative of the estate, did distribute to
                herself certain items of tangible personal property which
                [Cholis] believe[d] constituted partial distributions to her
                and which should be taken into account by charging her
                with the value of such items so distributed upon the final
                distribution of the remaining tangible personal property;
                ...” Id. at 43.

                • Stated that there were “numerous items of tangible
                personal property” located at the decedent’s former
                residence that Cholis “believe[d] can and should be
                distributed among the three residuary beneficiaries of the
                estate” through an in-kind selection process and a public
                auction. Id.

                • Requested the probate court to direct him to not attempt
                to recover items of tangible personal property that
                MacDonald identified as gifts that she received from her
                father before his death. Cholis cited to time limits in the
                probate code for proceedings against personal
                representatives and to case law in which a petition to re-
                open an estate was time-barred.

        On June 24, 2016, Hurwich filed a response to Cholis’s petition
        in which Hurwich stated that the parties wanted instruction from
        the probate court about how to determine whether the items that
        MacDonald testified were gifts were actually gifts from their
        father or whether they were self-distributed items. Hurwich
        requested, among other things, that Cholis identify and catalog
        each of the individual items in question. Hurwich also argued
        that the issue was not time-barred.

Court of Appeals of Indiana | Memorandum Decision 19A-EU-38 | May 28, 2019     Page 4 of 11
        A hearing took place on July 27, 2016. On July 29, 2016, the
        probate court denied Hurwich’s motion for leave to amend his
        complaint, finding that Hurwich was not entitled to amend a
        complaint that had been properly dismissed pursuant to the
        statute of limitations for relief against fraud. The probate court
        also found that Hurwich’s complaint was not a valid cause of
        action because Hurwich filed it as part of the estate
        administration, rather than a separate cause of action, and
        therefore failed to pay a filing fee or have a summons issued. The
        probate court ordered for Hurwich and another beneficiary to
        have access to the decedent’s home for an in-kind selection
        process of the 600 items located there and for all assets not
        selected to be sold at a public auction. Lastly, the probate court
        ordered that Hurwich’s claim against MacDonald about gifts
        received before their father’s death was time-barred under the
        statute of limitations.

        Throughout the fall of 2016, Cholis distributed the Estate’s assets
        as ordered by the probate court. On March 10, 2017, Cholis filed
        a Supplemental Report of Distribution (“the Report”) in which
        he summarized the distribution of the Estate’s assets; listed the
        value of the assets that Hurwich, MacDonald, and another
        beneficiary received; requested that he be discharged as personal
        representative; and requested that the court order the Estate
        closed. That same day, the probate court approved the report and
        entered an order closing the Estate. On March 20, 2017, Cholis
        served a copy of the Report and the probate court’s signed order
        to Hurwich and other interested parties. On March 30, 2017,
        Hurwich filed a motion to correct error, asking the probate court
        to vacate its order approving the Report because there was
        neither service nor an opportunity to object to the Report. On
        April 10, 2017, the probate court denied his motion.

In re Estate of Hurwich, 103 N.E.3d 1135, 1137–38 (Ind. Ct. App. 2018), reaff’d on

reh’g In re Estate of Hurwich, 109 N.E.3d 416 (Ind. Ct. App. 2018). In the

Court of Appeals of Indiana | Memorandum Decision 19A-EU-38 | May 28, 2019   Page 5 of 11
      previous appeal, we concluded that the probate court did not err by denying

      Hurwich’s motion to amend his complaint. Although we noted that the

      dismissal should have been without prejudice, we found that Hurwich’s appeal

      of that decision two years after it was decided was untimely and unavailing.

[3]   On remand, MacDonald sought to recover attorney’s fees. On December 13,

      2018, the probate court awarded her attorney’s fees in the amount of $44,444.00

      after finding that Hurwich’s complaint was frivolous, unreasonable, or

      groundless pursuant to Indiana Code section 34-52-1-1.

