John Forrest Baker, Appellant-Petitioner v. John Richards, et al., Appellees-Respondents (2025)

MEMORANDUM DECISION

Judges Pyle and DeBoer concur.

Case Summary

[1] John Forrest Baker appeals the trial court's order that directed the trustee of his late mother's revocable trust to sell farm property and distribute the proceeds to beneficiaries. He asserts that the farm should have been “divided and distributed to her family” as provided for in the trust and that the court's modification of the trust was improper. Appellant's Brief at 12. Finding that Baker had earlier agreed to the modification and sale, and that, regardless, statutory modification was not erroneous, we affirm.

Facts & Procedural History

[2] On October 21, 2008, Mary E. Koontz (Koontz) executed the Revocable Trust Agreement of Mary E. Koontz (the Trust). Along with other real property, the Trust assets included a farm located in Bloomington (the Farm). The Farm was around fifty-six acres and included Koontz's residence and, on another part of the Farm, a log cabin built more recently by Koontz's late son, Kenny. When she executed the Trust, Koontz had four surviving children: Baker, Mary Kathleen Hunter, Carolyn Robertson, and Daniel Baker (Daniel).¹ Koontz was both the settlor and trustee of the Trust; Hunter and Robertson were named as successor co-trustees in the event of Koontz's death or incapacity.

[3] The Trust provided that at Koontz's death, the Farm was to be divided and distributed to family members. Relevant here, Baker was to receive five acres, which contained the log cabin, for his lifetime after which it would go to his two daughters in equal shares.² Koontz's residence and the ten acres surrounding it went to Hunter, and other specific conveyances of property were made to a grandson and to Daniel. The Trust provided that all portions of the Farm remaining after the specified distributions were to be conveyed to Robertson and Hunter. To effectively distribute the parcels, the Trust directed the co-trustees to have the Farm surveyed to obtain accurate legal descriptions for each tract described. The Trust also included the following:

H. Should any of the above named distributees and recipients of tracts from [the F]arm decide in the future to sell the portion of the [F]arm received by them, it is my fervent and strong desire and wish that they first provide their siblings, children, nieces and nephews with the first opportunity to purchase their share of the [F]arm.

Appellant's Appendix at 33.

[4] In May 2017, Hunter was appointed guardian over the person and estate of Koontz in Cause No. 53C01-1703-GU-41 (GU-41). In June 2020, Hunter filed a Petition to Sell Real Estate, Vehicles, Distribution of Personal Property and Reimbursement to the Guardian, attaching the Trust and requesting sale of the Farm residence and surrounding ten acres with the proceeds placed in the guardianship estate to be used toward the costs of Koontz's care at an Alzheimer's facility. Following a July 2020 hearing, the trial court denied the petition but directed Hunter, as guardian, to obtain an inspection of the Farm residence and a survey that divided up the Farm into parcels as outlined in the Trust. The court reset the matter for hearing on January 14, 2021.

[5] After obtaining a survey by the Travis Norman Group (the Survey)³ and an inspection, Hunter filed a Renewed Petition to Sell Real Estate, Vehicles, Distribution of Personal Property and Reimbursement to the Guardian (the Petition to Sell), which co-trustee Robertson opposed. Following the January hearing and at the court's direction, Hunter docketed the Trust in a separate cause of action, Cause No. 53C01-2102-TR-38 (TR-38), before the same judge.

[6] On January 27, 2022, the trial court issued an order on the Petition to Sell – under both GU-41 and TR-38 – finding that the Trust owned the property subject to the Petition to Sell and ordering that an independent trustee be appointed to replace co-trustees. The court held the Petition to Sell under advisement. In February 2022, John Richards (Trustee) was appointed, and in June 2022, he filed a status report advising that the parties had agreed to participate in mediation.⁴

[7] In September 2022, Trustee filed, under both TR-38 and GU-41, an executed mediation agreement (the Mediated Agreement) signed by: Baker; Trustee; Hunter and her attorney; and Roberston and her attorney.⁵ The Mediated Agreement provided that the parties agreed “to settle any and all claims, whether known or unknown” and, as is relevant here, agreed that

1․ [The Trust] will sell all of the real estate owned and held by the Trust [including] ․ the Farm, consisting of approximately 56 acres with some improvements, excepting Lots 3 and 6 of the Farm, as described in the [Survey], which conveyance will be subject to the approval of the Monroe County Planning Commission of all the subdivided lots for the entire 56 acre tract, as set forth in the Survey with the net proceeds deposited with the Trust with [the Trustee].

