In re the Guardianship of K.K.L., C.T.L., Q.C.L., and A.S.L. (minor children), Dorothy Denise Carroll (mem. dec.) ( 2016 )

MEMORANDUM DECISION
FILED
Pursuant to Ind. Appellate Rule 65(D), Apr 26 2016, 9:44 am
this Memorandum Decision shall not be
CLERK
regarded as precedent or cited before any Indiana Supreme Court
Court of Appeals
court except for the purpose of establishing and Tax Court
the defense of res judicata, collateral
estoppel, or the law of the case.
ATTORNEYS FOR APPELLANT
Larry G. Evans
Kevin G. Kerr
Hoeppner Wagner & Evans, LLP
Valparaiso, Indiana
IN THE
COURT OF APPEALS OF INDIANA
In re the Guardianship of April 26, 2016
K.K.L., C.T.L., Q.C.L., and Court of Appeals Case No.
A.S.L. (minor children), 46A04-1507-GU-921
Appeal from the LaPorte Circuit
Court
Dorothy Denise Carroll
The Honorable Thomas J.
Appellant. Alevizos, Judge
Trial Court Cause No.
46C01-1212-GU-77
Mathias, Judge.
[1] Dorothy Denise Carroll (“Carroll”) appeals the order of the LaPorte Circuit
Court removing her as guardian of the estates of K.K.L., C.T.L., Q.C.L., and
A.S.L. (collectively “the Children”) and trustee over the Children’s trusts. On
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appeal, Carroll claims that the evidence does not support the trial court’s
decision to remove her as guardian of the Children’s estates and that the trial
court erred by removing her as trustee without giving her notice or an
opportunity to be heard on this issue.
[2] We reverse.
Facts and Procedural History
[3] This case involves the children of John Larkin (“Larkin”) and Stacey Larkin
(“Stacey”). As we explained in a previous appeal:
On December 11, 2012, police were dispatched to Larkin’s
residence following a report of a shooting. When an officer
arrived, he found Larkin’s wife, [Stacey], deceased in the closet.
An autopsy later determined that she died from two gunshot
wounds.
Larkin v. State, 43 N.E.3d 1281, 1283 (Ind. Ct. App. 2015). Larkin was
subsequently charged with voluntary manslaughter.
[4] Carroll is Larkin’s sister and the Children’s aunt. Carroll is an attorney licensed
to practice law in Illinois. She works for the Chicago Park District and manages
bond expenditures. Shortly after Stacey’s death, Carroll petitioned the trial
court to serve as guardian of the persons and estates of the Children. The trial
court granted this petition and issued an order on April 11, 2013, stating in
relevant part that Carroll “shall serve [as guardian] upon taking an oath and
without posting bond.” Appellant’s App. p. 13. Carroll filed her acceptance and
oath on May 29, 2013, and the trial court subsequently issued letters of
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guardianship the following day. Carroll was also granted legal and physical
custody of the Children.
[5] On August 29, 2014, Carroll petitioned the trial court to establish living trusts
for the benefit of the Children. The trial court granted the petition to establish
the trusts, and Carroll was appointed as trustee. Thus, Carroll was serving as
both guardian of the Children’s persons and estates and as trustee of their
individual trusts. Larkin disclaimed any interest he had in the proceeds of his
late wife’s insurance policy, and the trusts were funded with $253,424.66 each
from the proceeds of the policy.
[6] On May 3, 2013, Carroll, Larkin, Stacey’s parents Scott and Tracy Simon (“the
Simons”), and the Department of Child Services (“DCS”) filed a joint
stipulation regarding the care and custody of the children. The stipulation
provided among other things: (1) that the Children should be reunited with their
father because they “want to be with him and need the support of a parent after
having lost the other parent,” (2) that Larkin should participate in family
therapy with the Children, (3) that the Children should continue with individual
therapy, and (4) that the parties all agreed with the recommendation of the
therapist that Larkin return to his residence with the Children. Appellant’s App.
pp. 19-22.
