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Clark-Silberman v. Silberman

Court of Appeals of Indiana

June 20, 2017

Cynthia Clark-Silberman, Appellant-Respondent,
Richard M. Silberman and Susan A. Wang, Appellees-Petitioners.

         Appeal from the St. Joseph Probate Court Trial Court Cause No. 71J01-1306-TR-5[1] The Honorable James N. Fox, Judge

          ATTORNEY FOR APPELLANT Robert J. Palmer May Oberfell Lorber Mishawaka, Indiana

          ATTORNEYS FOR APPELLEE M. Patricia Hackett Peter A. Timler Hackett & Associates, P.C South Bend, Indiana Shawn P. Ryan South Bend, Indiana

          Kirsch, Judge.

         [¶1] After Harold A. Silberman ("Harold") died in 2013, litigation ensued between his wife, Cynthia Clark-Silberman ("Cynthia"), and his two adult children from a former marriage, Richard A. Silberman ("Richard") and Susan A. Wang ("Susan"), concerning Harold's estate and his revocable trust agreement. As is relevant here, Richard and Susan filed a Petition to Set Aside Trust Amendments and Petition for Damages. After a seven-day combined trial on the trust litigation and the pending will contest, the trial court issued findings and conclusions, ruling against Cynthia in all respects. Cynthia appeals only the trial court's determination that she converted funds that were in a safe deposit box, raising two issues that we consolidate and restate as: whether the trial court erred when it determined that Cynthia's act of removing $46, 182 in cash from the safe deposit box constituted conversion and that Richard and Susan were entitled to an award of treble damages.

         [¶2] We affirm.

         Facts and Procedural History[2]

         [¶3] Harold and Cynthia married on February 23, 1991. Each had been married before, and each had children from the prior marriage. About two years after they married, Cynthia moved out of their residence and to Indianapolis, and she filed for dissolution, although they later reconciled. Sometime prior to moving out, Cynthia had found Harold's estate papers on his desk and noticed that, in the event of his death, his plan was to give his one-half of the marital residence to his children, which made Cynthia feel "hurt" that he was not giving it to her. Tr. Vol. 3 at 171-172.

         [¶4] Harold died on May 5, 2013. Prior to his death, Harold had been suffering from chronic obstructive pulmonary disease ("COPD"), due to a lifetime of smoking, and other significant health problems including heart disease. Harold also suffered from depression and chronic anxiety disorder. While at home on or about January 24, 2013, Harold fell and was admitted to the intensive care unit of Memorial Hospital in South Bend for end-stage COPD. Harold spent much of the remainder of his life in the hospital or at a rehabilitation center.

         [¶5] During his life, Harold was a driven and successful business man, who could be demanding and difficult. One business venture was a ticket brokering business, involving the purchase and re-sale of sporting event tickets ("the Ticket Business") generally and, in particularly, Notre Dame football tickets.[3] Harold also had a number of investment funds and accounts. Harold generally consulted with long-time friend and business partner, Geoffrey Newman ("Geoff"), and with childhood friend, Irv Rosenberg ("Irv"), on business matters. Irv was also Harold's attorney.

         [¶6] Irv prepared estate planning documents for Harold. Among other things, Irv prepared a Financial Springing Power of Attorney, dated November 15, 1995, which named Cynthia, Richard, and Susan as co-financial attorneys-in-fact and named Geoff as the final arbiter of disagreements between Harold's fiduciaries. Appellees' App. Vol. 2 at 67. Irv later prepared the Harold A. Silberman Revocable Trust ("Trust"), which Harold executed on October 8, 2002. The Trust named Cynthia, Richard, and Susan as co-trustees. Irv also prepared Harold's Last Will and Testament ("Will"), which Harold executed on July 21, 2009. Cynthia, Richard, and Susan were named co-personal representatives. In the Will, Harold gifted to Richard and Susan a Philippe Patek gold watch that Harold had received from his father. Irv also prepared a First Amendment to Trust ("First Amendment"), dated October 8, 2002, and executed on July 21, 2009. Under the First Amendment, Cynthia, Richard, and Susan remained co-trustees, but Cynthia's share in the estate was increased from $300, 000 to a one-third share of the estate, with Richard and Susan also each getting a one-third share.[4] On July 21, 2009, Harold also executed a Health Care Power of Attorney, which named Cynthia, Richard, and Susan as co-health care personal representatives.

