                                                                               FILED
                                                                           Oct 13 2017, 7:51 am

                                                                               CLERK
                                                                           Indiana Supreme Court
                                                                              Court of Appeals
                                                                                and Tax Court




      ATTORNEY FOR APPELLANT                                     ATTORNEYS FOR APPELLEE
      James D. Johnson                                           David L. Jones
      Jackson Kelly, PLLC                                        David E. Gray
      Evansville, Indiana                                        Jones  Wallace, LLC
                                                                 Evansville, Indiana



                                                  IN THE
          COURT OF APPEALS OF INDIANA

      Brenda Sue Gittings and                                    October 13, 2017
      Marc Richmond Gittings,                                    Court of Appeals Case No.
      Appellants-Respondents,                                    74A01-1611-TR-2551
                                                                 Appeal from the Spencer Circuit
              v.                                                 Court
                                                                 The Honorable Jonathon A. Dartt,
      William H. Deal,                                           Judge
      Appellee-Peetitioner.                                      Trial Court Cause No.
                                                                 74C01-1305-TR-27



      Barnes, Judge.


                                              Case Summary
[1]   Brenda Sue Gittings and Marc Gittings (“the Gittingses”) appeal the trial

      court’s judgment in favor of William Deal. We affirm.




      Court of Appeals of Indiana | Opinion 74A01-1611-TR-2551 | October 13, 2017                  Page 1 of 24
                                                      Issues
[2]   The Gittingses raise three issues, and we address the following two issues:


                     I.         whether the trial court’s findings that the Gittingses’
                                claims are barred by the statute of limitations are
                                clearly erroneous; and

                    II.         whether the trial court’s findings that transfers of
                                property from the NDR Primary Trust to the NDR
                                Trust A and from the NDR Trust A to the GLR
                                Trust were proper are clearly erroneous.

                                                       Facts
[3]   Brenda is the daughter of Nile D. Richmond, and Marc Gittings is Brenda’s son

      and Nile’s grandson. In 1985, Nile married Georgia L. Richmond, who also

      had a prior child, William. Prior to their wedding, they signed an Antenuptial

      Agreement, which provided that all property acquired after marriage would be

      owned as community property and that, after their death, one-half of the

      community property would pass to each estate. In 1988, Nile and Georgia

      acquired property and mineral interests in West Virginia (“West Virginia

      Properties”).


[4]   In 1993, Nile and Georgia retained Attorney David E. Price to prepare trusts

      for them. Nile executed the NDR Trust Agreement, and Georgia executed the

      GLR Trust Agreement. Nile and Georgia funded the trusts with half of the

      parties’ assets being placed in each of the respective trusts. The Trust

      Agreements had substantially identical terms. The Trust Agreements provided:




      Court of Appeals of Indiana | Opinion 74A01-1611-TR-2551 | October 13, 2017      Page 2 of 24
              [D]uring the life of the Settlor, the Settlor shall have the power to
              completely revoke or terminate this Trust Agreement, at any
              time, by an instrument signed by the Settlor and delivered to the
              Trustees during the life of the Settlor. In addition, during the life
              of the Settlor, the Settlor shall have the power to alter or amend
              this Trust Agreement, in whole or in part, at any time and from
              time to time, by an instrument signed by the Settlor, and
              delivered to the Trustees.


      Exhibits Vol. IV pp. 22, 46. Additionally, the Trust Agreements provided that

      they could not be “changed orally, but only by a written agreement of the

      parties hereto.” Id. at 37, 61. Upon the death of the Settlor, the Trust

      Agreement became “irrevocable.” Id. at 21, 45.


[5]   Each Trust Agreement created three separate trusts—the Primary Trust, Trust

      A, and Trust B. The Primary Trust was established to hold the primary trust

      estate during the life of the Settlor (Nile in the NDR Trust Agreement and

      Georgia in the GLR Trust Agreement). Upon the Settlor’s death, the Primary

      Trust estate was to be distributed to Trust A and Trust B. Trust A was designed

      to be a Q-TIP trust and qualify for a marital deduction to minimize the federal

      estate tax. Trust A was to be funded with


              the smallest fraction of the assets of Settlor’s estate that qualify
              for the federal estate tax marital deduction as will be sufficient to
              result in the lowest federal estate tax being imposed upon [the]
              estate after allowing for the unified credit, and any other
              allowable credits and deduction, but in no event shall Trust A be
              less than the smaller of $100,000.00 or the balance of the Primary
              Trust.



      Court of Appeals of Indiana | Opinion 74A01-1611-TR-2551 | October 13, 2017   Page 3 of 24
      Id. at 24, 48. Trust A was to be used to provide for the support, maintenance,

      and health of the Settlor’s spouse.


[6]   The remainder of the Primary Trust’s assets were to be distributed to Trust B.