2․ [The Trust] will convey fee simple title to Lots 3 and 6 of the Farm to John Baker.[6]

* * *

4․ [Trustee] will have all of the real estate appraised ․ secure a realtor to list and sell the property to be sold as described above and will have the sole discretion concerning the terms of any such sale ․ It is anticipated the Farm property, including any improvements will be sold in an “as is” condition.

Appellant's Appendix at 48 (emphases added).

[8] Koontz died on January 16, 2023, before any of the Farm property was sold. In August 2023, Trustee requested a hearing because he had been advised that the Farm could not be subdivided as agreed based upon the current Monroe County Subdivision Control Ordinance (the Ordinance) and desired direction from the court on how to proceed with disposition of that property. The court held two hearings on the matter, in September and November.

[9] At the latter, on November 30, 2023, Baker, Robertson, Hunter, and each of their respective attorneys, along with Trustee, were present. Trustee advised the court that he had learned from the Monroe County Planning Department (the Planning Department) that, under the Ordinance, the Farm's fifty-six acres could only be divided into four parcels consisting of a “parent parcel” containing 55% of the total acreage, which could not be further divided for twenty-five years, and three others, each with a minimum two and one-half acres. Transcript at 4. Trustee's understanding was that the Ordinance would not permit subdivision of parcels as provided in the Mediated Agreement and in the Trust. The trial court suggested a recess to allow the parties to take “one more crack at the drawing board” to solve the situation amongst themselves. Id. at 6. Before breaking, counsel for Hunter offered, in part, “I don't think we disagree with selling,” and counsel for Baker, Edward McCrea, then added, “I know my client [sic] intent is to sell.” Id. at 7.

[10] When court reconvened, McCrea reported to the court that “[t]here is a path forward” and that Hunter's counsel, Anne Curry, would be outlining it for the court. Id. at 8. Curry then stated:

MS. CURRY: Your honor, we are going to have the property appraised per parcel to determine each parcel[’]s value to the whole. And then it will be sold and the proceeds will be divided proportionally.

THE COURT: ․[O]kay․ [A]ppraisal per parcel, then once we get the appraisal it is to be sold and then the proceeds are to be divided proportionally.

MS. CURRY: Umm, hum. Expenses off the top (inaudible).

Id. Trustee confirmed he would handle the appraisal. The trial court then separately asked McCrea and counsel for Robertson whether the stated plan was acceptable and each responded affirmatively.

[11] The next day, December 1, 2023, McCrea filed a motion to withdraw his appearance for Baker, stating that Baker no longer wanted McCrea's representation and “made it clear” that he “will fight to stop the sale of the five acres his mother left him[.]” Appellant's Appendix at 58.

[12] On March 28, 2024, Baker's new counsel filed a request for a hearing for the court “to consider whether or not the property should be sold without Mr. Baker and his having have [sic] any opportunity to receive the real estate that they were to receive under the Trust.” Id. at 60. On April 1, 2024, Baker filed an Objection to Sale arguing that the parcels bequeathed to him in the Trust should be distributed to him and the remainder of the Farm could be subdivided and sold.⁷

[13] The court held a hearing on April 30, 2024.⁸ Baker testified that Koontz “wanted to keep the Farm in the family,” pointing out the Trust's provision that asked any beneficiary who wanted to sell their parcel to first give other family members the right to purchase it, and he asked the trial court to give him the real estate that his mother gave him in the Trust. Transcript at 22. Baker testified that he did not know why the Mediated Agreement (under which he was to receive fifteen acres in fee simple) was never finalized other than someone “changed her mind I guess.” Id. at 13; see also id. at 16 (“(inaudible) could have changed her mind (inaudible)”). Baker maintained that at no point in the proceedings did he agree to sell that property. When asked about the resolution reached between the parties and reported to the court at the November 30 hearing – to have the individual parcels appraised and thereafter the entire Farm sold – Baker testified that “they tried to tell me I had no choice but let them sell my property” but that he never agreed to do so. Id. at 18.

