MacK v. American Fletcher National Bank & Trust Co.

510 N.E.2d 725 · Indiana Court of Appeals · 1987

Facts

Rosealba J. Jordan created a trust in 1930, conveying commercial real estate in downtown Indianapolis to Fletcher Savings & Trust Co. as trustee, to distribute income to her daughters and lineal descendants. The trust instrument required the daughters' consent for certain actions, including leases over one year. Since 1948, the Trustee leased the building to Indianapolis Newspapers, Inc. (INI) and its predecessor, amending the lease in 1949 (30-year term), 1956 (options through 1998), and 1966 (options through 2018), all with the daughters' consent. Beneficiaries Nancy Mack and Arthur Hes, Jr. (great-grandchildren) had their interests vest upon their grandmother Esther's death in 1972, and were informed by the Trustee and provided trust documents. In 1982, the Beneficiaries filed a complaint against the Trustee and INI, alleging breaches of trust and lease improprieties related to the 1949 and 1966 amendments, among other claims.

Issue

Whether the Beneficiaries are barred by statutes of limitations from recovering damages from the Trustee and INI and from removing the Trustee for actions of which the Beneficiaries had notice no later than 1972 when their interests vested.

Holding

The court affirmed the trial court's decision, holding that the Beneficiaries' claims against the Trustee and INI were barred by the applicable statutes of limitations.

Rule

Statutes of limitations apply to both legal and equitable actions, and a cause of action accrues when injury and damages occur. Claims against a trustee for breach of trust seeking damages are considered actions at law, and breach of fiduciary duty is treated as a tort, subject to statutes of limitations for injury to personal or real property (e.g., two or six years). If a legal remedy is barred by a statute of limitations, an analogous equitable remedy, such as the removal of a trustee, is also barred.

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