Pursuant to Ind.Appellate Rule 65(D),
FILED
this Memorandum Decision shall not
be regarded as precedent or cited
before any court except for the purpose
of establishing the defense of res Feb 08 2013, 8:17 am
judicata, collateral estoppel, or the law
of the case. CLERK
of the supreme court,
court of appeals and
tax court
ATTORNEY FOR APPELLANT: ATTORNEYS FOR APPELLEE:
MARK R. REGNIER THOMAS M. BEEMAN
Bingham Farrer & Wilson KYLE B. DEHAVEN
Elwood, Indiana Anderson, Indiana
IN THE
COURT OF APPEALS OF INDIANA
ESTATE OF RUBY L. ROWLAND, )
)
JAMES A. ROWLAND, JR., )
)
Appellant-Petitioner, )
)
vs. ) No. 48A02-1203-ES-223
)
MICHAEL B. ROWLAND, )
)
Appellee-Respondent. )
APPEAL FROM THE MADISON CIRCUIT COURT
The Honorable Rudolph Pyle, III, Judge
The Honorable Joseph R. Kilmer, Master Commissioner
Cause No. 48C01-0807-ES-117
February 8, 2013
MEMORANDUM DECISION – NOT FOR PUBLICATION
BARNES, Judge
Case Summary
James A. Rowland, Jr. (“James”), personal representative of the Estate of Ruby
Rowland (the “Estate”), appeals the trial court’s denial of its petition to recover alleged
assets from Michael Rowland. We affirm.
Issues
The Estate raises several issues, which we consolidate and restate as whether the
trial court properly denied its petition to recover assets.1
Facts
Ruby was married to James Rowland, Sr. (“James, Sr.,”), and they had two sons,
James and Michael. After James, Sr., died in 2004, Ruby added Michael as a joint owner
of her checking and savings accounts. Ruby also had a certificate of deposit (“CD”) at
Main Source Bank that she opened in 2000 and renewed for the last time in March 2008.
The CD at all times listed Michael as the payable on death beneficiary.
In May 2005, Ruby signed a power of attorney appointing Michael as her attorney
in fact in the event of her disability or incapacity. Her attorney, Richard Benton, was
appointed the successor attorney in fact. Also in May 2005, Ruby signed a Last Will and
Testament. She made specific bequests, directed that cash, stocks, bonds, and CD be
equally divided between Michael and James, and directed that five acres of her real
1
The Estate also argues that the assets should be placed in constructive trust for James’s benefit.
However, the Estate did not make this argument to the trial court and cannot raise the issue for the first
time on appeal. See Babinchak v. Town of Chesterton, 598 N.E.2d 1099, 1103 (Ind. Ct. App. 1992)
(holding that an argument raised for the first time on appeal was waived).
2
property be given to her grandson and that the remaining real property be shared equally
by Michael and James.
Although James farmed the property, in February 2008, Ruby deeded her farm and
house to Michael. On April 15, 2008, Ruby executed a second Last Will and Testament.
Ruby again made specific bequests and directed that cash, stocks, bonds, and CD be
equally divided between Michael and James. If, however, Michael cared for her in his
home for at least thirty days prior to her death, Ruby directed that Michael receive all of
the cash, stocks, bonds, and CD. Ruby also directed that her residuary estate be divided
evenly between Michael and James. Shortly after signing the second will, Ruby became
ill and was hospitalized. She died on May 15, 2008. On the day of her death, Michael
wrote two checks from the joint account—one check for $9,999.99 to his business and
one check for $10,000.00 to purchase an annuity.
After Ruby’s death, James realized that she had previously transferred her real
property to Michael and that the CD and bank accounts had passed directly to Michael.
James filed a petition to be appointed personal representative of the Estate, which the trial
court ultimately granted. The Estate then filed a petition to recover assets. The Estate
alleged that Ruby was “in a subordinate position, was in bad health, and was susceptible
to undue influence” and that Michael had violated his position of trust and confidence by
becoming a joint owner of Ruby’s accounts, writing checks to himself, and withdrawing
funds. App. p. 22. The Estate also alleged that the transfer of property to Michael was
“inappropriate.” Id. at 23. The Estate claimed that the transactions were “presumptively
fraudulent” and asked that the assets be returned to the Estate. Id.