                                Discussion and Decision
                                I. Award of Attorney’s Fees
[4]   Hurwich contends that the trial court erroneously awarded MacDonald

      attorney’s fees pursuant to Indiana Code section 34-52-1-1. A probate court

      may award attorney’s fees if the court finds that a party brings a claim that is

      frivolous, unreasonable, or groundless. Ind. Code § 34-52-1-1(b)(1).

              The trial court’s decision to award attorney’s fees under § 34-51-
              1-1 is subject to a multi-level review: the trial court’s findings of
              facts are reviewed under the clearly erroneous standard and legal
              conclusions regarding whether the litigant’s claim was frivolous,
              unreasonable, or groundless are reviewed de novo. Finally, the
              trial court’s decision to award attorney’s fees and any amount
              thereof is reviewed for an abuse of discretion. A trial court abuses
              its discretion if its decision clearly contravenes the logic and
              effect of the facts and circumstances or if the trial court has
              misinterpreted the law.

      Court of Appeals of Indiana | Memorandum Decision 19A-EU-38 | May 28, 2019   Page 6 of 11
      Purcell v. Old Nat. Bank, 972 N.E.2d 835, 843 (Ind. 2012) (internal citations

      omitted). A claim is frivolous if it is brought primarily for the purpose of

      harassment, if the attorney is unable to make a good faith and rational

      argument on the merits of the action, or if the attorney is unable to support the

      action taken by a good faith and rational argument for an extension,

      modification, or reversal of existing law. Yoost v. Zalceburg, 925 N.E.2d 763, 772

      (Ind. Ct. App. 2010), trans. denied. A claim is unreasonable if, based on the

      totality of the circumstances, including the law and facts known at the time of

      filing, no reasonable attorney would consider the claim worthy of litigation. Id.

      A claim is groundless if there are no facts existing that support the legal claim

      presented by the losing party. Id.

[5]   We conclude that the probate court did not err in awarding MacDonald

      attorney’s fees. Hurwich brought his original complaint against MacDonald

      more than seven years after the Estate was originally closed, which was far after

      the applicable statutes of limitations had run. We note that the purpose of

      statutes of limitations is to encourage the prompt filing of claims. This not only

      prevents the litigation of stale claims but also allows Hoosiers to live their lives

      without endlessly waiting for the axe to fall. See Perryman v. Motorist Mut. Ins.

      Co., 846 N.E.2d 683, 689 (Ind. Ct. App. 2006) (“The general purpose of a

      statute of limitation is to encourage the prompt presentation of claims…They

      are practical and pragmatic devices to spare the courts from litigation of stale

      claims, and the citizen from being put to his defense after memories have faded,

      witnesses have died or disappeared, and evidence has been lost.”). Given that

      Court of Appeals of Indiana | Memorandum Decision 19A-EU-38 | May 28, 2019   Page 7 of 11
      Indiana Code section 34-52-1-1 is written in the disjunctive, Hurwich’s claims

      need only be frivolous, unreasonable, or groundless, but not all three. That said,

      based on the totality of the circumstances in this matter, no reasonable attorney

      would consider claims worthy of litigation well after the applicable statutes of

      limitations have run.

[6]   Hurwich specifically argues that had he been permitted to amend his complaint

      to allege fraudulent concealment, his claim would not have been frivolous,

      unreasonable, or groundless because it would have been within the applicable

      statute of limitations. The probate court, however, denied Hurwich the

      opportunity to amend his complaint, which we affirmed on appeal. Therefore,

      his argument is without merit, and he has failed to establish that his claims were

      not frivolous, unreasonable, or groundless.

                              II. Amount of Attorney’s Fees
[7]   MacDonald contends that the trial court erroneously interpreted the amount of

      attorney’s fees attributable to the instant action outlined in her request, and in

      doing so, failed to award approximately $40,306.50 in additional fees. We

      review a probate court’s decision to award attorney’s fees and any amount

      thereof for an abuse of discretion. Purcell, 972 N.E.2d at 843. Again, a probate

      court abuses its discretion if its decision clearly contravenes the logic and effect

      of the facts and circumstances or if the probate court has misinterpreted the law.

