Court Opinion

ID: 852219
Source: CourtListenerOpinion
Date Created: 2013-03-02 01:16:34.662434+00
Date Added: 2024-06-11T09:04:12.241197
License: Public Domain

ATTORNEYS FOR APPELLANT                                     ATTORNEY FOR APPELLEE
P. Gregory Cross                                            Stan G. Wyrick
Muncie, Indiana                                             Muncie, Indiana

Sara E. Shade

                                                                               FILED
Muncie, Indiana
______________________________________________________________________________
                                                                            Sep 09 2010, 11:21 am
                                            In the
                                                                                    CLERK
                           Indiana Supreme Court                                  of the supreme court,
                                                                                  court of appeals and
                                                                                         tax court

                             _________________________________

                                    No. 18S04-1002-CV-118

IN RE: THE ESTATE OF HARRY L.
RICKERT,

CAROLE BAKER, PERSONAL REPRESENTATIVE
OF THE ESTATE OF HARRY L. RICKERT,                          Appellant (Petitioner Below),
DECEASED,
                                                v.

KETA TAYLOR,                                           Appellee (Respondent Below).
                             _________________________________

                  Appeal from the Delaware Circuit Court, No. 18C01-0605-EU-118
                             The Honorable Marianne Vorhees, Judge
                              _________________________________

      On Petition to Transfer from the Indiana Court of Appeals, No. 18A04-0812-CV-746
                            _________________________________

                                       September 9, 2010

Boehm, Justice.

        A holder of a power of attorney is a fiduciary and therefore any transaction in which the
holder uses a power of attorney to transfer assets to the holder is presumed invalid. The Non-
Probate Transfer Act creates a presumption that joint ownership of a bank account is intended to
transfer the account to the survivor(s) at the death of an owner. We hold that the Act’s
presumption of intent to transfer does not overcome the fiduciary’s duty to prove that the account
was properly established as a joint account. The holder in this case used the power to establish
joint accounts with herself, and did not overcome the presumption that the accounts were not
validly established as joint accounts.

                                  Facts and Procedural History

       Harry Rickert and his wife, Novella, had no children. When Novella suffered a stroke in
1990, Rickert hired Keta Taylor to assist him in caring for her. After Novella’s death in 1991,
Taylor continued to provide general housekeeping duties and care for Rickert until his death in
May 2006 at the age of 93. In 1992, Rickert executed a will that divided his residuary estate
equally among four nieces and nephews, and Carole Baker, whom Rickert described in his will
as one “loved as if she were [the Rickerts’s] daughter.”

       According to some witnesses Rickert could sign his name but was otherwise illiterate. In
1997 Rickert gave Taylor a general power of attorney, and six months later he executed a codicil
to his will adding Taylor as a sixth residuary beneficiary. In 1999, a second codicil named Baker
as personal representative of his estate. At that time he told Baker that his estate was worth
about $600,000 and that each beneficiary would receive approximately $100,000 when he died.

       Between 1999 and 2006, Rickert’s health declined. He required more constant care and
was attended by Taylor on weekdays and by other hired caregivers on the weekends. The
evidence is undisputed that by 2005 Rickert could no longer make decisions for himself, but it is
not clear how long that was the case before then. According to Baker and Ervin Rickert and
Walter Washburn, two of Rickert’s nephews, Rickert lost the ability to make conscious decisions
for himself sometime around 2000, but Taylor disputes that and the record includes no medical
evidence. A Mutual Federal Savings Bank employee testified that when she dealt with Rickert
prior to 2002 it was her opinion that he understood the terms of the accounts that he and Taylor
opened.

       At Rickert’s death his probate estate was valued at approximately $147,000, including
real estate, furniture and household goods, corporate stocks, cash, and the proceeds of insurance
policies payable to the estate.          Baker also identified $404,000 in non-probate assets.
Specifically, a number of bank certificates of deposit (CDs) had been purchased in Rickert’s
name as joint owner with Taylor and others. Ind. Code § 30-5-6-4(b) (2004). Because Baker

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was herself a joint owner of CDs that had been established by Rickert, she requested that the trial
court appoint a special personal representative to investigate whether the joint accounts should
be recovered for the Estate. I.C. § 29-1-13-16. Attorney P. Gregory Cross was appointed and
conducted an investigation. Some, but not all banks furnished the documentation surrounding
these accounts.

