Edward A. Grady v. Michael M. Yoder, Robert E. Kirsch, The Dekko Foundation, Erica Dekko, Tad Dekko, Phil Salsberry, Dean Kruse, The Kruse Foundation, JPMorgan Chase Bank (mem. dec.) ( 2020 )

MEMORANDUM DECISION
Pursuant to Ind. Appellate Rule 65(D),
this Memorandum Decision shall not be FILED
regarded as precedent or cited before any Dec 29 2020, 9:17 am
court except for the purpose of establishing CLERK
the defense of res judicata, collateral Indiana Supreme Court
Court of Appeals
estoppel, or the law of the case. and Tax Court
APPELLANT PRO SE ATTORNEYS FOR APPELLEE
Edward A. Grady, Jr. ROBERT E. KIRSCH
Bunker Hill, Indiana Curtis T. Hill, Jr.
Attorney General of Indiana
Natalie F. Weiss
Deputy Attorney General
Indianapolis, Indiana
ATTORNEY FOR APPELLEES
MICHAEL M. YODER, PROBATE OF
ESTATE FOR EDWARD A. GRADY,
SR., THE DEKKO FOUNDATION,
ERICA DEKKO, TAD DEKKO, AND
PHIL SALSBERY
Michael M. Yoder
Kendallville, Indiana
IN THE
COURT OF APPEALS OF INDIANA
Court of Appeals of Indiana | Memorandum Decision 20A-CT-591 | December 29, 2020 Page 1 of 14
Edward A. Grady, December 29, 2020
Appellant-Petitioner, Court of Appeals Case No.
20A-CT-591
v. Appeal from the Noble Circuit
Court
Michael M. Yoder, Robert E. The Honorable Michael J. Kramer,
Kirsch, The Dekko Foundation, Judge
Erica Dekko, Tad Dekko, Phil Trial Court Cause No.
Salsberry, Dean Kruse, The 57C01-2001-CT-1
Kruse Foundation, JPMorgan
Chase Bank,
Appellees-Respondents,
Robb, Judge.
Case Summary and Issues
[1] Edward Grady filed a pro se complaint against nine defendants alleging they
deprived him of his interests in shares of the Kendallville Bank and Trust and
thereby violated Indiana law as well as two federal statutes. His complaint
against five of the defendants was dismissed for failure to state a claim upon
Court of Appeals of Indiana | Memorandum Decision 20A-CT-591 | December 29, 2020 Page 2 of 14
which relief could be granted.1 Grady appeals, raising two issues for our
review: 1) whether the trial judge who granted the dismissal should have
recused from this case and 2) whether the trial court erred in dismissing his
complaint. Concluding the trial judge was not required to recuse and that
dismissal was proper, we affirm.
Facts and Procedural History
[2] Grady’s appeal raises issues that implicate not only this civil case, but also a
prior criminal case and a post-conviction proceeding. In 2008, Grady was
convicted in Noble Superior Court of four counts of Class A felony child
molesting and two counts of Class C felony child molesting. Judge Robert E.
Kirsch presided over the jury trial and sentenced him to 120 years.
Grady contends that [while he was in prison] the Defendants, by
false representations as to the financial condition of the former
Kendallville Bank and Trust and the interests in the
shares/stocks/interests in his name, induced [him] to sign a
blank “Quit Claim Deed” in 2010. It was not until early or mid
2015 when Grady began to suspect that he had been defrauded.
Grady began to ask questions and do some research on his late
father’s . . . estate and the share holdings he had in the former
Kendallville Bank and Trust (now JP Morgan Chase Bank, N.C.
[sic]). . . . In early 2019, Grady began to put his facts and
complaint together.
1
Separate dismissals were entered for two other defendants and the remaining two defendants have not been
successfully served.
