text:
    Tony SLUDER, Appellant-Defendant, v. STATE of Indiana, Appellee-Plaintiff.
    No. 03A01-1305-CR-208.
    Court of Appeals of Indiana.
    Nov. 20, 2013.

      Alan L. Whitted, Whitted Law, LLC, Columbus, IN, Attorney for Appellant.
    Gregory F. Zoeller, Attorney General of Indiana, James B. Martin, Deputy Attorney General, Indianapolis, IN, Attorneys for Appellee.
   OPINION

VAIDIK, Judge.

Case Summary

Columbus Police Department Officer Troy Love stopped Tony Sluder after discovering Sluder had an outstanding arrest warrant. Officer Love searched Sluder but did not find anything. When Officer Angela Owens arrived to transport Sluder to the Bartholomew County Jail, she again searched Sluder, finding a syringe in the back pocket of his jeans. Sluder had a bench trial and was convicted of Class A misdemeanor possession of paraphernalia. Sluder appeals his conviction, arguing that the evidence was insufficient to establish that he intended to use the syringe to introduce a controlled substance into his body. Finding that no evidence of intent existed, we reverse.

Facts and Procedural History

Officer Love was on a bicycle patrolling the area of Fourteenth and Lafayette Streets in Columbus in August 2012. While on patrol, he recognized Sluder riding past him on a scooter. Officer Love called the station to see if Sluder had any outstanding arrest warrants, and the station confirmed that he did. Officer Love then turned around and found Sluder stopped at 1334 Lafayette Street. Officer Love informed Sluder that there was a warrant out for his arrest, arrested him, and searched him. When Officer Love searched Sluder, he did not find anything. Officer Love then called for a police car to transport Sluder to the jail.

Officer Owens arrived in her police car to transport Sluder. Although Officer Love had already searched Sluder, Officer Owens searched Sluder again because she always performs a search before placing someone in her car. Tr. p. 11. This time, Officer Owens found a syringe in the bottom of his rear pocket. She does not recall whether the syringe actually had a needle on it. Id. at 13. No drugs were found on Sluder.

At the time of his arrest, Sluder claimed that the syringe was not his. According to his sister, Tammy Sluder, the syringe Officer Owens found was actually a medicine dropper the hospital gave her to feed her premature baby. Last summer, Tammy gave her small dropper to Sluder because he wanted to use the dropper to feed puppies after their mother was hit and killed by a car. Tammy also stated that she had only one dropper of the same size, which was admitted into evidence for demonstrative purposes as Defendant’s Exhibit A, and she remembered giving the small dropper to Sluder because a bigger dropper “would be too much to give the dog.” Id. at 18. According to Sluder, the syringe was in his pocket because he had fed the puppies earlier that day. Tammy’s dropper did not have a needle. Instead, it was a hollow tube with a plunger. Id. at 26; Def.’s Ex. A.

Sluder claims that he never used the syringe to ingest any kind of controlled substances because, “I don’t see how you could.” Id. at 27. He also claimed that he did not use it for any illegal purpose.

Officer Owens took Sluder to the Bartholomew County Jail and confiscated the syringe. After transporting Sluder to jail, she placed it in a sharps container at the Columbus Police Department, which was the standard practice for confiscated syringes. Although Columbus police officers usually take pictures of confiscated syringes before destroying them, no photograph of Sluder’s syringe was taken.

The State charged Sluder with Class A misdemeanor possession of paraphernalia. Appellee’s App. p. 1. A bench trial was held. Following the trial, the trial court stated that it did not find Sluder’s testimony or his sister’s testimony credible. Tr. p. 33. For this reason, the trial court found Sluder guilty of Class A misdemean- or possession of paraphernalia. Id. Based on a sentencing agreement between the State and Sluder, the trial court sentenced Sluder to one year in the Bartholomew County Jail, all suspended to probation. Id. at 35-36.

Sluder now appeals.

Discussion and Decision

Sluder contends that the evidence is insufficient to support his conviction for Class A misdemeanor possession of paraphernalia. When reviewing the sufficiency of the evidence, we neither reweigh the evidence nor determine the credibility of witnesses. Bailey v. State, 979 N.E.2d 133, 135 (Ind.2012). We look solely to the evidence most favorable to the judgment together with all reasonable inferences to be drawn therefrom. Id. A conviction will be affirmed if the probative evidence and reasonable inferences to be drawn from the evidence could have allowed a reasonable trier of fact to find the defendant guilty beyond a reasonable doubt. Id.

As charged here, Class A misdemeanor possession of paraphernalia is knowingly or intentionally possessing a raw material, instrument, device, or other object with the intent to introduce a controlled substance into one’s body. Ind.Code § 35-48-4-8.3(a)(l), (b); Appellee’s App. p. 1. Sluder argues that the State did not prove that the object seized was intended to introduce a controlled substance into his body. Appellant’s Br. p. 3.

The intent to introduce a controlled substance into one’s body may be inferred from circumstantial evidence. See Dabner v. State, 258 Ind. 179, 279 N.E.2d 797, 798-99 (1972) (puncture marks over the veins of the defendant’s forearm, evidencing recent injections, are sufficient to establish intent); Stevens v. State, 257 Ind. 386, 275 N.E.2d 12, 13 (1971) (admission to past drug use coupled with needle marks on defendant’s arms sufficient to establish intent); Von Hanger v. State, 255 Ind. 666, 266 N.E.2d 197,198 (1971) (previous convictions of drug use sufficient to establish intent); Trigg v. State, 725 N.E.2d 446, 450 (Ind.Ct.App.2000) (residue-encrusted crack pipe found where defendant was sitting was sufficient to establish intent to use the pipe to smoke crack); McConnell v. State, 540 N.E.2d 100, 103-04 (Ind.Ct.App.1989) (expert testimony that paraphernalia contained drug residue sufficient to establish intent). However, evidence of flight and attempted concealment, without more, is not sufficient to prove the intent element of the statute. Bradley v. State, 153 Ind.App. 421, 287 N.E.2d 759, 763 (1972).

Our Supreme Court has also held that the mere possession of paraphernalia when a statute requires intent is not sufficient to establish that crime without additional evidence of intent. For example, in Taylor v. State, the Supreme Court held that no intent existed when the defendant possessed a hypodermic needle, an eye-dropper covered with an unknown sticky substance, a bottle cap that had been burned on the bottom, and an empty Excedrin bottle because “there was no evidence of flight or any other behavior indicating consciousness of guilt.” 256 Ind. 170, 267 N.E.2d 383, 385 (1971). In that opinion, the Supreme Court commented on the intent element of an earlier version of the statute stating that

To permit such a conviction [without proving intent] would be in effect to amend the statute. We assume the Legislature did not do a useless act in including the element of intent; if they had intended to punish the mere possession of adapted instruments they would not have included that element. The fact that the Legislature included the requirement that intent be proved necessarily implies that they recognized that there could be cases of possession of adapted instruments which would not be punishable under the statute.

Id.

In this case, the State presented no evidence that Sluder intended to use the syringe to inject a controlled substance into his body. There was no evidence of track marks on Sluder’s arms, past drug use, previous drug convictions, or the presence of drugs that would circumstantially establish his intent to use drugs. While the State is correct that this is not an exclusive list of the type of evidence necessary to establish intent, the State has not pointed to any other evidence in the record that circumstantially establishes Sluder’s intent to use the syringe to introduce a controlled substance into his body.

The State argues in its brief that Sluder exhibited behavior indicating a consciousness of guilt because he denied that the syringe was his but testified to a different story at trial and allegedly hid the syringe. Merely denying ownership of an item without more is insufficient to indicate a consciousness of guilt. Second, there is no evidence that Sluder hid the syringe when he was arrested. According to Officer Love, Sluder was given a pat down when he was taken into custody. When Officer Owens arrived to transport Sluder to jail, she again searched Sluder. It was not until the second search that Officer Owens found Sluder’s syringe in the back pocket of his jeans. Tr. p. 15. The mere fact that the syringe was not found until the second search is not evidence that Sluder hid the syringe. The evidence was insufficient to establish that Sluder intended to use the syringe to introduce a controlled substance into his body.

Reversed.

BAKER, J., and FRIEDLANDER, J., concur.

      . Tammy did not explain how the dropper admitted into evidence for demonstrative purposes could be the same item taken from Sluder if she only had one dropper of that size. On cross-examination she stated that, “I don’t know what [the police] took from him. I know I gave him one identical to that.” Tr. p. 21.

      . The dropper admitted into evidence is contained in the record on appeal.

      . On redirect examination, Officer Owens stated that there would have been no reason to dispose of the syringe in the sharps container if the syringe did not have a needle, but that needleless syringes would be placed in the sharps container for safety concerns. Tr. p. 14.

      . We note that Sluder’s counsel did not file an Appendix. See Ind. Appellate Rule 49(A) ("The appellant shall file its Appendix with its appellant’s brief”). We also direct counsel to Indiana Appellate Rule 50(B), which states that the Appellant’s Appendix shall contain "(a) the Clerk’s Record, including the chronological case summary.” Ind. Appellate Rule 50(B). The Clerk’s Record "shall consist of the Chronological Case Summary (CCS) and all papers, pleadings, documents, orders, judgments, and other materials filed in the trial court....” Ind. Appellate Rule 2(D). Instead of relying on the charging information, we must rely on the chronological case summary submitted by the State.

