Guardianship: Ray Lamey M.D. v. Ziemer, Stayman, Weitzel & Shoulders, LLP

FILED
Nov 08 2017, 9:16 am
CLERK
Indiana Supreme Court
Court of Appeals
and Tax Court
ATTORNEYS FOR APPELLANTS ATTORNEYS FOR APPELLEES
Richard A. Smikle Allyson R. Breeden
Jenny R. Buchheit Jean M. Blanton
Andrew J. Miroff Molly E. Briles
Steven R. Latterell Ziemer Stayman Weitzel &
Ice Miller, LLP Shoulders, LLP
Indianapolis, Indiana Evansville, Indiana
Jeffrey B. Kolb
Charles E. Traylor
Kolb Roellgen & Kirchoff, LLP
Vincennes, Indiana
IN THE
COURT OF APPEALS OF INDIANA
In the Matter of the November 8, 2017
Guardianship of Darvin Henry Court of Appeals Case No.
Lamey, An Adult 26A01-1703-GU-588
Appeal from the Gibson Circuit
Court
Raymond L. Lamey and
The Honorable S. Brent Almon,
Ramona Lamey, Co-Guardians Special Judge
of the Person of Darvin Henry
Trial Court Cause No.
Lamey and Co-Personal
26C01-1408-GU-21
Representatives of the Estate of
Darvin Henry Lamey,
Appellants-Respondents,
v.
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Ziemer, Stayman, Weitzel &
Shoulders, LLP and Kolb
Roellgen & Kirchoff, LLP,
Appellees-Petitioners.
Riley, Judge.
STATEMENT OF THE CASE
[1] Appellants-Respondents, Raymond L. Lamey, M.D. (Raymond) and Ramona
Lamey (Mona) (collectively, Appellants), Co-Guardians of the Person of
Darvin Henry Lamey and Co-Personal Representatives of the Estate of Darvin
Henry Lamey, appeal the trial court’s findings of fact and conclusions of law
granting the payment of attorney fees to Appellees-Petitioners, Ziemer,
Stayman, Weitzel & Shoulders, LLP (ZSWS) and Kolb Roellgen & Kichoff,
LLP (Kolb), incurred during their representation of the protected person.
[2] We affirm.
ISSUES
[3] Appellants present this court with two issues on appeal, which we restate as
follows:
(1) Whether the trial court properly granted payment of attorney fees to ZSWS
when ZSWS entered into an attorney-client relationship with Darvin Henry
Lamey (Darvin) while Darvin was a protected person and under a
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guardianship, and entered into this relationship without the knowledge of
Darvin’s Guardian ad Litem (GAL) and without contracting with the guardian
of his estate; and
(2) Whether the trial court properly granted payment of attorney fees to Kolb
when Kolb entered into an attorney-client relationship with Darvin, without the
knowledge of Darvin’s GAL, and without contracting with the guardian of his
estate, for purposes of modifying Darvin’s estate plan and making an election
under the Virginia Lamey Trust.
[4] ZSWS and Kolb present this court with two issues on appeal, which we restate
as:
(1) Whether Appellants can bring this interlocutory appeal of right even though
Appellants were not ordered to pay any amount of money; and
(2) Whether ZSWS and Kolb are entitled to appellate attorney fees pursuant to
Indiana Appellate Rule 66(E).
[5] In addition, Kolb presents this court with one issue on appeal, which we restate
as: Whether Appellants have standing to pursue this appeal.
FACTS AND PROCEDURAL HISTORY
[6] A lifelong farmer with significant business acumen, Darvin accumulated
substantial wealth in real estate and personal property during his lifetime. In
the summer of 2014, Darvin was nearly 87 years old and resided at River Point
Health Campus in Evansville, Indiana. He had been diagnosed with
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degenerative dementia, an enlarging abdominal aortic aneurysm, and was
hospitalized for a knee infection. On June 23, 2014, Darvin’s son, Raymond,
an anesthesiologist in Evansville Indiana, petitioned and obtained a temporary
appointment as a guardian over Darvin after Raymond became concerned his
father could no longer make “informed decisions concerning his health.”
(Transcript, Jan. 2016, p. 200). At Darvin’s request, the trial court appointed a
Guardian ad Litem (GAL) to periodically prepare reports and make
recommendations to the trial court.
[7] Prior to the guardianship, Darvin relied on a female friend and companion
(Darvin’s Friend) to take him to his medical appointments and help take care of
his basic needs and financial affairs. After being appointed as guardian,
Raymond discovered large sums of money missing from Darvin’s accounts. He
was also contacted by staff at River Point with concerns for Darvin’s safety,
based on Darvin’s Friend’s means of transportation and disregard for Darvin’s
high risk for falling. As a result, Raymond obtained an ex parte order of
protection against Darvin’s Friend.
[8] On August 8, 2014, Raymond filed his petition for appointment of guardian
over Darvin’s person and estate. Even though the GAL reported that Darvin
objected to the appointment of Raymond as his guardian and the GAL
expressed a concern that Raymond would not be willing or able to meet
Darvin’s emotional needs, the trial court appointed Raymond as guardian on
September 18, 2014, due to Darvin’s “degenerative dementia and general
mental decline under Indiana law.” (Appellant’s Conf. App. Vol. II, p. 64). To
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abate the GAL’s concerns, the trial court instituted some limitations to
Raymond’s guardianship, in pertinent part, as:
5. The guardian shall allow reasonable visitation of the ward by
friends and family. Further, the guardian shall provide visitation
with his two favorite dogs at least weekly. The guardian shall
ensure that the monthly social security payments go into the
guardianship account and from that $500.00 be placed into a
separate account for the use and benefit of the ward.
