Charles R. Ferguson v. The Estate of Lera v. Ferguson , 40 N.E.3d 881 ( 2015 )

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”).
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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.
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[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
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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.
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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.
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“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,
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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).
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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
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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.
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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.
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