IBJNews

Appeals court: Eiteljorg estate trustees breached duties

Back to TopCommentsE-mailPrintBookmark and Share

Trustees for the estate of deceased Indianapolis businessman Harrison Eiteljorg breached their duty to distribute more than $1 million from his trust, a panel of state appellate court judges ruled Monday.

The judges affirmed an earlier decision from the Marion Superior Court, which determined the trustees should have distributed $1.2 million in October 2004 to Eiteljorg’s sons, Harrison Eiteljorg II and Jack Eiteljorg. The trustees distributed the money the next year, after being ordered to by a court.

Harrison Eiteljorg founded the Eiteljorg Museum of American Indians and Western Art in downtown Indianapolis in 1989.

Trustees for his estate are Eiteljorg’s stepson, Roger Eiteljorg, and accountant John Lienhart. The trustees were appealing rulings by judges Charles Dieter and Tanya Walton Pratt in 2005, claiming they erred in finding a breach of duty and in assessing damages and attorneys'  fees.

Two of the three appellate judges on the panel affirmed Pratt’s decision, while one dissented.

Harrison Eiteljorg died in 1997 and named his second wife, Sonja, as sole beneficiary. She died in July 2003. At the time, the assets of the Eiteljorg trust totaled about $6.5 million, including $3.2 million in liquid assets, according to court documents.

The two Eiteljorg sons requested a distribution in October 2004 of $2 million, which Lienhart considered excessive because the trust may have owed as much as $2 million in additional taxes, the documents said.

Instead, Lienhart and Roger Eiteljorg countered by offering a total of $1 million.

Following failed attempts at negotiating, the brothers petitioned the court in January 2005 to remove Lienhart and Roger Eiteljorg as trustees, and later raised 13 claims of breach of trust.

Judge Charles Dieter issued an order denying their removal as trustees but required an immediate distribution of $1.5 million. In July 2005, the trustees complied by distributing $1.2 million in cash, in addition to non-liquid assets, according to court documents.

Dieter also determined that the trustees breached their duty by failing to promptly distribute the assets, but the judge found them not liable on the 11 remaining breach of trust claims.

Judge Dieter found the trustees breached their duties, but died before ruling on damages. Pratt took over the case and concluded that $1.2 million should have been distributed at an October 2004 meeting.

“The bottom line is that [trustees] John and Roger, in violation of the explicit terms of the trust agreement, and knowing that the property was available, did not distribute $1 million in trust assets or seek guidance from the courts for at least six months following the October meeting,” the judges wrote in supporting Pratt.

Pratt also awarded Harrison Eiteljorg II $156,701 in lost earnings from investments he planned to make with the money from the trust and awarded Jack Eiteljorg $112,046 in lost profits from a missed real estate deal. In addition, she awarded the two $353,612 in attorney’s fees.

But the panel of judges in the appeal said the brothers are only entitled to interest on their withheld distributions and found the damages awarded by Pratt to be “erroneous.”

The appellate judges also found the attorney’s fees to be excessive and concluded a fee of $150,000 to be more appropriate.

The appellate judges remanded the awarding of compensatory damages and attorney’s fees back to the trial court.
 

 

ADVERTISEMENT

Post a comment to this story

COMMENTS POLICY
We reserve the right to remove any post that we feel is obscene, profane, vulgar, racist, sexually explicit, abusive, or hateful.
 
You are legally responsible for what you post and your anonymity is not guaranteed.
 
Posts that insult, defame, threaten, harass or abuse other readers or people mentioned in IBJ editorial content are also subject to removal. Please respect the privacy of individuals and refrain from posting personal information.
 
No solicitations, spamming or advertisements are allowed. Readers may post links to other informational websites that are relevant to the topic at hand, but please do not link to objectionable material.
 
We may remove messages that are unrelated to the topic, encourage illegal activity, use all capital letters or are unreadable.
 

Messages that are flagged by readers as objectionable will be reviewed and may or may not be removed. Please do not flag a post simply because you disagree with it.

Sponsored by
ADVERTISEMENT

facebook - twitter on Facebook & Twitter

Follow on TwitterFollow IBJ on Facebook:
Follow on TwitterFollow IBJ's Tweets on these topics:
 
Subscribe to IBJ
  1. I had read earlier this spring that Noodles & Co was going to open in the Fishers Marketplace (which is SR 37 and 131st St, not 141st St, just FYI). Any word on that? Also, do you happen to know what is being built in Carmel at Pennsylvania and Old Meridian? May just be an office building but I'm not sure.

  2. I'm sorry, but you are flat out wrong. There are few tracks in the world with the history of IMS and probably NO OTHER as widely known and recognized. I don't care what you think about the stat of Indy Car racing, these are pretty hard things to dispute.

  3. Also wondering if there is an update on the Brockway Pub-Danny Boy restaurant/taproom that was planned for the village as well?

  4. Why does the majority get to trample on the rights of the minority? You do realize that banning gay marriage does not rid the world of gay people, right? They are still going to be around and they are still going to continue to exist. The best way to get it all out of the spotlight? LEGALIZE IT! If gay marriage is legal, they will get to stop trying to push for it and you will get to stop seeing it all over the news. Why do Christians get to decide what is moral?? Why do you get to push your religion on others? How would legalizing gay marriage expose their lifestyle to your children? By the way, their lifestyle is going to continue whether gay marriage is legalized or not. It's been legal in Canada for quite a while now and they seem to be doing just fine. What about actual rules handed down by God? What about not working on Sundays? What about obeying your parents? What about adultery? These are in the 10 Commandments, the most important of God's rules. Yet they are all perfectly legal. What about divorce? Only God is allowed to dissolve a marriage so why don't you work hard to get divorce banned? Why do you get to pick and choose the parts of the Bible you care about?

  5. Look at the bright side. With the new Lowe's call center, that means 1000 jobs at $10 bucks an hour. IMS has to be drooling over all that disposable income. If those employees can save all their extra money after bills, in five years they can go to the race LIVE. Can you say attendance boost?

ADVERTISEMENT