Nancy Richardson v. Susan Thieme ( 2017 )

FILED
Apr 28 2017, 10:37 am
CLERK
Indiana Supreme Court
Court of Appeals
and Tax Court
ATTORNEY FOR APPELLANT ATTORNEY FOR APPELLEE
Joseph R. McKinney Robert G. Forbes
Muncie, Indiana Forcum & Forbes, LLP
Hartford City, Indiana
IN THE
COURT OF APPEALS OF INDIANA
Nancy Richardson, April 28, 2017
Appellant, Court of Appeals Case No.
05A02-1608-EU-1749
v. Appeal from the Blackford Circuit
Court
Susan Thieme, The Honorable Jeffrey Eggers,
Appellee. Special Judge
Trial Court Cause No.
05C01-1407-EU-27
Barnes, Judge.
Case Summary
[1] Nancy Richardson appeals the trial court’s order rejecting her objections to the
closing of the Unsupervised Estate of Clayton Ford by the Estate’s personal
representative, Susan Thieme. We affirm.
Court of Appeals of Indiana | Opinion 05A02-1608-EU-1749| April 28, 2017 Page 1 of 15
Issues
The issues before us are:
I. whether the trial court applied an incorrect standard of
proof in accepting Thieme’s closing of the Estate and final
accounting;
II. whether the trial court correctly found no improprieties in
the manner in which the Estate’s personal property was
distributed; and
III. whether Thieme breached her fiduciary duty to the Estate.
Facts
[2] Ford died on June 30, 2014. Ford’s will directed that his estate be administered
without supervision, by either his wife or by Thieme, one of his daughters. It
further stated:
Either of said representatives shall act without bond and without
the intervention of any court to the extent that such bond and
court intervention of any process may be waived by me under the
laws of the State of lndiana. Each shall have full power to sell,
convey, and encumber, without notice or confirmation, any
assets of my estate, real, personal or mixed, at such prices and
terms as to either may seem just.
Appellee’s App. Vol. II p. 7. Because Ford’s wife pre-deceased him, Thieme
was appointed personal representative. On November 7, 2014, Richardson,
another of Ford’s daughters, filed a petition for supervised administration of the
Estate. The petition claimed Thieme failed to respond to Richardson’s request
Court of Appeals of Indiana | Opinion 05A02-1608-EU-1749| April 28, 2017 Page 2 of 15
for an inventory of Estate assets and had sold or otherwise disposed of assets
without any accounting. Thieme objected to Richardson’s request; the trial
court allowed continued unsupervised administration of the Estate unless any
party requested a hearing on the matter, and Richardson never did so.
[3] On November 23, 2015, Thieme filed her closing statement and final
accounting for the Estate. The accounting stated there were a total of
$94,663.31 in Estate assets, leaving $89,973.31 in distributable assets after
deducting $2,000.00 in fees for Thieme and $2,690.00 in attorney fees. Each of
Ford’s five children received one-sixth of that amount, or $14,995.55, in cash
and property-in-kind, with the remaining one-sixth divided between his three
grandchildren.
[4] On February 19, 2016, Richardson filed an objection to Thieme’s closing
statement and final accounting. The objection listed several instances of alleged
improprieties regarding deposits to and withdrawals from the Estate bank
account opened after Ford’s death, which Richardson claimed were
unsupported by adequate documentation. The objection also claimed that it
was improper to pay Thieme $2,000 in fees based on her blanket statement that
she had worked over 160 hours on Estate matters. The objection also alleged:
It is extremely difficult to determine and reconcile the receipts
and disbursements without a written Estate Account setting forth
simple schedules of Receipts (inventoried assets and net value of
property, receipts from sale of property, receipts from property
not appraised, cancelled checks deposits to the Estate, etc. and a
“Total” column regarding receipts). Similarly, there is no
schedule of Disbursements. The PR did not provide the “totals”
Court of Appeals of Indiana | Opinion 05A02-1608-EU-1749| April 28, 2017 Page 3 of 15
for either the Receipts or Disbursements. Totals for Receipts and
Disbursements and Assets on hand (if any) must be the same but
this cannot be determined without a proper accounting and
closing statement. The problem is that (assuming all of the
unidentified amounts on the deposit slips are for the sale of
items) the total adds up to far less (over $2500) than the “cash”
that was deposited to the Estate account. Further, there were 92
items that were not appraised by Ellenberger that are
unaccounted for in the final accounting statement. Were those
items sold for cash and the money (how much?) received and
deposited? If not sold, what happened to the items? Were they
distributed to the heirs? The insufficiency of the closing
statement and lack of supporting documentation raises these
questions and falls short of a full and understandable closing
statement.
