IN THE MATTER OF THE SUPERVISED ESTATE OF MILDRED BORGWALD, Deceased, Appellant-Respondent,
OLD NATIONAL BANK and RAELYNN POUND, Appellee-Petitioner
APPEAL FROM THE VIGO SUPERIOR COURT. The Honorable John T. Roach, Judge. Cause No. 84D01-1004-ES-3250.
ATTORNEYS FOR APPELLANT: ERIC A. FREY, Terre Haute, Indiana.
ATTORNEYS FOR APPELLEE: KURT V. LAKER, CRAIG D. DOYLE, Doyle Legal Corporation, P.C., Indianapolis, Indiana; MATTHEW A. SHEEHAN, Smock & Etling, Terre Haute, Indiana.
MAY, J. and ROBB, J.
STATEMENT OF THE CASE
Appellant-Respondent, The Supervised Estate of Mildred Borgwald, Deceased (the Estate), appeals the trial court's decision in favor of Appellees-Claimants, Old National Bank (ONB) and Raelynn Pound (Raelynn), entitling ONB to foreclose the
mortgage and equity line of credit against the Estate.
The Estate raises four issues on appeal, which we restate as follows:
(1) Whether the trial court abused its discretion when it excluded the testimony of the Estate's proffered expert witness, Dr. Robert Lalouche (Dr. Lalouche), a gynecologist who had never treated Mildred Borgwald (Mildred);
(2) Whether the trial court improperly denied the Estate an opportunity to make an offer of proof with respect to Dr. Lalouche's anticipated testimony;
(3) Whether the trial court abused its discretion when it admitted redacted, certified copies of medical records containing the observations of nurses and physicians regarding Mildred's mental and physical status; and
(4) Whether ONB's mortgage was invalidated by the closing agent's failure to read the loan documents to Mildred in violation of Indiana Code section 33-42-2-2(a)(4).
FACTS AND PROCEDURAL HISTORY
Ninety-five-year-old Mildred passed away on August 29, 2008. On March 21, 2001, Mildred executed her Last Will and Testament, leaving $1,000 to each of her five grandchildren, with the remainder of her estate to her daughter, Lana McGee (Lana). On the same date, Mildred also executed a general durable power of attorney, designating Lana as attorney-in-fact upon a written declaration by Mildred's doctor that she was unable to manage her own affairs. On July 17, 2001, Dr. Lance Pickrell (Dr. Pickrell), Mildred's ophthalmologist, declared that Mildred was " unable to manage her own affairs due to the onset of blindness." (Trial Exh. 3). As such, Dr. Pickrell's declaration activated the power of attorney.
For the next six years, and prior to June 2007, Mildred, despite increasing difficulties with sight and hearing, insisted that she reside on her own in her residence. In the summer of 2007, Mildred had become hard of hearing and had vision problems. Her family accommodated her by speaking louder, interacting closer, and by describing checks to her and showing her where to sign.
In June of 2007, Mildred fell in her home and required hospitalization. After her discharge from the hospital, she returned home and was cared for by the Visiting Nurses Association. In addition, Mildred asked her granddaughter and Lana's daughter, Raelynn, to take care of her in Mildred's home. Between July 2007 and June 2008, Raelynn cared for her grandmother " 24/7." (Appellant's App. p. 26). Mildred offered to pay Raelynn $650.00 per week for her services.
On October 23, 2007, Raelynn accompanied Mildred to Old National Bank (ONB) to complete an application of an equity line of credit against her home, which was valued at $55,000. Denise Keegan (Keegan), ONB's customer service representative, observed the close connection between Mildred and Raelynn. Mildred informed Keegan that she wanted to obtain a loan to pay for Raelynn's in-home health care services. During her dealings with Mildred, Keegan was assured that Mildred was cognizant of her surroundings and her actions.
At no time did Keegan believe that Raelynn was directing or influencing the transaction.
On October 31, 2007, Mildred closed on an equity line of credit in the amount of $36,000. A first disbursement in the amount of $12,600 was transferred into Mildred and Raelynn's joint checking account that same day. This entire amount was paid out to Raelynn by check on November 7, 2007. Thereafter, a series of checks from November 2007 through June 2008 were written to further deplete the equity line of credit and which were drawn on the joint checking account, " consistent with a weekly wage of $650.00 for healthcare." (Appellant's App. p. 6).
In June of 2008, Mildred became hospitalized. Asserting her authority under the power of attorney, Lana accused Raelynn of theft and undue influence, demanding that Raelynn leave the hospital and move out of Mildred's residence. Mildred passed away on August 29, 2008.
On April 19, 2010, Lana, as personal representative, opened Mildred's estate (Estate). On July 15, 2010, ONB filed a claim for $36,274.54, representing the funds borrowed by Mildred under the equity line of credit. Although the claim was initially disallowed by the Estate and the trial court, the trial court granted ONB's subsequent motion to correct error and relief from judgment. At the same time, the Estate filed a petition seeking to recover assets from Raelynn and asserting fraud and undue influence.
Despite several requests by ONB to the Estate to submit its witness lists and to make its expert witnesses available for discovery, the Estate neglected to do so. Finally, on May 30, 2012, ONB filed a renewed motion to exclude the Estate's expert witnesses, which the trial court conditionally granted on June 14, 2012. On July 6, 2012, the Estate produced the report of its proffered expert witness, Dr. Lalouche. This report disclosed for the first time that Dr. Lalouche was a non-treating gynecologist. Additionally, the Estate noticed a video deposition, which it intended to use at trial and refused to make Dr. Lalouche available for a discovery deposition. On July 13, 2012, the trial court granted a motion to quash the video deposition. Thereafter, on July 18, 2012, the trial court ordered Dr. Lalouche's testimony excluded because (1) the Estate refused to make the doctor available for anything other than a video deposition for trial in contravention of the trial court's prior orders; (b) Dr. Lalouche was engaged to render an opinion about the mental state of a patient he had never met; and (c) the doctor intended to testify solely on the basis of medical records.
On August 26 and October 26, 2012, the trial court conducted a bench trial. On January 25, 2013, the trial court issued its findings of fact and conclusions of law, finding that Mildred had the mental capacity to enter into a contract and was not unduly influenced by Raelynn. The trial court concluded that ONB was the holder and owner of a valid mortgage and was entitled to have the mortgage foreclosed as a valid and paramount lien on Mildred's real property.
The Estate now appeals. Additional facts will be ...