                                                                           FILED
                                                                       Oct 25 2018, 8:32 am

                                                                           CLERK
                                                                       Indiana Supreme Court
                                                                          Court of Appeals
                                                                            and Tax Court




ATTORNEYS FOR APPELLANT                                    ATTORNEYS FOR APPELLEE
Alex E. Gude                                               Gregg S. Gordon
Meaghan Klem Haller                                        Dale & Eke, PC
Bingham Greenebaum Doll, LLP                               McCordsville, Indiana
Indianapolis, Indiana                                      Erick P. Knoblock
                                                           Dale & Eke, PC
                                                           Indianapolis, Indiana



                                            IN THE
    COURT OF APPEALS OF INDIANA

In Re the Matter of the Trust of                           October 25, 2018
Barbara J. Rawlings                                        Court of Appeals Case No.
                                                           18A-TR-345
Rex R. Rawlings,
                                                           Appeal from the Clinton Circuit
Appellant-Petitioner,                                      Court
        v.                                                 The Honorable Brad Mohler,
                                                           Judge
Kim R. Rawlings,                                           Trial Court Cause No.
                                                           12C01-1412-TR-110
Appellee-Respondent.



Riley, Judge.




Court of Appeals of Indiana | Opinion 18A-TR-345 | October 25, 2018                            Page 1 of 22
                                 STATEMENT OF THE CASE
[1]   Appellant-Petitioner, Rex R. Rawlings (Rex), appeals the trial court’s summary

      judgment in favor of Appellee-Respondent, Kim R. Rawlings (Kim), granting

      equitable relief to Kim by enforcing the agreement between the parties in the

      termination and division of a trust.


[2]   We affirm.


                                                      ISSUE
[3]   Rex raises three issues on appeal, which we consolidate and restate as the

      following single issue: Whether the trial court properly concluded that Kim is

      entitled to equitable relief in the division of the trust assets.


                       FACTS AND PROCEDURAL HISTORY
[4]   On August 11, 1981, Anna Blanche Hillis (Hillis) established the Hillis Land

      Trust (Hillis Trust), with a sole asset of 422.803 acres of real estate (Hillis

      Land). At the time the Hillis Trust was established, 10,000 units were

      apportioned between the various beneficiaries, with the majority of the units

      held by Hillis. Hillis passed away in November 1983, and pursuant to her Last

      Will and Testament, the interest in the Hillis Trust passed into testamentary

      trusts established for the benefit of her daughters, Barbara Rawlings (Barbara),

      the mother of Rex and Kim, and Julia Wilkinson (Julia). In 1984, Rex and his

      wife, Colleen Rawlings (Colleen), entered into a promissory note to acquire

      Julia’s 50% interest in the Hillis Trust. This promissory note was secured by

      mortgages from Barbara’s husband, Richard Rawlings (Richard), and Rex on
      Court of Appeals of Indiana | Opinion 18A-TR-345 | October 25, 2018         Page 2 of 22
      201.12 acres of the Hillis Land. On March 21, 1988, Richard and Barbara

      signed a personal guarantee on behalf of Rex and Colleen with the Summit

      Bank of Clinton County for a secured amount of $311,515.79. As a result of

      the guarantee, Richard and Barbara became jointly and severally liable for

      Colleen’s and Rex’s “each and every debt, of every type and description, that

      [they] may now or at any time in the future owe[.]” (Appellant’s App. Vol. III,

      p. 5). The Hillis Trust was not subject to the personal guarantee. Accordingly,

      by November 1988, members of the Rawlings family had become the only

      beneficiaries of the Hillis Trust through a buyout of the Wilkinson family by

      way of promissory notes secured by mortgages on part of the Hillis Land. Only

      227 acres of the land remained unencumbered by mortgages or other

      encumbrances.


[5]   In an effort to release Barbara and Richard from their personal guarantee for

      Colleen and Rex’s debts, Rex proposed to terminate the Hillis Trust and to

      mortgage the real estate therein. As a result, the Rawlings family could then

      allow the unencumbered portion of the real estate to be used as collateral to

      secure Colleen and Rex’s debts, and Barbara and Richard would be released

      from their personal guarantee. However, to be successful, Rex required the

      consent of all beneficiaries of the Hillis Trust, including Rex’s brother, Kim,

      and Kim’s wife, Deborah Rawlings (Deborah).


