ATTORNEY FOR APPELLANT:
JACK E. ROEBEL
Fort Wayne, Indiana
COURT OF APPEALS OF INDIANA
WW EXTENDED CARE, INC., )
Appellant-Plaintiff, ) )
MARY SWINKUNAS, )
Defendant, ) No. 02A03-0109-CV-302
JOHN RUSHINSKY and )
MARIA RUSHINSKY, )
APPEAL FROM THE ALLEN CIRCUIT COURT
The Honorable Stanley A. Levine, Special Judge
Cause No. 02C01-9711-MI-133
March 19, 2002
WW Extended Care, Inc., (Extended Care) appeals the trial courts denial of its
motion to correct errors and raises several issues which we consolidate and restate
as: 1) whether Judge Levine lacked jurisdiction to rule on Extended Cares
verified motion for proceedings supplemental; and 2) whether the trial court properly assigned
the burden of proof to Extended Care to show that the appellees-garnishees-defendants, John
and Maria Rushinsky (the Rushinskys), breached their fiduciary duty as attorneys-in-fact to defendant
Extended Care obtained a judgment in Ohio state court against Mary Swinkunas for
$35,667.82, an amount that Swinkunas owed in connection with nursing home services provided
by Extended Care. On June 8, 1998, the Allen Circuit Court domesticated
the judgment. To satisfy its judgment against Swinkunas, on August 5, 1998,
Extended Care filed a Verified Motion for Proceedings Supplemental, naming the Rushinskys as
garnishees-defendants. John Rushinsky is Swinkunass son, and he and his wife,
Maria, were Swinkunass attorneys-in-fact for health care powers.
The proceedings supplemental hearing was conducted on March 10, 2000, before Special Judge
Pro Tem Kathryn A. Brogan.
Following the conclusion of Extended
Cares case-in-chief, Judge Brogan ordered the Rushinskys to file a complete accounting of
all Swinkunass funds and property over which they exercised control as attorneys-in-fact.
Special Judge Levine accepted jurisdiction over this case in May 2000. On
June 28, 2000, he ordered the Rushinskys to complete the accounting and ordered
Extended Care to pay the associated costs. In response to the
trial courts order, Extended Care filed a motion to correct errors on July
7, 2000. Extended Cares motion alleged that Judge Levine lacked jurisdiction
to issue the June 28, 2000 order and that he erred in shifting
the costs of the accounting from the Rushinskys to itself.
On August 28, 2000, Judge Levine granted Extended Cares motion to correct errors
to the extent that he amended his June 28, 2000 order to require
the Rushinskys to complete the accounting but no longer required Extended Care to
bear the associated costs. Judge Levine did not rule on the issue
of his jurisdiction.
The Rushinskys filed their Accounting Report on October 16, 2000. Shortly
thereafter, on November 1, 2000, Extended Care filed a motion for default judgment.
In its motion, Extended Care alleged that 1) the Rushinskys had breached
their fiduciary duty to Swinkunas because they had not properly accounted for the
money they had administered for her, and 2) it had a derivative right,
as a creditor of Swinkunass, to pursue a defalcation judgment in her name.
Specifically, Extended Care claimed that the Rushinskys had breached their fiduciary duty
to keep complete records of all transactions entered into on Swinkunass behalf, because
they failed to identify the source of certain income and failed to explain
the purpose of certain expenditures and cash withdrawals.
Judge Levine conducted a hearing on Extended Cares motion for default judgment on
April 23, 2001. He subsequently denied the motion on May 29, 2001.
In so doing, Judge Levine found, among other things, that:
While said accounting reveals a number of checks written for either cash, or
legal advise, [sic] which were for a thousand dollars or more, all of
said checks were written prior to the filing of Proceedings Supplementary to Execution
in this matter.
One manner in which Plaintiff would be entitled to moneys written to said
Garnishee Defendants prior to judgment and/or prior to the filings of Proceedings Supplementary
to Execution would be to deem said payments as fraudulent transfers.
