Reversal: Court wrongly denied evidence alleging guardianship mismanagement

A Boone County trial court wrongly rejected a husband’s effort to show that the guardianship for his wife was being financially mismanaged and should be terminated, the Indiana Court of Appeals ruled Thursday, finding the judge overseeing the case failed to properly notify him of regular accountings.

A few years after Gwendolyn M. Reagan was diagnosed with Alzheimer’s disease, her daughter, Mary Elizabeth Spaw, was appointed as her sole guardian in September 2014. Reagan moved from Lebanon to live with Spaw in her home in Kendallville from November 2014-March 2015, at which time she returned to Lebanon to live with her husband, Thomas Meranda, who had retired and could care for her at home, according to the record.

“At that time, Reagan’s monthly allowance was increased to allow for eating out and hairdresser appointments, while Meranda was reimbursed for medical expenses he paid on behalf of Reagan after providing the receipts to Spaw. On September 16, 2016, Spaw filed her verified guardian’s second amended inventory, with notice to Reagan. Three days later, the trial court approved the filing without a notice or hearing,” Judge Patricia Riley wrote.

“On June 8, 2017, Spaw filed a petition for authority to clean-up and sell Reagan’s real estate … . In her petition, Spaw noted that the property had been empty for years and had deteriorated as a result.  The trial court granted the petition without notice, hearing, or service of the order.

“On June 21, 2018, Meranda filed a pro se letter with the trial court advising the court that because Spaw had not been paying Reagan’s medical bills, he had been forced to pay them and was falling in debt,” Riley continued. “Meranda requested that Spaw find Reagan another place to live due to the possibility of Meranda’s mortgage being foreclosed. A month later, on July 18, 2018, Spaw submitted a status report to the trial court, advising the court ‘that the medical bills are being paid by the Guardian herein.'”

Again, Boone Superior Judge Matthew Kincaid approved Spaw’s report and accounting without notice or hearing.

“On February 11, 2019, Meranda, represented by counsel, filed an emergency petition for termination of the guardianship and for succession of guardianship. In his petition, Meranda asserted that Spaw had mismanaged Reagan’s estate and failed to provide for Reagan’s physical and mental needs. In addition, he claimed to have incurred more than $40,000 of unreimbursed medical and personal expenses in his care for Reagan. On February 13, 2019, Spaw filed her response to Meranda’s emergency petition contending that the accountings ‘were approved [by the court] and none of which were appealed by Meranda’ and ‘no objections were raised at any time until the recent filing.’”

The trial court held a hearing on Meranda’s petition about a month later, finding it was “substantially a rehashing of issues previously decided.” The trial court denied Meranda’s petition and awarded Spaw attorney fees, finding his petition frivolous.

The COA reversed and remanded in Thomas Meranda v. Mary Elizabeth Spaw, 19A-GU-1218.

“Meranda’s main argument focuses on the trial court’s refusal to admit evidence of Spaw’s financial mismanagement of Reagan’s estate and the unreimbursed medical expenses incurred in his care for Reagan. The trial court denied their admission because the issues had been ‘previously decided’ and the trial court was ‘not going to revisit any of those.’ … (Meranda) now contends that because the trial court’s orders, accepting Spaw’s accountings and inventory, were decided ex parte, the issues are not definitely concluded and can still be challenged in the current proceedings,” Riley wrote.

“… Here, Spaw’s accounts of administration and inventories were not filed as part of a final settlement and discharge, but amounted to intermittent financial reports of the guardianship. The record is silent as to any evidence that the trial court notified Reagan, or in case of waiver, Meranda, of the filing and the subsequent court hearing.  As no notice was given — and according to the record, no hearings were held — the trial court’s orders were issued ex parte. While an ex parte order is permitted, it is not binding on Meranda and can still be challenged and reviewed ‘at any subsequent time.’ See I.C. § 29-3-9-6(f).

“… Accordingly, because the trial court issued ex parte orders on Spaw’s interim accountings, Meranda may still challenge these findings,” the panel concluded. “While we acknowledge the discretionary power of the trial court of its subsequent review of the ex parte orders, here, the trial court erred by declaring the ex parte orders to have been conclusively decided and by denying admission of evidence purporting to establish financial mismanagement of Reagan’s estate and unreimbursed medical invoices.  We reverse the trial court’s Order denying Meranda’s petition and remand for a new hearing.”

In a footnote, the panel also reversed the grant of attorney fees to Spaw.