153 N.E.3d 243
Ind. Ct. App.2020Background:
- Milton Bergal executed a revocable estate trust (2009) naming Linda (wife) and Sanders as successor co-trustees; Trust A for Linda and Trust B for David (son).
- During Milton’s cognitive decline, six non-real-estate accounts (≈ $8M) were retitled to name Linda as primary beneficiary; only about $200k flowed to the Trust, effectively disinheriting David.
- After Milton’s death, a December 2016 meeting occurred: Linda agreed to resign as co-trustee and to return the Assets to the Trust in exchange for David’s promise not to sue and to try to preserve family harmony; she returned one Vanguard TOD but not the others.
- David sued on multiple theories (undue influence, lack of testamentary capacity, breach of fiduciary duty, fraud/constructive fraud, conversion, breach of contract); jury found for David and ordered most accounts restored; Vanguard IRA (never part of the Trust) was treated differently on appeal.
- Trial court reserved damages/accounting to avoid duplicative recovery; on appeal the court affirmed most rulings but reversed as to the Vanguard IRA and remanded for further proceedings.
Issues:
| Issue | Plaintiff's Argument (David) | Defendant's Argument (Linda) | Held |
|---|---|---|---|
| Enforceability of oral agreement / motion to dismiss breach of contract | The December 2016 oral agreement to return wrongly removed Assets was enforceable and need not be in writing because it did not concern "administration" of the Trust | I.C. ch.30-4-7 requires agreements compromising trust matters to be in writing; alternatively the oral terms were too indefinite to enforce | Court affirmed denial of dismissal: agreement need not be in writing because returning wrongly taken property did not constitute trust "administration;" but reversed contract remedy as to the Vanguard IRA (it was never in the Trust) |
| Dead Man’s Statute – exclusion of Linda’s testimony about Milton | Statute properly bars Linda from testifying about statements by Milton because the Trust was central to Milton’s estate plan and Sanders acts in an executor-like role | Statute does not apply to trusts/non‑probate assets; trust is distinct from an estate so testimony should be admissible | Court upheld application: given the Trust’s centrality to the estate plan, the Dead Man’s Statute barred Linda’s testimony about Milton’s statements |
| Striking of affirmative defenses / modification of pretrial order | David: many defenses were untimely, raised days before trial, and some were attempts to resurrect struck counterclaims; striking them prevented surprise | Linda: the second amended complaint justified new defenses; defenses were timely in light of pleadings changes | Court affirmed striking seventeen newly-filed defenses as untimely and proper modification of the PTO to prevent prejudice and injustice |
| Jury instructions / verdict form / remedy / double recovery | Verdict forms were appropriate to identify which accounts must be restored; remedy (return of accounts) is legal and damages/accounting can prevent double recovery; any erroneous instruction was harmless | Verdict forms were improper (special/verdict interrogatories abolished); jury ordered an equitable remedy (restoration of corpus) and risked double recovery; fraud instruction was misleading | Court rejected these challenges as waived or harmless: forms were practical given overlapping claims; return of misappropriated funds is a legal remedy; trial court prevented double recovery by ordering each account delivered once and reserving damages/accounting. |
Key Cases Cited
- Vernon v. Acton, 732 N.E.2d 805 (Ind. 2000) (oral agreements generally enforceable)
- Reddick v. Keesling, 28 N.E. 316 (Ind. 1891) (Dead Man’s Statute applied to trust-related disputes)
- Given v. Cappas, 486 N.E.2d 583 (Ind. Ct. App. 1985) (Dead Man’s Statute inapplicable where estate assets cannot be affected)
- Fisher v. Estate of Haley, 695 N.E.2d 1022 (Ind. Ct. App. 1998) (purpose and scope of Dead Man’s Statute explained)
- Tincher v. Davidson, 762 N.E.2d 1221 (Ind. 2002) (abolition/limits on special verdict practice under Trial Rule 49)
- Miller v. State, 575 N.E.2d 272 (Ind. 1991) (experts may rely on out-of-court information reasonably relied on in the field under Rule 703)