American Management, Inc. v. MIF Realty, L.P., 49A05-9507-CV-279

Decision Date04 June 1996
Docket NumberNo. 49A05-9507-CV-279,49A05-9507-CV-279
Citation666 N.E.2d 424
PartiesAMERICAN MANAGEMENT, INC., Richard B. McCool, Sr. and Richard B. McCool, Jr., Appellants-Defendants, v. MIF REALTY, L.P. as Successor in Interest to Resolution Trust Corporation, as Conservator for Transohio Federal Savings Bank, Appellee-Plaintiff.
CourtIndiana Appellate Court
OPINION

SHARPNACK, Chief Judge.

American Management, Inc., Richard B. McCool, Sr. and Richard B. McCool, Jr. (collectively "appellants") appeal the entry of summary judgment in favor of MIF Realty, L.P. ("MIF") as successor in interest to Resolution Trust Corporation ("RTC"), as conservator for Transohio Federal Savings Bank ("Transohio"). The parties raise three issues for our review which we restate as:

(1) whether the trial court erroneously relied upon undesignated evidence;

(2) whether the trial court properly entered summary judgment on the question of MIF's right to recover the debt; and

(3) whether the trial court erroneously entered summary judgment on the question of the amount owed to MIF.

We affirm in part, reverse in part, and remand.

Procedural History

On June 26, 1992, the original plaintiff, Transohio, filed an action against American Management to recover under a promissory note, to foreclose a mortgage on real estate owned by American Management, to appoint a receiver, and to recover against the McCools on a guaranty agreement. On July 10, 1992, Transohio was placed in a receivership and RTC was named as the receiver. In addition, Transohio was placed in conservatorship and RTC was named as the conservator. As the receiver for Transohio, RTC entered into an agreement to purchase all of the deposits, assets, and secured liabilities of Transohio. Accordingly, as conservator for Transohio, RTC became the owner of the note, mortgage, and guaranty, which formed the basis of Transohio's action.

On August 5, 1992, RTC sought substitution as plaintiff as the real party in interest, which was granted. Then, on August 7, 1992, RTC filed its notice of removal and the cause was removed to the United States District Court for the Southern District of Indiana. On August 25, 1992, the appellants filed their answer and counterclaim. In the counterclaim, the appellants alleged that certain funds were not disbursed pursuant to the note and that the appellants were entitled to offset such amounts against the total debt owed.

On May 27, 1993, GE Capital Realty Group, Inc. ("GE") moved for substitution as the real party in interest, stating that GE was the new owner of the note and mortgage. The following day, GE was substituted as plaintiff.

On July 16, 1993, MIF sought substitution as the real party in interest, stating that it owned the note, mortgage, and guaranty. MIF claimed that GE was the "Sub-Asset Manager" for MIF rather than the owner of the note and mortgage. On July 19, 1993, MIF was substituted as the new plaintiff. On July 29, 1994, MIF filed a motion for summary judgment.

On November 21, 1994, the District Court concluded that it lacked subject matter jurisdiction with the substitution of MIF for RTC. The case was remanded to the Marion Superior Court without a decision on the motion for summary judgment. Thus, on December 8, 1994, MIF filed a renewed motion for summary judgment. On February 14, 1995, the trial court granted MIF's motion and entered findings of fact and conclusions thereon. The findings and conclusions were subsequently amended on February 24, 1995.

On March 16, 1995, the appellants filed a motion to correct errors, which was denied. They now appeal the trial court's determination.

Facts

On February 12, 1990, American Management executed a promissory note to Transohio for $1,600,000. The note called for sixteen payments of $14,635.83, with a final balloon payment due on August 1, 1991. The final balloon payment was equal to the entire amount of the unpaid principal balance, accrued interest, and all charges due and unpaid. The note was secured by a mortgage on real estate owned by American Management known as the Red Mill I Apartments, and the repayment terms of the note were guaranteed by the McCools. American Management failed to pay the note at maturity.

Standard of Review

When we review a trial court's entry of summary judgment, we are bound by the same standard as the trial court. Ayres v. Indian Heights Volunteer Fire Dep't, 493 N.E.2d 1229, 1234 (Ind.1986). We may consider only those portions of the pleadings, depositions, answers to interrogatories, admissions, matters of judicial notice, and any other matters designated to the trial court by the moving party for purposes of the motion for summary judgment. Ind.Trial Rule 56(C), (H); Rosi v. Business Furniture Corp., 615 N.E.2d 431, 434 (Ind.1993). The moving party in a motion for summary judgment bears the burden of making a prima facie showing that there are no genuine issues of material fact and that the movant is entitled to judgment as a matter of law. Hermann v. Yater, 631 N.E.2d 511, 513 (Ind.Ct.App.1994), reh'g denied. Once the movant satisfies this burden, the burden shifts to the nonmoving party to produce specifically designated facts showing the existence of a genuine issue. Id.