         [¶7] On December 29, 2012, Irv prepared an Asset Purchase, Independent Contractor, and Non-Compete Agreement ("Purchase Agreement"), in which the Ticket Business was sold to a third party. The Purchase Agreement identified Harold and Cynthia as "Sellers" of the business. Appellant's App. Vol. 3 at 21. The agreed purchase price was $125, 000, payable in one installment of $62, 500 and two later installments of $31, 250. In the event that Harold died before all payments were made, any remaining installment payments would be paid to Cynthia at a fifty percent reduction since the goodwill of the business was personal to Harold. The first installment, received in December 2012, was deposited in Harold's trust account and then transferred in January 2013 to a joint account held by Harold and Cynthia. After Harold died, Cynthia received the two remaining installment payments of $15, 625 each on May 15, 2013 and September 15, 2013.

         [¶8] Cynthia testified that, in December 2012 or early January 2013, Harold told her that his estate planning documents were located in a filing cabinet in the basement, and he told her she could look at them. She obtained and reviewed the estate planning documents and was unhappy about only receiving a one-third share of Harold's estate, stating that it made her feel "sick to her stomach" and "crushed." Tr. Vol. 3 at 112-113. She felt that he should have "explained this stuff to me" before then and that Harold's plan to give her one-third and each of his children one-third was treating her like a child. Id. at 113. She also was concerned about serving as a co-trustee or co-personal representative with Richard. Sometime after Harold was hospitalized, Cynthia spoke to her friend Pat LeMaire ("Pat") about her concerns, and Pat offered to have her husband, Denis Glick ("Denis") review the documents; Denis had been an attorney in California, but was disbarred in 1992. Pat and Denis did not speak to Harold, but they prepared: (1) an "Amendment" to the Trust ("Third Amendment") which changed the successor co-trustees from Cynthia, Richard and Susan to just Cynthia as the sole successor trustee; and (2) an "Amendment" to Harold's Will ("Codicil"), providing that the proceeds of the Ticket Business were to go to Cynthia. Appellee's App. Vol. 2 at 138, 140.

         [¶9] Harold fell and was hospitalized near the end of January 2013. On February 6, Cynthia went to PNC Bank ("PNC"), where Harold had a safe deposit box, titled in the names of Harold, Richard, and Susan. Richard and Susan each had keys to the box. PNC was not willing to allow Cynthia access to the box without a power of attorney. At Cynthia's request, Pat and Denis prepared a financial power of attorney ("Financial POA"), naming Cynthia as the sole attorney-in-fact; Cynthia took the Financial POA to Harold in the hospital on February 6, and he signed it. Cynthia returned to PNC on February 7, where she presented the Financial POA. After Denis spoke to a manager, PNC allowed Cynthia to open the box, from which she removed cash in the amount of $46, 182 and the Philippe Patek gold watch.[5] Although Richard and Susan were at that time either in town or arriving in town to see their father, Cynthia did not tell them that she was going to or did open the safe deposit box. Cynthia returned one or more times to PNC and removed gold coins and an engraved pen set. Cynthia testified that she used some of the money to pay living expenses and she put the remainder in her Key Bank safe deposit box.

         [¶10] On February 10 or 11, 2013, Harold was transferred from the hospital by ambulance to a rehabilitation facility called Healthwin Specialized Care ("Healthwin"). On February 11, Cynthia brought the Third Amendment and the Codicil, documents which had been prepared by Pat and Denis, to Harold at Healthwin, and he signed them.

