In re Bender, 53A01-0411-CV-473.

• Decision Date: 22 March 2006
• Docket Number: No. 53A01-0411-CV-473.,53A01-0411-CV-473.
• Citation: 844 N.E.2d 170
• Parties: In the Matter of the Supervised Estate of David A. BENDER, Deceased Paul E. Bender, Appellant, v. Brian D. Bender and Monroe Bank, as Trustee, Appellees.
• Court: Indiana Appellate Court

844 N.E.2d 170

In the Matter of the Supervised Estate of David A. BENDER, Deceased

Paul E. Bender, Appellant, v. Brian D. Bender and Monroe Bank, as Trustee, Appellees.

No. 53A01-0411-CV-473.

Court of Appeals of Indiana.

March 22, 2006.

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Peter J. Rusthoven, Bart A. Karwath, Mark J. Crandley, Paul L. Jefferson, Barnes & Thornburg LLP, Indianapolis, for Appellant.

Angela S. Cash, Jeffrey S. Toole, Scopelitis, Garvin, Light & Hanson, Indianapolis, for Appellees.

OPINION

KIRSCH, Chief Judge.

Paul E. Bender ("Paul"), as personal representative in the supervised Estate of David A. Bender (the "Estate"), appeals the probate court's¹ entry of partial summary judgment in favor of David's son, Brian D. Bender ("Brian"), and Monroe Bank ("Trustee"), as Trustee of the David A. Bender Irrevocable Trust for the benefit of Brian.² On appeal the parties raise the following consolidated and restated issues:

I. Whether the probate court erred in determining that conveyances of Estate property made by Paul, acting in his capacity as personal representative of David's supervised estate, were void due to self-dealing, breach of fiduciary duty, and failure to obtain prior approval.

II. Whether the probate court erred in determining that the agreements, which governed the operation of the Bender Family business entities, did not reflect David's testamentary intent.

III. Whether the probate court had jurisdiction to construe the terms of the Bender Family agreements and, if so, whether the probate court properly interpreted those agreements.

IV. Whether the probate court erred in concluding that Paul could not assert the affirmative defenses of waiver, estoppel, and laches.

V. Whether the probate court erred in charging Paul with payment of attorney fees.

We affirm in part, reverse in part, and remand for further proceedings.³

FACTS AND PROCEDURAL HISTORY⁴

On September 18, 1987, David A. Bender ("David") executed his Last Will and Testament ("Will"), in which he directed the payment of Estate debts, made specific bequests of his Porsche to Paul and $50,000 to his daughter, named a personal representative to administer his Estate and left the residuary of his Estate to his son Brian as follows:

I give, bequeath, and devise all my residuary estate, being all property, real and personal, tangible and intangible, wherever situated, in which I may have any interest at the time of my death not otherwise effectively disposed of to my son, Brian David Bender, . . .

Appellant's App. at 101. Five years later, David executed a codicil to his Will ("Codicil"), which modified only one issue—naming his brother Paul as personal representative for his Estate in place of the person previously named. David died testate on June 25, 1998.

At the time of his death, David and his two brothers, Paul and John W. Bender ("John"), owned the following family businesses: Bender Lumber Company, Inc., an Indiana corporation ("Lumber"); Bender Enterprises, an Indiana general partnership ("Enterprises"); Bender Vernal LLC, an Indiana limited liability company ("Vernal"); and Indiana Leasing, an Indiana general partnership ("Leasing") (collectively, the "Bender Businesses"). Prior to David's death, the brothers entered into partnership agreements for Enterprises and Leasing, a Restrictive Stock Agreement for Lumber, and a Buy-Sell Agreement for Vernal (collectively, the "Bender Agreements"). Id. at 327, 340, 352, 364. David's Will and Codicil made no reference to the Bender Agreements or to the disposition of David's share of the Bender Businesses.⁵

Paul was appointed as personal representative of the Estate on July 27, 1998. On August 5, 1998, notice of his appointment was first published. Eight months later, on April 29, 1999, Paul filed the inventory of the Estate's assets. Id. at 2-3.

In June and July of 1999, acting in his capacity as personal representative, Paul sold the Estate's interests in Lumber to himself for $57,200. He also sold the Estate's interest in Vernal and Enterprises to himself and to John, in equal shares, at a total price of $45,000 and $700,000, respectively. Finally, Paul transferred the Estate's interests in Leasing to himself and to John. No money was paid to the Estate in connection with this latter transaction due to a legal opinion that Leasing's assets had no value. Id. at 374. Believing that the Bender Agreements required these sales, Paul completed these transfers without notification to or the approval of Brian, the Trustee, or the probate court.