Appellant’s App. Vol. II pp. 11-12.
[5] The trial court held a hearing on Richardson’s objections on May 20, 2016.
Richardson testified that she had difficulty communicating with Thieme
regarding Estate matters throughout its administration and received “push
back” when she attempted to get information. Tr. p. 8. Richardson also stated
that other family members frequently met and distributed items of Ford’s
personal property between themselves for months before she had an
opportunity to review and request items and that Thieme allowed the heirs to
charge items against the Estate rather than paying for them. During
Richardson’s testimony there was discussion of an appraisal of personal
property that amounted to approximately $5,200.00, but which allegedly failed
to include about ninety items. Richardson also claimed that this amount was
Court of Appeals of Indiana | Opinion 05A02-1608-EU-1749| April 28, 2017 Page 4 of 15
not reflected in the final accounting or deposited into the Estate’s account. This
appraisal list was not introduced into evidence nor is it in the record before us.
[6] During her testimony, Thieme gave explanations for each of the Estate bank
account withdrawals or deposits that Richardson had challenged in her written
list of objections. Regarding the personal property, Thieme stated that it was
difficult to distribute the personal property amongst the multiple heirs and their
families but that she believed she had done so to the best of her ability. As for
the appraisal list, Thieme testified generally that some of the items were paid for
and some were charged to the Estate. She also testified that she deposited
“pretty close” to $5,200.00 into the Estate account with respect to these items,
although counsel for Richardson asserted that the deposits in that regard were
approximately $2,000.00 short. Id. at 43.
[7] On July 8, 2016, the trial court rejected all of Richardson’s objections to the
closing of the Estate. It entered the following sua sponte findings with its order:
1. The initial inventory listed assets of $123,129.00.
2. The initial inventory was high as the real estate, appraised
at $78,500.00, only netted at sale $65,732;00, a difference of
negative $12,768.00.
3. In addition, the personal property appraisal was high as
the personal property did not net $5,852.00.
4. Expenses incurred by the estate for administration of the
estate, maintaining utilities, taxes, insurance, repairs to the
home, court costs, publication fees, attorney fees and the
Court of Appeals of Indiana | Opinion 05A02-1608-EU-1749| April 28, 2017 Page 5 of 15
personal representative fees total approximately $15,141.00
which the Court determines is a reasonable number.
5. The objections listed on the February 19, 2016, pleading
were reasonably overcome by the evidence presented at the
hearing on May 20, 2016.
6. Even assuming the personal property as listed in the initial
inventory was worth $5,852.00, the distribution, at best, would
have been as follows:
A. Initial inventory ($123,129.00)
B. Reduction for net real estate ($12,768.00)
C. Cost, fees, etcetera ($15,141.00)
D. Net estate for distribution $95,220.00
E. Net estate divided 6 shares for heirs $15,870.00
7. The $875.00 difference between what was received by the
heirs 1/6th share is insignificant given the personal property
value question and what was actually received by each heir.
Appellant’s App. Vol. II pp. 25-26.1 The trial court thus ordered the Estate
closed. Richardson now appeals.
1
The initial inventory and property appraisals the trial court referred to are not in the record before us.
