In Re: The Scott David Hurwich 1986 Irrevocable Trust Scott D. Hurwich v. Stacey MacDonald (mem. dec.) ( 2019 )

MEMORANDUM DECISION
Pursuant to Ind. Appellate Rule 65(D), FILED
this Memorandum Decision shall not be
Jul 03 2019, 5:59 am
regarded as precedent or cited before any
court except for the purpose of establishing CLERK
Indiana Supreme Court
Court of Appeals
the defense of res judicata, collateral and Tax Court
estoppel, or the law of the case.
ATTORNEYS FOR ATTORNEY FOR
APPELLANT/CROSS-APPELLEE APPELLEE/CROSS-APPELLANT
James M. Lewis Timothy J. Maher
Michael J. Hays Barnes & Thornburg LLP
Tuesley Hall Konopa LLP South Bend, Indiana
South Bend, Indiana
IN THE
COURT OF APPEALS OF INDIANA
In Re: The Scott David Hurwich July 3, 2019
1986 Irrevocable Trust; Court of Appeals Case No.
18A-TR-2906
Scott D. Hurwich,
Appeal from the St. Joseph Probate
Appellant/Cross-Appellee-Plaintiff, Court
v. The Honorable Steven L.
Hostetler, Special Judge
Stacey MacDonald, Trial Court Cause No.
71D07-1410-TR-16
Appellee/Cross-Appellant-Defendant.
Najam, Judge.
Court of Appeals of Indiana | Memorandum Decision 18A-TR-2906 | July 3, 2019 Page 1 of 20
Statement of the Case
[1] Scott D. Hurwich is the settlor and sole beneficiary of the Scott David Hurwich
1986 Irrevocable Trust (“the Trust”). In 2014, Scott filed a complaint in which
he alleged that Stacey R. MacDonald, the former trustee of the Trust, had
breached her fiduciary duty to Scott. Stacey filed a counterclaim in which she
alleged that Scott had received compensation in the amount of $10,000 for
timber that had been removed from Stacey’s property. Following a hearing, the
probate court found in favor of Stacey on most of Scott’s claims. However, the
court found that Stacey had wrongfully used funds from the Trust to pay two
nontrust expenses, so the court ordered Stacey to pay Scott $416.67. The
probate court also found for Stacey on her counterclaim and ordered Scott to
pay Stacey $10,000 for the timber taken from Stacey’s property. The probate
court denied both parties’ requests for attorneys’ fees.
[2] Scott now appeals and raises four issues for our review, which we revise and
restate as follows:
1. Whether the probate court erred when it concluded that
Stacey’s legal fees were reasonable Trust expenses.
2. Whether the probate court erred when it determined that
Stacey had substantially complied with the statutory
requirement for her to deliver Trust accountings to Scott.
3. Whether the probate court erred when it denied his request
for attorneys’ fees.
Court of Appeals of Indiana | Memorandum Decision 18A-TR-2906 | July 3, 2019 Page 2 of 20
4. Whether the probate court erred when it found in favor of
Stacey on her counterclaim.
Additionally, Stacey raises the following issue for our review:
5. Whether the probate court erred when it denied her request
for attorneys’ fees.
[3] We affirm in part, reverse in part, and remand for further proceedings.
Facts and Procedural History
[4] Scott created the Trust in 1986, and he is the only beneficiary. Scott has two
siblings, Jeff Hurwich and Stacey, who each have their own trust. Jeff, Stacey,
and Scott jointly owned seventeen properties located across the country. Some
of the properties were owned in equal shares by the three trusts, and some were
jointly owned by the three individuals.
[5] Stacey began serving as Trustee of the Trust in 2004. While she was the
Trustee, Stacey had control over investment accounts that contained stocks and
other liquid Trust assets. Those investment accounts were managed by John A.
Siberell & Company (“Siberell”). Siberell also managed the liquid assets of
Jeff’s and Stacey’s trusts. Stacey would periodically transfer an equal amount
of funds from all three trust accounts at Siberell into a bank account at
KeyBank that Stacey controlled. Stacey then used the funds in the KeyBank
account to manage the assets that were jointly owned. Stacey also served as
Trustee of Jeff’s trust for some period of time.
