Gatlin Plumbing & Htg. v. Estate of Yeager

• Decision Date: 08 February 2010
• Docket Number: No. 45A03-0907-CV-318.,45A03-0907-CV-318.
• Citation: 921 N.E.2d 18
• Parties: GATLIN PLUMBING & HEATING, INC., Appellant-Plaintiff, v. ESTATE OF Robert YEAGER, Appellee-Defendant.
• Court: Indiana Appellate Court

921 N.E.2d 18

GATLIN PLUMBING & HEATING, INC., Appellant-Plaintiff, v. ESTATE OF Robert YEAGER, Appellee-Defendant.

No. 45A03-0907-CV-318.

Court of Appeals of Indiana.

February 8, 2010.

Benjamen W. Murphy, Murphy Yoder Law Firm, P.C., Merrillville, IN, Richard Anderson, Anderson & Anderson, Merrillville, IN, Attorneys for Appellant.

Edward P. Grimmer, Joseph C. Svetanoff, Austgen Kuiper & Associates, P.C., Crown Point, IN, Attorneys for Appellee.

OPINION

DARDEN, Judge.

STATEMENT OF THE CASE

Gatlin Plumbing & Heating, Inc. ("Gatlin") appeals the denial of its objection to the trial court's order in the Matter of the Estate of Robert H. Yeager ("the Estate") that directed the transfer of 63 shares of Gatlin capital stock held by the late Robert H. Yeager ("Robert").

We affirm.

ISSUES

1. Whether the trial court erred when it held that Gatlin's objection was barred by Indiana Code section 29-1-14-1.

2. Whether the trial court erred when it held that Gatlin's objection based on the Shareholders' Agreement was not timely.

3. Whether the trial court erred when it did not vacate its transfer order.

FACTS

In 1951, Robert married Musetta Gatlin ("Musetta"). On June 27, 1957, Gatlin was formed. On December 16, 1975, a Shareholders' Agreement was signed for Gatlin, noting the growth of Gatlin and naming its current shareholders as Ivan Gatlin, Chief Operating Executive, with 1080 shares; Marjorie Gatlin, with 491 shares; and 10 shares each held by Iris Tamminga, Doris Cox, Musetta,¹ John Gatlin, Darl Gatlin, and Roger Gatlin. (App.84). The Shareholders' Agreement initially recited that its purpose was to provide for "the possibility of death of the parties," and for the "continued profitable operation of the business in the event of Ivan Gatlin's or Marjorie Gatlin's death." (App.84, 85). Stating that "open market ... sale without restriction" of shares was "not advisable," it sought to "restrict [ ] the privilege of owning shares." (App.85²). Article V, entitled "Death of a Shareholder," then specified as follows:

In the event of the death of any person who is not a descendant of Ivan Gatlin and Marjorie Gatlin and who is holding shares of stock of this CORPORATION, in their own name individually or as a surviving joint tenant, the CORPORATION shall have the option, within sixty (60) days after such decease, or within thirty (30) days after the appointment and qualification of an executor or administrator of the estate of such decedent, to purchase any or all of the shares of stock of such decedent, at a price as provided in ARTICLE II, Paragraph 5, hereof, and upon a tender of the amount of such purchase price to the heirs or legal representatives of such decedent, the heirs or legal representatives shall thereupon surrender to the CORPORATION the certificates evidencing ownership of such shares of stock.

(App.89).

On May 15, 1979, an amendment to the Shareholders' Agreement noted that Gatlin had "additional shareholders who [were] not signators" to the December 1975 agreement, and "the wish and desire of all existing shareholders of the corporation that all current and future shareholders be bound by that Agreement." (App.52). Accordingly, the "undersigned, being all of the current shareholders of the corporation, ... agree[d] to be bound by all the terms of" the December 1975 Shareholders Agreement. Id. Both Robert and Musetta signed the May 1979 amendment as shareholders.³

On October 25, 2006, Robert died. On July 11, 2007, an Indiana inheritance tax return was filed.

On June 4, 2008, his widow, Musetta, and her co-successor trustee of the Yeager Joint Trust filed an affidavit of entitlement pursuant to Indiana Code section 29-1-8-4.5.⁴ The affidavit stated that Robert had died testate but the will (provided therewith) was not probated as the estate was of minimal value; and seeking an order, pursuant to the terms of Robert's will and the Yeager Joint Trust, directing Gatlin to transfer Robert's 63 shares of Gatlin capital stock—32 shares to Musetta and Belinda Hamacher, as successor co-trustees of the Joint Trust; and 31 shares to Musetta as trustee of the Musetta Yeager Trust. Also on June 4, 2004, Musetta and her co-successor trustee filed an affidavit for transfer of personal property. That same day, June 4, 2004, the trial court issued its order on affidavit of entitlement, holding that "the affiants" were "entitled to the transfer" of the 63 shares of Gatlin stock in Robert's name. (App.18).