[7] Stacey’s will designated as alternate personal representative Anne Larkin
Tuomey (“Tuomey”). Tuomey is Larkin’s sister and thus Stacey’s sister-in-law
and lives in Massachusetts. On June 20, 2013, Tuomey appointed Carroll as her
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resident agent, listing the Larkin family home as Carroll’s address. After being
appointed as guardian and trustee in early 2013, Carroll took time off from
work under the federal Family and Medical Leave Act (“FMLA”) and began to
live with the Children at their family home for approximately thirteen weeks.
She then began to see the Children less frequently but still approximately ten
times per month.
[8] On March 18, 2015, Carroll filed a verified petition seeking to obtain the trial
court’s approval to purchase the Children’s family home from Larkin. The
petition alleged that Larkin was having financial difficulties because he was
unable to obtain employment due to a pending charge of voluntary
manslaughter arising from Mother’s death. The petition also alleged that,
because of this charge, the home was on the verge of foreclosure. An appraiser’s
report valued the home at $850,000 for the real property alone. Carroll
negotiated a price of $650,000 to purchase the home and all of its contents,
including furniture. In exchange for permission to continue to live in the home,
Larkin also agreed to pay property taxes, insurance, and utilities totaling over
$1,200 per month. Even though the trust document contained no requirement
that Carroll seek trial court approval of the purchase, she sought such approval
because the transaction involved her brother.
[9] The trial court held a hearing on Carroll’s petition on May 13, 2015. Counsel
for the Simons also appeared at the hearing and stipulated that the Children had
been raised in the home and that it was in the best interests of the Children to
remain in the home. The Simons, however, stated that they had insufficient
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information to determine whether purchasing the home from Larkin was in the
best financial interests of the Children.
[10] Carroll presented the testimony of Toni Henke-Wheeler (“Henke-Wheeler”),
who provided family and individual counseling to the Children. Henke-
Wheeler testified that the Children were dealing with grief stemming from the
death of their mother, their father’s alleged role in the death of their mother,
and the perceived “loss” of their mother during the latter part of her life due to
her substance abuse problems. When Henke-Wheeler referred to the “alleged”
role Larkin played in the death of the Children’s mother, the trial court
interrupted her and stated:
So is the — the involvement isn’t alleged. The nature of the
involvement is what’s at issue. Is that my understanding of the
criminal case? So you don’t need to [use] alleged there.
Tr. pp. 10-11. Henke-Wheeler was then cross-examined by Larkin’s counsel,
who asked the question, “Given the fact that the children now only have one
parent, their father, in your opinion, if he is removed from their presence, what
impact would his absence have on the children?” Tr. p. 14. Before Henke-
Wheeler could respond, the trial court objected sua sponte, stating “It’s
irrelevant. You don’t have to object. It’s irrelevant.” Id.[11] The court then denied the petition from the bench, stating, “The Court denies
the request. There are adequate places you can rent, buy, purchase to stay in
the same neighborhood and in the same schools.” Id. at 16. The trial court
issued an order that same day providing in part:
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1. The Petition alleges that the Larkin family home is in danger
of being “foreclosed upon.” However, Guardian offered no
evidence to substantiate that claim.
2. The only evidence presented was the testimony of Toni
Henke-Wheeler, ACSW/LCSW, the children’s social worker.
Ms. Henke-Wheeler testified that it is in the children’s best
interest to maintain their neighborhood, friends and school.
Upon cross-examination, she reiterated that school was the
principal focus. She also indicated that she had no knowledge as
to the children’s financial interests.
3. Absent from the presentation of evidence was discussion of
the effect that this large expenditure might have regarding funds
needed for the children’s education, therapy, medical or other
future needs.
4. Also absent was a discussion, assuming the house is in danger
of being lost, of how the children could maintain their
neighborhood, friends and school without spending $650,000
($460,000 for the note and $190,000 to father). There was no
evidence of any other housing options being pursued.
5. Even if the Guardians proved the house was in danger of
being lost and the house itself was important to the interest of the
children, there are numerous other ways this could be
accomplished short of having the children’s trust, pay $190,000
to the man allegedly criminally responsible for the death of their
mother. Amongst those, the Guardian could have requested the
expenditure of some funds to help pay the mortgage. Also, the
trust could pay off the note and take a mortgage back. There was
no evidence that any of this was contemplated.
6. The Guardian is the father’s sister. The CASA office indicated
none of this proposal was discussed with the children’s CASA.
