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FOR PUBLICATION
ATTORNEYS FOR APPELLANT: HAROLD ABRAHAMSON SCOTT BILSE JONATHAN E. HALM Abrahamson, Reed & Bilse Hammond, Indiana ATTORNEY FOR APPELLEE: STEVEN A. KUROWSKI Schererville, Indiana

FILED
Dec 30 2011, 9:15 am
of the supreme court, court of appeals and tax court

CLERK

IN THE COURT OF APPEALS OF INDIANA
AMERICAN SAVINGS, FSB, Appellant-Defendant, vs. STEVE H. TOKARSKI, Successor Personal Representative of the Estate of John Wroblewski, on Behalf of the Estate, Appellee-Plaintiff. ) ) ) ) ) ) ) ) ) ) )

No. 45A04-1105-CC-237

APPEAL FROM THE LAKE SUPERIOR COURT The Honorable Gerald N. Svetanoff, Judge Cause No. 45D04-0706-CC-00075

December 30, 2011

OPINION - FOR PUBLICATION

GARRARD, Senior Judge

Plaintiff-Appellee Steve H. Tokarski, in his capacity as successor personal representative of the Estate of John Wroblewski, filed a three-count complaint against Defendant-Appellant American Savings, FSB, in Lake Superior Court. Both parties filed motions for summary judgment. American Savings now appeals the trial courts order granting summary judgment in favor of Tokarski on the first two counts. We reverse and remand. On June 20, 2003, Wroblewski, then in his late eighties, executed a general power of attorney naming Zorica Milovanovic as his attorney-in-fact and giving her the authority to, among other things, engage in banking transactions on his behalf. He also executed a will leaving everything to Milovanovic and naming her as the personal representative of his estate. On June 26, 2003, Milovanovic used the power of attorney to purchase two cashiers checks from Citizens Financial Services with funds from Wroblewskis account there. The first check was for $98,869.78, and the second check was for $414,236.00, for a total of $513,105.78. Both checks were made payable to Wroblewski. The next day on June 27, 2003, Milovanovic opened a savings account at American Savings in her name only with an opening deposit of $200. She then endorsed the cashiers checks "Zorica Milovanovic P.O.A. Jhon [sic] Wroblewski," Appellants App. pp. 59, 62, and deposited them into her savings account. In November 2003, Milovanovic used $170,000 from her savings account to purchase a certificate of deposit. Later that month, Milovanovic assigned the certificate of deposit to American Savings as collateral for a $154,800 mortgage loan.

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Wroblewski died in February 2004. In March 2004, Milovanovic offered his will to probate and was appointed personal representative of his estate. In May 2004,

Wroblewskis heirs filed a complaint in Lake Superior Court contesting the will, alleging that it was a result of Milovanovics undue influence. In January 2005, Wroblewskis heirs filed a petition to remove Milovanovic as personal representative of the estate. In March 2005, Wroblewskis heirs filed a complaint against Milovanovic and others in the United States District Court for the Northern District of Indiana. As to Milovanovic, the complaint alleged that she breached her fiduciary obligation to Wroblewski and converted $513,105.78 for her own use. In April 2005, Milovanovic directed American Savings, through a Notice of Restriction, to "tag, label and identify" her certificate of deposit "so that [she would] not [be] able to in any way alter, transfer, pledge or negotiate the certificate without the written consent" of her attorney and the attorney for Wroblewskis heirs. Id. at 77. The vice president of American Savings accepted and signed the notice of restriction. Milovanovic became delinquent on her mortgage loan. In May 2005, American Savings applied the funds held in the pledged certificate of deposit to pay off her mortgage. American Savings did not notify either of the attorneys named in the notice of restriction. Fifth Third Bank became the successor personal representative of Wroblewskis estate in July 2005. In November 2005, Lake Superior Court declared Wroblewskis will invalid, concluding that it was the product of Milovanovics undue influence. The same day the will was declared invalid, Fifth Third Bank sent a letter to American Savings requesting records and noting that Milovanovic deposited at American Savings two
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cashiers checks made payable to Wroblewski in an account solely in her name. In December 2005, the federal district court entered judgment against Milovanovic and others in the amount of $513,105.78.1 Also in December 2005, Tokarski succeeded Fifth Third Bank as the personal representative of Wroblewskis estate. On June 15, 2007, Tokarski filed the present case against American Savings. Count I was based on American Savingss act of permitting Milovanovic to deposit the $513,105.78 in cashiers checks into her own savings account: 4. Although American Savings was aware that the money belonged to John Wroblewski and that Zorica Milovanovic was endorsing the [two cashiers] checks in her capacity as the alleged attorney in fact for John Wroblewski, the bank did not deposit the money in John Wroblewskis name, and permitted Zorica Milovanovic to deposit the money as her own, thereby converting the funds of John Wroblewski to the exclusion of John Wroblewski and subsequently his estate. .... 6. With the knowledge that the funds were rightfully John Wroblewskis and that Zorica Milovanovic was exercising authority on his behalf for his benefit as his alleged attorney in fact, [American Savings] breached its contract to hold the funds for John Wroblewski, by dealing with his agent as if she were the principal. Id. at 16. Count II was based on American Savingss act of applying Milovanovics pledged certificate of deposit to pay off her mortgage despite the notice of restriction: 8. On or about June 1, 2005, without prior approval from counsel as agreed [in the notice of restriction], American Savings permitted the withdrawal of One Hundred Fifty-Four Thousand Eight Hundred Dollars and 00/100 ($154,800.00) to pay off a mortgage which it held on real estate owned by Zorica Milovanovic. 9. The taking of funds to pay off the mortgage amounted to a further conversion of assets belonging to the Estate of John Wroblewski.

