McCullough v. CitiMortgage, Inc.

• Decision Date: 14 March 2017
• Docket Number: No. 71S03-1605-MF-272,71S03-1605-MF-272
• Citation: 70 N.E.3d 820
• Parties: Lt. Henry G.L. MCCULLOUGH and Princess S.D. Naro-McCullough, Appellants (Defendants below), v. CITIMORTGAGE, INC., Appellee (Plaintiff below).
• Court: Indiana Supreme Court

70 N.E.3d 820

Lt. Henry G.L. MCCULLOUGH and Princess S.D. Naro-McCullough, Appellants (Defendants below),

v.CITIMORTGAGE, INC., Appellee (Plaintiff below).

No. 71S03-1605-MF-272

Supreme Court of Indiana.

March 14, 2017

Appellants Pro Se : Lt. Henry G.L. McCullough, Princess S.D. Naro-McCullough, South Bend, Indiana.

Attorneys for Appellee : Shannon O'Connell Egan, Ft. Mitchell, Kentucky, Harry W. Cappel, Cincinnati, Ohio.

On Petition To Transfer from the Indiana Court of Appeals, No. 71A03-1509-MF-1349

Rucker, Justice.

Husband and wife appeal the grant of summary judgment that resulted in foreclosure of their family homestead. Concluding there are no genuine issues of material fact precluding summary disposition, we affirm the judgment of the trial court.

Background

Lt. Henry G.L. McCullough and his wife Princess S.D. Naro-McCullough ("Homeowners") are honorably discharged Viet Nam era military veterans against whom CitiMortgage, Inc. ("CitiMortgage") obtained a judgment of foreclosure against their home of more than twenty years. Homeowners attempted to appeal, but as they had done before the trial court, the couple proceeded without legal representation. In doing so, they encountered difficulty navigating our appellate rules. Specifically, after filing a timely Notice of Appeal and Completion of Transcript, Homeowners tendered a woefully defective Appellant's Brief and Appendix. The Clerk of Courts issued a letter of defect noting the numerous deficiencies in the parties' brief. Homeowners responded with a motion asking the Court of Appeals to accept their non-conforming submissions. The Court of Appeals denied the motion. Thereafter CitiMortgage moved to dismiss the appeal on grounds that Homeowners failed to remedy the defects in their filings within the applicable time period. In response, Homeowners tendered, and moved for permission to file, a belated brief which was also defective. The Court of Appeals denied the motion and dismissed the attempted appeal with prejudice. And it acted well within its discretion in doing so. See, e.g. , Miller v. Hague Ins. Agency, Inc. , 871 N.E.2d 406, 407 (Ind. Ct. App. 2007) (noting, "[a]lthough we will exercise our discretion to reach the merits when violations are comparatively minor, if the parties commit flagrant violations of the Rules of Appellate Procedure we will hold issues waived, or dismiss the appeal"). Here the violations were flagrant. Homeowners filed a petition to transfer which the Court initially denied. On reconsideration, deciding to address the merits, we vacated the order denying transfer and assumed jurisdiction over this appeal. Briefing on the merits proceeded in due course.

Facts and Procedural History¹

The relevant undisputed facts in this case are these. On April 15, 1994, Homeowners borrowed $158,620.00 from the Union Federal Savings Bank of Indianapolis ("Union Federal") and executed a promissory note ("Note") in that principal sum. This was a 30-year loan backed by the Veteran's Administration with a 7.5% rate of interest beginning June 1, 1994.² Union Federal assigned the Note to Waterfield Mortgage Company, Incorporated ("Waterfield"), which then assigned it back to Union Federal. Union Federal subsequently endorsed the Note in blank making it payable to bearer.³ Monthly installments were in the amount of $1,109.10 and made payable to Waterfield. Under terms of the Note, a single untimely payment would constitute default.

Also on April 15, 1994, Homeowners executed a mortgage ("the Mortgage") in favor of Union Federal using the property as security for repayment of the loan. A family home located on Farmingdale Drive in Granger, Indiana, the Mortgage described the property as follows:

Lot Numbered Eight (8) as shown on the recorded Plat of Country Side Estates, Section Three (3), recorded August 29, 1978 in the Office of the Recorder of St. Joseph County, Indiana, as Instrument No. 7818691[.]

Complaint On Note and To Foreclose Mortg., Ex. B. The Mortgage was recorded on April 18, 1994 in the Office of the Recorder of St. Joseph County. On September 15, 1999 Union Federal assigned the Mortgage to Waterfield. Three years later on February 21, 2002 Waterfield assigned the Mortgage back to Union Federal; and on May 4, 2006 Union Federal as "assignor" transferred the Mortgage to Mortgage Electronic Registration Systems, Inc. ("MERS") as "nominee" for CitiMortgage as "assignee."