[6]   It is undisputed that at that point, Kim and his family were vested beneficiaries

      of the 2,321 units of the Hillis Trust (either directly or as a remainder

      beneficiary of Barbara’s testamentary trust). Therefore, if the Hillis Trust had

      Court of Appeals of Indiana | Opinion 18A-TR-345 | October 25, 2018         Page 3 of 22
      terminated at that moment and the real estate divided among the beneficiaries

      based on their unit ownership, Kim and his family would have been entitled to

      receive 121.09 acres of real estate.


[7]   In order to safeguard his inheritance, Kim agreed to allow Rex to terminate the

      Hillis Trust and to use the land as collateral for Rex’s financial obligations in

      exchange for the execution of an agreement stipulating to the parties’ respective

      rights and obligations. On November 28, 1988, Kim and Rex entered into the

      Inheritance Agreement, which provided, in relevant part, that Rex “is desirous

      of having the [Hillis Trust] terminated and having all of the beneficiaries to said

      Trust receive their undivided interest in the assets of said Trust[.]” (Appellant’s

      App. Vol. IV, p. 3). To pursue his goal, it was Rex’s “intent to borrow certain

      sums of money and obtain a mortgage on the real estate currently held by the

      [Hillis Trust] and the undersigned parties acknowledge that in effect this is an

      advance on [Rex’s] inheritance.” (Appellant’s App. Vol. IV, p. 3). In

      exchange, Kim agreed to


              sign all necessary documents to allow [Rex] along with his wife,
              [Colleen], to serve as successor Co-Trustees to the [Hillis Trust]
              for the sole purpose of terminating said Trust and distributing the
              assets in said Trust to the beneficiaries of said Trust. And [Kim]
              further agrees to consent to a mortgage being placed on the land
              which is presently owned by the [Hillis Trust] and [Rex] agrees
              that should a mortgage balance remain on the property which is
              currently owned by the [Hillis Trust] at the death of the survivor
              of [Barbara] and [Richard], then said mortgage balance shall be
              paid before [Rex] shall receive his inheritance from [Barbara] and
              [Richard] or a credit in favor of [Kim] in the amount of the
              mortgage balance owing shall be made prior to any distribution

      Court of Appeals of Indiana | Opinion 18A-TR-345 | October 25, 2018        Page 4 of 22
              from the estates of [Barbara] and [Richard]. Parties further state
              that the purpose of this document is to insure that [Kim] and
              [Rex] are treated as equally as possible in the estates of their
              parents.


      (Appellant’s App. Vol. IV, pp. 3-4).


[8]   Upon the execution of the Inheritance Agreement, Rex and Colleen filed their

      petition of beneficiaries to docket the Hillis Trust, clarify title to property and

      terminate the Hillis Trust. On December 2, 1988, the Hillis Trust was

      terminated by court order and four days later, on December 6, 1988, Rex and

      Colleen, as co-trustees of the Hillis Trust, conveyed the Hillis Land to the

      Rawlings family.


[9]   Richard passed away on December 16, 1988, and an estate was opened.

      Barbara was appointed the personal representative of the estate and in February

      of 1989, Summit Bank filed a contingent claim for the amount of $311,515.79

      as secured by the personal guarantee. To resolve the debt, on March 29, 1989,

      Kim and Deborah, in accordance with the Inheritance Agreement, executed,

      along with Rex and Colleen, an indemnifying mortgage on the Hillis Land, as

      well as on other certain real estate held by Barbara’s testamentary trust, to

      Summit Bank, in order


              to induce Mortgagee to renew existing indebtedness, to make
              new loans, and to secure the due and punctual payment of all
              such indebtedness of [Rex and Colleen], husband and wife,
              hereinafter called ‘Borrower’, to Mortgagee whether now existing
              or hereinafter incurred, including all renewals and extensions
              thereof, not to exceed an aggregate principal amount of

      Court of Appeals of Indiana | Opinion 18A-TR-345 | October 25, 2018          Page 5 of 22
               [$600,000] and all interest accrued thereon and fees and expenses
               of Mortgagee incurred in connection therewith, all without relief
               from valuation and appraisement laws.


       (Appellant’s App. Vol. III, p. 111). A second indemnifying mortgage on the

       Hillis Land and other real estate held by Barbara’s testamentary trust was

       executed in favor of Summit Bank on May 13, 1992.


