text:
    IN RE the Matter of the TRUST OF Barbara J. RAWLINGS
    Rex R. Rawlings, Appellant-Petitioner, v. Kim R. Rawlings, Appellee-Respondent.
    Court of Appeals Case No. 18A-TR-345
    Court of Appeals of Indiana.
    Filed October 25, 2018
    Attorneys for Appellant: Alex E. Gude, Meaghan Klem Haller, Bingham Greenebaum Doll, LLP, Indianapolis, Indiana
    Attorneys for Appellee: Gregg S. Gordon, Dale & Eke, PC, McCordsville, Indiana, Erick P. Knoblock, Dale & Eke, PC, Indianapolis, Indiana
   Riley, Judge.

STATEMENT OF THE CASE

[1] Appellant-Petitioner, Rex R. Rawlings (Rex), appeals the trial court's summary judgment in favor of Appellee-Respondent, Kim R. Rawlings (Kim), granting equitable relief to Kim by enforcing the agreement between the parties in the termination and division of a trust.

[2] We affirm.

ISSUE

[3] Rex raises three issues on appeal, which we consolidate and restate as the following single issue: Whether the trial court properly concluded that Kim is entitled to equitable relief in the division of the trust assets.

FACTS AND PROCEDURAL HISTORY

[4] On August 11, 1981, Anna Blanche Hillis (Hillis) established the Hillis Land Trust (Hillis Trust), with a sole asset of 422.803 acres of real estate (Hillis Land). At the time the Hillis Trust was established, 10,000 units were apportioned between the various beneficiaries, with the majority of the units held by Hillis. Hillis passed away in November 1983, and pursuant to her Last Will and Testament, the interest in the Hillis Trust passed into testamentary trusts established for the benefit of her daughters, Barbara Rawlings (Barbara), the mother of Rex and Kim, and Julia Wilkinson (Julia). In 1984, Rex and his wife, Colleen Rawlings (Colleen), entered into a promissory note to acquire Julia's 50% interest in the Hillis Trust. This promissory note was secured by mortgages from Barbara's husband, Richard Rawlings (Richard), and Rex on 201.12 acres of the Hillis Land. On March 21, 1988, Richard and Barbara signed a personal guarantee on behalf of Rex and Colleen with the Summit Bank of Clinton County for a secured amount of $311,515.79. As a result of the guarantee, Richard and Barbara became jointly and severally liable for Colleen's and Rex's "each and every debt, of every type and description, that [they] may now or at any time in the future owe[.]" (Appellant's App. Vol. III, p. 5). The Hillis Trust was not subject to the personal guarantee. Accordingly, by November 1988, members of the Rawlings family had become the only beneficiaries of the Hillis Trust through a buyout of the Wilkinson family by way of promissory notes secured by mortgages on part of the Hillis Land. Only 227 acres of the land remained unencumbered by mortgages or other encumbrances.

[5] In an effort to release Barbara and Richard from their personal guarantee for Colleen and Rex's debts, Rex proposed to terminate the Hillis Trust and to mortgage the real estate therein. As a result, the Rawlings family could then allow the unencumbered portion of the real estate to be used as collateral to secure Colleen and Rex's debts, and Barbara and Richard would be released from their personal guarantee. However, to be successful, Rex required the consent of all beneficiaries of the Hillis Trust, including Rex's brother, Kim, and Kim's wife, Deborah Rawlings (Deborah).

[6] It is undisputed that at that point, Kim and his family were vested beneficiaries of the 2,321 units of the Hillis Trust (either directly or as a remainder beneficiary of Barbara's testamentary trust). Therefore, if the Hillis Trust had terminated at that moment and the real estate divided among the beneficiaries based on their unit ownership, Kim and his family would have been entitled to receive 121.09 acres of real estate.

[7] In order to safeguard his inheritance, Kim agreed to allow Rex to terminate the Hillis Trust and to use the land as collateral for Rex's financial obligations in exchange for the execution of an agreement stipulating to the parties' respective rights and obligations. On November 28, 1988, Kim and Rex entered into the Inheritance Agreement, which provided, in relevant part, that Rex "is desirous of having the [Hillis Trust] terminated and having all of the beneficiaries to said Trust receive their undivided interest in the assets of said Trust[.]" (Appellant's App. Vol. IV, p. 3). To pursue his goal, it was Rex's "intent to borrow certain sums of money and obtain a mortgage on the real estate currently held by the [Hillis Trust] and the undersigned parties acknowledge that in effect this is an advance on [Rex's] inheritance." (Appellant's App. Vol. IV, p. 3). In exchange, Kim agreed to

sign all necessary documents to allow [Rex] along with his wife, [Colleen], to serve as successor Co-Trustees to the [Hillis Trust] for the sole purpose of terminating said Trust and distributing the assets in said Trust to the beneficiaries of said Trust. And [Kim] further agrees to consent to a mortgage being placed on the land which is presently owned by the [Hillis Trust] and [Rex] agrees that should a mortgage balance remain on the property which is currently owned by the [Hillis Trust] at the death of the survivor of [Barbara] and [Richard], then said mortgage balance shall be paid before [Rex] shall receive his inheritance from [Barbara] and [Richard] or a credit in favor of [Kim] in the amount of the mortgage balance owing shall be made prior to any distribution from the estates of [Barbara] and [Richard]. Parties further state that the purpose of this document is to insure that [Kim] and [Rex] are treated as equally as possible in the estates of their parents.

(Appellant's App. Vol. IV, pp. 3-4).

[8] Upon the execution of the Inheritance Agreement, Rex and Colleen filed their petition of beneficiaries to docket the Hillis Trust, clarify title to property and terminate the Hillis Trust. On December 2, 1988, the Hillis Trust was terminated by court order and four days later, on December 6, 1988, Rex and Colleen, as co-trustees of the Hillis Trust, conveyed the Hillis Land to the Rawlings family.

[9] Richard passed away on December 16, 1988, and an estate was opened. Barbara was appointed the personal representative of the estate and in February of 1989, Summit Bank filed a contingent claim for the amount of $311,515.79 as secured by the personal guarantee. To resolve the debt, on March 29, 1989, Kim and Deborah, in accordance with the Inheritance Agreement, executed, along with Rex and Colleen, an indemnifying mortgage on the Hillis Land, as well as on other certain real estate held by Barbara's testamentary trust, to Summit Bank, in order

to induce Mortgagee to renew existing indebtedness, to make new loans, and to secure the due and punctual payment of all such indebtedness of [Rex and Colleen], husband and wife, hereinafter called 'Borrower', to Mortgagee whether now existing or hereinafter incurred, including all renewals and extensions thereof, not to exceed an aggregate principal amount of [$600,000] and all interest accrued thereon and fees and expenses of Mortgagee incurred in connection therewith, all without relief from valuation and appraisement laws.

(Appellant's App. Vol. III, p. 111). A second indemnifying mortgage on the Hillis Land and other real estate held by Barbara's testamentary trust was executed in favor of Summit Bank on May 13, 1992.

[10] On October 12, 1990, Barbara executed a Revocable Trust, which included certain real estate located in Clinton County and Tipton County, Indiana. Barbara executed several Amendments to the Revocable Trust, of which the Second Amendment, executed on July 22, 2002, included the following language:

Settlor hereby declares that she has helped each of her sons financially and otherwise over the years, but she hereby states that she does not consider there to be any debt owed to her, her estate, or this Trust by either son or their respective issue. Successor Trustees [Kim and Rex] are directed to make distribution of the Trust assets without trying to take into consideration any assets heretofore given or advances to either of said sons or their respective issue.

(Appellant's App. Vol. II, p. 34).

[11] Rex and Colleen failed to satisfy their financial commitments, and on January 27, 1995, NBD Bank, N.A. (NBD Bank), successor in interest to Summit Bank, filed an action to foreclose on the mortgages. Less than a month after NBD Bank filed its foreclosure action, Rex and Colleen filed for bankruptcy. Neither Kim nor Deborah were listed as creditors in the bankruptcy proceedings. As part of the bankruptcy proceedings, Rex and Colleen were obligated to endeavor to sell 237 acres of real estate previously held by the Hillis Trust and by Barbara's testamentary trust. Accordingly, the Hillis Land and the real estate in Barbara's testamentary trust was quitclaimed to Rex and Colleen in late 1995, and on May 22, 1996, most of the land was sold to satisfy Rex and Colleen's indebtedness. NBD Bank, after being paid an amount of $875,000, released the mortgages. Rex and Colleen retained 11 acres of the Hillis Land that had been quitclaimed to them but which was not sold to satisfy their debt to NBD Bank.

[12] Barbara passed away on October 9, 2013. Both Rex and Kim became co-successor trustees of Barbara's Revocable Trust. On December 31, 2014, Rex filed his petition to docket the trust with the trial court, with a request to appoint a successor trustee because the co-successor trustees "cannot work together." (Appellant's App. Vol. II, p. 20). On January 9, 2015, Kim filed his objection to the appointment of a successor trustee and served Rex, in his capacity as a beneficiary of the Trust, with a summons and a copy of the objection. Kim requested the trial court for an order compelling the final distribution of Barbara's Revocable Trust, as well as for equitable relief by asking the trial court to enforce the Inheritance Agreement upon the distribution of the Trust assets. Specifically, Kim explained, in pertinent part:

36. Rex received a substantial benefit from Kim since Rex was able to use the Hillis Land as collateral for Rex's debts. Without Kim's agreement, Rex would not have been able to mortgage the Hillis Land.
37. In exchange for that benefit, Rex promised that Kim would receive his portion of the Hillis Land free and clear of such encumbrances or that Kim would receive a credit for the amount of such encumbrances. This cannot occur since the Hillis Land was sold to a third party.
38. Rex received a substantial benefit from Kim, and absent an adjustment of the distribution of the remaining Trust assets, Kim will lose the value of his bargain with Rex. This is precisely the type of situation where equity intercedes to prevent an unjust result.
* * * *
40. If the Hillis Land had not been mortgaged, Kim and Rex would now each be entitled to receive some 200 acres of real estate. But Rex mortgaged the Hillis Land for his personal benefit and, because Rex did so, some 221 acres was deeded to him so that it could be sold in the Bankruptcy to service his individual debts. If the Hillis Land was in the Trust, both Kim and Rex would each receive some 200 acres. In other words, when the Hillis Land was encumbered and then deeded to Rex, Rex received a benefit that exceeded the value of the inheritance he would otherwise now be entitled to receive if the Hillis Land was still in the Trust.
41. Directing that Rex's share of the remaining Trust assets be distributed to Kim, will restore a portion of that benefit that Rex received, affect the intent of the Inheritance Agreement and prevent an unjust result.