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Brief of Appellant at 7-8 (record citations omitted).2
[3] Alleging “fraud, deception and trickery,” Grady filed a civil complaint on
January 3, 2020 in Noble Circuit Court. Appendix of Appellant at 17. The
Honorable Michael Kramer is the judge of the Noble Circuit Court. Grady’s
complaint named the following defendants as part of this scheme: Judge
Robert E. Kirsch; Michael Yoder, attorney for his father’s estate; the Dekko
Foundation; Erica Dekko, Tad Dekko, and Phil Salsbery, members of the
Dekko Foundation’s board of directors; the Kruse Foundation; Dean Kruse,
president of the Kruse Foundation; and the Kendallville Bank and Trust (now
JPMorgan Chase Bank, N.A.). The complaint alleged the defendants’ actions
deprived him of his interests in shares of the Kendallville Bank and Trust in
2010 and violated Indiana law as well as 42 U.S. Code sections 1983 and 1985.
[4] In the meantime, Grady had filed a petition for post-conviction relief in his
child molesting case in Noble Superior Court in 2017. Judge Kirsch was still
judge of the Noble Superior Court when Grady filed his petition for post-
conviction relief. The post-conviction case was still pending when Grady filed
his civil complaint in Noble Circuit Court. Although Judge Kirsch had
previously denied a Motion for Change of Venue from Judge filed by Grady in
the post-conviction case,3 after the filing of Grady’s civil complaint, Judge
2
Citations to Grady’s Brief of Appellant are based on the .pdf pagination.
3
Grady filed this motion on December 16, 2019, and it was denied the same day. See App. of Appellant at
117, 120 (citation to the Appendix is based on the .pdf pagination). Grady alleges his complaint was
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Kirsch reconsidered his earlier denial and granted the motion for change of
judge on January 6, 2020. Judge Kramer was assigned by the Noble County
Clerk as special judge in the post-conviction case.
[5] On January 27, 2020, JPMorgan Chase Bank, N.A., as the successor to
Kendallville Bank and Trust, filed a notice of removal of the civil case to federal
court. And on February 3, 2020, the United States District Court for the
Northern District of Indiana dismissed the section 1983 and 1985 claims against
all defendants for failure to state a claim upon which relief could be granted.
The court dismissed the federal claims with prejudice and remanded to the trial
court “for further proceedings on the State law claims.” Appellee’s Appendix,
Volume 2 at 4. Back in the Noble Circuit Court, Judge Kirsch filed a motion to
dismiss the remaining claims against him for failure to state a claim upon which
relief could be granted. The same was granted on February 11, 2020.
JPMorgan Chase Bank, N.A. was also granted a dismissal on that date. And
finally, Michael Yoder, the Dekko Foundation, Erica Dekko, Tad Dekko, and
Phil Salsbery (the “Dekko Foundation Defendants”) sought a dismissal alleging
Grady’s claims for fraud were barred by the six-year statute of limitations and
were not pleaded with specificity as required by Trial Rule 9(B) and therefore
failed to state a claim upon which relief could be granted. Their motion was
filed on February 20, 2020, and was granted the next day. Grady filed a Notice
submitted on December 17, 2019, although it was not file-marked until January 3, 2020. Regardless, the
complaint was not filed until after Judge Kirsch had initially ruled on Grady’s request for change of judge in
his post-conviction case.
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of Appeal on March 9, 2020, appealing only the February 21, 2020 dismissal of
the complaint against the Dekko Foundation Defendants. See App. of
Appellant at 84.
Discussion and Decision
I. Recusal
[6] Grady first contends the order of dismissal was improper because Judge Kramer
should have recused himself from presiding over this case. Grady alleges
several reasons for recusal: that Judge Kramer was not duly appointed as a
special judge in this case; that he had a conflict of interest because he was also
presiding over Grady’s post-conviction case; and that Judge Kramer showed
actual bias against him by ruling on the motion to dismiss without allowing
Grady to respond.4
[7] With regard to Grady’s claim that Judge Kramer was not “duly appointed” as a
special judge in this case because Judge Kirsch “personally appointed [him] to
preside over a case in which [Judge] Kirsch was a defendant[,]” Brief of
Appellant at 10, Grady appears to have conflated his civil case with his post-
4
We note that despite the fact Grady does not appeal the dismissal of his complaint as against Judge Kirsch,
see Appellant’s August 21, 2020 Request for the Court [of Appeals] to Take Judicial Notice at 2
(acknowledging that he is “no longer pursuing litigation against Judge Robert Kirsch”), the State entered an
appearance and filed a brief on behalf of Judge Kirsch in this appeal. Although it does not appear the State
needed to file a brief, and we need not address the order of dismissal in Judge Kirsch’s favor which the bulk
of the State’s brief defends, we do appreciate that the State also addressed Grady’s recusal argument, as the
Dekko Foundation Defendants have not done so in their brief.
