H.S. v. W.P. ( 2016 )

FILED
Dec 29 2016, 8:51 am
CLERK
Indiana Supreme Court
Court of Appeals
and Tax Court
ATTORNEY FOR APPELLANT ATTORNEYS FOR APPELLEE
Robert H. Little John K. Morris
Brookston, Indiana Morris Law Office
Lafayette, Indiana
Derek R. Molter
Jenny R. Buchheit Karl L. Mulvaney
Ice Miller LLP Nana Quay-Smith
Indianapolis, Indiana Bingham Greenebaum Doll LLP
Indianapolis, Indiana
IN THE
COURT OF APPEALS OF INDIANA
H.S., December 29, 2016
Appellant-Petitioner, Court of Appeals Case No.
79A05-1604-GU-776
v. Appeal from the Tippecanoe
Circuit Court
W.P., The Honorable Thomas H. Busch,
Appellee-Respondent Judge
Trial Court Cause No.
79C01-1512-GU-130
Baker, Judge.
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[1] H.S. (Granddaughter) appeals the judgment of the trial court, which dismissed
her guardianship petition regarding W.P. (Grandfather). The trial court found
that Granddaughter’s petition was precluded by the doctrine of res judicata
because a previous case filed by J.C.P.—her uncle and Grandfather’s son—
under the trust code was dismissed with prejudice. The trial court also found
that Granddaughter’s petition violated a local court rule. We find that there is
no evidence that Granddaughter influenced J.C.P.’s decision to dismiss his own
case and that, therefore, the doctrine of res judicata cannot be fairly applied to
preclude her petition. Moreover, Granddaughter did not violate the local court
rule. Accordingly, we reverse and remand with instructions to vacate the order
dismissing her case and for further proceedings.
Facts
[2] In 1996, Grandfather and M.P. (Grandmother) (collectively, Grandparents)
established a trust of which they were settlors, trustees, and primary
beneficiaries. Their three sons—M.L.P., W.K.P., and J.C.P.—were the
residual beneficiaries, and M.L.P. and J.C.P. were set to be the successor
trustees. In July 2014, Grandfather amended the trust to make M.L.P. the sole
successor trustee.
[3] On August 27, 2014, J.C.P. filed a petition requesting that Grandfather and
M.L.P. be replaced by a corporate trustee. Granddaughter, who is the daughter
of W.K.P. and a contingent beneficiary of the trust, was notified and
summonsed as an interested party, but did not join the lawsuit as a party.
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J.C.P. also requested an accounting of the trust and a preliminary injunction,
alleging that M.L.P. and M.L.P.’s wife were exercising undue influence over
Grandparents and were self-dealing out of trust assets. Shortly thereafter,
Grandmother passed away, making M.L.P. a co-trustee with Grandfather.
[4] After hearing testimony, the trial court on October 6, 2014, granted J.C.P.’s
motion for a preliminary injunction. The trial court noted that Grandfather
suffered from dementia, and it stated, “During the course of the hearing in this
matter, [Grandfather] became irrational and disoriented and stormed around
the courtroom yelling and left the courtroom and had to be restrained by a
deputy.” Appellant’s App. p. 48. Moreover, he “confused his children’s
names, was unsure who or when people contacted him, exhibited confusion
about his affairs and total reliance on [M.L.P.] and his attorney.” Id. at 49.
After finding that M.L.P. was using Grandfather’s confusion to sow discord in
the family, the trial court concluded that J.C.P. had made the requisite
showings to establish a reasonable likelihood of successfully proving that
M.L.P. was exercising undue influence over Grandfather and was using this
influence to gift himself trust resources. Grandfather and M.L.P. appealed this
order, but we remanded before issuing any opinion so that more evidence could
be taken on the matter.
[5] The trial court set a trial for June 23, 2015. Although Granddaughter did not
join the case as a party, she did provide deposition testimony. A week before
the trial, however, J.C.P. filed a motion to dismiss his own case, citing the
emotional and financial toll the case was having on the family, and contending
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that he would not be able to attend the trial. After a hearing on the motion, the
trial court dismissed the case, ordering J.C.P. to pay attorney fees. There is no
evidence in the record that Granddaughter had notice of this motion or the
hearing, which she did not attend.1
[6] On December 4, 2015, Granddaughter filed a petition to establish a
guardianship over Grandfather. She alleged that Grandfather was “an
incapacitated person [] incapable of managing his business and property
because of, inter alia, the undue influence of others.” Appellant’s App. p. 12.
W.K.P. and J.C.P. consented to the guardianship, but M.L.P. did not. On
December 15, Grandfather filed a motion to dismiss Granddaughter’s petition,
and M.L.P. joined Grandfather’s motion to dismiss.
[7] After holding a hearing and receiving briefs on the issue, the trial court granted
Grandfather’s motion to dismiss on March 9, 2016. First, it found that
Granddaughter’s claims were res judicata, based on the earlier probate case that
was dismissed with prejudice, and that “[a] contrary finding would permit each
of the persons interested in replacing a trustee or removing a person from
control of his own assets to come to court in succession to litigate the identical
claim.” Appellant’s App. p. 9. Second, the trial court found that
Granddaughter’s petition failed to comply with a local court rule because her
1
J.C.P.’s appeal of this case is currently pending.
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guardianship petition did not include a doctor’s report. Granddaughter now
appeals.