Neither party asserts that our viewing of those documents is necessary to resolve this appeal. Also, we note
Court of Appeals of Indiana | Opinion 05A02-1608-EU-1749| April 28, 2017 Page 6 of 15
Analysis
[8] The trial court here entered some limited findings without either party having
requested them under Indiana Trial Rule 52(A). “In such a case, the specific
findings control only with respect to issues they cover, and a general judgment
standard applies to issues outside the findings.” Montgomery v. Montgomery, 59
N.E.3d 343, 349 (Ind. Ct. App. 2016), trans. denied. We will set aside the trial
court’s findings or judgment only if they are clearly erroneous. Id. “A finding
is clearly erroneous only if there are no facts or inferences drawn therefrom to
support it.” Id. Additionally, “[w]e may affirm a general judgment with sua
sponte findings upon any legal theory supported by the evidence introduced at
trial.” Stone v. Stone, 991 N.E.2d 992, 998 (Ind. Ct. App. 2013). Sua sponte
findings control as to the issues upon which the court has found, but they do
not otherwise affect our general judgment standard of review, “and we may
look both to other findings and beyond the findings to the evidence of record to
determine if the result is against the facts and circumstances before the court.”
Id.
I. Burden of Proof/Accounting
[9] The first claim Richardson makes is that the trial court applied an incorrect
burden of proof in deciding whether to reject her objections to the Estate
closing. She notes that it has been held, at least within the context of supervised
the discrepancy between the trial testimony that the personal property originally appraised for $5,200.00 and
the trial court’s finding that it appraised for $5,852.00, but we are not able to resolve that discrepancy.
Court of Appeals of Indiana | Opinion 05A02-1608-EU-1749| April 28, 2017 Page 7 of 15
estates, that a personal representative faced with objections to a final estate
accounting and closing bears the burden of establishing the correctness of the
accounting. Matter of Estate of Saylors, 671 N.E.2d 905, 907 (Ind. Ct. App.
1996). She contends that the trial court’s statement in its findings that Thieme
had “reasonably overcome” Richardon’s objections was inconsistent with this
burden of proof.
[10] We disagree. Even if we were to assume that the same standard of proof
applies to objections to the closing of an unsupervised estate as a supervised
one, the trial court’s statement is not inconsistent with that standard. It clearly
indicates the trial court placed the burden of proof upon Thieme to rebut
Richardson’s objections to the closing of the Estate and found that Thieme had
met that burden.
[11] Richardson also suggests that the Estate should not have been closed because
Thieme failed to adequately keep records and receipts related to disposition of
Estate assets. She asserts, “When filing the accounting, the personal
representative must also ‘file receipts for disbursements of assets made during
the period covered by the account.’” Appellant’s Br. p. 6. For this proposition,
Richardson cites Saylors. However, the quoted language actually comes from
Indiana Code Section 29-1-16-4, which states:
Accounts rendered to the court by a personal representative shall
be for a period distinctly stated and shall consist of three (3)
schedules, of which the first shall show the amount of the
property chargeable to the personal representative; the second
shall show payments, charges, losses and distributions; the third
Court of Appeals of Indiana | Opinion 05A02-1608-EU-1749| April 28, 2017 Page 8 of 15
shall show the property on hand constituting the balance of such
account, if any. When an account is filed, the personal
representative shall also file receipts for disbursements of assets
made during the period covered by the account. Whenever the
personal representative is unable to file receipts for any
disbursements, the court may permit him to substantiate them by
other proof. The court may provide for an inspection of the
balance of assets on hand. The court may, upon its own motion,
or upon petition, provide that verification of accounts or credits
thereon may be made by the unqualified certificate of a certified
public accountant in lieu of receipts or other proof.
Richardson also contends that the final accounting Thieme prepared did not
comply with the three-schedule format required by the statute. Thieme argues
that this and other statutory provisions governing final estate accountings found
in Indiana Code Chapter 29-1-16 do not apply to unsupervised estates. We
agree.
[12] Indiana Code Section 29-1-7.5-4(a) provides that a personal representative may
close an unsupervised estate by filing a verified statement with the court
relaying that the personal representative has done the following:
(1) Published notice to creditors as provided in IC 29-1-7-7(b),
and that the first publication occurred more than three (3)
months prior to the date of the statement.
(2) Provided notice to creditors as required under IC 29-1-7-7(c)
and IC 29-1-7-7(d).
(3) Fully administered the estate of the decedent by making
payment, settlement, or other disposition of all claims which
were presented, expenses of administration and estate,
Court of Appeals of Indiana | Opinion 05A02-1608-EU-1749| April 28, 2017 Page 9 of 15
inheritance, and other death taxes, except as specified in the
statement. If any claims remain undischarged, the statement
shall:
(A) state whether the personal representative has
distributed the estate, subject to possible liability, with the
agreement of the distributees; or
(B) detail other arrangements which have been made to
accommodate outstanding liabilities.