On June 19, 2008, Gatlin filed its objection to the order, stating that it was "an interested party" because "it h[e]ld a valid right to purchase the Gatlin" stock ordered to be transferred. (App.21). Gatlin cited Article V as giving it "the right to purchase stock from a deceased shareholder within 30 days after the appointment and qualification of an executor or administrator." Id. Gatlin asserted that there had been "no executor or administrator appointed in this estate due to the amount of assets being under $50,000.00"; and that "due to the lack of an executor or administrator," the "30-day period for the corporation to exercise its right should run from the date of the Order transferring the stock, as that was the first instance that a right existed in order to transfer said stock." (App.21, 22).

Subsequently, Gatlin submitted its memorandum of law in support of its objection to the order to transfer, and its designation of undisputed material facts. Gatlin repeatedly argued its "right to repurchase stock from a deceased stockholder within thirty (30) days after the appointment and qualification of an executor or administrator of the estate of a deceased shareholder." (App.55, 57, 59). It argued that because there was no executor or administrator of the estate appointed, the "first" opportunity for transfer of stock pursuant to the Shareholders' Agreement provision was either upon the filing of the affidavit of entitlement or the trial court's order of June 4, 2008. (App.55, 59). Its arguments made no reference to the option provided in the Shareholders' Agreement whereby Gatlin could "within sixty (60) days after" Robert's death, exercise the option of purchasing his share of stock by tendering the price as specified. (App.89). Nor did Gatlin designate any evidence or make any argument that it was unaware of Robert's death on October 25, 2006.

The Estate's brief in response noted that Gatlin had the option of acting within sixty days of Robert's death to purchase his stock, and that it had failed to exercise this option. An affidavit by Musetta recited her November 2007 conversations with Gatlin shareholders indicating that Gatlin would not pursue purchase of the stock; and chronicled her fruitless correspondence, after employing counsel, from June of 2007 through March of 2008 asking Gatlin to transfer Robert's stock before filing the affidavit of entitlement on June 4, 2008.

On June 19, 2009, the trial court issued its order. It found that Gatlin had neither exercised its option within sixty days of Robert's death, as provided in the Shareholders' Agreement, nor "open[ed] an estate" itself—which it could have done pursuant to the Probate Code as an "interested party." (App.132). Concluding that Gatlin had failed to exercise its legal rights in a timely manner, the trial court denied its objection to the order that Gatlin transfer the stock held in Robert's name.

DECISION

1. Indiana Code section 29-1-14-1

Gatlin first argues that the trial court erred as a matter of law when it held that its objection, seeking to exercise its option to purchase Robert's share, was time-barred pursuant to Indiana Code section 29-1-14-1. As it correctly notes, appellate review of the trial court's interpretation of a statute is de novo. See, e.g., Gibson v. Hernandez, 764 N.E.2d 253, 255 (Ind.Ct.App.2002).

Indiana Code section 29-1-14-1 expressly provides limitations on filing "claims against a decedent's estate." We have frequently held, however, that "a claim," as the term is used in that particular statutory provision, refers to a debt or demand of a pecuniary nature which could have been enforced against the decedent in his lifetime and could have been reduced to a simple money judgment. Cardwell v. Estate of Kirkendall, 712 N.E.2d 1047, 1049 (Ind.Ct.App.1999) (citing Matter of Williams' Estate, 398 N.E.2d 1368, 1370 (Ind.Ct.App.1980); Ostheimer v. McNutt, 116 Ind.App. 649, 652, 66 N.E.2d 142 (1946); Tinkham v. Tinkham, 112 Ind. App. 532, 538, 45 N.E.2d 357 (1942)). The option given to Gatlin by the Shareholders' Agreement to purchase Robert's stock was not a debt or demand of a pecuniary nature which Gatlin could have enforced against him in his lifetime. Hence, Gatlin's objection was not time-barred pursuant to Indiana Code section 29-1-14-1.

We do not read the trial court's conclusion that Gatlin's objection was untimely, however, to be solely grounded on that statutory provision. The Probate Code defines "interested persons" as

heirs, devisees, spouses, creditors, or any other having a property right in or claim against the estate of a decedent being administered. This meaning may vary at different stages and different parts of a proceeding and must be determined according to the particular purpose and matter involved.

I.C. § 29-1-1-3. The Code further provides that after the death of a testator,

[a] verified written application may be filed by or on behalf of any interested person ..., in any court having jurisdiction of the administration of the decedent's estate for an order of that court against any person who is alleged to have the custody of the will of said person so dying, to produce said will before said court ... in order that said will may be probated.

I.C. § 29-1-7-3. More specifically, "[a]ny interested person ... may petition the court ... to have the will of such decedent ... probated," and to have letters testamentary issued to the named executor or an administrator appointed. I.C....