Paul filed his Personal Representative Intermediate Report ("Intermediate Report") with the probate court in June 2001. Id. at 126. Attached to the Intermediate Report was a summary of the Estate's accounts with schedules showing receipts and disbursements from June 25, 1998 through June 13, 2001. Id. at 129-69. This forty-page summary made reference to Paul's conveyances of the Estate's interests in the Bender Businesses to Paul and John. Id. at 132, 145. On June 22, 2001, the probate court entered an order approving, settling, and confirming the Intermediate Report. Id. at 28.⁶

Approximately two years later, on July 21, 2003, Brian and the Trustee filed a Complaint to Set Aside Sale of Decedent's Business Interests, alleging that Paul had purchased the Bender Businesses substantially below their true value and that the sales transactions were "void" for Paul's "self-dealing" and for his having failed to obtain a court order authorizing the sale. Id. at 30-32. The complaint also alleged that David's Will or a settlement agreement did not authorize the sale.⁷ Id. at 32. Paul responded, raising the affirmative defenses of laches, estoppel, and waiver. Id. at 37.

About a year later, Brian and the Trustee filed a motion for partial summary judgment. After a hearing, the probate court entered its October 12, 2004 order granting their motion. Id. at 18-26. The order, in part, provided that the sales and transfers of David's interests were void as a matter of law; that Paul's self-dealing constituted constructive fraud because Paul breached his fiduciary duties; that the Bender Agreements were not valid testamentary expressions of David's intent; and directed the return of $25,000 in personal representative fees that had been paid to Paul and $50,000 in attorney fees that had been paid to Paul's attorneys. Id. at 21-25. The order also construed the terms of the Bender Agreements, ruled that the defenses of waiver, estoppel, and laches did not apply, awarded Brian attorney fees, and ruled in favor of Brian on other subsidiary issues. Id. 21-25, Appellant's App. at 4. Paul now appeals the probate court's grant of partial summary judgment. Additional facts will be added as needed.

DISCUSSION AND DECISION⁸

The parties disagree about the appropriate standard of review this court should use to judge the probate court's grant of partial summary judgment in favor of Brian and the Trustee. Citing Peoples Bank & Trust Co. v. Price, 714 N.E.2d 712, 716 (Ind.Ct.App.1999), trans. denied, Paul asserts that construction of the Bender Agreements is a pure question of law for the courts and, therefore, that our standard of review on appeal is de novo. Appellant's Br. at 11. We agree with Paul that the interpretation of the Bender Agreements is integral to the ultimate distribution of the Estate. However, at this point in the probate proceedings, we need not concern ourselves with contract interpretation. Instead, we must determine whether the probate court erred in granting partial summary judgment, i.e., whether there is a genuine issue of material fact that Paul's conveyances of the Estate's interest in the Bender Businesses were void.

Our standard of review for a grant of summary judgment is the same as that used in the trial court: summary judgment is appropriate only where the evidence shows that there is no genuine issue of material fact, and the moving party is entitled to judgment as a matter of law. Chenoweth v. Estate of Wilson, 827 N.E.2d 44, 47 (Ind.Ct.App.2005). The moving party bears the burden of designating sufficient evidence to eliminate any genuine factual issues and, once the moving party has fulfilled this requirement, the burden shifts to the nonmoving party to come forth with contrary evidence. Id. All facts and reasonable inferences drawn from those facts are construed in favor of the nonmoving party. Id. at 48.

On appeal, we consider only those matters that were designated to the trial court at the summary judgment stage. Reed v. Beachy Constr. Corp., 781 N.E.2d 1145, 1148 (Ind.Ct.App.2002), trans. denied. We do not weigh the evidence, but we liberally construe all designated evidentiary material in the light most favorable to the nonmoving party to determine whether there is a genuine issue of material fact for trial. Id. The party that lost in the trial court has the burden to persuade the appellate court that the trial court erred. Id. Specific findings and conclusions by the trial court are not required, and although they offer valuable insight into the rationale for the judgment and facilitate our review, this court is not limited to reviewing the trial court's reasons for granting summary judgment as it may be affirmed upon any theory supported by the designated materials. Id.

I. Conveyance of the Bender Businesses

The probate court granted summary judgment to Brian and to the Trustee, reasoning that Paul's 1999 conveyances of the Estate's interest in Bender Businesses were void as a matter of law due to Paul's self-dealing, his breach of fiduciary duty, and his failure to obtain the prior approval required in a supervised estate. Paul, while acknowledging that he did not obtain prior court approval, asserts that the Bender Agreements directed him, as personal representative, to sell David's interests in Lumber, Vernal, and Enterprises to the purchasers designated in...