ESTATE OF SONJA EITELJORG v. EITELJORG et al

Filing 71

ORDER - denying 61 Motion for Judgment on the Pleadings; *** SEE ORDER ***. Signed by Judge Sarah Evans Barker on 5/3/2012. (CKM)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF INDIANA
INDIANAPOLIS DIVISION
)
)
)
)
)
)
vs.
)
HARRISON EITELJORG, II and JACK M. )
)
EITELJORG,
)
Defendants.
ESTATE OF SONJA EITELJORG by
ROGER EITELJORG as PERSONAL
REPRESENTATIVE,
Plaintiff,

1:09-cv-0726-SEB-DML

ORDER DENYING DEFENDANTS’ MOTION FOR JUDGMENT ON THE
PLEADINGS
Presently before the Court is Defendants’ Motion for Judgment on the Pleadings
[Docket No. 61], filed on December 12, 2011, pursuant to Federal Rule of Civil
Procedure 12(c). Plaintiff, the Estate of Sonja Eiteljorg by Roger Eiteljorg as personal
representative (“the Estate”), opposes the motion [Docket No. 65]. For the reasons
detailed below, Defendants’ Motion for Judgment on the Pleadings is DENIED.
Factual Background
This lawsuit is a regrettable aspect of a longstanding family feud among the
survivors of the late Harrison Eiteljorg (“Harrison”1). For our purposes, the relevant
subject matter dates back to 1994, when Harrison established a testamentary trust (the
Harrison Eiteljorg Revocable Trust–JN, hereafter “the JN Trust”) for which he served as

1

Except when referring to the Estate or to Nick and Jack Eiteljorg as “the Eiteljorgs” in
their capacity as joint defendants, we use first names throughout the order. We do so to alleviate
the confusion otherwise inherent when several parties share a surname.

sole trustee until his death in 1997. The lifetime income beneficiary of the JN Trust was
Harrison’s second wife, Sonja Eiteljorg (“Sonja”); the remainder beneficiaries were
Harrison Eiteljorg II (“Nick”) and Jack Eiteljorg (“Jack”), the two biological children
from Harrison’s first marriage. Several individuals succeeded Harrison as co-trustees:
Sonja, Nick, Jack, Roger Eiteljorg (Harrison’s stepson and Sonja’s biological son,
hereafter “Roger”), and John Lienhart (Harrison’s accountant and friend, hereafter
“Lienhart”).
Following Harrison’s death, the successor co-trustees of the JN Trust found
themselves at odds with one another regarding the proper allocation of trust assets. Sonja,
Nick, and Jack attempted to effect a mutually agreeable solution by signing a settlement
agreement on December 18, 2001 (the “Settlement Agreement”), which––if only
temporarily––tamped down their disagreement. Then, after Sonja’s death in July 2003,
the dispute was rekindled. Sonja’s Estate was opened on July 23, 2003 in the probate
division of the Miami-Dade County Circuit Court in Miami, Florida,2 and her son, Roger,
served as its personal representative. Pl.’s Resp. Ex. A at 1. Nearly eight years later, in
March 2011, Roger executed a document assigning the claim to three transferees on
March 2, 2011. He filed a petition for discharge as personal representative of the Estate
one month later and was discharged by the Florida probate court on June 28, 2011.

2

Sonja was a citizen of the State of Florida at the time of her death. Accordingly, because
the federal diversity statute treats the legal representative of an estate as a citizen of the same
state as the decedent, the Estate is also a citizen of the State of Florida. 28 U.S.C. § 1332(c)(2);
Gustafson v. zumBrunnen, 546 F.3d 398, 399 (7th Cir. 2008).
2