Court of Appeals of Indiana | Memorandum Decision 18A-TR-2906 | July 3, 2019 Page 3 of 20
[6] After a dispute arose between Jeff and Stacey regarding how Stacey was
handling Jeff’s trust, Scott became concerned with how Stacey was handling the
Trust. Scott attempted to talk to Stacey, but Stacey did not address his
concerns. Scott was also unable to get a Trust accounting from Stacey.
Accordingly, on October 12, 2012, Scott removed Stacey as Trustee.
[7] In 2013, a dispute arose between the three siblings in relation to their real estate
holdings. On April 9, Scott, Jeff, and Stacey entered into a mediated settlement
agreement. Pursuant to that agreement, the three individuals partitioned the
properties. Additionally, on June 3, 2014, Stacey became the sole owner of a
property on Adams Road in St. Joseph County, Indiana. That property
bordered a property on Primrose Lane that is owned by Scott. On June 16,
Scott entered into two contracts with U.S. Timber & Veneer (“U.S. Timber”).
One contract provided that U.S. Timber would harvest timber from Scott’s
property on Primrose Lane in exchange for $6,000, and the other provided that
U.S. Timber would pay Scott $4,000 in exchange for timber from another
property. However, U.S. Timber did not harvest any trees at that time.
[8] On October 2, Scott filed a complaint against Stacey. In relevant part, Scott
asserted that Stacey had breached her fiduciary duty to Scott. Specifically,
Scott alleged that Stacey had used funds from the Trust to pay for personal
expenses and that she had refused to provide an accounting of the Trust at any
time while she was the Trustee. Accordingly, Scott asked the probate court to
order Stacey to deliver an accounting of the Trust to him and to award him
damages, including costs and attorneys’ fees. In response, Stacey filed a motion
Court of Appeals of Indiana | Memorandum Decision 18A-TR-2906 | July 3, 2019 Page 4 of 20
to dismiss pursuant to Indiana Trial Rule 12(B)(6). The probate court granted
Stacey’s motion and dismissed Scott’s complaint. Scott appealed.
[9] Meanwhile, on April 7, 2015, Stacey’s husband, Terry MacDonald, received a
phone call alerting him that there were people logging trees on Stacey’s
property on Adams Road. Terry then went to the Adams Road property, but
by the time he had arrived, the people were gone. Terry was able to see that
“sap was running on the stumps and the tree tops,” which indicated that the
trees had been “freshly cut.” Tr. Vol. II at 123. Terry later learned that U.S.
Timber had removed the trees. 1 Accordingly, Terry contacted U.S. Timber,
and U.S. Timber provided Terry with a copy of a check for $10,000 that they
had paid to Scott.
[10] On August 25, 2016, this Court held that the probate court had erred when it
dismissed Scott’s complaint against Stacey and reversed the judgment of the
probate court. See Hurwich v. MacDonald (In re Hurwich Trust), 59 N.E.3d 977,
984 (Ind. Ct. App. 2016). Accordingly, the probate court reinstated Scott’s
complaint. Stacey then filed her answer. In her answer, Stacey denied the
allegations, and, as an affirmative defense, she asserted that Scott’s claims were
barred by a two-year statute of limitations. Stacey also filed a counterclaim
1
Scott asserts that, when Terry testified at the ensuing trial as to who had cut the trees on Stacey’s property,
the court sustained Scott’s hearsay objection. Scott is correct that the probate court sustained his objection
when Terry first attempted to testify that his neighbor had told him who had removed the trees from his
property. However, Stacey’s counsel rephrased the question and again asked Scott who had removed the
trees. At that point, Scott again objected, but the probate court stated that Scott could question Terry about
his personal knowledge and, in effect, overruled the objection.