(4) Executed and recorded a personal representative’s deed for
any real estate owned by the decedent.
(5) Distributed all the assets of the estate to the persons entitled to
receive the assets.
(6) Sent a copy of the statement to all distributees of the estate
and to all creditors or other claimants of whom the personal
representative has actual knowledge whose claims are neither
paid nor barred and has furnished a full account in writing of the
personal representative’s administration to the distributees whose
interests are affected.
(7) Provided the court with the names and addresses of all
distributees, creditors, and claimants to whom the personal
representative has sent a copy of the statement under subdivision
(6).
[13] Absent from this detailed list is any requirement that the personal representative
for an unsupervised estate file a final accounting with the trial court or that it be
in any particular format, whereas such an accounting is expressly required in
Court of Appeals of Indiana | Opinion 05A02-1608-EU-1749| April 28, 2017 Page 10 of 15
supervised estates by Indiana Code Section 29-1-16-3. It also appears to be the
general understanding of probate practitioners that no such accounting is
required for unsupervised estates unless local rules require them. See 25 IND.
PRACTICE, ANDERSON’S PROBATE FORMS § 4:12 (2016-17 ed.) (“Since the
accounting does not have to be filed with the court, you can establish whatever
format for the estate accounting that you prefer.”). The express provisions
governing unsupervised estates are found in Indiana Code Chapter 29-1-7.5.
There are many other statutes in other chapters of the Indiana Probate Code
governing estate administration, but there is no explicit statutory language as to
whether these other statutes also govern unsupervised estates. When
interpreting statutes, we must bear in mind how multiple statutory provisions
interact, and consider the act as a whole and its general purpose. Murray v.
Conseco, Inc., 795 N.E.2d 454, 460 (Ind. 2003).
[14] We conclude that, to the extent a statute governing unsupervised estates
conflicts with another statute in the Probate Code, the other statute does not
apply to unsupervised estate administration. Here, the detailed statutes
governing final estate accountings are inconsistent with the express, limited
requirements for closing an unsupervised estate. As such, Thieme had no
obligation to file a formal three-schedule accounting with the trial court, and
neither did the statutory requirement of keeping detailed receipts apply here.
Indeed, requiring such detailed accountings and filing of receipts would seem to
contravene the notion and purpose of having an unsupervised estate. It likewise
would contravene the clearly-stated intent of Ford in his will that the personal
Court of Appeals of Indiana | Opinion 05A02-1608-EU-1749| April 28, 2017 Page 11 of 15
representative of his Estate should have broad, unsupervised discretion to
dispose of Estate assets as she saw fit.
[15] Richardson did take steps to convert administration of the Estate into a
supervised one, as was her right under Indiana Code Section 29-1-7.5-2(d), in
which case Thieme would have been required to keep more detailed records
regarding the Estate administration and to file a detailed final accounting.
However, the trial court was not required to grant Richardson’s request; the
statute provides that a trial court “may” grant such a request “if the court finds
that such a revocation is in the best interests of the estate, creditors, taxing
authorities, heirs, legatees, or devisees.” The trial court did leave open the
possibility that Richardson could request a hearing to further argue for
revocation of unsupervised administration, but she did not pursue that
possibility and the Estate remained unsupervised, to her peril. See In re Estate of
McNabb, 744 N.E.2d 569, 573 (Ind. Ct. App. 2001). In effect, Richardson
through her objections to the Estate closing wished to retroactively impose
supervised estate requirements upon Thieme. We believe it is neither
appropriate nor advisable to do so. The trial court did not err in not requiring
more detailed filings or documentation from Thieme regarding the
administration of the Estate.
II. Personal Property Distribution
[16] Next, Richardson contends the trial court erred in finding no improprieties with
respect to Thieme’s distribution of Ford’s personal property. She takes
particular issue with the trial court’s finding that, even if the personal property
Court of Appeals of Indiana | Opinion 05A02-1608-EU-1749| April 28, 2017 Page 12 of 15
had fetched the amount it was originally appraised at, “[t]he $875.00 difference
between what was received by the heirs 1/6th share is insignificant given the
personal property value question and what was actually received by each heir.”