6. The prior Order requiring the ward to remain at River Point
Nursing home is hereby lifted and the guardian may place the
ward at University Nursing home, or another suitable facility.
(Appellant’s Conf. App. Vol. II, p. 65).
[9] On November 26, 2014, the GAL filed a report with the trial court detailing
recent meetings and communications with Darvin. Commenting on Darvin’s
health, the GAL reported a “decline in Darvin[’s] mental status, specifically his
memory and escalation of anger and frustration[.]” (Appellant’s Conf. App.
Vol. II, p. 67). She observed that as Darvin’s mental health declines, he
“becomes more vocal, paranoid and angry over the circumstances he has found
himself.” (Appellant’s Conf. App. Vol. II, p. 67). The GAL detailed Darvin’s
numerous apprehensions regarding Raymond’s behavior as his guardian, as
well as her investigations into his concerns, and concluded that “there is no
evidence to support that [Raymond] is not meeting Darvin’s needs.”
(Appellant’s Conf. App. Vol. II, p. 71). Although “Darvin tells everyone who
will listen to him that [Raymond] is stealing his money, mishandling his assets
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and not showing him the documentation,” and despite the fact that the GAL
herself had “shown Darvin the evidence that [Raymond] is not stealing his
money[,] . . . Darvin refuse[d] to believe it.” (Appellant’s Conf. App. Vol. II, p.
71). “Darvin has accused the [GAL] of being on [Raymond’s] side despite
being shown the bank records.” (Appellant’s Conf. App. Vol. II, p. 71). The
GAL twice alerted the trial court in her report that one of Darvin’s friends,
Charlie Schmitt, had contacted her regarding Raymond’s perceived
mishandling of Darvin’s money and alleged refusal to produce the appropriate
documentation. Subsequently, in January 2015, the trial court authorized the
removal of the limitations on the guardianship and authorized Darvin’s
placement in a more secure nursing home facility.
[10] In mid-January of 2015, ZSWS became aware that Darvin was seeking counsel
to terminate Raymond’s guardianship over his person and estate. ZSWS
gathered information from collateral sources and attempted to meet with
Darvin prior to entering its appearance but Raymond prevented ZSWS from
consulting with Darvin. On February 17, 2015, ZSWS filed its appearance and
several emergency motions with the trial court seeking access to Darvin, as well
as a petition to terminate the guardianship. The trial court granted ZSWS’s
emergency motions on April 7, 2015. On March 31, 2015, the GAL filed an
additional report with the trial court, reporting that Darvin had been moved to
the West River Health Campus’ Legacy Unit and alerting the court that:
When [Darvin’s Friend] and Charlie Schmitt visit, Darvin’s
frustration intensified and he cannot be redirected. Staff reported
the Schmitt’s [sic] have conversations with Darvin regarding
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court. Staff has had to tell Darvin to stop talking in front of the
other residents. Staff reported on a scale of 1 to 10, with one (1)
being a normal day, Darvin’s frustration level reaches an eight (8)
after the Schmitt’s [sic] leave. Staff reported they witness an
obvious change in Darvin’s demeanor on Monday after the
Schmitt’s [sic] have visited over the weekend. Staff reported it
takes a couple of days to calm Darvin. Staff reported Darvin will
also have a list of questions or things he wants taken care of by
[Raymond] or staff after the Schmitt’s [sic] have visited.
(Appellant’s Conf. App. Vol. II, p. 101). The GAL explicitly noted her
ongoing concerns regarding the number of people who are
attempting to micromanage and interfere in [Darvin’s] life based
on their own value system and presumptions of what is in his
best interest. The GAL questions the motivating factors of the
individuals given Darvin’s considerable assets. The GAL read a
letter written by [Darvin] in which he offers $100,000 to any
Evansville attorney who “takes Guardianship + Power attorney
from [Raymond].
(Appellant’s Conf. App. Vol. II, p. 103). On August 18, 2015, the trial court
struck Darvin’s petition to terminate the guardianship and denied his
emergency motions to replace Raymond as a guardian.
[11] Darvin, via ZSWS, appealed the trial court’s order striking his petition to
terminate the guardianship. Due to Darvin’s life expectancy, which at that time
was six to nine months, we granted an expedited appeal. On December 15,
2015, this court suspended consideration of the appeal and ordered the trial
court to conduct a full evidentiary hearing within thirty days of the order
addressing “(1) whether Darvin is incapacitated; (2) what limitations shall be
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placed on any guardian’s powers; (3) what is the least-restrictive placement
appropriate for Darvin’s care; and (4) who is the best family member or other
person to serve as Darvin’s guardian given the obvious animosity and
estrangement between Darvin and [Raymond].” (Appellant’s App. Vol. III, p.
23).
