Gerald F. Scott v. Cheryl Carrico (Dillman), Carla Cook (Dillman), and Rhonda K. Vance ( 2018 )

FILED
Nov 16 2018, 10:35 am
CLERK
Indiana Supreme Court
Court of Appeals
and Tax Court
ATTORNEYS FOR APPELLANT ATTORNEY FOR APPELLEES
J. David Agnew CHERYL CARRICO & CARLA
Gregory M. Reger COOK
Maxwell W. McCrite Robert W. Adams III
Lorch Naville Ward, LLC Adams Law Group
New Albany, Indiana Louisville, Kentucky
ATTORNEY FOR APPELLEE
RHONDA VANCE
John M. Plummer, Jr.
Bedford, Indiana
IN THE
COURT OF APPEALS OF INDIANA
Gerald F. Scott, November 16, 2018
Appellant-Defendant, Court of Appeals Case No.
59A01-1712-CT-2878
v. Appeal from the Orange Circuit
Court
Cheryl Carrico (Dillman), Carla The Honorable Joseph L.
Cook (Dillman), and Rhonda K. Claypool, Special Judge
Vance, Trial Court Cause No.
Appellees-Plaintiffs 59C01-1606-CT-161
May, Judge.
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[1] Gerald F. Scott appeals the trial court’s denial of his motion to dismiss. 1 Gerald
argues that, when an estate is open, tort claims related to that estate must be
brought in probate court. Because the claims at issue herein were not known
until after the probate court statute of limitations had passed, appellees have no
recourse in probate court. As we hold their claims can be brought in civil court,
we affirm the trial court’s denial of Gerald’s motion to dismiss.
Facts and Procedural History
[2] Melvin Dillman and Rebecca Dillman were married for over thirty years.
Rebecca had three sons: Gerald, Timothy, and Bradley (collectively, “Sons”)
from a previous relationship. Melvin had three daughters: Cheryl, Carla, and
Rhonda (collectively, “Daughters”) from a previous relationship. Melvin and
Rebecca each executed wills with reciprocal provisions, stating, in pertinent
part:
In the event my said (spouse) shall predecease me, or shall die
under circumstances making it difficult to determine the order of
our deaths, then in such event I give, bequeath and devise all of
said rest, residue and remainder of my estate, absolutely and in
fee, unto my children and my (spouse’s) children, namely
GERALD F. SCOTT, BRADLEY F. SCOTT, TIMOTHY E.
SCOTT, RHONDA KAY VANCE, CARLA ANN COOK and
CHERYL SUE CARRICO, and their issue per stirpes who shall
be living at the time of my death.
1
Gerald’s brothers, Timothy Scott and Bradley Scott, do not take part in this appeal.
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*****
The distributive provisions in this Will and in my
husband’s/wife’s Will are to be considered a binding contract
between us. In the event of the death of one of us, the surviving
spouse shall be prohibited from revoking, amending, or changing
their Will with regard to the distribution of assets as it pertains to
any children named under this Will. Provisions that do not affect
distribution of assets, may be changed by my surviving spouse.
Any change with regard to the distribution of assets on the part of
surviving spouse shall be considered breach of our agreed upon
contract made during our respective lifetime as to the disposition
of our estate upon the death of both of us.
(Appellant’s App. Vol. II at 11, 12) (errors in original).
[3] Melvin died on January 26, 2014. Following a diagnosis of Amyotrophic
Lateral Sclerosis (ALS), Rebecca died on September 27, 2014. On October 17,
2014, Rebecca’s probate estate was opened (“the Estate”). Gerald and Rhonda
served as co-executors.
[4] During the probate proceedings, Daughters came to believe Sons had induced
Rebecca to transfer assets to Sons at below fair market value. Daughters
believed the transferred assets included “real estate holdings, a thriving
hardware business, a funeral home and adjoining land, a farm with eighty-three
acres, two boats, two trailers, automobiles, and jewelry.” (Br. of Appellees at
9.) At some point, Rebecca had granted Sons powers of attorney, which would
have aided Sons in their ability to transfer ownership of the assets. These
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actions, if true, reduced the assets available to be distributed to the six children
following Rebecca’s death.
[5] On April 19, 2016, Gerald filed a final accounting in the Estate. The probate
court set May 4, 2016, as the final filing date for any objections to that
accounting. On May 2, 2016, Cheryl filed an objection to the Estate’s final
accounting. On May 31, 2016, the probate court noted the “estate should not
remain open infinitum [sic],” and ordered Cheryl had until “June 24, 2016, to
file suit in said estate.” (Appellant’s App. Vol. II at 86.) On June 20, 2016,
Rhonda resigned as co-executrix of the Estate. On June 21, 2016, Rhonda also
filed an objection to the final accounting.
