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FOR PUBLICATION
ATTORNEYS FOR APPELLANTS: RICHARD A. KEMPF ABRAM B. GREGORY Taft Stettinius & Hollister LLP Indianapolis, Indiana ATTORNEYS FOR APPELLEE THE TRUST COMPANY OF OXFORD: KARL L. MULVANEY DAVID C. CAMPBELL BRIANA L. CLARK Bingham McHale LLP Indianapolis, Indiana ATTORNEYS FOR APPELLEE JULIE R. WATERFIELD: BYRON L. GREGORY Foley & Lardner LLP Chicago, Illinois JARRELL B. HAMMOND Lewis Wagner, LLP Indianapolis, Indiana

FILED
of the supreme court, court of appeals and tax court

Dec 30 2011, 8:59 am

CLERK

IN THE COURT OF APPEALS OF INDIANA
IN THE MATTER OF THE JULIE R. WATERFIELD IRREVOCABLE TRUST AGREEMENT DATED OCTOBER 21, 1997, RICHARD R. WATERFIELD and J. RANDALL WATERFIELD, Appellants, vs. THE TRUST COMPANY OF OXFORD and JULIE R. WATERFIELD, Appellees. ) ) ) ) ) ) ) ) ) ) ) ) ) ) )

No. 49A04-1103-TR-95

APPEAL FROM THE MARION SUPERIOR COURT The Honorable Gerald S. Zore, Judge Cause No. 49D08-0703-TR-011621

December 30, 2011 OPINION - FOR PUBLICATION BAILEY, Judge

STATEMENT OF THE CASE Richard R. Waterfield and J. Randall Waterfield appeal the trial court's entry of summary judgment for Julie R. Waterfield and The Trust Company of Oxford ("TCO"). Richard and Randall raise two issues1 for our review, which we restate as follows: 1. Whether Richard and Randall's claims for breach of fiduciary duty and breach of trust are time-barred; and Whether Richard and Randall have demonstrated a genuine issue of material fact that they were injured by Julie's and TCO's allegedly fraudulent behavior.

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We affirm. FACTS AND PROCEDURAL HISTORY Richard and Randall are two of Julie's three children, and the grandchildren of John and Ruth Rhinehart, Julie's parents. In 1997, John and Ruth established the Julie R. Waterfield Irrevocable Trust ("the Trust") with an initial principal balance of $4 million. The Trust's stated purpose is for Julie's "benefit." Appellants' App. at 241. Under the terms of the Trust, Julie was originally entitled to an annual distribution of $100,000. Richard and Randall are not entitled to any distributions from the Trust. Rather, any distributions Richard and Randall might receive from the Trust are discretionary and
Given our disposition, we need not consider Richard and Randall's arguments that they were not bound by their consent to reform the Trust or that the "trial court . . . erred in applying the advice of counsel defense." Appellants' Br. at 14. We also do not consider TCO's assertion that Richard and Randall have waived appellate review of the trial court's judgment because they failed t o provide an adequate appendix.
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require an assessment of their health, education, maintenance, and support needs at the time of the potential distribution. John and Ruth named themselves co-trustees of the Trust along with TCO, but after John's death Ruth served as co-trustee with TCO. The Trust terminates at Julie's death, at which time its assets will pour over into additional trusts created by John and Ruth ("the Pour-Over Trusts"). Under the terms of the Pour-Over Trusts, Richard and Randall will each be entitled to an annual $25,000 distribution and might also receive discretionary distributions under certain conditions identical to the provisions in the Trust. Sometime before November of 2002, Ruth pledged $1.5 million to Indiana University-Purdue University Fort Wayne ("IPFW") to fund a new recital hall within IPFW's music building. Ruth intended to fund her pledge with stock holdings, but those holdings later became worthless. In November of that year, Ruth met with her attorney, C. Daniel Yates, and TCO financial advisor Debra Bennett. The three agreed that, "to achieve [Ruth's] objectives, the [T]rust[ would] have to be reformed." Appellants' App. at 495. Pursuant to the terms of the Trust, Ruth, in her "sole judgment and discretion," initiated the reformation process. Appellants' App. at 248. However, in order to reform the Trust, the reformation had to be based on an "unforeseeable condition," such as an "event[] tending to greatly impair the intent and purposes of" the Trust. Appellants' App. at 247-48. And to protect that limited basis for reformation, Ruth had to obtain the permission of a court.
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Shortly thereafter, TCO hired Yates as its own attorney. On December 13, 2002, TCO, as co-trustee, filed a "Petition to Docket and Reform Trust and Remove Trust From Docket" in the Marion Superior Court. Appellants' App. at 66. The petition sought to increase Julie's annual distribution from the Trust from approximately $100,000 to $275,000 for the rest of Julie's life. No other changes were requested. That same day, the court conditionally granted TCO's petition provided that all primary, remainder, and contingent beneficiaries of the Trust--eighteen people total--filed a written consent to the reformation within thirty days of TCO's petition. Yates, who had prepared the Trust and now represented both TCO and Ruth, drafted the necessary consent forms. According to the consent form relevant here ("the Consent Form"): The undersigned do hereby state, as follows: 1. Julie R. Waterfield is Beneficiary") of the [T]rust . . . . the primary beneficiary ("Primary