Court of Appeals of Indiana | Memorandum Decision 18A-TR-2906 | July 3, 2019 Page 5 of 20
against Scott in which she asserted that Scott had committed conversion when
he accepted payment for timber that had been harvested from her property.
[11] The probate court held a hearing on October 2, 2018. Prior to the hearing,
Scott and Stacey stipulated to the admission of the exhibits. Those exhibits
included copies of some of the bank statements from the KeyBank account and
copies of invoices from Stacey’s attorneys. During the hearing, Stacey testified
that she had never prepared a Trust statement for Scott while she was Trustee.
However, she testified that Siberell generated monthly statements that listed the
Trust assets and their gains and losses and that they prepared a year-end
summary each year. She also testified that she had hired Crowe Chizek
(“Crowe”) to prepare an annual accounting of the Trust for tax purposes, which
Crowe did every year that Stacey was Trustee of the Trust. Stacey further
testified that she believed that Scott had received the reports from Siberell and
Crowe every year.
[12] Scott then questioned Stacey about the invoices from her attorneys. Stacey
testified that the invoices were for work her attorneys had done for her between
September of 2011 and November of 2013 and that she had paid those invoices
from the KeyBank account. Stacey further testified that, in addition to the
current legal dispute between her and Scott, she had previously been involved
in other legal proceedings with family members. Scott attempted to ask Stacey
about the scope of the work that the invoices covered, but Stacey’s attorney
objected to the question as the description of the work provided by the attorneys
had been redacted on all of the invoices.
Court of Appeals of Indiana | Memorandum Decision 18A-TR-2906 | July 3, 2019 Page 6 of 20
[13] Scott also testified at the hearing. He testified that, when he contracted for U.S.
Timber to harvest trees from his property, he never authorized anyone to enter
onto Stacey’s property. He further testified that he had previously had his
property surveyed and that the surveyor had marked the boundaries of his
property with orange flags. He also testified that he had informed U.S. Timber
that the orange flags marked the boundary to his property.
[14] Following the hearing, the parties each submitted post-trial briefs. Thereafter,
the probate court issued findings of fact and conclusions thereon. As to Scott’s
claims, the court found that “Stacey did not directly or indirectly steal,
misappropriate, misuse, or improperly receive, retain, or apply any of Scott’s
assets or any assets of the Trust.” Appellant’s App. Vol. II at 11. However, the
probate court did find that Stacey had wrongfully paid $750 for Terry’s real
estate taxes and $500 for hay for her horses out of the KeyBank account.
Accordingly, the probate court found that Scott “is entitled to recover from
Stacey one-third . . . of the total of those two amounts, or $416.67.” Id. As for
Scott’s claim that Stacey had wrongfully used funds in the KeyBank account to
pay for her personal legal bills, the court found that “no evidence was
introduced to support that speculation.” Id. at 13. Accordingly, the probate
court denied Scott’s claims arising from Stacey’s payments to her attorneys.
[15] The court also found for Stacey on Scott’s claim that she had failed to provide
an accounting of the Trust. Specifically, the probate court found that Stacey
was not derelict in her responsibility to provide Scott with periodic accountings
of the Trust because Scott had received monthly and yearly statements from
Court of Appeals of Indiana | Memorandum Decision 18A-TR-2906 | July 3, 2019 Page 7 of 20
Siberell and annual tax returns from Crowe. In addition, the probate court also
found that “Scott knew for a long time that he was not being provided other
reports or accounting from Stacey.” Id. at 12. Because “Scott failed to take any
action within two years after becoming aware that Stacey was not providing the
information he desired,” his “claims arising from a lack of providing
accountings [are] barred by the applicable two-year statute of limitations.” Id.
at 13. Accordingly, the court only awarded Scott $416.67.
[16] In regard to Stacey’s counterclaim, the probate court found that Scott had
received $10,000 “from timber taken from Stacey’s property.” Id. at 16.
However, the court found that it was an “honest error” on Scott’s part and not
conversion, so the court declined to award treble damages to Stacey. Id.