      . Sluder also contends that the evidence is insufficient because the object seized was incapable of introducing a controlled substance into the body. Appellant’s Br. p. 3. The evidence most favorable to the judgment suggests that the object seized was a syringe. Moreover, there is no requirement in the statute requiring the seized paraphernalia to be capable of introducing a controlled substance into the body. See Ind.Code § 35-48-4-8.3(a).

      . The statute discussed in Taylor, Indiana Code section 35-24-1-2 (1971), was repealed in 1976. P.L. 148-1976, Sec. 24. An earlier version of the statute under which Sluder was charged was added to the Indiana Code in the same Act. See P.L. No. 148-1976, Sec. 8.

      . The State argues that this Court should find that the evidence of Sluder's intent to use the syringe to introduce a controlled substance into the body existed because the trial court found Tammy's testimony not credible and it would be a "disregard of Defendant’s repeated denials of what the item that the officers seized was.” Appellee's Br. p. 8. However, doing so would impermissibly shift the burden of disproving intent from the State to Sluder.


source: Caselaw Access Project

author: RUSH, Justice.

license: Public Domain

text:
    Harold O. FULP, Jr., Appellant (Plaintiff below), v. Nancy A. GILLILAND, Appellee (Defendant below).
    No. 41S01-1306-TR-426.
    Supreme Court of Indiana.
    Nov. 22, 2013.

      Robert M. Hamlett, Indianapolis, IN, Attorney for Appellant.
    Thomas W. Vander Luitgaren, Matthew S. Schoettmer, Greenwood, IN, Attorneys for Appellee.
   RUSH, Justice.

Revocable trusts are popular substitutes for wills, intended to provide non-probate distribution of people's estates after their deaths, allowing them to retain control and use of their assets during their lifetimes. Here, Ruth Fulp placed her family farm in a revocable trust, reserving the right to revoke or amend the trust and to use its assets-with any remaining trust assets going to her three children upon her death. A few years later, she decided to sell the farm to her son Harold Jr. for a low price, to pay for her retirement-home care and keep the farm in the family. Ruth's daughter, Nancy Gilliland, argued that a bargain sale would breach Ruth's fiduciary duty to her children and deprive Naney of "her share" of the trust.

We granted transfer to address an issue of first impression in Indiana: while a revocable trust is revocable, whom does the trustee serve? Of course, Ruth as trustee owed a duty to herself as the trust's settlor and primary beneficiary. But the trial court found Ruth also owed that same fiduciary duty to her children as remainder beneficiaries We conclude, though, that neither the terms of Ruth's trust nor the Indiana Trust Code require her to serve two masters-her duty as trustee was only to herself,. Holding that trustees also owe a duty to remainder beneficiaries would create conflicting rights and duties for trustees and essentially render revocable trusts irrevocable. Ruth was free to sell her farm as trustee for whatever price she desired, without breaching a duty to her children.

Facts

Soon after Ruth and Harold Fulp Sr. married, they moved to the family farm, where they raised their three children-Harold Ir., Nancy, and Terry. Harold Sr. farmed the land; Junior later joined him, then took over after Senior's death. A few years later, Ruth placed the farm into the Ruth E. Fulp Revocable Trust. As the Trust's primary beneficiary, Ruth could use its assets; as trustee, she could sell them; and as settlor, she could "alter, amend or revoke" the Trust "in any respect." In addition, the Trust required the trustee-unless another term of the trust provided otherwise-to "administer the trust solely in the interest of the beneficiaries," "treat multiple beneficiaries impartially," and "preserve the trust property." Upon Ruth's death, the trust would become irrevocable, and the successor trustee would distribute any remaining assets to the children.

As Ruth got older, she moved to the Indiana Masonic Home and decided to sell the farm to pay for her living expenses there. But she wanted to keep the farm in the family, so she approached Harold Jr., who was interested in buying it. He offered her a discounted price per acre-the same price Nancy's daughter had previously paid Ruth for another portion of the farm. Ruth agreed and said "what I did for one I can do for the other." But Harold Jr. cautioned her that the farm was worth more than the $450,252 he was offering. Indeed, an appraisal later showed it was worth more than $1 million.

Harold Jr.'s lender, Farm Credit, drew up the purchase agreement, and Ruth signed it. When Naney found out, she objected because she "wanted her share." Before the sale closed, Ruth resigned as trustee. Naney then became successor trustee and refused to proceed with the sale, and Harold Jr. sought specific performance of the purchase agreement. He also argued that Naney tortiously interfered with the agreement.

After a bench trial, the trial court found that Ruth was competent to sell the farm, the price paid for the farm was adequate, and Harold Jr. exerted no undue influence. Still, the court denied specific performance because it found that Ruth breached her fiduciary duty to the children by selling the farm at a low price, and Harold Jr. breached his fiduciary duty as a beneficiary by participating in the sale.

Harold Jr. appealed. The Court of Appeals agreed with the trial court that if Ruth had sold the farm as trustee, she would have breached a fiduciary duty to her children. Fulp v. Gilliland, 972 N.E.2d 955, 964 (Ind.Ct.App.2012), trans. granted, 988 N.E.2d 797 (Ind.2013). But it also recognized that if Ruth had such a duty, her conflicting rights and duties as trustee would essentially render the Trust irrevocable. To avoid that untenable result, the court instead concluded that Ruth sold the farm as seftlor, so that the purchase agreement "in effect" amended the Trust. The Court of Appeals also conelud-ed that Naney had not tortiously interfered with the contract.

Nancy sought transfer, asking us to decide whether the trustee of a revocable trust owes a duty to the settlor alone or also to the remainder beneficiaries We granted transfer to address that issue, and we conclude that while a revocable trust is revocable, the trustee only owes a duty to the settlor. Therefore, Ruth was free to sell the farm as trustee, as the purchase agreement reflected, without breaching any fiduciary duty. And since Ruth owed her children no duty as trustee, she had no need to sell the farm as settlor, as the Court of Appeals concluded-nor would the facts in this case support any intent to amend the Trust. Finally, we expressly adopt the Court of Appeals' conclusion that Naney did not tortiously interfere with a contractual relationship. Rule 58(A). Ind. Appellate

Standard of Review

This case requires us to determine Ruth's duties under the terms of the Trust and the Indiana Trust Code. The interpretation of trusts and statutes is a question of law, which we review de novo. Univ. of S. Ind. Found. v. Baker, 843 N.E.2d 528, 531 (Ind.2006); Kaser v. Barker, 811 N.E.2d 930, 932 (Ind.Ct.App.2004), trans. denied.

Revocable Trusts

Ruth held the farm in a revocable trust. Revocable trusts have become popular estate planning tools and substitutes for wills because they allow settlors to avoid probate and guardianship, to have greater privacy, and to manage their assets. John J. Barnosky, The Incredible Revocable Iiving Trust, 10 J. Suffolk Acad. L. 1, 1-15 (1995). Like other trusts, a revocable trust "is a fiduciary relationship between a person who, as trustee, holds title to property and another person for whom, as beneficiary, the title is held." See Ind.Code § 30-4-1-1(a) (2004). A set-tlor creates a revocable trust by executing the trust agreement, at which time the trustee takes legal title to the property, and the beneficiary takes equitable title. Breeze v. Breeze, 428 N.E.2d 286, 287 (Ind.Ct.App.1981); see I.C. § 30-4-1-1(a). But unlike other trusts, settlors of revocable trusts continue using the trust property during their lives and retain the power to revoke or amend the trust at any time. Kesling v. Kesling, 967 N.E.2d 66, 80, 86 (Ind.Ct.App.2012), trans. denied. And unlike a will, upon the settlor's death, the "trust property is not in the decedent settlor's estate." In re Walz, 423 N.E.2d 729, 732 (Ind.Ct.App.1981). When Ruth agreed to sell the farm, her Trust was fully revocable, and she was its settlor, trustee, and primary beneficiary.

Interpreting Ruth's Trust

We must interpret the terms of the Trust to determine the duties it imposed upon Ruth as trustee, and to determine whether the sale of the farm breached any of those duties Our primary purpose "in construing a trust instrument is to ascertain and give effect to the settlor's intention." Univ. of S. Ind. Found., 843 N.E.2d at 532. We look at the trust as a whole and cannot take "individual clauses out of context." Walz, 423 N.E.2d at 733 (quoting Hauck v. Second Nat. Bank of Richmond, 153 Ind.App. 245, 259-60, 286 N.E.2d 852, 861 (1972)). If the "trust is capable of clear and unambiguous construction," we "must give effect to the trust's clear meaning." Univ. of S. Ind. Found., 843 N.E.2d at 532. Finally, after interpreting the terms of the Trust, we must ensure that its application does not violate the Trust Code. See 1.C. § 30-4-1-3 (2004).

Ruth's Fiduciary Duties

Nancy argues that Ruth as trustee breached a fiduciary duty to the remainder beneficiaries by selling the farm for below market value. A trustee breaches his or her fiduciary duties by violating any duty owed to the settlor or beneficiary. IC. § 30-4-1-2(4) (2004). Ruth's Trust provided that she, as trustee, owed a fiduciary duty to herself as settlor and primary beneficiary. We disagree with Naney's argument that the Trust imposed on Ruth an additional duty to her own children.