2. Jill Loraine Waterfield, Richard Rhinehart Waterfield, and John Randall Waterfield are the remainder beneficiaries of the Trust. *** 4. Each of the undersigned has read the Petition to Docket and Reform Trust and Remove Trust From Docket, attached hereto as Exhibit "A" and by reference made a part hereof, of [TCO], a Co-Trustee of the Trust, as the petitioner, and understands that the Petition seeks an order, without notice and a hearing, for the Court to (i) invoke the jurisdiction of the Court over the Trust; (ii) docket the same for the limited purpose of reforming the Trust to provide that commencing on January 1, 2003, the sum of [$275,000] be distributed annually to the Primary Beneficiary [Julie], during her lifetime, in installments not less frequently than quarterly; (iii) order that the Co-Trustees of the Trust be held harmless and released from any liability related to such reformation and that they be indemnified from the assets of the trust for any such liability (including reasonable attorneys'
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fees); and (iv) authorize the Clerk of the court to remove the Trust from the Trust Docket Book of this Court's records. 5. Each of the undersigned acknowledges and understands that the terms of such reformation will reduce the assets of the Trust[,] and, accordingly, that they or their issue will ultimately receive less or none of the assets of the Trust than if such reformation were not made. 6. This Consent shall be binding upon each of the undersigned and his or her respective heirs, successors, assigns[,] and legal representatives. 7. Each of the undersigned voluntarily and irrevocably (i) consents to such reformation of the Trust, the indemnification of the Co-Trustees and the other actions as set forth in paragraph 4 above, (ii) executes this Consent on behalf of himself or herself and his or her respective issue, and (iii) understands that this Consent shall be binding upon his or her heirs, successors, assigns[,] and legal representatives. 8. Each of the undersigned waives his or her right to notice and hearing in this matter. 9. Each of the undersigned acknowledges, with respect to this Consent, that he or she (i) was not represented by counsel for the petitioner . . . , (ii) did not receive any advice from said counsel, and (iii) had the right and opportunity to obtain independent counsel prior to signing. EACH OF THE UNDERSIGNED AFFIRMS, UNDER THE PENALTIES FOR PERJURY, THAT THE FOREGOING REPRESENTATIONS ARE TRUE. Appellants' App. at 207-09. The Consent Form's pages were numbered, with the

signature page on numbered page three, which included the emphasized perjury notice ("the Signature Page"). Yates read the Consent Form to Ruth and Julie at a meeting and explained the necessity of obtaining the signatures of all beneficiaries in order to reform the Trust. Ruth and Julie informed Yates that they would obtain the signatures of Julie's children