Accordingly, the court awarded Stacey $10,000. The court then offset the two
awards and ordered Scott to pay Stacey $9,583.33. The court declined to award
either party attorneys’ fees. This appeal ensued.
Discussion and Decision
[17] The parties appeal the probate court’s findings of fact and conclusions thereon
following an evidentiary hearing. Where, as here, the court sua sponte issues
findings and conclusions, “the specific findings control our review and the
judgment only as to the issues those specific findings cover. Where there are no
specific findings, a general judgment standard applies, and we may affirm on
any legal theory supported by the evidence adduced at trial.” Trust No. 6011,
Court of Appeals of Indiana | Memorandum Decision 18A-TR-2906 | July 3, 2019 Page 8 of 20
Lake Cty Trust Co. v. Heil’s Haven Condos. Homeowners Ass’n, 967 N.E.2d 6, 14
(Ind. Ct. App. 2012). Further,
[w]e apply the following two-tier standard of review to sua sponte
findings and conclusions: whether the evidence supports the
findings, and whether the findings support the judgment.
Findings and conclusions will be set aside only if they are clearly
erroneous, that is, when the record contains no facts or inferences
supporting them. A judgment is clearly erroneous when a review
of the record leaves us with a firm conviction that a mistake has
been made. We consider only the evidence favorable to the
judgment and all reasonable inferences flowing therefrom, and
we will neither reweigh the evidence nor assess witness
credibility.
Id.
Issue One: Stacey’s Legal Fees
[18] Scott first contends that the trial court erred when it concluded that Stacey’s
legal fees were a legitimate Trust expense based on its finding that Scott’s
claims were mere speculation and that he did not present any evidence to
support his claims. In essence, Scott contends that the probate court wrongly
placed the burden on him to prove that the legal fees were not a valid Trust
expense. We must agree.
[19] It is well settled that “a trustee bears the burden of justifying the propriety of
items in a trust account.” Goins v. Riddle (In re Trust of Riddle), 946 N.E.2d 61,
68 (Ind. Ct. App. 2011). Then, if the trustee makes a prima facie showing that
the accounts are proper, the burden shifts to the beneficiaries to show specific
Court of Appeals of Indiana | Memorandum Decision 18A-TR-2906 | July 3, 2019 Page 9 of 20
instances of impropriety. See id. Accordingly, the burden was first on Stacey to
demonstrate that the legal fees were a legitimate Trust expense.
[20] Here, there is no dispute that Stacey used the KeyBank account, which was
funded in part by the Trust, to pay more than $107,000 in attorneys’ fees. But
the only evidence Stacey presented in relation to those legal fees were invoices
in which the description of the work performed is completely redacted. And
Stacey did not provide any testimony to indicate that those legal bills pertained
to services performed only in relation to the Trust. In other words, the invoices
show only who did the legal work, not the work that was done, and there is no
dispute that Stacey had hired the same lawyers to work on prior, unrelated
lawsuits with which she had been involved in capacities other than her capacity
as Trustee of Scott’s Trust. Indeed, the evidence demonstrates that, while Scott
did not file his lawsuit against Stacey until 2014, the legal bills covered a period
of time between 2011 and 2013 and all of the invoices listed Jeff’s name, not
Scott’s name, in reference to the services rendered. See, e.g., Ex. at 266.
Accordingly, we agree with Scott that Stacey did not meet her burden to show
that the legal fees at issue were related to the Trust or were otherwise a
legitimate Trust expense.
[21] We agree with Scott that the trial court improperly placed the burden on him to
prove that the legal fees were improper Trust expenses. There is no evidence to
support the court’s determination that the fees related to the Trust. Thus, we
hold that the probate court erred when it found that the legal fees were a
legitimate Trust expense. Accordingly, we reverse the probate court’s finding in
Court of Appeals of Indiana | Memorandum Decision 18A-TR-2906 | July 3, 2019 Page 10 of 20
favor of Stacey on this issue, and we remand with instructions for the probate
court to order Stacey to reimburse Scott for his share, or one-third of the legal
fees paid from the KeyBank account.
