CAPPELLETTI v. JPMORGAN CHASE BANK (2025)

MEMORANDUM DECISION

Case Summary

[1] Kathleen Hurley and Dawn Cappelletti (collectively, Appellants) appeal the trial court's order dismissing, without prejudice, their action against JPMorgan Chase Bank, N.A. (JPMorgan), the Indianapolis Museum of Art d/b/a Newfields, Inc. (Newfields), and Oldfields, LLC (Oldfields) (collectively, Defendants). We affirm based on Ind. Trial Rule 12(B)(8), as the same action was pending in another court when Appellants filed this action, and thus we do not reach the issue of whether dismissal was also proper under T.R. 12(B)(1).

[2] We affirm.

Facts & Procedural History

[3] JPMorgan is the trustee of a revokable trust (the Trust) created by Alicia C. Ballard in 1969 and amended in 1981 before her death in 1982. The beneficiaries of the Trust included, among others, Ballard's three children – Sylvia Hurley (Sylvia), Edward Ballard (Edward), and Chad Ballard (Chad) – and Newfields. Sylvia had five children, and Edward and Chad both had none. In July 2020, Edward was the last of Ballard's children to die.

[4] On November 10, 2020, JPMorgan, pursuant to Ind. Code § 30-4-3-18(a) of the Trust Code, filed a petition (the Petition) under Cause No. 49D08-2011-TR-039783 (the Trust Case), seeking instruction from the probate court as to how to distribute the residual trust assets following Edward's death. JPMorgan believed that the Trust was ambiguous regarding whether the assets should be distributed to Sylvia's descendants or to Newfields. JPMorgan served the interested parties – including Appellants and Newfields – with notice of its petition.

[5] JPMorgan verified in the Petition that the following trust property remained at the time of Edward's death:

a. Marketable securities with a value of $898,514.09;

b. An undivided 4.58% interest in five parcels of farm real estate with an approximate value of $440,367 (based on a February 2019 appraisal of a 100% interest in the real estate, without discount); and

c. Life insurance, with total proceeds of $86,867.48 paid to Edward's Trust after his death.

Appellants’ Appendix Vol. II at 16-17 (footnote omitted). On April 6, 2021, JPMorgan filed a supplement to the Petition and indicated that the farm real estate (the Farmland) had recently been sold at auction for $2,132,330 and that as part of the sales process, JPMorgan received title policies showing that the Trust held a 100% interest in one parcel of 230 acres rather than a 4.58% interest in five parcels as previously represented. JPMorgan noted that the sale was set to close on or before April 23, 2021.

[6] Appellants and Newfields eventually filed cross motions for summary judgment in the Trust Case, and on March 15, 2022, the probate court entered summary judgment in favor of Appellants, concluding that Ballard had intended for the trust funds to benefit all her descendants before any funds were to be distributed to Newfields. Thus, the probate court created a resulting trust and ordered that the remaining funds that had been set aside for Edward's benefit be distributed to Ballard's/Sylvia's descendants. Newfields appealed.

[7] While the appeal was pending, on December 15, 2022, Appellants filed in the Trust Case a motion to remove trustee (Motion to Remove) based on multiple alleged breaches of trust by JPMorgan. Appellants’ lengthy allegations centered on JPMorgan's handling and sale of the Farmland in 2021. They claimed that without prior notice to them or the probate court JPMorgan sold the Farmland at auction together with six other tracts, which were owned by The Edward N Ballard Unitrust and Oldfields, LLC, a subsidiary of Newfields. Appellants alleged that JPMorgan had undisclosed conflicts of interest because it also served as trustee for The Edward N Ballard Unitrust, had two executives on the Board of Trustees for Newfields, and is a significant donor to Newfields. Appellants alleged further that “[Newfields] knew about the sale of the property and in all likelihood orchestrated the sale of the property along with JPMorgan, which included [the Farmland] to which it had no property interest – and as this Court has ruled, never did have a property interest.” Appellants’ Appendix Vol. II at 28. Appellants alleged that JPMorgan failed to act impartially and as a prudent investor because the sale benefitted the other two parties while resulting in more than $500,000 in capital gains taxes for the Trust and foregoing additional income that could have been generated by the Farmland had it not been sold while the Petition was being litigated. In addition to removal of JPMorgan as trustee, Appellants asked the probate court to order JPMorgan to “pay the difference in tax liability and real estate value as a result of its unethical and improper sale of the Trust's real estate.”¹ Id. at 33.

[8] JPMorgan opposed the Motion to Remove, denying any allegations of wrongdoing related to the sale of the Farmland or breaches of fiduciary duty, and sought a stay of resolution of the motion until the pending appeal was final and the remainder beneficiaries of the Trust were conclusively determined on appeal. The probate court granted the stay on February 8, 2023.

[9] On March 24, 2023, a panel of this court affirmed the probate court's summary judgment order, holding that Ballard's descendants were entitled to the residual funds of the Trust and that the probate court properly created a resulting trust to administer those funds. See Indianapolis Museum of Art v. Hurley, 206 N.E.3d 488, 494-95 (Ind. Ct. App. 2023). Newfields's petition for transfer was denied by the Supreme Court on August 24, 2023.