During this time period, notwithstanding the Settlement Agreement and its mutual
release and litigation clauses (both of which underlie the parties’ core dispute), the
Eiteljorgs filed a verified petition in the probate division of the Marion Superior Court on
January 6, 2005. Their purpose in filing suit was to seek an order removing Roger and
Lienhart as co-trustees of the JN Trust. The probate court found Roger and Jack liable for
breach of their fiduciary duty to administer the JN Trust according to its terms and
awarded damages and fees to the Eiteljorgs in April 2010.3 Two months later, the Indiana
Court of Appeals issued a decision affirming the probate court’s judgment regarding
liability, reversing the probate court’s calculation of fees, and remanding the action for a
reassessment of compensatory damages. In re Eiteljorg, 951 N.E.2d 565, 570-73 (Ind.
Ct. App. 2011).
Plaintiff filed the instant lawsuit on June 12, 2009, asserting breach of contract by
the Eiteljorgs and requesting damages as detailed in the Settlement Agreement as well as
an award of pre-judgment interest, fees, and costs. The Eiteljorgs moved to dismiss the
Estate’s Complaint on September 20, 2010, and the Court granted their motion without
prejudice, pursuant to Federal Rule of Civil Procedure 12(b)(6). In our order dated
September 27, 2011 [Docket No. 52], we granted the Estate leave to amend its Complaint.
Accordingly, the Estate filed its Amended Complaint [Docket No. 56] on November 4,
2011, and the Eiteljorgs filed their Answer [Docket No. 58] on November 14, 2011. In

3

The length of time between filing and disposition of the probate litigation was due in
large part to the fact that the presiding judge died before a final ruling issued.
3

the motion currently before the Court, the Eiteljorgs seek judgment on the pleadings on
the basis that the Estate lacks the capacity to sue and is not a real party in interest in the
instant matter.
Legal Analysis
I. Standard of Review
Federal Rule of Civil Procedure 12(c) allows a party to move for judgment after
the pleadings are closed but early enough not to delay trial. Remy, Inc. v. Tecnomatic,
S.p.A., No. 1:08-cv-1227-SEB-WGH, 2010 WL 4174594, at *2 (S.D. Ind. Oct. 18, 2010).
A motion for judgment on the pleadings is subject to the same standard of review as a
motion to dismiss under Rule 12(b)(6). Id. (citing Cuatle v. Torres, No. 1:09-cv-0820RLY-TAB, 2010 WL 2545627, at *1 (S.D. Ind. June 15, 2010)). This analysis
necessarily implicates Rule 8(a), which prescribes the contents of pleadings. Fed. R. Civ.
P. 8(a); see Killingsworth v. HSBC Bank Nev., N.A., 507 F.3d 614, 618 (7th Cir. 2007)
(requiring a “short and plain statement” to demonstrate the pleader’s entitlement to relief).

“[A] plaintiff’s obligation to provide the ‘grounds’ of his ‘entitle[ment] to relief’
requires more than labels and conclusions, and a formulaic recitation of a cause of
action’s elements will not do.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007)
(citing Papasan v. Allain, 478 U.S. 265, 286 (1986)). Similarly, a claim is facially
plausible “when the plaintiff pleads factual content that allows the court to draw the
reasonable inference that the defendant is liable for the misconduct alleged.” Greater
4

Indianapolis Chapter of N.A.A.C.P. v. Ballard, 741 F. Supp. 2d 925, 930 (S.D. Ind.
2010). But where the properly pleaded facts do not permit the court to infer “more than
the mere possibility of misconduct,” the pleader has not satisfied his burden. Id. at 931
(citing Ashcroft v. Iqbal, 129 S. Ct. 1937, 1950 (2009)).
If, on a motion for judgment on the pleadings, the parties present matters outside
the pleadings, the motion will be treated as one for summary judgment under Rule 56.
Fed. R. Civ. P. 12(d). However, judicially noticed documents such as “historical
documents, documents contained in the public record, and reports of administrative
bodies” may be considered by the court at this stage of litigation without converting the
motion into a motion for summary judgment. Menominee Indian Tribe of Wis. v.
Thompson, 161 F.3d 449, 456 (7th Cir. 1998). All uncontested allegations to which the
parties had an opportunity to respond must be accepted as true. United States v. Wood,
925 F.2d 1580, 1581 (7th Cir. 1991).
A motion for judgment on the pleadings is a motion for judgment on the merits.
Smith v. Jupiter Aluminum Corp., No. 2:09-cv-356, 2011 WL 197577, at *2 (N.D. Ind.
Jan. 18, 2011); see also 5C WRIGHT & MILLER, FEDERAL PRACTICE AND PROCEDURE
CIVIL § 1369, at 261 (3d ed. 2007). If judgment is entered for the moving party, a motion
for judgment on the pleadings will result in the final disposition of the action. Id.
II. Discussion
In the sole count of the Amended Complaint, the Estate seeks monetary damages
for injuries resulting from the Eiteljorgs’ alleged breach of the Settlement Agreement.
5