3
After a hearing, the trial court entered findings of fact and conclusions thereon.
The trial court found there was no indication Ruby was of unsound mind or subject to
undue influence when she signed the second will, Michael never used the power of
attorney to transfer Ruby’s assets, there was no evidence that Ruby had any mental
impairments, there was no evidence that Ruby did not intend Michael to receive the
proceeds of the bank accounts or CD, and there was no evidence that Ruby’s transfer of
the property to Michael was a result of undue influence. The trial court denied the
Estate’s petition to recover alleged assets. The Estate filed a motion to correct error,
which the trial court denied. The Estate now appeals.
Analysis
The issue is whether the trial court properly denied the Estate’s petition to recover
alleged assets of the Estate. The trial court here issued sua sponte findings of fact and
conclusions thereon.2 Sua sponte findings control only as to the issues they cover, and a
general judgment will control as to the issues upon which there are no findings. Yanoff
v. Muncy, 688 N.E.2d 1259, 1262 (Ind. 1997). We will affirm a general judgment
entered with findings if it can be sustained on any legal theory supported by the evidence.
Id. When a trial court has made special findings of fact, we review sufficiency of the
evidence using a two-step process. Id. First, we must determine whether the evidence
2
At the conclusion of the hearing on this matter, the trial court asked if the parties wanted to provide
proposed findings, and the parties agreed to do so. The Estate argues that the trial court adopted
Michael’s findings verbatim. “While a trial court is discouraged from adopting a party’s proposed
findings verbatim, this practice is not prohibited.” In re Adoption of A.S., 912 N.E.2d 840, 851 (Ind. Ct.
App. 2009), trans. denied. Moreover, the Estate has not included the parties’ proposed findings in its
appendix and has failed to demonstrate that the findings were verbatim.
4
supports the trial court’s findings of fact. Id. Second, we must determine whether those
findings of fact support the trial court’s conclusions of law. Id.
Findings will only be set aside if they are clearly erroneous. Id. “Findings are
clearly erroneous only when the record contains no facts to support them either directly
or by inference.” Id. A judgment is clearly erroneous if it applies the wrong legal
standard to properly found facts. Id. In order to determine that a finding or conclusion is
clearly erroneous, an appellate court’s review of the evidence must leave it with the firm
conviction that a mistake has been made. Id.
The Estate argues that several of the trial court’s findings of fact and conclusions
thereon are clearly erroneous. We begin by addressing the Estate’s main argument—that
a presumption of undue influence applies here due to Michael’s status as Ruby’s power
of attorney. We first look to the statutes governing the liabilities of an attorney in fact.
Indiana Code Section 30-5-9-2 provides:
(a) An attorney in fact who acts with due care for the
benefit of the principal is not liable or limited only
because the attorney in fact:
(1) also benefits from the act;
(2) has individual or conflicting interests in relation
to the property, care, or affairs of the principal;
or
(3) acts in a different manner with respect to the
principal’s and the attorney in fact’s individual
interests.
(b) A gift, bequest, transfer, or transaction is not presumed
to be valid or invalid if the gift, bequest, transfer, or
transaction:
5
(1) is:
(A) made by the principal taking action; and
(B) not made by an attorney in fact acting for
the principal under a power of attorney;
and
(2) benefits the principal’s attorney in fact.
Ind. Code § 30-5-9-2.
Although the Estate argues that a presumption of undue influence applies here, we
held in In re Estate of Compton, 919 N.E.2d 1181, 1187 (Ind. Ct. App. 2010), trans.
denied, that “[a] presumption of undue influence is now conditioned upon the attorney in
fact’s actual use of the power of attorney to effect the questioned transaction for his or
her benefit.” “The benefiting attorney in fact is freed from the presumption of undue
influence so long as the power of attorney is unused in the questioned transaction.”
Compton, 919 N.E.2d at 1187.