[12] Pursuant to the Court of Appeal’s order, on January 4 through January 7, 2016,
the trial court conducted an evidentiary hearing. At the conclusion of the
fourth day of testimony, the parties presented the trial court with an Agreed
Order of Limited Guardianship (Agreed Order), representing their jointly
negotiated resolution of all pending matters. The Agreed Order was signed by
the trial court on January 8, 2016, and stipulated, in pertinent part:
1. [Darvin] is an incapacitated person due to his inability to
manage in whole or in part his property and/or to provide
self-care.
2. The welfare of Darvin would be best served by limiting the
scope of the guardianship pursuant to Indiana Code section
29-3-5-3(b) in order to encourage development of Darvin’s
self-improvement, self-reliance, and independence; and
contribute to Darvin’s living as normal a life as Darvin’s
condition and circumstances permit without psychological or
physical harm to Darvin.
3. Darvin’s son, [Raymond], is hereby replaced as guardian over
Darvin’s estate by German American Bank (the “Bank
Trustee”) effective immediately subject to the requirement for
[Raymond] to provide the [c]ourt with a final accounting of
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the guardianship estate in accordance with the Indiana Code
section 29-3-9-6. . . .
****
5. The [c]ourt hereby appoints the Bank Trustee to serve as
guardian over Darvin’s estate. The Bank Trustee shall allow
Darvin to provide input into the business and financial decisions
of the estate. The Bank Trustee shall allow Darvin to review his
bank and other account statements and business records on a
monthly basis and upon reasonable request by Darvin. The Bank
Trustee shall also allow [Raymond] and Mona to review the
same statements and records on a quarterly basis. No counsel of
record in this matter will represent the Bank Trustee in any
representative capacity involving these parties. The Bank Trustee
will distribute to Darvin $2,000 per month for his personal use
with the manner of distribution thereof to be determined in the
Bank Trustee’s discretion.
****
8. [Raymond] and Darvin’s daughter, Mona, are hereby
appointed co-guardians over Darvin’s person with their power
limited to the ability to consent to medical or other professional
care and treatment for Darvin’s health and welfare. [Raymond]
and Mona shall allow Darvin to provide input into decisions
involving his medical and other professional care and treatment.
****
11. Darvin shall have unrestricted access to visitors of his
choosing unless an order of the court is issued to the contrary
after Darvin is given notice and an opportunity to be heard.
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Family members shall be allowed reasonable private visitation
with Darvin.
****
15. Darvin shall have unrestricted access to counsel of his
choosing during the pendency of the guardianship.
16. If Darvin desires to make any change to this trust or estate
plan(s) or to make an election under Virginia Lamey’s Trust, a
hearing must first be held in front of Judge Meade in the Gibson
Circuit Court and be subject to approval by the [c]ourt. Such
hearing will be given docket priority after notice to counsel for all
parties. This provision does not limit the Bank Trustee’s power
under Indiana Code section 23-3-9-4.5.
(Appellant’s App. Vol. III, pp. 25-28).
[13] On April 29, 2016, Raymond filed a motion to intervene in the guardianship
proceedings in his capacity as the Successor-Trustee of the Revocable
Declaration of Trust Agreement of Darvin H. Lamey, dated September 3, 1997
(Darvin’s Trust), for the purpose of collaborating with the guardian of Darvin’s
estate, German American Bank (GAB), to transfer certain parcels of real estate
and items of personal property into Darvin’s Trust, consistent with Darvin’s
then-existing estate plan, and in order to avoid the probate process. At the
same time, Raymond, in his capacity of Successor-Trustee, filed a petition for
the execution of the estate plan on behalf of Darvin, seeking to execute the
estate plan and to request a hearing pursuant to Paragraph 16 of the Agreed
Order. The trial court set the matter for a hearing on May 6, 2016.
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[14] On May 5, 2016, after meeting with Darvin, ZSWS met with Kolb to explore a
possible consultation and evaluation of Darvin in order to determine his
testamentary capacity, and to prepare new estate planning documents according
to Darvin’s wishes. During the scheduled hearing of May 6, 2016, ZSWS
moved for a continuance and advised the trial court that Darvin intended to
make changes to his estate plan and would file a petition with the court shortly.
The trial court granted Raymond’s motion to intervene, took Raymond’s estate
plan petition under advisement, and reaffirmed the scheduling of a contested
hearing on May 20, 2016, on all remaining pending matters. On May 13 and
16, 2016, respectively, Kolb consulted with Darvin, after which Kolb concluded
that Darvin possessed testamentary capacity and that Darvin intended to
include certain gifts in a revised estate plan. On May 16, 2016, ZSWS filed the
Darvin estate plan petition, advising the trial court that Darvin anticipated to
amend his estate plan and to exercise his power of appointment under the
Virginia Lamey Trust. The petition sought an expedited hearing with docket
priority on the issue of testamentary capacity pursuant to Paragraph 16 of the
Agreed Order, and as such, requested the trial court to hear the petition at the
already scheduled hearing of May 20, 2016. Raymond objected to the
expedited hearing and requested additional time to address the issue of Darvin’s
testamentary capacity.