[10]   On October 12, 1990, Barbara executed a Revocable Trust, which included

       certain real estate located in Clinton County and Tipton County, Indiana.

       Barbara executed several Amendments to the Revocable Trust, of which the

       Second Amendment, executed on July 22, 2002, included the following

       language:


               Settlor hereby declares that she has helped each of her sons
               financially and otherwise over the years, but she hereby states
               that she does not consider there to be any debt owed to her, her
               estate, or this Trust by either son or their respective issue.
               Successor Trustees [Kim and Rex] are directed to make
               distribution of the Trust assets without trying to take into
               consideration any assets heretofore given or advances to either of
               said sons or their respective issue.


       (Appellant’s App. Vol. II, p. 34).


[11]   Rex and Colleen failed to satisfy their financial commitments, and on January

       27, 1995, NBD Bank, N.A. (NBD Bank), successor in interest to Summit Bank,

       filed an action to foreclose on the mortgages. Less than a month after NBD

       Bank filed its foreclosure action, Rex and Colleen filed for bankruptcy. Neither

       Kim nor Deborah were listed as creditors in the bankruptcy proceedings. As
       Court of Appeals of Indiana | Opinion 18A-TR-345 | October 25, 2018      Page 6 of 22
       part of the bankruptcy proceedings, Rex and Colleen were obligated to

       endeavor to sell 237 acres of real estate previously held by the Hillis Trust and

       by Barbara’s testamentary trust. Accordingly, the Hillis Land and the real

       estate in Barbara’s testamentary trust was quitclaimed to Rex and Colleen in

       late 1995, and on May 22, 1996, most of the land was sold to satisfy Rex and

       Colleen’s indebtedness. NBD Bank, after being paid an amount of $875,000,

       released the mortgages. Rex and Colleen retained 11 acres of the Hillis Land

       that had been quitclaimed to them but which was not sold to satisfy their debt

       to NBD Bank.


[12]   Barbara passed away on October 9, 2013. Both Rex and Kim became co-

       successor trustees of Barbara’s Revocable Trust. On December 31, 2014, Rex

       filed his petition to docket the trust with the trial court, with a request to

       appoint a successor trustee because the co-successor trustees “cannot work

       together.” (Appellant’s App. Vol. II, p. 20). On January 9, 2015, Kim filed his

       objection to the appointment of a successor trustee and served Rex, in his

       capacity as a beneficiary of the Trust, with a summons and a copy of the

       objection. Kim requested the trial court for an order compelling the final

       distribution of Barbara’s Revocable Trust, as well as for equitable relief by

       asking the trial court to enforce the Inheritance Agreement upon the

       distribution of the Trust assets. Specifically, Kim explained, in pertinent part:


               36. Rex received a substantial benefit from Kim since Rex was
               able to use the Hillis Land as collateral for Rex’s debts. Without
               Kim’s agreement, Rex would not have been able to mortgage the
               Hillis Land.

       Court of Appeals of Indiana | Opinion 18A-TR-345 | October 25, 2018         Page 7 of 22
        37. In exchange for that benefit, Rex promised that Kim would
        receive his portion of the Hillis Land free and clear of such
        encumbrances or that Kim would receive a credit for the amount
        of such encumbrances. This cannot occur since the Hillis Land
        was sold to a third party.


        38. Rex received a substantial benefit from Kim, and absent an
        adjustment of the distribution of the remaining Trust assets, Kim
        will lose the value of his bargain with Rex. This is precisely the
        type of situation where equity intercedes to prevent an unjust
        result.


        ****


        40. If the Hillis Land had not been mortgaged, Kim and Rex
        would now each be entitled to receive some 200 acres of real
        estate. But Rex mortgaged the Hillis Land for his personal
        benefit and, because Rex did so, some 221 acres was deeded to
        him so that it could be sold in the Bankruptcy to service his
        individual debts. If the Hillis Land was in the Trust, both Kim
        and Rex would each receive some 200 acres. In other words,
        when the Hillis Land was encumbered and then deeded to Rex,
        Rex received a benefit that exceeded the value of the inheritance
        he would otherwise now be entitled to receive if the Hillis Land
        was still in the Trust.


        41. Directing that Rex’s share of the remaining Trust assets be
        distributed to Kim, will restore a portion of that benefit that Rex
        received, affect the intent of the Inheritance Agreement and
        prevent an unjust result.


(Appellant’s App. Vol. II, pp. 47-48).