[6] On June 22, 2016, Cheryl and Carla filed suit in civil court (hereinafter, “trial
court”) against Gerald, individually, for tortious interference with inheritance
and tortious interference with contract. On June 23, 2016, Rhonda filed suit
against Gerald, individually and in his role as Executor of the Rebecca’s Estate,
and against Bradley and Timothy. Sons all filed answers to the complaints. On
November 7, 2016, Gerald requested the two cases be consolidated, and the
trial court granted Gerald’s motion. On February 24, 2017, Cheryl and Carla
filed a motion for leave to amend wherein they included the allegations made
by Rhonda and included the other two brothers (collectively, “Tort Claims”).
Sons all filed amended answers.
[7] Through a series of recusals and requests for change of venue, Special Judge
Joseph L. Claypool became the sitting judge in both the Estate and the Tort
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Claims. On August 28, 2017, the trial court held a hearing “on all outstanding
motions [in the consolidated cases.]” 2 (Appealed Order at 4.) The trial court
entered findings of fact and conclusions of law. Therein, it denied Gerald’s
motion to reconsider its approval of Cheryl and Carla’s amended complaint;
dismissed Gerald, in his capacity as Executor, as a defendant in the Tort
Claims; and denied Gerald’s motions to dismiss the consolidated Tort Claims.
[8] The trial court supported its denial of Gerald’s motion for dismissal of the Tort
Claims by concluding that, although there was an open Estate in probate court,
Daughters’ allegations did not sound exclusively in probate. Additionally, the
trial court concluded the probate court’s permission for Cheryl to “file suit”
permitted Cheryl to file a complaint outside the Estate. (Appellant’s App. Vol.
II at 86.) Conspicuously, the trial court noted “[l]imitations provided by the
Probate Code have been addressed recently which call into question the efficacy
of the protection provided by said limitations regarding fraud on the part of
those owing a fiduciary duty [to] the aggrieved party.” 3 (Appealed Order at 6.)
2
Daughters suggest this hearing was “on all outstanding motions from the now-consolidated trial court
actions and the probate case.” (Br. of Appellees at 7.) As support for that assertion, they cite the copy of the
appealed order in the Appendix. However, the appealed order designates the Estate with the appellation
“ES-36,” (Appellant’s App. Vol. II at 12, ¶ 4), and the consolidated Tort Claims as “Cns-CT-161,” (id. at 13,
¶ 24), and indicates: “The Court held a hearing and heard arguement [sic] on all outstanding motions of Cns
CT-161 on August 28, 2017[.]” (Id. at 13, ¶ 28.) Thus, Daughters’ assertion that the August 28, 2017,
hearing was to consider motions brought in the Estate is not supported by the record.
3
The trial court cites Gittings v. Deal, 84 N.E.3d 749 (Ind. Ct. App. 2017), trans. granted. Because transfer was
granted, that Court of Appeals opinion was vacated. See Ind. Appellate Rule 58(A). It also cites Matter of
Guardianship of Hurst v. Hurst, 84 N.E.3d 1222 (Ind. Ct. App. 2017), opinion vacated on reh’g, 93 N.E.3d 790
(Ind. Ct. App. 2018, withdrawn from bound volume (Feb. 2, 2018). Therefore, neither opinion is now pertinent
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Discussion and Decision
[9] Gerald argues the trial court erred when it denied his motion to dismiss
pursuant to Indiana Trial Rule 12(B)(6) because Daughters failed to state a
claim that can be addressed in the trial court. A motion to dismiss for failure to
state a claim tests the legal sufficiency of the claim, not the facts supporting it.
Babes Showclub, Jaba, Inc. v. Lair, 918 N.E.2d 308, 310 (Ind. 2009). Review of a
grant or denial of a motion based on Ind. Trial Rule 12(B)(6) is therefore de
novo. Id. When reviewing a motion to dismiss, we view the pleadings in the
light most favorable to the nonmoving party, with every reasonable inference
construed in the nonmovant’s favor. Id. We may affirm the judgment of the
trial court on any legal theory supported by the evidence of record. Meyer v.
Meyer, 756 N.E.2d 1049, 1051 n.4 (Ind. Ct. App. 2001).
[10] Gerald asserts Daughters’ claims are either against the Estate or on behalf of the
Estate; therefore, he argues, Daughters’ claims must be brought in the Estate in
probate court and not as separate Tort Claims in trial court. Daughters argue
they are suing Sons and not the Estate; therefore, their claims sound in tort and
are not required to be brought within the Estate.
[11] In Minton v. Sackett, 671 N.E.2d 160 (Ind. Ct. App. 1996), Dorothea Sackett and
her husband Henry had executed a joint and mutual will. Id. at 161. This
nor precedential. However, it seems the trial court was influenced by these opinions in some fashion that
called into doubt whether the probate court time limits accounted for instances of possible fraud.