      Upon the surviving spouse’s death, the remainder of Trust A was also to be

      distributed to Trust B. In the event that the Settlor’s spouse predeceased the

      settlor, upon the Settlor’s death, the Primary Estate’s assets were to be

      transferred to Trust B. Upon the death of both the Settlor and the Settlor’s

      spouse, Trust B was to be distributed as follows: one-third to Brenda, one-third

      to William, and one-third to the grandchildren of the Settlor and Settlor’s

      spouse.


[7]   Initially, the Trust Agreements provided that Nile and Georgia were the

      Trustees of both Primary Trusts. The Trust Agreements then provided:


              As to the primary trust during the life of the Settlor, either of the
              initial Trustees may resign by giving ten (10) days written notice
              to the other Co-Trustee. Upon such event or if either initial Co-
              Trustee otherwise ceased to continue to be qualified during the
              life of Settlor, then the remaining Trustee shall be the sole
              Trustee. If both the initial Co-Trustees cease to be qualified, then
              William H. Deal and Brenda Sue Gittings, or the survivor
              thereof, shall be the Co-Trustee. Sandra Deal shall be the next
              alternate successor Trustee.


              Upon the death of the Settlor, if he is survived by his spouse, then
              she along with William B. Deal and Brenda Sue Gittings, shall
              serve as Co-Trustees of Trust A and Trust B. If William H. Deal
              and Brenda Sue Gittings decline to act or are unable to act,



      Court of Appeals of Indiana | Opinion 74A01-1611-TR-2551 | October 13, 2017   Page 4 of 24
              Sandra Deal shall be the alternate Co-Trustee of Trust A and
              Trust B.


              Upon the death of Settlor’s spouse, or upon the death of Settlor if
              his spouse predeceased him, William H. Deal and Brenda Sue
              Gittings, or the survivor therof, shall be the Co-Trustees of Trust
              A and Trust B. Sandra Deal shall be the alternate Trustee. In no
              event shall the surviving spouse serve as sole Trustee after the
              death of Settlor.


      Id. at 32-33, 56-57. The Trusts also provided: “Upon the death of the Settlor,

      the Trustees shall divide the trust estate of the Primary Trust . . . into separate

      trust estates [Trust A and Trust B].” Id. at 22, 46.


[8]   Nile died on January 24, 1995. Georgia then distributed property from the

      NDR Primary Trust to the NDR Trust A and NDR Trust B without consulting

      Brenda or William.


[9]   On October 5, 1995, Georgia executed a First Amendment to the GLR Trust

      and eliminated Brenda as a beneficiary and as a trustee. That First Amendment

      was prepared by Attorney Price. Georgia did not inform Brenda of the

      amendment. On the same day, with the assistance of Attorney Price, Georgia

      transferred a one-half interest in the West Virginia Properties from the NDR

      Primary Trust to the NDR Trust A. Georgia then sent Brenda a copy of the

      NDR Trust and asked Brenda to sign and return four deeds and an assignment

      regarding the West Virginia Properties to transfer the properties from the NDR

      Trust A to the GLR Primary Trust.



      Court of Appeals of Indiana | Opinion 74A01-1611-TR-2551 | October 13, 2017   Page 5 of 24
[10]   Brenda consulted with her attorney, who requested relevant documents from

       Attorney Price. On November 20, 1995, Attorney Price provided some relevant

       documents to Brenda’s attorney, but he did not provide copies of the GLR

       Trust or its Amendment or inform Brenda’s attorney that Brenda had been

       eliminated as a beneficiary of the GLR Trust.


[11]   On December 28, 1995, Georgia and William signed deeds as trustees of the

       NDR Trust A purporting to transfer the West Virginia properties from the NDR

       Trust A to the GLR Primary Trust. Those documents were prepared by

       Attorney Price. After consulting with her attorney, on December 29, 1995,

       Brenda signed the deeds that had been sent to her as co-trustee of the NDR

       Trust and sent the documents to Attorney Price. The deeds signed by Brenda

       were not recorded at that time. Brenda did not know that the West Virginia

       properties were being transferred to a trust in which she did not have an

       interest. Although there are some documents in Attorney Price’s records that

       indicate the GLR Primary Trust was purchasing the property from the NDR

       Trust A, no funds were transferred into any of the NDR trusts to compensate

       the trusts for the properties. Ultimately, Brenda received a distribution of

       approximately $90,000 from the NDR Trust B, and Marc received a

       distribution of approximately $22,000.


[12]   In November 1996, Georgia executed a Second Amendment to the GLR Trust

       Agreement that again changed the beneficiaries and left William as the sole

       beneficiary if living and, otherwise, to his descendants, per stirpes. Georgia

       died on March 4, 1997.