[15] During the proceedings on May 20, 2016, the trial court denied Darvin’s
request for an expedited hearing and set the matter for a hearing on June 21,
2016. However, the trial court granted the GAL’s request that any proposed
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changes to Darvin’s estate plan be disclosed to the GAL so that she could
“determine if the changes are in Darvin’s best interest or if Darvin [] has been
unduly influenced to make said changes.” (Appellant’s App. Vol. III, p. 50).
The trial court ordered Kolb to provide the GAL with a copy of the current
draft of Darvin’s revised estate plan, over Darvin’s objection.
[16] Meanwhile, both parties engaged expert witnesses to evaluate Darvin’s
testamentary capacity. Raymond engaged Jeffrey Gray, Ph.D., a
neuropsychologist, and Juan Cabrera, M.D., while ZSWS retained Nicole
Werner, Ph.D., a forensic psychologist, and Alan Felthous, M.D. (Dr.
Felthous), a forensic psychiatrist, both located in St. Louis, Missouri. Although
initially Raymond attempted to prevent Darvin from leaving the nursing home
to travel to St. Louis for evaluation with ZSWS’s experts, after consultation
between the parties and Judge Meade on June 8, 2017, an agreement was
reached and, that same day, Darvin met with Dr. Felthous. On June 13, 2016,
Darvin was deposed. Based on Darvin’s testimony at the deposition, the GAL
expressed her “great concern about [Darvin’s] testamentary capacity and
possibility of undue influence to Darvin’s counsel”:
1. [Darvin] stated that he was unsure and need it proven to him
that the Virginia Lamey Trust even exists. I am baffled that a
motion for power of appointment under the Virginia Lamey
Trust could be requested when the person seeking such
appointment does not know if the Trust exists.
2. [Darvin] had no recollection of [Kolb], meeting with [Kolb]
or having [Kolb] prepare the estate planning documents. This
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was in spike [sic] of you leading the witness by asking,
“Darvin, don’t you recall going to Vincennes to meet with an
attorney to do your estate planning?” [Darvin’s] response
was, “No.”
3. [Darvin] testified that he did not know what changes he
wanted to make to his Will and/or Trust, that he would have
to think it over and would need to talk to [Darvin’s Friend] as
to what she wanted from his estate. This is a far cry from the
documents provided by [Kolb] at the last hearing. At the last
hearing, you requested that the court allow [Darvin] to
execute the documents prepared by [Kolb] in case the court
ruled in his favor on his testamentary capacity. This morning,
you advised that [Kolb’s] documents were only a draft. I am
confused by the representations at our last hearing and the
representations in our telephone conversation. The two
positions are wholly inconsistent.
(Appellant’s App. Vol. III, pp. 99-100). Based on these apprehensions, the
GAL advised the parties that she would “oppose any estate planning on
[Darvin’s] part” as well as “oppose any attorney’s fees that are incurred after
[Darvin’s] deposition.” (Appellant’s App. Vol. III, p. 100).
[17] On June 30, 2016, after the June 21st hearing was continued, Darvin filed an
emergency motion, requesting to set aside Paragraph 16 of the Agreed Order
which would enable him to proceed with executing estate planning documents
because his health continued to decline. The trial court did not set a hearing on
Darvin’s motion. On July 15, 2016, Kolb met with Darvin to review and revise
his estate planning documents. Darvin executed a Superseding Will and
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Superseding Trust Amendment, which diverted benefits from his family to
various philanthropic institutions.1
[18] On August 29 and 30, 2016, the trial court conducted a hearing on Darvin’s
testamentary capacity, during which both Dr. Werner and Dr. Felthous testified
over the co-guardians’ objections. On both days, Kolb waited to testify, but was
never called to the stand. Darvin did not attend the hearing due to his
deteriorating health. At the close of the second day, the hearing was recessed
and continued to September 23, 2016, without the trial court making a
determination on Darvin’s testamentary capacity, or a decision on the estate
planning petitions or the application of Paragraph 16 of the Agreed Order.
Darvin passed away on September 1, 2016.
[19] On September 8, 2016, ZSWS filed its fee petition, 2 seeking payment from the
Guardianship Estate of those fees and expenses involved in establishing
Darvin’s testamentary capacity: $95,693.25 in attorneys’ fees, $960.78 in
expenses, and $14,006.42 in advanced costs, as well as a $10,575.00 invoice
from Dr. Werner. The following day, Kolb submitted its fee petition in the
amount of $15,959.80. On October 18, 2016, over Raymond’s and Mona’s
objections, the trial court ordered GAB to pay ZSWS $86,718.25 in attorneys’
1
A related will contest is pending in the Gibson Circuit Court.
2
This is ZSWS’s second fee petition in the Guardianship Estate. Its first fee petition, which is not part of this
appeal and which covered its fees to contest Raymond’s guardianship over Darvin, were ordered to be paid
in full by the trial court on March 8, 2016. See Appellee’s App. Vol. III, p. 79.
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fees, $778.26 in expenses, and $14,006.24 in advanced costs. The trial court
also ordered GAB to pay Dr. Werner’s invoice in full.
[20] Subsequently, on October 7, 2016, ZSWS filed its verified petition for payment
of Dr. Felthous’ incurred fees, in the sum of $42,882.96. It also filed a motion
to correct errors, seeking to collect the unpaid $8,975.00 in fees and $182.50 in
expenses from its original fee petition. After the original trial judge recused
himself, the special judge set the motion to correct error, the Felthous fee
petition and Kolb’s fee petition for hearing on February 20, 2017. After a
contested hearing, the trial court issued its Findings of Fact and Conclusions
regarding Certain Claims, 3 granting ZSWS’s fee petition and ordering the
payment of Dr. Felthous’ invoice and the partial payment of Kolb’s fee petition.