(Appellant's App. Vol. II, pp. 47-48).

[13] On January 29, 2015, Rex filed a motion to enlarge time to file his response to Kim's objection because he needed "additional time to respond to the allegations that constitute a [C]omplaint." (Appellee's App. Vol II, p. 7). Thereafter, on February 27, 2015, Rex filed his motion to dismiss for failure to state a claim upon which relief can be granted. In his motion, Rex argued that Kim's objection failed to state a claim because 1) the Inheritance Agreement only contemplated that a balance would be owing on the mortgage; 2) the Inheritance Agreement failed to include a requirement to deed any real estate back to Kim; 3) the intent of the Inheritance Agreement was to ensure that Kim and Rex would be treated equally in the estate of their parents while the instant proceeding did not originate from an estate; and 4) the provision of the Second Amendment to the Trust sought an equal distribution to Rex and Kim.

[14] On June 12, 2015, the trial court conducted a hearing on Rex's motion to dismiss and subsequently entered an order denying that motion on September 9, 2015. At the same time, the trial court also docketed Barbara's Revocable Trust and appointed the Farmers Bank as the successor trustee of the Trust. On September 21, 2015, Rex filed his answer to Kim's request compelling a final distribution of the Trust and asserted a counterclaim request to investigate whether Kim had breached his fiduciary duties as a co-successor trustee to the Revocable Trust. On October 14, 2016, Kim filed his reply to the counterclaim, denying all allegations.

[15] On June 24, 2016, Kim filed his motion for summary judgment, together with a memorandum and designation of evidence. On July 25, 2016, Rex filed his response and designation of evidence, as well as a motion to strike certain portions of Kim's and Deborah's affidavits submitted as part of Kim's designated evidence. On August 30, 2016, Kim filed a response to the motion to strike.

[16] On January 2018, after a hearing, the trial court granted summary judgment to Kim, concluding, in pertinent part:

9. That, in summary, unless equity intercedes to [ ] enforce the [Inheritance Agreement], [Rex] would receive numerous benefits to the detriment of [Kim], i.e. , obtaining land from the Hillis Trust, using [Kim's] land from the Hillis Trust as collateral for his debts, having his debts discharged through bankruptcy, receiving an equal amount of the remaining Hillis Land despite the fact that his financial hardships caused much of the land to be sold to pay his debts, and not being bound by the [Inheritance Agreement]. Equity should not allow such an injustice, but rather, equity should do what should be done.
10. That the language contained in the Second Amendment to the Barbara Rawlings Revocable Trust, executed on July 22, 2002, is not dispositive of the issues, as such language does not alter or vacate the terms agreed upon by [Rex] and [Kim] in the [Inheritance Agreement].
11. That the [c]ourt therefore concludes that the real estate now owned by Barbara Rawlings' Trust should be divided equally between [Kim] and [Rex]. After such division, and before final distribution from Barbara Rawlings' Trust, up to 121.09 acres of real estate which would otherwise be distributed to [Rex] as part of his share of Barbara Rawlings' Trust shall be credited and distributed to [Kim] along with his one-half share of Barbara Rawlings' Trust.

(Appellant's App. Vol. II, pp. 17-18) (internal citation and references omitted).

[17] Rex now appeals. Additional facts will be provided if necessary.

DISCUSSION AND DECISION

I. Standard of Review

[18] In reviewing a trial court's ruling on summary judgment, this court stands in the shoes of the trial court, applying the same standards in deciding whether to affirm or reverse summary judgment. First Farmers Bank & Trust Co. v. Whorley , 891 N.E.2d 604, 607 (Ind. Ct. App. 2008), trans. denied . Thus, on appeal, we must determine whether there is a genuine issue of material fact and whether the trial court has correctly applied the law. Id. at 607-08. In doing so, we consider all of the designated evidence in the light most favorable to the non-moving party. Id. at 608. A fact is 'material' for summary judgment purposes if it helps to prove or disprove an essential element of the plaintiff's cause of action; a factual issue is 'genuine' if the trier of fact is required to resolve an opposing party's different version of the underlying facts. Ind. Farmers Mut. Ins. Group v. Blaskie , 727 N.E.2d 13, 15 (Ind. App. 2000). The party appealing the grant of summary judgment has the burden of persuading this court that the trial court's ruling was improper. First Farmers Bank & Trust Co. , 891 N.E.2d at 607. When the defendant is the moving party, the defendant must show that the undisputed facts negate at least one element of the plaintiff's cause of action or that the defendant has a factually unchallenged affirmative defense that bars the plaintiff's claim. Id. Accordingly, the grant of summary judgment must be reversed if the record discloses an incorrect application of the law to the facts. Id.

[19] We observe that, in the present case, the trial court entered findings of fact and conclusions of law in support of its judgment. Special findings are not required in summary judgment proceedings and are not binding on appeal. AutoXchange.com. Inc. v. Dreyer and Reinbold, Inc. , 816 N.E.2d 40, 48 (Ind. Ct. App. 2004). However, such findings offer this court valuable insight into the trial court's rationale for its review and facilitate appellate review. Id.

II. Equitable Relief

[20] Rex contends that the trial court erred in finding no genuine issues of material fact and issuing summary judgment to Kim. As this cause initially commenced as a petition to docket the Trust and to appoint a successor trustee, Rex asserts that the trial court exceeded the scope of its limited probate proceedings by issuing a division of the Trust corpus in accordance with the terms of the Inheritance Agreement. Focusing on Barbara's Revocable Trust, Rex maintains that the trial court, by applying the Inheritance Agreement, disregarded Barbara's intent of dividing the assets of the Trust equally between Rex and Kim. In essence, he claims that the trial court re-wrote the Trust instrument based on the Inheritance Agreement.

[21] Initially, we note that the trial court, sitting as a probate court, had the authority to hear and decide this particular cause and to grant the requested relief. The probate jurisdiction conferred upon circuit courts is separate and distinct from their general jurisdiction in civil causes, and the methods of proceeding in the exercise of such probate jurisdiction are equally separate and distinct from those prescribed by the code of civil procedure in ordinary causes. Cmty. Hosps. of Ind., Inc. v. Estate of North , 661 N.E.2d 1235, 1239 (Ind. Ct. App. 1996). It is only where the probate code does not provide an adequate and complete mode of procedure that it is proper to resort to the rules of pleading and practice applicable to civil actions. Id. However, probate courts must also be considered courts of general jurisdiction. Id. They are courts of record and, by the act under which they were organized, in the exercise of the jurisdiction granted to them, are vested with the incidental powers of other courts of law and equity. Id. With regards to probate matters, the North court pointed out that:

We agree that the administration of an estate is a single proceeding in rem. During the course of the administrative proceeding, however, collateral proceedings may occur which are adversarial in nature and result in separate decisions finally adjudicating the rights of interested persons. Again, under these circumstances, the probate code directs the probate court to the rules of pleading and practice applicable in ordinary civil cases. Even if the Estate's counterclaim addresses matters outside the rem of the Estate and even if potential class members are not part of the Estate, under the rules just mentioned, those matters are merely collateral to the administration of the Estate and do not affect the jurisdiction of the court with regard to the particular case before it.

Id. at 1241. Even though North is an estate case, we find the same holds true for trust proceedings. See Matter of Trust of Loeb , 492 N.E.2d 40, 43 (Ind. Ct. App. 1986) (noting that probate courts possess general equity powers, which include the authority to supervise and control the administration of trusts).

[22] Rex invoked the Clinton County court's probate jurisdiction when he docketed the Trust and sought to get a successor trustee appointed. Kim, in accordance with Ind. Code § 30-4-6-5, filed his petition seeking the termination of the Trust and a distribution of the assets in accordance with the Inheritance Agreement. Pursuant to I.C. § 30-4-6-6(b), he served Rex the filing along with a summons. Although the cause commenced as a trust proceeding, the insertion of the Inheritance Agreement is a collateral proceeding which affects the Trust's rem and can be pled before the trial court sitting in the probate matter in accordance with the Indiana Rules of Procedure. See North , 492 N.E.2d at 43. At no point did Rex object to the consideration of the Inheritance Agreement; rather, to the contrary, he obtained an extension of time "to respond to the allegations that constitute a [C]omplaint" and subsequently moved to dismiss the pleading, which was denied by the trial court. (Appellant's App. Vol. II, p. 7). As the purported enforcement of the Inheritance Agreement is a collateral issue and might affect the parties' inheritance, the trial court had jurisdiction to consider Kim's allegation.

[23] Turning to the merits of his claim, Rex now argues that the trial court used the Inheritance Agreement to re-write the unambiguous language of Barbara's Revocable Trust and to impose a division of the corpus inconsistent with Barbara's express wishes. While Kim agrees that the Inheritance Agreement cannot be used to re-write the terms of the Trust, in a similar vein it should be noted that the Trust cannot be used to re-write the Inheritance Agreement. Both documents are separate and distinct agreements, each with a different purpose and parties. Rex does not contest the validity of either instrument.

[24] The Revocable Trust provides for the equal distribution of the assets between Rex and Kim, "share and share alike," upon Barbara's death-at which time the Trust "shall terminate." (Appellant's App. Vol. II, p. 40). Also, during the lifetime of the Trust, "no beneficiary shall have any power to sell, assign, transfer, encumber or in any other manner to anticipate or dispose of his or her interest in the Trust estate or in the income produced thereby[.]" (Appellant's App. Vol. II, p. 26). In sum, it was Barbara's intent that there was no "debt owed to her, her estate, or this Trust by either son or their respective issue. Successor Trustees [Kim and Rex] are directed to make distribution of the Trust assets without trying to take into consideration any assets heretofore given or advanced to either of said sons or their respective issue." (Appellant's App. Vol. II, p. 34).

[25] The Inheritance Agreement, executed prior to the establishment of Barbara's Revocable Trust, recognized that both Rex and Kim would be beneficiaries of the Hillis Trust. It provided that Rex's termination of the Hillis Trust and encumbering of the Hillis Land would be "in effect [ ] an advance on [Rex's] inheritance." (Appellant's App. Vol IV, p. 3). The parties agreed that "should the mortgage balance remain on the property which is currently owned by the Hillis Land Trust at the death of the survivor of [Barbara] or [Richard], the said mortgage shall be paid before" Rex shall receive his inheritance from Barbara and Richard or a credit in favor of Kim in the amount of the mortgage balance owing shall be made prior to any distribution from the estate of Barbara and Richard. (Appellant's App. Vol. IV, p. 3). The Inheritance Agreement clearly expressed its intended purpose of treating Kim and Rex "as equally as possible in the estates of their parents." (Appellant's App. Vol. IV, p. 4). Although the Inheritance Agreement sought to protect Kim's vested interest in the Hillis Land and operated to ensure that Rex would not receive a windfall from receiving his inheritance early, the agreement did not address the situation if the mortgage on the Hillis Land would be foreclosed upon.