The Eiteljorgs argue that such an award is inappropriate because the Estate is no longer a
recognized legal entity. They further assert that Roger has been discharged from his
duties as personal representative of the Estate and, therefore, “the Estate of Sonja
Eiteljorg by Roger Eiteljorg as personal representative” does not exist. According to the
Eiteljorgs, the case before the Court is now a “suit by a non-entity” which lacks capacity
to sue and is not a real party in interest. Thus, the Eiteljorgs contend that they are entitled
to judgment on the Amended Complaint as a matter of law because the Estate has no right
or power to maintain an action in federal court.
We note preliminarily that “[t]he capacity of an individual, other than one acting in
a representative capacity, to sue . . . [is] determined by the law of the individual’s
domicile. . . . In all other cases[,] capacity to sue or be sued [is] determined by the law of
the state in which the district court is held.” Owner-Operators Indep. Drivers Ass’n, Inc.
v. Mayflower Transit, Inc., No. 1:98-cv-0457-SEB-VSS, 2006 WL 1794751, at *5 n.9
(S.D. Ind. June 27, 2006) (citing Fed. R. Civ. P. 17(b)(3)). Pursuant to the Indiana Code,
the legal representative of the deceased has capacity to sue or be sued; such representative
may bring a civil action which “is considered a continued action and accrues to the
representative[] . . . at the time the action would have accrued to the deceased if the
deceased had survived.” Ind. Code § 34-9-3-1(b). Successor personal representatives
“have all the rights and powers of [their] predecessor[s]” except for rights and powers that
are expressly personal. Id. § 29-1-10-8. Moreover, Indiana case law makes clear that
“the estate of a decedent cannot be a party to an action without some form of
6

representation.” Pasley v. Am. Underwriters, Inc., 433 N.E.2d 838, 841 (Ind. Ct. App.
1982) (citing Wilson v. King’s Estate; 170 N.E.2d 63 (Ind. Ct. App. 1960); Carr v.
Schneider’s Estate, 51 N.E.2d 392 (Ind. Ct. App. 1943)). The party asserting lack of
capacity bears the burden of proof on the issue and must raise it as an affirmative defense.
Ind. Trial R. 9(A).
Rule 17(A) of the Indiana Rules of Trial Procedure requires every action to be
brought in the name of the “real party in interest.” Ind. Trial R. 17(A). This term refers
to “the person who is the true owner of the right sought to be enforced.” Hammes v.
Brumley, 659 N.E.2d 1021, 1030 (Ind. 1995). Under Indiana’s probate code, “the
personal representative of the decedent may bring an action to recover assets . . . [and]
[t]he right to bring such an action is specifically vested in the personal representative.”
Spitler v. Schell, 205 N.E.2d 155, 158 (Ind. 1965).
Here, there is no question that Indiana law vests in Plaintiff, the Estate of Sonja
Eiteljorg by Roger Eiteljorg as personal representative, the capacity to sue and be sued.
Plaintiff therefore had the capacity to file its initial pleadings in the United States District
Court for the Southern District of Indiana on June 9, 2012. It is equally clear that
Plaintiff was the proper real party in interest at the time the action was commenced.
Indeed, the parties do not dispute Plaintiff’s capacity to sue or its status as real party in
interest as of the filing of the Original Complaint. What is disputed, however, is the
practical effect that Roger’s filings in the Florida probate court––to wit, the assignment of
the claim and the petition for discharge––have on the status of the parties in the case at
7