On May 21, 2014, CitiMortgage, which by that time held both the Note and Mortgage on Homeowners property, filed its Complaint On Note and To Foreclose Mortgage. The complaint alleged default in the monthly installments on the Note as of January 1, 2013, and on the first day of each month thereafter. CitiMortgage sought:

[J]udgment, IN REM, against the real estate being foreclosed herein, in the sum of the outstanding principal balance of $100,806.90 together with all accrued interest thereon as provided in the mortgage note, and together with all late charges, expenses, advances and other amounts due and owing thereunder, including reasonable attorney fees, court costs, title work and any other further amounts expended by plaintiff, which are collectible, under the terms of said mortgage note and mortgage[.]

Complaint On Note and To Foreclose Mortg. at 3. During a telephone conference on July 16, 2014, Homeowners requested a settlement conference that was scheduled for September 18, 2014, the result of which is not in the record before us. In any event on January 23, 2015, CitiMortgage moved for summary judgment on its previously-filed complaint. In support CitiMortgage submitted the following designated evidence among others: (1) the Note, a copy of which was attached to its complaint as an exhibit; (2) the Mortgage, a copy of which was attached to its complaint as an exhibit; (3) the Assignments of the Mortgage, copies of which were attached to its complaint; and (4) an Affidavit made by Linda Rodriguez, CitiMortgage's Vice President of Document Control ("the Rodriguez affidavit"). The Rodriguez affidavit declared among other things:

6. Borrower executed a promissory note dated April 15, 1994, for $158,620.00 secured by a Mortgage on a property located at 52854 Farmingdale Drive, Granger, Indiana 46530.

7. CitiMortgage, Inc. has the right to foreclose based on the following: CitiMortgage, Inc., is the holder of the Note. The Plaintiff's agent has possession of the original promissory note, which has been endorsed in blank.

8. Due to Borrower's failure to make proper payments when due on January 1, 2013 and thereafter, Borrower is in default and continues to be in default under Borrower's loan documents. As of the date of this affidavit, Borrower has not cured its payment default under the promissory note and mortgage. As a result, Borrower's loan payment has been accelerated and the entire loan balance is now due an[d] owing pursuant to the terms of the loan documents.

Plaintiff's Motion for Summary Judgment, Ex. A. Homeowners did not immediately respond to CitiMortgage's motion for summary judgment. Instead, they filed a cross-motion to dismiss CitiMortgage's complaint contending generally they were not in default on their Note and Mortgage. Homeowners attached various exhibits which they contended supported their arguments. Thereafter on February 16, 2015 CitiMortgage renewed its motion for summary judgment, and Homeowners responded with a cross-motion for summary judgment which they subsequently amended. Then on motion by CitiMortgage the trial court converted Homeowners' cross-motion to dismiss to a motion for summary judgment and deemed it amended to their pending cross-motion for summary judgment. Both sides tendered numerous documents in support of and in opposition to their motions. Ironically, Homeowners' submissions included a July 2, 2013 letter to CitiMortgage acknowledging Homeowners continued to be in arrears on their mortgage. See R. at 203, Ex. 18. On August 5, 2015 the trial court granted summary judgment in favor of CitiMortgage and denied Homeowners' motion. Essentially the trial court granted CitiMortgage an in rem judgment against the property in the principal sum of $100,806.90 together with interest plus various expenses and ordered a Sheriff's sale. This appeal followed in due course.

Standard of Review

"When reviewing a grant or denial of a motion for summary judgment our standard of review is the same as it is for the trial court." Reed v. Reid , 980 N.E.2d 277, 285 (Ind. 2012). The moving party "bears the initial burden of making a prima facie showing that there are no genuine issues of material fact and that it is entitled to judgment as a matter of law." Gill v. Evansville Sheet Metal Works, Inc. , 970 N.E.2d 633, 637 (Ind. 2012). Summary judgment is improper if the movant fails to carry its burden, but if it succeeds, "then the nonmoving party must come forward with evidence establishing the existence of a genuine issue of material fact." Id. In determining whether summary judgment is proper, the reviewing court considers only the evidentiary matter the parties have specifically designated to the trial court. See Ind. Trial R. 56(C). We construe all factual inferences in the nonmoving party's favor and resolve all doubts as to the existence of a material issue against the moving party. Kroger Co . v. Plonski , 930 N.E.2d 1, 5 (Ind. 2010), abrogated on other grounds by Rogers v. Martin , 63 N.E.3d 316 (Ind. 2016).

Discussion

Despite massive submissions to the trial court, Homeowners presented no affidavits in support of their own motion for summary judgment or in opposition to CitiMortgage's motion for summary judgment. Although "[s]ummary judgment shall not be granted as of course because the opposing party fails to offer opposing affidavits or evidence," Ind. Tr. R. 56(C), affidavits are an important tool to "set forth specific facts showing that there is a genuine issue for trial." Ind. Tr. R. 56(E). And many of the purported "exhibits" Homeowners...