[26] Rex now seizes on this omission to claim that the Inheritance Agreement is inapplicable and the trial court erred in enforcing it. However, it is a well established premise that "when an express contract does not fully address a subject, a court of equity may impose a remedy to further the ends of justice. Stated another way, the existence of a contract, in and of itself, does not preclude equitable relief which is not inconsistent with the contract." Coppolillo v. Cort , 947 N.E.2d 994, 998 (Ind. Ct. App. 2011).

[27] By executing the Inheritance Agreement, Rex received a substantial benefit to the detriment of Kim's vested interest in the Hillis Land. Specifically, by signing the Inheritance Agreement, Kim allowed Rex to use all the Hillis Land, in which Kim had a vested interest, as collateral for a mortgage to satisfy Rex's personal financial problems. As such, the Inheritance Agreement occurred outside the estate planning of Richard and Barbara and cannot be considered a debt to Barbara or to the Revocable Trust, but rather created a debt between Rex and Kim. In order to satisfy this debt, the Inheritance Agreement specified that the encumbrance of the Hillis Land, including the 121.09 acres which would have been passed to Kim and his family, would be "in effect" an advance on Rex's inheritance. (Appellant's App. Vol. IV, p. 3). Because he was allowed to mortgage the Hillis Land, Rex was able to borrow approximately $600,000 and to have that debt discharged by the sale of the encumbered real estate which included the 121.09 acres of real estate which was otherwise owned by Kim and his family. The Inheritance Agreement also specified that an equalization of their respective inheritances would only occur following the death of their last surviving parent and in conjunction with the parents' estate plan.

[28] Accordingly, upon Barbara's death, the Revocable Trust terminated, and a division of the corpus had to be made in accordance with the Trust provisions, while at the same time, the Inheritance Agreement had become enforceable. In harmonizing both the Trust and the Inheritance Agreement, the trial court viewed both documents as independent of each other, first mandating the division of the Trust and then almost simultaneously applying the Inheritance Agreement in equity. As "equity looks to the substance and not the form," the Inheritance Agreement sought to safeguard Kim's inheritance while at the same time helping his brother. Walter v. Balogh , 619 N.E.2d 566, 568 (Ind. 1993). Because Rex defaulted on his financial obligations and the Hillis Land was foreclosed upon, "a court of equity has the power to require that to be done which should have been done." Id. Accordingly, upon the termination and division of the Revocable Trust, the trial court mandated the distribution of the assets of the Trust in accordance with Barbara's wishes, while immediately the court ordered up to 121.09 acres of real estate otherwise transferred to Rex under the provisions of the Trust to be credited and distributed to Kim, along with his 50% interest in the Trust rem. We find that there is no genuine issue of material fact and the trial court properly applied the law.

CONCLUSION

[29] Based on the foregoing, we hold that the trial court properly concluded that Kim is entitled to equitable relief in the division of the Trust assets and by enforcing the Inheritance Agreement.

[30] Affirmed.

[31] Kirsch, J. concurs

[32] Vaidik, C. J. dissents with separate opinion

[33] I respectfully dissent. Once the trial court took it upon itself to administer the Trust, its tasks were to (1) determine Barbara's intent and (2) give effect to that intent. See Goodwine v. Goodwine , 819 N.E.2d 824, 829 (Ind. Ct. App. 2004) ; In re Valma M. Hanson Revocable Trust No. 103-83-1 , 779 N.E.2d 1218, 1221 (Ind. Ct. App. 2002), reh'g denied , trans. denied . The trial court completed the first task, acknowledging that Barbara's intent was that the property in the Trust "would pass equally to Rex Rawlings and Kim Rawlings." Appellant's App. Vol. II p. 13. Having done so, however, the court did not complete the second task. Instead of giving effect to Barbara's clear intent, the court ordered that the trust assets be divided in accordance with Rex and Kim's "Agreement"-an agreement that Barbara was not a party to, that was executed two years before Barbara established the Trust, and that is not mentioned in the trust instrument or the amendments thereto. The court concluded that the agreement entitled Kim to "equitable relief" from the plain language of the Trust. Id. at 16.

[34] In affirming the trial court's decision, the majority relies heavily on this Court's opinion in Community Hospitals of Indiana, Inc. v. Estate of North , 661 N.E.2d 1235 (Ind. Ct. App. 1996), trans. denied . But that opinion said nothing at all about the authority of a court sitting in probate to grant a party equitable relief from the terms of a will or trust. Rather, we held that a probate court administering an estate had authority to adjudicate the estate's counterclaim against a creditor that had made a claim against the estate. Id. at 1240. We based that decision not on any general principle of "equity" but on Indiana Code sections 29-1-14-12 and -13, two provisions of Indiana's Probate Code that specifically contemplate counterclaims by estates against creditors. Here, neither Kim nor the trial court nor the majority has identified any similar statute, either in the Probate Code (Ind. Code art. 29-1) or the Trust Code (Ind. Code art. 30-4), that gave the trial court authority, in this proceeding relating to Barbara's trust, to adjudicate Rex and Kim's rights under their separate agreement. Absent such statutory authority, I would hold that the trial court, sitting in probate, had no business adjudicating Kim's claim under that agreement.

[35] I do not mean to suggest that Rex and Kim's agreement is void or that Kim cannot seek to enforce it in a separate proceeding. I would merely hold that the interpretation and enforcement of the agreement-again, an agreement that Barbara was not a party to, that was executed two years before Barbara established the Trust, and that is not mentioned in the trust instrument or the amendments thereto-are matters that fall outside the scope of the trust proceeding initiated by Rex.

      Indiana Code section 30-4-6-5 provides that "[a]ny proceedings under this article [i.e., the Trust code] may be initiated on either a petition or complaint and upon notice as provided in [I.C. §] 30-4-6-6."

      Indiana Code section 30-4-6-6(b), specifies, in pertinent part, that the form of notice required "shall be in the form of a summons as provided in the Indiana Rules of Procedure for service of summons[.]"

      In addition, Rex makes several arguments which are waived for our review. First, Rex contends that the trial court in its summary judgment improperly relied on inadmissible portions of the affidavits designated by Kim and Deborah, thereby ignoring Rex's motion to strike. He maintains that because the trial court failed to rule on the motion to strike, it is unclear whether and to what extent the court considered inadmissible evidence in ascertaining the purpose of the Inheritance Agreement and therefore, a reversal is warranted. However, the trial court's judgment does not indicate that the court considered the affidavits; rather, the trial court merely enforced both agreements. Furthermore, Rex's argument presupposes that the statements in the affidavits are inadmissible but his appellate brief omits a cogent argument on the bases on which these statements would be considered inadmissible. Accordingly, this argument is waived. See Ind. Appellate Rule 46(A)(8). Similarly, Rex contends that Kim's request for equitable relief was barred by the Statute of Limitations. This argument was not raised before the trial court during the summary judgment proceeding even though it was raised as an affirmative defense by Rex in his Answer. Failure to raise this defense in the summary judgment proceeding resulted in a waiver of the non-asserted affirmative defense. See Reiswerg v. Statom , 926 N.E.2d 26, 31 (Ind. 2010) (holding that a party is required to assert affirmative defenses in response to a motion for summary judgment that would dispose of the case).


source: Caselaw Access Project

author: Tavitas, Judge.

license: Public Domain

text:
    M JEWELL, LLC, Appellant-Plaintiff, v. Roger BAINBRIDGE, in his capacity as Grant County Auditor; Sarah A. Melford, in her capacity as County Treasurer; John Lawson, in his capacity as a Grant County Commissioner; Mark E. Bardsley, in his capacity as a Grant County Commissioner; SRI, Incorporated, Appellees-Defendants.
    Court of Appeals Case No. 18A-MI-36
    Court of Appeals of Indiana.
    Filed October 26, 2018
    Attorney for Appellant: Jon Orlosky, Muncie, Indiana
    Attorneys for Appellee: Stephen J. Peters, David I. Rubin, Pamela A. Paige, Plunkett Cooney, P.C., Indianapolis, Indiana
   Tavitas, Judge.

Case Summary

[1] M Jewell, LLC ("M Jewell") appeals the trial court's grant of summary judgment to SRI, Incorporated ("SRI"). We affirm.

Issue

[2] M Jewell raises one issue, which we restate as whether the trial court properly granted summary judgment to SRI on M Jewell's third-party beneficiary claim.

Facts

[3] This case is about whether the purchasers of real estate in a tax sale are third-party beneficiaries of contracts between SRI and Grant County. In 1994, Grant County, Indiana, entered into a Services Master Agreement ("SMA") with SRI. In 2010, Grant County and SRI entered into a Tax Sale Support Services Addendum to the SMA ("Addendum") and a 2010 Tax Sale Workplan-Grant County ("Workplan") (collectively, "Agreements"). Under the Agreements, SRI agreed to perform certain services related to tax sales in Grant County, including the preparation and mailing of notices to property owners with delinquent property taxes.

[4] Farmers Mutual Insurance Company of Grant & Blackford Counties ("Farmers Mutual") owned property in Grant County. Farmers Mutual failed to update its mailing address with the Grant County auditor or treasurer, and Farmers Mutual accumulated delinquent property taxes. Farmers Mutual's real estate was placed on a list of properties to be sold at tax sale on September 23, 2010, and SRI sent the notices of tax sale. Because of the erroneous address in the records, the notices were returned unclaimed. Neither SRI nor the auditor's office made any further attempt to notify Farmers Mutual of the tax sale or to locate a more accurate address.

[5] On September 23, 2010, M Jewell purchased the real estate at a tax sale in Grant County for $5,508.98. M Jewell later filed a petition for an order directing the auditor of Grant County to issue a tax deed, which the trial court granted. A tax deed was issued to M Jewell in December 2011. On February 27, 2012, Farmers Mutual filed a petition to set aside the tax deed and a motion for leave to pay funds into the court in the sum of $6,985.33 for the delinquent property taxes and interest. The trial court granted the motion for leave to pay funds into the court. The trial court, however, later denied Farmers Mutual's motion to set aside the tax deed.