   Cross concluded that at the time of his death, in addition to the probate estate, Rickert did
own other assets totaling approximately $404,000. These included:

   1. At least nine CDs totaling $168,000 and one checking account with a balance at Rickert’s
       death of $3010.      These accounts were at four Muncie area banks and each was
       established from 2001 to 2005 as either a joint account owned by Rickert and Taylor, or
       an account in Rickert’s name with Taylor as “Pay on Death” beneficiary.                 The
       documentation creating each of these accounts was signed only by Taylor using her
       power of attorney to sign for Rickert;
   2. One checking account with a balance at Rickert’s death of $2833 and one CD worth
       $31,200. The checking account was established in 2001 as a joint account with Taylor
       and the CD purchased in 2000 named Taylor as POD beneficiary. The documentation
       creating these two accounts was signed by Rickert himself;
   3. Two CDs totaling $22,000 naming Charles Jester as POD beneficiary. Taylor’s marriage
       to Jester was dissolved in 1999. According to Taylor, Rickert and Jester were close
       friends. One of these CDs for $10,000 was purchased in 2000 by documentation bearing
       Rickert’s signature and a $12,000 CD was purchased in 2001 with Rickert’s signature on
       the I.R.S. withholding documentation, but not the account papers;
   4. Three CDs totaling $100,009 were established in 2001, 2004 and 2005 as joint accounts
       owned by Rickert and Taylor. The documentation creating these accounts is not in the
       record;
   5. One $50,000 CD with Rickert and Baker as joint owners was purchased in 2001 by
       documents signed by Rickert. Documentation relating to a second CD payable on death
       to Baker indicates only that its value as of Rickert’s death was $40,045;

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   6. One $10,000 CD jointly owned by Rickert and Nancy Wolfe, who, according to Taylor,
         was another of Rickert’s caregivers. This CD was created in 2001 by Taylor using her
         power of attorney; and
   7. Two vehicles titled as owned jointly by Rickert and Taylor.

In addition to these assets located at death, Cross identified three CDs totaling $39,000 that
apparently matured in 2005 without any record of the use of the proceeds. All of these assets
were purchased originally with Rickert’s funds, or were renewals of CDs purchased with his
funds.

         In November 2007, Cross issued a report recommending that the thirteen accounts
benefiting Taylor that were created without evidence of Rickert’s involvement be placed in the
Estate. Cross proposed that the remaining jointly held accounts and pay-on-death accounts be
released to their presumptive owners. The report also recommended that the two vehicles be
returned to the Estate. Baker requested a trial.

         At the trial the Estate successfully invoked the Dead Man Statute, Indiana Code section
34-45-2-4, to exclude any testimony from Taylor. The trial court nonetheless ruled for Taylor on
most issues. The trial court relied on the Non-Probate Transfer Act (NPTA), which provides that
“[s]ums remaining on deposit at the death of a party to a joint account belong to the surviving
party or parties as against the estate of the decedent unless there is clear and convincing evidence
of a different intention at the time the account is created.” I.C. § 32-17-11-18(a). The trial court
concluded that “[t]he estate has failed in its burden to show by clear and convincing evidence
that Harry L. Rickert intended anything different than the joint ownership or pay on death status
of the accounts or certificates of deposits in this matter.” The trial court accepted Cross’s
recommendation as to the vehicles, which were not “sums remaining on deposit” subject to the
NPTA, but ordered that the funds in all accounts and CDs be released to their presumptive
owners.

         The Estate appealed, and a majority of the Court of Appeals reversed and remanded with
directions to apply the common law presumption of undue influence to determine the validity of
Taylor’s transactions as attorney-in-fact. In re Estate of Rickert, 912 N.E.2d 831, 838 (Ind. Ct.
App. 2009). Judge Barnes dissented, finding the NPTA placed the burden on the Estate to

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establish by clear and convincing evidence that Rickert did not intend for Taylor to receive the
funds in the joint accounts. Id. at 839. Taylor argued that the trial court erred in excluding her
testimony justifying her transactions. She contended that the Estate had waived any objection to
her testimony based on the Dead Man’s Statute by filing her deposition with Cross’s report in the
trial court. Id. at 838. The Court of Appeals held that her testimony was properly excluded. Id.
We granted transfer.

                                       Standard of Review

       This case raises two issues. First, does the NPTA override the common law and statutory
presumptions of invalidity of transactions in which a holder of a power of attorney uses that
power to benefit the holder? Second, does filing a deposition of a person adverse to an estate
constitute use of the person’s testimony that waives the estate’s Dead Man’s Statute objection to
the claimant’s testifying adversely to the estate? Both issues present questions of law which we
review de novo. Smith v. Champion Trucking Co., 925 N.E.2d 362, 364 (Ind. 2010).

