Court Opinion

ID: 2818533
Source: CourtListenerOpinion
Date Created: 2015-07-20 19:03:04.077214+00
Date Added: 2024-06-11T12:26:10.621754
License: Public Domain

Jul 20 2015, 10:45 am

      ATTORNEYS FOR APPELLANT                               ATTORNEYS FOR APPELLEE
      Briane M. House                                       Scott L. Starr
      R. Daniel Faust                                       Jacob M. O’Brien
      House Reynolds & Faust, LLP                           Starr Austen & Miller, LLP
      Carmel, Indiana                                       Logansport, Indiana

                                                  IN THE
          COURT OF APPEALS OF INDIANA

      Charles R. Ferguson,                                        July 20, 2015

      Appellant,                                                  Court of Appeals Case No.
                                                                  34A02-1411-ES-793

              v.                                                  Interlocutory Appeal from the
                                                                  Howard Circuit Court
                                                                  The Honorable J. David Grund,
      The Estate of Lera V. Ferguson,                             Special Judge
      Appellee.                                                   Trial Court Cause No. 34C01-1310-
                                                                  ES-52

      Bradford, Judge.

                                            Case Summary
[1]   Lera V. Ferguson passed away intestate in 2013 and was survived by her two

      children and sole heirs, Appellant Charles Ferguson and Nancy Mosson.

      Mosson was appointed personal representative of Lera’s estate (“the Estate”).

      Court of Appeals of Indiana | Opinion 34A02-1411-ES-793 |July 20, 2015                  Page 1 of 10
      Charles eventually filed a claim for over one million dollars against the Estate

      for services provided to Lera over her lifetime, a claim that Mosson disallowed.

[2]   Meanwhile, Mosson had petitioned the trial court for authority to sell real

      estate, namely a parcel that was the family farm (“the Farm”). Charles objected

      to Mosson’s petition and requested the trial court to set a bond sufficient to stay

      the sale. After a hearing, the trial court ordered Charles to deliver a surety bond

      of $1,133,833.71, which represented the amount of his claim plus some

      administrative costs, within thirty days in order to stay the sale of the Farm.

      Charles now appeals, contending that the trial court erred in setting his bond.

      The Estate argues that Charles’s interlocutory appeal should be dismissed

      because the trial court’s order did not give him an interlocutory appeal of right

      and he did not follow the procedures for discretionary interlocutory appeals.

      Because we conclude that Charles’s interlocutory appeal was properly taken

      and that the trial court abused its discretion in setting the amount of Charles’s

      bond, we reverse and remand with instructions.

                             Facts and Procedural History
[3]   Lera died intestate on June 7, 2013, survived by her two children and sole heirs,

      Mosson and Charles. On October 2, 2013, the trial court appointed Mosson

      personal representative of the Estate, whose sole asset of significance is the

      Farm. On December 23, 2013, Charles filed his claim against the Estate,

      alleging that Lera had entered into a lifetime contract for personal services with

      Charles and that the Estate owed him $1,073,833.71.

      Court of Appeals of Indiana | Opinion 34A02-1411-ES-793 |July 20, 2015    Page 2 of 10
[4]   On March 6, 2014, Mosson petitioned for authority to sell the Farm, which

      motion was granted. On March 12, 2014, Charles moved to vacate the trial

      court’s order granting Mosson authority to sell the Farm, which motion the trial

      court granted. On April 3, 2014, Mosson disallowed Charles’s claim against

      the Estate.