bar. Plaintiff contends that the Estate remains a suitable party to this lawsuit based on a
straightforward application of Rule 25(c) of the Federal Rules of Civil Procedure. By
contrast, the Eiteljorgs assert that the 2011 developments in the Florida probate court
preclude Plaintiff from continued participation in the present matter and, therefore,
compel this court to grant judgment on the pleadings in the Eiteljorgs’ favor.
The Eiteljorgs reference a substantial excerpt of Hawkeye Security Insurance
Company v. Porter, 95 F.R.D. 417 (N.D. Ind. 1982), to support their contention that the
Florida probate court’s June 2011 grant of Roger’s petition for discharge (the “Order of
Discharge”) stripped Plaintiff of its capacity to sue. They direct the Court’s attention to
the reasoning employed in Porter by emphasizing the following language in their brief:
[T]he discharge of the personal representative by the probate court acts not only as
a release from any further duties to the estate, but acts also as a bar to suit against
the personal representative’s fraud, mistake, or willful misconduct.
***
Thus, at the time of the filing of this action in federal court, Minnie Porter was no
longer personal representative of the estate, and said estate had ceased to exist as a
legal entity. . . . Since an estate must cease to exist as a legal entity once it has
been fully probated and the personal representative has been discharged, it
necessarily follows that the default judgment entered by [the court] . . . against
Minnie Porter in her capacity as personal representative of Arthur Buck’s estate
constitutes a judgment against a non-entity.
Porter, 95 F.R.D. at 418-19. As we understand the Eiteljorgs’ position, they rely on
Porter to bolster an otherwise rather conclusory argument that a grant of judgment on the
pleadings in their favor is a foregone conclusion. We remind the Eiteljorgs, however, that
in ruling on a motion for judgment on the pleadings, we examine the factual sufficiency
8

of the pleadings and any reasonable inferences arising therefrom. Based on the facts as
contained in the pleadings, it would be unreasonable for this court to draw the inference
that Porter’s result of dismissal is appropriately applied here.
The facts of Porter compared to the facts of the Eiteljorgs’ case shows them to be
inapposite. Porter arose out of an automobile accident and involved a dispute between an
insurance company and Minnie Porter in her capacity as personal representative of the
Estate of Arthur Buck. Porter, 95 F.R.D. at 418. Probate of Mr. Buck’s estate was
completed on January 26, 1981, and Ms. Porter was contemporaneously discharged as
personal representative. However, the insurance company did not file suit against Ms.
Buck in her representative capacity until April 2, 1981. Id. at 418-19. As a result, the
district court relied on the important distinction that “at the time of the filing of this action
in federal court, Minnie Porter was no longer personal representative of the estate, and
said estate ha[d] ceased to exist as a legal entity.” Id. at 419 (emphasis added). Ms.
Porter was not the real party in interest; moreover, the district court’s observation that “a
gap of more than two months separate[d] the closing of [the] estate . . . from the filing of
this action” informs us that the Porter court properly allowed a reasonable opportunity for
the real party in interest to be joined or substituted under Federal Rule of Civil Procedure
17(a)(3).4 Fed. R. Civ. P. 17(a)(3); see also CWCapital Asset Mgmt., LLC v. Chi. Props.,

4

Rule 17(a)(3) of the Federal Rules of Civil Procedure provides, in relevant part, that
“[t]he court may not dismiss an action for failure to prosecute in the name of the real party in
interest until, after an objection, a reasonable time has been allowed for the real party in interest
(continued...)
9