[21] Appellants now appeal. Additional facts will be provided as necessary.
DISCUSSION AND DECISION
[22] For a thorough understanding and a proper framework to situate these
proceedings, it merits reiterating that at this point in time, the guardianship
proceedings—even as the protected person has passed away—are conducted
side-by-side with the estate proceedings. Although legally, the guardianship
terminates upon death and an estate is opened, due to the current dispute, the
3
We would be remiss in not mentioning the detailed and thorough nature of the special judge’s findings of
fact and conclusions of law in this matter.
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guardianship has yet to close and the case at bar is posited squarely within its
province.
[23] However, before we can address the merits of Appellants’ appeal, we must
evaluate the threshold jurisdictional issues advanced by ZSWS and Kolb.
Advocating that Appellants have neither standing nor the right to bring this
interlocutory appeal, ZSWS and Kolb urge this court to dismiss this cause.
I. Standing
[24] Contending that Appellants have no standing to pursue this appeal either as the
co-guardians of Darvin’s person or as the co-personal representatives of
Darvin’s estate, Kolb claims that Appellants cannot contest the trial court’s
order on attorney fees and the award on expert witness fees and invites us to
dismiss this appeal.
[25] Standing is a fundamental, threshold, constitutional issue that must be
addressed by this, or any, court to determine if it should exercise jurisdiction in
the particular case before it. Alexander v. PSB Lending Corp., 800 N.E.2d 984,
989 (Ind. Ct. App. 2003), trans. denied. To have standing, a party’s “interest
‘must be a present, substantial interest, as distinguished from a mere expectancy
or future contingency interest.’” Inlow v. Henderson, daily, Withrow & DeVoe, 787
N.E.2d 385, 395 (Ind. Ct. App. 2003), reh’g denied, trans. denied (citing 59 Am.
Jur. 2d Parties § 37, at 442 (2002)).
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[26] Darvin died on September 1, 2016. Upon his passing, the guardianship ended
and an estate was opened. At that point, Raymond and Mona became the co-
personal representatives of Darvin’s estate and received the remaining property
of the guardianship into the estate. See I.C. § 29-3-12-1(e) (“When a
guardianship terminates by reason of the death of the protected person, the
powers of the guardian cease, except that the guardian may pay the expenses of
administration that are approved by the court . . . and may deliver the
remaining property for which the guardian is responsible to the protected
person’s personal representative.”). On December 23, 2016, GAB filed its final
accounting to wind down the guardianship estate. See I.C. § 29-3-9-6(a)
(explains the duty of the guardian to file a written verified account of the
guardian’s administration after the termination of the appointment). While
GAB was compiling its final accounting and prior to filing its report with the
trial court, ZSWS and Kolb submitted petitions for the payment of their fees
and the payment of Dr. Felthous’ expert witness fee with the guardianship
estate. On January 18, 2017, Appellants, as co-personal representatives of
Darvin’s estate, filed their appearance in the guardianship proceedings and
objected to the payment of the respective fee petitions. When GAB filed its
accounting and attempted to close the guardianship estate, ZSWS and Kolb
objected on the basis that the guardianship could not be closed while the
remaining fee claims were outstanding. On January 20, 2017, all parties,
including Appellants in their capacity as co-personal representatives of the
estate, appeared for a telephonic conference with the trial court. During this
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hearing, the parties agreed that all fee contestations would be heard in the
guardianship proceedings and not in the estate proceedings.
[27] Although expectant heirs have only a future and contingent interest in the assets
of the estate, here, by virtue of the timing of Darvin’s death, Appellants
received a present and substantial interest in the estate’s assets on September 1,
2017. See I.C. § 29-1-7-23; Inlow, 787 N.E.2d at 395. As the assets of the
guardianship must pass into the estate, Appellants, as co-personal
representatives of the estate, had an actual and substantive interest in the
possible decline of the guardianship assets and thus had standing to oppose the
payment of the fee petitions in the guardianship proceedings upon Darvin’s
death.
[28] Nevertheless, Kolb now contends that Appellants lack standing as co-personal
representatives of the estate because they omitted to file a motion to intervene
in that capacity. Focusing on this court’s decision in Simon v. Simon, 957
N.E.2d 980 (Ind. Ct. App. 2011), and our supreme court’s ruling in Old Nat’l
Bancorp v. Hanover College, 15 N.E.2d 574, 576-79 (Ind. 2014), Kolb maintains
that the filing of a motion to intervene is “fundamental to maintaining order
and certainty in trial court cases regarding true parties of record” and the lack
thereof is fatal to acquiring standing. (Kolb Br. p. 11).
[29] In Simon, a removed trustee and personal representative attempted to appeal an
order denying a motion to recuse. Simon, 957 N.E.2d at 982. She brought the
appeal in her personal representative capacity. Id. at 983. We dismissed for
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lack of jurisdiction, because we found that “[s]he is no longer the Personal
Representative or Trustee and, therefore, she cannot litigate on behalf of the
Estate or the Trust in a capacity she no longer occupies.” Id. at 989-99.