Appellants App. at 132. He then concluded that Extended Care bore
the burden of proving that any transfers of money to the Rushinskys were
fraudulent, and that Extended Care had not met its burden of proof.
Extended Care filed a motion to correct errors on June 22, 2001, alleging
that Judge Levine had confused its claim. Specifically, Extended Care stated
that it had never contended that the payments to the Rushinskys were fraudulent.
Rather, its contention was that the Rushinskys had breached their fiduciary
obligation to Swinkunas by failing to keep complete records and properly account for
the monies they had expended on her behalf.
On August 10, 2001, Judge Levine issued an order modifying his original judgment.
In his order, he again found that the checks in question
were written prior to the filing of the proceedings supplemental and that the
Rushinskys possessed no property of Swinkunass at the time of the filing.
In addition, he found that counsel for Extended Care had never reviewed the
cancelled checks and other documents that the Rushinskys filed to support the accounting.
He also found that at the default judgment hearing Extended Care had
elicited no testimony from the Rushinskys regarding any of the items they filed
in the accounting. Thus, he concluded that Extended Care had not met
its burden of establishing a breach of fiduciary duty on the part of
the Rushinskys. Extended Care now appeals from the denial of its
motion to correct errors.
DISCUSSION AND DECISION
I. Standard of Review
We note at the outset that the Rushinskys have failed to file an
appellees brief. In such a situation, the reviewing court does not undertake
the burden of developing arguments for the appellees. White v. Porter County
Treasurer, 671 N.E.2d 1196, 1197 (Ind. Ct. App. 1996). Applying a less
stringent standard of review with respect to showings of reversible error, we may
reverse the lower court if the appellant can establish prima facie error.
Id. When, as here, we are presented with an alleged error
of law, our review is de novo. Halteman Swim Club v. Duguid,
757 N.E.2d 1017, 1020 (Ind. Ct. App. 2001).
II. Extended Cares Claims
Extended Care first claims that Judge Levine lacked jurisdiction to rule on its
verified motion for proceedings supplemental. Specifically, Extended Care asserts that
Judge Levine improperly assumed jurisdiction over the evidentiary phase of the proceedings supplemental
rather than permitting Judge Brogan to conclude the evidentiary hearing and rule on
the cause as required by Ind.Trial Rule 63. That rule provides in
relevant part, that the judge who presides at an evidentiary hearing shall, if
possible, hear motions and make all decisions and rulings required to be made
. . . relating to the evidence and conduct of the hearing after
it is concluded. T.R. 63.
We note that Extended Care did not raise the issue of Judge Levines
jurisdiction in its June 22, 2001 motion to correct error, which is the
subject of this appeal. Appellants App. at 134-35. Rather, Extended Care
raised the issue of Judge Levines lack of jurisdiction in an earlier motion
to correct error it filed on July 7, 2000. Appellants App.
at 71. The July 7, 2000 motion challenged Judge Levines authority to
issue the June 28, 2000 order in which he shifted the costs of
the accounting from the Rushinskys to Extended Care. Appellants App. at
71. Specifically, Extended Care alleged that Judge Levine lacked jurisdiction to issue
the June 28, 2000, order according to T.R. 63, and that he erred
in requiring Extended Care to pay the accounting costs. Appellants App. at
71, 74. On August 28, 2000, Judge Levine granted Extended Cares
motion to correct error to the extent that he no longer required Extended
Care to pay the costs of accounting; however, he did not rule on
the jurisdictional issue. Appellants App. at 80-81.
When a party opts to file a motion to correct error, the notice
of appeal must be filed within thirty days from either the date that
the trial court rules upon the motion to correct error or the date
that the motion is deemed denied. Ind.Trial Rule 53.3(A).
A motion to correct error is deemed denied as a matter
of law if the trial court fails to rule upon it within thirty
days after it was heard or forty-five days after it was filed.
T.R. 53.3(A). The timely filing of a notice of appeal
is a jurisdictional prerequisite, and failure to conform within the applicable time limits
results in forfeiture of the appeal. Ostertag v. Ostertag, 755 N.E.2d 686, 687
(Ind. Ct. App. 2001).