I. Trust Law Generally.

Whether the trustee of a revocable trust owes a duty to remainder or contingent beneficiaries while the trust is revocable is an issue of first impression in Indiana, but other states have concluded that trustees owe no such duty while a trust is revocable. We find Justice Guzman's concurrence in Moon v. Lesikar, 230 SW.3d 800, 806 (Tex.App.2007), persuasive. There, a contingent beneficiary of a revocable trust argued that her rights were violated when the settlor/trustee of a revocable trust sold trust property for well below fair market value. Id. at 802, 809. Justice Guzman concluded that if the settlor/trustee of a revocable trust owed the contingent beneficiaries a duty, the settlor/trustee's rights and duties would conflict because "the set-tlor, in his capacity as trustee, would have a duty to prevent himself, in his capacity as settlor, from revoking the trust." Id. at 809. Because this illogical conclusion would render the trust "no longer ... freely revocable," Justice Guzman concluded that the trustee's duty was to the set-tlor not the contingent beneficiaries, while the trust was still revocable. Id. at 809-10. And the Florida Court of Appeals reached a similar conclusion in Brundage v. Bank of Am., 996 So.2d 877, 882 (Fl.Dist.Ct.App.2008): "during the settlor/ben-eficiary's lifetime, a trustee owes a fiduciary duty to the settlor/beneficiary and not the remainder beneficiaries, who not only have no vested interest but whose contingent interest may be divested by the set-tlor prior to her death."

Finally, the Uniform Trust Code takes a similar position: "While a trust is revocable ..., rights of the beneficiaries are subject to the control of, and the duties of the trustee are owed exelusively to, the settlor." Unif, Trust Code $ 603(a) (amended 2010). Courts in states that have enacted the Uniform Trust Code have easily concluded that trustees exclusively owe a duty to settlors-and indeed, we can find no jurisdiction that holds otherwise. E.g., In re Stephen M. Gunther Revocable Living Trust, 350 S.W.3d 44, 47 (Mo.Ct.App.2011) (finding "[the trustee owed no duty to the beneficiaries prior to the settlor's death"); Ex Parte Synovus Trust Co., 41 So.3d 70, 74 (Ala.2009) (finding the trustee owed a duty only to the settlors, so the beneficiaries "causes of action for breach of fiduciary duty do not seek redress for legally protected rights ").

II. Terms of Ruth's Trust.

With those general trust law principles in mind, we turn to Ruth's duties under her Trust. Our primary purpose in interpreting the Trust is to implement her intent as settlor, Univ. of S. Ind. Found., 843 N.E.2d at 532, and two provisions of Ruth's Trust show she intended to owe a duty only to herself. First, Article I provides that Ruth could revoke the Trust for any reason at any time, which shows that she intended to control the farm and treat it as her own property. See Marshall Cnty. Tax Awareness Comm. v. Quivey, 780 N.E.2d 380, 383, 385 (Ind.2002) (finding that settlor/trustee/primary beneficiary of property was still its "beneficial owner," even though he had previously transferred title to the trustee); Kesling, 967 N.E.2d at 83 (finding settlor of trust could vote shares of stock held by the trust because he was the stock's beneficial and record owner); see also 26 U.S.C. § 677(a) (2006) (taxing income from revocable trust property as if it was the settlor's property because the settlor has control of the property). Second, Article II provides that the Trust is for Ruth's "use and benefit" including the right to use all Trust assets. The children's interest in the Trust is purely secondary and arises only if Ruth chooses not to divest them and if she chooses not to use all of the assets. So as trustee, Ruth's fiduciary duty was to herself, as settlor and primary beneficiary. Stated differently, Ruth was her own master.

But Naney argues that Ruth's duty as trustee also extends to her remainder beneficiary children. To find that Ruth owed such a duty, however, would bring her rights and duties into conflict-she would have to serve two masters. As discussed above, such conflicting duties would essentially make her Trust irrevocable, because complying as trustee with her own wishes to revoke the Trust would breach her purported duty to the remainder beneficiaries by placing her own interests above theirs. Moon, 230 S.W.3d at 809. In sum, Nancy's argument fails because it would defeat, rather than implement, the settlor's intent. Univ. of S. Ind. Found., 843 N.E.2d at 532.

Nancy nevertheless argues that the terms of Article V of the Trust compel the counterintuitive conclusion that Ruth's duty as trustee also extended to her children. That provision, titled Trustee's Duties, states: "Umiless the terms of the trust provide otherwise, the Trustee also has a duty: 1. to administer the trust solely in the interest of the beneficiaries; 2. to treat multiple beneficiaries impartially; ... [and] 4. to preserve the trust property" (emphasis added). Here, though, Article V would conflict with other rights and duties given to Ruth while the Trust is revocable and she is still primary benefi-clary. For instance, Ruth cannot have a duty to administer the Trust solely in the interest of the beneficiaries, when Article I lets her remove any beneficiary anytime. And she cannot have any duty to preserve the Trust's assets, when Article II gives her the right to consume them. By contrast, no such conflict exists in applying Article V to a successor trustee once the Trust has become irrevocable and Ruth is no longer primary beneficiary-at that time, the successor trustee can readily administer the trust for the beneficiaries, treat them impartially, and preserve the Trust property. But until then, Article V by its terms must yield to Ruth's own powers as settlor, trustee, and primary beneficiary.

Accordingly, Ruth as trustee owed a duty only to herself. As primary benefi-clary, she was entitled to use the Trust assets for her own benefit-and here, selling the farm benefitted her by providing her with money for her care while keeping the farm in the family. The sale did not breach any duty to Ruth's remainder beneficiaries because she owed them no duty. Since Ruth complied with the terms of the Trust, we must next determine whether its terms comply with the Indiana Trust Code.

IIH. Indiana's Adoption of Uniform Trust Code Section 603.

In 2018, the Legislature amended the Trust Code to declare the same rule we announce today-that while a trust is revocable, the trustee's duty is only to the settlor: "While a trust is revocable and the settlor has the capacity to revoke the trust: ... (2) the duties of the trustee are owed exclusively to ... the settlor" IC. § 30-4-3-1.3(a) (Supp.2013), Act of Apr. 29, 2018, P.L. 99-2013, § 9, 2013 Ind. Acts 745. That provision is materially identical to Uniform Trust Code section 603, discussed above-and though this amendment took effect after Ruth executed the Trust, Trust Code amendments apply retroactively unless they would "adversely af-feet a right given to any beneficiary ... [or] relieve any person from any duty or liability imposed by the terms of the trust or under prior law." IC. § 30-4-1-4(b) (Supp.2013). As detailed above, this statute captures Ruth's intent, and does not adversely affect the rights of any of the beneficiary children because their rights were subject to Ruth's right as settlor to revoke the Trust. Similarly, the law does not relieve any person of a duty because while the Trust was revocable, Ruth owed a duty only to herself. Therefore, under both the terms of the Trust and under Indiana law, Ruth owed no duty to her remainder beneficiary children.

The Court of Appeals Decision and Amending a Revocable Trust

The Court of Appeals also concluded that Ruth could sell the farm for below fair market value, but for a different reason. It recognized that without some power to freely sell the farm, Ruth's revocable Trust would essentially become irrevocable. But the Court of Appeals believed that "viewing Ruth as trustee" would cause the sale to breach a fiduciary duty to the remainder beneficiaries-so that instead, Ruth must have intended to sell the farm as settlor, "in effect partially amending the Trust." Since Ruth's Trust is silent about how to amend it, the Trust Code requires any purported amendment to be in writing and "manifest[ ] clear and convincing evidence of the settlor's intent" to amend the trust. I.C. § 80-4-3-1.5(c)(2)(B) (Supp.2013). The Court of Appeals concluded that the signed purchase agreement between Ruth and Harold Jr. was a sufficient written manifestation of intent to amend.

We respectfully disagree with our colleagues' conclusion for three reasons. First, as discussed above, Ruth as trustee owed no duty to her children while her trust was revocable, so no amendment was necessary for her to carry out her intent to sell the farm. Second, she held title to the farm as trustee and signed the purchase agreement in that express capacity. And third, the agreement did not purport to change the Trust, because nothing about the sale would change the Trust's terms, but only convert its primary asset from illiquid real estate to liquid cash,. Because of these facts, we find that the purchase agreement did not manifest clear and convincing evidence that Ruth intended to amend the Trust.

Is Harold Jr. Entitled to Specific Performance?

Harold Jr. sought specific performance of the purchase agreement, which the trial court denied because it found that Ruth and Harold Jr. breached their respective fiduciary duties We review a trial court's decision to grant or deny specific performance for an abuse of discretion, Kesler v. Marshall, 792 N.E.2d 893, 896 (Ind.Ct.App.20083), trans. denied-that is, for whether the decision is "clearly against the logic and effect of the facts and cireumstances before the court or if the court has misinterpreted the law." State v. Willits, 773 N.E.2d 808, 811 (Ind.2002). Because real estate is unique, courts routinely grant specific performance of purchase agreements. Kesler, 792 N.E.2d at 896. Here, the trial court misinterpreted the Trust and the law by determining that Ruth had a duty to her children that she breached and that Harold Jr. aided in that breach. Therefore, its denial of specific performance was an abuse of discretion.