Court of Appeals of Indiana | Opinion 18A-TR-345 | October 25, 2018           Page 8 of 22
[13]   On January 29, 2015, Rex filed a motion to enlarge time to file his response to

       Kim’s objection because he needed “additional time to respond to the

       allegations that constitute a [C]omplaint.” (Appellee’s App. Vol II, p. 7).

       Thereafter, on February 27, 2015, Rex filed his motion to dismiss for failure to

       state a claim upon which relief can be granted. In his motion, Rex argued that

       Kim’s objection failed to state a claim because 1) the Inheritance Agreement

       only contemplated that a balance would be owing on the mortgage; 2) the

       Inheritance Agreement failed to include a requirement to deed any real estate

       back to Kim; 3) the intent of the Inheritance Agreement was to ensure that Kim

       and Rex would be treated equally in the estate of their parents while the instant

       proceeding did not originate from an estate; and 4) the provision of the Second

       Amendment to the Trust sought an equal distribution to Rex and Kim.


[14]   On June 12, 2015, the trial court conducted a hearing on Rex’s motion to

       dismiss and subsequently entered an order denying that motion on September

       9, 2015. At the same time, the trial court also docketed Barbara’s Revocable

       Trust and appointed the Farmers Bank as the successor trustee of the Trust. On

       September 21, 2015, Rex filed his answer to Kim’s request compelling a final

       distribution of the Trust and asserted a counterclaim request to investigate

       whether Kim had breached his fiduciary duties as a co-successor trustee to the

       Revocable Trust. On October 14, 2016, Kim filed his reply to the counterclaim,

       denying all allegations.


[15]   On June 24, 2016, Kim filed his motion for summary judgment, together with a

       memorandum and designation of evidence. On July 25, 2016, Rex filed his

       Court of Appeals of Indiana | Opinion 18A-TR-345 | October 25, 2018      Page 9 of 22
       response and designation of evidence, as well as a motion to strike certain

       portions of Kim’s and Deborah’s affidavits submitted as part of Kim’s

       designated evidence. On August 30, 2016, Kim filed a response to the motion

       to strike.


[16]   On January 2018, after a hearing, the trial court granted summary judgment to

       Kim, concluding, in pertinent part:


               9. That, in summary, unless equity intercedes to [] enforce the
               [Inheritance Agreement], [Rex] would receive numerous benefits
               to the detriment of [Kim], i.e., obtaining land from the Hillis
               Trust, using [Kim’s] land from the Hillis Trust as collateral for
               his debts, having his debts discharged through bankruptcy,
               receiving an equal amount of the remaining Hillis Land despite
               the fact that his financial hardships caused much of the land to be
               sold to pay his debts, and not being bound by the [Inheritance
               Agreement]. Equity should not allow such an injustice, but
               rather, equity should do what should be done.


               10. That the language contained in the Second Amendment to
               the Barbara Rawlings Revocable Trust, executed on July 22,
               2002, is not dispositive of the issues, as such language does not
               alter or vacate the terms agreed upon by [Rex] and [Kim] in the
               [Inheritance Agreement].


               11. That the [c]ourt therefore concludes that the real estate now
               owned by Barbara Rawlings’ Trust should be divided equally
               between [Kim] and [Rex]. After such division, and before final
               distribution from Barbara Rawlings’ Trust, up to 121.09 acres of
               real estate which would otherwise be distributed to [Rex] as part
               of his share of Barbara Rawlings’ Trust shall be credited and
               distributed to [Kim] along with his one-half share of Barbara
               Rawlings’ Trust.

       Court of Appeals of Indiana | Opinion 18A-TR-345 | October 25, 2018         Page 10 of 22
       (Appellant’s App. Vol. II, pp. 17-18) (internal citation and references omitted).


[17]   Rex now appeals. Additional facts will be provided if necessary.


                                DISCUSSION AND DECISION
                                               I. Standard of Review


[18]   In reviewing a trial court’s ruling on summary judgment, this court stands in the

       shoes of the trial court, applying the same standards in deciding whether to

       affirm or reverse summary judgment. First Farmers Bank & Trust Co. v. Whorley,

       891 N.E.2d 604, 607 (Ind. Ct. App. 2008), trans. denied. Thus, on appeal, we

       must determine whether there is a genuine issue of material fact and whether

       the trial court has correctly applied the law. Id. at 607-08. In doing so, we

       consider all of the designated evidence in the light most favorable to the non-

       moving party. Id. at 608. A fact is ‘material’ for summary judgment purposes if

       it helps to prove or disprove an essential element of the plaintiff’s cause of

       action; a factual issue is ‘genuine’ if the trier of fact is required to resolve an

       opposing party’s different version of the underlying facts. Ind. Farmers Mut. Ins.

