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Court affirms bank lacks standing to appeal termination of trusts

September 4, 2014

The Indiana Supreme Court agreed with the Court of Appeals that a bank’s appeal of the termination of two of its trusts must be dismissed for lack of jurisdiction. The bank, as trustee, lacked standing to appeal in its representative capacity and did not appeal in its individual capacity.

Old National Bancorp severed as trustee for two trusts in which Hanover College was the beneficiary. The college decided in 2012 that it made better fiscal sense for the trusts’ funds to be held in its endowment fund. The trial court granted Hanover’s petitions to terminate the trusts. Old National never sought a stay of the order and distributed the assets to Hanover. It instead appealed the decision, but the Court of Appeals dismissed the action because it held the bank lacked standing in its representative capacity since it failed to obtain the stay. The bank never intervened in its individual capacity at trial so, therefore, could not be an aggrieved party on appeal, the COA held.

The justices affirmed in Old National Bancorp d/b/a Old National Trust Company v. Hanover College, 68S05-1404-TR-296.

Old National argued to the justices that it has a “personal stake” in the outcome of this case and is appealing “in its own right” the orders that terminated the trusts and its status as trustee.

But the bank did not intervene or appear at the trial court level in its individual capacity nor did it appeal in its individual capacity, despite what it may claim, Justice Steven David pointed out.

“It paid its attorney fees, accrued during the course of the appeal, from the assets of the trusts – an act that could only be done as a trustee and one completely inconsistent with Old National’s current position that it was acting in its individual, non-fiduciary, capacity,” he wrote. “Old National’s substantive briefs on appeal are replete with references to its (now-prior) status as trustee, and wholly devoid of references to its claimed status as an individual aggrieved person.”

“Simply put, Old National arguing that it appealed here in anything other than its representative capacity fails the Duck Test,” David wrote, referring to Justice Mark Massa’s opinion in Brandy L. Walczak, Individually and on Behalf of Those Similarly Situated v. Labor Works - Fort Wayne LLC, d/b/a Labor Works, 02S04-1208-PL-497, in which Massa explained in a wage dispute case if it walks like a duck, swims like a duck and quacks like a duck – it’s a duck.

 
 

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