Drake Invs., LTD v. Ballatan

• Decision Date: 23 August 2019
• Docket Number: Court of Appeals Case No. 18A-PL-2775
• Citation: 130 N.E.3d 1213
• Parties: DRAKE INVESTMENTS, LTD and Paul D. Huntley, Appellants-Defendants, v. Peter BALLATAN, Appellee-Plaintiff
• Court: Indiana Appellate Court

130 N.E.3d 1213

DRAKE INVESTMENTS, LTD and Paul D. Huntley, Appellants-Defendants,

v.Peter BALLATAN, Appellee-Plaintiff

Court of Appeals Case No. 18A-PL-2775

Court of Appeals of Indiana.

Filed August 23, 2019

Attorneys for Appellants: J.F. Beatty, Kathryn Merritt-Thrasher, Landman Beatty, Lawyers, Indianapolis, Indiana

Attorneys for Appellee: Kurt V. Laker, Mark S. Gray, Doyle & Foutty, P.C., Indianapolis, Indiana

MEMORANDUM DECISION

May, Judge.

[1] Drake Investments and Paul D. Huntley ("Doug") (collectively "Appellants") appeal the trial court's entry of summary judgment in favor of Peter Ballatan. Appellants raise two issues on appeal, which we restate as whether the trial court erred in denying their motion for summary judgment and granting Ballatan's motion for summary judgment. We affirm.

Facts and Procedural History

[2] On September 28, 2007, Ballatan obtained a judgment in the amount of $125,438.43 against Joanne Huntley ("Joanne") in a civil case, Cause No. 49D03-0403-PL-000625 ("Cause 0625"). The judgment represented lost rental income and travel expenses incurred by Ballatan in a real estate dispute with Joanne. At the time of that dispute, Joanne owned four parcels of land in Indianapolis, Indiana: 460 North Kealing Avenue; 6464 Brookville Road; 5235 East Washington Street; and 5269 East Washington Street (collectively, "Properties").

[3] However, while Cause 0625 was pending, Joanne purported to grant mortgages on each of the Properties to her son, Doug. The mortgages were executed on March 1, 2007, via three mortgage documents. The mortgage documents consist of pre-printed forms with blank spaces for the parties to insert the requisite information. Each document consisted of one substantive page.

[4] Joanne and Doug completed the documents by hand and had them notarized. The mortgage documents indicate that Joanne agreed to pay Doug $80,000.00 secured by the Kealing Avenue property, $250,000.00 secured by the Brookville Road property, and $500,000.00 secured by the two Washington Street properties (hereinafter collectively, "Huntley Mortgages"). Each document states that Joanne "mortgage[s] and warrant[s] to Paul Douglas Huntley" the Properties. (Appellants' App. Vol. II at 131, 134, & 137.) The boilerplate language of each document states

the mortgagor expressly agree [sic] to pay the sum of money above secured, without relief from valuation or appraisement laws; and upon failure to pay any one of said notes, or any part thereof, at maturity, or the interest thereon, or any part thereof, when due, or the taxes or insurance as hereinafter stipulated, then all of said notes are to be due and collectible, and this mortgage may be foreclosed accordingly. And it is further expressly agreed, that until all of said notes are paid, said mortgagor will keep all legal taxes and charges against said premises paid as they become due, and will keep the buildings thereon insured for the benefit of the mortgagee, as h [sic] interest may appear and the policy duly assigned to the mortgagee, to the amount of [redacted] [sic] Dollars, and failing to do so, said mortgagee, may pay said taxes or insurance, and the amount so paid, with per cent interest thereon, shall be a part of the debt secured by this mortgage.

Id.

[5] In his affidavit designated at summary judgment, Doug averred Joanne "mortgaged to me the properties ... in exchange for me taking care of her living expenses, including making monthly payment to her lender for her personal residence in Johnson County, ensuring that all property taxes, insurance and her other daily living expenses were paid timely." (Id. at 108 ¶ 7.)¹ On or about August 27, 2008, Joanne transferred ownership in the Properties from herself as an individual to herself as trustee of the Joanne B. Huntley Trust. The purported mortgage interests conveyed by the Huntley Mortgages were not recorded until October 15, 2009.

[6] On February 17, 2011, Doug paid Joanne $30,000.00, and Joanne transferred her ownership interests in the Properties to Doug, who purchased the Properties for investment purposes. On May 22, 2017, Doug transferred his ownership interest in the Properties to Drake Investments, LTD. Doug is the president of Drake Investments.

[7] On September 7, 2017, Ballatan filed his complaint to renew and foreclose judgment lien against real property from Cause 0625. Doug asserted in his affidavit that he did not know about Ballatan's judgment in Cause 0625 until Ballatan filed suit on September 7, 2017. Joanne died on September 25, 2017. She did not make any payment to Ballatan toward satisfaction of the judgment before her death.

