Jim Hilyard, Appellant v. Wesley J. Hurley, et al., Appellees (2026)

MEMORANDUM DECISION

Case Summary

[1] A trust (the Trust), created by Joseph W. Hurley's maternal great grandmother, Alicia Ballard, in 1969 and amended in 1981, was fully performed when Joseph's uncle, Edward Ballard (Uncle Edward), died childless in July 2020. Because funds remained in the Trust with no valid residuary clause, as determined in a prior appeal in this case, a resulting trust was created by operation of law over the residue for the benefit of Alicia's successors in interest. Indianapolis Museum of Art v. Hurley (Hurley I), 206 N.E.3d 488, 495 (Ind. Ct. App. 2023), trans. denied. Joseph's mother, Sylvia, had five children, four of whom were living at the time of Uncle Edward's death, and Joseph's deceased brother, John, had two living children.

[2] Joseph survived Uncle Edward but died about two years later while litigation with the Indianapolis Museum of Art (IMA) remained pending as to whether Sylvia's children or IMA were entitled to distribution of the remaining funds. After it was finally determined that IMA had no claim to the funds, the successor trustee, Scout Advocacy LLC (Successor Trustee), sought instructions from the trial court as to whether Joseph's share of the resulting trust should be distributed to his testate beneficiary or to his son, Wesley Hurley. The trial court determined that Wesley was entitled to his father's share. Jim Hilyard, as personal representative for Joseph's Estate, appeals that decision. As Joseph's share vested in him upon the death of Uncle Edward, we conclude that Joseph cannot be divested of his right to devise such property.

[3] Judgment reversed.

Facts & Procedural History

[4] The underlying facts and procedural history of this case, particularly the details of the Trust, are long and tedious, but we need not stroll down the entire path. We start with Uncle Edward's death on July 13, 2020, whereupon the Trust was fully performed and there were substantial residual assets left. Uncle Edward died without surviving issue, so the trustee at the time, JPMorgan Bank, N.A. (Initial Trustee), was uncertain as to how to distribute the residuary assets. On November 10, 2020, Initial Trustee filed a petition for instruction and to docket the Trust. As relevant here, Initial Trustee questioned whether the assets should be distributed to the surviving issue of Sylvia ¹ or to IMA.

[5] After competing motions for summary judgment, on March 15, 2022, the trial court granted summary judgment in favor of Sylvia's issue and against IMA. Interpreting the terms of the Trust, the trial court concluded that the residuary clause failed and that Alicia's clear intent was to provide for her family, not IMA. Accordingly, the trial court determined that a resulting trust was created by operation of law in favor of Alicia's successors in interest, and the court directed Initial Trustee to distribute the remaining funds to them.

[6] IMA appealed and on March 24, 2023, another panel of this court affirmed the summary judgment order. That appeal ² establishes that upon Uncle Edward's death the Trust was fully performed with no designated beneficiary of the residuary assets, so a resulting trust was created by operation of law. Hurley I, 206 N.E.3d at 495. Further, the beneficiaries of the resulting trust were observed to be Sylvia's children ³ and two grandchildren (referred to collectively in the opinion as “the Children”). Id. at 490.

[7] After Hurley I, Initial Trustee, along with IMA and the personal representative of Uncle Edward's estate (a newly added party, referred to as “Edward's Estate”), asked the trial court to specifically identify Alicia's successors in interest. This purportedly required a determination of whether the beneficiaries of the resulting trust should be determined as of the date of Alicia's death in 1982 or as of the date the express trust failed in 2020 (that is, upon Uncle Edward's death). If the earlier date applied, Initial Trustee proposed the following distribution of the residual assets:

a. [Alicia's husband] Charles's 1/2 interest to the IMA;

b. [Alicia's son] Chad's 1/6 interest to Edward's Estate;

c. Edward's 1/6 interest to Edward's Estate;

d. Sylvia's 1/6 interest to her children and grandchildren as follows:

i. John's 1/30 interest to John's estate, to be distributed pursuant to his will (if he died testate) or based on the laws of intestacy (if he died intestate);

ii. Joseph's 1/30 interest to Joseph's Estate;

iii. Eric's 1/30 interest to Eric's estate which would be distributed according to the laws of Illinois intestacy, as follows: 1/4 of Eric's 1/30 share to each of Christopher, Kathleen, and Wesley J. Hurley (Joseph's son); and 1/8 of Eric's 1/30 share to each of Dawn Cappelletti and Michael Hurley;

iv. Christopher 1/30 interest; and

v. Kathleen 1/30 interest.