Nancy's Equitable Defenses

Finally, Naney argues that Harold Jr. should not be granted specific performance because the agreement is unfair, harsh, and inequitable, based on the disparity between the farm's value and the sale price. But the trial court specifically found that the sale price was adequate, considering that Ruth offered Harold Jr. the same discounted price that she had previously offered Nancy's daughter and wanted to keep the farm in the family. And we will not set aside the trial court's findings or judgment unless they are clearly erroneous. Marion Cnty. Auditor v. Sawmill Creek, LLC, 964 N.E.2d 213, 216 (Ind.2012) (quoting Ind. Trial Rule 52(A)). Nancy has failed to show that the trial court erred. Id.

Conclusion

We conclude that under the terms of the Trust and the Trust Code Ruth owed her children no fiduciary duties and was free to sell her farm at less than fair market value; and that Harold Jr. is therefore entitled to specific performance. We also conclude that Ruth did not effectively amend the Trust by selling the farm. The judgment of the trial court is therefore reversed and remanded, with instructions to grant specific performance of the purchase agreement.

DICKSON, C.J., and RUCKER, DAVID, and MASSA, JJ., concur.


text:
    In the Matter of Gary Michael SELIG, Respondent.
    No. 49S00-1305-DI-345.
    Supreme Court of Indiana.
    Nov. 27, 2013.
   PUBLISHED ORDER APPROVING STATEMENT OF CIRCUMSTANCES AND CONDITIONAL AGREEMENT FOR DISCIPLINE

Pursuant to Indiana Admission and Discipline Rule 28(11), the Indiana Supreme Court Disciplinary Commission and Respondent have submitted for approval a "Statement of Cireumstances and Conditional Agreement for Discipline" stipulating agreed facts and proposed discipline as summarized below:

Stipulated Facts: On September 4, 2008, Respondent was convicted of operating a motor vehicle with a blood alcohol level of 0.08 or more, a class C misdemean- or. He did not report this conviction to the Commission.

On March 22, 2013, Respondent was convicted of operating a motor vehicle with a blood alcohol level of between 0.08 and 0.14, a class C misdemeanor.

The parties cite no facts in aggravation. The parties cite the following facts in mitigation: (1) Respondent has no disciplinary history; (2) Respondent was cooperative with the Commission and self-reported his second violation to the Commission; (8) Respondent is remorseful; and (4) Respondent voluntarily engaged himself in alcohol treatment and monitoring through Indiana Judges and Lawyers Assistance Program ("JLAP") and is compliant with JLAP monitoring.

Violations: The parties agree that Respondent violated these rules prohibiting the following misconduct:

Ind. Professional Conduct Rule 8.4(b): Committing a eriminal act that reflects adversely on the lawyer's trustworthiness or fitness as a lawyer.
Ind. Admission and Discipline Rule 23(11.1)(a)(2): Failure to notify the Commission of a guilty finding, and failure to transmit a certified copy of a guilty finding to the Commission within ten days of the finding.

Discipline: The Court, having considered the submission of the parties, now approves the following agreed discipline.

For Respondent's professional misconduct, the Court suspends Respondent from the practice of law for a period of 30 days beginning on the date of this order, all stayed subject to completion of at least six months of probation with JLAP monitoring. The Court incorporates by reference the terms and conditions of probation set forth in the parties' Conditional Agreement, which include:

(1) Respondent shall have no violations of the JLAP agreement, the law, or the Rules of Professional Conduct during his probation.
(2) Respondent shall totally refrain from the use of alcohol and all mind-altering substances except as prescribed.
(3) If Respondent violates his probation, the stay of his suspension will be revoked, Respondent will serve the full suspension without automatic reinstatement.

Notwithstanding the expiration of the minimum term of probation set forth above, Respondent's probation shall remain in effect until it is terminated pursuant to a petition to terminate probation filed under Admission and Discipline Rule 23(17.1).

The costs of this proceeding are assessed against Respondent. With the acceptance of this agreement, the hearing officer appointed in this case is discharged.

The Clerk is directed to forward a copy of this Order to the hearing officer, to the parties or their respective attorneys, and to all other entities entitled to notice under Admission and Discipline Rule 23(8)(d). The Clerk is further directed to post this order to the Court's website, and Thomson Reuters is directed to publish a copy of this order in the bound volumes of this Court's decisions.

All Justices concur.


author: BAILEY, Judge.

text:
    Detona SARGENT, Appellant-Respondent, and One 1996 Buick, VIN 1G4AG55M3T6449095, Appellant-Defendant, v. STATE of Indiana, the Consolidated City of Indianapolis/Marion County, and the Indianapolis Metropolitan Police Department, Appellees-Plaintiffs.
    No. 49A02-1209-MI-708.
    Court of Appeals of Indiana.
    Aug. 2, 2013.
    Andrew A. Ault, Jay Chaudhary, Indiana Legal Services, Inc., Indianapolis, IN, John E. Brengle, Indiana Legal Services, Inc., New Albany, IN, Attorneys for Appellant.
    Gregory F. Zoeller, Attorney General of Indiana, Kathy Bradley, Deputy Attorney General, Indianapolis, IN, Attorneys for Appellee.
   Dissent from Denial of Petition for Rehearing

BAILEY, Judge.

The majority would deny rehearing. However, I think Sargent's petition for rehearing provides us with an important opportunity to elarify our prior opinion on her appeal, and I would therefore grant rehearing for that limited purpose.

Sargent correctly notes that the exempted amounts for debtors' property are to be liberally construed and find their basis in the Indiana Constitution. Ind. Const. Art. 1, § 22; Branham v. Varble, 952 N.E.2d 744, 747 (Ind.2011). Our opinion in Sargent's case stated that "[the forfeiture proceedings from which Sargent appeals were not part of a bankruptcy proceeding, and expanding the reach of those exemptions to proceedings outside the seope of bankruptey would be contrary to the clear intent of our legislature." Sargent v. State, 985 N.E.2d 1108, 1114-15 (Ind.Ct.App.2013). Partially on that basis, we concluded that the debtor's exemptions did not serve to preclude the forfeiture of Sargent's vehicle under our forfeiture statute. Sargent notes this, and argues in her petition for rehearing that this aspect of our opinion in the case is incorrect.

I agree. It seems clear from the language of the statutory scheme that the Legislature intended the debtor's exemptions codified in Indiana Code chapter 34-55-10 to apply not only in bankruptcy proceedings, but in many other forms of action. First, the exemptions are part of the broader statutory scheme provided for execution of judgments. Further, the applicability of the exemptions beyond bank-ruptey is made clear by Section 34-55-10-0.2:

(a) The amendments made to IC 34-2-28 (before its repeal, now codified in this chapter) by P.L.182-1986 do not apply to causes of action in tort that acerue before September 1, 1986.
(b) The amendments made to IC 34-2, 28-1 (before its repeal, now codified at section 2 of this chapter) by P.L.290-1989 apply to judgments obtained after June 30, 1989.

1.C. § 34-55-10-0.2. And while Sections 34-55-10-1 and -2 contemplate bankruptcy proceedings, see, e.g., I.C. § 34-55-10-2(d) (providing that ownership by a bank-ruptey estate of an interest in a tenancy by the entireties does not sever the tenancy), their terms do not foreclose the exemptions from use outside of the bankruptcy context. For example, Section 34-55-10-2 provides that it "does not apply to judgments obtained before October 1, 1977." I.C. § 34-55-10-2(a).

To the extent, then, that our prior opinion could be construed to limit the debtor's exemptions solely to proceedings related to bankruptcy, I would grant rehearing to clarify that nothing in our prior opinion should be construed in derogation of our supreme court's prior holdings concerning the seope and applicability of the bankruptcy exemptions. Nor, I think, should our prior opinion be construed to preclude the applicability of the debtor's exemptions outside of bankruptey proceedings. Because I agree with the results of our prior opinion as to the applicability vel non of the debtor's exemptions to forfeiture actions like the one at issue here, however, I would not otherwise disturb our prior opinion.

For that sole purpose, then, I respectfully disagree with the majority and would grant rehearing.


author: BAKER, Judge.

text:
    Nancy A. MISSIG, Appellant-Plaintiff, v. STATE FARM FIRE & CASUALTY COMPANY, Andre M. Missig, and Autumn Missig, Appellees-Defendants.
    No. 34A02-1212-CT-1002.
    Court of Appeals of Indiana.
    Sept. 17, 2013.

      Katherine J. Noel, Noel Law, Kokomo, IN, Attorney for Appellant.

      James P., Tara Stapleton Lutes, Cantrell Strenski & Mehringer, LLP, Indianapolis, IN, Dan J. May, Kokomo, IN, Attorneys for Appellees.
   OPINION

BAKER, Judge.

