Hays v. Harmon

• Decision Date: 03 June 2004
• Docket Number: No. 13A04-0306-CV-299.,13A04-0306-CV-299.
• Parties: William HAYS, Appellant-Plaintiff, v. Paul HARMON, Personal Representative of the Estate of Rains Hays, Deceased, Appellee-Defendant.
• Court: Indiana Appellate Court

809 N.E.2d 460

William HAYS, Appellant-Plaintiff, v. Paul HARMON, Personal Representative of the Estate of Rains Hays, Deceased, Appellee-Defendant.

No. 13A04-0306-CV-299.

Court of Appeals of Indiana.

June 3, 2004.

Brent Welke, Virginia Beach, VA, for Appellant.

Derrick H. Wilson, Mattox, Mattox & Wilson, New Albany, IN, for Appellee.

OPINION

VAIDIK, Judge.

Case Summary

William Hays ("Hays") appeals the circuit court's grant of partial summary judgments in favor of the Estate of Rains Hays ("the Estate") on two separate issues, both of which arose from the probate of Rains Hays' ("Rains") will. Because we find that Hays failed to designate evidence showing that there are genuine issues of material fact as to Rains' testamentary capacity, and because the trust provision in Rains' will—which evinced a charitable purpose and was sufficiently definite to establish the elements of a valid trust pursuant to Indiana Code § 30-4-2-1(b)—created a valid charitable trust, we affirm both partial summary judgments.

Facts and Procedural History

Rains died in December 2000, leaving behind a last will and testament and one child, Hays. In his will, executed in February 1999, Rains bequeathed $100,000 to Hays, $500 to the Masonic Lodge No. 470, and the rest and residue of his estate, totaling nearly one million dollars, to a Trustee, Paul Harmon, to be administered as a charitable trust. The will's trust provision ("the trust provision") provides as follows:

I give, bequeath and devise all the rest and residue of the property that I may own at the time of my death, real and personal, tangible and intangible[,] to Paul Harmon of Crawford County, Indiana, as Trustee. Paul Harmon shall hold and administer such sums as a trust estate, and shall distribute all of the net income of the trust and so much of the trust corpus as he shall deem reasonable, to provide for poor relief to worthy and needy individuals who reside in Crawford County, Indiana, and have[,] prior to their application to the Trustee, resided in Crawford County at least six months.

Appellant's App. p. 84.

Trustee Paul Harmon became acquainted with Rains when Harmon purchased Rains' farm sometime around 1993. In 1995, Harmon began spending more time on the farm assisting and preparing meals for Rains. And in February 1999, at Rains' request, Harmon drove Rains to the law office of J.C. Tucker to execute his last will and testament.

After Rains' death, Harmon, who was also named as Executor, filed a Petition for Probate of Will in the Crawford Circuit Court in January 2001 (Cause No. 13C01-0101-EU-003; "the Estate case"). Hays subsequently filed a will contest action against all beneficiaries and trustees named in the will, including "Paul Harmon, individually and as Personal Representative of the Will of Rains G. Hays" (Cause No. 13C01-0106-CP-066; "the Hays case"). Appellant's App. p. 17. In his complaint, Hays alleged that Harmon exercised undue influence over Rains and that Rains lacked testamentary capacity at the time the will was executed.¹

In September 2001, Harmon, as Trustee, adopted and tendered to the Internal Revenue Service (IRS) Trust By-Laws, which clarify various aspects of the Rains G. Hays Testamentary Trust's administration.

The Estate and Hays each filed a motion for partial summary judgment on the issue of whether the trust provision established a valid charitable trust. As a practical matter, the Estate case and the Hays case were consolidated for argument but not for trial.² A hearing was held, and the circuit court granted the Estate's motion, finding that Rains' will created a valid charitable trust because the trust provision established all six statutory elements of a valid trust.³

The Estate filed another motion for partial summary judgment, this time urging the circuit court to find that Rains had testamentary capacity at the time he executed his will and designating with specificity twelve affidavits and three depositions in support of this motion. Hays responded to the Estate's motion with a brief in which he argues what he calls the "credibility issues" of the Estate's affiants—"The issue is not the weight of the paper but the weight of the testimony."—and designates the following materials in support of his position: any and all documents designated or referred to by the Estate in its motion, excerpts from depositions of Harmon and Hays, Hays' original and amended complaints, and supporting affidavits. Appellant's App. p. 74. Hays also moved for leave to file belatedly an affidavit of Hays himself. During a hearing on the Estate's motion for partial summary judgment, the Estate orally moved to strike Hays' response to its motion on the grounds that Hays' response was not timely, contained hearsay, and was not properly designated. Following the hearing, the circuit court granted the Estate's motion for partial summary judgment—finding that no issues of material fact existed as to whether Rains had testamentary capacity at the time he executed his will—but denied the Estate's oral motion to strike Hays' response. Hays now appeals both partial summary judgments.