[8] Ballatan moved for summary judgment on April 3, 2018. Appellants responded to Ballatan's motion for summary judgment and cross-moved for summary judgment on June 2, 2018. The trial court held a hearing on the cross-motions for summary judgment on September 25, 2018. The trial court issued findings, granted Ballatan's motion for summary judgment, and denied Appellants' cross-motion for summary judgment on October 23, 2018. The trial court ordered the Properties be sold and the proceeds used to satisfy the sums due to Ballatan.

Discussion and Decision

[9] When reviewing the grant or denial of a motion for summary judgment, we apply the same standard as the trial court: whether there is a genuine issue of material fact and whether the moving party is entitled to judgment as a matter of law. Monroe Guar. Ins. Co. v. Magwerks Corp. , 829 N.E.2d 968, 973 (Ind. 2005). We grant summary judgment "only if the evidence sanctioned by Indiana Trial Rule 56(C) shows that there is no genuine issue of material fact and the moving party deserves judgment as a matter of law." Id. Further, we construe all evidence in favor of the nonmoving party and resolve all doubts as to the existence of a material issue of fact against the moving party. Id. While the moving party must first put forth evidence to support the motion, "the opposing party may not rest on his pleadings, but must set forth specific facts, using supporting materials contemplated by Trial Rule 56, which demonstrate that summary judgment is not appropriate." Conard v. Waugh , 474 N.E.2d 130, 134 (Ind. Ct. App. 1985). "A genuine issue of material fact exists where facts concerning an issue which would dispose of the litigation are in dispute or where the undisputed material facts are capable of supporting conflicting inferences on such an issue." Poyser v. Peerless , 775 N.E.2d 1101, 1105 (Ind. Ct. App. 2002).

[10] We do not resolve questions of credibility or weigh evidence at the summary judgment stage of proceedings. See Kader v. State , 1 N.E.3d 717, 727 (Ind. Ct. App. 2013) ("Assessments of credibility and weight are the province of the fact-finder at trial, not the trial court at summary judgment."). Summary judgment is not meant to be a substitute for trial and should not be granted merely because the party appears likely to prevail at trial. Hughley v. State , 15 N.E.3d 1000, 1005 (Ind. 2014).

[11] We do not modify our standard of review when the parties make cross motions for summary judgment. State Auto Ins. Co. v. DMY Realty Co., LLP , 977 N.E.2d 411, 419 (Ind. Ct. App. 2012). "Instead, we must consider each motion separately to determine whether the moving party is entitled to judgment as a matter of law." Id. The trial court's entry, in its summary judgment order, of findings of fact and conclusions of law does not change our standard of review. Id. We are not bound by the trial court's findings of fact and conclusions of law. Id. However, they may aid our review. Id.

Validity of Huntley Mortgages

[12] The parties do not dispute that Ballatan's judgment is a valid lien against the Properties pursuant to Indiana Code section 34-55-9-2.² However, Appellants assert that Doug's purported mortgage interests should take priority over Ballatan's judgment lien, because Indiana law places judgment liens subordinate to other liens. See Huntingburg Prod. Credit Ass'n v. Griese , 456 N.E.2d 448, 452 (Ind. Ct. App. 1983) ("Liens for judgments are subordinate to all prior legal or equitable liens[.]"). Ballatan asserts the Huntley Mortgages cannot have priority over his judgment lien because these purported mortgages are invalid.

[13] A "mortgage" is defined as a "conveyance of title to property that is given as security for the payment of a debt or the performance of a duty and that will become void upon payment or performance according to the stipulated terms." MORTGAGE, Black's Law Dictionary (11th ed. 2019). The term "mortgage" is also used to refer to the instrument specifying the terms of such a transaction. Id. In Indiana, the proper form for mortgages is defined by a statute that states:

A mortgage of land that is:

worded in substance as "A.B. mortgages and warrants to C.D." (here describe the premises) "to secure the repayment of" (here recite the sum for which the mortgage is granted, or the notes or other evidences of debt, or a description of the debt sought to be secured, and the date of the repayment); and

dated and signed, sealed, and acknowledged by the grantor;

is a good and sufficient mortgage to the grantee and the grantee's heirs, assigns, executors, and administrators, with warranty from the grantor (as defined in IC 32-17-1-1 ) and the grantor's legal representatives of perfect title in the grantor and against all previous encumbrances. However, if in the mortgage form the words ‘and warrant’ are omitted, the mortgage is good but without warranty.

Ind. Code § 32-29-1-5.

[14] All mortgages must be secured by a debt. Plummer & Co., Inc. v. Nat'l Oil & Gas. Inc. , 642 N.E.2d 291, 292 (Ind. Ct. App. 1994), trans. denied . The debt need not be described with literal accuracy but it "must be correct so far as it goes, and full enough to direct attention to the sources of correct information in regard to it, and be such as not to mislead or deceive, as to the nature or amount of it, by the language used." Bowen...