Inlow v. Henderson, Daily, Withrow & DeVoe, 49A02-0206-CV-476.

• Decision Date: 23 April 2003
• Docket Number: No. 49A02-0206-CV-476.,49A02-0206-CV-476.
• Citation: 787 N.E.2d 385
• Court: Indiana Appellate Court
• Parties: Jason L. INLOW, Heather N. Inlow, Jeremy H. Inlow, and Sarah C. Inlow, Appellants-Plaintiffs, v. HENDERSON, DAILY, WITHROW & DeVOE, a Partnership, Whitney B. Grayson, Grayson & Associates, Paul M. Harrington, The Heartland Insurance Group, and Great-West Life and Annuity Insurance Company, Appellees-Defendants.

787 N.E.2d 385

Jason L. INLOW, Heather N. Inlow, Jeremy H. Inlow, and Sarah C. Inlow, Appellants-Plaintiffs, v. HENDERSON, DAILY, WITHROW & DeVOE, a Partnership, Whitney B. Grayson, Grayson & Associates, Paul M. Harrington, The Heartland Insurance Group, and Great-West Life and Annuity Insurance Company, Appellees-Defendants.

No. 49A02-0206-CV-476.

Court of Appeals of Indiana.

April 23, 2003.

Stephen B. Caplin, Jame S. Goldstein, Caplin Park Tousley & McCoy, Marvin J. Frank, Robert M. Hamlett, Frank & Kraft, P.C., Indianapolis, IN, Attorneys for Appellants.

Robert F. Wagner, Dina M. Cox, Lisa Dillman, Lewis & Wagner, Indianapolis, IN, Attorneys for Appellee, Henderson, Daily, Withrow & DeVoe.

Nelson Nettles, John M. Choplin II, Norris Choplin & Schroeder, LLP, Indianapolis, IN, Attorneys for Appellees, Whitney B. Grayson, Grayson & Associates, Paul M. Harrington, and The Heartland Insurance Group.

Mary Jane Lapointe, Leagre Chandler & Millard, LLP, Indianapolis, IN, Raul A. Cuervo (Pro Hac Vice), Richard J. Karpinski (Pro Hac Vice), Jorden Burt LLP, Washington, DC, Attorneys for Appellee, Great-West Life and Annuity Insurance Company.

OPINION

BAKER, Judge.

Appellants-plaintiffs Jason L. Inlow, Heather N. Inlow, Jeremy H. Inlow, and Sarah C. Inlow (collectively, "Inlow Children") appeal the trial court's dismissal of their amended complaint bringing suit against a law firm, attorneys working for that firm, insurance companies, and agents of those insurance companies. The Inlow Children brought claims against the law firm of Henderson, Daily, Withrow & De-Voe and eighteen attorneys of Henderson, Daily, Withrow & DeVoe in their individual capacities (collectively, "Henderson Daily"). They also asserted claims against Whitney B. Grayson, Grayson & Associates, Paul M. Harrington, The Heartland Insurance Group, and Great-West Life and Annuity Insurance Company (collectively, "Insurers"). These claims were brought because of harms allegedly caused to Lawrence W. Inlow and his estate, which diminished the value of the estate.

The Inlow Children argue that in a number of capacities they: (1) have standing to maintain their claims, (2) are real parties in interest, and (3) have stated claims that avoid dismissal under Indiana Trial Rule 12(B)(6). The Inlow Children also complain that the trial court erroneously struck Counts IV through VIII of their motion for leave to file amended complaint and erroneously denied their motion to amend the amended complaint by interlineation. They contend that even if the dismissal of their claims, the striking of Counts IV through VIII of their motion for leave to file amended complaint, and the denial of their motion to amend the amended complaint by interlineation were proper; they are still entitled to reasonable time to seek the ratification, joinder, or substitution of the successor trustee and successor personal representative according to Indiana Trial Rule 17(A)(2).

Aside from their claims brought as assignees of the successor personal representative and attempted claims as assignees of the successor trustee, each claim the Inlow Children assert ultimately arises from their status as heirs. The Probate Code carefully limits the intrusion of heirs and other interested persons into the personal representative's administration of an estate. As heirs, the Inlow Children have not followed the procedures outlined in the Probate Code for intervening in the administration to sue alleged tortfeasors of the decedent and his estate. Moreover, the Inlow Children may not claim capacity to sue as assignees of the successor trustee for harms befalling the estate. A successor trustee has no authority to sue for harms resulting to an estate and, therefore, has no authority to assign such claims. Finally, the assignments made by the personal representative and the successor personal representative were invalid and are no basis for suit against Henderson Daily and the Insurers.