       Court of Appeals of Indiana | Opinion 74A01-1611-TR-2551 | October 13, 2017   Page 6 of 24
[13]   In July 1997, Brenda received a copy of the GLR Trust Agreement and the First

       and Second Amendments and learned that she and Marc had been eliminated

       as beneficiaries. In the fall of 1997, according to Brenda, William told Brenda

       and her husband that “there wasn’t anything left [of the inheritance] after they

       paid the medical bills, the nursing home bills, and the funeral bills.” Tr. Vol. II

       p. 22. Brenda believed that all of the money put into the trusts had been used to

       care for Georgia. However, in December 1997, William deeded the West

       Virginia properties, which were held by the GLR Trust, to himself.


[14]   In 2010, some of the oil and gas interests started producing significant amounts

       of income. By the time of the trial in this matter, William had received more

       than three million dollars in royalties, rental payments, and lease payments

       related to the West Virginia Properties. In September 2011, Brenda was

       contacted by an attorney and learned that William had transferred the West

       Virginia properties to himself in 1997. In June 2012, William recorded the

       deeds that Brenda had signed in 1995 as co-trustee transferring the West

       Virginia Properties from the NDR Trust A to the GLR Primary Trust.


[15]   In May 2013, William filed a petition to docket the NDR Trust Agreement.

       William requested that the trust be docketed to approve “the execution, delivery

       and recording of the deeds herein referenced, and the partial distribution of

       Trust A outright to Settlor’s spouse, Georgia L. Richmond, as being all within

       the terms of the subject trust and hence properly made pursuant to the trust

       terms and Indiana law.” Appellants’ App. Vol. II p. 48. William alleged that

       Brenda’s claims were barred due to her “consent and participation” and due to

       Court of Appeals of Indiana | Opinion 74A01-1611-TR-2551 | October 13, 2017   Page 7 of 24
       the statute of limitations. Id. at 49. In her answer and affirmative defenses,

       Brenda alleged in part that the transfers of the West Virginia Properties violated

       the terms of the trust agreements and were void and/or voidable, the transfers

       were induced by improper conduct, and Georgia and William had an adverse

       interest in the transactions. Brenda also filed a counterclaim alleging breach of

       a mutual estate plan/implied trust, breach of the trust agreement, self-dealing,

       breach of fiduciary duty, mismanagement of trust assets, tortious interference

       with an expectancy interest, fraud/misrepresentation by omission, negligent

       misrepresentation by omission, conversion, and failure to provide an

       accounting. William responded that the trusts were not mutual trusts and that

       Brenda’s claims were barred by the statute of limitations. Marc filed a petition

       to intervene, which the trial court granted.


[16]   After a bench trial, the trial court entered findings of fact and conclusions

       thereon in favor of William as follows:


               1.       The Primary Trusts of Nile and Georgia by their terms
                        were each revocable during the life of the Settlor. There
                        was no mutual estate plan that created an implied trust
                        and no binding agreement between Nile and Georgia that
                        their Trusts could not be amended. No evidence was
                        produced at trial to support these claims by [Brenda and
                        Marc].


               2.       Georgia as the Trustee of the Nile Primary Trust exercised
                        her authority to transfer assets from the Primary Trust into
                        Trusts A and B, and to determine the allocation of assets
                        for the marital deduction trust with Q-TIP (Trust A).
                        Brenda, William, and Georgia were Co-trustees of Trust

       Court of Appeals of Indiana | Opinion 74A01-1611-TR-2551 | October 13, 2017   Page 8 of 24
                 A—not the Primary Trust. Until Trust A and Trust B
                 were funded, the duties of the Co-trustees were not
                 activated. In any event, Respondent, Brenda, had notice
                 and knowledge of these transfers and made no timely
                 objection to same in 1995. Any such objection made in
                 2013 is waived and time-barred. I.C. 30-4-6-14 and I.C.
                 29-1-14-1(a).


        3.       Georgia had authority pursuant to Article II(F) of her
                 Primary Trust to amend the Trust to eliminate Brenda and
                 her offspring as beneficiaries. Georgia had no duty or
                 obligation to inform Brenda or her offspring that she chose
                 to amend her Primary Trust to eliminate them as
                 beneficiaries. Respondents had the burden of proof on
                 each of their Counterclaims. McGinnis v. Boyd, 42 N.E.
                 678. Respondents wholly failed to produce any evidence
                 at trial that the transfer of property from the Nile Trust A
                 to the Georgia Primary Trust was not for the “support,
                 maintenance or health” of Georgia.


        4.       Georgia’s actions as the surviving spouse—beneficiary and
                 Trustee were vested with broad discretion under the terms
                 of the Nile Trust A. . . .


        5.       Georgia clearly had the authority and discretion to transfer
                 assets from the Georgia Trust A to herself or the Georgia
                 Primary Trust. The uncontradicted evidence at trial
                 established an inference that Georgia transferred assets
                 from the Nile Trust A for reasons of and concern for her
                 support, maintenance, and health. Respondents had the
                 burden of proof on their claims that the said transfers were
                 contrary to the terms of Nile Trust A. Respondents wholly
                 failed to produce any evidence to support their claims.


