Wilson v. N. Salem Bank
| Decision Date | 21 June 2021 |
| Docket Number | Court of Appeals Case No. 20A-CC-1362 |
| Citation | 171 N.E.3d 1066 (Table) |
| Court | Indiana Appellate Court |
| Parties | David B. WILSON, Appellant-Intervenor, v. NORTH SALEM BANK, solely in its capacity as Personal Representative of the Estate of Marjorie Bymaster Wilson, Appellee-Plaintiff, v. Larry J. Wilson and Susan E. Craft, Appellees-Defendants. |
Attorney for Appellant: Jarrell B. Hammond, Lewis Wagner, LLP, Indianapolis, Indiana
Attorneys for Appellee-Cross Appellant North Salem Bank: Debra A. Mastrian, Suzannah W. Overholt, Smith Amundsen, LLC, Indianapolis, Indiana
Attorneys for Appellee-Cross Appellant Larry J. Wilson : Larry J. Wilson, Greencastle, Indiana
Attorneys for Appellee-Cross Appellant Susan E. Craft: Andrew R. Falk, Indianapolis, Indiana, Jeffrey A. Boggess, Greencastle, Indiana
[1] David Wilson appeals the Putnam Superior Court's final judgment as to a debt owed to the estate of his mother, Marjorie. Larry Wilson and Susan Craft, Marjorie's two other children, cross-appeal. The estate's personal representative, North Salem State Bank (the "Bank"), responds. The parties raise the following three restated issues for our review:
[2] We affirm and remand solely for proceedings to determine whether the debt owed to the estate remains unpaid.
[3] Between 1993 and 2008, Marjorie loaned Larry $104,550. She also loaned Susan $47,755. Marjorie died in 2014, and her estate was opened in Putnam Circuit Court (the "probate court") in 2016.1 Neither Larry nor Susan had paid their loans back by the time the estate was opened, and their unpaid debts comprised the bulk of the estate's assets. See Appellee's App. pp. 18–19, 43. Unlike Larry and Susan, David owed no debt to the estate.
[4] As personal representative of the estate, the Bank was tasked with collecting Larry's and Susan's debts and distributing those funds according to Marjorie's will.2 In August 2016, the Bank petitioned the probate court for a determination as to whether Larry's loans were interest-bearing. After holding an evidentiary hearing in April 2017, the court determined that both Marjorie's will and her records expressed silence as to interest, and the court determined that Marjorie intended the loans to be interest-free. Id. at 166–67.
[5] In September 2017, the Bank asked the probate court to reconsider that determination. The probate court reaffirmed that Marjorie gave Larry and Susan interest-free loans and further concluded that the principal amount of Larry's and Susan's debts would be deducted from their respective shares of the net estate. Id. at 167. Then, in January 2018, David petitioned the probate court to direct the Bank to take additional action to collect Larry's unpaid debt. The probate court scheduled a hearing on David's petition.
[6] However, David withdrew the petition and moved to vacate the hearing when, on April 26, 2018, the Bank initiated a collateral action to collect Larry's and Susan's debts. The Bank's complaint—filed in Putnam Superior Court (the "trial court")—sought a judgment against Larry and Susan for the principal amount of their debts "plus interest accrued, post-judgment interest, and costs of this action." Id. at 160–61. Larry admitted in his answer to the complaint that he owed the estate $104,550. Id. at 32.
[7] David, who was not initially named a party to the collection action, moved to intervene a few weeks later. In his motion, David expressed his belief that his interest as a beneficiary of the estate would "not be adequately represented" by the Bank. Appellant's App. p. 49. He also maintained that the Bank had "taken no position as to the method of computing interest." Id. The trial court allowed David to intervene in the collection action.
[8] In November 2018, the Bank moved for partial summary judgment as to the principal amount of Larry's debt.3 Appellee's App. p. 20. Larry argued in response that the trial court lacked subject matter jurisdiction over the collection action and that the Bank's complaint should therefore be dismissed under Indiana Trial Rule 12(B)(1). On May 14, 2019, the trial court denied Larry's motion to dismiss, id. at 192, and granted the Bank's motion for partial summary judgment, concluding that Larry undisputedly owed the estate a principal balance of $104,550, Appellant's App. p. 59. Notably, the trial court also issued a separate order acknowledging that, three months prior to the court's entry of summary judgment, Larry paid $43,408.81 toward his outstanding balance. Id. at 61. This partial payment reduced his balance to $61,141.19. The court reserved all issues related to calculating interest on Larry's remaining balance for a later evidentiary hearing.