         [¶11] In June 2013, Cynthia filed a petition to docket Harold's Revocable Trust Agreement and amendments thereto. In August 2013, Richard and Susan filed, among other things, a Petition to Set Aside Trust Amendments and Petition for Damages ("the Petition"). The Petition alleged: Count I, undue influence, duress, fraud, and/or coercion; Count II, insufficient capacity; Count III, breach of trust through improper removal, commingling and/or conversion of trust assets; and Count IV, breach of fiduciary duties as Harold's attorney-in-fact; and Count V, failure to administer the Trust according to its terms.

         [¶12] In October and November 2014, the trial court held seven days of trial on pending motions and matters, including the Petition. Irv testified that Harold never mentioned, and Irv was never told about, the February 2013 Financial POA or Codicil that Cynthia had Pat and Denis prepare, by purchasing a form from the internet and adding Harold and Cynthia's names, and that Cynthia presented to Harold in the hospital. Irv testified that he recalled discussing Harold's 1995 Financial Springing Power of Attorney with Harold in December 2012, in the presence of Cynthia, during their discussions related to the sale of the Ticket Business. Geoff testified that in a December 2012 lunch meeting, Harold discussed with Geoff that his estate plan was one-third to Cynthia and one-third each to Richard and Susan; Geoff stated that Harold after that date never indicated to Geoff an intent or desire to change that plan. About one week before his fall and hospitalization at the end of January 2013, Harold sent an email to Cynthia, Richard, and Susan giving them information that the three of them would need, as co-trustees and co-personal representatives, about his financial holdings and persons to contact. Based on conversations that Irv had with Harold in the year or two prior to his death, including as late as April 18, 2013, Irv's understanding was that Harold intended to have three successor co-trustees upon his passing.

         [¶13] Evidence presented at trial indicates that, during their marriage, Harold for the most part did not share his finances or estate plan with Cynthia. She testified that when she would ask to see his estate plan, he generally would respond by telling her that he would tell her "after football is over." Tr. Vol. 3 at 111. His unwillingness to share his estate plan with Cynthia frustrated her, as she felt she had a right to know, and this continued to be "on her mind" during their twenty-plus years of marriage. Id. at 184.

         [¶14] Cynthia testified that Harold gave her his key to the safe deposit box and told her to go to PNC and remove the cash, watch, pen set, and coins; however, bank personnel did not allow her to access it without a power of attorney. The next day, she returned to PNC with the Financial POA that Harold had signed the previous day, and presented it in order to gain access to the safe deposit box jointly titled to Harold, Richard, and Susan. Cynthia removed $46, 182 in cash, which she placed in her own Key Bank safe deposit box, along with Harold's father's Philippe Patek gold watch, which Harold had gifted to Richard and Susan in his Will. On February 9, 2013, Cynthia returned to PNC twice, and, took up to eighty gold coins and an engraved pen set. Richard and Susan were in South Bend to see their father in the hospital at the time Cynthia gained access to the box, and Cynthia never told them that she was doing so. Cynthia acknowledged that she knew the safe deposit box was titled to Richard, Susan, and Harold.

         [¶15] At trial, petitioners Susan and Richard called Dr. Paul W. Macellari ("Dr. Macellari"), a clinical neuropsychologist, to testify to, among other things, how illnesses impact cognitive functioning. Dr. Macellari reviewed all of Harold's medical records, with focus on the stage and severity of his COPD and related lung infections, resulting in drops of oxygen levels and episodes of respiratory failure. Dr. Macellari testified that he had never treated a patient with Harold's severity of illness who was not cognitively impaired nor who would not be susceptible to influence or manipulation if actions were taken to increase the patient's anxiety. Cynthia presented the trial deposition of Dr. Motasem Afyouni ("Dr. Afyouni"), who was Harold's treating physician. Dr. Afyouni's deposition testimony included his opinion that patients with end-stage COPD often ...

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