[14] Trustee testified that the Mediated Agreement was expressly contingent upon approval from the Planning Department and that the division of the Farm provided in the Mediated Agreement “is not approvable [ ] under the [Ordinance],” because the Survey called for eight parcels. Id. at 29.

[15] Baker also called as a witness Jacelyn Julen, the director of the Planning Department, who Baker had met with about subdividing the Farm. She testified that the Ordinance provided for “sliding scale” subdivision of the Farm, under which the parent parcel would have to be 55% of the total acreage, and

that if you do not have access to sewer, you cannot create more than four lots if each of the parcels are less than 10 acres. So if you were to create eight parcels all accessible only via septic, that would not meet the sub-division control [O]rdinance requirements[.]

Id. at 26 (emphasis added). When asked whether a court could divide the land, Julen testified, “There is a possibility that if a court provides us with a [ ] decree splitting up the property that we would allow that” under an “administrative type C” (Type C) process that would “essentially bypass our sub-division [O]rdinance.” Id. at 25. She further explained that if the lots transferred through that process did not meet the Planning Department's requirements, they would be non-buildable and require waivers and variances from the Ordinance and other zoning laws for any developed use. Julen confirmed that any existing dwellings, however, such as the residence and the cabin, could continue their current use.

[16] Trustee, Hunter, and Robertson opposed Baker's request that two parcels be conveyed to him while the rest be sold. Trustee noted that doing so would not be treating all beneficiaries the same and would affect the value of the Farm as a whole. Further, Trustee pointed out that, pursuant to the parties’ November 30 agreement and the court's ensuing directive, he had expended funds obtaining an appraisal of the surveyed parcels.

[17] The trial court issued findings and conclusions on August 29, 2024. After recognizing that, under Indiana law, a trial court statutorily may modify the terms of a trust in certain circumstances – such as if the trust's existing terms would be impracticable or wasteful or if, because of circumstances not known or anticipated by the settlor, compliance would defeat or substantially impair the purpose of the trust – the court denied Baker's requested relief. The court concluded, in part:

K. The Koontz Trust was established to distribute various personal property, monies and real estate to [ ] Koontz's beneficiaries. With the Farm it was the clear intention to provide each beneficiary with a specific portion of the Farm with no associated restrictions. There is no indication that while establishing the terms of the trust that Mary E. Koontz foresaw or anticipated that the distribution of the Farm would be contrary to zoning ordinances.

L. John F. Baker has proposed a modification [under] a Type C administrative subdivision under [a section of the] ․ Ordinance. [ ] Baker's suggested modification increases his bequest and is in contradiction to the Trust while simultaneously restricting the use of the remaining beneficiaries’ interests ․ Further, the suggested modification decreases the value of the individual parcels whereas a sale of the whole would maximize the value as it would be sold subject without any restrictions․

M. The Trustee ․ is placed in the untenable position of violating his fiduciary duty if forced by the Court to move forward with a Type C administrative subdivision. Ind. Code [§ 30-4-3-6] provides a Trustee has a duty to make Trust property productive. A division under a Type C administrative subdivision does not make the Trust property productive.

N․ Indiana law provides that a fiduciary shall administer a trust or estate impartially, based on what is fair and reasonable to all the beneficiaries, except to the extent that the terms of the trust or the will clearly manifest an intention that the fiduciary shall or may favor one or more of the beneficiaries. Ind. Code § [30-2]-14-14(b).

* * *

P. The Trust does not clearly manifest an intention that the fiduciary favor one or more beneficiaries.

Q. John F. Baker's only interest ․ as bequeathed is a life estate in two parcels of the [Farm]. John F. Baker's demand for a forced division ․ is a request for preferential treatment․ that diminishes the value of the remainder of the [Farm].

* * *

U. [T]he only equitable remedy is to allow the Trustee to sell the entirety of the [Farm] and distribute to each beneficiary his or her pro rata share of the proceeds. This ensures that all beneficiaries are treated in a reasonable and fair manner in accordance with the purpose and intention of [ ] Koontz, the Settlor of the Trust.

Appellant's Appendix at 15-16. The court ordered Trustee to proceed with selling the Farm consistent with the agreement reached by the parties at the November 30, 2023 hearing.