When Judge Levine failed to rule on the jurisdictional issue within forty-five days
after Extended Care filed its July 7, 2000, motion to correct error, that
issue was deemed denied. See T.R. 53.3(A). Extended Care then
had thirty days from August 21, 2000the date that it was deemed deniedto
file a notice of appeal.
However, Extended Care failed to file a
notice of appeal with respect to the July 7, 2000 motion to correct
error. Having failed to file such an appeal, Extended Care has waived
that issue for appellate review and may not raise it belatedly in its
appeal of Judge Levines ruling on its June 22, 2001 motion to correct
error. See Ostertag, 755 N.E.2d at 687; Ind.Appellate Rules 5(A), 2(H)
(An appeal may be taken from final appealable orders and judgments, and a
judgment is final, among other things, if it is deemed final by law.).
Extended Care next contends that the trial court improperly assigned it the burden
of proving that the Rushinskys breached their fiduciary duty by failing to properly
account to Swinkunas for the monies they administered as her attorneys-in-fact. According
to Extended Care, such burden is insurmountable because the accounting report contains unexplained
discrepancies with respect to the source of certain income and the purpose of
certain expenditures and cash withdrawals. Appellants brief at 14-15.
Thus, Extended Care urges that the burden should properly be placed on the
Rushinskys to explain these discrepancies and to prove that the transactions were legitimate.
Extended Care asserts that if the Rushinskys are unable to account
for the transactions in question, they are liable to it in garnishment.
Appellants App. at 18.
In addressing Extended Cares claim, we note that the Indiana Power of Attorney
Act (the Act) requires an attorney-in-fact to use due care for the benefit
of the principal and to act in a fiduciary capacity. See
Ind. Code §§ 30-5-6-2, 3. The Act also provides that the attorney-in-fact
is only liable under the powers granted in I.C. §§ 30-5-5-16 and 17
(the healthcare powers) if the attorney-in-fact acted in bad faith. I.C. §
30-5-9-1. One of the duties of the attorney-in-fact is to
keep complete records of all transactions entered into . . . on behalf
of the principal. See I.C. § 30-5-6-4(a). However, the
attorney-in-fact is not required to render a written accounting with respect to those
transactions unless ordered to do so by a court or requested to do
so by certain statutorily authorized parties. See I.C. § 30-5-6-4(a).
Where the exercise of an attorney-in-facts powers are brought into question, the burden
of proof is ordinarily on the party asserting breach of fiduciary duty to
establish such breach. Villanella v. Godbey, 632 N.E.2d 786, 790 (Ind.
Ct. App. 1994). However, if the questionable transactions benefited the attorney-in-fact as
agent of the principal,
Indiana law imposes a presumption of undue influence and
fraudulent transfer. The burden of proof [then] shifts to the agent who
must demonstrate by clear and unequivocal evidence that he or she acted in
good faith and did not take advantage of [the] trusted relationship. Diane
L. Liptack, Curbing Power-of-Attorney Abuse, 42 Res Gestae 14, 14 (1999) (citing Villanella,
632 N.E.2d at 790 (determining that power of attorney in great-nephew created fiduciary
relationship between him and his great-aunt, and this relationship coupled with inter vivos
transfer of large sums of cash and real property for nominal or no
consideration, gave rise to presumption of undue influence and fraudulent transfer)); see also
Dotlich v. Dotlich, 475 N.E.2d 331, 342 (Ind. Ct. App. 1985) (stating that
[o]nce it is established that one with a fiduciary duty has attempted to
benefit from a questioned transaction, the law presumes fraud and the burden of
proof then shifts to the fiduciary to overcome the presumption by showing that
his actions were honest and in good faith), trans. denied, but abrogated on
other grounds by State Bd. of Tax Commrs v. Town of St. John,
751 N.E.2d 657 (Ind. 2001).
In this instance, Extended Care does not contend that the transactions the Rushinskys
made on Swinkunass behalf constituted fraudulent transfers
and it does not allege that
the purported breach of fiduciary duty inured to the Rushinskys benefit. Rather,
Extended Cares claim that the Rushinskys have breached their fiduciary duty to Swinkunas
is based solely upon their failure to maintain complete records and to properly
account for the monies in their possession during their tenure as [her] attorney-in-fact.