7. The Guardian has not proven that it would be in the
children’s best interest to have the trust purchase the family home
for $650,000.
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Appellant’s App. pp. 115-16. Carroll did not appeal this order and did not
purchase the home.
[12] On May 20, 2015, the trial court sua sponte ordered Carroll to appear and show
cause why she should not be removed as guardian of the Children’s estates and
as personal representative of the estate of Stacey Larkin.1 The trial court cited
the following reasons for its order:
1. It appears from the Chronological Case Summary that
[Carroll] has not filed an accounting;
2. [Carroll] caused to be filed a petition to have the wards’
trust purchase her brother, John Larkin’s, house. The
Court finds this as evidence that she was more interested
in her brother’s fiduciary interest than the fiduciary
interests of the wards.
3. More importantly, [Carroll] did not, in her capacity as
personal representative/Guardian, file a lawsuit against
(her brother) John Larkin, who is the individual charged
with the homicide of the wards’ mother (and the Estate’s
decedent). It appears that the statute of limitations has
now passed for her to attempt to bring suit at this time.
Appellant’s App. pp. 117-18.
[13] A hearing was held on the trial court’s show cause order on June 8, 2015. At
the beginning of the hearing, the trial court informed the parties, “I’m more
interested in finding out why it seems that the guardian and the estate seem to
1
As explained below, Carroll was, in fact, not the personal representative of Stacey’s estate.
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be working for John Larkin as opposed to his children who are the estate of
Stacey Larkin, and I want some explanations.” Tr. p. 23.
[14] Carroll testified and explained that, at the outset of the guardianship, she or
Larkin paid for the Children’s expenses. She later hired counsel to work with
Stacey’s insurer to ensure that the Children received the proceeds of Stacey’s
life insurance. Carroll then took these proceeds and placed them in an account
with Chase Bank. She also spoke with a bank employee about investing the
trust funds but backed out when the bank’s fees were higher than what she had
been led to believe. She also thought that it was a poor time to invest and did
not want to “get in at the top of the market.” Tr. p. 39. Carroll testified that she
thought purchasing the home would be a good investment of the trust assets
because “they would be getting a 20 percent -- really a 24 percent return
immediately.” Tr. p. 40. She stated she had sought the court’s approval, and “if
the Court said no, then it’s not a good idea.” Id. at 52.
[15] Carroll’s counsel also explained that she had not yet filed an accounting
because he calculated the start of the guardianship from the date Carroll
received her letters of guardianship, not the date of the trial court’s order
approving the appointment. Accordingly, counsel thought the accounting was
not due until the end of June 2015. When notified of the issue by the trial
court’s show cause order, Carroll’s counsel filed a complete accounting as to
one of the Children and a partial accounting as to the others. Counsel expected
the complete accounting on the remaining children to be completed “very
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shortly.”2 Tr. p. 24. The trial court took the matter under advisement and, on
June 17, 2015, issued an order that stated in relevant part:
The Court, having moved sua sponte, for rule to show cause,
makes the following additional findings:
1. The probate court may remove a guardian who has failed
to perform a duty imposed by law or lawful order of the
court or has other wise proven unsuitable of discharging
her responsibilities. See Carr v. Carr, 685 N.E.2d 92, 97
(Ind. Ct. App. 1997). See also Ind. Code § 29-3-12-4(a);
Ind. Code § 29-1-10-6.
2. Dorothy Denise Carroll, by her own testimony, admits
that no due diligence was made regarding whether the
house was in danger of being foreclosed upon. The only
source of the foreclosure information comes from her
brother, Mr. John Larkin. This fact alone counters
Dorothy Denise Carroll’s assertion that she acted with due
diligence in attempting to have her wards’ estates purchase
the home from John Larkin. To date, the Court has been
presented no other evidence that the mortgage holder was
threatening foreclosure regarding the house. Had Dorothy
Denise Carroll actually attempted to do “due diligence” in
this regard, she would have been in the position to either
ascertain that foreclosure was not impending or if it was,
to discuss alternative solutions with the mortgage lender
and John Larkin.
3. Although Dorothy Denise Carroll indicates that her
experience has allowed her to be a great steward of her
wards’ estate, the evidence is that the estates’ holdings are
all in a rudimentary account at J.P. Morgan Chase earning
less than the rate of inflation (.80%).