[6] Farmers Mutual appealed the trial court's order. On appeal, this court concluded that the trial court erred by denying the motion to set aside the tax deed. See Farmers Mut. Ins. Co. of Grant & Blackford Ctys. v. M Jewell, LLC , 992 N.E.2d 751 (Ind. Ct. App. 2013), trans. denied. We noted that, under the statute in effect at the time, the auditor was statutorily required to research its records to determine a more complete or accurate address if both notices are returned due to incorrect or insufficient addresses. Id. at 756 (citing Ind. Code § 6-1.1-24-4 ). Because the auditor and SRI failed to perform the additional research, we concluded that the statutory notices were not in substantial compliance and the tax deed was void. Id. at 759-60. We directed the trial court to grant Farmers Mutual's petition to set aside the tax deed. M Jewell was reimbursed $6,997.50 as the statutory refund payment for the real estate.

[7] In September 2014, M Jewell filed a complaint against Roger Bainbridge, in his capacity as Grant County Auditor; Sarah Melford, in her capacity as Grant County Treasurer; John Lawson, in his capacity as a Grant County Commissioner; Michael Burton, in his capacity as a Grant County Commissioner, (collectively, "Grant County"); and SRI. M Jewell alleged in Count I that Grant County was negligent in conducting the tax sale and that M Jewell had been damaged. In Count II, M Jewell alleged that it, as the purchaser of real estate in a tax sale, was a third-party beneficiary of Grant County's contracts with SRI and that M Jewell had suffered damages of $784,000.00.

[8] Grant County filed a motion for summary judgment, and M Jewell filed a motion to dismiss Grant County as a defendant with prejudice. The trial court granted M Jewell's request and dismissed M Jewell's claims against Grant County with prejudice.

[9] SRI also filed a motion for summary judgment regarding M Jewell's third-party beneficiary claim. SRI argued that M Jewell's claims failed as a matter of law because M Jewell was not a third-party beneficiary of the contracts. SRI also argued that, even if M Jewell was a third-party beneficiary of the contracts, the SMA's terms precluded the damages sought by M Jewell. Finally, SRI argued that M Jewell had already received the statutory refund of the purchase price at the tax sale plus interest and that M Jewell was not entitled to a "windfall." Appellant's App. Vol. II p. 120. M Jewell filed its response to SRI's motion for summary judgment. At a hearing on the motion for summary judgment, SRI and M Jewell agreed that the issue was a matter of law appropriate for summary judgment.

[10] The trial court granted SRI's motion for summary judgment. Regarding the third-party beneficiary claim, the trial court found that, based on the language in the Agreements, "the intent is for SRI to provide the notices and the work necessary to hold the tax sale, to conduct the tax sale, and then to advise property owners that their property was sold in a tax sale and how to redeem it." Id. at 21-22. The trial court did not find "any language that evidences an intent to benefit tax sale purchasers, directly or indirectly." Id. at 22. The trial court noted that the "only intended beneficiaries of the SMA are Grant County and SRI" and that "[a]ny potential profit to a tax sale purchaser such as M Jewell is at best incidental to the performance of the SMA." Id. The trial court found, accordingly, that M Jewell was not a third-party beneficiary of the SMA.

[11] The trial court also found that, even if M Jewell qualified as a third-party beneficiary, M Jewell's claimed damages were precluded by the "SMA's limitation of liability provision." Id. at 24. Finally, the trial court also determined that M Jewell's remedy is wholly statutory, that Indiana Code Section 6-1.1-24-4"does not provide a private cause of action for M Jewell," and that "Grant County has made M Jewell whole by refunding to M Jewell the amount it bid for the tax sale purchase (plus interest)." Id. at 23, 25. The trial court, accordingly, granted SRI's motion for summary judgment. M Jewell now appeals.

Analysis

[12] M Jewell appeals the trial court's grant of summary judgment to SRI. Summary judgment is appropriate only when the moving party shows there are no genuine issues of material fact for trial and the moving party is entitled to judgment as a matter of law. Erie Indem. Co. for Subscribers at Erie Ins. Exch. v. Estate of Harris by Harris , 99 N.E.3d 625, 629 (Ind. 2018), reh'g denied ; see also Ind. Trial Rule 56(C). Once that showing is made, the burden shifts to the non-moving party to rebut. Schoettmer v. Wright , 992 N.E.2d 702, 705-06 (Ind. 2013). When ruling on the motion, the trial court construes all evidence and resolves all doubts in favor of the non-moving party. Id. at 706. We review the trial court's ruling on a motion for summary judgment de novo, and we take "care to ensure that no party is denied his day in court." Id. "We limit our review to the materials designated at the trial level." Gunderson v. State, Indiana Dep't of Nat. Res. , 90 N.E.3d 1171, 1175 (Ind. 2018).

[13] M Jewell and SRI agreed below that there are no genuine issues of material fact in this case. Rather, the issue is whether SRI is entitled to judgment as a matter of law on M Jewell's third-party beneficiary claim.

[14] M Jewell first argues that the trial court erred when it determined M Jewell was not a third-party beneficiary to Grant County's Agreements with SRI. "Generally, only parties to a contract or those in privity with the parties have rights under the contract." OEC-Diasonics, Inc. v. Major , 674 N.E.2d 1312, 1314-15 (Ind. 1996).

One not a party to an agreement may nonetheless enforce it by demonstrating that the parties intended to protect him under the agreement by the imposition of a duty in his favor. To be enforceable, it must clearly appear that it was the purpose or a purpose of the contract to impose an obligation on one of the contracting parties in favor of the third party. It is not enough that performance of the contract would be of benefit to the third party. It must appear that it was the intention of one of the parties to require performance of some part of it in favor of such third party and for his benefit, and that the other party to the agreement intended to assume the obligation thus imposed.

Id. at 1315 (quoting Kirtley v. McClelland , 562 N.E.2d 27, 37 (Ind. Ct. App. 1990), reh'g denied, trans. denied ).

[15] "The intent of the contracting parties to bestow rights upon a third party 'must affirmatively appear from the language of the instrument when properly interpreted and construed.' " Id. (quoting Freigy v. Gargaro Co. , 223 Ind. 342, 349, 60 N.E.2d 288, 291 (1945) ). "However, it is not necessary that the intent to benefit a third party be demonstrated any more clearly than the parties' intent regarding any other terms of the contract." Id. (citing Nash Eng'g Co. v. Marcy Realty Corp. , 222 Ind. 396, 416-17, 54 N.E.2d 263, 271 (1944) ). "The intent necessary to the third-party's right to sue is not a desire or purpose to confer a particular benefit upon the third-party nor a desire to advance his interest or promote his welfare, but an intent that the promising party or parties shall assume a direct obligation to him." Centennial Mortg., Inc. v. Blumenfeld , 745 N.E.2d 268, 276 (Ind. Ct. App. 2001). We must read the contract as a whole when trying to ascertain the parties' intent. OEC-Diasonics, Inc. , 674 N.E.2d at 1315. We accept an interpretation of a contract that harmonizes its provisions. Id.

[16] Our supreme court last engaged in a significant analysis of third-party beneficiary claims in Cain v. Griffin , 849 N.E.2d 507 (Ind. 2006). In Cain , a customer slipped and fell in a restaurant parking lot. The customer brought a claim against the restaurant owners and their insurer. The trial court granted the insurer's motion for summary judgment.

[17] On appeal, our supreme court addressed the customer's claim that she was a third-party beneficiary to the medical payments coverage portion of the insurance policy. The court concluded:

It is clear from the language of the contract that the [restaurant owners] intended to require [the insurer] to pay medical expenses for "bodily injury" to a third party-in this case, [the customer]-caused by an accident on the [restaurant owners'] premises, "regardless of fault." It is also clear that [the insurer] intended to assume the obligation thus imposed.

Cain , 849 N.E.2d at 515. The court, consequently, held that, "as a third-party beneficiary," the customer could sue the insurer "directly to enforce the medical payment coverage provision of the contract between" the insurer and the restaurant owners. Id.

[18] Here, Grant County and SRI entered into three agreements: the SMA, the Addendum, and the Workplan. In the SMA, the parties agreed that SRI would perform certain tasks detailed in an addendum for each "service program." Appellee's App. p. 47. The SMA also provided in relevant part:

5. Information To Be Provided By County. The County hereby agrees to provide SRI in a timely manner with all reports, data and information as requested by SRI and further agrees that SRI may rely on all such reports, data and information in performing the services set forth herein and in all addenda made a part hereof.
6. Limitation Of Liability. The County hereby agrees that in no event shall SRI be liable for any loss of profit or indirect, special, incidental or consequential damages as a result of the use by SRI of inaccurate, omitted, erroneous, fraudulent, or other insufficient information supplied to SRI by the County or its agents or employees under this Agreement, or by the actions, fault, failure or negligence of any individual not employed by or a principal of SRI.
7. Right To Contract. SRI and the County each warrant that neither its execution and delivery of this Agreement, nor its performance of the provisions hereof is, or will constitute, a violation on its part of any applicable law or regulation or any contract, indenture or other agreement or relationship to which it is a party or by which it is bound, and each agrees that it will indemnify and save the other harmless from and against any loss, costs, liability, damages or expense by reason of any claim which may be asserted to the contrary by any third party.

Id. at 49. The Addendum describes the tax sale support services that SRI agreed to perform for Grant County and how SRI would be paid for the services. The Workplan went into greater detail regarding the tax sale support services SRI agreed to perform.

[19] In support of M Jewell's argument that it is a third-party beneficiary, M Jewell relies on the indemnity language of the SMA, which provided: "[E]ach agrees that it will indemnify and save the other harmless from and against any loss, costs, liability, damages or expense by reason of any claim which may be asserted to the contrary by any third party." Id. According to M Jewell, this language indicates that Grant County and SRI recognized the possibility of third-party liability. M Jewell argues: "If there is no intent to benefit third parties, i.e., tax sale purchasers, and thus creates that potential for liability, then why is there the need to indemnify for such liability?" Appellant's Br. p. 11.

[20] M Jewell seems to be conflating the concepts of a claim against either Grant County or SRI by a third party with third-party beneficiaries to a contract. To qualify as a third-party beneficiary, M Jewell was required to demonstrate that Grant County and SRI intended to protect tax sale purchasers under the agreement. It is not enough that the performance of the contract would be of an incidental benefit to tax sale purchasers. The language cited by M Jewell merely indicates an intention that the parties indemnify each other; the language does not indicate an intention to benefit tax purchasers under the Agreements. Unlike in Cain , we find no language in the Agreements expressing an intent that Grant County or SRI assume a direct obligation to tax sale purchasers.