     I. Presumptions As To Joint Accounts Established Through a Power of Attorney

       The trial court did apply the common law presumption to order the two vehicles, which
were not subject to the NPTA, to be restored to the probate estate, finding the common law
presumption of invalidity was not rebutted. The NPTA was deemed conclusive as to the
accounts, however. The NPTA states: “Sums remaining on deposit at the death of a party to a
joint account belong to the surviving party or parties as against the estate of the decedent unless
there is clear and convincing evidence of a different intention at the time the account is created.”
I.C. § 32-17-11-18(a). It is undisputed that Taylor’s name appears as joint owner or pay on death
beneficiary for the thirteen accounts at issue. The trial court and the Court of Appeals dissent
found this statute controlling and found no clear and convincing evidence that Rickert did not
intend to create joint accounts with rights of survivorship.

       A person holding a power of attorney is in a fiduciary relationship to the person granting
the power. I.C. § 30-5-6-3; see Nichols v. Estate of Tyler, 910 N.E.2d 221, 229 (Ind. Ct. App.
2009). Here we have a classic example of self-dealing by a fiduciary. On the face of the
transactions Taylor used her position as attorney-in-fact for Rickert to transfer an interest in

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Rickert’s assets to herself. At common law, such a transaction was presumed to be invalid.
Nichols, 910 N.E.2d at 229; see also In re Estate of Wade, 768 N.E.2d 957, 963 (Ind. Ct. App.
2002). This presumption now finds statutory support. Indiana Code section 30-5-9-2(b) (2005)
eliminates the presumption of invalidity of a “gift, bequest, transfer, or transaction” between the
principal and the attorney-in-fact only if it is “made by the principal” and “not made by an
attorney-in-fact acting for the principal under a power of attorney.” If undue influence is
presumed, the burden “then shifts to the dominant party to demonstrate, by clear and unequivocal
proof, that the transaction was voluntary and fair.” 4 Henry’s Indiana Probate Law and Practice
§ 30.18 at 155 (2009).

        In sum, it was up to Taylor to prove by clear and convincing proof that her use of her
power of attorney from Rickert to create accounts purportedly giving her rights of survivorship
in Rickert’s money was “voluntary and fair.” With respect to both the vehicles and the accounts,
the record before us includes no evidence beyond the documents evidencing transfer of
ownership to support either Rickert’s knowing and voluntary consent to these transactions or
their inherent fairness. If these transactions were indeed “voluntary and fair,” i.e., if Rickert
indeed intended to confer several hundred thousand dollars on Taylor, there were abundant
means to validate these transactions by third party witnesses or contemporary documents.1
Because none of these were pursued at the time these transactions were done, the law leaves
Taylor with the uphill battle of attempting to prove them by clear and convincing evidence years
after the fact. On this record she did not succeed.

        Under the trial court’s view of the law, in the absence of any clear evidence that Rickert
did not intend to create joint accounts, the trial court was compelled to award the bank accounts
1
  Once a presumption of undue influence has been established, the party claiming the validity of the transactions
may rebut the presumption with proof that the transactions were voluntary and fair. In Meyer v. Wright, 854 N.E.2d
57, 62–64 (Ind. Ct. App. 2006), a son successfully rebutted the presumption of undue influence by presenting
testimony from a witness that the father’s intention was to make the questioned changes to his will, a physician that
the father was competent at the time he changed his will, and another witness concerning the quality of the father’s
relationship with the son. In Villanella v. Godbey, 632 N.E.2d 786, 791 (Ind. Ct. App. 1994), a power of attorney
received over $48,000 and thirty-seven acres of real property from the decedent. Id. The attorney-in-fact presented
evidence that the decedent personally signed all of the bank account withdrawal slips and checks, and testimony
from an attorney who witnessed the real estate transfer that the transfer was voluntary. The court found that this
evidence, taken together with evidence of the attorney-in-fact’s care of decedent in declining health, was enough to
rebut the presumption of undue influence. Id. In Outlaw v. Danks, 832 N.E.2d 1108, 1111–12 (Ind. Ct. App. 2005),
a nephew who held his aunt’s power of attorney successfully rebutted the presumption of undue influence with
testimony of bank employees who attested to the decedent’s statements that she understood the contents of the will
at the time she executed it.

