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In re Scott David Hurwich 1986 Irrevocable Trust

Court of Appeals of Indiana

August 25, 2016

In re the Scott David Hurwich 1986 Irrevocable Trust
v.
Stacey R. MacDonald, Appellee-Defendant. Scott D. Hurwich, Appellant-Plaintiff,

         Appeal from the St. Joseph Probate Court The Honorable James N. Fox, Judge Trial Court Cause No. 71J01-1410-TR-16

          ATTORNEYS FOR APPELLANT James M. Lewis Michael J. Hays Tuesley Hall Konopa LLP South Bend, Indiana

          ATTORNEY FOR APPELLEE Timothy J. Maher Barnes & Thornburg South Bend, Indiana

          Bradford, Judge.

         Case Summary

         [1] Appellant-Plaintiff Scott Hurwich is the settlor and beneficiary of the Scott David Hurwich 1986 Irrevocable Trust ("the Trust"). Appellee-Defendant Stacey R. MacDonald served as trustee of the Trust until her removal at Hurwich's request on November 28, 2012. Hurwich filed a complaint against MacDonald which alleged that MacDonald mismanaged Trust assets while acting as trustee. MacDonald filed a motion to dismiss Hurwich's complaint which the probate court granted. Hurwich filed a motion to reconsider which he later requested to be treated as a motion to correct error. Over the following six months, the probate court held two hearings on the motion to reconsider and the parties submitted several briefs in support of their positions. The probate court never made a ruling on the motion and Hurwich filed his appeal in February of 2016. On appeal, the parties dispute (1) whether Hurwich timely filed his notice of appeal, and (2) whether the probate court erred in granting MacDonald's motion to dismiss. We reverse the probate court's order dismissing Hurwich's claims.

         Facts and Procedural History

         [2] Hurwich is the settlor and beneficiary of the Trust. MacDonald served as trustee of the Trust until November 28, 2012. On October 2, 2014, Hurwich filed a complaint against MacDonald alleging that she mismanaged Trust assets, comingled Trust assets with her own funds, converted Trust assets, committed waste of Trust property, and otherwise breached her fiduciary duties to Hurwich. On November 14, 2014, MacDonald filed a motion to dismiss Hurwich's complaint arguing that (1) Hurwich's claim was barred by the applicable statute of limitations, (2) the language of the Trust limited MacDonald's liability as trustee, and (3) Hurwich's complaint lacked sufficient factual allegations.

         [3] On June 12, 2015, the probate court issued an order dismissing Hurwich's claim with prejudice. Hurwich filed a motion to reconsider on June 22, 2015. On July 17, 2015, the probate court scheduled a hearing on Hurwich's motion to reconsider for July 27. At the hearing, MacDonald argued that the probate court no longer had jurisdiction to rule on Hurwich's motion to reconsider because the motion was automatically denied five days after it was filed pursuant to Indiana Trial Rule 53.4(B). Hurwich asked the probate court to treat his motion to reconsider as a motion to correct error. Following the hearing, the probate court issued an order indicating that it would take the matter under advisement and "allow[] [MacDonald] to file a motion regarding lack of jurisdiction [] within two (2) weeks, a response by [Hurwich] to be filed within two (2) weeks thereafter and [MacDonald] an additional one (1) week for final response." Appellant's App. p. 47.

         [4] On August 11, 2015, MacDonald filed a brief arguing that the probate court lacked jurisdiction and objected to further action by the probate court on the motion to reconsider. On August 18, 2015, Hurwich filed a responsive brief arguing that the probate court had jurisdiction and in support of his motion to reconsider. After receiving an extension of time, MacDonald filed a reply brief on September 8, 2015. On October 7, 2015, a notice of hearing on all pending matters was set for November 6, 2015. At the hearing, ultimately held on December 14, 2015, the parties made arguments regarding (1) whether the probate court had jurisdiction to address Hurwich's motion to reconsider and (2) the merits of Hurwich's motion. The probate court took the matter under advisement but took no further action. Hurwich filed his notice of appeal on February 9, 2016.

         Discussion and Decision

         [5] The parties presented the following issues for our review: (1) whether Hurwich timely filed an appeal following the denial of his motion to reconsider, and (2) whether the probate court erred in granting MacDonald's motion to dismiss.[1]

         I. Whether Hurwich's Appeal was Timely

         [6] MacDonald argues that Hurwich failed to timely appeal the denial of his motion to reconsider. Hurwich filed his motion to reconsider on June 22, 2015. MacDonald argues that Hurwich's motion was denied on June 27 under Indiana Trial Rule 53.4(B), which provides that a motion to reconsider is automatically denied if it is not ruled on within five days. The probate court took no action on the motion until July 17, 2015, when it set a hearing on the motion for July 27.

         [7] Hurwich argues that his motion to reconsider was not automatically denied because it should have been treated as a motion to correct error. We agree. The probate court's June 12, 2015 order dismissing Hurwich's claim with prejudice was a final judgment. As such, the probate court no longer had the power to rule on a motion to reconsider. "Our review of the trial rules reveals that motions to reconsider are properly made and ruled upon prior to the entry of final judgment." Hubbard v. Hubbard, 690 N.E.2d 1219, 1221 (Ind.Ct.App. 1998) (citing Ind. Trial Rule 53.4(A)). In Hubbard, this court found that a party's motion to reconsider, filed after issuance of final judgment, should have been treated as a motion to correct error. "[A]lthough substantially the same as a motion to reconsider, a motion requesting the court to revisit its final judgment must be considered a motion to correct error. We decline to favor form over substance and, despite its caption, Mother's motion in the instant case should have been treated as a motion to correct error." Id. Because Hurwich's motion should be treated as a motion to correct error, it was not automatically denied five days after its filing.[2]

         [8] MacDonald argues that even if Hurwich's motion is treated as a motion to correct error, the probate court's inaction amounted to a denial of Hurwich's motion and Hurwich did not timely file his appeal. MacDonald contends that Hurwich's thirty-day window to appeal the denial of his motion to correct error expired on September 25, 2015. Indiana Trial Rule 53.3 provides as follows:

(A) Time limitation for ruling on motion to correct error.

In the event a court fails…to rule on a Motion to Correct Error within thirty (30) days after it was heard…the pending Motion to Correct Error shall be deemed denied. Any appeal shall be initiated by filing the notice of appeal under Appellate Rule 9(A) within thirty (30) days after the Motion to Correct Error is deemed denied.

(B) Exceptions.

The time limitation for ruling on a motion to correct error established under Section (A) of this rule shall not ...


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