The power of attorney at issue here was signed by Ruby in May 2005 and
appointed Michael as her attorney in fact in the event of her disability or incapacity.
However, many of the transactions at issue occurred prior to Ruby’s signing of the power
of attorney in May 2005. Ruby’s CD was established 2000 with Michael listed as the
payable on death beneficiary, and Ruby renewed the CD through March 2008. Ruby
added Michael to her accounts as a joint owner in July 2004.
As for the transactions after May 2005, it is clear from the record that Ruby was
never declared disabled or incapacitated, and Michael never acted as Ruby’s attorney in
6
fact. Ruby lived alone and continued conducting her own business until her death,
although the testimony at the hearing established that she required some assistance.
Despite the fact that Ruby herself signed the checks, signed the wills, and transferred the
property, the Estate argues Indiana Code Section 30-5-9-2(b) is inapplicable because the
transactions were not “made by the principal taking action.” The Estate seems to argue
that Ruby was unaware of the consequences of her actions and was influenced by
Michael. See Compton, 919 N.E.2d at 1188 (noting “this is not a case where Stephen
merely signed off on the contracts and did not know the consequences of his actions
because Scott was the orchestrator of the deal”).
The trial court found no evidence that anyone had “dominant control” over Ruby
and no evidence that she was “mentally incompetent.” App. p. 13. As a result, the trial
court found no presumption of undue influence under Indiana Code Section 30-5-9-2.
Although there may have been conflicting evidence regarding whether Ruby was fully
aware of the consequences of her actions and was influenced by Michael, our standard of
review does not allow us to reweigh the evidence or judge the credibility of witnesses.
Consequently, we conclude that the trial court properly found that the presumption of
undue influence as a result of Michael’s status as Ruby’s attorney in fact does not apply
here.
The Estate also challenges the trial court’s findings that Michael was entitled to
the funds in Ruby’s bank accounts. “Since Indiana’s adoption of the Non-Probate
Transfer Act, Indiana has operated under a statutory presumption that a survivor to a joint
account is the intended receiver of the proceeds in that account.” Dean v. Pelham, 899
7
N.E.2d 662, 666 (Ind. Ct. App. 2008), clarified on reh’g, 901 N.E.2d 648 (Ind. Ct. App.
2009), trans. denied. That statutory presumption is based on Indiana Code Section 32-17-
11-18(a), which provides: “Sums remaining on deposit at the death of a party to a joint
account belong to the surviving party or parties as against the estate of the decedent
unless there is clear and convincing evidence of a different intention at the time the
account is created.” A “party” to an account is defined as “a person who, by the terms of
the account, has a present right, subject to request, to payment from a multiple party
account.” I.C. § 32-17-11-7(a). “To overcome the statutory presumption for
survivorship rights, the burden falls upon the Estate to prove by clear and convincing
evidence that survivorship was not intended.” Dean, 899 N.E.2d at 669.
The only evidence presented here is that, after her husband’s death, Ruby added
Michael as a joint owner of the accounts. The trial court concluded there was no
evidence that Ruby “intended for anyone other than Michael, the joint owner, to have the
proceeds.” App. p. 12. The Estate argues that Michael became the owner of the accounts
through undue influence, but our review of the record reveals no support for this
assertion. There is no evidence of any undue influence by Michael at the time Ruby
created the accounts, which is the relevant time period. The trial court properly found
that the Estate failed to prove by clear and convincing evidence that the statutory
presumption was overcome.
The trial court made similar findings of fact and conclusions thereon concerning
the CD that listed Michael as the payable upon death beneficiary. The trial court found
that Indiana Code Section 32-17-11-18(b) applied, and the Estate does not challenge that
8
finding. That statute provides: “If the account is a trust account, on death of the trustee . .
. , any sums remaining on deposit belong to the person or persons named as beneficiaries
who survive the trustee, unless there is clear and convincing evidence of a contrary
intent.” I.C. § 32-17-11-18(b).3 Ruby opened the CD in 2000 and renewed it for the last
time in March 2008. There was no evidence presented regarding Ruby’s intent when she
created the CD. The trial court properly found that the Estate failed to prove by clear and
convincing evidence that the statutory presumption was overcome.