Discussion and Decision
I. Res Judicata
[8] Grandfather argues that Granddaughter is precluded from advancing her
guardianship petition because of J.C.P.’s earlier lawsuit. Grandfather points
out that a single factual issue, whether M.L.P. is exercising undue influence
over Grandfather, is central to both cases. Moreover, Granddaughter was sent
a notice of J.C.P.’s suit; Grandfather argues that she should have joined that
case as a party or else risk losing her right to pursue a similar claim.
[9] Grandfather’s argument “compel[s] us to enter the miasmic land of res judicata
where historic marsh vapors obscure concepts and semantic footing is slippery.”
State v. Speidel, 181 Ind. App. 448, 451, 392 N.E.2d 1172, 1176 (1979). Res
judicata, whether in the form of claim preclusion or issue preclusion (also called
collateral estoppel), aims to prevent repetitious litigation of disputes that are
essentially the same, by holding a prior final judgment binding against both the
original parties and their privies. Becker v. State, 992 N.E.2d 697, 700 (Ind.
2013). The term privity describes the relationship between persons who are
parties to an action and those who are not parties to an action but whose
interests in the action are such that they may nevertheless be bound by the
judgment in that action. Small v. Centocor, Inc., 731 N.E.2d 22, 27-28 (Ind. Ct.
App. 2000). The term includes those who control an action, though not a party
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to it, and those whose interests are represented by a party to the action. Id.When determining whether a party is precluded from asserting a claim due to a
previous adjudication, “the prime consideration is whether the party against
whom the prior judgment is pled had a full and fair opportunity to litigate the
issue and whether it would be otherwise unfair under the circumstances to
permit the use of collateral estoppel.” Sullivan v. Am. Cas. Co. of Reading, Pa.,
605 N.E.2d 134, 138 (Ind. 1992).
[10] We find that it would be unfair to preclude Granddaughter’s guardianship
petition under the present circumstances. Grandfather would have a much
stronger argument if J.C.P.’s case had been fully litigated and not voluntarily
dismissed; if that had happened, then Grandfather could argue that
Granddaughter was an individual “whose interests [were] represented by a
party to the action.” Small, 731 N.E.2d at 28. But we find dispositive the fact
that there is no evidence that she was notified or had knowledge of J.C.P.’s
motion to dismiss. In other words, if the doctrine of res judicata precludes
Granddaughter’s claim, then a motion filed by someone else, without her
knowledge or control, would act to extinguish all of her present and future
claims on the issue. This is a conclusion we cannot countenance.
[11] Grandfather is correct that a case does not have to be argued to its denouement
to have preclusive effect. For instance, in Small, a son of a decedent filed a
proposed complaint with the Indiana Department of Insurance as the
representative of his father’s estate on the grounds that his father’s hospital
committed negligence, but his case was dismissed by the trial court after he
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failed to respond to discovery requests. 731 N.E.2d at 25. Four years later,
Small filed a complaint for damages on his own behalf, again raising the issue
of his father’s hospitalization and death. Id. We held that, because Small as a
personal representative of his father and Small as an individual were in privity,
the first case precluded the second. Id. at 28.
[12] Unlike Small, whose first case was dismissed due his own action or lack
thereof, the first case Granddaughter was involved in was dismissed without her
knowledge, consultation, or control. To find that the doctrine of res judicata
precludes her guardianship claim in these circumstances would be unfair, and
the trial court’s decision to grant Grandfather’s motion to dismiss on this basis
was error.
II. Local Rule 79-PR-8.2
[13] Tippecanoe County Local Rule of Court 79-PR-8.2 provides as follows:
In guardianship matters seeking to declare an adult incapacitated
for any reason, a report or similar statement or document from
the doctor treating the alleged incapacitated person, or such
additional evidence as the Court shall require, shall be presented
to the Court at the time the petition is filed or on the hearing
date. No determination will be made without a supporting
medical report or other evidence clearly demonstrating the
reasons supporting the need for a guardianship.
Granddaughter did not attach any doctor’s report to her petition, but instead
argued that the rule did not apply to her petition. Accordingly, the trial court
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found as an alternative grounds for dismissal that she had not complied with
the local rule.
[14] The parties argue over whether this local rule is in conflict with state law and
therefore outside the authority of the trial court to enforce. We find that even if
this local rule is valid, the plain language of the rule does not support the trial
court’s decision to dismiss Granddaughter’s petition.
[15] The rule’s explicit language contemplates the admission of a doctor’s report “at
the time the petition is filed or on the hearing date.” Local Rule 79-PR-8.2
(emphasis added). A litigant reading the rule would have no notice that failure
to include a doctor’s report with the petition would result in dismissal. At
most, the rule could be read to permit a trial court to order a litigant to produce
such a report before holding a hearing; if the party did not comply with the
court order, then perhaps the petition could be dismissed on that basis. See, e.g.,
Ind. Trial Rule 9.2 (requiring a pleading based on a written instrument to
include that instrument, but instructing that non-compliance with the rule only
permits the trial court to “order compliance, the reasons for non-compliance to
be added to the pleadings, or allow the action to continue without further
pleading”). Moreover, the rule also does not only refer to doctor’s reports, but
also “such additional evidence as the Court shall require.” In the absence of
any court order specifying what evidence the trial court would like to see, a
litigant cannot fairly have her case dismissed for failure to comply with the rule.
Because the trial court never ordered Granddaughter to produce the report
contemplated in the local rule, or any other evidence, the alleged non-
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compliance with the local rule cannot be a valid basis for dismissing her
petition.
[16] The judgment of the trial court is reversed and remanded with instructions to
vacate its March 9, 2016, order and for further proceedings.
Mathias, J., and Pyle, J., concur.
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