[21] None of the Agreements-the SMA, the Addendum, or the Workplan-indicate an intent to benefit tax sale purchasers directly or indirectly. We conclude the trial court properly found that M Jewell was not a third-party beneficiary of the Agreements between Grant County and SRI. See, e.g. , Ayres v. Indian Heights Volunteer Fire Dep't, Inc. , 493 N.E.2d 1229, 1235 (Ind. 1986) (rejecting a third-party beneficiary argument because the "contract entered into between the trustee and the fire department was for the benefit of the residents of [the township] as a whole" and the "obligation was not particularized as to any single resident of the township"); Giles v. Brown Cty. ex rel. its Bd. of Comm'rs , 868 N.E.2d 478, 480 n.3 (Ind. 2007) (noting that Ayres 's "holding remains intact with respect to the contract law third-party beneficiary theory" and holding that the "Brown County Board of Commissioners entered into the contract for ambulance services with Columbus Regional Hospital for the benefit of Brown County as a whole, not for any individual resident of Brown County"). There are no genuine issues of material fact, and SRI is entitled to judgment as a matter of law on M Jewell's third-party beneficiary claim. The trial court properly granted SRI's motion for summary judgment.

[22] Alternatively, even if M Jewell was a third-party beneficiary, we would still conclude that its claim against SRI fails. We agree with the trial court's conclusions that M Jewell's remedy is statutory and that M Jewell has been made whole.

[23] It is a firmly-settled general rule that a purchaser at a tax sale buys at his own risk, and that, if the sale proves ineffectual, he cannot, in the absence of an express statute, recover from the county the money paid by him. The payment is regarded as a voluntary one, and he assumes all risks; for, as in judicial sales, there is no warranty in tax sales. Where an action is brought to recover money paid on the purchase of property at a sale, the party asking that it be refunded must show a statute providing that it shall be paid back to him.

State ex rel. McKenzie v. Casteel , 110 Ind. 174, 11 N.E. 219, 222 (1887). "The remedy for purchasers at invalid tax sales or holders of invalid tax deeds is wholly statutory." Stephenson v. Martin , 84 Ind. 160, 161 (1882). Indiana Code Chapter 6-1.1-25 details the refund procedure where a tax sale is declared invalid. See Ind. Code § 6-1.1-25-11 (discussing refunds where a tax sale is declared invalid after the issuance of a tax deed); Ind. Code § 6-1.1-25-10 (discussing refunds where a tax sale is declared invalid before the issuance of a tax deed).

[24] It is undisputed that M Jewell received $6,997.50 as the statutory refund payment for the real estate. See Appellant's Br. p. 13 (conceding that "M Jewell did receive funds based on the sale being invalidated pursuant to Ind. Code 6-1.1-25-11 from the county"). Despite this payment, M Jewell claims that it is entitled to alleged lost profits in the amount of $784,000.00. M Jewell presents no statutory or common law authority that it is entitled to lost profits rather than the statutory refund amount. M Jewell's proposed damages would create a substantial windfall, and we have held that "the award of damages should not create a windfall for the injured party." Warrick Cty. v. Waste Mgmt. of Evansville , 732 N.E.2d 1255, 1260 (Ind. Ct. App. 2000). M Jewell received the statutory refund of damages. We conclude that, even if M Jewell was a third-party beneficiary of the Agreements between Grant County and SRI, M Jewell has been fully compensated by its receipt of the statutory refund. Again, there are no genuine issues of material fact, and SRI is entitled to judgment as a matter of law on M Jewell's damages claim. The trial court properly granted SRI's motion for summary judgment.

Conclusion

[25] M Jewell is not a third-party beneficiary to the Agreements between Grant County and SRI. Even if M Jewell was a third-party beneficiary, M Jewell has received the statutory compensation to which it is entitled. The trial court properly granted SRI's motion for summary judgment. We affirm.

[26] Affirmed.

Brown, J., and Altice, J., concur.

      The alleged damages were based on "a potential sale price of the property of $7,000.00 per acre" for 112.30 acres. Appellee's App. Vol. II p. 40.

      The court analyzed the relevant part of the policy, which provided:
      COVERAGE C. MEDICAL PAYMENTS
      1. Insuring Agreement.
      a. We will pay medical expenses as described below for "bodily injury" caused by an accident:
      (1) On premises you own or rent;
      (2) On ways next to premises you own or rent; or
      (3) Because of your operations; provided that:
      (1) The accident takes place in the "coverage territory" and during the policy period;
      (2) The expenses are incurred and reported to us within one year of the date of the accident; and
      (3) The injured person submits to examination, at our expense, by physicians of our choice as often as we reasonably require.
      b. We will make these payments regardless of fault. These payments will not exceed the applicable limit of insurance. We will pay reasonable expenses for:
      (1) First aid at the time of an accident;
      (2) Necessary medical, surgical, x-ray and dental services, including prosthetic devices; and
      (3) Necessary ambulance, hospital, professional nursing and funeral services.
      2. Exclusions.
      We will not pay expenses for "bodily injury":
      a. To any insured.
      b. To a person hired to do work for or on behalf of any insured or a tenant of any insured.
      c. To a person injured on that part of premises you own or rent that the person normally occupies.
      d. To a person, whether or not an employee of any insured, if benefits for the "bodily injury" are payable or must be provided under a workers' compensation or disability benefit law or similar law.
      e. To a person injured while taking part in athletics.
      f. Included within the "products-completed operations hazard".
      g. Excluded under Coverage A.
      h. Due to war, whether or not declared, or any act or condition incident to war. War includes civil war, insurrection, rebellion or revolution.
      Cain , 849 N.E.2d at 514-15.

      The court later concluded that, although the customer could sue the insurer as a third-party beneficiary to the medical payments coverage of the insurance contract, the insurer did not owe the customer "a duty of good-faith dealing" and the customer could not "proceed on a tort claim against [the insurer] for failure to deal in good faith." Cain , 849 N.E.2d at 515.


author: Bailey, Judge.

text:
    Nolan CLAYTON, Appellant-Defendant, v. Gregory SMITH, Appellee-Plaintiff.
    Court of Appeals Case No. 18A-CT-705
    Court of Appeals of Indiana.
    Filed October 26, 2018
    Attorneys for Appellant: William H. Kelley, Thaddeus C. Kelley, Kelley Law Offices LLC, Bloomington, Indiana
    Attorneys for Appellee: Ann Marie Waldron, Waldron Law, Indianapolis, Indiana, Michael E. Simmons, Hume Smith Geddes Green & Simmons, LLP, Indianapolis, Indiana
   Bailey, Judge.

Case Summary

[1] Upon the trial of a personal injury action brought by Gregory Smith ("Smith") against Nolan Clayton ("Clayton"), a jury found Clayton liable for $21,000,000.00, and the trial court subsequently awarded Smith a portion of the prejudgment interest he requested. Clayton moved for post-verdict credit for advance payments purportedly made by insurers on his behalf, but the trial court did not contemporaneously reduce the verdict. Clayton appeals, asking that we set aside the judgment entered upon the jury verdict and remand for a new trial. We affirm.

Issues

[2] Clayton presents four issues for review:

I. Whether the trial court abused its discretion in making evidentiary rulings pertaining to prior conduct of Clayton and Smith;
II. Whether the trial court abused its discretion in admitting testimony from Smith's three expert or skilled witnesses;
III. Whether Smith was improperly awarded prejudgment interest; and
IV. Whether Clayton is entitled to post-verdict credit for advance payments.

Facts and Procedural History

[3] Smith and Clayton met as Stacked Pickle co-workers and became friends who socialized a few times per week, typically going to a gym to work out or to bars to drink and watch televised sports. As of February 2016, Smith was the manager of a Stacked Pickle bar in Fishers. He volunteered to work a few hours on the evening of February 17, 2016 at a special event at the Stacked Pickle near downtown Indianapolis. Smith asked Clayton to accompany him and wait while Smith worked.

[4] Smith drove his truck to the Indianapolis Stacked Pickle, with Clayton as his passenger. At that time, it was anticipated that Smith would be driving himself and Clayton home. Smith began his work and Clayton sat down at a bar table. Clayton ordered his first alcoholic drink around 10:30 p.m. About one hour later, Smith was told that there were sufficient employees to cover the special event without him. Smith sat down at Clayton's table and began to consume alcoholic drinks also.

[5] After several hours of drinking, Smith and Clayton apparently realized that they should not drive. They had some discussion about calling a ride-sharing service, but Clayton was unable to get his telephone application to work. Ultimately, a Stacked Pickle employee asked that Smith leave. He and Clayton complied with the request, but both were unable to walk steadily. On the way out, the pair crashed into a hostess stand and broke it. A Stacked Pickle employee locked the door and called for a cab to pick up the men outside.

[6] Smith and Clayton began to bang on the glass and yell that a coat had been left behind. Someone handed a coat out to Smith or Clayton and they moved away from the door. Thereafter, some Stacked Pickle patrons or employees saw Smith and Clayton wrestling around on the pavement, but their words were not audible inside the building. As the summoned cab arrived, Smith's truck passed the cab and headed north. Clayton was the driver and Smith was the passenger. Neither would later remember how Clayton obtained the truck keys or what discussion preceded Clayton taking the wheel.

[7] Minutes later, at around 3:52 a.m. on February 18, Smith's truck crashed into a tree near 10th Street and White River Parkway. Clayton was not seriously injured. However, Smith was ejected from the truck and suffered a broken neck. He was rendered quadriplegic, deprived of sensation below his neck and lacking control of his extremities, other than some limited bicep function. Blood tests revealed that, at 4:52 a.m., Smith's blood alcohol content was 0.245 and, at 6:20 a.m., Clayton's blood alcohol content was 0.208. Clayton was arrested and ultimately pleaded guilty to driving while intoxicated.

[8] Smith had liability coverage through a policy issued by Progressive Southeastern Insurance Company ("Progressive"). Progressive denied that its policy provided bodily injury coverage for a single vehicle accident in which its named insured was the injured party; however, Progressive tendered $5,000.00 for medical payments. Clayton's parents had a policy with Allstate Insurance ("Allstate"). Stacked Pickle was insured by Erie Insurance ("Erie"). Allstate and Erie provided payments to Smith pursuant to settlement agreements. Clayton assigned any cause of action he might have against Progressive, for bad faith or other claims, to Allstate. Additionally, Smith agreed that he would not execute recovery upon Clayton's personal assets.

[9] On June 15, 2016, Smith filed a personal injury complaint against Clayton in Marion County Superior Court, seeking both compensatory and punitive damages. Allstate and Progressive intervened to provide legal representation for Clayton.

Clayton raised a non-party defense, naming Stacked Pickle.

[10] In January of 2017, Progressive filed a declaratory judgment in a Marion County court, seeking a declaration that it had no liability for bodily injury incurred in the single vehicle collision. In the instant matter, the trial court denied motions to stay pending resolution of the declaratory action or to bifurcate the personal injury trial. The matter proceeded to a jury trial on December 4, 2017.

