Divided COA allows fraud claim against bank to proceed

A man whose inheritance from his deceased mother was depleted by more than $60,000 while a bank and his relatives were guardians of his family’s estates can continue in his lawsuit against the bank, the Indiana Court of Appeals ruled Tuesday.

The divided panel found the bank failed to prove a statute of limitations prevented the case from moving forward.

When Luanne Hurst died in 2004, her son, Nathaniel, was left as her sole heir, while her boyfriend, Robert Suarez, became personal representative of her estate and guardian of Nathaniel’s person. Additionally, Patrick and Michelle Hurst, Nathaniel’s aunt and uncle, became guardians of his estate, which was valued at roughly $72,000.

In November 2005, the Hursts successfully moved to have Suarez removed as personal representative of Luanne Hurst’s estate and instead had Centier Bank appointed to that position. Centier then moved to close Luanne Hurst’s estate, which was valued at $94,000.

The closing statement showed the bank disbursed $57,000 of the assets to itself, $7,000 to Patrick Hurst individually and $1,750 to both Patrick and Michelle as guardians of Nathaniel’s estate. The Hursts did not object to the closing statement, so the estate was ordered closed.

When Nathaniel turned 18 years old in 2013, the Hursts petitioned to terminate their guardianship over his estate, which by then was listed with a final value of roughly $3,000. Nathaniel objected and enjoined the bank after learning it may have “’committed acts of negligence, fraud, inadequate disclosure or misrepresentation.”

Nathaniel then filed a complaint for damages in March 2016, alleging the bank and the Hursts had committed fraud that resulted in his inheritance dropping to $3,000. After the bank filed a second motion to dismiss in July 2016, the trial court dismissed the motion while noting that it had treated it as a motion for summary judgment.

In a Tuesday appellate opinion in the case of In the Matter of the Guardianship of Nathaniel C. Hurst, A Minor, Centier Bank and Centier Bank, Personal Representative of the Estate of Luanne Hurst v. Nathaniel C. Hurst, 45A03-1612-GU-2790, Indiana Court of Appeals Judge Margret Robb noted the bank’s appeal was untimely, as the denial of its motion for summary judgment was not a final order and it had not sought certification to bring an interlocutory appeal. However, the appellate panel chose to consider the case on its merits under the holding in In re D.J. v. Indiana Department of Child Services, 68 N.E.3d 574, 578 (Ind. 2017).

Robb, writing for the majority, rejected Centier’s argument that the three-month statute of limitations in Indiana Code 29-1-7.5-6 and one-year statute of limitations in I.C. 29-1-1-21 barred Nathaniel from bringing his claim. I.C. 29-1-7.5-6 “specifically provides the rights barred do not include the right to recover from a personal representative for fraud, misrepresentation, or inadequate disclosure,” while I.C. 29-1-1-21 “only bars attempts to modify or vacate a probate order as a result of illegality, fraud, or mistake,” she wrote.

Instead, pointing to I.C. 34-11-2-7, Robb wrote “actions for relief against fraud must be commenced within six years after the cause of action accrues,” and the bank failed to demonstrate when Nathaniel knew or could have discovered the alleged fraud.

“This issue, left unaddressed by the bank, is crucial to determining whether Nathaniel’s claims are barred by the statute of limitations,” the judge wrote.

However, Chief Judge Nancy Vaidik dissented in a separate opinion, finding the holding in D.J. was inapposite to the case because no appealable order was issued, so the appellate court did not have jurisdiction to hear the appeal.

“D.J. should not … be interpreted as a means of avoiding the strictures of Appellate Rule 14,” Vaidik wrote, noting she would dismiss the appeal and not consider it on its merits.