       Group v. Blaskie, 727 N.E.2d 13, 15 (Ind. 2000). The party appealing the grant

       of summary judgment has the burden of persuading this court that the trial

       court’s ruling was improper. First Farmers Bank & Trust Co., 891 N.E.2d at 607.

       When the defendant is the moving party, the defendant must show that the

       undisputed facts negate at least one element of the plaintiff’s cause of action or

       that the defendant has a factually unchallenged affirmative defense that bars the

       plaintiff’s claim. Id. Accordingly, the grant of summary judgment must be

       Court of Appeals of Indiana | Opinion 18A-TR-345 | October 25, 2018          Page 11 of 22
       reversed if the record discloses an incorrect application of the law to the facts.

       Id.


[19]   We observe that, in the present case, the trial court entered findings of fact and

       conclusions of law in support of its judgment. Special findings are not required

       in summary judgment proceedings and are not binding on appeal.

       AutoXchange.com. Inc. v. Dreyer and Reinbold, Inc., 816 N.E.2d 40, 48 (Ind. Ct.

       App. 2004). However, such findings offer this court valuable insight into the

       trial court’s rationale for its review and facilitate appellate review. Id


                                                 II. Equitable Relief


[20]   Rex contends that the trial court erred in finding no genuine issues of material

       fact and issuing summary judgment to Kim. As this cause initially commenced

       as a petition to docket the Trust and to appoint a successor trustee, Rex asserts

       that the trial court exceeded the scope of its limited probate proceedings by

       issuing a division of the Trust corpus in accordance with the terms of the

       Inheritance Agreement. Focusing on Barbara’s Revocable Trust, Rex

       maintains that the trial court, by applying the Inheritance Agreement,

       disregarded Barbara’s intent of dividing the assets of the Trust equally between

       Rex and Kim. In essence, he claims that the trial court re-wrote the Trust

       instrument based on the Inheritance Agreement.


[21]   Initially, we note that the trial court, sitting as a probate court, had the authority

       to hear and decide this particular cause and to grant the requested relief. The

       probate jurisdiction conferred upon circuit courts is separate and distinct from

       Court of Appeals of Indiana | Opinion 18A-TR-345 | October 25, 2018          Page 12 of 22
their general jurisdiction in civil causes, and the methods of proceeding in the

exercise of such probate jurisdiction are equally separate and distinct from those

prescribed by the code of civil procedure in ordinary causes. Cmty. Hosps. of

Ind., Inc. v. Estate of North, 661 N.E.2d 1235, 1239 (Ind. Ct. App. 1996). It is

only where the probate code does not provide an adequate and complete mode

of procedure that it is proper to resort to the rules of pleading and practice

applicable to civil actions. Id. However, probate courts must also be

considered courts of general jurisdiction. Id. They are courts of record and, by

the act under which they were organized, in the exercise of the jurisdiction

granted to them, are vested with the incidental powers of other courts of law

and equity. Id. With regards to probate matters, the North court pointed out

that:


        We agree that the administration of an estate is a single
        proceeding in rem. During the course of the administrative
        proceeding, however, collateral proceedings may occur which are
        adversarial in nature and result in separate decisions finally
        adjudicating the rights of interested persons. Again, under these
        circumstances, the probate code directs the probate court to the
        rules of pleading and practice applicable in ordinary civil cases.
        Even if the Estate’s counterclaim addresses matters outside the
        rem of the Estate and even if potential class members are not part
        of the Estate, under the rules just mentioned, those matters are
        merely collateral to the administration of the Estate and do not
        affect the jurisdiction of the court with regard to the particular
        case before it.


Id. at 1241. Even though North is an estate case, we find the same holds true for

trust proceedings. See Matter of Trust of Loeb, 492 N.E.2d 40, 43 (Ind. Ct. App.

Court of Appeals of Indiana | Opinion 18A-TR-345 | October 25, 2018       Page 13 of 22
       1986) (noting that probate courts possess general equity powers, which include

       the authority to supervise and control the administration of trusts).