Issue Two: Accounting
[22] Scott next asserts that the probate court erred when it found that Stacey had
substantially complied with the statutory requirement to deliver a written
statement of accounts to Scott because Scott received monthly and yearly
statements from Siberell and annual tax returns from Crowe. Specifically, Scott
contends that Stacey never provided an accounting of the Trust to Scott. He
further contends that the statements from Siberell and Crowe did not offer any
“insight into Stacey’s use of funds in the Key Bank account” and, as such, did
not satisfy her reporting requirement. Appellant’s Br. at 13.
[23] Scott is correct that Stacey had an obligation to deliver an accounting to him
while she was Trustee of the Trust. See Ind. Code § 30-4-5-12(a) (2018). And
there is no dispute that Stacey never delivered an accounting to Scott.
However, the probate court did not only find in favor of Stacey on Scott’s claim
regarding Stacey’s duty to account based on its conclusion that the statements
from Siberell and Crowe fulfilled her reporting obligation. Rather, the probate
court also found that “Scott knew for a long time that he was not being
provided other reports or accounting from Stacey” and that “Scott was placed
on notice several years before 2012 that Stacey understood her responsibility” to
provide statements to Scott. Id. Accordingly, in addition to finding that the
Siberell and Crowe statements met Stacey’s statutory obligation, the probate
Court of Appeals of Indiana | Memorandum Decision 18A-TR-2906 | July 3, 2019 Page 11 of 20
court alternatively found that, “[b]ecause Scott failed to take any action within
two years after becoming aware that Stacey was not providing the information
he desired, Scott’s claims arising from a lack of providing accountings [are]
barred by the applicable two-year statute of limitations.” Id. at 13.
[24] Scott makes no argument on appeal to explain why his claims regarding
Stacey’s failure to provide Trust accountings are not barred by a statute of
limitations. Indeed, Scott does not even acknowledge the probate court’s
alternate rationale for finding in favor of Stacey on his claim. As such, Scott
has not met his burden on appeal to demonstrate that the probate court erred
when it denied Scott’s claim that Stacey had failed to provide Trust accountings
to him. We therefore affirm the probate court’s judgment in favor of Stacey on
this claim.
Issue Three: Scott’s Attorneys’ Fees
[25] Scott also asserts that the probate court erred when it denied his request for
attorneys’ fees. Specifically, Scott contends that, because “Stacey misspent trust
funds, the probate court “should have awarded Scott his legal fees[.]”
Appellant’s Br. at 10. We agree.
[26] Indiana Code Section 30-4-3-11(b)(4) provides that, “[i]f the trustee commits a
breach of trust, the trustee is liable to the beneficiary for . . . reasonable
attorney’s fees incurred by the beneficiary in bringing an action on the breach.”
Additionally, Indiana Code Section 30-4-3-22(e) provides that, “[i]f a
beneficiary successfully maintains an action” to compel the trustee to redress a
Court of Appeals of Indiana | Memorandum Decision 18A-TR-2906 | July 3, 2019 Page 12 of 20
breach of trust, “he is entitled to a judgment for reasonable attorney’s fees.”
Further, our Supreme Court has stated that a trial court is required to award
attorneys’ fees under those statutes. See Malachowski v. Bank One, Indianapolis,
N.A., 682 N.E.2d 530, 532 (Ind. 1997) (holding that the beneficiaries were
entitled to reasonable attorney’s fees after they successfully maintained an
action for breach of trust against the trustee).
[27] Here, the probate court found, and Stacey does not dispute, that she had
wrongfully used the KeyBank account, which was funded in part by the Trust,
to pay $750 of her husband’s real estate taxes and $500 for hay for her horses. 2
Because Scott successfully maintained an action for breach of Trust against
Stacey, Scott is entitled to a judgment for reasonable attorneys’ fees. We
therefore reverse the probate court’s judgment denying Scott’s request for
attorneys’ fees, and we remand to the probate court for a determination of
reasonable attorneys’ fees to award to Scott.