Today we are confronted with the issue of whether the appellee-defendant State Farm Insurance Company (State Farm) had a duty to inquire about the cireum-stances surrounding a particular land sale transaction before issuing a homeowner's policy to individuals who may have had an interest in the insured property. Specifically, it was contended that the appellant-plaintiff Naney Missig's interest in the particular real property was a matter of public record and, therefore, State Farm had sufficient notice of Nancy's interest in the property before issuing the policy to her son and daughter-in-law, the appellees-defendants Autumn and Andre Missig. As a result, Naney claims that State Farm was negligent in issuing the policy without naming her as an insured in the policy.

The trial court entered sixty-nine findings of fact and conclusions of law, and granted equitable relief to Naney against Andre and Autumn for the full unpaid balance owed under a land contract plus accrued interest. The trial court also granted a lien and constructive trust in Nancy's favor with regard to other property that Autumn had purchased with the insurance proceeds that State Farm had paid her and Andre following the loss of another residence in a fire. However, it determined that Naney was not entitled to relief from State Farm.

Andre also cross-appealed, claiming, among other things, that State Farm was liable for failing to take any steps to recover the proceeds of the check that State Farm had issued where Autumn had forged his signature. Andre also maintained that the trial court erred in not ordering State Farm to pay Naney for her insurable interest in the real estate because it had notice or knowledge of Nancy's claim to the fire loss proceeds, that State Farm was negligent in issuing the homeowner's policy, and that it breached a duty of good faith to its policy holders because it purportedly failed to inquire as to all of the insurable interests in the residence that sustained a loss in the fire. Finally, Andre asserted that he is entitled to indemnification by State Farm for an amount that is allegedly owed to Naney for her insurable interest in the residence.

We note that Andre raises several of these issues for the first time in his brief on cross-appeal. Moreover, the cireum-stances properly established that Autumn and Andre were liable to Nancy, and the trial court correctly determined that State Farm had no liability to Andre for Autumn's actions, and no evidence was presented that State Farm breached any duty of good faith and fair dealing to Andre.

Finally, the circumstances showed that Andre was under a duty to pay Nancy some of the insurance proceeds, and his failure to do so superseded any alleged wrongful conduct on State Farm's part. As a result, we affirm the trial court's judgment.

FACTS

In February 1990, Raymond and Nancy Missig (the Missigs) purchased a residence at 8889 East 250 North in Kokomo (hereinafter referred to as the Kokomo Property), titling the real estate in both of their names as husband and wife with rights of survivorship. Raymond died on November 22, 1999. Thus, Naney became the sole owner of the property. Raymond and Nancy have one son, Andre.

In 2001, Andre and his girlfriend Autumn, along with Autumn's minor children, eventually moved into the home with Nancy. Shortly thereafter, Naney moved from the residence because the living arrangements were not working. Thus, Andre, Autumn, and the children were the sole occupants of the residence. Andre and Autumn were married sometime in 2002.

In April 2002, Naney as the seller, and Andre and Autumn as the buyers, entered into two nearly identical land installment contracts regarding the property. The contract provided for a purchase price of the property in the amount of $71,600. It was agreed that Andre and Autumn would make monthly payments of $400. Under the contracts, Andre and Autumn were to provide the insurance on the property and pay the property taxes. Although Andre and Autumn made only seven installment payments, Naney continued to pay the property taxes and insurance premiums. As of March 14, 2012, Andre and Autumn owed a balance of $153,642.28 to Nancy under the April 2002 land contract.

In 2005, the Howard County Auditor's office informed Nancy that the property was not eligible for a homestead exemption because Nancy no longer lived there. As a result, the property taxes were going to increase substantially. However, in 2006, Naney quitelaimed the property from herself as the sole owner to herself and Andre as co-tenants with rights of survivorship, so Andre could claim the homestead exemption and decrease the tax burden. Id.

There was no mortgage on the residence, and Naney invested approximately $48,000 for improvements to the residence, including new flooring, adding a bedroom, and installing new plumbing. From 2001 until 2008, Nancy paid the taxes and insurance on the property. After 2006, Naney obtained homeowners' insurance through Shelter Insurance (Shelter) because the previous company, Auto-Owners Insurance, either cancelled or would not renew the property. The Shelter policy had to be renewed in 2007; however, Naney told Andre and Autumn that they should begin paying the homeowners' insurance premiums. In response, Autumn called to obtain quotes and decided on a policy with State Farm. Andre told Nancy that he and Autumn would be obtaining a State Farm homeowners' policy through agent Linda Newell's office.

After Naney spoke with Andre in May 2007, Nancy telephoned Newell's State Farm office and spoke with Sheila Richardson, a State Farm certified service representative. Naney told Richardson that her son and daughter-in-law were purchasing a homeowners' policy for the residence in which Naney was a co-owner and wanted to know if she would be a named insured on the policy. Richardson told Nancy that if she were an owner of the property, she would be named on the insurance policy as an additional insured. On the other hand, Richardson made no promise to Nancy that she would, in fact, be on a policy that would be issued at some point in the future.

Andre and Autumn waited until January 2008, to apply for the State Farm policy. On January 22, 2008, Autumn completed the application process with Richardson. Autumn informed Richardson that she and Andre jointly owned the home and her mother-in-law, Nancy, owned only the land. Autumn requested that the policy be issued to her and Andre because she wanted to insure their residence and personal property. Autumn specifically told Richardson that she did not want Nancy's name on the policy.

When completing the application, Richardson could not recall whether she checked the county's website to obtain information such as the age of the residence or square footage. However, she indicated that she had probably done so. The county records would have established that Andre and Nancy were co-owners of the property. On the other hand, it was Richardson's experience that information on the assessor's website was occasionally inaccurate. Also, sometimes the property owner information would be on the assessor's website, and sometimes it would not. Despite recalling her telephone conversation with Naney seven months earlier, Richardson accepted Autumn's word that Naney's interest was limited to the land and honored Autumn's request that Naney not be named as an insured on the policy.

State Farm does not require that its agents or employees independently verify ownership of a property before accepting an application for homeowners' insurance. State Farm issued an insurance policy listing Andre and Autumn as the insureds, retroactive to January 22, 2008..

The relevant portion of the policy provided that

COVERAGE A-DWELLING
1. Dwelling. We cover the dwelling used principally as a private residence on the residence premises shown in the Declarations.
a # *
COVERAGE B-PERSONAL PROPERTY
1. Property Covered. We cover personal property owned or used by an insured while it is anywhere in the world. This includes structures not permanently attached to or otherwise forming a part of the realty. At your request, we will cover personal property owned by others while the property is on the part of the residence premises occupied exclusively by an insured.
* * *
COVERAGE C-LOSS OF USE
1. Additional Living Expense. When a Loss Insured causes the residence premises to become uninhabitable, we will cover the necessary increase in costs you incur to maintain your standard of living for up to 24 months. Our payment is limited to incurred costs for the shortest of: (a) the time required to repair or replace the premises; (b) the time required for your household to settle elsewhere; or (c) 24 months. This coverage is not reduced by the expiration of this policy.
* * *
COVERAGE A-DWELLING
We insure for accidental direct physical loss to the property described in Coverage A, except as provided in SECTION I-LOSSES NOT INSURED.
COVERAGE B-PERSONAL PROPERTY
We insure for accidental direct physical loss to property described in Coverage B caused by the following perils, except as provided in SECTION I-LOSSES NOT INSURED.

Appellant's App. p. 310, 319-20, 323.

Andre and Autumn paid the premiums on the policy and renewed the contract and paid the premiums that were due in January 2009 and January 2010. After purchasing the policy, Andre told Nancy that she was included on the policy. Naney did not request a copy of the policy or verify her status on the policy.

On May 4, 2010, the residence burned to the ground that resulted in a total loss. Autumn went to the State Farm office that was currently managed by Andre Brown and reported the incident. Nancy also went to the State Farm office to obtain information regarding the claims process. At that time, Brown told Naney that she was not a named insured on the policy and could not discuss the claim with her. Brown subsequently contacted the claims adjuster, Zach Dunham, and informed him that Naney was claiming an interest in the policy proceeds.

When Nancy heard that she was not named in the policy, she contacted Richardson, who was employed by another insurance agency in Kokomo. Richardson stated that Nancy was not on State Farm's policy because Autumn specifically informed her that Naney was not an owner of the residence.

During the investigation of the claim, Autumn told Dunham that she and Andre had purchased the residence on contract from Naney, and that Naney no longer held an interest in the house. However, Dunham did not request a copy of the real estate contract. Despite this fact, and despite being called by Andre Brown's office regarding Nancy's purported interest in the real estate, Dunham did not contact Naney or search the county property ree-ords to confirm or deny Nancy's claim. According to Dunham, State Farm does not require its claims adjusters to verify ownership or interest in property before issuing payment of claims. Moreover, State Farm authorizes its adjusters to pay claims only to those individuals who are named in the policy. Dunham did not require Andre and Autumn to complete a proof of loss as to the residence, except for a claim regarding personal property items.

From May 2010, to August 2010, State Farm issued proceeds from the policy to Andre and Autumn as follows: $194,876.68 under Coverage A for damages to the home; $74,259.81 under Coverage B for damage to their personal property; and $1,647.64 under Coverage C for additional living expenses, for a total of $270,784.13. On May 26, 2010, State Farm issued a check payable to Andre and Autumn for $206,624.32, representing partial satisfaction of the policy claims. After receiving State Farm's check, Autumn endorsed her name, forged Andre's signature on the check, and deposited the funds into their joint checking account.