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Milovanovic is now believed to be residing outside of the United States.

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Id. at 17. In Count III, Tokarski demanded treble damages, attorneys fees, and costs due to American Savingss conversion of the funds as set forth in the complaint. Id. at 18. Both parties moved for summary judgment and filed memorandums and designations in support of their motions. The parties filed responses to each others motions, and American Savings filed a reply to Tokarskis response. After a hearing, the trial court entered an order with findings and conclusions granting summary judgment in favor of Tokarski on the first two counts and granting summary judgment in favor of American Savings on the third count. The trial court found American Savings liable on Count I pursuant to In re Estate of Rickert, a case between an estate and the decedents attorney-in-fact, in which our Supreme Court stated, "A holder of a power of attorney is a fiduciary and therefore any transaction in which the holder uses a power of attorney to transfer assets to the holder is presumed invalid." 934 N.E.2d 726, 727 (Ind. 2010). Relying on In re Estate of Rickert, the trial court stated: There is no dispute that Milovanovic, with the assistance of American, engaged in a transaction presumed to be invalid by the common law as well as the Indiana Code. This Court finds that by facilitating a transaction presumed to be invalid on its face, American breached its duty to Wroblewski who was the owner of the funds in question. Appellants App. p. 11. The trial court also found American Savings liable on Count I pursuant to Indiana Code section 26-1-3.1-307 (1994), which provides circumstances in which a taker of a negotiable instrument has notice of a fiduciarys breach of fiduciary duty, and Indiana Code section 26-1-3.1-420 (1998), which provides that a negotiable instrument is converted if "a bank makes or obtains payment with respect to the instrument for a person not entitled to enforce the instrument or receive payment."
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Because the trial court found American Savings liable under Count I, the court found it unnecessary to separately address Count II. Finally, the trial court found that Tokarski was not entitled to treble damages under Count III. American Savings now appeals. American Savings raises three issues, which we restate as: I. Whether the trial court erred by granting Tokarskis motion for summary judgment and denying American Savingss motion for summary judgment on Count I. Whether the trial court erred by granting Tokarskis motion for summary judgment and denying American Savingss motion for summary judgment on Count II. Whether there are genuine issues of material fact as to the amount of Tokarskis damages and American Savingss defense of set-off.

II.

III.

As an initial matter, we note that Tokarski invites us to apply the wrong standard of review. Tokarski asserts that we must determine whether the record supports the findings and then whether the findings support the judgment. This is not the standard of review employed when reviewing an order on summary judgment. When reviewing the entry or denial of summary judgment, our standard of review is the same as that of the trial court: summary judgment is appropriate only where there is no genuine issue of material fact and the moving party is entitled to a judgment as a matter of law. Ind. Trial Rule 56(C); Dreaded, Inc. v. St. Paul Guardian Ins. Co., 904 N.E.2d 1267, 1269-70 (Ind. 2009). All facts established by the designated evidence and reasonable inferences drawn from those facts are construed in favor of the nonmoving party. Naugle v. Beech Grove City Sch., 864 N.E.2d 1058, 1062 (Ind. 2007). The fact that the parties filed crossmotions for summary judgment does not alter our standard of review. Nasser v. St.
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Vincent Hosp. & Health Servs., 926 N.E.2d 43, 47 (Ind. Ct. App. 2010), trans. denied. We consider each motion separately to determine whether the moving party is entitled to judgment as a matter of law. Id. In the summary judgment context, the entry of specific facts and conclusions aids our review by providing us with a statement of reasons for the trial courts decision, but it has no other effect. City of New Albany v. Cotner, 919 N.E.2d 125, 131 (Ind. Ct. App. 2009), trans. denied. I. COUNT I: RECEIVING DEPOSIT OF CASHIERS CHECKS TO MILOVANOVICS SAVINGS ACCOUNT American Savings contends that the trial court erred by granting Tokarskis motion for summary judgment and denying American Savingss motion for summary judgment on Count I. At the proceedings below, Tokarski argued that American Savings was liable for permitting Milovanovic to deposit the two cashiers checks into her own savings account based on conversion, failure to exercise ordinary care, breach of contract, and Indiana Code section 26-1-3.1-307. We address each in turn. A. CONVERSION AND FAILURE TO EXERCISE ORDINARY CARE At the summary judgment hearing, the trial court questioned Tokarskis counsel regarding the legal basis of Count I. Tokarskis counsel responded that Count I was based on contract and not tort: THE COURT: What is the basis of your Count I? Is it

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