[5]   On April 28, 2014, Mosson filed a memorandum in support of her petition for

      authority to sell the Farm, reasserting her request to sell the Farm. On August

      1, 2014, Charles responded to Mosson’s renewed request to sell the Farm and

      requested that the trial court set a bond sufficient to pay the Estate’s

      administrative expenses and stay the sale of the Farm pursuant to Indiana Code

      section 29-1-15-4. Following a hearing, the trial court issued an order (“the

      Order”) on October 14, 2014, that provided, in part, as follows:

              The Court finds that there is an estate claim filed by [Charles] in
              the amount of $1,[073],833.71. [Mosson] further estimating
              approximately $60,000.00 of the expenses in estate existing. The
              Court finds that I.C. 29-1-15-4 specifically requires that the bond
              be “Conditioned to pay all obligations of the estate to the extent
              that the other property of the estate is insufficient therefor[.]”
              The Court finds that the aforementioned claim is a potential
              obligation of the estate, along with other estate administration
              expenses.
              The Court further finds that the parties agree that there are no
              other assets sufficient to satisfy the obligations of the estate.
              Therefore, the Court orders that [Charles] shall deliver to the
              Clerk of the Court a surety bond in the amount of $1,133,833.71.
              The Court orders said bond to be posted within thirty (30) days
              of this order. If said bond is not posted within the
              aforementioned time frame, [Mosson], as personal representative

      Court of Appeals of Indiana | Opinion 34A02-1411-ES-793 |July 20, 2015     Page 3 of 10
               of [the Estate], is authorized to sell [the Farm] for not less than
               the appraised value.
      Order pp. 2-3.

[6]   On November 12, 2014, Charles filed his notice of interlocutory appeal. On

      appeal, Charles contends that the trial court abused its discretion in setting the

      amount of his bond. The Estate counters that Charles failed to employ the

      proper procedures to perfect his allegedly discretionary interlocutory appeal and

      the trial court did not err in determining the amount of Charles’s bond. Charles

      responds to the Estate’s first claim by arguing that his interlocutory appeal is

      one of right, not subject to the rules governing discretionary interlocutory

      appeals.

                                  Discussion and Decision
                           I. Whether Charles’s Interlocutory
                                Appeal is One of Right
[7]   The Estate contends that Charles’s appeal is not properly before this court

      because the Order is subject to Indiana Appellate Rule 14(B), which governs

      discretionary interlocutory appeals, and Charles did not satisfy the section’s

      requirements. Charles responds that his appeal is one of right, governed by

      Appellate Rule 14(A).1 Appellate Rule 14 provides, in part, as follows:

      1
       Charles also argues, essentially, that the Estate’s argument does not make it clear on which grounds it seeks
      dismissal of his appeal. The Estate’s argument is more than clear enough for us to evaluate.

      Court of Appeals of Indiana | Opinion 34A02-1411-ES-793 |July 20, 2015                            Page 4 of 10
              A. Interlocutory Appeals of Right. Appeals from the following
              interlocutory orders are taken as a matter of right by filing a
              Notice of Appeal with the Clerk within thirty (30) days after the
              notation of the interlocutory order in the Chronological Case
              Summary:
                       (1) For the payment of money;
                       (2) To compel the execution of any document;
                       (3) To compel the delivery or assignment of any securities,
                       evidence of debt, documents or things in action;
                       (4) For the sale or delivery of the possession of real
                       property;
                       (5) Granting or refusing to grant, dissolving, or refusing to
                       dissolve a preliminary injunction;
                       (6) Appointing or refusing to appoint a receiver, or
                       revoking or refusing to revoke the appointment of a
                       receiver;
                       (7) For a writ of habeas corpus not otherwise authorized to
                       be taken directly to the Supreme Court;
                       (8) Transferring or refusing to transfer a case under Trial
                       Rule 75; and
                       (9) Issued by an Administrative Agency that by statute is
                       expressly required to be appealed as a mandatory
                       interlocutory appeal.
              The Notice of Appeal shall be in the form prescribed by Rule 9,
              and served in accordance with Rule 9(F)(10).
              B. Discretionary Interlocutory Appeals. An appeal may be
              taken from other interlocutory orders if the trial court certifies its
              order and the Court of Appeals accepts jurisdiction over the
              appeal.
[8]   “An appeal from an interlocutory order is not allowed unless specifically

      authorized by the Indiana Constitution, statutes, or the rules of court.” Allstate

      Ins. Co. v. Scroghan, 801 N.E.2d 191, 193 (Ind. Ct. App. 2004) (citing Bayless v.