[22]   Rex invoked the Clinton County court’s probate jurisdiction when he docketed

       the Trust and sought to get a successor trustee appointed. Kim, in accordance

       with Ind. Code § 30-4-6-5, 1 filed his petition seeking the termination of the

       Trust and a distribution of the assets in accordance with the Inheritance

       Agreement. Pursuant to I.C. § 30-4-6-6(b), 2 he served Rex the filing along with

       a summons. Although the cause commenced as a trust proceeding, the

       insertion of the Inheritance Agreement is a collateral proceeding which affects

       the Trust’s rem and can be pled before the trial court sitting in the probate

       matter in accordance with the Indiana Rules of Procedure. See North, 492

       N.E.2d at 43. At no point did Rex object to the consideration of the

       Inheritance Agreement; rather, to the contrary, he obtained an extension of

       time “to respond to the allegations that constitute a [C]omplaint” and

       subsequently moved to dismiss the pleading, which was denied by the trial

       court. (Appellant’s App. Vol. II, p. 7). As the purported enforcement of the

       Inheritance Agreement is a collateral issue and might affect the parties’

       inheritance, the trial court had jurisdiction to consider Kim’s allegation.




       1
        Indiana Code section 30-4-6-5 provides that “[a]ny proceedings under this article [i.e., the Trust code] may
       be initiated on either a petition or complaint and upon notice as provided in [I.C. §] 30-4-6-6.”
       2
         Indiana Code section 30-4-6-6(b), specifies, in pertinent part, that the form of notice required “shall be in
       the form of a summons as provided in the Indiana Rules of Procedure for service of summons[.]”

       Court of Appeals of Indiana | Opinion 18A-TR-345 | October 25, 2018                                 Page 14 of 22
[23]   Turning to the merits of his claim, Rex now argues that the trial court used the

       Inheritance Agreement to re-write the unambiguous language of Barbara’s

       Revocable Trust and to impose a division of the corpus inconsistent with

       Barbara’s express wishes. While Kim agrees that the Inheritance Agreement

       cannot be used to re-write the terms of the Trust, in a similar vein it should be

       noted that the Trust cannot be used to re-write the Inheritance Agreement.

       Both documents are separate and distinct agreements, each with a different

       purpose and parties. Rex does not contest the validity of either instrument.


[24]   The Revocable Trust provides for the equal distribution of the assets between

       Rex and Kim, “share and share alike,” upon Barbara’s death—at which time

       the Trust “shall terminate.” (Appellant’s App. Vol. II, p. 40). Also, during the

       lifetime of the Trust, “no beneficiary shall have any power to sell, assign,

       transfer, encumber or in any other manner to anticipate or dispose of his or her

       interest in the Trust estate or in the income produced thereby[.]” (Appellant’s

       App. Vol. II, p. 26). In sum, it was Barbara’s intent that there was no “debt

       owed to her, her estate, or this Trust by either son or their respective issue.

       Successor Trustees [Kim and Rex] are directed to make distribution of the Trust

       assets without trying to take into consideration any assets heretofore given or

       advanced to either of said sons or their respective issue.” (Appellant’s App.

       Vol. II, p. 34).


[25]   The Inheritance Agreement, executed prior to the establishment of Barbara’s

       Revocable Trust, recognized that both Rex and Kim would be beneficiaries of

       the Hillis Trust. It provided that Rex’s termination of the Hillis Trust and

       Court of Appeals of Indiana | Opinion 18A-TR-345 | October 25, 2018       Page 15 of 22
       encumbering of the Hillis Land would be “in effect [] an advance on [Rex’s]

       inheritance.” (Appellant’s App. Vol IV, p. 3). The parties agreed that “should

       the mortgage balance remain on the property which is currently owned by the

       Hillis Land Trust at the death of the survivor of [Barbara] or [Richard], the said

       mortgage shall be paid before” Rex shall receive his inheritance from Barbara

       and Richard or a credit in favor of Kim in the amount of the mortgage balance

       owing shall be made prior to any distribution from the estate of Barbara and

       Richard. (Appellant’s App. Vol. IV, p. 3). The Inheritance Agreement clearly

       expressed its intended purpose of treating Kim and Rex “as equally as possible

       in the estates of their parents.” (Appellant’s App. Vol. IV, p. 4). Although the

       Inheritance Agreement sought to protect Kim’s vested interest in the Hillis

       Land and operated to ensure that Rex would not receive a windfall from

       receiving his inheritance early, the agreement did not address the situation if the

       mortgage on the Hillis Land would be foreclosed upon.