Issue Four: Stacey’s Counterclaim
[28] Scott next asserts that the probate court erred when it ordered him to pay Stacey
$10,000 based on the court’s conclusion that Scott had been paid that money
for timber taken from Stacey’s property. We note that the probate court
explained its reasoning but did not issue specific findings of fact on this issue.
2
And now, on appeal, Scott prevails on his claim that Stacey wrongfully spent over $107,000 from the
KeyBank account on legal expenses unrelated to the Trust. Accordingly, Scott is entitled to an award of
attorneys’ fees on that ground as well.
Court of Appeals of Indiana | Memorandum Decision 18A-TR-2906 | July 3, 2019 Page 13 of 20
Accordingly, the general judgment standard applies, and we may affirm on any
legal theory supported by the evidence. See Trust No. 6011, Lake Cty Trust Co.,
967 N.E.2d at 14.
[29] Scott contends that “[t]here was no . . . evidence regarding who cut Stacey’s
trees or when they were cut.” Appellant’s Br. at 15. We cannot agree. While
the probate court did not expressly find that U.S. Timber had removed trees
from Stacey’s property, that finding is implicit in the court’s judgment on
Stacey’s counterclaim, and there is sufficient evidence in the record to support
that inference. Terry testified that he had received a call on April 7, 2015,
alerting him that someone was cutting trees on Stacey’s property. Terry further
testified that, on the same day, he visited Stacey’s property and discovered that
trees had been “freshly cut.” Tr. Vol. II at 123. And Terry testified that U.S.
Timber had removed the trees and had provided him with copies of its contracts
with Scott, to which the parties stipulated. Thus, contrary to Scott’s assertion,
there is evidence in the record that U.S. Timber removed trees from Stacey’s
property on or about April 7, 2015.
[30] Scott next contends that the probate court erred when it ordered Scott to pay
Stacey for the timber because “Scott did not direct anyone to go on Stacey’s
land.” Appellant’s Br. at 16. He further asserts that, “[i]f U.S. Timber . . . went
outside the scope of Scott’s authority and harvested trees from neighboring
lands, it was outside its agency, and Scott is not liable for its actions.” Id. In
essence, Scott contends that U.S. Timber was an agent but that he is not
responsible for the actions of an agent that exceeded the scope of its authority.
Court of Appeals of Indiana | Memorandum Decision 18A-TR-2906 | July 3, 2019 Page 14 of 20
[31] While Scott describes U.S. Timber as an “agent,” and Stacey does not dispute
that characterization, the record indicates that U.S. Timber was an independent
contractor. An independent contractor is “a person who contracts with another
to do something for him but who is not controlled by the other nor subject to
the other’s right of control with respect to his physical conduct in the
performance of the undertaking.” Sword v. NKC Hospitals, Inc., 714 N.E.2d 142,
148 (Ind. 1999). Here, U.S. Timber contracted with Scott to remove timber
from two properties owned by Scott. And there is no evidence in the record to
indicate that Scott exerted any control over U.S. Timber when it removed the
timber. Indeed, Scott testified that he was out of the state at the time U.S.
Timber harvested Stacey’s trees. All of the evidence shows that U.S. Timber
was an independent contractor.
[32] It is well settled that, generally, a person who hires an independent contractor is
not liable for the acts of the independent contractor. See Barnard v. Menard, Inc.,
25 N.E.3d 750, 755 (Ind. Ct. App. 2015). This is because the person who hires
the contractor typically exercises little, if any, control over the means or manner
of the works of its contractors and requires only that the completed work meet
the specifications of the contract. See id. Because U.S. Timber was an
independent contractor, and because Scott did not exert any control over U.S.
Timber, Scott is not liable at law for U.S. Timber’s act of removing timber from
Stacey’s property.
