An order for a brother to pay nearly $245,000 in a dispute with his siblings over a breach of their mother’s revocable trust was affirmed Friday by the Indiana Court of Appeals.
The case centers on William G. Zartman Jr. and Marilyn Zartman, who owned a 303-acred farm in Miami and Fulton County. The couple had three children: William III, Brenda and Paul. The parents each established a revocable trust in 1980 and amended both trusts in 1993.
William Jr.’s trust provided that after Marilyn’s death, his income would be divided equally among the children. The children were also named co-successor trustees. Only Marilyn’s trust is at issue in the instant appeal, and the parties do not have a complete copy of the document. However, both William III and Paul testified that their mother’s trust was identical to their father’s.
By 2003, each trust held a one-quarter interest in the farm, while William III and his wife, Kim, owned a one-half interest. Marilyn died in 2004, followed by William Jr. in 2010.
In 2011, William III conveyed the one-quarter interest of the family farm in his mother’s trust to himself and his wife as tenants in common. They transferred that interest to Zartman Farm, of which they were member managers.
Then in 2016, Paul and Brenda, both individually and as trustees, sued William III and Kim to set aside the conveyance of the one-quarter interest from Marilyn’s trust. Paul and Brenda claimed they were co-trustees and that their brother could not act alone to transfer property. They also claimed the transfer violated the trust’s disposition provisions.
The Miami Circuit Court denied summary judgment to Paul and Brenda in 2018, but the Court of Appeals in 2019 remanded for reconsideration. On remand, the trial court ruled in favor of Paul and Brenda, finding the property could only be transferred by the co-trustees jointly and voiding William III’s conveyance of the one-quarter interest.
William III was thus removed for cause as a trustee of Marilyn’s trust, putting Paul in his place. The court then entered a $134,799.98 judgment against William III to be paid to the trust for lost income and also awarded his siblings $110,000 in attorney fees.
The Indiana Court of Appeals affirmed Friday in a second appeal, finding first that any inconsistencies between the first and second summary judgment orders came from the trial court correcting the error identified in the first appeal of the case.
“Next, we decline Appellants’ invitation to speculate regarding the ownership of the one-quarter interest in the farm by Marilyn’s Trust. Although Appellants argue that the interest could have been transferred earlier and that a title search was necessary, the designated evidence does not support these conjectures,” Judge Elizabeth Tavitas wrote.
The panel also affirmed the finding that William III could not transfer property on his own and that the interest in the property should have been equally divided, pointing to the trust’s terms. Thus, the trial court properly concluded William III’s transfer of the one-quarter interest was null and void and properly ordered him to pay the lost income as a result of his breach of trust.
Likewise, “the designated evidence demonstrates that a measurable benefit was conferred on Kim and Zartman Farms under such circumstances that the retention of the benefit without payment would be unjust. The trial court properly granted summary judgment to Appellees on the claim against Kim and Zartman Farms,” the panel held.
Finally, the COA upheld the $110,000 award for attorney fees, noting the “extraordinarily lengthy litigation, which involved complex issues, two summary judgment proceedings, a jury trial, and two appeals … .”
The case is William G. Zartman, III, Individually and as Successor Co-Trustee of the Marilyn M. Zartman Revocable Trust, et al. v. Paul Zartman and Brenda Cameron, Individually, et al., 20A-PL-1861.