Appendix Vol. III at 155 (footnotes omitted). If the later date was applicable, a different distribution was proposed by Initial Trustee:

a) Christopher 1/5 interest;

b) Kathleen 1/5 interest;

c) Joseph's 1/5 interest to Joseph's Estate;

d) Michael Hurley 1/10 interest;

e) Dawn Cappelletti 1/10; and

f) Eric's 1/5 interest to his estate which would be distributed according to the laws of Illinois intestacy, as follows: 1/4 of Eric's 1/5 share to each of Christopher, Kathleen, and Wesley J. Hurley (Joseph W. Hurley's son); and 1/8 of Eric's 1/5 share to each of Dawn Cappelletti and Michael Hurley.

Id. at 156.

[8] The trial court held a hearing on the matter in December 2023, and the Children argued both at the hearing and in written filings that the matter had already been fully litigated and that the law of the case was that the Children were entitled to all the residuary assets. IMA and Edward's Estate, on the other hand, argued that Alicia's successors in interest had not been identified by the trial court or this court in Hurley I and that the trial court should look to Alicia's 1982 date of death to determine her successors in interest. The trial court took the matter under advisement after the hearing.

[9] On March 16, 2024, the trial court issued a written order, which included findings of fact and conclusions of law. It agreed with the Children that the law of the case, as established in Hurley I, is that “the successors in interest of Alicia Ballard are ‘the Children,’ namely ‘Sylvia's five children and two grandchildren.’ ” Appendix Vol. VI at 175 (quoting Hurley I, 206 N.E.3d at 490). Therefore, the trial court directed Initial Trustee to “distribute the residue of [the Trust] to Alicia Ballard's successors in interest, namely Sylvia's five children and two grandchildren, the class identified by our Court of Appeals as ‘the Children.’ ” Id.

[10] IMA and Edward's Estate filed an unsuccessful motion to correct error and then appealed the March 2024 order under consolidated Cause No. 24A-TR- 1240 (Hurley II). The Children moved to dismiss the appeal, arguing that the identity of Alicia's successors in interest had been conclusively resolved in Hurley I, which constituted the law of the case.⁴ After responses and full briefing by the parties, another panel of this court issued an order dismissing Hurley II with prejudice on January 15, 2025. IMA and Edward's Estate petitioned for rehearing and then transfer. These petitions were denied on February 25 and June 26, respectively.

[11] Meanwhile, upon mounting pressure from the Children and claims of breach of trust, Initial Trustee reached an agreement with the Children and resigned as trustee. On March 20, 2025, Successor Trustee was appointed by the trial court.

[12] On July 9, 2025, Successor Trustee petitioned the trial court “for instructions to state specifically who the beneficiaries are of the resulting trust and their proportionate share, including clarification of who is to receive Joseph W. Hurley's distributive share of the resulting trust.” Appendix Vol. VIII at 170. Successor Trustee sought clarification as to whether Joseph's share should be distributed to his testate beneficiary or to his son Wesley, whom Joseph had disinherited. Looking to the date of the March 2022 order, rather than the date of Uncle Edward's death, to determine per stirpes beneficiaries of the resulting trust, Successor Trustee proposed the following distribution:

Christopher Hurley (living child of Sylvia Hurley) Kathleen (Hurley) Hoakes (living child of Sylvia Hurley) Dawn Cappelletti (living child of John W. Hurley, deceased child of Sylvia Hurley) Michael Hurley (living child of John W. Hurley, deceased child of Sylvia Hurley) Wesley Hurley (sole living child of Joseph W. Hurley, deceased child of Sylvia Hurley) 25% 25% 12.5% 12.5% 25%

Id. at 172-73. The trial court set the petition for hearing on September 2, 2025.