      Bayless, 580 N.E.2d 962, 964 (Ind. Ct. App. 1991), trans. denied), trans. denied.

      Court of Appeals of Indiana | Opinion 34A02-1411-ES-793 |July 20, 2015           Page 5 of 10
      “The authorization is to be strictly construed, and any attempt to perfect an

      appeal without such authorization warrants a dismissal.” Id. (citing Anthrop v.

      Tippecanoe Sch. Corp., 257 Ind. 578, 277 N.E.2d 169, 171 (1972)). “The matters

      which are appealable as of right under Appellate Rule [14(A)] involve trial court

      orders which carry financial and legal consequences akin to those more

      typically found in final judgments: payment of money, issuance of a debt,

      delivery of securities, and so on.” State v. Hogan, 582 N.E.2d 824, 825 (Ind.

      1991).

[9]   Charles contends that Appellate Rule 14(A)(4) applies, arguing that the Order is

      for the sale of real property, namely, the Farm. We disagree with Charles on

      this point. However, keeping in mind our preference for resolving disputes on

      the merits, see, e.g., Coslett v. Weddle Bros. Const. Co., 798 N.E.2d 859, 862 (Ind.

      2003), we conclude that the Order falls under subsection (A)(1), an order “[f]or

      the payment of money[.]” The Order specifically orders Charles to deposit a

      bond payment in excess of one million dollars with the trial court clerk, the

      consequences of a failure to do so being the sale of the Farm, an act that could

      not be undone if it occurred. We have little trouble concluding that the Order

      carries legal and financial consequences akin to a final judgment. Moreover, it

      does not matter if some—or even most—of the bond is likely to be returned to

      Charles eventually. As we stated in Schwedland v. Bachman, 512 N.E.2d 445,

      450 (Ind. Ct. App. 1987), the “purpose of allowing appeals for the payment of

      money is to provide a remedy to parties compelled to part with money which is

      tied up awaiting litigation[.]” Id. at 450 (citing McKnight v. Knisely, 25 Ind. 336,

      Court of Appeals of Indiana | Opinion 34A02-1411-ES-793 |July 20, 2015      Page 6 of 10
       337 (1865)). Even if Charles’s claim against the Estate is valid, it will do him

       little good if he cannot afford to pursue the litigation further because of the

       bond he has been ordered to post. We conclude that Charles’s interlocutory

       appeal is one of right pursuant to Appellate Rule 14(A)(1), and we therefore

       have jurisdiction to hear it.

            II. Whether the Trial Court Abused it Discretion in
                  Setting the Amount of Charles’s Bond
[10]   Charles contends that the trial court abused its discretion in setting the bond at

       $1,133,833.71, which represents the amount of his claim against the Estate plus

       $60,000.00 in Estate administrative costs. Indiana Code section 29-1-15-4

       provides as follows:

               An order authorizing a personal representative to sell, mortgage
               or lease real or personal property for the payment of obligations
               of the estate shall not be granted if any of the persons interested
               in the estate shall execute and file in the court a bond in such
               sum and with such sureties as the court may approve,
               conditioned to pay all obligations of the estate to the extent that
               the other property of the estate is insufficient therefor, within
               such time as the court shall direct. An action may be maintained
               on such bond by the personal representative on behalf of any
               person interested in the estate who is prejudiced by breach of any
               obligation of the bond.
[11]   This issue ultimately turns on the interpretation of section 29-1-15-4. “The

       interpretation of a statute is a question of law reserved for the courts.” Scott v.

       Irmeger, 859 N.E.2d 1238, 1239 (Ind. Ct. App. 2007).