[26]   Rex now seizes on this omission to claim that the Inheritance Agreement is

       inapplicable and the trial court erred in enforcing it. However, it is a well

       established premise that “when an express contract does not fully address a

       subject, a court of equity may impose a remedy to further the ends of justice.

       Stated another way, the existence of a contract, in and of itself, does not

       preclude equitable relief which is not inconsistent with the contract.” Coppolillo

       v. Cort, 947 N.E.2d 994, 998 (Ind. Ct. App. 2011).


[27]   By executing the Inheritance Agreement, Rex received a substantial benefit to

       the detriment of Kim’s vested interest in the Hillis Land. Specifically, by

       Court of Appeals of Indiana | Opinion 18A-TR-345 | October 25, 2018      Page 16 of 22
       signing the Inheritance Agreement, Kim allowed Rex to use all the Hillis Land,

       in which Kim had a vested interest, as collateral for a mortgage to satisfy Rex’s

       personal financial problems. As such, the Inheritance Agreement occurred

       outside the estate planning of Richard and Barbara and cannot be considered a

       debt to Barbara or to the Revocable Trust, but rather created a debt between

       Rex and Kim. In order to satisfy this debt, the Inheritance Agreement specified

       that the encumbrance of the Hillis Land, including the 121.09 acres which

       would have been passed to Kim and his family, would be “in effect” an advance

       on Rex’s inheritance. (Appellant’s App. Vol. IV, p. 3). Because he was

       allowed to mortgage the Hillis Land, Rex was able to borrow approximately

       $600,000 and to have that debt discharged by the sale of the encumbered real

       estate which included the 121.09 acres of real estate which was otherwise

       owned by Kim and his family. The Inheritance Agreement also specified that

       an equalization of their respective inheritances would only occur following the

       death of their last surviving parent and in conjunction with the parents’ estate

       plan.


[28]   Accordingly, upon Barbara’s death, the Revocable Trust terminated, and a

       division of the corpus had to be made in accordance with the Trust provisions,

       while at the same time, the Inheritance Agreement had become enforceable. In

       harmonizing both the Trust and the Inheritance Agreement, the trial court

       viewed both documents as independent of each other, first mandating the

       division of the Trust and then almost simultaneously applying the Inheritance

       Agreement in equity. As “equity looks to the substance and not the form,” the


       Court of Appeals of Indiana | Opinion 18A-TR-345 | October 25, 2018     Page 17 of 22
Inheritance Agreement sought to safeguard Kim’s inheritance while at the same

time helping his brother. Walter v. Balogh, 619 N.E.2d 566, 568 (Ind. 1993).

Because Rex defaulted on his financial obligations and the Hillis Land was

foreclosed upon, “a court of equity has the power to require that to be done

which should have been done.” Id. Accordingly, upon the termination and

division of the Revocable Trust, the trial court mandated the distribution of the

assets of the Trust in accordance with Barbara’s wishes, while immediately the

court ordered up to 121.09 acres of real estate otherwise transferred to Rex

under the provisions of the Trust to be credited and distributed to Kim, along

with his 50% interest in the Trust rem. We find that there is no genuine issue of

material fact and the trial court properly applied the law. 3




3
  In addition, Rex makes several arguments which are waived for our review. First, Rex contends that the
trial court in its summary judgment improperly relied on inadmissible portions of the affidavits designated by
Kim and Deborah, thereby ignoring Rex’s motion to strike. He maintains that because the trial court failed
to rule on the motion to strike, it is unclear whether and to what extent the court considered inadmissible
evidence in ascertaining the purpose of the Inheritance Agreement and therefore, a reversal is warranted.
However, the trial court’s judgment does not indicate that the court considered the affidavits; rather, the trial
court merely enforced both agreements. Furthermore, Rex’s argument presupposes that the statements in the
affidavits are inadmissible but his appellate brief omits a cogent argument on the bases on which these
statements would be considered inadmissible. Accordingly, this argument is waived. See Ind. Appellate Rule
46(A)(8). Similarly, Rex contends that Kim’s request for equitable relief was barred by the Statute of
Limitations. This argument was not raised before the trial court during the summary judgment proceeding
even though it was raised as an affirmative defense by Rex in his Answer. Failure to raise this defense in the
summary judgment proceeding resulted in a waiver of the non-asserted affirmative defense. See Reisweg v.
Statom, 926 N.E.2d 26, 31 (Ind. 2010) (holding that a party is required to assert affirmative defenses in
response to a motion for summary judgment that would dispose of the case).