[13] At the very short hearing, Hilyard argued by counsel that Joseph's Estate, rather than Wesley, was entitled to Joseph's share of the resulting trust. Hilyard reasoned that Joseph was alive when Uncle Edward died and that Joseph could not be divested of the ability to devise this vested property right simply because he did not outlive the trust litigation. No other interested party spoke on this issue, including Wesley who appeared at the hearing pro se.

[14] That same day, Hilyard filed a post-hearing submission supporting the arguments made on behalf of Joseph's Estate at the hearing. Hilyard also noted a “critical distinction” between Wesley and Wesley's two cousins, the grandchildren who were referenced in Hurley I as successors in interest of Alicia. Id. at 185. That is, his cousins’ father, John, died in 2018 and thus predeceased Uncle Edward, while Joseph outlived Uncle Edward.

[15] On September 4, 2025, the trial court issued an order instructing Successor Trustee to distribute Joseph's share directly to Wesley, rather than Joseph's Estate, because Wesley is a living descendant of Alicia and Sylvia. The trial court reasoned that Alicia's intention was to benefit her living descendants before any other person or entity, and thus Joseph's Estate was “necessarily exclude[d]” as a beneficiary of the resulting trust. Appendix Vol. II at 66. The court continued by addressing Hurley I:

Our Court of Appeals ․ determined that “The Children,” or the living descendants of Alicia Ballard through Sylvia Hurley, would benefit from the Resulting Trust. Our Court of Appeals also determined that no entity, including [IMA], could receive distributions from the Resulting Trust as long as there are still living descendants of Sylvia Hurley. This determination by our Court of Appeals in favor of Sylvia's living descendants as the class of beneficiaries also precludes the estates of any deceased family from receiving shares of the Trust. It is certain that the death of Joseph Hurley was a loss to his family, but his children are entitled to his share per stirpes, and his estate is not because it is not part of the class of living Hurley descendants.

Id. at 67 (citation omitted). Ultimately, the trial court determined that Sylvia's two living children – Christopher and Kathleen – were each entitled to 25%, Wesley was entitled to his late father's 25% share, and Michael and Dawn were each entitled to 12.5% for their late father's 25% share.

[16] Hilyard now appeals, arguing that the trial court erred in ordering Joseph's share to be distributed to Wesley rather than Joseph's Estate. Successor Trustee filed a short appellate brief and expressed no position with respect to the issue presented on appeal.⁵ Wesley did not file an appellate brief, nor did any other interested party.

Standard of Review

[17] We review questions of law de novo and thus owe no deference to a trial court's legal conclusions. See Fulp v. Gilliland, 998 N.E.2d 204, 207 (Ind. 2013). Further, where an appellee, like Wesley, does not file an appellate brief, we will not undertake to develop an argument on his behalf. Morton v. Ivacic, 898 N.E.2d 1196, 1199 (Ind. 2008). Rather, we may reverse “upon an appellant's prima facie showing of reversible error,” which is error “at first sight, on first appearance, or on the face of it.” Id.

Discussion & Decision

[18] Hilyard argues that the trial court erred in disinheriting Joseph's Estate and awarding Jospeh's share to Wesley. We agree.

[19] As Hilyard observes, the proper beneficiaries of the resulting trust have already been litigated twice. In Hurley I, this court determined that Alicia's successors in interest were entitled to distribution of the assets of the residual trust, which was created by operation of law upon failure of the residuary clause in the Trust. Hilyard I, 206 N.E.3d at 495 (discussing Doll v. Post, 132 N.E.3d 34 (Ind. Ct. App. 2019), trans. denied). Joseph was clearly within the class of recognized beneficiaries, a descendant of Alicia and Sylvia living at the time of Uncle Edward's death. The two grandchildren – Dawn and Michael – were the living descendants of Alica, Sylvia, and their late father John, who predeceased Uncle Edward.

[20] In Hurley II, IMA and Edward's Estate tried to relitigate the class of individuals entitled to the residuary assets of the Trust. They argued that Alicia's successors in interest should be determined as of Alicia's death, not Edward's death. The Children, however, argued that Hurley I had already identified the successors in interest as the Children, thereby excluding IMA and Edward's Estate. On the Children's motion, the Hurley II appeal was dismissed with prejudice.