Within a few days of depositing the funds, Autumn purchased a new residence in Windfall (the Windfall Property), at a purchase price of $171,000. Autumn had this residence titled only in her name. Andre knew that Autumn was using the insurance proceeds to purchase the Windfall Property, and chose not to join her in purchasing or owning the property. Autumn made this purchase while Nancy was in Arizona conducting personal business, without giving notice to her. Autumn, her children, and Andre moved into the residence on the Windfall Property in the summer of 2010.

In August 2010, State Farm issued another check payable to Andre and Autumn in the amount of $41,125.12, as partial satisfaction of their claims. They both endorsed that check and deposited those funds into their joint checking account. Andre used a portion of those proceeds for the purchase of a four-wheeler and some power tools.

Nancy soon learned she would not be receiving any of the policy proceeds from State Farm; however, she requested that Andre and Autumn share the proceeds with her. Nancy never received anything from Andre or Autumn.

Nancy filed her complaint for damages on August 20, 2010, against State Farm, Andre, and Autumn. Naney sought to recover a judgment in an amount equal to the insurance proceeds that State Farm paid to Andre and Autumn, and for an equitable purchase money lien on the Windfall Property. Naney claimed that State Farm should pay her $153,642.28, plus interest on the funds that were paid to Andre and Autumn. Naney claimed that Richardson assured her that she would be a named insured under the policy.

On January 31, 2012, State Farm filed a motion for summary judgment. Andre filed a cross-claim against State Farm seeking relief for indemnification regarding any claims that Nancy had against him for the insurance proceeds. Andre also alleged, among other things, that State Farm and Autumn were liable to him for forgery and embezzlement of the policy proceeds.

Following a hearing on May 7, 2012, the trial court denied State Farm's motion for summary judgment, concluding that there were genuine issues of material fact for trial. As of March 14, 2012, Andre and Autumn owed Naney a balance of $153,642.28 on the April 2002 land purchase contract.

The matter proceeded to a bench trial, and following the presentation of the evidence, the trial court issued an order on September 24, 2012, entering judgment in State Farm's favor and against Nancy. However, the trial court entered a judgment in favor of Naney against Andre and Autumn for the full, unpaid balance of the land contract, plus interest at 8% per an-num acerued since March 14, 2012, until paid. The trial court determined that no contractual relationship existed between Nancy and State Farm and that Nancy was not a party to the policy. Moreover, the trial court observed that Naney did nothing to confirm that her interest in the property was protected.

The trial court also ordered an equitable lien and constructive trust in Naney's favor on the Windfall Property. More particularly, the judgment and order entered on September 24, 2012, provided that

State Farm has already paid more than $270,000.00 to their named insureds Andre and Autumn Missig for property loss from the fire. Nothing prevented Andre and Autumn from paying part of these proceeds to Nancy except for their own unwillingness to do so. Neither equity nor justice dictates a result in which State Farm pays Nancy more, when her contract buyer family members were over-compensated for their individual losses and should have equitably shared the proceeds with her.
L *# *
Thirdly, the court in [Property Owners Ins. Co. v.] Hack, [559 N.E.2d 396 (Ind.Ct.App.1990),] provided that if the insurer has knowledge of a buyer's covenant to insure for the seller's benefit, the insurer is under a duty to disburse policy proceeds as though the seller's interest appeared in the policy, even if the buyer breached its covenant. Id., at 400. Here, there is no evidence that State Farm's agents had knowledge of any duty Andre and Autumn had to insure the property for Nancy's benefit, contrary to the facts in the Hack case.
* * *
Under Hack, what Nancy told Sheila Richardson seven (7) months before Andre and Autumn applied for their policy was not enough to place some burden of further inquiry upon State Farm. Appellant's App. p. 32-83.

As for Andre's cross-claim, where he alleged that State Farm was liable for failing to take any steps to recover from Autumn the proceeds of the check in which she had forged Andre's name, it was determined that State Farm was not liable to Andre for Autumn's actions because those funds were not embezzled.

The trial court also found that no evidence was presented that State Farm breached any duty of good faith and fair dealing that was owed to Andre. There was no evidence that State Farm refused to pay policy proceeds with regard to Andre, caused a delay in paying those proceeds, deceived the insureds, or exercised unfair advantage in their settlement of the claim against them.

The trial court also observed that no evidence was presented that Andre had any contractual or statutory right of indemnity. Indeed, it was undisputed that Andre and Autumn were primarily at fault regarding the claims that Naney brought against them. Andre and Autumn made the conscious decision to not pay Nancy the $270,000-plus policy proceeds that were jointly issued to them by State Farm. It was also determined that a claim of common law indemnity was not available to Andre. As a result, the trial court entered judgment for State Farm on Andre's cross-claim against it. Andre was also not entitled to recover against Autumn on his cross-claim because he knew that Autumn had forged his name on the check and deposited it into their joint checking account. Andre was aware of Autumn's intent to purchase the property, yet he chose not to sign the purchase agreement or attend the closing.

Nancy now appeals, and Andre cross appeals.

DISCUSSION AND DECISION

I. Nancy's Claims

While Nancy does not challenge the trial court's judgment in her favor as against Autumn and Andre, she contends that she was also entitled to equitable relief against State Farm. Specifically, Nancy maintains that she was entitled to the insurance proceeds from State Farm because the company had "actual knowledge" that she was the titled owner of the Kokomo Property that was destroyed in the fire. Appellant's Br. p. 1.

In reviewing Nancy's claims, we note that deference is given to the trial court's judgment where the proceeding sounds in equity and judgments in equity are clothed in a presumption of correctness. Mayfair Investment Corp. v. Bryant, 922 N.E.2d 123, 131 (Ind.Ct.App.2010). When reviewing cases of equity, the trial court's findings and judgment will be reversed only if clearly erroneous, that is, only if this Court is left with a definite and firm conviction that a mistake has been made. We look only to the evidence and inferences therefrom supporting the judgment. We do not reweigh the evidence or judge the credibility of the witnesses, and will reverse only where the evidence leads to a conclusion directly opposite of that reached by the trial court. Indiana Lawrence Bank v. PSB Credit Services, Inc., 706 N.E.2d 570, 572 (Ind.Ct.App.1999).

As noted above, the trial court found in Nancy's favor with regard to her equitable claims against Andre and Autumn. More particularly, the $153,642.28 judgment represented the balance that Andre and Autumn owed to Naney on the April 2002 land purchase contract. Appellant's App. p. 29, 34. The trial court also awarded Naney a lien and constructive trust in the judgment amount plus interest in the Windfall Property, which was the real estate that Andre and Autumn had purchased with the State Farm proceeds. Appellant's App. p. 27, 34. Thus, while Naney may not have prevailed against State Farm, the trial court awarded her damages against Andre and Autumn beyond the damages that she requested in her complaint. More specifically, the trial court entered the following finding and conclusion:

State Farm has already paid more than $270,000.00 to their named insureds Andre and Autumn Missig for property loss from the fire. Nothing prevented Andre and Autumn from paying part of these proceeds to Naney except for their own unwillingness to do so. Neither equity nor justice dictates a result in which State Farm pays Naney more, when her contract buyer family members were over-compensated for their individual losses and should have equitably shared the proceeds with her.

Appellant's App. p. 33.

As noted above, prior to the fire on May, 2010, Naney jointly owned the Kokomo Property with her son, Andre. However, the result that Nancy sought in this appeal, including the money damages from State Farm, along with the equitable remedies already awarded against Andre and Autumn, would lead to the inequitable result of placing her in a far better position than she was in before the May, 2010 fire at the Kokomo Property.

The parties agree that this Court's holding in Property Owners Ins. Co. v. Hack, 559 N.E.2d 396 (Ind.Ct.App.1990), controls the outcome here. However, the parties argue about the seope of the holding in Hack as well as the application of its rationale under the facts and cireum-stances here.

In Hack, it was shown that Joseph and Jean Hack (collectively, "the Hacks") sold some property on an installment land contract to Rex and Betty Lacey (collectively, "the Laceys"). Under that agreement, the Laceys were required to obtain insurance on the land for the Hacks' benefit. In June 1987, the existing insurance carrier notified the Hacks that the Laceys had permitted the required coverage to lapse for failing to pay the required premiums.

The Hacks contacted Victor McGill, an insurance broker for Property Owners Insurance, and explained the situation. The Hacks informed McGill that there were three interested parties; the bank as mortgage holder, the Hacks as sellers, and the Laceys as the buyers. Insurance was then issued that listed the Hacks on the policy in some capacity. Later, when a fire destroyed the property at issue, the insurance company refused to pay Hack the proceeds. Id. at 398.

In light of these cireumstances, the Court recognized that entitlement to proceeds arises in one of three ways. First, as was the situation in Hack, the seller is entitled to the insurance proceeds if its name appears on the policy under one or more of several designations. Second, if a buyer covenants to keep the property insured for the seller's benefit and obtains insurance without assigning it or making it payable to the seller, the covenant creates an equitable lien in the seller's favor upon the proceeds that the buyer holds after a loss. Third, if the insurer has knowledge of a buyer's covenant to insure for the seller's benefit, the insurer is under a duty to pay the policy proceeds as though the seller's interest appeared in the policy, even if the buyer breached its covenant. Id. at 400.

