Walter v. Balogh, 57S05-9308-CV-922

Decision Date24 August 1993
Docket NumberNo. 57S05-9308-CV-922,57S05-9308-CV-922
PartiesAlwilda WALTER, and Fort Wayne National Bank, Guardian of the Estate of Alwilda Walter, Appellants-Defendants, v. Mark S. BALOGH, Diana L. Balogh, Barry Hoeppner & Janet Hoeppner, Appellees-Plaintiffs, and Howard Hoeppner and B & H Producers, Inc., Appellees-Third Party Defendants.
CourtIndiana Supreme Court

GIVAN, Justice.

In an opinion reported at 604 N.E.2d 1226, the Court of Appeals reversed the trial court's judgment in favor of appellees. In so doing, they remanded the case to the trial court with instructions to make specific findings of fact sufficient to preserve the right of review regarding whether Howard Hoeppner provided sufficient proof that he had not wielded undue influence over Alwilda. The Court of Appeals also instructed the trial court to proceed with foreclosure of mortgages against the appellees. We set aside the decision of the Court of Appeals and affirm the trial court.

Howard Hoeppner had been a close friend of the Walters for many years and had performed many services and favors for them. Martin Walter died in 1983. At that time, his wife Alwilda was 79 years of age. After Martin's death, Alwilda executed a Durable Power of Attorney, naming Howard Hoeppner as her attorney-in-fact. She also named him as personal representative under her will executed in 1983. Howard Hoeppner's son Barry became a tenant farmer of the Walters in 1974. Over time, Barry and his business partner, Mark Balogh, became responsible for farming approximately 600 acres of the Walters' land. They also became close friends of the Walters and did many favors for them. After Martin Walter died, both Barry and Mark did considerable favors for Alwilda.

The Walters also had other tenants, Bruce and Minnie Provine, who since 1957 had operated another tract of land of 285 acres owned by the Walters. In 1984, Alwilda Walter decided to make gifts to both the Provines and Barry and Mark. She stated her desire to give each of them the farms which they had been tending. For the purpose of drafting the necessary papers, she contacted attorney Jeanne Miller of New Haven, Indiana. Mrs. Miller advised Alwilda that if she reported the gift as being made instanter she would incur a sizeable gift tax liability. To lessen that liability, Mrs. Miller set up contracts whereby the possession of the farms would be delivered and the responsibility of operation would be solely in the hands of the donees. For tax purposes, they set up a payment schedule to be made over a period of years and each time a payment became due Alwilda would forgive the due payment as a gift, thus taking advantage of annual gift tax allowances.

After this had been accomplished, Mrs. Miller discovered that the farm given to the plaintiffs in this case (the Provines are not a part of this litigation) was valued at only approximately half of its true value. She stated her concern to Alwilda Walter that the agreement should be redrafted so as to show the true value of the property. In 1985, a new agreement was drawn to reflect the true value. As part of that agreement, Alwilda made a codicil to her will excusing any indebtedness from plaintiffs to her which might have remained unpaid at that time.

In June of 1988, Alwilda, who then was 84 years of age, started to become confused and forgetful. Her niece, Ellen Bates, became involved in Alwilda's financial affairs. Alwilda appointed Bates as her attorney-in-fact and revoked Howard Hoeppner's 1983 power of attorney (a power of attorney issued to Hoeppner in 1986 remained in effect). Alwilda also executed another codicil to her will which in part revoked the provision forgiving the debts of the appellees. In August of 1988, a guardianship was established over the estate of Alwilda and the Fort Wayne National Bank was appointed as her guardian. On August 23, 1988, the appellees filed a request for special notice of hearing in Alwilda's guardianship proceeding. They allege they were entitled to special notice as mortgagors. Howard Hoeppner filed a petition in the guardianship proceeding requesting the court to adjudicate Alwilda's competence.

As Alwilda's guardian, the bank issued a notice of default to the appellees with respect to their obligations under the 1985 mortgages. The appellees filed the present action for declaratory judgment requesting the trial court to enter a judgment to the effect that the 1985 notes and mortgages were null and void and that the 1984 land contract was binding and enforceable. Alwilda and the bank answered the complaint asserting duress, undue influence, failure of consideration, no consideration and estoppel. A counterclaim was filed naming Howard Hoeppner as third party defendant and sought the recission of the transactions in question, an accounting and damages, or in the alternative a foreclosure of the mortgages.

The Court of Appeals opinion in this case does an excellent job of setting forth the law concerning arms-length contracts between parties and the law concerning conditional gifts. However, in the case at bar, we believe the trial judge to be correct in his observation that Alwilda was interested in, and in fact did give, a gift to the appellees in 1984. Although she complained about having to do so much paper work to accomplish the simple gift she went along with Mrs. Miller's advice, which in fact was sound, to enter into an agreement which would minimize her gift tax liabilities. We agree with the trial judge's observation that there never was any intent on the part of Alwilda to exercise any dominion whatever over the...

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    ...LLC, 935 N.E.2d at 179 (citing Belterra Resort Ind., LLC v. Ind. Dep't of State Rev., 900 N.E.2d 513, 517 (Ind. 2010)); Walter v. Balogh, 619 N.E.2d 566, 568 (Ind. 1993); Bethlehem Steel Corp. v. Ind. Dep't of State Rev., 597 N.E.2d 1327, 1331-1332 (Ind. T.C. 1992); Monarch Beverage Co. Inc......
  • Shell Oil Co. v. Meyer
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    • August 19, 1997
    ... ...         Our supreme court has held, "a court of equity has the power to require that to be done which should have been done." Walter v. Balogh, 619 N.E.2d 566, 568 (Ind.1993). Similarly, we have stated, "[t]he trial court has full discretion to fashion equitable remedies that are ... ...
  • Marriage of Dall, In re
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    • Indiana Appellate Court
    • May 30, 1997
    ... ... See Walter v. Balogh, 619 N.E.2d 566, 568 (Ind.1993) (The refusal of the donor to execute the necessary documents does not defeat the efficacy of a completed ... ...
  • Crider v. Crider
    • United States
    • Indiana Appellate Court
    • August 26, 2014
    ... ... 38A C.J.S. Gifts, 7 (2014). In Walter v. Balogh, 619 N.E.2d 566 (Ind.1993), our supreme court disregarded mortgages purporting to require payments for the transfer of land, where the ... ...
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