Chmiel v. US Bank Nat'l Ass'n

• Decision Date: 29 June 2018
• Docket Number: Court of Appeals Case No. 75A05–1708–PL–1979
• Citation: 109 N.E.3d 398
• Parties: Terrance E. CHMIEL, Appellant–Plaintiff, v. US BANK NATIONAL ASSOCIATION, Appellee–Defendant.
• Court: Indiana Appellate Court

109 N.E.3d 398

Terrance E. CHMIEL, Appellant–Plaintiff,

v.US BANK NATIONAL ASSOCIATION, Appellee–Defendant.

Court of Appeals Case No. 75A05–1708–PL–1979

Court of Appeals of Indiana.

FILED June 29, 2018

Attorneys for Appellant: James R. Bryon, Lisa Gilkey Schoetzow, Thorne Grodnik, LLP, Elkhart, Indiana

Attorneys for Appellee: Tammy L. Ortman, Jennifer S. Ortman, Lewis & Kappes, P.C., Indianapolis, Indiana

Pyle, Judge.

Statement of the Case

[1] Terrance E. Chmiel ("Chmiel") appeals the trial court's grant of summary judgment in favor of U.S. Bank, National Association ("U.S. Bank") on U.S. Bank's cross-motion for summary judgment in Chmiel's quiet title proceedings. Chmiel argues that the trial court erred in determining that: (1) his quiet title action was barred by the statute of limitations; (2) his quiet title action was barred by the doctrine of laches; (3) a 2005 deed in which he purportedly conveyed his property rights to his mother was valid; and (4) U.S. Bank was a bona fide mortgagee¹ of the property at issue. Because we conclude that: (1) Chmiel's quiet title action was not barred by the statute of limitations; and (2) there remain genuine issues of material fact regarding whether: (a) the doctrine of laches bars Chmiel's claim; (b) the 2005 deed was valid; and (c) U.S. Bank was a bona fide mortgagee, we agree that the trial court erred when it granted summary judgment. We reverse the trial court's order and remand for further proceedings.

[2] We reverse and remand.

Issues

1. Whether the trial court erred in granting summary judgment based on its determination that Chmiel's quiet title action was barred by the statute of limitations.

2. Whether the trial court erred in granting summary judgment based on its determination that Chmiel's quiet title action was barred by laches.

3. Whether the trial court erred in granting summary judgment based on its determination that a 2005 deed to the property at issue was valid.

4. Whether the trial court erred in granting summary judgment based on its determination that U.S. Bank was a bona fide mortgagee.

Facts

[3] On November 27, 1991, Chmiel's mother, Ann L. Nied ("Ann"), and step-father, Ovid O. Nied ("Ovid"), conveyed to Chmiel a fee simple interest in their property ("the Property") subject to life estates in their names. The deed conveying the Property ("1991 Deed") was recorded in the Starke County Recorder's Office on December 3, 1991. Ovid then died on November 18, 2000.

[4] On October 31, 2005, a quitclaim deed ("2005 Deed") conveying Chmiel's fee simple interest in the Property back to Ann was registered in the Starke County Recorder's Office. The 2005 Deed included two signature pages, each containing Ann's signature and a signature purporting to belong to Chmiel. The first signature page was dated October 13, 2005 and had been notarized by a notary public named Gale J. Davis ("Notary Davis"). The second signature page was dated October 6, 2005 and had been notarized by a notary public named Sandra L. Hansen.

[5] After Ann received title to the fee simple interest in the Property, she executed a promissory note ("Note") to Homeowners Loan Corporation ("Homeowners") and a mortgage ("Mortgage") on the Property securing the Note, in exchange for $40,000. The terms of the Mortgage described Ann's fee simple interest in the Property rather than the life estate she had retained in the 1991 Deed.

[6] Two years later, on August 9, 2007, Chmiel's attorney wrote a letter ("First Letter") to Homeowners to notify the company that Chmiel had become aware of the 2005 Deed and Mortgage and disputed the 2005 Deed's legitimacy. Specifically, Chmiel claimed that his signature on the 2005 Deed was forged and that he still owned a fee simple interest the Property. Chmiel also asserted that, because he still owned a fee simple interest in the Property, the Mortgage applied to only the life estate interest that Ann had retained in the 1991 Deed. Homeowners did not respond to Chmiel's letter.

[7] Thereafter, the Note and Mortgage were assigned to other entities, but the dates of those assignments and names of those assignees are not a part of the record. Chmiel's attorney wrote a letter dated May 27, 2009 ("Second Letter") to Homecoming Financial, the apparent Mortgage assignee or loan servicer at that time, to notify the company of his allegations regarding the 2005 Deed and the Mortgage. He also attached a copy of the First Letter to this Second Letter. Homecoming Financial did not respond to the Second Letter.