                                                   *****

Court of Appeals of Indiana | Opinion 74A01-1611-TR-2551 | October 13, 2017   Page 9 of 24
        7.       Article III(B) manifests the intent of Nile that the wishes of
                 the Settlor’s spouse shall prevail regarding the operation or
                 management of his Trust A. Article III(D) manifests the
                 intent of Nile during the life of Settlor’s spouse the
                 Trustees may distribute to the Settlor’s spouse all or any
                 portion of the principal of Trust A to provide for the
                 support, maintenance, and health of the Settlor’s spouse
                 and, in the event of any disagreement among the Trustees
                 regarding the distribution of principal, the decisions of the
                 Settlor’s spouse shall in all events control.


        8.       Georgia had no conflict of interest because she clearly had
                 the right to distribute all of the principal of the Nile Trust
                 A for her own support, maintenance and health of the
                 Settlor’s spouse and the decisions of the Settlor’s spouse in
                 all events controlled (Article III(D) Nile Primary Trust). If
                 this provision or the fact Georgia was a beneficiary of
                 Nile’s Trust, as well as a Co-trustee, has the appearance of
                 a conflict of interest, the Settlor, Nile, was well aware of
                 the authority he was giving to Georgia to make such
                 transfers.


        9.       When evaluating the actions of a trustee and the trustee
                 has been vested with discretion, the Court will not disturb
                 the trustee’s determinations unless there has been an abuse
                 of that discretion. Goodwine v. Goodwine, 819 N.E.2d 824,
                 828 (2004).


        10.      Each of the Co-trustees, William and Brenda, signed the
                 instruments conveying the West Virginia Property from
                 the Nile Trust A to the Georgia Primary Trust. Georgia
                 had no duty to tell either William or Brenda that she had
                 amended her Primary Trust. Moreover, Brenda had legal
                 counsel throughout these transactions to advise her of the
                 legal ramifications of the documents she was signing and
                 legal actions she could take to challenge or contest these
Court of Appeals of Indiana | Opinion 74A01-1611-TR-2551 | October 13, 2017   Page 10 of 24
                 transactions. Brenda, as a co-trustee represented by legal
                 counsel, did not challenge the transfer of property at the
                 time based upon either a conflict of interest claim or a
                 breach of fiduciary duty claim. If the transfer from the
                 Nile Trust A to the Georgia Primary Trust was a conflict
                 of interest and/or a breach of fiduciary duty, it would have
                 been so at the time of the transfer in 1995 and without
                 regard to any amendment of the Georgia Primary Trust.


        11.      The Court finds that as a matter of law from the evidence
                 presented, Georgia did not purchase property from the
                 Nile Trust A. Insufficient evidence was presented to
                 substantiate that property was “actually” purchased from
                 Nile Trust A.


        12.      The Court further finds that there was no
                 misrepresentation by Georgia or William relevant to the
                 issues in the case. There was no breach of fiduciary duty
                 or failure to disclose by Georgia or William in their
                 capacities as Trustees and Co-trustees. Under Indiana
                 Law and Indiana Statutes such as I.C. 30-4-3 et. seq., the
                 law and statutes on Conflict of Interest or Breach of
                 Fiduciary Duty have an exception if such transaction is
                 specifically authorized by the terms of the trust. See i.e.
                 I.C. 30-4-3-5(a)(3).


        13.      Each of the Counterclaims is barred by applicable statutes
                 of limitations, statutes of repose and laches. Brenda had
                 two (2) years within which to bring her claims against
                 Georgia and/or William for her claims of Tortious
                 Interference of Expectancy Interest, Negligent
                 Misrepresentation by Omission, and Conversion. I.C. 34-
                 11-2-4(2). Actions for relief against fraud must be
                 commenced within six (6) years after the cause of action
                 has accrued. I.C. 34-11-2-7(4). Breach of trust claims


Court of Appeals of Indiana | Opinion 74A01-1611-TR-2551 | October 13, 2017    Page 11 of 24
                 alleging damages to an interest in real property must be
                 brought within six (6) years. I.C. 34-11-2-7(3).


        14.      On July 14, 1997, Brenda’s causes of action, if any,
                 accrued, at the latest, when she realized and clearly
                 understood, after she reviewed Georgia’s Primary Trust
                 and Amendments, that she was excluded from receiving
                 any further property pursuant to the terms of that Trust.
                 By her own testimony at trial, Brenda also knew at that
                 time that all of the property from the Nile Trust A had
                 been transferred to the Georgia Primary Trust and,
                 pursuant to the Amendments, William was the only
                 beneficiary of the Georgia Primary Trust.


