Old National Bancorp d/b/a Old National Trust Company, as Trustee of the Percy E. Goodrich Trust and the Hanover College Trust v. Hanover College

FOR PUBLICATION
ATTORNEYS FOR APPELLANT: ATTORNEYS FOR APPELLEE:
JOSHUA D. HAGUE BRIAN J. PAUL
LIBBY Y. GOODKNIGHT NATHANIEL M. UHL
Krieg DeVault LLP Ice Miller LLP
Carmel, Indiana Indianapolis, Indiana
Dec 05 2013, 9:06 am
IN THE
COURT OF APPEALS OF INDIANA
OLD NATIONAL BANCORP d/b/a )
OLD NATIONAL TRUST COMPANY, as )
Trustee of the Percy E. Goodrich Trust and the )
Hanover College Trust, )
)
Appellant-Respondent, )
)
vs. ) No. 68A05-1303-TR-111
)
HANOVER COLLEGE, )
)
Appellee-Petitioner. )
APPEAL FROM THE RANDOLPH CIRCUIT COURT
The Honorable Jay L. Toney, Judge
Cause Nos. 68C01-1110-TR-116
68C01-1110-TR-117
December 5, 2013
OPINION - FOR PUBLICATION
DARDEN, Senior Judge
STATEMENT OF THE CASE
Old National Trust Company (“Old National”) served as the trustee for both the
Percy E. Goodrich Trust and the Hanover College Trust. In 2012, Hanover College
petitioned the trial court to terminate both trusts. Following a hearing, the trial court
entered judgments terminating both trusts and ordering the transfer of the trusts’ assets to
Hanover College.
Old National, as Trustee, brought separate appeals from the trial court’s orders
terminating both trusts. The two appeals were consolidated into one, and Hanover
College filed a motion to dismiss the appeal alleging that Old National lacked standing.
As this issue is dispositive, we need not and cannot consider the appeal on its merits, and,
therefore, we dismiss.
ISSUE
Whether Old National has standing to pursue an appeal of the trial court’s
judgments terminating the trusts.
FACTS AND PROCEDURAL HISTORY
In 2012, Hanover College filed petitions to terminate both the Hanover College
Trust and the Goodrich Trust pursuant to Indiana Code section 30-4-3-24.4. At that time,
Old National was the Trustee of both trusts. The trial court held a hearing on both
petitions on September 27, 2012. On February 14, 2013, the trial court issued its findings
of fact and conclusions of law granting Hanover College’s petitions, approving
immediate termination of both trusts, and ordering Old National to transfer the trust
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assets to Hanover College. Old National did not seek a stay of the trial court’s judgment
but rather transferred the assets of both trusts to Hanover College and subsequently
brought appeals, in its capacity as Trustee, in both causes.
This Court granted Hanover College’s unopposed motion to consolidate the
appeals, and Hanover College subsequently filed a motion to dismiss on the ground that
Old National lacked standing to bring the appeal. Old National filed a response, and
Hanover College has filed a reply and a motion to accept its reply, which we grant under
separate order.
DISCUSSION AND DECISION
Hanover College contends that Old National lacks standing to pursue this appeal.
Standing is defined as having a sufficient stake in an otherwise justiciable controversy.
Ind. Civil Rights Comm’n v. Indianapolis Newspapers, Inc., 716 N.E.2d 943, 945 (Ind.
1999). The point of the standing requirement is to insure that the party before the court
has a substantive right to enforce the claim that is being made in the litigation. Pence v.
State, 652 N.E.2d 486, 487 (Ind. 1995). The standing requirement is a limit on the
court’s jurisdiction that restrains the judiciary to resolving real controversies in which
there is a demonstrable injury to the complainant. Id. at 488. Accordingly, in order to
have standing, the complaining party must show adequate injury or the immediate danger
of sustaining some injury. Id.
In the present case, the trial court terminated the trusts in its judgment of February
14, 2013. In granting Hanover College’s petitions to terminate the trusts, the trial court
stated that it approved termination of the trusts “effective immediately,” and ordered the
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parties to do all things necessary to effectuate the termination of the trusts, including
transfer of the trusts’ assets from Old National to Hanover College. Appellant’s App. pp.
17, 24. The parties agree that the trusts terminated and the assets were transferred.
Generally, upon the termination of a trust, the powers and office of the trustee
terminate. 90 C.J.S. Trusts § 114 (2010); see also Clifford v. Helvering, 105 F.2d 586,
590 (8th Cir. 1939) (stating that when trust ceases, powers and office of trustee
terminate), rev’d on other grounds, 309 U.S. 331, 60 S. Ct. 554, 84 L. Ed. 788 (1940).