Discussion and Decision

Hays contends that the circuit court erred in granting the Estate's motions for partial summary judgment on both Rains' testamentary capacity and the validity of the charitable trust. In particular, Hays argues that Rains lacked testamentary capacity at the time he executed his will and that the trust provision in Rains' will did not meet the statutory requirements for a valid trust—charitable or otherwise. We consider each issue in turn.

In reviewing the circuit court's entry on a summary judgment motion, we apply the same standard of review used in the circuit court: we must decide whether there is a genuine issue of material fact that precludes summary judgment and whether the moving party is entitled to judgment as a matter of law. Ind. Trial Rule 56(C); Birch v. Midwest Garage Door Sys., 790 N.E.2d 504, 509 (Ind.Ct.App.2003). Once the moving party has sustained its initial burden of proving the absence of a genuine issue of material fact and the appropriateness of judgment as a matter of law, the party opposing summary judgment must respond by designating specific evidence establishing a genuine issue for trial. Birch, 790 N.E.2d at 509.

In ruling on a motion for summary judgment, the circuit court may consider only properly designated evidence that would be admissible at trial. Kronmiller v. Wangberg, 665 N.E.2d 624, 627 (Ind.Ct. App.1996). Supporting and opposing affidavits shall be made on personal knowledge, shall set forth such facts as would be admissible in evidence, and shall show affirmatively that the affiant is competent to testify to the matters stated therein. Ind. Trial Rule 56(E). The party offering a deposition into evidence bears the burden of establishing its admissibility. Clark v. Sporre, 777 N.E.2d 1166, 1171 (Ind.Ct. App.2002). Objection may be made at the hearing on a motion for summary judgment to receiving in evidence any depositions or part thereof for any reason that would require the exclusion of the evidence if the witness were then present and testifying. Ind. Trial Rule 32(B).

With regard to the validity of the trust, the circuit court issued findings of fact and conclusions of law in support of its summary judgment for the Estate. In the summary judgment context, we are not bound by the circuit court's specific findings of fact and conclusions thereon. Birch, 790 N.E.2d at 509. They merely aid our review by providing us with a statement of reasons for the circuit court's actions. Id.

I. Testamentary Capacity

Hays contends that Rains lacked testamentary capacity at the time he executed his will. Every person is presumed to be of sound mind to execute a will until the contrary is shown. Estate of Verdi v. Toland, 733 N.E.2d 25, 28 (Ind.Ct.App. 2000),reh'g denied. To rebut this presumption, it must be shown that the testator lacks mental capacity at the time of executing his will to know: (1) the extent and value of his property; (2) those who are the natural objects of his bounty; and (3) their deserts, with respect to their treatment of and conduct toward him. Id. It is the testator's soundness of mind at the time of executing the will that is controlling; nonetheless, evidence of the testators mental condition prior to the date of execution is admissible, as it relates to the testators mental state when executing his will. Id.

In moving for partial summary judgment on this issue, the Estate had the burden of showing by designated evidentiary materials that there is no genuine issue of material fact as to Rains' testamentary capacity at the time he executed his will. To prove the absence of a genuine issue of material fact as to Rains' testamentary capacity, the Estate attached to its motion twelve affidavits and three depositions and directed the circuit court to the specific relevant paragraphs of each affidavit and deposition. The Estate's affidavits were of Rains' long-time neighbors, bank advisors, physician, tax preparer, and attorney; the depositions were of Harmon and Hays. The affidavits collectively depict Rains as an opinionated, thrifty, nearly deaf man who maintained friendships with his neighbors—with whom he discussed politics, current events, and financial matters—until the end of his life, but who had a strained relationship with his only son. Neighbor Earl Luttrell stated, "In over 30 years of being around [Rains], I saw his son twice." Appellant's App. p. 56.

In affidavits of the professionals in Rains' life, Rains is described as opinionated and very knowledgeable about his personal finances. Thomas J. Krodel, Vice President-Senior Trust Advisor of Old National Trust Company, stated that until Rains' death, Rains "was well aware of his investments and [the bank's] strategy for investing his money" and "seemed knowledgeable about his affairs and was able to respond to...