                                                   *****


        22.      In summary, although the results of Georgia’s transfers
                 and Amendments may not “now” seem fair and equitable,
                 they were and are allowed by the plain language of the
                 Revocable Trust Agreements signed by Nile and Georgia.
                 Georgia was the sole trustee of Nile’s Primary Trust when
                 he died until she funded Nile Trust A and Nile Trust B at
                 which time Brenda and William became co-trustees with
                 her. As sole trustee, she had discretion in consulting with
                 her attorneys as to which assets to place from Nile’s
                 Primary Trust into Nile’s Trust A. Pursuant to Article II
                 (I) and Article V(I) of the Trust the Court finds the term
                 “Trustees” referred to are initially the Settlor and the
                 Settlor’s spouse as stated in the first paragraph of the Trust
                 and do not include William and Brenda as Co-Trustees
                 until Trusts A and B are funded pursuant to Article V(I).
                 The transfer of property from Nile Primary Trust to Nile
                 Trust A was proper.




Court of Appeals of Indiana | Opinion 74A01-1611-TR-2551 | October 13, 2017   Page 12 of 24
               23.      Next, the transfer of property from Nile Trust A to
                        Georgia’s Primary Trust was allowed as Trust A was to
                        some extent for Georgia’s benefit to help pay taxes and
                        pursuant to Article III(D) if deemed necessary for her
                        support, maintenance, and health. A transfer from Nile
                        Trust A to Georgia Primary Trust did require the consent
                        of the cotrustees, William and Brenda. They gave that
                        consent as to the disputed property by signing the deeds
                        transferring the West Virginia property from Nile Trust A
                        to Georgia Primary Trust. Around that time, the evidence
                        is that Georgia was diagnosed with cancer and facing
                        having a kidney removed. The Court cannot say that this
                        transfer was improper as there was evidence to support it
                        and Brenda did not present contrary evidence.
                        Furthermore, although more information could have been
                        shared between the parties, Georgia got the consent for the
                        transfers in that all parties signed the West Virginia deeds
                        from Nile Trust A to Georgia Primary Trust. No one
                        objected and even if they would have, under Article III(D)
                        Georgia’s decision was controlling. Brenda also had the
                        advice of counsel in consenting to this transfer.


               24.      Thereafter, even if all the assets in Georgia’s Primary Trust
                        that were transferred from Nile’s Trust A were not used for
                        her health and maintenance, she had the right to amend
                        (or even revoke) her Trust pursuant to Article II(F).


       Appellants’ App. Vol. II pp. 34-42. The Gittingses now appeal.


                                                     Analysis
[17]   The Gittingses challenge the trial court’s judgment for William. Generally,

       when, as here, a trial court enters findings of fact and conclusions thereon

       pursuant to Indiana Trial Rule 52(A), we apply a two-tiered standard of review.


       Court of Appeals of Indiana | Opinion 74A01-1611-TR-2551 | October 13, 2017   Page 13 of 24
       Smith v. Smith, 938 N.E.2d 857, 860 (Ind. Ct. App. 2010). First, we determine

       whether the evidence supports the findings, and second, whether the findings

       support the judgment. Id. We disturb the judgment only where there is no

       evidence supporting the findings or the findings fail to support the judgment.

       Id. We do not reweigh the evidence. Id. Rather, we consider only the evidence

       favorable to the trial court’s judgment. Id. Those appealing the trial court’s

       judgment must establish that the findings are clearly erroneous. Id. Findings

       are clearly erroneous when a review of the record leaves us firmly convinced

       that a mistake has been made. Id. We do not defer to conclusions of law,

       however, and evaluate them de novo. Id.


[18]   The parties’ arguments require that we interpret the Trust Agreements, which

       are written contracts. “‘The construction of a written contract is a pure

       question of law.’” The Winterton, LLC v. Winterton Inv’rs, LLC, 900 N.E.2d 754,

       759 (Ind. Ct. App. 2009) (quoting Four Seasons Mfg., Inc. v. 1001 Coliseum, LLC,

       870 N.E.2d 494, 501 (Ind. Ct. App. 2007)), trans. denied. Our duty is to

       interpret a contract to ascertain the intent of the parties. Id. “When interpreting

       a contract, we attempt to determine the intent of the parties at the time the

       contract was made by examining the language used in the instrument to express

       their rights and duties.” Id. Where the language of the contract is

       unambiguous, we determine the parties’ intent from the four corners of the

       document. Id. The unambiguous language of a contract is conclusive upon the

       parties to the contract as well as upon the court. Id. We will neither construe

       unambiguous provisions nor add provisions not agreed upon by the parties. Id.

       Court of Appeals of Indiana | Opinion 74A01-1611-TR-2551 | October 13, 2017   Page 14 of 24
[19]   A contract is ambiguous when a reasonable person could find its terms

       susceptible to more than one interpretation. Id. If a contract is ambiguous, its

       meaning is to be determined by extrinsic evidence and its construction is a

       matter for the fact finder. Id. When trying to ascertain the intent of the parties,

       we will read the contract as a whole. Id. Additionally, we will make all

       attempts to construe the language in a contract so as not to render any words,

       phrases, or terms ineffective or meaningless. Id. We must accept an

       interpretation of the contract that harmonizes its provisions rather than one that

       causes the provisions to conflict. Id.