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conviction case. Although Grady claims that when Judge Kirsch recused
himself from the post-conviction case on January 6, he “also [recused himself]
from Grady’s civil complaint[,]” see id., Grady’s civil case was filed in the Noble
Circuit Court of which Judge Kramer is the regular sitting judge. Judge Kramer
has therefore been the judge presiding over the civil case since the day it was
filed.
[8] Judge Kramer is the special judge of Grady’s post-conviction case, but that
appointment was made by the clerk of the Noble County Courts pursuant to
local rule. Noble County Local Rule 57-TR-79(H)-5 states, “In the event of a
change of judge resulting from . . . the judge disqualifying or recusing under
Trial Rule 79(C), . . . then unless the parties agree to the appointment of a
special judge pursuant to Trial Rule 79(D) the case will be randomly assigned
by the clerk to one of the two other courts in Noble County in which the regular
sitting judge of that court is not otherwise disqualified.” And the Chronological
Case Summary in Grady’s post-conviction case affirms that is the procedure
that was followed here. See Appellee’s App., Vol. 2 at 13 (Chronological Case
Summary entry for post-conviction proceeding stating, “The court reconsiders
its prior denial of Petitioner’s Motion for Change of Judge and now grants
Petitioner’s motion. Pursuant to LR57-TR-79(H)-5 the Honorable Michael J.
Kramer, Judge of the Noble Circuit Court, is assigned by the clerk as special
judge.”) (emphasis added). To the extent Grady argues Judge Kramer should
recuse in the post-conviction case, that issue is not before us in this appeal from the
civil case.
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[9] After Judge Kramer was appointed special judge in Grady’s post-conviction
case, creating what Grady now calls a conflict of interest, Grady did not file a
motion for change of judge or otherwise object to Judge Kramer presiding over
the civil case until this appeal. “Timeliness is important on recusal issues.”
Carr v. State, 799 N.E.2d 1096, 1098 (Ind. Ct. App. 2003) (quotation omitted).
A party may not lie in wait to raise a recusal issue after receiving an adverse
decision. Id. On more than one occasion we have held that a party has waived
any argument regarding a judge’s impartiality by failing to raise the issue in a
timely manner. See, e.g., id. (holding defendant waived issue of whether his
right to a fair trial was violated when trial judge did not recuse himself after
indicating he had previously represented the defendant in an unrelated family
law case when defendant did not object or move for recusal); Booker v. State, 741
N.E.2d 748, 757 (Ind. Ct. App. 2000) (holding defendant waived any issue
concerning trial judge’s decision not to recuse herself because he did not object
when trial judge disclosed her husband represented the victim’s father and uncle
in another matter); Southwood v. Carlson, 704 N.E.2d 163, 167-68 (Ind. Ct. App.
1999) (holding plaintiff waived any objection to trial judge’s alleged
professional relationship with defendant-doctor by not raising it until after entry
of judgment against him). Grady’s argument that Judge Kramer should have
recused in the civil case because he is now also presiding in the post-conviction
case is therefore waived.
[10] Waiver notwithstanding, the law presumes that a judge will be unbiased
regardless of the matter that comes before him. Carr, 799 N.E.2d at 1098. To
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rebut that presumption, the defendant must establish actual bias or prejudice
that places him in jeopardy and makes a fair trial impossible. Massey v. State,
803 N.E.2d 1133, 1139 (Ind. Ct. App. 2004). Grady asserts Judge Kramer
showed actual bias by not ensuring he received file-stamped copies of pleadings
and specifically by ruling on the motion to dismiss without allowing him an
opportunity to respond.5 First, we note that the Chronological Case Summary
shows in every instance that copies of pleadings and rulings were sent to “all
parties.” App. of Appellant at 8-11. Second, we note that the Dekko
Foundation Defendants’ motion to dismiss shows a copy was served on Grady.