Court of Appeals of Indiana | Opinion 18A-TR-345 | October 25, 2018                                Page 18 of 22
                                              CONCLUSION
[29]   Based on the foregoing, we hold that the trial court properly concluded that

       Kim is entitled to equitable relief in the division of the Trust assets and by

       enforcing the Inheritance Agreement.


[30]   Affirmed.


[31]   Kirsch, J. concurs


[32]   Vaidik, C. J. dissents with separate opinion




       Court of Appeals of Indiana | Opinion 18A-TR-345 | October 25, 2018       Page 19 of 22
                                                   IN THE
           COURT OF APPEALS OF INDIANA

       In Re the Matter of the Trust of                           Court of Appeals Case No.
       Barbara J. Rawlings                                        18A-TR-345

       Rex R. Rawlings,
       Appellant-Petitioner,

               v.

       Kim R. Rawlings,
       Appellee-Respondent.



       Vaidik, Chief Judge, dissenting.


[33]   I respectfully dissent. Once the trial court took it upon itself to administer the

       Trust, its tasks were to (1) determine Barbara’s intent and (2) give effect to that

       intent. See Goodwine v. Goodwine, 819 N.E.2d 824, 829 (Ind. Ct. App. 2004); In

       re Valma M. Hanson Revocable Trust No. 103-83-1, 779 N.E.2d 1218, 1221 (Ind.

       Ct. App. 2002), reh’g denied, trans. denied. The trial court completed the first

       task, acknowledging that Barbara’s intent was that the property in the Trust

       Court of Appeals of Indiana | Opinion 18A-TR-345 | October 25, 2018                    Page 20 of 22
       “would pass equally to Rex Rawlings and Kim Rawlings.” Appellant’s App.

       Vol. II p. 13. Having done so, however, the court did not complete the second

       task. Instead of giving effect to Barbara’s clear intent, the court ordered that the

       trust assets be divided in accordance with Rex and Kim’s “Agreement”—an

       agreement that Barbara was not a party to, that was executed two years before

       Barbara established the Trust, and that is not mentioned in the trust instrument

       or the amendments thereto. The court concluded that the agreement entitled

       Kim to “equitable relief” from the plain language of the Trust. Id. at 16.


[34]   In affirming the trial court’s decision, the majority relies heavily on this Court’s

       opinion in Community Hospitals of Indiana, Inc. v. Estate of North, 661 N.E.2d

       1235 (Ind. Ct. App. 1996), trans. denied. But that opinion said nothing at all

       about the authority of a court sitting in probate to grant a party equitable relief

       from the terms of a will or trust. Rather, we held that a probate court

       administering an estate had authority to adjudicate the estate’s counterclaim

       against a creditor that had made a claim against the estate. Id. at 1240. We

       based that decision not on any general principle of “equity” but on Indiana

       Code sections 29-1-14-12 and -13, two provisions of Indiana’s Probate Code

       that specifically contemplate counterclaims by estates against creditors. Here,

       neither Kim nor the trial court nor the majority has identified any similar

       statute, either in the Probate Code (Ind. Code art. 29-1) or the Trust Code (Ind.

       Code art. 30-4), that gave the trial court authority, in this proceeding relating to

       Barbara’s trust, to adjudicate Rex and Kim’s rights under their separate

       agreement. Absent such statutory authority, I would hold that the trial court,


       Court of Appeals of Indiana | Opinion 18A-TR-345 | October 25, 2018       Page 21 of 22
       sitting in probate, had no business adjudicating Kim’s claim under that

       agreement.


[35]   I do not mean to suggest that Rex and Kim’s agreement is void or that Kim

       cannot seek to enforce it in a separate proceeding. I would merely hold that the

       interpretation and enforcement of the agreement—again, an agreement that

       Barbara was not a party to, that was executed two years before Barbara

       established the Trust, and that is not mentioned in the trust instrument or the

       amendments thereto—are matters that fall outside the scope of the trust

       proceeding initiated by Rex.




       Court of Appeals of Indiana | Opinion 18A-TR-345 | October 25, 2018     Page 22 of 22