                                           I. Statute of Limitations

[20]   The Gittingses argue that the trial court erred when it determined that their

       claims are barred by the statute of limitations. The Gittingses brought several

       counterclaims, including breach of a mutual estate plan/implied trust, breach of

       the trust agreement, self-dealing, breach of fiduciary duty, mismanagement of

       trust assets, tortious interference with an expectancy interest,

       fraud/misrepresentation by omission, negligent misrepresentation by omission,

       conversion, and failure to provide an accounting. The Gittingses bear “‘the

       burden of bringing suit against the proper party within the statute of

       limitations.’” Huff v. Huff, 892 N.E.2d 1241, 1246 (Ind. Ct. App. 2008) (quoting

       Beineke v. Chemical Waste Mgmt. of Ind., LLC, 868 N.E.2d 534, 539-540 (Ind. Ct.

       App. 2007)), as revised on reh’g, 895 N.E.2d 407 (Ind. Ct. App. 2008).


[21]   Indiana Code Section 34-11-5-1 provides: “If a person liable to an action

       conceals the fact from the knowledge of the person entitled to bring the action,
       Court of Appeals of Indiana | Opinion 74A01-1611-TR-2551 | October 13, 2017   Page 15 of 24
       the action may be brought at any time within the period of limitation after the

       discovery of the cause of action.” “[T]o invoke the protection provided by this

       statute, the wrongdoer must have actively concealed the cause of action and the

       plaintiff is charged with the responsibility of exercising due diligence to discover

       the claims.” Malachowski v. Bank One, Indianapolis, 590 N.E.2d 559, 563 (Ind.

       1992). “However, where the parties are in a fiduciary relationship, such as

       trustee/beneficiary, the concealment of the claim need not be active.” Id. “A

       mere failure to disclose, when there is a duty to disclose, may be sufficient to

       toll the statute.” Id.


[22]   It is undisputed that the Gittingses did not become aware of Georgia’s actions

       until July 1997, when Brenda discovered that Georgia had amended the GLR

       Trust Agreement to eliminate the Gittingses as beneficiaries. The trial court

       concluded that the Gittingses’ “causes of action, if any, accrued” at this time.

       Appellants’ App. Vol. II p. 38. The Gittingses argue that their causes of action

       did not accrue until 2011, when Brenda learned that William had

       misrepresented in 1997 that all of the GLR Trust assets had been used to pay

       for Georgia’s support. According to the Gittingses, Brenda did not know that

       she was “damaged until 2011 when she learned that William Deal had

       transferred to himself the West Virginia properties and that they were not used

       for proper trust purposes.” Appellants’ Reply Br. p. 9.


[23]   “Under Indiana’s discovery rule, ‘a cause of action accrues and the statute of

       limitations begins to run when the plaintiff knew or, in the exercise of ordinary

       diligence, could have discovered that an injury had been sustained as a result of

       Court of Appeals of Indiana | Opinion 74A01-1611-TR-2551 | October 13, 2017   Page 16 of 24
       the tortious act of another.’” Custom Radio Corp. v. Actuaries & Benefit

       Consultants, Inc., 998 N.E.2d 263, 268 (Ind. Ct. App. 2013) (quoting Wehling v.

       Citizens Nat. Bank, 586 N.E.2d 840, 843 (Ind. 1992)); see also Malachowski, 590

       N.E.2d at 564. “For a wrongful act to give rise to a cause of action and thus to

       commence the running of the statute of limitations, it is not necessary that the

       extent of the damage be known or ascertainable but only that damage has

       occurred.” Custom Radio, 998 N.E.2d at 268 (quoting Shideler v. Dwyer, 275 Ind.

       270, 282, 417 N.E.2d 281, 289 (1981)).


[24]   We have no trouble holding that the statute of limitations was tolled until July

       1997, when Brenda became aware that Georgia had eliminated the Gittingses

       as beneficiaries. See, e.g., Huff, 892 N.E.2d at 1246-48 (holding that genuine

       issues of material fact existed regarding whether the trustee properly disclosed

       to the beneficiaries the material facts of the conveyance in accordance with his

       duty as trustee and that summary judgment on the expiration of the statute of

       limitations was inappropriate). At that point, however, Brenda was well aware

       that the properties had been transferred to a trust in which she was not a

       beneficiary and that she had been damaged. Although she may not have

       understood the extent of the damage until 2011, it was not necessary that the

       full extent of the damage be evident before the cause of action accrued. We

       conclude that, under any of the Gittingses’ counterclaims, the statute of

       limitations would have run well before their claims were filed in 2013. While

       the result here is extremely regrettable and the behavior concerning these trust




       Court of Appeals of Indiana | Opinion 74A01-1611-TR-2551 | October 13, 2017   Page 17 of 24
       assets is disturbing, we simply cannot say that the trial court’s findings and

       conclusions regarding the statute of limitations are clearly erroneous.