[8] Thereafter, ownership of the Note and Mortgage apparently changed, and on March 29, 2010, Chmiel's attorney wrote a letter ("Third Letter") to GMAC Mortgage, LLC ("GMAC Mortgage"), to advise the company of his interest in the Property. He attached copies of his First and Second Letters to this Third Letter. GMAC Mortgage replied to the Third Letter on April 9, 2010, writing that it "acknowledge[d] Mr. Chmiel's allegations of forgery" but stating that it "[did] not investigate this type of fraud on behalf of third parties." (App. Vol. 4 at 88). The company suggested that Chmiel might "wish to take legal action against the alleged perpetrator" and requested Chmiel to forward any police reports or other documents pertaining to any such investigation. (App. Vol. 4 at 88).

[9] On July 28, 2011, the Mortgage Electronic Registration System ("MERS"), as "nominee for Homeowners Loan Corporation, its successors and/or assigns," assigned the Mortgage to U.S. Bank "as trustee for RASC."² (App. Vol. 4 at 152).

Shortly thereafter, U.S. Bank initiated foreclosure proceedings because Ann had defaulted on the Mortgage payments. Chmiel filed a motion to intervene in the foreclosure proceedings, claiming again that he owned a fee simple interest in the Property and that his signature on the 2005 Deed had been forged. However, the foreclosure proceedings were stayed when Ann filed a petition for bankruptcy in the Northern District of Indiana United States Bankruptcy Court. Chmiel entered an appearance in the bankruptcy proceedings and filed a motion requesting that the bankruptcy court abandon the Property as an asset of Ann's bankruptcy estate. In this motion, Chmiel again argued that the 2005 Deed had been forged and that he still owned a fee simple interest in the Property.

[10] Ultimately, Ann and her creditors agreed to a Chapter 13 bankruptcy plan that provided that Ann would make monthly mortgage payments and cure the pre-bankruptcy petition arrearage. Because Chapter 13 bankruptcy plans allow debtors to retain assets and pay off their debts with future income, neither the foreclosure court nor the bankruptcy court ruled on the ownership of the Property after Ann agreed to the Chapter 13 bankruptcy plan. See McCullough v. CitiMortgage, Inc. , 70 N.E.3d 820, 826 (Ind. 2017) (explaining Chapter 13 bankruptcy plans) (internal citations and quotations omitted).

[11] Subsequently, Ann made timely mortgage payments until she passed away on January 21, 2015. One year later, on January 19, 2016, Chmiel filed a complaint against U.S. Bank to quiet title to the Property. He argued that the Mortgage was a cloud on his fee simple title and asked the trial court to: (1) determine that he owned a fee simple title to the Property; (2) find that the Mortgage had expired upon Ann's death because it applied to only her life estate; and (3) quiet his fee simple title to the Property against U.S. Bank. U.S. Bank filed an Answer raising the affirmative defense that it was a holder in due course of the Mortgage.

[12] On March 23, 2017, Chmiel filed a motion for summary judgment. As designated evidence, Chmiel attached an affidavit in which he averred that he had not signed the 2005 Deed and had not been aware that Ann had obtained a mortgage on the Property. He also averred that he had never transferred his interest in the Property to Ann or to any other party.

[13] U.S. Bank filed a response in opposition to Chmiel's summary judgment motion, as well as its own cross-motion for summary judgment. In its cross-motion, U.S. Bank argued that: (1) it was a bona fide mortgagee because it had purchased the right to enforce the Mortgage in good faith and without any notice of Chmiel's claims regarding the validity of the 2005 Deed; and (2) Chmiel's cause of action was barred by either the statute of limitations for forgery or the doctrine of laches. In support of its argument that it had not received notice, U.S. Bank contended that, under Indiana law, the signatures on the 2005 Deed were prima facie valid because they contained a certificate of acknowledgement from a notary public. Therefore, according to U.S. Bank, it had not had cause to question the 2005 Deed's validity or had notice of Chmiel's allegations.

[14] U.S. Bank also designated an affidavit from Notary Davis, who had notarized the October 13, 2005 signature page of the 2005 Deed. In the affidavit, Notary Davis averred that she had met with Ann and Chmiel on October 13, 2005 at her office and that she knew, based on her knowledge of the "manner in which [she] kept and maintained records of transactions" that she "would have reviewed and made a photocopy of each of their [d]rivers [l]icenses to confirm their identities" and would have kept those photocopies in her notary journal. (App. Vol. 3 at 41–42). She explained that those records had been "destroyed in the ordinary course after the passage of five years." (App. Vol. 3 at 42). Notary Davis further averred that she would not have notarized the quitclaim deed unless she had witnessed both Ann and Chmiel personally sign it on October 13, 2005.

[15] Chmiel filed a response to U.S. Bank's cross-motion for summary judgment in which he disputed U.S. Bank's arguments. First, Chmiel contended that U.S. Bank had waived its statute of limitations, laches, and bona fide mortgagee arguments by failing to raise them as affirmative defenses in its Answer. Alternatively, he claimed that the statute of limitations and...