Next, the Estate argues that the trial court’s findings regarding the transfer of
Ruby’s real property were clearly erroneous. “Certain legal and domestic relationships
raise a presumption of trust and confidence as to the subordinate party on the one side
and a corresponding influence as to the dominant party on the other.” Supervised Estate
of Allender v. Allender, 833 N.E.2d 529, 533 (Ind. Ct. App. 2005), trans. denied.
“ʻThese relationships include that of attorney and client, guardian and ward, principal and
agent, pastor and parishioner, husband and wife, parent and child, and there may be
others.’” Id. (quoting Lucas v. Frazee, 471 N.E.2d 1163, 1166-67 (Ind. Ct. App. 1984)).
In such cases, if the plaintiff’s evidence establishes (a) the
existence of such a relationship, and (b) that the questioned
transaction between those parties resulted in an advantage to
the dominant person in whom trust and confidence was
reposed by the subordinate, the law imposes a presumption
that the transaction was the result of undue influence exerted
by the dominant party, constructively fraudulent, and thus
void.
3
Indiana Code Section 32-17-11-18(b) originally referred directly to payable on death accounts, but it
was amended by Pub. L. No. 143-2009, § 37, which was effective July 1, 2009.
9
Id. At that point, the burden of proof shifts to the dominant party who must demonstrate
by clear and unequivocal proof that the questioned transaction was made at arm’s length
and thus valid. Id. When a judgment is entered in favor of the dominant party, we
review not only the question of whether the judgment is contrary to law, but also whether
the dominant party’s evidence is sufficient to sustain the judgment that the presumption
has been rebutted under the clear and unequivocal proof standard. Id.
The trial court found that “no one person had any dominant position over [Ruby]
in the last years of her life” and that multiple people assisted her. App. p. 11. The Estate
argues that this finding is erroneous because Michael and/or his wife “orchestrated” the
preparation and signing of two wills, two power of attorney forms, the deed, and the
addition of Michael as joint or payable on death beneficiary on her accounts. Appellant’s
Br. p. 19. This argument is merely a request that we reweigh the evidence, which we
cannot do. Evidence was presented to the trial court that several people assisted Ruby,
that Ruby lived alone until her final hospitalization, that she conducted her own business
affairs with some assistance, that she was never diagnosed with a mental impairment, and
that she often visited casinos with her friends. This evidence supported the trial court’s
finding, and thus, the presumption of undue influence is inapplicable. See, e.g., Barkwill
v. Cornelia H. Barkwill Revocable Trust, 902 N.E.2d 836, 841 (Ind. Ct. App. 2009)
(holding that the son “was not in a dominant role in the relationship with his mother at
the time she changed the trust, and therefore, no presumption of undue influence
attaches”), trans. denied. The trial court also concluded that the real estate was a gift
from Ruby to Michael and that “[t]here is absolutely no evidence that the gift was in any
10
way the product of undue influence or fraud.” App. p. 13. The trial court’s conclusion is
not clearly erroneous.
Finally, the Estate challenges some of the trial court’s findings related to cash
given to Michael. The trial court found that, during her lifetime, Ruby gave gifts to both
James and Michael and that there was no evidence the gifts were procured by undue
influence. The Estate contends that the gift to James was small and that the gifts to
Michael were a result of undue influence. We have already found that the trial court’s
finding of no undue influence is not clearly erroneous. The Estate’s argument to the
contrary is merely a request that we reweigh the evidence, which we cannot do.4
Conclusion
The trial court properly denied the Estate’s petition to recover assets. We affirm.
Affirmed.
BAKER, J., and RILEY, J., concur.
4
The Estate also challenges several findings related to Ruby’s 2005 and 2008 wills. However,
neither will has been admitted to probate, and the wills are irrelevant to the petition to recover assets,
except possibly to the extent they show undue influence or dominance over Ruby. Both Attorney Benton
and Ruby’s friend, Betty Miller, testified that Ruby was competent at the time she signed the wills.
Further, the trial court found no dominance or undue influence, and the trial court’s findings are supported
by the evidence.
11