[11] On December 11, 2017, the jury apportioned fault for Smith's injuries: 5% to Stacked Pickle, as a non-party, 35% to Smith, and 60% to Clayton. Smith's damages were found to be $35,000,000.00; accordingly, $21,000,000.00 was Clayton's share. The jury awarded no punitive damages. Smith was granted prejudgment interest in the amount of $714,574.35, providing for a total judgment against Clayton of $21,714,574.35.

[12] Clayton filed a motion to reconsider the award of prejudgment interest and a motion to correct error. Clayton also filed a motion for post-verdict credit for advance payments, seeking $5,000.00 credit for sums paid by Progressive, and seeking credit in an amount equal to the payment received by Smith from Allstate in a confidential settlement. On February 14, 2018, the trial court conducted a hearing on the pending motions. Clayton's motions for reconsideration of prejudgment interest and correction of error were denied. Although the trial court heard argument on Clayton's motion for credit for advance payments, the parties acknowledged that resolution of the declaratory judgment was pending, and ultimately the trial court did not enter an order reducing the jury verdict against Clayton at that time. Clayton now appeals.

Discussion and Decision

Prior Conduct Evidence

[13] Clayton contends that the trial court's evidentiary rulings denied him a fair trial on the matter of liability. Specifically, Clayton observes that the jury - tasked with apportioning fault - learned of his prior bad conduct but did not learn of Smith's criminal history.

[14] During pretrial depositions, Clayton admitted to driving while intoxicated prior to the accident, although he had no alcohol-related arrests or convictions, and Smith admitted to having some criminal history. Smith's criminal history, which he sought to exclude via a motion in limine, consisted of one conviction each for public intoxication, reckless driving, and battery. He was on probation at the time of the accident and one probationary term required that he not consume alcohol in an illegal manner.

[15] A theory of Clayton's defense was that Smith, highly motivated to avoid further legal peril or violation of his probation, must have insisted upon Clayton driving. As such, he argued that the jury might apportion greater fault to Smith if advised of his criminal history. The trial court disagreed with Clayton's relevance argument and granted Smith's motion in limine.

[16] During Smith's case-in-chief, Clayton was called as a witness. He testified that both he and Smith had driven while intoxicated on some prior occasions. Despite defense counsel's contention that Clayton's testimony had "opened the door" to evidence of Smith's criminal history, and the trial court's indication that this "might" have happened, ultimately the criminal history was not admitted into evidence. (Tr. Vol. II, pg. 104.) In sum, the jury heard about Smith's and Clayton's prior uncharged conduct of driving while intoxicated but did not hear about Smith's convictions, one of which was alcohol-related and two of which were allegedly committed while Smith was under the influence of alcohol.

[17] A trial court exercises broad discretion in ruling on the admissibility of evidence, and an appellate court should disturb its ruling only where it is shown that the court abused its discretion. Sims v. Pappas , 73 N.E.3d 700, 705 (Ind. 2017). An abuse of discretion occurs when the trial court's decision is clearly against the logic and effect of the facts and circumstances before the court. Id.

[18] "Evidence is relevant if: (a) it has any tendency to make a fact more or less probable than it would be without the evidence; and (b) the fact is of consequence in determining the action." Ind. R. Evid. 401. Pursuant to Evidence Rule 403, "[t]he court may exclude relevant evidence if its probative value is substantially outweighed by a danger of one or more of the following: unfair prejudice, confusing the issues, misleading the jury, undue delay, or needlessly presenting cumulative evidence." "Although evidence must be relevant to be admissible, not all relevant evidence is admissible." Sims , 73 N.E.3d at 707.

[19] Smith contended that his and Clayton's lack of memory about the choice of driver and the absence of corroboration from bystanders rendered the jury unable to determine whether Smith influenced Clayton to drive. Accordingly, Smith claimed that his prior criminal history was not relevant to the determination of a fact in issue. Clayton argued the criminal history was admissible to show Smith's state of mind and was evidence of his habit. Clayton also argued that the criminal history was relevant to damages, specifically, lost wages, and to punitive damages.

[20] In Sims , our Indiana Supreme Court considered whether and under what circumstances a drunk driver's prior alcohol-related driving convictions could be introduced into evidence. The Court specified that evidence of the driver's prior convictions was "not relevant" with respect to the plaintiff's claims for compensatory damages and loss of consortium, and thus the Court addressed only whether the evidence was relative to the punitive damages claim. 73 N.E.3d at 706.

[21] In performing this narrow review, the Court agreed with the Court of Appeals that "evidence of similar acts may be admissible 'because of the light which it throws on the state of mind of a person, as for example, his knowledge, motive or intent.' " Id. (quoting Lindley v. Oppegaard , 150 Ind.App. 209, 275 N.E.2d 825, 827 (1971) ). The Court concluded that evidence of the driver's two prior similar acts had a tendency to demonstrate whether his conduct at the time of the collision was a conscious and voluntary act committed in reckless disregard of the consequences to others. Id. The evidence was thus relevant within the meaning of Rule 401, but the Court "hasten[ed] to emphasize the evidence was relevant only on the issue of punitive damages." Id. at 706-07.

[22] However, as Clayton observes, the Court left open the question of relevance in other situations:

Amicus curiae Indiana Trial Lawyers Association contends evidence of prior convictions is also relevant on the question of reasonable care and proximate cause, both of which are implicated in determining liability for a negligence claim. The parties do not explore this issue likely because liability was conceded. In similar fashion we decline to explore this issue as well. Instead we leave it open for another day.

Id. at 706, n. 5.

[23] Although Clayton broadly claims that Smith's criminal history was relevant to "throw light on his state of mind," Appellant's Brief at 14, as in Sims , the proximate cause of Smith's injuries was not in dispute. Nor did Clayton claim that he had acted with reasonable care; rather, he admitted some fault but stopped short of conceding that he had greater fault than Smith and non-party Stacked Pickle. As such, the issues of proximate cause and reasonable care were not the contested issues before the jury herein. The jury, which did not award punitive damages, apportioned fault and awarded compensatory damages. Given that our Supreme Court has held that a drunk driver's prior alcohol-related convictions are not relevant to compensatory damages, it would follow that a drunk passenger's prior alcohol-related convictions are not relevant to compensatory damages. That is, Smith did not sustain greater or lesser compensable damages from the collision because he had a criminal history.

[24] Thus, only the narrow question remains as to whether Smith's prior convictions might constitute "state of mind" evidence relevant to the jury's apportionment of fault under the unique circumstances of this case. We are not so persuaded. Arguably, one who had been criminally punished in the past and was actively on probation would be motivated to avoid drunk driving and might insist that another person drive instead. However, there is simply no evidence that Smith did so insist. His criminal history was not relevant to a fact "of consequence in determining the action." Evid. R. 401.

[25] Clayton also claims that, as a matter of fundamental fairness, if Smith's past convictions were excluded, evidence of Clayton's past misconduct should have been excluded. Initially, we observe that Smith and Clayton were not in like positions. Clayton was potentially liable for punitive damages. "Admitting evidence of past similar criminal conduct allows the factfinder to determine whether defendant has learned his lesson and profited by his past experience or whether despite his past experience the defendant nonetheless engaged in a 'conscious, voluntary act or omission in reckless disregard of the consequences to another party.' " Sims , 73 N.E.3d at 709 (quoting N. Ind. Pub. Serv. Co. v. Sharp , 790 N.E.2d 462, 465 (Ind. 2003) ). That said, Smith and Clayton were deemed to be birds of a feather before the eyes of the jury, as to their willingness to drink and drive.

[26] Clayton described his typical social outings with Smith as "we were probably going to the bars a couple nights a week, and he would - would drink a lot. So I mean every - every - a couple days a week, probably, I saw him pretty intoxicated." (Tr. Vol. II, pg. 95.) Subsequently, Clayton admitted that he must have been driving at the time of the collision, although he lacked memory of that, and the following exchange ensued:

Smith's Counsel: Well, you have - before this accident with Greg Smith, you had previously been intoxicated and been out driving vehicles, right?
Clayton: We both had done it together a couple - on a couple different occasions, yes.
Smith's Counsel: But that's not my question. My question is you, had [you] been out previously intoxicated and driving a vehicle, correct?
Clayton's Counsel: Excuse me, Your Honor, I'm going to object.

(Tr. Vol. II, pg. 103.) Clayton's counsel objected only after Clayton explained that both he and Smith had driven while intoxicated and Smith's counsel asked a follow-up, clarifying question. By this point, the jury had heard the evidence of both parties' past misconduct.

[27] Clayton's remedy, albeit limited, would have been to ask for a limiting instruction in accordance with Sims , that is, the jury could have been instructed that they were to consider evidence of Clayton's past misconduct of drunk driving only relative to punitive damages. The request was not made. At bottom, Clayton's argument on appeal is that Smith's past criminal conduct was more egregious than Clayton's and the jury should have heard about it. But Smith's convictions were not relevant and, regardless of relevancy, the jury was informed of Smith's willingness to drink and drive. The jury was not left to apportion fault with a misleading impression that only one of the young men in the truck had such a propensity. Clayton has not demonstrated an abuse of discretion in the trial court's evidentiary rulings in this regard.

Expert or Skilled Witnesses

[28] After pre-trial depositions were taken, Clayton filed a series of motions to exclude or restrict the opinion testimony of three of Smith's anticipated expert or skilled witnesses: "Motion to exclude Plaintiff's expert witness Sara Ford," "Motion to exclude Plaintiff's expert witness Ralph M. Buschbacher, M.D.," and "Motion to exclude certain testimony of Plaintiff's expert witness Debra E. Berens." (Appellant's App. at 159, 174, 204.) The trial court denied each of the motions; Clayton lodged continuing objections at trial based upon the grounds enumerated in his pretrial motions and now argues that the trial court abused its discretion by permitting the introduction of all or a portion of each challenged expert's testimony.

[29] Clayton's motion to exclude witness Sara Ford ("Ford"), a vocational economist, addressed alleged deficiencies brought to light in Ford's deposition testimony. Ford had opined that Smith was 100% disabled and concluded that he suffered a lifetime loss of earning totaling $2,150,684.00. Clayton argued that Ford had made a bald assertion as to total disability, based upon incomplete information and faulty logic. Allegedly, Ford "failed to provide an adequate foundation for her opinion that Plaintiff is 100% occupationally disabled since she reviewed an insufficient amount of data, she did not review data specific to Plaintiff's local job market, and because she used boilerplate language in her report not tailored to the Plaintiff." (Id. at 162.) Clayton contended that Ford had reviewed out-of-date medical records and strenuously suggested that Ford's determination of 100% vocational disability was suspect because it was not based upon a physician's like assessment or a medical records notation of 100% disability. Clayton also alleged that Ford had ignored Smith's expressed desire to return to work and aspects of his education and work history.