[21] After Hurley I and Hurley II, the trial court essentially reconsidered whether Joseph was among the beneficiaries of the resulting trust. The trial court ignored the fact that Joseph was alive when Uncle Edward died, which was the point of failure for the Trust's residuary clause and when the resulting trust was created by operation of law for the benefit of Alcia's successors in interest. Joseph unfortunately died about two years into the extended litigation in this case, most of which was due to IMA's unsuccessful claims to the residuary assets, but he was not required to outlive the litigation for his rights as a beneficiary to vest. The effect of the trial court's September 2025 order was to divest Joseph of his right to a share of the resulting trust. The law of the case, however, was that Joseph was among the beneficiaries of the resulting trust.⁶ Accordingly, the trial court erred by denying Joseph's Estate of his beneficial interest and instead passing that interest to Wesley.

[22] We direct Successor Trustee to distribute Joseph's 25% share to Joseph's Estate. All other distributions shall be as ordered by the trial court and proposed by Successor Trustee.⁷

[23] Judgment reversed.

FOOTNOTES

1.   Sylvia's had five children, and her issue were the only surviving issue of Alicia. Joseph and three of his siblings (Christopher, Kathleen, and Eric) survived Uncle Edward. Joseph's brother John died in 2018 and left two children, Dawn Cappelletti and Michael Hurley, who are the two grandchildren referenced throughout the litigation involving IMA. Joseph and Eric died after Uncle Edward. Joseph had one child, Wesley, whom he disinherited in his will, and Eric died intestate without a surviving spouse or children.

2.   IMA sought rehearing and transfer, but both petitions were denied.

3.   The court noted that four of Sylvia's five children were alive when Uncle Edward died.

4.   “Pursuant to the law of the case doctrine, an appellate courts determination of a legal issue binds both the trial court and the court on appeal in any subsequent appeal involving the same case and substantially the same facts.” In re Larry L. Thompson Revocable Tr., 954 N.E.2d 1056, 1062 (Ind. Ct. App. 2011). “All issues decided directly or by implication in a prior decision are binding in all further portions of the same case.” Id.

5.   Successor Trustee explained:This appeal does not threaten the existence of the resulting trust nor challenge any of the material terms thereof. Rather, the appeal goes to the question of the identity of the rightful beneficiary to the Joseph Hurley share. Consequently, there is no duty on the part of [Successor Trustee] to defend the trust in any way. Exercising its duty of impartiality among beneficiaries, [Successor Trustee] makes no other response to the Appellant's Brief.Appellee's Brief of Successor Trustee at 3.

6.   Law of the case aside, we note that in construing language of a residuary bequest, our Supreme Court has held, “the date of the maturity or falling due of the legacy last to be paid is the date at which the residuary legatees were entitled to the residue, and the time to which we must look for the number of persons entitled to share in it.” Goodwin v. Goodwin, 48 Ind. 584, 590 (1874). The trust and probate codes also provide support for defining the class of residuary beneficiaries as of the date of Uncle Edward's death. See Ind. Code § 29-1-6-1)(c) (providing that with respect to a devise to “heirs,” “family,” or the like that does not take effect upon the testator's death, “the time when such class is to be ascertained shall be the time when the devise is to take effect in enjoyment”); Ind. Code § 30-40-1-10 (providing that if the manner of distribution among “descendants” or “issue” is not specified in the trust, “the property is to be distributed among the class members who are living when the distribution is to take effect in possession or enjoyment, in such shares they would receive, under the applicable law of intestate succession, as if the designated ancestor had then died intestate, unmarried, and owning the subject matter of the distribution”).

7.   We recognize that Eric was among the class defined as the Children, as he died after Uncle Edward. But he died intestate and predeceased Joseph. Accordingly, applying the intestacy laws of Illinois, the distributions under the resulting trust would remain unchanged. See 755 Ill. Comp. Stat. 5/2-1(d).

Altice, Judge.

Brown, J. and DeBoer, J., concur.