A factual issue is "genuine" if it is not capable of being conclusively foreclosed by reference to undisputed facts. Haniford v. Belanger, 433 N.E.2d 39, 42 (Ind.Ct.App.1982), reh'g denied. Although there may be genuine disputes over certain facts, a fact is "material" when its existence facilitates the resolution of an issue in the case. Yaney by Yaney v. McCray Memorial Hosp., 496 N.E.2d 135, 136 (Ind.Ct.App.1986). Again, the threshold burden is on the movant to demonstrate the absence of a genuine issue of material fact. See Hermann, 631 N.E.2d at 513. This burden is not satisfied where the facts presented as undisputed can support different inferences. See County of Laporte v. James, 496 N.E.2d 1325, 1328 (Ind.Ct.App.1986). Moreover, any doubt as to the existence of an issue of material fact, or an inference to be drawn from the facts, must be resolved in favor of the nonmoving party. Cowe v. Forum Group, Inc., 575 N.E.2d 630, 633 (Ind.1991).

Finally, when the trial court enters findings of fact and conclusions thereon in ruling on a motion for summary judgment, the findings and conclusions "merely afford the appellant an opportunity to address the merits of the trial court's rationale". Campbell v. Spade, 617 N.E.2d 580, 582 (Ind.Ct.App.1993). The findings and conclusions also aid the appellate court by providing a statement of reasons for the trial court's action. Id. However, they have no other effect. Id. Rather, we must base our decision upon the material designated to the trial court. Shourek v. Stirling, 652 N.E.2d 865, 867 (Ind.Ct.App.1995).

I.

The first issue raised by the parties is whether the affidavit of indebtedness from Michael Hudspeth, filed January 26, 1995 (the "second Hudspeth affidavit"), was insufficient to establish the amount owed to MIF. Specifically, the parties dispute whether Hudspeth had personal knowledge of American Management's debt. 1 In the affidavit, Hudspeth indicated that American Management owed MIF "$1,812,086.16, plus interest accruing from January 16, 1995, at the per diem rate of $485.19, plus late charges, plus reasonable attorney's fees." Supp.Record, item R. The affidavit was offered by Hudspeth "to the best of his knowledge and belief, in his capacity as Asset Manager of GE Capital Realty Group, Inc., the authorized representative of the Plaintiff, MIF Realty, L.P. ('MIF Realty'), based upon a review of the files in his possession." Supp.Record, item R. The appellants maintain that Hudspeth did not have personal knowledge of the amount of the debt because Hudspeth was not familiar with the note until 1993 when MIF acquired it from RTC.

However, we need not address the merits of this argument because the trial court improperly considered the affidavit, as it had not been designated. 2 A party is required to designate those materials which it contends support or preclude the entry of summary judgment. T.R. 56(C). As the reviewing court, we are not free to search the entire record to determine the propriety of the trial court's entry of summary judgment. Jackson v. Blanchard, 601 N.E.2d 411, 415 (Ind.Ct.App.1992). Only those portions of the record that were specifically designated to the trial court comprise the entire record for appellate review. Id.; see Keating v. Burton, 617 N.E.2d 588, 591 (Ind.Ct.App.1993), reh'g denied, trans. denied. The trial rule, however, does not dictate the manner in which a party must designate the material to the trial court. Nat'l Bd. of Exmrs. for Osteopathic Physicians & Surgeons, Inc. v. American Osteopathic Ass'n, 645 N.E.2d 608, 615 (Ind.Ct.App.1994). Thus, the parties have the discretion to designate the material either in the summary judgment motion itself, in a separate filing, or in a brief in support of or in opposition to the motion for summary judgment. Id. The parties act within their discretion as long as they inform the trial court of the specific material upon which the parties rely in support of or in opposition to a motion for summary judgment. Id.

Here, the original motion for summary judgment was filed on July 29, 1994, in the federal district court. In addition, on July 29, 1994, MIF filed an affidavit from Hudspeth (the "first Hudspeth affidavit"), in which Hudspeth indicated that the amount of indebtedness was "in the sum of $1,872,190.67, plus interest accruing from July 1, 1994 at the per diem rate of $507.53, plus late charges, plus reasonable attorney's fees." Supp.Record, item H.

On December 8, 1994, after the case was remanded from the federal district court to the Marion Superior Court, MIF filed a renewed ...

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