The cireumstances show that the Hacks sought insurance to protect their interests in the property at issue after the Laceys had allowed the coverage to lapse. Mr. Hack clearly spelled out the respective interests of himself, the Laceys, and the mortgage company when he contracted for the insurance. Indeed, Hack was the customer and premium payer on the policy that was taken out through Property Owners, the insurance company. Id. at 398.

Here, unlike the circumstances in Hack, Naney was not the State Farm customer and did not pay the premiums. Rather, Autumn was the customer and premium payer, and it is undisputed that she told State Farm staff member Richardson, that: 1) Nancy only owned the land, and Andre owned the structure at the Kokomo Property; and, 2) she did not want Nancy listed on the policy. State Farm then followed the wishes of its customer and premium payer and did not include Nancy as a named insured on the policy.

Naney appears to claim that State Farm had some legal or equitable duty to place her on the policy despite Autumn's explicit instructions not to do so. Such a finding would create an absurd result because insurance companies would be charged by law or equity to disregard the express wishes of its customer and premium payer and put entities on policies as additional insureds despite the policyholder's explicit instructions to the contrary. Under Indiana law, an insurance broker who undertakes to procure insurance for another is the agent of the proposed insured. T.R. Bulger, Inc. v. Indiana Ins. Co., 901 N.E.2d 1110, 1116 (Ind.Ct.App.2009). Here, had State Farm placed Nancy on the policy contrary to Autumn's instructions, it would have breached a duty to Autumn. For these reasons, the holding in Hack does not apply in this instance.

Naney also directs us to the May 2007 telephone conversation with Richardson as evidence that State Farm was put on notice of her interest in the Kokomo Property, which in turn triggered a duty of further inquiry. However, Nancy's call to Richardson took place more than seven months before Autumn even applied for coverage. As noted above, that call was with regard to a hypothetical seenario, and there was no promise of coverage either then or in the future made during the call. Tr. p. 43-44.

Also, as pointed out above, the fact that distinguishes this matter from all the cases that Nancy cites in her appellate brief is that the representations made in those cases were made by an applicant for the insurance policy. In this case, Nancy never applied for State Farm insurance. And again, Autumn was the applicant who unequivocally stated that she did not want Nancy on the policy. Under these facts, the trial court's finding and conclusion that, "what Naney told Sheila Richardson seven (7) months before Andre and Autumn applied for their policy was not enough to place some burden of further inquiry upon State Farm" was correct, and not clearly erroneous. Appellant's App. p. 37.

Finally, we note that Nancy attempts to establish that State Farm had both actual and constructive knowledge of her ownership interest in the Kokomo Property. Even assuming that this is true for the sake of argument, there was no equitable duty on State Farm's part to pay policy proceeds to Nancy. The Hack Court specifically found that a seller's insurable interest alone does not guarantee entitlement to the proceeds of a buyer's insurance. Id. at 399.

In our view, the primary inquiry is not State Farm's knowledge of Nancy's ownership interest in the Kokomo Property; rather, it is State Farm's knowledge (or lack thereof) of any covenant that Andre and Autumn had to insure the Kokomo Property for Nancy's benefit. And there was absolutely no evidence presented at trial that State Farm had any knowledge whatsoever of such a covenant. No witness informed Richardson of any such covenant in the April, 2002 land purchase contract when the insurance was applied for, and it is undisputed that Nancy never recorded the land purchase contract. Tr. p. 307.

Finally, Autumn represented to Dun-ham, the State Farm claims representative, that she and Andre had purchased the house on contract and that Naney no longer had an interest in it. Tr. p. 116. In short, State Farm was not placed on any notice that Andre and Autumn had covenanted to insure the Kokomo Property for Nancy's benefit. Hence, State Farm never had a duty to pay Naney any of the policy proceeds.

Finally, it is undisputed that Nancy made no inquiry between the issuance of the State Farm policy in January 2008 and the May 2010 fire regarding whether she was in fact listed as an insured on the State Farm policy. Tr. p. 58; 299. For all these reasons, we decline to set aside the trial court's judgment denying relief to Nancy against State Farm.

IIL. Andre's Cross-Appeal

Andre cross-appeals, asserting, among other things, that State Farm breached its contract of insurance with Naney and/or breached its duty to deal with him in good faith when State Farm placed Autumn's name on the fire loss proceeds check. Andre argues that State Farm should have tendered a check regarding the fire loss to the residence only to him and Nancy, the joint owners of the real estate, and then issued a separate check for the loss of personal property. In other words, Andre contends that State Farm failed to indemnify him for the losses that he sustained, and points out that State Farm should have had actual notice of Naney's interest in the property.

Andre's initial argument on cross-appeal is that the trial court's finding that Nancy did not appear on the policy at the request of the policy's purchasers and insureds-Andre and Auturn-is not supported by the evidence and/or was contradictory. However, as stated above, the record reflects that Richardson testified at trial that Autumn affirmatively told her that Naney was not to be included on the homeowners' policy. Tr. p. 49, 51. Autumn also testified that she did not want Nancy listed as a policyholder. Id. at 240-41. Therefore, Andre's argument that there was no evidence presented at trial to support the court's finding that Naney was not on the State Farm policy at Autumn's request lacks merit.

We next observe that a party may not change theories on appeal and argue an issue that was not properly presented at the trial court level. Smither v. Asset Acceptance, LLC, 919 N.E.2d 1153, 1157 (Ind.Ct.App.2010). The notion of fairness requires that the opposing party have some notice that an issue is before the court which has not been pleaded or has been agreed to in a pretrial order. Pardue v. Smith, 875 N.E.2d 285, 289-90 (Ind.Ct.App.2007).

Andre's arguments in his cross-claim against State Farm are that: 1) State Farm issued one of the settlement checks in the sum of $200,524.22 [sic] for payment of the fire claim in the names of Andre and Autumn; 2) Autumn forged Andre's name on the check; 3) State Farm was timely notified of the forgery but failed to take any steps to recover the proceeds of the check from Autumn and order a reissuance of the check; 4) Andre is entitled to one-half of the proceeds of the check for the sum of $200,524.22 [sic]; and, 5) Andre is entitled to reissuance of the check for the sum of $200,524.22 [sic] in his and Nancy's names. Appellee's Supp.App., p. 6.

In response to these claims, the trial court specifically found that there was no evidence presented at trial that State Farm breached its duty of good faith and fair dealing owed to Andre. More specifically, it was determined that Andre had no claim of contractual, statutory or common law indemnity against State Farm in relation to the elaims brought against him and Autumn by Naney because they were primarily at fault for making the decision not to pay Nancy any of the policy proceeds that State Farm had issued to them. Appellant's App. p. 35-36.

Notwithstanding the above, Andre submits several new claims and theories of recovery on appeal that he did not raise at trial. As a result, Andre has waived these contentions. Smither, 919 N.E.2d at 1157. However, even if Andre raised these contentions in a timely manner, State Farm directs us to Hack and again points out that Nancy was not the customer, applicant, and payer of the premiums. Rather, it was Autumn who occupied these positions, and it is undisputed that she informed Richardson that Nancy owned only the land, that Andre owned the structure at the Kokomo Property, and that she did not want Nancy named in the policy.

As discussed above, State Farm followed Autumn's wishes and did not include Nancy as a named insured on the policy. Like Nancy, Andre's position in this matter appears to be that State Farm had some legal or equitable duty to place Naney on the policy despite Autumn's explicit instructions that it not do so. Again, had State Farm placed Nancy on the policy contrary to Autumn's instructions, it would have breached its duty to Autumn. For these reasons, we reject Andre's contention that the holding in Hack dictates the result here.

Andre also directs us to Naney's May 2007 telephone conversation with Richardson as evidence that State Farm was put on notice of Nancy's interest in the Koko-mo Property that should have triggered a duty of further inquiry. However, Nancy's call to Richardson took place more than seven months before Autumn applied for insurance. As discussed above, the call involved a hypothetical scenario, and there was no promise of coverage either then or in the future when that call was made. Tr. p. 43-44.

Andre also asserts for the first time on cross-appeal that State Farm breached the insurance contract issued by it to him and Autumn. However, Andre does not direct us to any evidence in the record that supports this proposition. Indeed, the State Farm policy provided coverage for accidental physical loss to the Kokomo Property and the personal property therein, unless it was otherwise excluded. It is undisputed that State Farm paid over $270,000 to Andre and Autumn for the May 4, 2010 fire at the Kokomo Property. And neither Andre nor Autumn claimed that State Farm did not pay enough for the loss. Thus, because there was no evidence that State Farm breached a specific provision of the policy that State Farm issued to Andre and Autumn that resulted in damage to Andre, his contention that State Farm breached the contract of insurance fails.

As stated above, Andre's only allegations that were initially asserted in his cross-claim against State Farm were that Autumn forged his name on the check, that State Farm was notified of the forgery but refused to take any steps to recover any of the proceeds from Autumn, and that he is entitled to one-half of the proceeds of the check.