[18] Baker filed a motion to correct error on September 27, 2024, asking the court to order all the Farm parcels to be transferred to the beneficiaries as outlined in the Trust. After the motion was deemed denied pursuant to Ind. Trial Rule 53.3, the trial court issued an order on December 9, 2024, directing entry of final judgment. Baker now appeals. Additional information will be supplied as necessary.

Discussion & Decision

[19] The trial court entered findings and conclusions, in which case we apply a two-tiered standard of review. We first consider whether the evidence supports the findings and then whether the findings support the judgment. In re Estate of Owen, 855 N.E.2d 603, 608 (Ind. Ct. App. 2006). In doing so, we neither reweigh the evidence nor reconsider witness credibility and view the evidence only in the light most favorable to upholding the judgment. Beach v. Spiech, Tr. of Dauby Family Trust, 208 N.E.3d 619, 623 (Ind. Ct. App. 2023). Findings and conclusions are set aside only if they are clearly erroneous, that is, when the record contains no facts or inferences supporting them. In re Estate of Owen, 855 N.E.2d at 608. Any question of law is reviewed de novo. Beach, 208 N.E.3d at 623. We observe that courts have general equity powers over the administration of trusts. Ind. Code § 30-4-3-30.

[20] Baker seeks “that he be given what his mother gave him in her Trust.” Appellant's Brief at 19. Specifically, he asks this court to use the legal descriptions from the Survey – which were based on the Trust's descriptions – and order the trial court to convey those parcels to the various family members according to the Trust's terms.⁹ Baker acknowledges that he does not challenge any findings of fact “but is challenging certain conclusions of law.” Id. at 15.

1. Baker's Previous Agreements to Deviate from the Trust

[21] Indiana law permits compromise of a contest concerning administration of a trust, and a negotiated compromise is binding on all parties involved. Ind. Code § 30-4-7-1, -2. The terms of a compromise executed under this chapter must be set forth in an agreement that is in writing and executed by all persons who have an interest in the trust or have a claim against the trust. I.C. § 30-4-7-6. Once the court approves the agreement and directs the trustee and parties to implement its terms, all subsequent trust dispositions within the agreement's scope shall be made under the terms of the agreement. I.C. § 30-4-7-10.

[22] Here, in the fall of 2022, Baker executed the Mediated Agreement which deviated from the terms of the Trust, i.e., Baker would receive fee simple, rather than a life estate, in two lots and the rest of the surveyed lots would be sold. When division of the farm as outlined in the Mediated Agreement was not going to be approved by the Planning Department due to noncompliance with the Ordinance, the parties convened for a hearing on November 30, 2023.

[23] Before any evidence was presented and at the court's suggestion, the court recessed for the parties and their counsel to see if an agreement could be reached. Prior to breaking for a recess, Baker's attorney, McCrea, advised on the record that Baker's “intent is to sell.” Transcript at 7. When court resumed, Baker's attorney reported that a path forward had been reached, which Hunter's lawyer recited on the record: the Farm would be appraised by parcel, thereby determining the value of each, then sold, with the proceeds distributed proportionately. This agreed resolution – which deviated from the terms of the Trust – was not objected to, indeed agreement was affirmatively expressed by counsel. Consistent with the agreement reached, the court ordered Trustee to have the parcels appraised, which he did. And the trial court's CCS reflects its approval of the plan, stating in part “Parties agree an appraisal will be completed on each individual parcel․[T]rustee, to have parcels appraised and then sold. Proceeds will divide proportionally after expenses.” Appellant's Appendix at 6.

[24] Given Baker's repeated agreements to deviate from the Trust, his current claim that the trial court erred when it deviated from the terms of the Trust is not well taken. We acknowledge that Baker claims that he was “in the hallway” on November 30 when counsel advised the court that, by agreement, the Farm would be sold. Appellant's Brief at 10. To the extent that he suggests that he therefore did not know or understand that the agreement reached was to sell the Farm, he is bound by his attorney's statements to the court. See Koval v. Simon Telelect, Inc., 693 N.E.2d 1299, 1301 (Ind. 1998) (“under longstanding Indiana authority, retention does equip an attorney with the inherent power to bind a client to the results of a procedure in court”); Sharif v. Cooper, 141 N.E.3d 1258, 1263 (Ind. Ct. App. 2020) (“a client is bound by his attorney's actions and inactions”). Regardless, even if Baker never agreed to selling the property, we find, as discussed below, that the trial court's decision to modify the terms of the Trust pursuant to Indiana's trust modification statutes was not erroneous.