2
Accountings as to all the Children were filed on July 1, 2015.
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4. Although Dorothy Denise Carroll is a licensed attorney
(admittedly in Illinois), Dorothy Denise Carroll has
indicated that she was unaware of the deadline for filling
an accounting. However, even though the Courts’ Rule to
Show Cause informed her of her failure to meet the
deadline, to date only a partial accounting has been filed.
5. Dorothy Denise Carroll has been serving as a Resident
Agent for the Estate of Stacey Larkin (the wards’ mother),
thus allowing her sister (a Massachusetts resident) to be
the Personal Representative. However, Dorothy Denise
Carroll admitted under oath that she has not been an
Indiana resident during any times relevant to the matters
at hand. This troubles the Court and further evinces the
Court’s belief that she is no longer a person to be Guardian
of these Estates.
6. The Court, having appointed Jennifer Koethe as guardian
ad litem for the wards, and previously appointed a LaPorte
Court Appointed Special Advocate (CASA) to the wards,
hereby removes Dorothy Denise Carroll as guardian of the
wards’ estate and appoints Harbor Trust as Corporate
Guardian of the wards’ estate without bond as the Court
finds that bond is not necessary.
7. The Court ORDERS the GAL and CASA to submit a
report within thirty (30) days of this Court Order and
recommend whether Dorothy Denise Carroll should
remain Guardian of the Wards’ person.
8. Dorothy Denise Carroll is NOT absolved from providing a
complete accounting record of the wards’ estate to the
court. This accounting shall be submitted to the Court no
later than July 1, 2015.
9. The clerk shall issue to Harbor Trust upon guardian’s
filling [sic] of Oath and Acceptance as stated under Ind.
Code § 29-3-7-3(2)(A) and (B).
IT IS, THEREFORE, ORDERED that these additional findings
of fact be entered, that Dorothy Denise Carroll be removed as
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guardian of the wards’ estate, that Harbor Trust be appointed
Corporate Guardian’s of the wards’ estate and that the GAL and
CASA submit a report regarding whether Dorothy Denise
Carroll should remain guardian of the wards’ person, that
Dorothy Denise Carroll must submit a complete accounting
report to the Court no later than July 1, 2015 and that the clerks
issue a letter to Harbor Trust upon guardian’s filling [sic] of Oath
and Acceptance.
Appellant’s App. pp. 7-8.
[16] On July 21, 2015, the GAL filed a motion to clarify the court’s June 17 order.
Specifically, the GAL sought to clarify whether the trial court had removed
Carroll as trustee in addition to removing her as guardian of the Children’s
estates. The trial court responded on July 24, 2015, entering an order removing
Carroll as trustee of the Children’s trusts.3 Carroll now appeals.
Standard of Review
[17] Carroll first argues that the trial court improperly removed her as guardian of
the Children’s estates. Decisions in guardianship proceedings are within its
discretion of the trial court. Ind. Code § 29-3-2-4(a) (“[A]ll findings, orders, or
other proceedings under this [guardianship] article shall be in the discretion of
the court unless otherwise provided in this article.”); see also In re Guardianship of
M.N.S., 23 N.E.3d 759, 765 (Ind. Ct. App. 2014). Accordingly, we review the
trial court’s order only for an abuse of this discretion. Id. On appeal, we will not
3
On September 8, 2015, the trial court granted Carroll’s motion for a change of judge and recused himself,
and a special judge was appointed on September 25, 2015.
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reweigh the evidence nor will we reassess the credibility of witnesses; instead,
we will consider the evidence most favorable to the judgment with all
reasonable inferences drawn in favor of the judgment. Id. at 766.
[18] Tempering this deferential standard of review is the fact that only Carroll has
filed an appellate brief. When the appellee fails to submit a brief, we will not
undertake the burden of developing an argument on her behalf. Geico Ins. Co. v.
Graham, 14 N.E.3d 854, 857 (Ind. Ct. App. 2014) (citing Trinity Homes, LLC v.