Rejecting appellant’s argument that she could maintain the appeal in her
individual capacity as a beneficiary of the trust and estate, this court noted that
appellant “did not move to intervene in her individual capacity in the trial
court,” nor did she “bring this appeal in her individual capacity.” Id. at 989-90.
[30] Similarly, in Hanover, Old National served as trustee over two trusts, both of
which benefitted Hanover College. Old Nat’l Bancorp., 15 N.E.3d at 575. After
the trial court granted Hanover’s request to terminate the trusts, Old National
did not seek a stay of the order; instead, it appealed the order in its capacity as
trustee. Id. Hanover moved to dismiss the appeal, arguing lack of standing as
the trial court’s order had been effectuated and Hanover’s status as trustee had
ended. Id. In response, Old National claimed to pursue the appeal in its
individual capacity as a bank. Id. Rejecting Old National’s argument, the
supreme court determined that Old National had clearly appealed in its
capacity as the trustee of the terminated trusts—a capacity it no longer
possessed. Id. at 577. At the same time, the court refused to consider
Hanover’s argument, which relied on Simon and which claimed that “to gain
standing in its individual capacity, Old National must have first intervened at
the trial court and its failure to do so is fatal to its claim of standing as an
individual.” Id. Noting that Old National neither intervened, nor appeared in
its individual capacity before the trial court, the supreme court dismissed the
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appeal for lack of standing, referring extensively to Old National’s repeated
mentioning of its status as trustee in its appellate briefing (rather than its
individual status), and paid its attorney fees from the trust assets. Id. at 577-78.
[31] While Appellants concede that they did not file a formal motion to intervene in
accordance with Indiana Trial Rule 24(C), in Old Nat’l Bancorp, our supreme
court explicitly refused to consider whether such a motion was required and
instead focused on other factors, such as the party’s appearance below and its
appellate representations in determining standing. Unlike the appellant in
Simon and Old Nat’l Bancorp, Appellants here intervened before the trial court in
their capacity of co-personal representatives of Darvin’s estate. During the trial
court’s proceedings, neither ZSWS nor Kolb objected to the Appellants’
participation in the guardianship in that matter, and the trial court treated
Appellants as intervening parties. Throughout the appellate proceedings,
Appellants have consistently referred to themselves in their capacity of co-
personal representatives of the estate. If, in light of the specific circumstances
before us, we were now to require the actual filing of a motion to intervene to
acquire standing, we would be elevating form over substance. Accordingly,
Appellants have standing to appeal the trial court’s order in their status of co-
personal representatives of Darvin’s estate.
II. Interlocutory Appeal
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[32] In a related argument, ZSWS and Kolb contend that this appeal should be
dismissed because Appellants cannot bring an interlocutory appeal of right
when they were not ordered to pay money.
[33] The appellate authority of this court is “generally limited to appeals from final
judgments.” Ball State University v. Irons, 27 N.E.3d 717, 720 (Ind. 2015).
However, our Rules of Appellate Procedure also confer appellate jurisdiction
over non-final interlocutory appeals pursuant to Appellate Rule 14. There are
three ways a case may proceed as an interlocutory appeal: an interlocutory
appeal of right pursuant to Appellate Rule 14(A); a discretionary interlocutory
appeal, as provided in Appellate Rule 14(B); or an interlocutory appeal from an
order granting or denying class-action certification in accordance with
Appellate Rule 14(C). Appellants assert that their appeal was properly brought
as an interlocutory appeal of right under Appellate Rule 14(A)(1), which
provides, in relevant part:
A. Interlocutory Appeals of Right. Appeals from the following
interlocutory orders are taken as a matter of right by
conventionally filing a Notice of Appeal with the Clerk within
thirty (30) days after the notation of the interlocutory order in
the Chronological Case Summary:
(1) For the payment of money;
In general, the matters appealable of right pursuant to Appellate Rule 14(A) are
those which carry financial and legal consequences akin to those typically
found in a final judgment. Bacon v. Bacon, 877 N.E.2d 801, 805 (Ind. Ct. App.
Court of Appeals of Indiana | Opinion 26A01-1703-GU-588 | November 8, 2017 Page 21 of 30
2007), reh’g denied, trans. denied. Because the trial court mandated GAB, as
representative of Darvin’s guardianship estate, to pay the approved attorney
fees and expert witness fees, ZSWS and Kolb argue that Appellants were not
ordered to pay any sums of money in their capacities as the co-personal
representatives of Darvin’s estate and therefore cannot now pursue an
interlocutory appeal of right.
[34] However, even though GAB was ordered to pay the fees, the remainder of the
guardian estate must be transferred into Darvin’s estate. As Darvin was
deceased at the time of the Order, the amount payable from the assets in the
guardianship immediately impacts the amount delivered into the estate of
which Appellants are the co-personal representatives. See I.C. § 29-3-12-1(e).
Accordingly, as the Appellants have an interest in the amount that is to be paid
in response to ZSWS’s and Kolb’s fee petitions, they are entitled to pursue an
interlocutory appeal of right.