LLC, 610 F.3d 497, 502 (7th Cir. 2010). It was therefore wholly proper in Porter for the
court to conclude that without a real party in interest or an estate that still had capacity to
sue as a legal entity, no judgments in that case could be rendered against Ms. Porter in her
representative capacity. Porter, 95 F.R.D. at 419.
By contrast, the sequence of events underlying the present lawsuit easily
distinguishes it from Porter and requires a different result. Probate of the Estate in
Florida state court began on July 23, 2003. While the Florida probate suit was pending,
Roger, as personal representative for the Estate, filed this lawsuit alleging breach of
contract by the Eiteljorgs in our court. On March 2, 2011, Roger Eiteljorg executed an
“Assignment of Claim” in his representative capacity for the Estate, which document
provided, in relevant part, as follows:
Roger Eiteljorg, as Personal Representative of the Estate of Ellen Sonja Eiteljorg,
Miami-Dade County Circuit Court, Probate Division Case No. 01-1367(02), party
of the first part, as a distribution from such Estate to Roger Eit[el]jorg, Vivian
Wunsch and James Eiteljorg, together parties of the second part, . . . does hereby
distribute, grant, bargain, sell, assign, transfer and set over unto the said parties of
the second part, in equal interests, all the right, title, and interest owned and held
by the party of the first part to the claim against Harrison Eiteljorg II and Jack M.
Eiteljorg . . . in that certain suit filed in [t]he United States District Court for the
Southern District of Indiana.
Pl.’s Resp. Ex. A at 1, 3. Roger filed a petition for discharge as personal representative of
the Estate on April 15, 2011, which the Florida probate court granted on June 28, 2011.

4

(...continued)
to ratify, join, or be substituted into the action. After ratification, joinder, or substitution, the
action proceeds as if it had been originally commenced by the real party in interest.”
10

Id. at 1 ¶¶ 4-5; Defs.’ Br. Ex. B. Thus, according to Roger, the effect of the Order of
Discharge was to transfer his interest in the federal lawsuit to Roger Eiteljorg, Vivian
Wunsch, and James Eiteljorg, each in his or her individual capacity (“the Transferees”).
A well-established tenet of Indiana law5 is that “any cause or right of action may
be assigned that, in accordance with the rules relating to the survivability of causes of
action . . . would . . . survive to [the assignor’s] legal representative.” State Farm Mut.
Auto. Ins. Co. v. Estep, 873 N.E.2d 1021, 1025 (Ind. 2007). Furthermore, a right to
damages for breach of contract is assignable under Indiana law, although rights arising
under personal services contracts are generally not assignable. INS Investigations
Bureau, Inc. v. Lee, 709 N.E.2d 736, 741 (Ind. Ct. App. 1999). The breach of contract
claim for the Eiteljorgs’ alleged violation of the Settlement Agreement arises from a
legitimately executed document that contains no language prohibiting assignment of the
claim. See generally Am. Compl. Ex. A (the Settlement Agreement). Therefore, the
claim originally brought by the Estate appears facially assignable under general principles
of Indiana law.
When a party to a lawsuit transfers his interest in the matter, the transferee may, in
certain circumstances, become a party as well. See Hofheimer v. McIntee, 179 F.2d 789,
792 (7th Cir. 1950) (holding that “if [a transferee] acquires [this interest] after suit is

5

This case is before the Court on diversity jurisdiction. Because the parties raise no
conflict of law issues and the case was filed in a federal court in Indiana, we apply Indiana law.
See RLI Ins. Co. v. Conseco, Inc., 543 F.3d 384, 390 (7th Cir. 2008).
11