[9] The trial court held that hearing in February 2020 and entered findings of fact and conclusions of law on June 8, 2020. The court ordered Larry to pay his remaining balance of $61,141.19, plus post-judgment interest calculated from the date of the summary judgment order and prejudgment interest calculated from the start date of the collection action.
[10] David now appeals.4 He argues that the trial court awarded too little prejudgment interest. Larry cross appeals, arguing that the court lacked subject matter jurisdiction to award interest and that the court should not have awarded any interest even if it did have jurisdiction.5 We address these claims in turn.
[11] Larry first argues that because the probate court has "exclusive subject matter jurisdiction" over the administration of the estate, the trial court lacked authority to make any determination about his indebtedness to the estate.6 Larry's Br. at 28. In turn, he claims the trial court's partial summary judgment order, as well as its findings of fact and conclusions of law, are void. Id. at 17. We review subject matter jurisdiction claims de novo. D.A.Y. Invests. LLC v. Lake Cnty. , 106 N.E.3d 500, 504 (Ind. Ct. App. 2018).
[12] Without subject matter jurisdiction, a trial court cannot act in a given case. R.L. Turner Corp. v. Town of Brownsburg , 963 N.E.2d 453, 459 (Ind. 2012). A trial court has subject matter jurisdiction when the Indiana Constitution or a statute grants the court power to hear and determine cases of the general class to which a particular case belongs. Brown v. Lunsford , 63 N.E.3d 1057, 1060 (Ind. Ct. App. 2016). Like circuit courts, superior courts—such as the Putnam Superior Court here—possess "original and concurrent jurisdiction in all civil cases." Ind. Code § 33-29-1-1.5 ; see also I.C. § 33-33-67-2(b) (). Yet, other statutes may limit a court's authority to exercise its subject matter jurisdiction. See Lollar v. Hammes , 952 N.E.2d 754, 756 (Ind. Ct. App. 2004).
[13] Larry claims that Indiana Code section 29-1-13-16, a provision of the probate code, provides such a limitation. That statute provides, in relevant part:
Whenever any interested person files with the court having jurisdiction of an estate a petition showing that such person has reason to believe and does believe that the personal representative of the estate or any other person is indebted to the estate ... and that diligent effort is not being made to collect such indebtedness ... the court shall hold a hearing upon such petition and shall determine what action, if any, shall be taken. Should the court decide that there is sufficient merit in the petitioner's claim to warrant action, it shall direct the personal representative to take such action as the court deems necessary ....
I.C. § 29-1-13-16. Larry contends that "a proceeding to recover indebtedness brought in response to a petition under I.C. § 29-1-13-16 is under the exclusive subject matter jurisdiction of the probate court." Larry's Br. at 32.
[14] Yet, although David initially filed a section 29-1-13-16 petition in the probate court, and although the probate court scheduled a hearing to determine what action, if any, should be taken, David later withdrew the petition. As a result, the probate court did not hold a hearing on David's petition, and the parties did not proceed under section 29-1-13-16. Instead, the Bank initiated a collection action in the trial court. The Bank argues in response to Larry's subject matter jurisdictional claim that the collection action was authorized by Indiana Code section 29-1-13-3. That statute provides:
Every personal representative shall have full power to maintain any suit in any court of competent jurisdiction, in his name as such personal representative, for any demand of whatever nature due the decedent or his estate ....
I.C. § 29-1-13-3. We agree with the Bank.
[15] We have previously acknowledged "the authority of the personal representative or administrator of an estate to bring suit to protect or recover property necessary to satisfy debts, pay taxes, or distribute assets to the rightful beneficiaries." Inlow v. Ernst & Young, LLP , 771 N.E.2d 1174, 1181 (Ind. Ct. App. 2002) (collecting cases). Indeed, personal representatives are duty-bound to protect an estate's assets by taking precautionary measures to prevent loss. Id. One precautionary measure a personal representative may take is to bring suit under Indiana Code section 29-1-13-3 to recover property belonging to the estate. Id.
[16] Nonetheless, Larry maintains that the trial court is not a "court of competent jurisdiction" under section 29-1-13-3 because the probate code lodges subject matter jurisdiction over actions to collect probate assets exclusively in the probate court. Again, however, the trial court here has original and concurrent jurisdiction in all civil cases. I.C. § 33-29-1-1.5. The Bank's collection action—a civil case...
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