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mutual will split the estate evenly between their two children, James and
Susanne. Id. Henry died, and Dorothea subsequently executed three other
wills that left the bulk of the estate to James alone. Id. The last will, dated
August 8, 1992, was executed two days after Dorothea granted James durable
power of attorney and irrevocable power of appointment. Id.
[12] Dorothea died on March 2, 1994, and her last will was offered for probate. Id.
On April 13, 1994, in the probate court, Susanne filed a claim alleging breach of
contract and a complaint to resist probate, alleging Dorothea was of unsound
mind, amongst other things. Id. Later in April, still in the probate court,
Susanne filed a complaint against James “alleging that certain transfers of
property by Dorothea constituted a breach of the contracts to devise contained
in the joint and mutual wills of Dorothea and Henry.” Id.
[13] On December 29, 1994, Susanne filed a tort complaint alleging James had
interfered with her expectancy of inheritance “through the use of fraud (both
constructive and actual), duress, undue influence, and conversion and that
James was unjustly enriched by his actions.” Id. James moved, pursuant to
Indiana Trial Rule 12(B)(6), to dismiss Susanne’s tort claim, arguing the court
could not grant Susanne’s requested relief because Indiana did not recognize
the tort of intentional interference with inheritance. Id. The trial court, treating
the motion as one for summary judgment, entered summary judgment for
James. Id.
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[14] As a matter of first impression, our court looked for guidance from other
jurisdictions and the Restatement (Second) of Torts § 774B (1979). Id. at 162.
Our court noted other jurisdictions that had adopted this tort achieved balance
by prohibiting the tort if remedy is available via a will contest. Id. Our court
decided the best course of action was to balance the “competing goals of
providing a remedy to injured parties and honoring the strictures of our probate
court, which provides that a will contest is the exclusive means of challenging
the validity of a will.” Id. Applying that rationale to Susanne’s claim, our court
held that although the tort was available in Indiana, Susanne’s will contest
provided an adequate remedy, and we therefore affirmed the trial court’s grant
of summary judgment. Id. at 163.
[15] Here, Daughters noted, at the hearing in August, that because of the nine-
month time limitation for bringing a claim under the probate code, see Ind.
Code § 29-1-14-1(d) (“[a]ll claims barrable under subsection (a) shall be barred if
not filed within nine (9) months after the death of the decedent”), they did not
have a remedy in the Estate. Unlike Susanne Minton, who had an active will
contest claim in probate court, Daughters’ objections were noted and served to
object to the accounting but did not preserve their claims as to the assets
transferred from Rebecca to Sons prior to Rebecca’s death. Additionally,
Daughters do not argue they are contesting the will—merely Sons’
appropriation of property Daughters had expected to be included in the assets
of the Estate. As Daughters are not contesting the will, but rather Sons’
interference with inheritance, Daughters’ claims are barred within the Estate
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because they were not filed within nine months of the death of Rebecca.
Therefore, Daughters do not have a remedy in the Estate. This is just the type
of situation wherein Indiana has recognized the claim of tortious interference
with inheritance ought to exist. See Minton, 671 N.E.2d at 162.
[16] As to the claim of interference with contract, Gerald relies on Markey v. Estate of
Markey, 38 N.E.3d 1003 (Ind. 2015), and argues Daughters must prove breach
of contract. Gerald notes that such a breach would have had to have been
made by Rebecca; therefore, Gerald argues, this claim, too, had to be brought
within the Estate. Daughters argue Markey is inapposite because they are not
claiming breach of contract; rather, Daughters have filed a tort of interference
with contract. 4
[17] In Markey, David Markey brought a claim of breach of contract against the
estate of his step-mother Frances when he discovered Frances had changed her
will to disinherit him. Frances and David’s father had executed mutual wills
agreeing to not alter their wills for any reason. Id. at 1005. The recipients of
equal amounts of the assets were to be David and Frances’ granddaughter,
Gillian. Id. However, after David’s father died, David and Frances grew apart,
and Frances changed the terms of her will. Id. Because of the distance between
4
The elements of tortious interference with a contract are: “existence of a valid and enforceable contract,
defendant’s knowledge of that contract, defendant’s intentional inducement to breach that contract, the
absence of justification, and damages resulting from the breach.” Nat’l City Bank, Indiana v. Shortridge, 689
N.E.2d 1248, 1252 (Ind. 1997), supplemented sub nom. Nat’l City Bank, Ind. v. Shortridge, 691 N.E.2d 1210 (Ind.
1998).
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David and Frances’ family, David was not notified of Frances’ death in person.