2. Statutory Modification

[25] Pursuant to I.C. § 30-4-3-24.4(a), a trial court may modify the administrative or dispositive terms of a trust “if, because of circumstances not anticipated by the settlor, modification or termination will further the purposes of the trust” and “[t]o the extent practicable, the modification must be made in accordance with the settlor's probable intention.” The statute further provides that a court may modify a trust if, among other reasons, continuation of its existing terms “would be ․ impossible, impracticable, or wasteful[.]” I.C. § 30-4-3-24.4(b).

[26] I.C. § 30-4-3-26 codifies what is known as the equitable deviation doctrine ¹⁰ and provides that, upon the petition of a trustee or beneficiary, the court “shall direct or permit the trustee to deviate from a term of the trust, if, owing to circumstances not known to the settlor and not anticipated by him, compliance would defeat or substantially impair the accomplishment of the purposes of the trust.” As explained by this court in In re Chapman, “[w]hereas Section 24.4 requires that modification will ‘further the purpose of the trust,’ Section 26(a) requires that the change be necessary to carry out the purpose of the trust because compliance would defeat or substantially impair the accomplishment of the purpose of the trust.” 953 N.E.2d at 581.

[27] Baker challenges the court's determination in Conclusion K that “[t]here is no indication that while establishing the terms of the trust that [ ] Koontz foresaw or anticipated that the distribution of the Farm would be contrary to zoning ordinances.” Appellant's Appendix at 15. He argues, first, that distribution was not, in fact, “contrary to” zoning ordinances given that the court was permitted to transfer the parcels under Type C process and that the court's conclusion was thus “incorrect.” Appellant's Brief at 18. He makes a similar argument as to Conclusion S, where the trial court stated that the “Ordinance did not allow for” the Trust's outlined distribution to the various beneficiaries, arguing that the Ordinance “clearly does allow” for the various tracts of the Farm to be distributed to each of the named beneficiaries. Id. at 20. It is clear when reading the findings and conclusions in their entirety that the court understood it could transfer parcels under the Type C process. We find that the court's challenged statements in Conclusions K and S were referring to the general prohibition under the Ordinance, calling for sliding scale subdivision, as well as to the continued limitations on use of the property that would remain upon a Type C transfer. These conclusions were not clearly erroneous.

[28] Baker also challenges the portion of Conclusion K stating that Koontz did not foresee or anticipate zoning issues, arguing “there was never any evidence offered that she never foresaw zoning issues.” Id. at 18. Although there was no direct evidence on the subject, we find it was reasonable for the trial court to infer such, given the specific terms of her Trust. That is, Koontz directed certain acreage be given to certain individuals rather than directing that they all share in the whole, and her manner of division evinces an intent to devise property to a recipient for him or her to use independent of other family members. It is a reasonable inference that Koontz did not anticipate that some, but not all, would face significant restriction on use, and resulting diminished value, due to subdivision and zoning restrictions. We reject Baker's challenges to Conclusions K and S.

[29] In sum, we find no reversible error with the trial court's determination that modification was warranted under I.C. §§ 30-4-3-24.4 and -26 due to unanticipated zoning and land use restrictions and that the equitable remedy, consistent with Koontz's intent to transfer individual parcels, was to sell the Farm in its entirety and distribute the proceeds on a pro rata basis, thereby ensuring proportional distribution of value to all beneficiaries.

3. Trustee's Duties

[30] Further, we agree with the trial court that transferring the lots in the manner suggested by Baker would require Trustee to act contrary to his fiduciary duties. Specifically, a trustee has a duty to preserve the trust property and make it productive. I.C. § 30-4-3-6(b)(4). And a trustee must manage trust assets impartially, unless the terms of the trust clearly manifest an intent that one or more of the beneficiaries be favored. I.C. § 30-2-14-14(b); see also I.C. §§ 3-4-3.5-5, -6.