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while the family was together for the holidays. Bennett agreed to give a presentation to Julie's children, among others, on December 26. On December 26, Ruth held a family meeting at her house. Richard and Randall were present. The proposed reformation of the Trust was on the agenda for the meeting, which Richard later recalled having seen. Richard also later acknowledged that "IPFW may have been mentioned" at that meeting. Appellants' App. at 415. Richard, Randall, and the other beneficiaries executed the Consent Form. According to Richard's later testimony, they signed the Signature Page "a few days before" the family meeting, which Julie had told him "related to the reformation," and Richard then "asked for the [full] documents." Appellants' App. at 415. TCO filed the fully executed Consent Form with the court on January 6, 2003, and the court granted the request to reform the Trust. On January 8, 2003, Yates sent a letter to Richard. Yates stated, "[a]s requested, enclosed are copies of the Verified Consents you recently signed regarding . . . the [Trust] for your records. Should you have any questions or comments, of course, please let us know." Appellants' App. at 418. At the bottom of the letter, Yates indicated there were "[e]nclosures." Appellants' App. at 418. Richard later recalled receiving Yates' letter, but had no "specific recollection one way or the other" whether he saw the enclosures. Appellants' App. at 416. Richard also agreed that it would be "reasonable to assume that [he] would have contacted [Yates] about the missing documents" but stated that he had "no recollection of contacting Mr. Yates." Appellants' App. at 416. More than three years later, on March 24, 2006, the parties entered into a tolling agreement ("the Tolling Agreement"), which preserved any causes of action that had not
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yet tolled under the applicable statute of limitations. On March 22, 2007, Richard and Randall filed a complaint against Julie and TCO. In their original complaint, Richard and Randall alleged that Julie and TCO had obtained their signatures consenting to the reformation of the trust through fraud. Two months later, Richard and Randall filed their amended complaint. In their amended complaint, Richard and Randall reiterated that they did not knowingly execute the Consent Form and that they did not learn of Julie's increased annual distribution from the Trust "until long after" January of 2003. Appellants' App. at 71. In their amended background allegations, Richard and Randall stated that, in an earlier filing with the court, TCO had acknowledged that "a portion of the additional distributions [to Julie under the reformed Trust] was to be used to support Ruth['s] pledge to [IPFW] of $1.5 million," which was "inconsistent" with the stated purpose for the reformation of the Trust. Appellants' App. at 67 (quotations omitted). Richard and Randall then raised the following allegations: fraud, constructive fraud, breach of fiduciary duty, breach of trust, and improper reformation of trust. Richard and Randall sought as relief, among other things, restoring Julie's distribution from the Trust to $100,000 per year. On December 22, 2009, TCO filed its motion for summary judgment. On January 27, 2010, Julie likewise filed a motion for summary judgment. Richard and Randall filed their response on March 16. The court held a hearing on the motions in November of 2010, and, on January 31, 2011, the court granted summary judgment for TCO and Julie on all claims. This appeal ensued.

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DISCUSSION AND DECISION Standard of Review Richard and Randall appeal the trial court's summary judgment for TCO and Julie. Our standard of review for summary judgment appeals is well established: When reviewing a grant of summary judgment, our standard of review is the same as that of the trial court. Considering only those facts that the parties designated to the trial court, we must determine whether there is a "genuine issue as to any material fact" and whether "the moving party is entitled to a judgment a matter of law." In answering these questions, the reviewing court construes all factual inferences in the non-moving party's favor and resolves all doubts as to the existence of a material issue against the moving party. The moving party bears the burden of making a prima facie showing that there are no genuine issues of material fact and that the movant is entitled to judgment as a matter of law; and once the movant satisfies the burden, the burden then shifts to the non-moving party to designate and produce evidence of facts showing the existence of a genuine issue of material fact. Dreaded, Inc. v. St. Paul Guardian Ins. Co., 904 N.E.2d 1267, 1269-70 (Ind. 2009) (citations omitted). The party appealing from a summary judgment decision has the burden of persuading this court that the grant or denial of summary judgment was erroneous. Knoebel v. Clark County Superior Court No. 1, 901 N.E.2d 529, 531-32 (Ind. Ct. App. 2009). The trial court entered detailed findings and conclusions in its order on summary judgment. The entry of specific findings and conclusions does not alter the nature of a summary judgment, which is a judgment entered when there are no genuine issues of material fact to be resolved, nor does it alter our review upon appeal. Rice v. Strunk, 670 N.E.2d 1280, 1283 (Ind. 1996). Thus, in the summary judgment context, we are not bound by the trial court's specific findings of fact and conclusions thereon, which merely
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aid our review by providing us with a statement of reasons for the trial court's actions and, as with the trial court's order here, detailed citations to the summary-judgment documents. Id. Issue One: Statute of Limitations for Claims of Breach of Fiduciary Duty and Breach of Trust Richard and Randall assert that TCO and Julie breached their fiduciary duties and committed a breach of trust in the reformation of the Trust. Specifically, Richard and Randall allege that TCO and Julie were fiduciaries to Richard and Randall yet, despite that relationship, "neither [TCO nor Julie] informed [Richard and Randall] of the purposes for the Signature Pages and the contents of the Consent document to which their signatures were later attached." Appellants' Br. at 17-18. Richard and Randall further allege that they "relied upon and trusted" their fiduciaries "when they signed the Signature Pages without having read--or having been provided--the Consent documents or Petition. Accordingly, they are not bound as a matter of law to their signatures," which leads them to conclude that the reformation was accomplished without their consent. Appellants' App. at 18. In its summary judgment motion, TCO asserted that it was entitled to summary judgment on these two claims because (among other things) the statute of limitations had run. Where, as here, the alleged injury is to personal property, the statute of limitations for a claim of breach of fiduciary duty is two years. Ind. Code

Download Julie R. Waterfield Irrevocable Trust Agreement Dated October 21, 1997; Richard

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