After a trial court approved a guardian’s intermittent accounting without notice or a hearing, the Indiana Court of Appeals reversed, ordered a new hearing and vacated an attorneys’ fee award.
Recently, the Indiana Court of Appeals decided a case involving a guardianship over Gwendolyn, an adult who was diagnosed with Alzheimer’s disease in 2008 (see Meranda v. Spaw). Gwendolyn was married to Thomas, and her daughter Mary had been serving as her guardian since September 2014. Gwendolyn lived with Mary for a period of time after Mary was appointed as guardian, but she moved back in with Thomas after he retired. Thomas provided Gwendolyn’s daily care and paid for her medical expenses, which (for a time) Mary reimbursed from Gwendolyn’s assets.
In accordance with her duties as guardian, Mary filed an initial guardian’s report and accounting in November 2014. In September 2016, she filed an inventory. In June 2017, she petitioned the court to clean up and sell Gwendolyn’s real estate. The trial court approved each of these filings ex parte, meaning without providing notice or holding a hearing.
In June 2018, Thomas wrote a letter to the trial court advising the court that Mary was no longer reimbursing him for Gwendolyn’s medical bills and, consequently, he was falling into debt and in danger of losing the home in which he and Mary lived. His letter requested that Mary find another place for Gwendolyn to live. A month later, Mary responded with a status report to the court, contending that she was paying Gwendolyn’s medical bills, but she did not serve a copy of the report on Thomas.
In February 2019, Thomas filed an emergency petition to remove Mary as Gwendolyn’s guardian and to have himself appointed. Thomas alleged Mary mismanaged his wife’s estate and that he had amassed more than $40,000 in unreimbursed medical expenses. Mary responded by arguing that the court already had approved her various accountings and that Thomas had not objected to those filings or appealed the court’s approvals. Mary also requested reimbursement of attorneys’ fees and costs because Thomas’ petition, in her view, was frivolous.
The trial court held a hearing, at which the court excluded evidence of Mary’s mismanagement of Gwendolyn’s estate and Thomas’ unreimbursed medical expenses. The court ultimately denied Thomas’ petition on the grounds it was simply a “rehashing of issues previously decided.” The trial court also found that Thomas’ petition was frivolous and ordered that Thomas reimburse Mary for attorneys’ fees and related costs paid to Gwendolyn’s treating physician. Thomas appealed to the Indiana Court of Appeals.
Indiana Court of Appeals’ Analysis
In its analysis, the Court of Appeals explained that, by statute, the trial court “shall conduct a hearing” upon receipt of a guardianship accounting. The court must also give notice of the hearing to the protected person or, if the court waives notice to the protected person, to the protected person’s spouse. The statute permits approving an accounting without notice, but the accounting may be reviewed “at any subsequent time” and does not become final until approved by the court after notice and a hearing.
In short shrift, the Court of Appeals concluded that these intermittent accountings, not filed as part of a final settlement and discharge, were approved ex parte. Accordingly, they were subject to review at any time unless otherwise barred by the statute of limitations. The Court of Appeals then determined Thomas’ petition was not otherwise barred because, under the Guardianship Code, any person having a claim against the protected person’s property is permitted to file the claim with the court at any time before it is barred by the statute of limitations – which had not yet expired. Consequently, Thomas was entitled to present evidence of his claims for both financial mismanagement of the guardianship estate and reimbursement of medical expenses.
The Court of Appeals reversed the trial court’s order denying Thomas’ petition, vacated the attorneys’ fee award and remanded for a new hearing.
This unanimous published opinion demonstrates the unpredictability of guardianship litigation. The trial court found Thomas’ petition to be frivolous; the Court of Appeals held not only that it was not frivolous, but that it was legally correct.
Litigation involving guardians and other fiduciaries is complex and constantly evolving. Questions on these disputes should be directed to legal counsel.