III. Attorney fees
[35] Turning to the merits of their appeal, Appellants contend that the trial court
erred in awarding attorney fees to ZSWS and Kolb and in ordering the payment
of the expert witness fees. We review the trial court’s award of attorney fees for
an abuse of discretion. See I.C. § 29-3-2-4; In re Guardianship of Hickman, 811
N.E.2d 843, 851 (Ind. Ct. App. 2004), trans. denied. An abuse of discretion
occurs only if the judgment is against the logic and effect of the facts and
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circumstances before the court, together with any reasonable inferences arising
therefrom. Hickman, 811 N.E.2d at 851.
[36] Pursuant to Indiana Code section 29-3-9-9:
(a) Whenever a guardian is appointed for an incapacitated person
or minor, the guardian shall pay all expenses of the
proceeding, including reasonable medical, professional, and
attorney’s fees, out of the property of the protected person.
(b) The expenses of any other proceeding under this article that
results in a benefit to the protected person or the protected
person’s property shall be paid from the protected person’s
property as approved by the court.
The right to compensation from the guardianship estate “should not depend
upon the result of the litigation but rather upon the reasonable necessity for
such litigation.” In re Guardianship of N.R., 26 N.E.3d 97, 100 (Ind. Ct. App.
2015). Thus, when ruling on an attorney fee petition in a guardianship
proceeding, the trial court should consider not only the outcome of the
proceedings but also “(1) whether the parties acted reasonably and in good faith
incurring the fees, (2) whether the facts were in dispute, (3) whether the legal
issues were complex, and (4) whether any party’s misconduct caused the
proceedings.” Id.
A. ZSWS & Dr. Felthous
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[37] Appellants contend that the trial court abused its discretion when it granted
payment of ZSWS’s fees and Dr. Felthous’ expert witness fees. 4 Focusing on
the provision of the Agreed Order that gave Darvin the right to choose his own
counsel, they import the distinction that a right to choose does not encompass
the right to hire counsel, which belonged to GAB, as “ultimate decisionmaker
on behalf of the” guardianship estate. (Appellants’ Br. p. 31). Because ZSWS
omitted to contract with GAB to provide services to Darvin, Appellants claim
that they are not entitled to reimbursement. Moreover, only contesting ZSWS’s
fees incurred in its involvement to change Darvin’s estate plan and establish his
testamentary capacity, Appellants point out that these fees and expenses are not
necessary services which benefit the guardianship proceedings.
[38] Indiana law allows for the appointment of a guardian to act in the best interest
of a person who is unable to care for himself or for his property. Estate of
Prickett v. Womersley, 905 N.E.2d 1008, 1010 (Ind. Ct. App. 2009). In general, a
guardian of a protected person “is responsible for the incapacitated person’s
care and custody and for the preservation of the incapacitated person’s property
to the extent ordered by the court.” I.C. § 29-3-8-1(b). As such, a court has
discretion to “limit the scope of a guardianship by restricting the responsibilities
and powers a guardian would otherwise have under the Guardianship Code.”
I.C. § 29-3-5-3(b). Availing themselves of this provision, the parties, as affirmed
4
Appellants do not object to the payment of fees incurred by ZSWS to challenge and terminate the
guardianship.
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by the trial court, established certain boundaries to the guardianship and
determined in the Agreed Order that:
15. Darvin shall have unrestricted access to counsel of his
choosing during the pendency of the guardianship.
16. If Darvin desires to make any change to his trust or estate
plan(s) or to make an election under Virginia Lamey’s Trust, a
hearing must first be held in front of Judge Meade in the Gibson
Circuit Court and be subject to approval by the Court. []
(Appellants App. Vol. III, p. 28).
[39] By granting Darvin the right to choose his own counsel, the parties implicitly
granted him the corresponding right to hire this counsel. Requiring pre-
approval from GAB or Appellants to hire counsel of his choice, would have
eroded Darvin’s right to choose and interjected a measure of interference by the
guardians. It would also have placed Darvin’s chosen counsel in the
unenviable position to be cautious for a possible future conflict of interest
between their client and the parties that had approved counsel’s hire.
Accordingly, we find that, based on the Agreed Order, ZSWS did not have to
engage with GAB separately to negotiate a fee arrangement. 5
[40] In Wyneken v. Long, 400 N.E.2d 1147, 1148 (Ind. Ct. App. 1980), relied upon by
Appellants, an adult protected person, already represented by an appointed
5
This would not leave a guardian at the mercy of the fee structure of the ward’s counsel, as the guardian can
always contest the reasonableness of the incurred fees in a separate petition.
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attorney, entered into a contract with an attorney for legal services. When the
attorney requested payment for his services from the guardian, the guardian
refused reimbursement. Id. Upon review, we noted that if the attorney had
provided legal services to terminate the guardianship, he would have been
entitled to compensation; however, his services were not rendered for that
purpose. Id. Nonetheless, the Wyneken court stated that “the law will allow a
recovery against the incompetent’s estate for the reasonable value of the
necessary services rendered at the request of the incompetent.” Id. Applying
the principle of “necessary services,” the court concluded that these did not fall
within that definition as the services “did not involve matters of such exigency
that guardian approval could not have been obtained before the services were
rendered” and most of these “were rendered after an attorney from a legal aid
staff had entered an appearance” for the ward. Id. Analogizing to Wyneken,
Appellants now contend that ZSWS’s and Dr. Felthous’ fee were not necessary
as they were not provided in conjunction with Darvin’s subsistence, health,
comfort, and education, nor were they exigent.