                                           II. Transfers of Property

[25]   Although the statute of limitations issue is dispositive here, we have significant

       concerns regarding the conduct of the trustees in this case. Consequently, we

       will address Georgia’s transfers of property for guidance to future trustees. The

       Gittingses argue that Georgia’s transfers of property from the NDR Primary

       Trust to NDR Trust A and from NDR Trust A to the GLR Trust were

       improper. We begin by addressing Georgia’s transfer of assets from the NDR

       Primary Trust to Trust A. The trial court concluded that, at that time, Georgia

       was the sole trustee and had the discretion to allocate the funds as she wished.

       We disagree.


[26]   Initially, the NDR Trust Agreement provided that Nile and Georgia were the

       Trustees. The Trust Agreement then provided:


               As to the primary trust during the life of the Settlor, either of the
               initial Trustees may resign by giving ten (10) days written notice
               to the other Co-Trustee. Upon such event or if either initial Co-
               Trustee otherwise ceased to continue to be qualified during the
               life of Settlor, then the remaining Trustee shall be the sole
               Trustee. If both the initial Co-Trustees cease to be qualified, then
               William H. Deal and Brenda Sue Gittings, or the survivor
               thereof, shall be the Co-Trustee. Sandra Deal shall be the next
               alternate successor Trustee.


               Upon the death of the Settlor, if he is survived by his spouse, then
               she along with William B. Deal and Brenda Sue Gittings, shall

       Court of Appeals of Indiana | Opinion 74A01-1611-TR-2551 | October 13, 2017   Page 18 of 24
               serve as Co-Trustees of Trust A and Trust B. If William H. Deal
               and Brenda Sue Gittings decline to act or are unable to act,
               Sandra Deal shall be the alternate Co-Trustee of Trust A and
               Trust B.


               Upon the death of Settlor’s spouse, or upon the death of Settlor if
               his spouse predeceased him, William H. Deal and Brenda Sue
               Gittings, or the survivor therof, shall be the Co-Trustees of Trust
               A and Trust B. Sandra Deal shall be the alternate Trustee. In no
               event shall the surviving spouse serve as sole Trustee after the
               death of Settlor.


       Id. at 32-33. The Trust also provided: “Upon the death of the Settlor, the

       Trustees shall divide the trust estate of the Primary Trust . . . into separate trust

       estates [Trust A and Trust B].” Id. at 22.


[27]   The trial court determined that, upon Nile’s death, Georgia was the sole trustee

       of the NDR Primary Trust. According to William, he and Brenda were only

       trustees of Trust A and Trust B, not the Primary Trust. However, this

       conclusion and argument conflict with the provision of the Trust Agreement

       that specifically provides: “In no event shall the surviving spouse serve as sole

       Trustee after the death of Settlor.” Exhibits Vol. IV p. 32-33. Further, the Trust

       Agreement requires the “Trustees” to reallocate the assets from the Primary

       Trust to Trust A and Trust B and provides: “If the Settlor’s spouse survives the

       Settlor, then upon the death of the Settlor, the Trustees shall initially divide the

       trust estate of the Primary Trust into two separate trusts, namely Trust A and

       Trust B, as hereinafter described, and shall distribute the trust estate as

       hereinafter described.” Id. at 22, 23 (emphasis added). If it was intended that

       Court of Appeals of Indiana | Opinion 74A01-1611-TR-2551 | October 13, 2017   Page 19 of 24
       Georgia be the sole trustee of the Primary Trust after Nile’s death, the Trust

       Agreement could have provided so. The Trust Agreement, however,

       specifically required that Georgia not serve as the sole Trustee after Nile’s

       death. Given these provisions, it is clear that, after Nile’s death, Georgia,

       Brenda, and William were co-trustees of the NDR Primary Trust. Georgia

       acted improperly when she solely determined the distributions to Trust A and

       Trust B.


[28]   Next, the Gittingses argue that Georgia’s transfer of the West Virginia

       Properties from NDR Trust A to the GLR Primary Trust was improper. The

       trial court concluded that Georgia had the discretion under the Trust

       Agreements to transfer assets from NDR Trust A to her own trust for her

       support, maintenance, and health.


[29]   The Gittingses point out that, at the time of the transfers in 1995, Indiana Code

       Section 30-4-3-5 provided:


               (a) If the duty of the trustee in the exercise of any power conflicts
               with his individual interest or his interest as trustee of another
               trust, the power may be exercised only with court authorization.


               (b) For the purposes of subsection (a) of this section, the interest
               of an affiliate of the trustee will be deemed to be the interest of
               the trustee.