We, therefore, affirm the trial court's: (1) dismissal of each count of the amended complaint, (2) denial of stricken Counts IV through VIII of the motion for leave to file amended complaint, and (3) denial of the motion to amend the amended complaint by interlineation. We deny the Inlow Children's request to remand this cause to the Marion Superior Court for the ratification, joinder, or substitution of the successor personal representative through Trial Rule 17(A). Any further action they take must be within the bounds of the Probate Code as we will explain more fully below.

FACTS

Lawrence W. Inlow created the Lawrence W. Inlow Irrevocable Children Trust (Inlow Trust) for the benefit of his children and named himself trustee. As trustee of the trust, he purchased an insurance policy from Great-West Life and Annuity Insurance Company (Great-West Life) on July 8, 1996. The policy designated the trustee of the Inlow Trust as the beneficiary of the policy. In the event of Lawrence's death, Great-West Life was obligated to pay ten million dollars to the successor trustee who was yet unnamed.

On May 21, 1997, Lawrence Inlow died intestate, leaving six heirs: Anita Inlow, his second wife; Jesse Inlow, Lawrence and Anita's minor child; and the four plaintiffs to this action who are children of Lawrence's first marriage. After Lawrence's death, Karl Kindig was appointed personal representative of the Inlow Estate. Henderson Daily provided legal services to Kindig in his capacity as personal representative. Kindig later executed an assignment in favor of the Inlow Children of all claims belonging to the personal representative against all other persons, including any claims against Henderson Daily. With the consent of the Inlow Children, the successor personal representative agreed to pay Kindig $200,000 allegedly for his services to the Inlow Estate. The probate of the Inlow Estate is still pending in the Hamilton Superior Court as of the filing of the appellate briefs in this action.

On October 10, 2001, the Inlow Children filed an amended complaint for damages. In their amended complaint, the Inlow Children asserted claims of negligence, "intermeddling," and legal malpractice against Henderson Daily. They asserted these claims for harms allegedly caused to the Inlow Estate to the detriment of their intestate shares of the property. Though the trial court permitted the three claims against Henderson Daily, it struck five others the Inlow Children attempted to assert.

As for the insurance companies and agents, the Inlow Children brought claims of negligence and breach of contract, despite the fact that Great-West Life had paid the policy proceeds in full. In addition to claims brought in the amended complaint, the Inlow Children contend that they were entitled to assert claims assigned by the successor trustee of the Inlow Trust. They attempted to assert these assigned claims, not as part of their amended complaint, but in a motion to amend the amended complaint by interlineation. The trial court denied their motion to amend the amended complaint by interlineation.

In response to the amended complaint, Henderson Daily and the Insurers filed separate motions to dismiss. Among other arguments, they contended that the Inlow Children lacked standing to bring claims, the probate court had exclusive jurisdiction over certain claims, the Inlow Children were not real parties in interest, and the Inlow Children failed to state claims upon which relief could be granted. The trial court granted the motions to dismiss with prejudice in favor of all the defendants. The Inlow Children now appeal.

DISCUSSION AND DECISION

I. Standard of Review

Although the defendants made other arguments in favor of dismissal in addition to Indiana Trial Rule 12(B)(6), we need only resolve this appeal on the basis of that rule. "[A] complaint may not be dismissed for failure to state a claim upon which relief can be granted unless it is clear on the face of the complaint that the complaining party is not entitled to relief." City of New Haven v. Reichhart, 748 N.E.2d 374, 377 (Ind.2001). We review the pleadings in the light most favorable to the nonmoving party and draw every reasonable inference in favor of that party. Id. When reviewing a motion to dismiss for failure to state a claim, this court accepts as true the facts alleged in the complaint. Id. We will affirm a successful Trial Rule 12(B)(6) motion when a complaint states a set of facts, which, even if true, would not support the relief requested in that complaint. Id. We will affirm the trial court's ruling if it is sustainable on any basis found in the record. Id.

II. Claims Against Henderson Daily

The amended complaint asserted three claims against Henderson Daily. In Count I, the Inlow Children contended that Henderson Daily was negligent in creating and funding the Inlow Trust. According to the facts in the amended complaint, which we accept as true, Lawrence instructed Henderson Daily to prepare a trust agreement that would minimize tax consequences to property benefiting his children upon his death. To fund the trust, Henderson Daily requested the Insurers to issue a policy to the trustee for payment of proceeds in the event of Lawrence's death. Apparently in an effort to minimize certain tax consequences to estate property in the event of Lawrence's death, Henderson Daily, at Lawrence's request, required inclusion of a restrictive provision in the insurance policy. The insurance policy, however, was issued without the restrictive provision.

The amended complaint contained two other counts against Henderson Daily. In Count II, the Inlow Children sued Henderson Daily for "intermeddling" in the administration of the Inlow Estate through its denying and withholding of information the personal representative required to perform his duties. Finally, Count III includes a claim for Henderson Daily's malpractice in performing legal services for the personal...