Id. at 78, 81. To the extent Grady did not receive his copies, that is likely due to
the vagaries of jail mail, not a coordinated plan to keep court documents from
him. As for Judge Kramer ruling on the motion to dismiss without waiting for
a response, a trial court is not required to hold a hearing or to give a party an
opportunity to respond before it grants a motion to dismiss pursuant to Rule
12(B)(6). Browning v. Walters, 620 N.E.2d 28, 32 (Ind. Ct. App. 1993).
Accordingly, Grady has failed to establish actual bias that would warrant
reversing the dismissal of his complaint.
5
Grady argues the motion to dismiss did not clearly state whether it was filed under Trial Rule 12(B)(6) or
56(C) and argues he was entitled to thirty days to respond to a Trial Rule 56(C) motion. There is no question
that the motion was a Trial Rule 12(B)(6) motion – the motion clearly states as grounds for dismissal that the
complaint fails to state a claim for which relief can be granted and was accompanied by a supporting
memorandum of law but no designated evidence. See App. of Appellant at 77-81. It is true that if matters
outside the record are presented to and considered by the court, a Rule 12(B)(6) motion will be treated as a
motion for summary judgment, see Ind. Trial Rule 12(B), but that did not occur here.
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II. Dismissal
[11] The Dekko Foundation Defendants sought dismissal of Grady’s complaint
claiming it failed to state a claim upon which relief could be granted in that it
was filed outside the statute of limitations and did not plead fraud with
specificity. Grady contends the trial court erred in dismissing his complaint on
either ground.
[12] We apply a de novo standard of review to a trial court’s ruling on a motion to
dismiss for the failure to state a claim pursuant to Indiana Trial Rule 12(B)(6).
Bergal v. Bergal, 153 N.E.3d 243, 251 (Ind. Ct. App. 2020). “A motion to
dismiss under Rule 12(B)(6) tests the legal sufficiency of a complaint: that is,
whether the allegations in the complaint establish any set of circumstances
under which a plaintiff would be entitled to relief.” Trail v. Boys & Girls Clubs of
Northwest Ind., 845 N.E.2d 130, 134 (Ind. 2006).
[13] A court should accept as true the facts alleged in the complaint and should not
only consider the pleadings in the light most favorable to the plaintiff, but also
draw every reasonable inference in favor of the nonmoving party. Lei Shi v.
Cecilia Yi, 921 N.E.2d 31, 37 (Ind. Ct. App. 2010). The court need not accept as
true conclusory, nonfactual assertions or legal conclusions. Richards & O’Neil,
LLP v. Conk, 774 N.E.2d 540, 547 (Ind. Ct. App. 2002).
A. Statute of Limitations
[14] The Dekko Foundation Defendants asserted that Grady’s complaint failed to
state a claim because it was barred by the six-year statute of limitations for
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fraud. When a complaint shows on its face that the statute of limitations has
run, the defendant may file a Trial Rule 12(B)(6) motion. Chenore v. Plantz, 56
N.E.3d 123, 126 (Ind. Ct. App. 2016). Grady concedes fraud has a six-year
statute of limitations, see Ind. Code § 31-11-2-7(4), but argues it should not have
begun to run until he discovered the fraud, which he allegedly did in 2015 at the
earliest.
[15] In assessing the accrual of a cause of action for fraud, the discovery rule is
applicable. Estates of Kalwitz v. Kalwitz, 717 N.E.2d 904, 914 (Ind. Ct. App.
1999). The cause of action accrues and the statute of limitations begins to run
when the plaintiff knew or, in the exercise of ordinary diligence, could have
discovered that an injury had been sustained as a result of the tortious act of
another. Id. When ruling on a motion to dismiss, the court must limit its
review to the face of the pleadings. Schlosser v. Bank of W. Ind., 589 N.E.2d
1176, 1178 (Ind. Ct. App. 1992).