Fang, 848 N.E.2d 1065, 1068 (Ind. 2006)). Instead, we will reverse the trial
court’s judgment if the appellant’s brief presents a case of prima facie error. Id. In
this context, prima facie error is defined as, “at first sight, on first appearance, or
on the face of it.” Id. (quoting Fang, 848 N.E.2d at 1068)). This “prima facie
error rule” protects the court on appeal and takes from us the burden of
controverting arguments advanced for reversal, a duty which remains with the
appellee. Id.
I. Removal of Carroll as Guardian of the Children’s Estates
[19] Carroll claims that the trial court abused its discretion in removing her as
guardian of the Children’s estates. From the language of the order, it is evident
that the trial court based its decision to remove Carroll as guardian on four
grounds: (A) that Carroll had not diligently researched the financial soundness
of purchasing Larkin’s home; (B) that Carroll had invested the Children’s
money in an account that earned little interest; (C) that Carroll had not timely
filed the accountings required by the guardianship statutes; and (D) that Carroll
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was serving as resident agent of the personal estate of Stacey Larkin even
though she was not currently living in Indiana.4
A. Request to Purchase Larkin’s Home
[20] With regard to the first basis for the trial court’s decision, Carroll argues that
she presented evidence that the home was appraised at $850,000 without its
contents and that she had negotiated a price of $650,000 for the house and its
contents, in addition to allowing Larkin to live in the home in exchange for
paying taxes, insurance, and utilities totaling $1,200. Of course, the trial court
did not have to credit the testimony that the house was on the verge of
foreclosure, and the trial court rightly noted that Carroll presented no evidence
that she had offered to simply pay the mortgage payments or the balance of the
note, as opposed to a deal which gave her brother almost $200,000 in profit.
However, all the parties, even Stacey’s parents, agreed that it was in the best
interests of the Children to stay in their family home. Also, the Children’s
therapist thought that the Children should stay in their family home to assist in
the process of dealing with the loss of their mother.
[21] We also note that Carroll did not purchase the home from her brother. All she
did was request the trial court’s approval of the purchase. We agree with Carroll
that simply seeking the trial court’s approval should not be considered as a
4
Carroll is correct to note that the trial court’s inquiry into why she had not considered filing a wrongful
death claim against Larkin on behalf of the Children was misplaced because she was not the personal
representative of the estate of Stacey Larkin. The trial court, however, acknowledged this at the hearing and
did not base its decision to remove Carroll as guardian on this basis.
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reason for removing her as guardian of the Children’s estates. See Fletcher Trust
Co. v. Hines, 211 Ind. 111, 118, 4 N.E.2d 562, 565 (1936) (“Although it is not
necessary to obtain a court order to sell, it is certainly the wise and sound policy
on the part of a guardian to secure such an order not only for the protection of
the ward’s interest, but also for his own.”). Although her proposal might not
have been the most financially prudent way for the Children to remain in the
family home, it was not so unreasonable that simply seeking the trial court’s
approval justifies removing her as guardian.
B. Investment of Children’s Funds
[22] Carroll also takes issue with the trial court’s criticism of her decision to invest
the Children’s funds in a bank account earning only 0.8% interest, which the
trial court believed was less than the rate of inflation. Carroll notes that no
evidence was presented regarding the rate of inflation. Moreover, we may take
judicial notice5 that the rate of inflation for 2015, as calculated by the federal
Bureau of Labor Statistics, was 0.1187%. See http://www.bls.gov/data/
[23] inflation_calculator.htm. Thus, the trial court was factually incorrect in
concluding that the interest rate was less than the rate of inflation and should
not have held the low rate of interest on the accounts against Carroll.
5
See Vore v. Vore, 563 N.E.2d 154, 157 (Ind. Ct. App. 1990), aff’d, 573 N.E.2d 397 (Ind. 1991) (approving trial
court’s taking judicial notice of economic inflation); 31A C.J.S. Evidence § 140 (noting that courts have taken
judicial notice of historical inflation rates).
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C. Guardianship Accounting
[24] The trial court also faulted Carroll for failing to file an accounting for the
guardianships in a timely fashion. On appeal, Carroll argues that she did file the
accountings on time, and even if she did not, she had a good faith basis for
doing so, and no harm resulted. The relevant statute provides that, unless
otherwise provided by the court, a guardian “shall file with the court . . . at least
biennially, not more than thirty (30) days after the anniversary date of the
guardian’s appointment . . . a verified account of the guardian’s
administration.” Ind. Code § 29-3-9-6(a)(1). Thus, Carroll was required to file
an accounting of her guardianship no later than thirty days after the two-year
anniversary of her appointment. The confusion here arises from the calculation
of the anniversary of Carroll’s appointment as guardian.