[10] On March 15, 2023, before the appeal was final and shortly after the stay was issued in the Trust Case, Appellants filed the complaint at issue in this case against JPMorgan, Newfields, and Oldfields. At the outset, Appellants stated in the complaint that they were “seek[ing] redress for multiple breaches of trust committed by JPMorgan and [Newfields].” Appellants’ Appendix Vol. II at 36. The factual allegations in the complaint were virtually identical to those in the Motion to Remove filed in the Trust Case, with the additional allegations that Newfields knew or should have known (1) about the real estate sale and (2) that the Trust property – the Farmland – was being intermingled with its own property through the sale. Based on the factual allegations, Appellants filed the following legal claims: Breach of trust and constructive fraud against both JPMorgan and Newfields; breach of fiduciary duty and negligence against JPMorgan; and unjust enrichment against Newfields and Oldfields. Appellants sought damages and injunctive relief.

[11] On May 10, 2023, JPMorgan filed a motion to dismiss Appellants’ complaint based on, alternatively, T.R. 12(B)(1) (lack of subject matter jurisdiction), T.R. 12(B)(7) (failure to join all necessary parties), and T.R. 12(B)(8) (same action pending in another court). Newfields and Oldfields filed a similar motion to dismiss two days later. On June 29, 2023, Appellants amended their complaint to join all necessary parties, thus resolving the T.R. 12(B)(7) issue. Appellants also filed an opposition to the remaining T.R. 12(B) grounds.

[12] The trial court held a hearing on Defendants’ motions to dismiss on January 11, 2024. Thereafter, on February 11, 2024, the trial court entered an order dismissing the action without prejudice. The court did not specify whether its order was based on T.R. 12(B)(1) and/or T.R. 12(B)(8).

[13] Appellants appeal the dismissal of their complaint. Additional information will be provided below as needed.

Discussion & Decision

[14] Pursuant to T.R. 12(B)(8), a party may move for dismissal on the ground that “[t]he same action is pending in another state court in this state.” Id. This rule “implements the general principle that, when an action is pending in an Indiana court, other Indiana courts must defer to that court's authority over the case.” Kindred v. Ind. Dep't of Child Servs., 136 N.E.3d 284, 290 (Ind. Ct. App. 2019) (quoting Beatty v. Liberty Mut. Ins. Grp., 893 N.E.2d 1079, 1084 (Ind. Ct. App. 2008)), trans. denied. Such deference preserves fairness to litigants, comity between and among the courts of this state, and judicial efficiency. See id. We review a trial court's dismissal of a complaint under T.R. 12(B)(8) de novo. Kindred, 136 N.E.3d at 290.

[15] Appellants contend that their Motion to Remove in the Trust Case is distinct from the action they filed in this case. They claim that the former was filed against only JPMorgan and seeks no relief from Newfields and Oldfields, while the latter seeks damages from all three parties. Further, Appellants contend that the Motion to Remove was limited in scope – seeking removal of JPMorgan as trustee, disgorgement of fees, recovery of attorneys’ fees, and damages for the “unlawful sale” of the Farmland – while the instant action “lists five separate causes of action seeking all damages available.” Appellants’ Brief at 21.

[16] It is well established that the parties, subject matter, and remedies of the competing actions need not be precisely the same for T.R.12(B)(8) to apply; “it also applies when they are only substantially the same.” Kindred, 136 N.E.3d at 290. Ultimately, whether actions pending in different courts are the same depends on whether the outcome of one will affect the adjudication of the other. See id. (observing that the rule is “meant to avoid the risk of conflicting judgments or other confusion that can result from two courts exercising simultaneous jurisdiction over the same or substantially same action”); Bosley v. Niktob, LLC, 973 N.E.2d 602, 605 (Ind. Ct. App. 2012), trans. denied.

[17] Here, the outcome of one of the pending actions will most certainly affect the other and leaving both alive would create a risk of conflicting judgments or duplicative recovery. The factual allegations made by Appellants in both actions were virtually identical. Boiled down, Appellants alleged that JPMorgan and Newfields colluded with one another in the unlawful sale of the Farmland and that the sale caused losses to the Trust (that is, substantial capital gains taxes and loss of income). In both actions, the key issue was the propriety of the sale, and the Appellants sought damages related to the sale.

[18] Moreover, we do not find dispositive the fact that Appellants alleged additional bases for recovery in their complaint here or that they added Newfields and Oldfields as defendants. See Kindred, 136 N.E.3d at 291 (“The fact that these other parties are not exactly the same in both causes is ‘irrelevant to the Trial Rule 12(B)(8) requirement that each action contain the same parties’ and ‘does not preclude operation’ of the rule.”) (quoting Beatty, 893 N.E.2d at 1086). This is particularly true where Newfields was also an interested party in the Trust Case (indeed, a potential beneficiary at the time of the sale of the Farmland) and was alleged by Appellants in the Motion to Remove to have been acting in concert with JPMorgan.

[19] In the complaint, Appellants stated that they were “seek[ing] redress for multiple breaches of trust committed by JPMorgan and [Newfields].” Appellants’ Appendix Vol. II at 36. They alleged the same breaches of trust in their Motion to Remove filed in the Trust Case.

[20] We conclude that the two actions at issue here involved substantially the same parties, subject matter, and remedies. Accordingly, the trial court properly deferred to the authority of the probate court and granted Defendants’ motion to dismiss.

[21] Judgment affirmed.

FOOTNOTES

1.   Appellants also sought, among other things, reimbursement for their attorneys’ fees related to their motion and disgorgement of all fees JPMorgan charged to the Trust, including legal fees.

Altice, Chief Judge.

Vaidik, J. and Scheele, J., concur.