       Further, Indiana Code Section 30-4-3-7(d) provided:


               Unless the terms of the trust provide otherwise, the trustee may
               sell, exchange, or participate in the sale or exchange of trust
       Court of Appeals of Indiana | Opinion 74A01-1611-TR-2551 | October 13, 2017   Page 20 of 24
               property from one (1) trust to himself as trustee of another trust,
               provided the sale or exchange is fair and reasonable with respect
               to the beneficiaries of both trusts and the trustee discloses to the
               beneficiaries of both trusts all material facts related to the sale or
               exchange which the trustee knows or should know.


[30]   Finally, Indiana Code Section 30-4-3-19(b) provided:


               The consent, acquiescence, agreement to release or discharge,
               affirmance, or participation by a beneficiary will not relieve the
               trustee from liability if:


               (1) at the time it was given the beneficiary was under an
               incapacity;


               (2) at the time it was given the beneficiary did not know of his
               rights or all of the material facts which the trustee knew or should
               have known;


               (3) it was induced by the trustee’s improper conduct;


               (4) the trustee had an adverse interest in the transaction and the
               transaction was not fair and reasonable; or


               (5) the trustee pays or delivers a beneficiary’s interest to that
               beneficiary contrary to the terms of a trust with protective
               provisions.


[31]   We also note that “[t]here is a broad rule of equity grounded upon the high duty

       of a trustee or fiduciary to his beneficiary or correlate which does not permit

       him to acquire an interest in the subject-matter of the trust to the prejudice and

       detriment of his beneficiary or correlate.” Washington Theatre Co. v. Marion

       Court of Appeals of Indiana | Opinion 74A01-1611-TR-2551 | October 13, 2017   Page 21 of 24
       Theatre Corp., 119 Ind. App. 114, 125, 81 N.E.2d 688, 692 (1948). “Bad faith is

       presumed where a fiduciary acquires a conflicting interest to his beneficiary

       without such beneficiary’s knowledge and consent. It is of no consequence

       whether fraud is intended under such circumstances.” Id. at 132, 81 N.E.2d at

       695.


[32]   The transfer of property from NDR Trust A to the GLR Primary Trust was not

       done with the beneficiaries of both trusts having all material facts related to the

       transfer. Specifically, although Brenda signed the deeds at Georgia’s request,

       Brenda was unaware that she had been eliminated as a beneficiary of the GLR

       Trust Agreement. Brenda, thus, was unaware that the properties were being

       moved to a trust in which that she had no interest. Further, because Georgia

       had eliminated other beneficiaries of the GLR Trust Agreement in favor of her

       son, Georgia’s duty as a trustee of the NDR Trust Agreement conflicted with

       her interest as trustee of the GLR Trust Agreement. Consequently, we

       conclude that, under the statutes in effect at the time, court authorization was

       required to complete the transfer. See, e.g., Huff, 892 N.E.2d at 1246-48 (holding

       that a trustee’s conveyance of property from the trust to himself was a conflict

       of interest that required court approval and that the trustee had a duty to

       disclose the material facts of the conveyance to the beneficiaries).


[33]   William argues that court authorization was not required because of the

       “exceptionally broad authority” given to Georgia under the NDR Trust

       Agreement. Appellee’s Br. p. 39. In discussing NDR Trust A, the Trust

       Agreement provides: “In the event there is any disagreement between the

       Court of Appeals of Indiana | Opinion 74A01-1611-TR-2551 | October 13, 2017   Page 22 of 24
       Trustees regarding the distribution of principal from Trust A, the decisions of

       the Settlor’s spouse shall, in all events, control.” Exhibits Vol. IV p. 24. We

       must disagree.


[34]   Despite the broad authority given to Georgia in the trust agreement, she was

       not given the authority to breach her fiduciary duties and transfer property in

       violation of statutory authority, and the discretion given to her under the

       agreement does not excuse her improper conduct. William cites no relevant

       authority that would excuse Georgia’s conduct.1 We conclude that the transfer

       of the properties from NDR Trust A to the GLR Primary Trust without court

       authorization and without the beneficiaries’ knowledge of material facts was

       improper.


                                                    Conclusion
[35]   The trial court’s finding and conclusion that the Gittingses’ claims were barred

       by the statute of limitations is not clearly erroneous. Consequently, despite our

       reservations concerning the transfer of trust assets here, we affirm.


[36]   Affirmed.




       1
         William argues that Indiana Code Section 30-4-3-5 was later amended and does not require court approval
       if the power is authorized by the terms of the trust. William contends that amendments to the trust code
       should be applied “retroactively unless doing so would adversely affect beneficiary rights or relieve a person
       from a duty of liability imposed by the terms of the trust or under prior law.” Appellee’s Br. p. 42. Clearly,
       Georgia’s conduct adversely affected the Gittingses’ rights. We decline William’s invitation to apply the
       amended statutes retroactively.

       Court of Appeals of Indiana | Opinion 74A01-1611-TR-2551 | October 13, 2017                      Page 23 of 24
Baker, J., and Crone, J., concur.




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