[41] We find Wyneken to be inapposite to the particular facts of this case. Through
the Agreed Order, establishing the limited guardianship, the parties
incorporated estate planning services squarely within the administration of the
guardianship and allowed Darvin the limited authority to make a “change to
his trust or estate plan(s) or to make an election under the Virginia Lamey’s
Trust” subject to “approval by the [c]ourt.” (Appellants’ App. Vol. III, p. 28).
As a corollary of Darvin’s limited authority in the estate planning realm, it was
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incumbent to establish Darvin’s testamentary capacity. See I.C. § 29-3-9-4.5 (if
a guarding lacks testamentary capacity, the guardian over the estate may take
certain actions to effectuate estate planning purposes). To that end, ZSWS
engaged Dr. Felthous to evaluate Darvin’s competency to support his estate
planning decisions. Accordingly, as ZSWS’s and Dr. Felthous’ fee petitions
were for services which had been included by express agreement into the
guardianship proceedings, the trial court properly ordered payment from the
guardianship estate. See I.C. § 29-3-9-9.
B. Kolb
[42] Again contending that estate planning services are not a necessary service in the
guardianship proceedings, Appellants dispute the trial court’s grant of Kolb’s
fee petition. Although Kolb was retained to consult with Darvin on his estate
plan, prior to establishing Darvin’s testamentary capacity 6, we agree with the
trial court’s perception that “[g]iven the terminal and rapidly progressive nature
of Darvin’s illness and the protracted nature the litigation took on, it was not
unreasonable to seek to have the new estate plan ready to execute should
Darvin have been successful in gaining authority to change his estate plan.”
(Appellants’ App. Vol. II, p. 37). For the same reasons we affirmed the trial
court’s Order with respect to ZSWS’s and Dr. Felthous’ petitions, we conclude
6
We hasten to point out that nothing in this opinion should be read or constructed to establish the existence
or lack of Darvin’s testamentary capacity. As emphatically repeated by the trial court several times in its
Order, the issue of Darvin’s testamentary capacity is not before this court and will not be decided by this
court in this appeal.
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that the trial court did not abuse its discretion with respect to Kolb’s fee
petition.
III. Appellate Attorney Fees
[43] ZSWS and Kolb request an award of appellate attorney fees pursuant to
Indiana Appellate Rule 66(E), which provides, in pertinent part, “[t]he Court
may assess damages if an appeal . . . is frivolous or in bad faith. Damages shall
be in the Court’s discretion and may include attorney’s fees.” Our discretion to
award attorney fees under Indiana Appellate Rule 66(E) is limited, however, to
instances when an appeal is permeated with meritlessness, bad faith, frivolity,
harassment, vexatiousness, or purpose of delay. Thacker v. Wentzel, 797 N.E.2d
342, 346 (Ind. Ct. App. 2003). While Indiana Appellate Rule 66(E) provides
this court with the discretionary authority to award damages on appeal, we
must use extreme restraint when exercising this power because of the potential
chilling effect on the exercise of the right to appeal. Id. A strong showing is
required to justify an award of appellate damages, and the sanction is not
imposed to punish mere lack of merit, but something more egregious. In re
Estate of Carnes, 866 N.E.2d 260, 267 (Ind. Ct. App. 2007).
[44] Indiana appellate courts have formally categorized claims for appellate attorney
fees into “substantive” and procedural bad faith claims. Bozcar v. Meridian Street
Found., 749 N.E.2d 87, 95 (Ind. Ct. App. 2001). To prevail on a substantive
bad faith claim, the party must show that the appellant’s contentions are
arguments are utterly devoid of all plausibility. Id. Procedural bad faith, on the
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other hand, occurs when a party flagrantly disregards the form and content
requirements of the rules of appellate procedure, omits and misstates relevant
facts appearing in the record, and files briefs written in a manner calculated to
require the maximum expenditure of time both by the opposing party and the
reviewing court. Id. Even if the appellant’s conduct falls short of that which is
“deliberate or by design,” procedural bad faith can still be found. Id.
[45] In support of their procedural and substantive bad faith claims, Kolb points to
numerous specific instances ranging from the content of Appellants’ arguments
to their strategy and purported deficiencies in their Appendices. However, we
find that Appellants’ challenge is consistent with reasonable advocacy and
cannot conclude that they flagrantly disregarded the form and content
requirements of the rules of appellate procedure. Although Appellants are
ultimately unsuccessful in this appeal, we cannot say that it was permeated in
bad faith or litigated with frivolity or vexatiousness. Accordingly, we affirm the
judgment of the trial court and deny ZSWS’s and Kolb’s request for appellate
attorney fees.
CONCLUSION
[46] Based on the foregoing, we hold that while Appellants have standing to pursue
this interlocutory appeal of right, the trial court did not abuse its discretion in
granting ZSWS’s and Kolb’s fee petitions and in ordering the payment of the
expert witness fees. We deny ZSWS’s and Kolb’s request for appellate attorney
fees.
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[47] Affirmed.
[48] Robb, J. and Pyle, J. concur
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