Id. Frances’ family merely published the notice in the paper. Id. As David was
unaware of Frances’ death, he did not make a claim against the estate within
three months. Id.
[18] When he discovered Frances had died and had changed her will, David filed a
claim of breach of contract within the estate. Id. at 1006. His claim was
brought within nine months of Frances’ death. Id. David argued his claim was
as an “ascertainable creditor of the estate entitled to actual notice” but as notice
was not provided, he was entitled to have nine months to make his claim. Id.
The trial court found David’s claim was not one recognized by the Probate
Code; therefore, as a “non-claim” must be brought within three months of
death, David has missed the time limit. Id. The Indiana Court of Appeals
agreed. Id.
[19] On transfer, our Indiana Supreme Court disagreed. The Court noted for David
“to be eligible for filing up until the nine-month bar, [David] must (1) have a
‘claim’ and (2) be a reasonably ascertainable creditor.” Id. at 1008. The Court
held the Probate Code defined a claim to include liabilities arising in contract
and tort; therefore, David had a claim for purposes of the Probate Code because
he was claiming a breach of contract. Id. However, the Court held the probate
court had not heard sufficient evidence to determine whether David was a
reasonably ascertainable creditor and remanded to the court to conduct a
hearing “to determine whether David’s claim in probate should proceed as
timely filed.” Id. at 1009.
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[20] Tort claim statutes of limitation have been extended in situations wherein no
reasonable person could have known a claim could or should be made. See, e.g.,
Umolu v. Rosolik, 666 N.E.2d 450, 454 (Ind. Ct. App. 1996) (doctrine of
fraudulent concealment tolls the statute of limitations), reh’g denied. However,
“one of the basic tenets of public policy governing our Probate Code is the
uniform and expeditious distribution of property of a decedent.” Kuzma v.
Peoples Tr. & Sav. Bank, Boonville, 132 Ind. App. 176, 183, 176 N.E.2d 134, 138
(1961), reh’g denied. Because of this basic tenet, claims against the decedent or
the estate must be brought within the probate administration in order to ensure
efficient distribution. Inlow v. Henderson, Daily, Withrow & DeVoe, 787 N.E.2d
385, 395 (Ind. Ct. App. 2003), reh’g denied, trans. denied. Those claims are
further controlled by the probate code time limits wherein all claims must be
brought to the notice of the personal representative in a timely manner so
distribution may occur. See Ind. Code § 29-1-14-1 (claims against an estate
must be brought within certain time limits or “shall be forever barred”).
[21] Unlike Markey or Minton, Rebecca did not change her will and disinherit
Daughters. In Markey and Minton, as soon as the will was submitted for
probate, the expectant heirs could discern the contract, in the form of a will,
had been changed and were on notice to object. Here, Daughters knew
Rebecca died, they knew the mutual wills had been executed, and they knew
that will was the will submitted for probate. The fact the assets were no longer
in Rebecca’s Estate to be distributed as the will specified was not apparent until
the accounting was filed, which occurred after the probate time limits had
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lapsed. With the probate code public policy concerns in mind, it is
unreasonable to extend the probate court time limits; rather, as both claims are
viable Indiana torts, it is reasonable to permit Daughters’ Tort Claims to
proceed in the trial court.
Conclusion
[22] As it pertains to inheritance, we have acknowledged that Indiana recognizes a
party may make a separate tort claim, provided they cannot acquire adequate
relief in the probate court. Minton, 671 N.E.2d at 162. Here, we have just that
situation—Daughters cannot obtain adequate relief within the Estate because
they were unaware of the loss of assets until after the probate code time limits
had lapsed. It is against public policy to extend the probate court time limits.
Therefore, Daughters have rightfully filed their claims as a separate tort action
and the trial court did not err when it denied Gerald’s motion to dismiss
Daughters’ Tort Claims. 5 Accordingly, we affirm.
[23] Affirmed.
5
Gerald also argues the Tort Claims should be dismissed for improper venue pursuant to Trial Rule 12(B)(3).
However, the reasoning underlying this argument is duplicative of Gerald’s argument under Trial Rule
12(B)(6), and it fails for the same reasons.
Additionally, Gerald argues permitting Daughters to file this claim in trial court is a misinterpretation of the
probate court’s order to “file suit in said estate[.]” (Appellant’s App. Vol. II at 86.) “When construing the
language of a judgment the Court will attempt to read the provisions of the judgment so as to render all of
them effective and not mere su[r]plusage.” Flynn v. Barker, 450 N.E.2d 1008, 1009 (Ind. Ct. App. 1983), cert.
denied 469 U.S. 934 (1984). As Daughters do not have a viable claim in the Estate, the probate court’s order
must be interpreted to mean Cheryl was allowed to file a separate cause of action by the specified date.
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Riley, J., and Mathias, J., concur.
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