Appellant’s App. p. 26. Thieme asserts Richardson has waived consideration of
this issue by failing to cite any authority in support of it. See Kentucky Nat’l Ins.
Co. v. Empire Fire & Marine Ins. Co., 919 N.E.2d 565, 586 (Ind. Ct. App. 2010);
Ind. Appellate Rule 46(A)(8)(a).
[17] Waiver notwithstanding, we see no reversible error on this point. Standing
alone, the trial court’s statement that a difference of $875.00 per heir is an
“insignificant” amount might be incorrect; it is not a de minimis amount of
money to most individuals. However, in the context of the trial court’s other
findings and the record as a whole, this statement is not troublesome. First, we
note that property appraisals are not a perfect science; they are only an estimate
of value, not a perfect guarantee of an item’s worth, and values can fluctuate
over time. See Wagler v. W. Boggs Sewer Dist., Inc., 898 N.E.2d 815, 820 (Ind.
2008). That the personal property ultimately was disposed for less than it was
initially appraised for is not by itself an indication that Thieme acted improperly
in any way. Also, when Thieme was questioned on this topic at the hearing,
counsel for Richardson suggested that approximately $2,000.00 less than the
personal property’s appraised value had been deposited into the Estate account
for sales of that property. Thus, the only possible “gap” regarding the personal
property is $2,000.00, not $5,200.00 to $5,852.00. Richardson also claims that
eighty to ninety items of personal property were never appraised; however, she
Court of Appeals of Indiana | Opinion 05A02-1608-EU-1749| April 28, 2017 Page 13 of 15
failed to indicate whether these items were relatively worthless trinkets or items
that could be more valuable, nor did she herself place an estimate on these
items’ total value. Finally, once again Richardson’s main complaint seems to
be that Thieme did not adequately keep records of how each and every one of
Ford’s items of personal property were disposed. Given the relative informality
of an unsupervised estate administration, we cannot say that a slight
discrepancy between an initial appraisal of an estate’s personal property and the
records of what those items ultimately sold for is sufficient reason to prevent the
closing of such an estate.
III. Breach of Fiduciary Duty
[18] Richardon’s last argument is that Thieme breached her fiduciary duty to the
Estate by taking items of Ford’s personal property into her possession and
keeping them. A personal representative of an estate is equivalent to a trustee
appointed by law for the benefit of and the protection of creditors and
distributees of that estate. In re Bender, 844 N.E.2d 170, 178 (Ind. Ct. App.
2006). Generally, a personal representative is barred from purchasing estate
assets, unless there is a family settlement or agreement approving such
transactions. Id. at 179.
[19] However, Richardson failed to allege improper self-dealing by Thieme in her
written objections to the closing of the Estate, nor was that claim made during
the objections hearing. Indiana Code Section 29-1-1-10, which is a general
provision apparently applicable to both unsupervised and supervised estates,
states that any objections to estate filings or answers thereto “must be filed in
Court of Appeals of Indiana | Opinion 05A02-1608-EU-1749| April 28, 2017 Page 14 of 15
writing as a prerequisite of being heard by the court.” More generally, a party
waives appellate review of an issue or argument unless the issue or argument
was raised before the trial court. Akiwumi v. Akiwumi, 23 N.E.3d 734, 741 (Ind.
Ct. App. 2014). By failing to raise this issue before the trial court, Richardson
did not permit Thieme an opportunity to rebut a claim of improper self-dealing.
Richardson has waived appellate review of this claim.
Conclusion
[20] The trial court did not apply an incorrect standard of proof in considering
Richardson’s objections to Thieme’s closing of the Estate, and Thieme’s final
accounting did not have to comply with the requirements for final accountings
in supervised estates. Richardson also has failed to establish reversible error in
the distribution of the Estate’s personal property, either with respect to the
property’s valuation or Thieme’s alleged self-dealing. We affirm the trial
court’s order closing the Estate.
[21] Affirmed.
Kirsch, J., and Robb, J., concur.
Court of Appeals of Indiana | Opinion 05A02-1608-EU-1749| April 28, 2017 Page 15 of 15