      Id.

      Court of Appeals of Indiana | Memorandum Decision 19A-EU-38 | May 28, 2019   Page 8 of 11
[8]    We conclude that the probate court did not abuse its discretion in awarding the

       amount of attorney’s fees it did. First, it appears that the probate court took into

       account the verified statements outlining the fees and MacDonald’s attorney’s

       explanation of said statements made during the evidentiary hearing, finding as

       follows:

               After reviewing the billing of Stacey MacDonald’s attorney, the
               Court finds the hourly rate to be reasonable; however, the Court
               does not find that all the work submitted was related to the
               lawsuit. Therefore, the Court now awards $44,444.00 in attorney
               fees to Stacey MacDonald, payable by Scott Hurwich.

       Appellant’s App. Vol. II pp. 13–14. The probate court was free to reject this

       evidence from MacDonald’s attorney, and we will not second-guess its

       evaluation of the evidence.

[9]    Moreover, Indiana Code section 34-52-1-1, states that the probate court may

       award attorney’s fees if a claim is frivolous, unreasonable, or groundless.

       (emphasis added). The statute does not require the probate court to award

       attorney’s fees nor does it require the entire amount accumulated defending the

       claims be awarded if the probate court chooses to award fees. Given the

       discretionary nature of the statute coupled with the probate court’s explanation

       in its order, we cannot say that the amount awarded was an abuse of discretion.

                               III. Appellate Attorney’s Fees
[10]   MacDonald requests that the attorney’s fees and costs incurred in this appeal be

       awarded. Indiana Appellate Rule 66(E) provides that we “may assess damages

       Court of Appeals of Indiana | Memorandum Decision 19A-EU-38 | May 28, 2019   Page 9 of 11
       if an appeal…is frivolous or in bad faith. Damages shall be in the Court’s

       discretion and may include attorneys’ fees.”

               Our discretion to award attorney fees under Appellate Rule 66(E)
               is limited to instances when an appeal is permeated with
               meritlessness, bad faith, frivolity, harassment, vexatiousness, or
               purpose of delay. Moreover, while we have discretionary
               authority to award damages on appeal, we must use extreme
               restraint when exercising this power because of the potential
               chilling effect upon the exercise of the right to appeal. A strong
               showing is required to justify an award of appellate damages, and
               the sanction is not imposed to punish mere lack of merit, but
               something more egregious. Just as pro se litigants are required to
               follow all of the rules of appellate procedure, they are also liable
               for attorney fees when they disregard the rules in bad faith.

               Indiana appellate courts have categorized claims for appellate
               attorney fees into substantive and procedural bad faith claims. To
               prevail on a substantive bad faith claim, the party must show that
               the appellant’s contentions and arguments are utterly devoid of
               all plausibility. Substantive bad faith implies the conscious doing
               of wrong because of dishonest purpose or moral obliquity.

       Poulard v. LaPorte Cty. Election Bd., 922 N.E.2d 734, 737–38 (Ind. Ct. App. 2010)

       (internal quotations and citations omitted).

[11]   MacDonald contends that because Hurwich’s claims were found to be

       frivolous, unreasonable, or groundless by the probate court, this appeal is

       likewise frivolous or in bad faith. We cannot agree with this line of reasoning,

       because adopting it would render appeals of attorney’s fees which are awarded

       under Indiana Code section 34-52-1-1 meaningless. Although Hurwich’s

       Court of Appeals of Indiana | Memorandum Decision 19A-EU-38 | May 28, 2019   Page 10 of 11
       original complaint was frivolous, unreasonable, or groundless, his decision to

       appeal a decision that requires him to pay over $40,000 in attorney’s fees is

       entirely reasonable. Therefore, we deny MacDonald’s request for appellate

       attorney’s fees and costs.

[12]   The judgment of the probate court is affirmed.

       Crone, J., and Tavitas, J., concur.

       Court of Appeals of Indiana | Memorandum Decision 19A-EU-38 | May 28, 2019   Page 11 of 11