With regard to these claims, the trial court specifically found that following the alleged forgery, Autumn deposited the check into her and Andre's joint checking account, and informed Andre that she had done so. Thus, the trial court determined that Autumn did not embezzle these proceeds because Andre was aware of the deposit and had access to the funds that were deposited in the joint checking account. Appellant's App. p. 36. Therefore, any liability on State Farm's part for Autumn's alleged embezzlement cannot lie where the evidence demonstrated that the funds were not embezzled in the first instance. And even if the evidence conclusively showed that Autumn forged Andre's signature on the check and embezzled the proceeds, State Farm would not be liable to Andre for Autumn's actions.

Indeed, as we observed in Graves v. Johnson, 862 N.E.2d 716, 721-22 (Ind.Ct.App.2007), and in accordance with Indiana Code section 26-1-3.1-310(b)(1), onee a check is paid, it extinguishes the debt for which it is presented and such debt is extinguished even where a jointly payable check is sent to one co-payee and that co-payee embezzles the funds.

Andre also apparently contends on cross-appeal that State Farm breached its duty of good faith and dealing, and maintains that the trial court erred in its September 24, 2012 order that "no evidence was presented at trial that State Farm breached any duty of good faith and fair dealing owed to Andre." Appellant's App. p. 35. Notwithstanding this contention, Indiana law recognizes a legal duty, implied in all insurance contracts, for the insurer to deal in good faith with its insured. Freidline v. Shelby Insurance Co., 774 N.E.2d 37, 40 (Ind.2002). An insurance company's duty to deal in good faith and fair dealing includes the obligation to refrain from: (1) making an unfounded refusal to pay policy proceeds; (2) causing an unfounded delay in making payment; (8) deceiving the insured; and (4) exercising an unfair advantage to pressure an insured into settlement of his claim. Erie Ins. Co. v. Hickman, 622 N.E.2d 515, 519 (Ind.1993). A cause of action will not arise every time an insurance claim is denied. Freidline, 774 N.E.2d at 40. A good faith dispute about whether the insured has a valid claim will not supply the grounds for recovery in tort for the breach of the obligation to exercise good faith. Id. This is true even if it is ultimately determined that the insurer breached the insurance contract. Id. On the other hand, an insurer that denies liability knowing there is no rational, principled basis for doing so has breached its duty. Id. To prove bad faith, the plaintiff must establish by clear and convincing evidence that the insurer had knowledge that there was no legitimate basis for denying liability. Id.

As a preliminary matter, we note that no evidence was introduced at trial that State Farm breached the insurance policy that it issued to Autumn and Andre, no evidence was presented that State Farm refused to pay policy proceeds to Andre, caused an unfounded delay in paying proceeds, deceived the insureds, or otherwise exercised any unfair advantage in their settlement of the claim. Appellant's App. p. 35. Indeed, Andre testified that he was not accusing State Farm of shorting himself or Autumn with regard to the fire claim. Thus, the trial court correctly found that there was no evidence of any breach of the duty of good faith and fair dealing owed to Andre on State Farm's part.

Andre further alleges that State Farm owed a duty to indemnify him if any judgment was entered against him in Nancy's favor. However, no evidence was presented at trial demonstrating that State Farm owed any contractual or statutory indemnity to Andre. Absent any contractual or statutory right to indemnity, a party may only bring an action for common law indemnity only if he or she is without fault. INS Investigations Bureau, Inc. v. Lee, 784 N.E.2d 566 (Ind.Ct.App.2003).

Here, the trial court found that Andre had no common law indemnity claim because it was undisputed that he and Autumn bore primary fault in this matter in relation to any claims brought against them by Nancy. More particularly, the trial court determined that Andre and Autumn made a conscious decision not to pay Nancy any of the $270,000 policy proceeds that State Farm had issued jointly to them. Appellant's App. p. 35-86. Because Andre and Autumn were at fault with regard to the claims that Nancy brought against them, there is no claim of common law indemnity for Andre.

Finally, we note that Andre's general proposition in his cross-appeal appears to be that State Farm is Hable to him because it failed to discharge its duty under Hack. However, as discussed above, it was established that State Farm did not breach such a duty. Moreover, Andre and Autumn had an independent duty to disburse some of the policy proceeds to Nancy, which they chose not to do. Thus, because Autumn and Andre breached their own duty under the Hack rationale, the trial court decided that it made no sense for State Farm to have to pay additional funds to Nancy. More particularly, the trial court found that

53. Even if Naney has some equitable claim in this case, the appropriate remedy would not require State Farm to pay additional monies to her. Equity courts possess discretionary power to award damages to do complete justice, and courts are able to adjust remedies to grant necessary relief. W & W Equip. Co., Inc. v. Mink, 568 N.E.2d 564, 577 (Ind.Ct.App.1991).
54. State Farm has already paid more than $270,000 to their named insured, Andre and Autumn Missig for property loss from the fire. Nothing prevented Andre and Autumn from paying part of these proceeds to Naney except for their own unwillingness to do so. Neither equity nor justice dictates a result in which State Farm pays Naney more, when her contract buyer family members were over-compensated for their individual losses and should have equitably shared the proceeds with her.

Appellant's App. p. 33.

Andre's continued focus on State Farm's alleged breach of its duty under Hack disregards the trial court's conclusion that any action or inaction on State Farm's part was superseded when Andre and Autumn breached their duty by consciously refusing to pay Naney any of the insurance proceeds. In short, the fact that Andre disapproves of the trial court's remedy does not render it erroneous.

Also, Andre argues in his brief on cross-appeal that State Farm had both actual and constructive knowledge of Nancy's ownership interest in the Kokomo Property. Assuming this to be true, this fact did not create an equitable duty on the part of State Farm to pay policy proceeds to Nancy. The precise language in Hack provides that an insurer is under a duty to disburse policy proceeds to a contract seller as though the seller's interest appeared on the policy if the insurer has knowledge of a buyer's covenant to insure for the seller's benefit. Hack, 559 N.E.2d at 400. Further, the court in Hack specifically found that a seller's insurable interest alone does not guarantee entitlement to the proceeds of a buyer's insurance. Id. at 399. Thus, the main inquiry is not State Farm's knowledge of Nancy's ownership interest in the Kokomo Property; rather, the operative inquiry under Hack is State Farm's knowledge of any covenant that Andre and Autumn had to insure the Ko-komo Property for Nancy's benefit. And no evidence was presented at trial that State Farm had knowledge of any such covenant. No one told Richardson of any such covenant in the April 2002 land purchase contract at the time that the policy was applied for. It is also undisputed that Nancy never recorded the land purchase contract. Tr. p. 307. Finally, Autumn represented to Dunham after the fire that she and Andre had purchased the house on contract and that Naney no longer had an interest in it. Id. at 116.

In sum, State Farm was never on notice that Andre and Autumn had covenanted to insure the Kokomo Property for Nancy's benefit, and thus State Farm did not have a duty to pay Naney the policy proceeds. And under Andre and Nancy's theory of liability, an insurer would be legally obligated to pay policy proceeds to all parties that had a recorded interest in an insured property because the insurer would have constructive notice of the interest. Again, such a result would run contrary to the holding in Hack, which provides that an insurable interest alone does not guaranty entitlement to the proceeds of a buyer's insurance. Hack, 559 N.E.2d at 400. Also, neither Andre nor Naney have directed us to any case that requires an insurer to affirmatively check the recorder's office to verify all interested parties on a given property before issuing a policy or disbursing the proceeds.

Even if State Farm had been put on notice of the April, 2002 land purchase contract between Naney, Andre and Autumn (which it was not), that contract merely required Andre and Autumn to pay for the insurance-it did not require Andre and Autumn to obtain homeowners' insurance for Nancy's benefit. As a result, the trial court's finding and conclusion that, "There is no evidence that State Farm's agents had knowledge of any duty Andre and Autumn had to insure the property for Nancy's benefit, contrary to the facts in the Hack case," appellant's app. p. 82, was correct, and its September 24, 2012 Judgment and Order was not contrary to the rule announced in Hack. For all of these reasons, Andre's cross-claim fails.

CONCLUSION

In light of our discussion above, we conclude that the trial court properly entered judgment for Nancy against Andre and Autumn for the full unpaid balance of the land contract including interest, plus a lien and constructive trust as to the Windfall Property. We also conclude that the trial court properly determined that State Farm was not obligated to pay additional proceeds to Naney because it already paid the required funds to Andre and Autumn, the named insureds under the policy. Indeed, Autumn and Andre could have shared the proceeds they received from State Farm with Nancy, but chose not to do so.

As for Andre's cross-claim, we conclude that the trial court properly entered judgment for State Farm. Andre waived many of the issues, and there was no evidence that State Farm breached any duty of good faith and fair dealing to Andre. Moreover, no evidence was presented that Andre had any contractual or statutory right of indemnity against State Farm.

The judgment of the trial court is affirmed.

FRIEDLANDER, J., and VAIDIK, J., concur.

      . Interestingly, while Andre continues to press his claim against State Farm for Autumn's alleged forgery and embezzlement, Andre dismissed all cross-claims against Autumn prior to trial. Appellant's App. p. 216-217.