brought, i.e., pendente lite, then he may be made a party”). Timing of the transfer is a
determinative factor; specifically, timing dictates whether Rule 17 or 25 of the Federal
Rules of Civil Procedure governs the transferee’s continued status in the litigation. “Rule
17(a) applies to interests transferred prior to commencement of an action. . . . Rule 25(c),
an extension of Rule 17(a), controls situations where an interest is transferred during the
pendency of an action.” Tate v. Snap-On Tools Corp., No. 90-c-4436, 1997 WL 106275,
at *4 n.7 (N.D. Ill. Feb. 11, 1997); see also Commonwealth Edison Co. v. Diversified
Techs. Grp., Inc., No. 93-c-4138, 1993 WL 479046, at *2 (N.D. Ill. Nov. 17, 1993)
(noting that “Rule 25(c) only applies when the transfer of interest occurs during the
pendency of an action”). Having already established that Plaintiff––a real party in
interest when this action commenced––properly assigned its interest in the case at bar to
the Transferees pendente lite, we look to Rule 25(c) for guidance as to whether the suit
may continue with the Transferees as parties. See, e.g., Froning’s, Inc. v. Johnston Feed
Serv., 568 F.2d 108, 110 (8th Cir. 1978); Unison Realty Corp. v. RKO Theatres, Inc., 35
F.R.D. 232 (S.D.N.Y. 1964); 7A WRIGHT & MILLER, FEDERAL PRACTICE AND
PROCEDURE § 1958, at 663 (1972).
Pursuant to Rule 25(c), “[i]f an interest is transferred, the action may be continued
by or against the original party unless the court, on motion, orders the transferee to be
substituted in the action or joined with the original party.” Fed. R. Civ. P. 25(c). The
decision to substitute a party under this rule is within the discretion of the trial court. Otis

12

Clapp & Son, Inc. v. Filmore Vitamin Co., 754 F.2d 738, 743 (7th Cir.1985).
Importantly, this rule is intended to further the policy goals of efficient litigation:
The most significant feature of Rule 25(c) is that it does not require that anything
be done after an interest has been transferred. The action may be continued by or
against the original party, and the judgment will be binding on his successor in
interest even though he is not named. An order of joinder is merely a discretionary
determination by the trial court that the transferee’s presence would facilitate the
conduct of the litigation.
Id. (quoting 7A WRIGHT & MILLER, FEDERAL PRACTICE AND PROCEDURE § 1958, at 66465 (1968) (citations and quotation marks omitted)). A transferee generally “takes over
without any other change in the status of the case.” Brook, Weiner, Sered, Kreger &
Weinberg v. Coreq, Inc., 53 F.3d 851, 852 (7th Cir. 1995) (citing Kaplan v. Joseph, 125
F.2d 602, 606 (7th Cir. 1942)). As a result, the Transferees’ status in this litigation––just
like the substantive claim raised in the Amended Complaint––is identical to that of the
original litigant. See id. The Seventh Circuit’s well-reasoned justification for this precept
of law is that “[a]ny other approach would make a shambles of litigation; a party could
sell its interest or change its internal structure . . . and require the court to start from
scratch.” Id.
Here, we are mindful of the long history between the litigants and find that
maintaining the status quo of the parties is the best way to push this dispute ahead toward
a final resolution on the merits. We therefore find it proper for the litigation to continue

13

in the name of the Estate6 and conclude that the Eiteljorgs’ Motion for Judgment on the
Pleadings must be DENIED.
Conclusion
For the reasons set forth in this entry, the Court DENIES Defendants’ Motion for
Judgment on the Pleadings.
IT IS SO ORDERED.
05/03/2012
Date: _________________________________
_______________________________
SARAH EVANS BARKER, JUDGE
United States District Court
Southern District of Indiana

6

We decline to substitute or join the Transferees as Plaintiffs sua sponte at this time.
Because Roger Eiteljorg is one of the Transferees, and having no evidence before us to the
contrary, we do not believe that the Transferees’ presence would facilitate the conduct of the
litigation.
14

Copies to:
Mark S. Alderfer
HACKMAN HULETT & CRACRAFT LLP
[e-mail]
Vicki L. Anderson
HACKMAN HULETT & CRACRAFT LLP
[e-mail]
Joseph M. Hendel
HACKMAN HULETT & CRACRAFT LLP
[e-mail]
Brian J. Paul
ICE MILLER LLP
[e-mail]
Richard A. Smikle
ICE MILLER LLP
[e-mail]

15