[16] Although Grady avers now that “it was not until mid to late 2015 that he began
to suspect that a fraud had taken place[,]” Br. of Appellant at 17, his complaint
alleges only that he was induced to sign the allegedly fraudulent quitclaim deed
in 2010. See App. of Appellant at 15. Thus, on its face, the complaint does not
allege facts that would toll the statute of limitations from beginning to run in
2010. Grady could have amended his complaint within ten days to plead facts
in avoidance of the statute of limitations. Ind. Trial Rule 12(B); Chenore, 56
N.E.3d at 126. The opportunity to amend is automatic. See Platt v. State, 664
N.E.2d 357, 361 (Ind. Ct. App. 1996), trans. denied, cert. denied, 520 U.S. 1187Court of Appeals of Indiana | Memorandum Decision 20A-CT-591 | December 29, 2020 Page 11 of 14
(1997). Instead, he filed a notice of appeal and pursued this appeal,6 during
which he has for the first time alleged that his complaint was filed within six
years of his discovery of the fraud. But limiting our review to the facts alleged
in Grady’s complaint and accepting them as true, the statute of limitations has
run, and the trial court did not err in dismissing the complaint.
B. Pleading Requirements
[17] Although the complaint was properly dismissed because of the statute of
limitations, we briefly address the other ground on which the Dekko
Foundation Defendants moved for dismissal. Under Indiana Trial Rule 9(B),
“In all averments of fraud or mistake, the circumstances constituting fraud or
mistake shall be specifically averred. Malice, intent, knowledge, and other
conditions of mind may be averred generally.” This means that, generally, “to
allege fraud sufficiently, the pleadings must state the time, the place, the
substance of the false representations, the facts misrepresented, and
identification of what was procured by fraud.” Kapoor v. Dybwad, 49 N.E.3d
108, 120 (Ind. Ct. App. 2015) (quotation omitted), trans. denied. A pleading
6
Although not raised by the parties, we note that Grady indicated in his Notice of Appeal that he was
appealing from a final judgment as defined by Appellate Rule 2(H). However, from the record before us, it
would appear that the case is still active as against the Kruse Foundation and Dean Kruse, as no dispositive
motions have been filed and granted as to those parties. Thus, although the Kendallville Bank and Trust and
Judge Kirsch had been previously dismissed, the order dismissing the Dekko Foundation Defendants did not
dispose of all claims as to all parties, nor does it meet the criteria of subdivisions 2 through 5 of Rule 2(H) for
being considered a final judgment.
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which fails to comply with the specificity requirements of Trial Rule 9(B) does
not state a claim upon which relief can be granted. Id.[18] Grady’s complaint alleges:
[T]he Defendants, by false representations as to the financial
condition of the Kendallville Bank and Trust and the interests in
the shares/stocks/interests in his name, induced [him] to sign a
blank “Quit Claim Deed” to accept zero amount of the stock
instead of the amount he was entitled to[.]
App. of Appellant at 15. He does not, however, state which of the defendants
was alleged to have made fraudulent representations, the method used to make
the representations or the nature of what was represented, or how, even if he
was fraudulently induced to sign a quitclaim deed, that resulted in his loss of
shares. “[A] plaintiff claiming fraud must fill in a fairly specific picture of the
allegations in the complaint because Rule 9(B) requires some means of injecting
precision and some measure of substantiation[.]” State ex rel. Harmeyer v. Kroger
Co., 114 N.E.3d 488, 495 (Ind. Ct. App. 2018) (cleaned up), trans. denied.
Grady’s complaint does not paint a “fairly specific picture” of what occurred
and does not provide defendants with sufficient information to enable them to
prepare a defense to Grady’s claim of fraud. As with the statute of limitations,
Grady would have been permitted to amend his complaint to plead with more
specificity but eschewed that opportunity in favor of an immediate appeal.
Grady’s complaint did not meet the specificity requirement of Trial Rule 9(B)
and the trial court did not err in dismissing the complaint on this basis.
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Conclusion
[19] The trial judge was not required to recuse himself and properly dismissed
Grady’s complaint for failure to state a claim upon which relief could be
granted against the Dekko Foundation Defendants. The judgment of the trial
court is affirmed.
[20] Affirmed.
Crone, J., and Brown, J., concur.
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