[30] The trial court permitted Ford to testify and she opined that Smith was 100% occupationally disabled, and she further testified that his lost earnings amounted to $2,150,684.00 (based upon his managerial earnings at the time of the collision multiplied by 30.7 work years). On appeal, Clayton renews his argument that Ford "failed to provide an adequate foundation for her opinion that plaintiff is 100% occupationally disabled as she did not review a sufficient amount of data, she did not review data specific to plaintiff's local job market, and because she used boilerplate language in her report that was not tailored to plaintiff." Appellant's Brief at 28.

[31] The trial court acts as the gatekeeper when determining the admissibility of opinion evidence under Indiana Evidence Rule 702. Summerhill v. Klauer , 49 N.E.3d 175, 180 (Ind. Ct. App. 2015). Evidence Rule 702 provides:

(a) A witness who is qualified as an expert by knowledge, skill, experience, training, or education may testify in the form of an opinion or otherwise if the expert's scientific, technical, or other specialized knowledge will help the trier of fact to understand the evidence or to determine a fact in issue.
(b) Expert scientific testimony is admissible only if the court is satisfied that the expert testimony rests upon reliable scientific principles.

Under this rule, a witness may be qualified as an expert by only one of the enumerated characteristics: knowledge, skill, experience, training, or education. Kubsch v. State , 784 N.E.2d 905, 921 (Ind. 2003). "It is within the trial court's sound discretion to decide whether a person qualifies as an expert witness." Id.

[32] Expert scientific testimony is admissible only if the court is satisfied that the scientific principles upon which the expert testimony rests are reliable, and the court determines admissibility under 702(b) by considering the factors discussed in Daubert v. Merrell Dow Pharm., Inc. , 509 U.S. 579, 113 S.Ct. 2786, 125 L.Ed.2d 469 (1993). Id. A witness not qualified to offer expert testimony under Evidence Rule 702 may be qualified as a "skilled witness" or "skilled lay observer." Id. at 922. A skilled witness has a degree of knowledge that falls short of being declared an expert under Rule 702, but somewhat beyond that possessed by ordinary jurors. Id. Pursuant to Indiana Evidence Rule 701, a skilled witness may provide an opinion or inference that is "(a) rationally based on the witness's perception; and (b) helpful to a clear understanding of the witness's testimony or to a determination of a fact in issue."

[33] Clayton has not challenged Ford's credentials or qualifications to present expert or skilled witness testimony. Rather, he criticized the thoroughness of her research and observed that her assessment of 100% vocational disability had not been echoed by a physician. However, "[o]nce the admissibility of the expert's opinion is established under Rule 702, 'then the accuracy, consistency, and credibility of the expert's opinions may properly be left to vigorous cross-examination, presentation of contrary evidence, argument of counsel, and resolution by the trier of fact.' " Estate of Borgwald v. Old Nat'l Bank , 12 N.E.3d 252, 257 (Ind. Ct. App. 2014) (quoting Sears Roebuck & Co. v. Manuilov , 742 N.E.2d 453, 460 (Ind. 2001) ).

[34] Clayton subjected Ford's methodology and conclusions to vigorous cross-examination. Confronted with the knowledge that she alone had assigned the fixed, maximum 100% numeric value, Ford testified that she had heavily relied upon the fact that Smith could not use his hands to perform a task. Clayton takes issue with the breadth of Ford's research, the methodology used to forecast lost wages, and the purported lack of corroboration of her definitive conclusion. Such arguments go to the weight of the opinion testimony as opposed to its admissibility. Clayton has not demonstrated that the trial court abused its discretion by permitting Ford to testify.

[35] Regarding Dr. Buschbacher's anticipated testimony, Clayton filed a motion to exclude him as a witness, but substantively the motion sought exclusion of specific areas of testimony. That is, based upon Dr. Buschbacher's deposition testimony, Clayton considered discussion of nine potential health risks to "constitute speculation." (App. Vol. III, pg. 177.) Prior to and at trial, Clayton sought to exclude testimony he characterized as "nine opinions issued by [Dr.] Buschbacher." Id.

[36] At trial, Dr. Buschbacher described Smith's then-current medical conditions and diagnoses; that is, Smith had sustained a permanent spinal cord injury at the neck level, with poor prognosis for improvement, with attendant brain injury, spasticity, shoulder pain, and depression. He was intellectually normal. In Dr. Buschbacher's opinion, Smith had a reduction in his life expectancy of twenty years.

[37] Over Clayton's objection, Dr. Buschbacher was permitted to describe "potential complications" of Smith's quadriplegia. (Tr. Vol. IV, pg. 57.) As for conditions for which Smith was thought to be at risk, these included complications from pressure sores, syringomyelia (enlargement of a tiny tube in the center of the spinal cord), megacolon (which could require a colostomy ), renal failure, deep vein thrombosis, abnormal bone growth, accelerated cervical degenerative joint disease, cardiovascular disease /abnormalities, and orthostatic hypotension.

[38] Clayton did not challenge Dr. Buschbacher's qualifications to examine Smith, to draw conclusions based upon a reasonable medical certainty, or to assist the jury in understanding Smith's diagnosis, prognosis, and risk factors. In short, Clayton did not contest Dr. Buschbacher's qualifications as a medical expert. Rather, Clayton sought to tailor the expert testimony to exclude testimony about certain risks relatively unlikely to occur.

[39] On appeal, Clayton observes that Dr. Buschbacher made certain admissions, such as: it is more likely than not that Clayton would not suffer from cardiovascular disease, predictably all persons suffer some joint degeneration in time, the chances of a bone infection, deep vein thrombosis, or syringomyelia are low, proper care could lessen the chance of renal failure to less than 10%, the occurrence of megacolon is less than 10%, and it is impossible to predict a specific risk of abnormal bone growth. These observations illustrate that Dr. Buschbacher's testimony was indeed subjected to vigorous testing of its accuracy, consistency and credibility. Dr. Buschbacher did not simply speculate as to whether some risks existed; rather, he testified that, based upon his training and experience, some risks were present to a reasonable degree of medical certainty. He explained the chances that some conditions would manifest was low, some were hard to predict, and, as to at least one risk, it could not be known. Dr. Buschbacher did not offer a medical opinion based upon mere speculation nor did the trial court ignore its gatekeeping function. Clayton's arguments are directed to the weight of the evidence and not its admissibility.

[40] Finally, in his pre-trial motion, Clayton sought to exclude testimony from Debra Berens, Ph.D. ("Berens"), a life care planner, "regarding the opinions that rely on the expert opinion of an economist as they lack foundation." (App. Vol. III, pg. 205.) Berens testified that she had reviewed Smith's medical records, researched costs for services, and compiled a life care plan inclusive of such expenses as home modifications, wheelchair replacement, massage therapy, medications, psychological services, transportation, and medical care. She explained the origins of assigned costs; for example, psychological and medical providers "have been billing at that rate." (Tr. Vol. IV, pg. 136.) Some costs were derived from a national database; she looked to a Veterans Administration estimate for wheelchair accessibility home modification costs. She used current actual medication costs. Berens conceded that she "deferred to an economist for some present value calculations," Id. at 214, and some costs were neither adjusted for inflation nor reduced to present value. Generally, Berens used current costs multiplied by life expectancy and she suggested that "a layperson could add up" the total once costs were assigned. Id. at 215.

[41] The thrust of Clayton's appellate argument is that "the opinions in question admittedly require an economist and no economist testified to support the plan" and thus "Berens' report and testimony is her own admission unsupported and lack[ing] foundation and should have been excluded." Appellant's Brief at 35. He also makes a bald assertion that, as to each expense, a "personal injury" litigant "would only be entitled to the present value of the aforementioned items under Indiana law." Appellant's Brief at 34. "Present value" has been defined as representing the present value of a sum of money to be paid over a period of years, with the discounted award consisting of an amount which would be invested to yield the future sum. Ind. Bureau of Motor Vehicles v. Ash, Inc. , 895 N.E.2d 359, 368 (Ind. Ct. App. 2008). Although evidence of present value may assist the trier of fact in the determination of a reasonable award, it is not essential to an award of damages. Id.

[42] At bottom, Clayton's position is that Berens did not offer specialized knowledge that could help the jury understand the evidence because she is not an economist. However, Clayton does not provide authority for the propositions that only an economist can project future aggregate costs or that each individual cost must be reduced to present value for presentment to the jury. Indeed, we have acknowledged that, although present value is generally a proper consideration in determining an appropriate award, "an awareness of general inflation and a constant depreciation and cheapening of money lies within the zone of discretion given to the trier of fact in the assessment of damages." Griffin v. Acker , 659 N.E.2d 659, 663 (Ind. Ct. App. 1995). Clayton's preference for testimony from an economist expressed uniformly in present day values is directed to the weight of the evidence. Again, he has not demonstrated that the trial court abused its discretion by refusing to exclude Dr. Berens as a skilled witness.

Award of Prejudgment Interest

[43] Clayton next argues that Smith was ineligible for prejudgment interest because he failed to satisfy the statutory prerequisite of making a written offer of settlement to Clayton under the Tort Prejudgment Interest Statute, Indiana Code Sections 34-51-4-1 to -9 ("the TPIS"). Clayton acknowledges that Smith sent a letter to counsel who had been retained by Progressive to pursue a declaratory judgment but asserts that the only written offer of settlement in the tort action was addressed to Allstate's counsel.

[44] Pursuant to Indiana Code Section 34-51-4-6, the chapter providing for prejudgment interest does not apply if:

(1) within one (1) year after a claim is filed in the court, or any longer period determined by the court to be necessary upon a showing of good cause, the party who filed the claim fails to make a written offer of settlement to the party or parties against whom the claim is filed;
(2) the terms of the offer fail to provide for payment of the settlement offer within sixty (60) days after the offer is accepted; or
(3) the amount of the offer exceeds one and one-third (1 1/3) of the amount of the judgment awarded.

[45] "A prerequisite to the recovery of prejudgment interest is a settlement letter." Alsheik v. Guerrero , 979 N.E.2d 151, 154 (Ind. 2012). Its purpose is to afford the adverse party with notice of a claim and to provide them with an opportunity to engage in meaningful settlement. Id. The letter must contain the appropriate time-limiting language and the letter must be timely sent. Id.

