Estate of Kelly Ecker, by its Personal Representative, Patricia Ann Leturgez v. Estate of George Scott Samson , 2016 Ind. App. LEXIS 315 ( 2016 )

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.
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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
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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.
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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
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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
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(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).
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[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
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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
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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.
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[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.
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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.
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