[31] Trustee argues, and we agree, that transfer of the lots under the Type C process as Baker requests “disregards the impact that such [ ] will have on the beneficiaries’ interests” and “disregards the fact that the Trustee has fiduciary duties to all of the beneficiaries not just [ ] Baker.” Appellee Trustee's Brief at 17 (italics in original). The requested transfer would result in unbuildable lots for some, but not all, recipients; Hunter's lot with Koontz's residence and Baker's Lot 6 with the log cabin could be used as is, but others would need to seek waivers or variances to build, limiting the ability to meaningfully use their property and resulting in diminished value. Thus, “[p]roceeding as [ ] Baker requests serves to reduce the value of the trust property” and treats some “to the detriment of other trust beneficiaries.” Id. at 16. The court's decision to modify the terms of the Trust and order Trustee to sell it and distribute the proceeds proportionately avoided forcing Trustee to violate fiduciary duties and ensured the equitable treatment of the beneficiaries consistent with what Koontz gave them and maximized the value of the trust property.

[32] We are not unsympathetic to Baker's desire to hold onto the Farm. However, we cannot say based on the record before us that the trial court clearly erred in ordering Trustee to sell the property and distribute the proceeds to the beneficiaries according to each parcel's appraised value.

[33] Judgment affirmed.

FOOTNOTES

1.   At some point, Daniel was placed under legal guardianship, with Baker and Robertson as his guardians.

2.   The Trust distributed a ten-acre hay field of the Farm to “John D. Baker” during his lifetime, and at his death to Robertson and Hunter in equal shares. Appellant's Appendix at 8. Appellant is John Forrest Baker. It is not clear if he is the same person as the John D. Baker who received a life estate in the ten-acre hay field. Trustee understands those two “to be one and the same individual” such that Appellant Baker received a life estate in a total of fifteen acres under the Trust. Appellee Trustee's Brief at 8 (n.4). Baker, however, refers to receiving five acres under the Trust and makes no mention of receiving the ten-acre hay field. See Appellant's Brief at 6, 9, 19; Transcript at 13 (Baker stating that, under the Trust, he was to receive five acres with the cabin and no more of the Farm). We need not resolve the issue as it is not determinative to our decision.

3.   The copy of the Survey filed with this court is somewhat blurry but reflects the Farm divided into eight parcels – also sometimes referred to by the parties as lots – that appear to range in size from about four acres to ten acres. See Exhibit Vol. at 4.

4.   In addition to the Farm, the mediation pertained to other real property in Bloomington and Florida.

5.   Daniel, through his guardians, was also a party to the Mediated Agreement. In the Mediated Agreement, the parties agreed to cooperate with each other to secure the necessary permission from any other beneficiaries or contingent beneficiaries and, to that end, would complete a separate “family settlement agreement.” Appellant's Appendix at 49.

6.   Lots 3 and 6 are positioned one above the other and together total fifteen acres. Lot 6 included the log cabin. Lots 3 and 6 are located toward the middle of the Farm, with other Farm lots on either side.

7.   The objection that Baker filed is not included in the record before us; our description of Baker's argument is taken from the trial court's findings of fact. Appellant's Appendix at 13 (Finding No. 24).

8.   As noted by the parties, many times throughout the Transcript testimony is transcribed as being inaudible.

9.   We note that this is not the relief Baker initially sought below. It appears – from both the April 2024 hearing and in the court's ensuing August 2024 order – that Baker asked the court to order Trustee to separate and distribute to him, in fee simple, the two parcels bequeathed to him in the Trust and sell the rest of the parcels of the Farm. See Appellant's Appendix 13 (Finding of Fact No. 24 stating that Baker's objection asked court to separate his parcels and distribute to him and that balance can be subdivided and sold by other beneficiaries) and at 16 (Conclusion Q stating that Baker wishes to convert life estate in two parcels to fee simple interest and order rest sold). However, in the motion to correct error, Baker appears to request the relief he now seeks, to order all the parcels described in the Trust be transferred to the various beneficiaries as directed by Koontz in the Trust. Id. at 73.

10.   The equitable deviation doctrine is the common law approach for allowing modification for unanticipated circumstances and provides: if circumstances unanticipated by the settlor occur, the court may modify the administrative terms of the trust, but only to prevent the unanticipated circumstances from defeating or substantially impairing the accomplishment of the purposes of the trust. In re Stephen L. Chapman Irrevocable Trust Agreement, 953 N.E.2d 573, 580 (Ind. Ct. App. 2011), trans. denied.

Altice, Chief Judge.

Pyle, J. and DeBoer, J., concur.