[46] Smith filed suit against Clayton on June 15, 2016. On July 18, 2016, Randall Degan ("Degan") entered an appearance on behalf of Clayton and filed an answer. Degan had been retained by Allstate (who insured Clayton pursuant to his parents' insurance policy) to provide a defense for Clayton. On September 28, 2016, Smith sent a Time-Limited Settlement Demand addressed to Degan. Although Degan would subsequently be permitted to withdraw his representation, he was counsel of record for Clayton at that time. Progressive was then denying coverage; counsel retained by Progressive entered an appearance on Clayton's behalf on November 9, 2016.

[47] On March 9, 2017, Smith sent a Time-Limited Settlement Demand addressed to Thomas Vetne, counsel for Progressive who had entered an appearance in the declaratory judgment action. The demand letter stated in part:

Your client ... Progressive is defending Clayton in the personal injury action pending in the Marion County Superior Court ... Cause number 49D14-1606-CT-021431; and has also initiated a Declaratory Judgment action [in] which you are representing Progressive in the Marion County Superior Court ... cause number 49D02-1701-PL-002865. Because of the dual ongoing litigation and the time and expense which will be incurred in pursuing both lawsuits, it would seem appropriate to discuss settlement of Progressive's exposure prior to incurring those costs.

(Appellee's App. Vol. II, pg. 107.)

[48] The TPIS requires that a compliant demand for settlement be made to the party or parties against whom the claim is filed. Here, the trial court found that Clayton received the requisite statutory settlement demand. Our review of the record indicates that, on September 28, 2016, Smith complied with the TPIS by making a demand for settlement upon Clayton, the sole defendant in this tort claim, through his counsel of record on that date. The sole defendant having been timely made aware of a demand for settlement, the TPIS does not require that additional entities be served with a demand letter. The trial court did not err in concluding that Smith was eligible for an award of prejudgment interest under the TPIS.

Motion for Post-Verdict Credit

[49] In July of 2016, Smith forwarded medical bills to a Progressive claims adjuster and requested confirmation of receipt of the bills. A Progressive claims representative responded via e-mail: "To my knowledge, there is no bodily injury on this claim as it is a single vehicle accident. There is $5,000.00 of medical payments available and once that is exhausted health insurance will pick up." (Appellee's App. Vol. II, pg. 52.) Thereafter, Progressive paid out the sum of $5,000.00.

[50] Post-trial, Clayton asserted that he was entitled to a $5,000.00 reduction of the jury award due to the Progressive payment, pursuant to Indiana Code chapter 34-44-2, which governs advance payments in a personal injury case.

[51] Indiana Code Section 34-44-2-1 provides:

(a) This chapter applies to an action brought to recover damages for:
(1) personal injuries;
(2) wrongful death; or
(3) property damage.
(b) This chapter does not apply to actions in which there is more than one (1) defendant.

[52] Indiana Code Section 34-44-2-3 provides:

If it is determined that the plaintiff is entitled to recover in an action described in section 1 of this chapter:
(1) the defendant may introduce evidence of any advance payment made; and
(2) the court shall reduce the award to the plaintiff to the extent that the award includes an amount paid by the advance payment.

[53] The purpose of the advance payment statute is to prevent double recovery if an advance payment has been made to a plaintiff by a defendant's insurance company. Nealy v. Am. Family Mut. Ins. Co. , 910 N.E.2d 842, 846 (Ind. Ct. App. 2009), trans. denied . Apart from the advance payment statute, some policies include an explicit provision for a setoff of medical expense payments. Id. at 848. Where a policy permits an insurer to offset payments under medical coverage against payments under liability coverage, the insurer has the burden of establishing that a liability judgment actually included the advanced medical expenses, and no offset will be allowed where it does not sustain this burden. Crabtree ex rel. Kemp v. Estate of Crabtree , 837 N.E.2d 135, 142 (Ind. 2005).

[54] A typical case involving advance payments is one with an injured plaintiff in one vehicle and a tortfeasor in another, with medical payments coverage supplied by the insurer of the plaintiff's car and the relevant liability coverage insured by the tortfeasor's insurer. Nealy , 910 N.E.2d at 845. In that case, an "advance payment" is one advanced by the tortfeasor's insurer as, in effect, an interim payment of potential damages for which the tortfeasor may be liable. Crabtree , 837 N.E.2d at 140. Reducing a judgment by the amount of an advance payment eliminates exposure of the defendant against whom the judgment is entered (as opposed to his insurer) to the amount already paid by the insurer. Id. The statutory definition of "advance payment" only encompasses a payment made by a defendant or the defendant's insurance company. Nealy , 910 N.E.2d at 846.

[55] Here, the jury heard evidence of tortious conduct and determined that Clayton was liable to Smith. However, although Progressive provided a defense to Clayton, it did so under a reservation of rights. Progressive denied that it had an obligation to pay compensation arising from Clayton's tortious conduct. Given that the declaratory judgment was pending at the time of the post-trial hearing in this personal injury action, it had not been judicially determined that Progressive had any duty to Clayton. It had not been established that Progressive was or was not defendant Clayton's insurer. "The [advance payments] statute provides simply that payment by the defendant or his insurance company will be treated as advance payments thus reducing any judgment to the extent that the award includes an amount paid by the advance payment."

Crabtree , 837 N.E.2d at 142. Here, the trial court was not obliged, upon argument of counsel and in the absence of further factual development, to reduce the jury verdict under the advance payment statute by the $5,000.00 tendered by Progressive.

[56] Clayton also summarily claimed, at the post-trial hearing, that sums paid by Allstate to Smith pursuant to a confidential settlement should be treated, in their entirety, as advance payments offsetting the verdict. On appeal, Progressive asserts that Clayton was Allstate's insured and any payment to Smith from Allstate was to limit Clayton's liability in the tort action. Smith responds that Clayton's motion for set-off was premature and there has been no factual development as to the nature and extent of claims settled in the Allstate-Smith-Clayton settlement. However, Smith seems to concede that the automobile bodily injury liability limits of the Allstate policy ($100,000.00) could likely in future litigation be deemed an advance payment to Smith on behalf of Clayton.

[57] As we have previously observed, the declaratory judgment action was pending when the trial court conducted the post-trial hearing in the personal injury case. At that hearing, argument of counsel was heard but no additional evidence was introduced. As such, we agree with Smith that Clayton did not establish his entitlement to have the jury verdict reduced at that hearing.

Conclusion

[58] Clayton did not demonstrate an abuse of the trial court's discretion in its evidentiary rulings. The trial court did not err in finding the prejudgment interest statute to be applicable. Clayton did not establish entitlement to a contemporaneous reduction of the jury verdict under the advance payment statute.

[59] Affirmed.

Mathias, J., and Bradford, J., concur.

      A declaratory judgment action involving one or more of the insurers was pending in another court.

      Ultimately, at least eight attorneys entered an appearance to represent a party or an intervenor.

      Smith requested preclusion of:
      Any evidence, questions, or remarks pertaining to Plaintiff's driving record, criminal arrests, criminal charges and/or convictions, or the underlying facts related thereto; and
      Any evidence, questions, or remarks related to criminal arrests, charges or convictions, including civil infractions, of Plaintiff which are not otherwise admissible under Rule of Evidence 609.
      (Appellee's App. Vol. II, pg. 7.)

      Clayton did not seek to introduce evidence of the prior convictions to impeach Smith's testimony. Indiana Evidence Rule 609 provides the general rule and limitation in such instances: "For the purpose of attacking the credibility of a witness, evidence that the witness has been convicted of a crime or an attempt of a crime must be admitted but only if the crime committed or attempted is (1) murder, treason, rape, robbery, kidnapping, burglary, arson, or criminal confinement; or (2) a crime involving dishonesty or false statement, including perjury."

      To prevail on a punitive damages claim, the plaintiff must show that the defendant subjected another person to probable injury, with an awareness of such impending danger and with heedless indifference of the consequences. Sims , 73 N.E.3d at 706. The tortious conduct must be marked by malice, fraud, gross negligence, or oppressiveness that is not the result of mistake of law or fact, honest judgment error, overzealousness, mere negligence or other such noniniquitous human failing. Id.

      Clayton theorized that, had Smith not been injured, Stacked Pickle management may have fired him for his drunken behavior at a company location and then argued that his lost wages could be correspondingly reduced by the jury. This theory, not based upon the actual events, is speculative. Moreover, as our Supreme Court has found prior criminal history irrelevant to compensatory damages, we are not free to carve out an exception for wages.

      Having determined the lack of relevance to a fact of consequence in determining the action, we do not address Clayton's argument that Smith's criminal convictions constituted evidence of his habitual conduct of drinking and getting into trouble or the argument that Smith's criminal history was somehow relevant to a determination of the punitive damages claim against Clayton.

      Clayton also testified that Smith "would get a little aggressive when he would drink." (Tr. Vol. II, pg. 160.)

      Although Ford was the sole witness to state that Smith has a total vocational disability, there was not a total absence of corroboration. Dr. Scott Shapiro testified that Smith's spinal cord injuries were so extensive that he retained only some bicep function. Dr. Julie Chow testified that Smith was classified as quadriplegic. Dr. Ralph Buschbacher testified that Smith's injuries were permanent and prognosis for improvement was poor. According to Dr. Buschbacher, Smith was "not a candidate for employment" and was "truly unemployable." (Tr. Vol. IV, pg. 56.) He opined that there was an 85% to 90% chance that Smith would not be gainfully employed. Smith's mother testified that his health was not stable enough to permit him to go back to school and that he needed a caregiver to leave home.

      Dr. Buschbacher had examined Smith but was not one of his treating physicians.

      Dr. Buschbacher clarified that he was more than 50% certain that Smith was at risk for complications, but this did not mean that Smith more than likely would experience a particular complication.

      Dr. Buschbacher differentiated between risks less likely to occur and those very likely to occur. For example, he opined that all persons who have suffered a spinal cord injury lose bone mass and that there was a very high risk of osteoporosis or osteoporatic fracture below the spinal injury site.

      At the hearing on motion to correct error, Clayton's counsel acknowledged that "[Smith] gave a letter to Allstate's counsel, or defendant Clayton's counsel through Allstate," but argued that "[he] did not give one to counsel for Clayton for Progressive. So, they offered to settle with Allstate. Again, it wasn't a full and complete settlement." (Tr. Vol. IV, pg. 214.)

      There was some discussion, in a bench conference, regarding an insurance policy and whether counsel had been provided with a copy. In any event, no testimony was elicited at the hearing and no evidentiary exhibits were formally admitted into evidence.

      At the post-trial hearing, Smith acknowledged that Clayton had been partially released but also asserted that Allstate had been released upon any claim that Clayton might have for negligent or wrongful claims handling. Clayton assigned to Allstate any claim that he might have against Progressive.