       Court of Appeals of Indiana | Opinion 34A02-1411-ES-793 |July 20, 2015      Page 7 of 10
               A statute should be construed so as to ascertain and give effect to
               the intention of the legislature as expressed in the statute. In so
               doing, the objects and purposes of the statute in question must be
               considered as well as the effect and consequences of such
               interpretation. When interpreting the words of a single section of
               a statute, this court must construe them with due regard for all
               other sections of the act and with regard for the legislative intent
               to carry out the spirit and purpose of the act. We presume that
               the legislature intended its language to be applied in a logical
               manner consistent with the statute’s underlying policy and goals.
               Statutes relating to the same general subject matter are in pari
               materia and should be construed together so as to produce a
               harmonious statutory scheme. Courts are not bound to adopt a
               construction that would lead to manifest absurdity in order that
               the strict letter of the statute may be adhered to. They will rather
               look to the intention of the legislature, as gathered from the
               import of the whole act, and will carry out such intention as thus
               obtained.
       Fuller v. State, 752 N.E.2d 235, 237-38 (Ind. Ct. App. 2001) (citations omitted).

[12]   In arguing that the trial court properly set the amount of Charles’s bond, the

       Estate points out that Indiana Code section 29-1-15-4 requires that the bond be

       set “in such sum and with such sureties as the court may approve, conditioned

       to pay all obligations of the estate to the extent that the other property of the

       estate is insufficient therefor[.]” Essentially, the Estate’s argument seems to be

       that the trial court properly set Charles’s bond in a sum that would cover all

       claims against the Estate, even though Charles is the primary claimant. Charles

       argues that his claim itself is sufficient surety for his claim and contends that

       this cash bond should have been set in the amount of the Estate’s remaining

       Court of Appeals of Indiana | Opinion 34A02-1411-ES-793 |July 20, 2015     Page 8 of 10
       administrative expenses. Under the circumstances of this case, we agree with

       Charles.

[13]   The obvious purpose of Indiana Code section 29-1-15-4 is to protect those who

       have claims against estates while giving “interested persons”2 an avenue to

       preserve real estate that otherwise would have to be liquidated. In practice, an

       interested person must be willing to guarantee the Estate’s debts to claimants if

       he wishes to prevent a sale of real estate which is intended to raise money to

       satisfy those debts. In this case, however, the claimant and the interested

       person are one and the same: Charles. It strikes us as somewhat unjust that

       Charles should, in effect, be forced to post a bond to protect himself if he,

       understandably, does not wish to. This is made plain when one considers what

       would happen down the road if Charles were required to post surety for his own

       claim: if Charles’s claim were determined to be valid, he would receive his

       bond in satisfaction of the claim, and if his claim were denied, his bond would

       be returned to him as no longer required. Ordering Charles to post a bond to

       cover his own claim does not protect him; if anything, it harms him by denying

       him the use of his money. We do not believe that this is what the General

       Assembly had in mind when drafting Indiana Code section 29-1-15-4. We

       2
           Indiana Code section 29-1-1-3(13) provides as follows:

                 “Interested persons” means heirs, devisees, spouses, creditors, or any others having a
                 property right in or claim against the estate of a decedent being administered. This
                 meaning may vary at different stages and different parts of a proceeding and must be
                 determined according to the particular purpose and matter involved.

       Court of Appeals of Indiana | Opinion 34A02-1411-ES-793 |July 20, 2015                             Page 9 of 10
       conclude that the trial court abused its discretion in setting Charles’s bond

       pursuant to Indiana Code section 29-1-15-4.

                                                 Conclusion
[14]   We conclude that the Order was one “for the payment of money” and therefore

       provided Charles with an interlocutory appeal of right. Moreover, we conclude

       that the trial court abused its discretion in ordering that Charles post a bond as

       surety for his own claim. We reverse the judgment of the trial court and

       remand with instructions to order Charles to post a bond of $60,000.00 (the

       amount of administrative costs to date) in order to stay the sale of the Farm and

       for further proceedings not inconsistent with this opinion.

[15]   We reverse and remand with instructions.

       May, J., and Mathias, J., concur.

       Court of Appeals of Indiana | Opinion 34A02-1411-ES-793 |July 20, 2015   Page 10 of 10