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to the persons shown as joint owners. But because of the presumption of invalidity of self-
dealing by fiduciaries, the same absence of clear evidence dictates that the judgment of the trial
court be reversed and the joint assets restored to the Estate. Finally, both the trial court and the
dissent in the Court of Appeals cited In re Estate of Banko, 622 N.E.2d 476 (Ind. 1993), in
support of their reading of the NPTA. We do not find Banko controlling here. In Banko, the
decedent had been married to his third wife Nadine Banko for seventeen years. Id. at 477. The
decedent’s daughter, who was a will beneficiary, petitioned to reopen Nadine’s estate when she
learned that the decedent’s estate had not included certain joint accounts held by Nadine and
decedent. Id. at 478. We held that the joint accounts were properly excluded from the estate
because they were joint accounts subject to the NPTA, and that the daughter had not presented
clear and convincing evidence that decedent did not intend for Nadine to receive the account
proceeds. Id. at 480. We also noted that “[t]he legislative enactment of the survivorship
presumption by unmistakable implication replaces the common law presumption of undue
influence.” Id.

       Banko was correct in holding that the NPTA creates a strong presumption that a joint
account holder is entitled to the proceeds in the account on death of the other account holder.
Banko based this holding on the “underlying assumption . . . that most persons who use joint
accounts want the survivor or survivors to have all balances remaining at death.” Id. (quoting
Unif. Probate Code § 6-104(a), 8 U.L.A. (1983)). But in Banko there was no issue whether the
accounts were in fact established by the decedent. Here the presumption is that Taylor’s use of
her power of attorney to benefit herself did not create valid accounts in the first place, and that
presumption was not rebutted.

                    II. Waiver of Objection Based on Dead Man’s Statute

       When Taylor attempted to testify, the Estate objected and the trial court excluded any
testimony related to “the things that deal with the accounts and surrounding the accounts and the
handling of them.” The court cited the Dead Man’s Statute, Indiana Code section 34-45-2-4, as
the reason for the exclusion. The Dead Man’s Statute establishes as a matter of legislative policy
that claimants to the estate of a deceased person should not be permitted to present a court with
their version of their dealings with the decedent. In re Estate of Neu, 588 N.E.2d 567, 569 (Ind.

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Ct. App. 1992) (“The dead man’s statute guards against false testimony by requiring that, when
the lips of one party to a transaction are closed by death, the lips of the other party are closed by
law.”). The statute provides that “a person (1) who is a necessary party to the issue or record;
and (2) whose interest is adverse to the estate; is not a competent witness as to matters against
the estate.” I.C. § 34-45-2-4(d). Taylor contends that although she is an incompetent witness
under the Dead Man’s Statute, the Estate waived any objection to her competence by filing her
deposition with the trial court. Taylor cites the rule that if a party “uses” the deposition in court
for an evidentiary purpose, that party waives the protection of the Dead Man’s Statute. Taylor v.
Taylor, 643 N.E.2d 893, 895 (Ind. 1994) (designating evidence in summary judgment waives the
statute); see also Carlson v. Warren, 878 N.E.2d 844, 849 (Ind. Ct. App. 2007) (estate
beneficiaries waived application of Dead Man’s Statute by designating numerous excerpts from
deposition testimony). This doctrine is grounded in a notion of fairness, and prevents the estate
from being able to pick and choose from among the statements the claimant may have made.
But the waiver is effected by actual use of the claimant’s deposition, not by “[t]he mere taking of
a deposition.” J.M. Corp. v. Roberson, 749 N.E.2d 567, 571 (Ind. Ct. App. 2001).

       The Estate filed the deposition with the trial court but did not cite it in summary judgment
proceedings or offer it into evidence at trial. Although Taylor concedes that the Estate did not
actually use the deposition for any evidentiary purpose, she contends that filing it with the trial
court allowed for its potential use. Because the Estate could have used the deposition testimony,
she argues, she should have been able to testify at trial. We do not agree. In order to waive
objection to the competence of a witness under the Dead Man’s Statute by taking advantage of a
deposition of a person who is adverse to a decedent’s estate, the estate must use the deposition by
offering it into evidence at trial or pretrial hearing, or citing it to the court as, for example, by
designating it in support of or opposition to a summary judgment motion.

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                                           Conclusion

       The judgment of the trial court is reversed. This case is remanded to the trial court with
directions to order restoration to the Estate of Harry Rickert of bank accounts owned of record by
Rickert and Keta Taylor that were created through use of Taylor’s power of attorney from
Rickert and lacking any supporting documentation indicating participation by Rickert.

Shepard, C.J., and Dickson, Sullivan, and Rucker, JJ., concur.

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