Appellants brief at 14. Thus, the burden of proving a
breach of fiduciary duty based on the accounting claims remains squarely with Extended
To the extent that Extended Care urges that the Rushinskys should be
required to explain the alleged discrepancies in their accounting, we note that Extended
Care had the opportunity at the default judgment hearing to extensively examine the
Rushinskys regarding their administration of Swinkunass funds. Nevertheless, it appears from
the trial courts finding that Extended Care failed to take advantage of that
opportunity and elicited no testimony from the Rushinskys regarding any items filed in
This court will not compensate Extended Care for its failure to examine the
Rushinskys about alleged discrepancies in their accounting by shifting the burden of proof.
Moreover, it was within the trial courts discretion to determine
from the evidence before it that the accounting report was credible.
Thus, we conclude that the trial court properly assigned the burden of proof
to Extended Care to show that Rushinskys breached their fiduciary duty as attorneys-in-fact
NAJAM, J., and MATTINGLY-MAY, J., concur.
Judge Norman E. Baker was originally appointed to hear the
case but recused himself. Judge Paul D. Mathias was then appointed Special
Judge, but was unavailable to conduct the hearing on Extended Cares motion for
proceedings supplemental. Consequently, Kathryn A. Brogan was appointed as Special Judge Pro
Tem to act in his stead. Appellants App. at 8, 15.
Judge Mathias subsequently recused himself from this case on March 29, 2000, when
he was appointed as a Judge to this court. Appellants App. at
8. Judge Stanley A. Levine was then selected as the Special Judge
on April 20, 2000, and he accepted jurisdiction over this case on May
8, 2000. Appellants App. at 7.
Footnote: This order was entered nunc pro tunc on August 10,
We note that when Judge Levine granted Extended Cares motion
to correct errors in part on August 28, 2000, he did so after
expiration of the time limits prescribed in T.R. 53.3(A). Thus, while he
granted the July 20, 2000, motion to the extent that he required the
Rushinskys to bear the costs of the accounting, the motion was already deemed
denied. However, our supreme court has determined that a grant of
a motion to correct error after expiration of the prescribed time limits is
not necessarily a nullity, but rather is voidable and subject to enforcement of
the deemed denied provision of Trial Rule 53.3(A) in the event the party
opposing the motion to correct error promptly appeals. Cavinder Elevators, Inc. v.
Hall, 726 N.E.2d 285, 288 (Ind. 2000). In this instance, the Rushinskys
did not appeal the trial courts ruling, and thus the trial courts judgment
granting Extended Cares motion with respect to the issue of who should bear
the costs of the accounting stands.
A power of attorney creates an agency relationship between the
person granting the power of attorney (the principal) and the designated attorney-in-fact (the
Pollas v. Hardware Wholesalers, Inc., 663 N.E.2d 1188, 1190 (Ind. Ct.
Extended Care made clear in its motion to correct errors
filed June 22, 2001, that: [It] has never contended that these payments
[by the Rushinskys] constituted fraudulent transfers. Appellants App. at 134. Extended
Care also reiterates this point in its brief. Appellants brief at
12 n.4, 14.
Footnote: We note that Extended Care did not provide this court
with a transcript of the default judgment hearing. However, Extended Care does
not contest Judge Levines finding that it did not attempt to elicit testimony
from the Rushinskys regarding the items filed in the accounting.
Footnote: Extended Care also asserts that the trial court may have
improperly considered cancelled checks and other documents to support the Rushinskys accounting that
were never introduced into evidence. Appellants App. at 11.
However, Extended Care can find nothing in the record establishing that the trial
court considered any such additional evidence or even that such evidence even exists.
See Appellants brief at 11 n.3. Thus, we need not address this