An exception to this general rule is the continuation of the powers of the trustee for a
reasonable time in a restricted manner in order to wind up the trust and distribute trust
property. 90 C.J.S. Trusts § 114. However, even in such a case, upon completion of the
winding up of the trust, the trustee’s remaining limited powers terminate.
We find Union Savings & Trust Co. v. Eddingfield, 78 Ind. App. 286, 134 N.E.
497 (1922), instructive. In that case, a trust company was appointed administrator of an
estate. Later, the trial court issued an order revoking the trust company’s letters of
administration. The trust company appealed in its representative capacity, and this Court
stated that the order of revocation was self-executing and took effect immediately. The
order completely stripped the trust company of its representative capacity and authority
such that its prior connection with the estate was completely severed and that
“[t]hereafter it had no more standing as an administrator than a dead man.” Id. at 498.
More recently, a panel of this Court discussed standing in Simon v. Simon, 957
N.E.2d 980 (Ind. Ct. App. 2011). There, after having been removed as personal
representative and trustee of her late husband’s estate and trust, Bren Simon brought an
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appeal of an order of the trial court in her representative capacities. This Court noted that
the trial court’s removal order had not been stayed and held that Bren lacked standing to
maintain the appeal because when she was removed as personal representative and
trustee, she lost her authority to pursue the appeal in a representative capacity.
Similarly here, the trial court’s termination orders took effect immediately and Old
National did not request a stay of those orders. Once the trusts terminated, Old
National’s representative capacity was terminated and, along with it, any power or ability
to act on behalf of the trusts. Therefore, Old National cannot maintain this appeal in its
representative capacity.
Just short of outright concession of this point, Old National responds that it is not
bringing this appeal in its representative capacity. Rather, it states that it is appealing in
its individual capacity. See Appellant’s Response to Motion to Dismiss, pp. 6-7. In
support of this argument, Old National claims that it is an aggrieved party pursuant to
Indiana Code section 30-4-6-11(a). Under the Trust Code, “[a]ny person considering
himself aggrieved by any decision of a court having jurisdiction in proceedings under this
article may prosecute an appeal to the court having jurisdiction of such an appeal.” Ind.
Code § 30-4-6-11(a). Old National asserts that it is personally aggrieved by the trial
court’s orders terminating the trusts because the orders terminated its position as trustee
and ended its administration of the trusts’ assets. Therefore, it maintains it has standing
to pursue this appeal.
We again turn to this Court’s decision in Simon. Bren, like Old National, argued
that she had standing as an aggrieved party under Indiana Code section 30-4-6-11(a) and
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the corresponding statute in the Probate Code, Indiana Code section 29-1-1-22. The
Court noted, however, that just as Indiana Appellate Rule 17(A) provides that “[a] party
of record in the trial court . . . shall be a party on appeal,” the converse is also true: a
person who is not a party of record in the trial court cannot become a party for the first
time on appeal. Simon, 957 N.E.2d at 989. Accordingly, to prosecute an appeal, the
entity considering itself aggrieved must have first been a party before the trial court. Id.
at 988-89. Additionally, there are no appellate rules providing for intervention in an
appeal. Id. at 989.
The Court then noted that after her removal as personal representative and trustee,
Bren did not move to intervene in her individual capacity in the trial court. Further, the
Court stated that the fact that Bren was personal representative and trustee at the moment
she filed her request for certification of an interlocutory appeal did not mean she retained
her standing to maintain the appeal after she lost her fiduciary status. Consequently, the
Court concluded that Bren, who brought the appeal in her representative capacity and did
not intervene in the trial court in her individual capacity, could not establish standing as
an aggrieved party for the first time on appeal. Id.
Here, Old National, in its individual capacity, was not a party in the trial court.
Further, after the trial court ordered the trusts terminated, Old National did not move to
intervene in its individual capacity. Merely because Old National is aggrieved by losing
the business and corresponding revenue that is involved in holding the position of trustee
and administering trust assets does not automatically confer standing. As the Court found
with Bren in the Simon case, the fact that Old National is aggrieved is insufficient in itself
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to confer standing where Old National no longer occupies its representative capacity and
did not intervene in its individual capacity. Standing is a jurisdictional prerequisite, and
one with standing can lose it. Id.
In summary, we hold that Old National lacks standing to pursue this appeal. Old
National did not obtain a stay of the trial court’s order terminating the trusts. Therefore,
the trusts, as well as Old National’s position as trustee, terminated. As Old National is no
longer the trustee of the trusts, it can no longer litigate in its representative capacity on
behalf of the trusts.
In addition, Old National did not intervene in its individual capacity in the trial
court. Thus, Old National was not a party in the trial court, and, consequently, it cannot
be an aggrieved party on appeal.
CONCLUSION
For the reasons stated, we are without jurisdiction to consider this appeal on the
merits, and we dismiss.
Dismissed.
BAKER, J., and NAJAM, J., concur.
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