[33] The probate court explained its judgment on Stacey’s counterclaim as follows:
Court of Appeals of Indiana | Memorandum Decision 18A-TR-2906 | July 3, 2019 Page 15 of 20
The final issue is the claim asserted by Stacey against Scott for
timber removed from Stacey’s separate property for which Scott
received compensation in the amount of $10,000.00. The Court
finds that Scott received $10,000.00 from timber taken from Stacey’s
property, and Scott must pay that amount to Stacey. However, there
was absolutely no evidence whatsoever that would allow the
Court to find that Scott’s actions in receiving $10,000.00 from the
sale of timber from Stacey’s land was done intentionally,
recklessly, or willfully. It was not a conversion. It was an honest
error on Scott’s part. Scott’s actions are not criminal in nature
and do not justify the trebling of damages or an award of
attorney fees pursuant to I.C. § 34-24-3-1. However, the timber
proceeds belong to Stacey and judgment on Stacey’s
counterclaim is therefore entered in favor of Stacey and against
Scott in the amount of $10,000.00.
Appellant’s App. Vol. II at 15-16 (emphasis added).
[34] While the probate court did not mention unjust enrichment, the court found, in
effect, that Scott had been unjustly enriched. The parties did not address unjust
enrichment in their briefs. Because we may affirm on any theory supported by
the record, see Trust No. 6011, Lake Cty Trust Co., 967 N.E.2d at 14, we will
consider whether Scott was unjustly enriched. This court has recently stated
that, to show unjust enrichment, “‘a plaintiff must establish that a measurable
benefit has been conferred on the defendant under such circumstances that the
defendant’s retention of the benefit without payment would be unjust.’” Estate
of Henry v. Woods, 77 N.E.3d 1200, 1207 (Ind. Ct. App. 2017) (quoting Bright v.
Kuehl, 650 N.E.2d 311, 316 (Ind. Ct. App. 1995) (emphasis added).
Court of Appeals of Indiana | Memorandum Decision 18A-TR-2906 | July 3, 2019 Page 16 of 20
[35] The evidence shows that Scott contracted with U.S. Timber to remove timber
from two of his properties; the contract price was a total of $10,000; U.S.
Timber removed timber from Stacey’s property; and U.S. Timber paid Scott
$10,000. From this evidence, the trial court inferred “that Scott received
$10,000 from timber taken from Stacey’s property,” Appellant’s App. Vol. II at
15-16, and, hence, that Scott received a measurable benefit to which he was not
entitled. There is no direct evidence that either all or any part of U.S. Timber’s
$10,000 payment to Scott was attributable to timber cut from Stacey’s property.
For that matter, there is no evidence that any such payment was not for timber
removed from Scott’s properties. The contract price was not based on whether
more or less timber was cut, and there is no evidence that Scott received any
additional consideration or benefit from U.S. Timber’s removal of Stacey’s
timber beyond the contract price. There are gaps in the evidence, including
questions that could have and should have been asked on the direct or cross-
examination of Scott, or evidence that might have been provided by third-party
witnesses who were not called to testify.
[36] Nevertheless, we need not decide whether the evidence supports the trial court’s
conclusion that Scott received a benefit for which he was not entitled because
there is an adequate and independent reason why Stacey is not entitled to
recover from Scott. Unjust enrichment is an equitable remedy, which is usually
unavailable where there is an adequate remedy at law. Swami, Inc. v. Lee, 841
N.E.2d 1173, 1178 (Ind. Ct. App. 2006). Here, again, shortly after Terry
received a phone call in April 2015 alerting him that timber was being removed
Court of Appeals of Indiana | Memorandum Decision 18A-TR-2906 | July 3, 2019 Page 17 of 20
from Stacey’s property, he learned that U.S. Timber had harvested the trees.
That same day, Terry filed a police report in which he asserted that timber had
been stolen from Stacey’s property. There is no discovery issue here. Stacey
was on inquiry notice that her timber had been cut and had good reason to
believe that U.S. Timber was liable for it. Stacey could have pursued a claim
against U.S. Timber but did not. Because Stacey had an adequate remedy at
law in 2015, she is not entitled to an equitable remedy from Scott years later. 3
[37] In sum, the evidence shows that Stacey had been damaged by the unauthorized
removal of timber from her property. The evidence also shows that U.S.