[25] Carroll notes that the trial court’s guardianship appointment order provided
that Carroll “shall serve upon taking an oath[.]” Appellant’s App. p. 13. This
tracks the statutory requirement letters of appointment of a guardian may be
issued only after the guardian takes an oath. See Ind. Code § 29-3-7-3(a)(1).
Carroll filed her acceptance and oath on May 29, 2013. Thirty days from the
two-year anniversary of this date is June 28, 2015. The trial court issued its
show-cause order on May 20, 2015. Therefore, no accounting was yet due, nor
was the accounting due at the time of the show-cause hearing on June 8, 2015,
yet Carroll had already filed a complete accounting for one of the children and
a partial accounting for the other children as of the hearing date. Accordingly,
the trial court should not have considered that Carroll had not yet filed her
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guardianship accountings as evidence that Carroll had not been diligent in her
role as guardian.
D. Carroll Serving as Resident Agent
[26] The trial court also faulted Carroll for serving as resident agent of the Estate of
Stacey Larkin even though she admitted that she was currently living in
Chicago, Illinois. Pursuant to Indiana Code section 29-1-10-1(d)(2), a
nonresident may serve as a personal representative if the nonresident meets
certain qualifications, including “notice of the appointment of a resident agent
to accept service of process, notices, and other documents.” We are unable to
find a statutory definition of “resident agent” in the probate code, but Carroll
argues on appeal that she could still serve as a resident agent even if her
domicile was not in Indiana.
[27] First, we think that this is only tangentially related to Carroll’s role as guardian.
Moreover, the evidence was uncontroverted that, immediately after Stacey
Larkin’s death, Carroll took time off under the FMLA and did reside with the
Children in Indiana for several weeks. Even after she moved back to Illinois,
Carroll spent approximately ten days per month with the Children in Indiana.
Carroll’s address as resident agent was the Larkin family home. Therefore, she
was still able to accept service of process, notices, and other documents as
required by statute. Although we do not condone Carroll’s acting as a resident
agent while not residing in Indiana, without any evidence of any resulting
harm, we cannot say that this is grounds for removing her as guardian of the
Children’s estates.
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[28] In short, Carroll has established prima facie error in the trial court’s order
removing her as guardian of the Children’s estates.
II. Removal of Carroll as Trustee of the Children’s Trusts
[29] Carroll also claims that the trial court erred when it removed her as trustee of
the Children’s trusts. Carroll notes that the trial court’s show-cause order did
not mention anything about the potential of removing her as trustee, nor did the
trial court’s initial order removing Carroll as guardian mention removing her as
trustee. Instead, on July 21, 2015, the GAL filed a motion seeking to clarify
whether the trial court’s order removed Carroll as trustee in addition to
removing her as guardian of the Children’s estates. The trial court responded on
July 24, 2015, entering an order removing Carroll as trustee of the Children’s
trusts.
[30] We agree that Carroll has established prima facie error in the trial court’s order
removing her as trustee because she had no notice that her status as trustee was
at issue. See State ex rel. Anderson-Madison Cty. Hosp. Dev. Corp. v. Superior Court of
Madison Cty., 245 Ind. 371, 381, 199 N.E.2d 88, 93 (1964) (holding that removal
of trustee was improper where the removal was sua sponte, without specific
charges being filed and notice being given, and without a reasonable
opportunity for the trustee to be heard); In re Kilgore, 120 Ind. 94, 22 N.E. 104,
106 (1889) (holding that trustee had right to due notice and an opportunity to be
heard before being removed as trustee). Without giving Carroll notice and
without holding a hearing on the issue, the trial court could not properly
remove Carroll as trustee.
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Conclusion
[31] Carroll has established prima facie error in the trial court’s order removing her as
guardian of the Children’s estates and the trial court’s order removing her as
trustee of the Children’s trusts.
[32] Reversed.
Kirsch, J., and Brown, J., concur.
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