Timber was acting as an independent contractor when it removed the timber
and that Scott is not liable as a matter of law for U.S. Timber’s conduct.
Further, because Stacey had an adequate remedy at law against U.S. Timber
but failed to pursue it, she is not entitled to an equitable remedy against Scott,
and the trial court erred when it ordered Scott to pay Stacey $10,000. We
therefore reverse the trial court’s judgment on this issue.
Issue Five: Stacey’s Attorneys’ Fees
[38] Finally, Stacey contends that the probate court erred when it found that she is
not entitled to recover attorneys’ fees from Scott. Specifically, Stacey contends
3
Moreover, we observe that Stacey’s action against U.S. Timber would be for the wrongful removal of her
timber, and damages would be measured by stumpage not the contract price agreed to by Scott and the
timber company. And Stacey would be entitled to seek an amount not to exceed three times her actual
damages, costs of the action, a reasonable attorney’s fee, travel expenses, and other reasonable costs of
collection. See Ind. Code § 34-24-3-1.
Court of Appeals of Indiana | Memorandum Decision 18A-TR-2906 | July 3, 2019 Page 18 of 20
that the probate court “prematurely” ruled on the issue of attorneys’ fees
because the parties had agreed in the final pretrial order “that neither party
would submit a fee claim until such time as the underlying matters had been
determined.” Appellee’s Br. at 17, 19. In essence, Stacey contends that the
probate court wrongly denied her the opportunity to file a motion for attorneys’
fees. We cannot agree.
[39] In the final pre-trial order, the parties agreed that “any claim for legal fees will
be presented through a post-trial motion[.]” Appellant’s App. Vol. II at 34, n.1.
Following the hearing, Stacey submitted a post-trial brief in which she
extensively argued that Scott’s claims were baseless and not supported by the
evidence. She further asserted that she had not breached her duties as Trustee.
Accordingly, Stacey asserted in her post-trial brief that she is “entitled” to
recover “the money she has spent defending the claims in this matter[.]” Id. at
58.
[40] Because the parties agreed to present any claim for attorneys’ fees in post-trial
motions, and because Stacey filed a post-trial brief in which she requested
attorneys’ fees for defending against Scott’s action, the probate court did not
deny Stacey the opportunity to make her claim that she is entitled to an award
Court of Appeals of Indiana | Memorandum Decision 18A-TR-2906 | July 3, 2019 Page 19 of 20
of attorneys’ fees. 4 We affirm the probate court’s denial of an award of
attorneys’ fees for Stacey.
Conclusion
[41] In sum, we hold that the probate court erred when it found that Stacey’s legal
fees were reasonable Trust expenses. We further hold that Scott did not meet
his burden on appeal to demonstrate that the probate court erred when it
concluded that his claims against Stacey regarding her duty to account were
precluded by the applicable statute of limitations. Additionally, we hold that
the probate court erred when it declined to award Scott attorneys’ fees. As to
Stacey’s counterclaim, the probate court erred when it ordered Scott to pay
Stacey $10,000 for timber that U.S. Timber had harvested from her property.
Finally, we hold that the probate court did not deny Stacey the opportunity to
file a motion for attorneys’ fees. We therefore affirm the probate court in part,
reverse in part, and remand with instructions.
[42] Affirmed in part, reversed in part, and remanded for further proceedings.
Baker, J., and Robb, J., concur.
4
Stacey also asserts that a “consideration of Stacey’s fees is warranted” because she “was found not to have
violated any of her obligations as Trustee. Appellee’s Reply Br. at 7. To the extent Stacey asserts that she is
entitled to an award of attorneys’ fees because she successfully defended against Scott’s claims, we cannot
agree. As discussed above, Stacey wrongfully used a bank account partially funded by Trust funds to pay for
over $107,000 in legal fees not related to the Trust, her husband’s real estate taxes, and hay for her horses.
Court of Appeals of Indiana | Memorandum Decision 18A-TR-2906 | July 3, 2019 Page 20 of 20