Morequity, Inc. v. KEYBANK, NA

• Citation: 773 N.E.2d 308
• Decision Date: 13 August 2002
• Docket Number: No. 41A04-0111-CV-480.,41A04-0111-CV-480.
• Parties: MOREQUITY, INC., Appellant Defendant, v. KEYBANK, N.A., Appellee-Plaintiff, and Robert Aaron Young, Karen Denise Young, Mellon Mortgage Co., and Firstplus Financial, Inc., Appellees-Defendants.
• Court: Court of Appeals of Indiana

773 N.E.2d 308

MOREQUITY, INC., Appellant Defendant, v. KEYBANK, N.A., Appellee-Plaintiff, and Robert Aaron Young, Karen Denise Young, Mellon Mortgage Co., and Firstplus Financial, Inc., Appellees-Defendants.

No. 41A04-0111-CV-480.

Court of Appeals of Indiana.

August 13, 2002.

Gary P. Price, Todd A. Richardson, Lewis & Kappes, Indianapolis, IN, for Appellant.

OPINION

MATHIAS, Judge.

Morequity, Inc. ("Morequity") appeals the Johnson Circuit Court's order denying its request for relief from a default judgment and decree of foreclosure entered in favor of KeyBank, N.A. ("KeyBank"). Morequity raises several issues on appeal, which we restate as the following two:

I. Whether the trial court abused its discretion when it refused to consider an affidavit Morequity attempted to submit in support of its Motion for Relief from Judgment and Stay of Sheriff's Sale; and,

II. Whether the trial court's default judgment and decree of foreclosure was void as against Morequity because the trial court lacked personal jurisdiction over Morequity.

We affirm.¹

Facts and Procedural History

On September 10, 1997, Robert Aaron Young and Karen Denise Young ("the Youngs") executed and delivered a Home Equity Line of Credit Agreement and Disclosure Statement to KeyBank ("KeyBank Agreement") for an amount not to exceed $100,000.00 plus interest and other charges. The Youngs executed and delivered a mortgage ("KeyBank Mortgage") on their residence located in Nineveh, Indiana to secure the KeyBank Agreement. On September 15, 1997, KeyBank recorded the KeyBank Mortgage in the Office of the Recorder of Johnson County, Indiana. This line of credit could only be closed if the balance was reduced to zero and if the Youngs sent written authorization to KeyBank to close the account.

On November 20, 1998, the Youngs executed a mortgage and promissory note on the same residential property in favor of Morequity ("Morequity Mortgage") in the amount of $133,450.00 plus interest, attorney fees and costs. The Morequity Mortgage was recorded in the Office of the Recorder of Johnson County on December 8, 1998. A portion of the Morequity Mortgage proceeds were used to reduce the KeyBank Mortgage balance to zero. Morequity believed the KeyBank Mortgage was then closed; therefore, Morequity believed it had a first lien at that time. Nevertheless, KeyBank never received written authorization from the Youngs authorizing it to close the account.

The Youngs subsequently borrowed money from the KeyBank line of credit and defaulted. At the time that KeyBank filed its complaint on the note in February 2000, there was an approximate balance of $46,000.00 on the account. The named defendants on the complaint were the Youngs, Morequity, Mellon Mortgage Company,² and Firstplus Financial, Inc.³ Mellon Mortgage Company and Firstplus Financial, Inc. are not parties to this appeal.

KeyBank served Juliana Robertson ("Robertson"), an Indianapolis attorney, with Morequity's copy of the complaint on February 24, 2000. On March 2, 2000, Robertson filed an appearance on behalf of Morequity. That same day, Robertson filed Morequity's answer to KeyBank's complaint, stating in pertinent part that, "Morequity does not dispute that Keybank's mortgage lien is superior to that of Morequity." Appellant's App. p. A39. In May of 2000, the Youngs filed a Notice of Bankruptcy. Then on June 27, 2000, in the foreclosure case, KeyBank filed a Motion for Entry of Default Judgment, and Robertson filed a Consent to Judgment on Morequity's behalf. The trial court granted KeyBank's Motion for Default Judgment and Decree of Foreclosure on September 14, 2000. In either August or September 2000, Morequity asked Robertson to foreclose the Morequity Mortgage, and to name KeyBank as a defendant. Robertson did so. At some point, Robertson came to realize that Morequity wanted to foreclose on the same mortgage that was involved in KeyBank's earlier foreclosure in which she had already consented to judgment and agreed that the KeyBank Mortgage had priority over Morequity. On January 19, 2001, almost seven months after consenting to judgment, Robertson filed a Motion for Relief from Judgment and Stay of Sheriff's Sale on Morequity's behalf, claiming that Morequity's previous consent to judgment in KeyBank's foreclosure was "due to an administrative error that led it to believe that the Keybank Mortgage was indeed junior to the Morequity Mortgage." Appellant's App. p. A43.

The trial court conducted an initial hearing on May 29, 2001, at which Robertson, on behalf of Morequity, testified that Morequity's consent to judgment in Key-Bank's foreclosure was a mistake and/or the result of excusable neglect. Robertson presented two affidavits that KeyBank had not seen prior to the hearing. One was the affidavit of Dorece Kabisch, president of Dreibilbiss Title Company, which handled the Morequity Mortgage closing, and the other was from Robertson herself. Because KeyBank had not had time to review the affidavits or prepare a response, the trial court gave KeyBank thirty days to submit counter-affidavits or request an evidentiary hearing. Morequity was also given ten days thereafter to file any responsive affidavits or evidence. The trial court set the matter for argument and/or evidentiary hearing on July 20, 2001.

On June 28, 2001, KeyBank received an extension of time to file counter-affidavits, until July 29, 2001. Then on July 18, 2001, KeyBank received a continuance of the hearing, until September 21, 2001. On August 30, 2001 Robertson filed a Motion to Withdraw Appearance, which was granted on September 11, 2001. On September 21, 2001, ten days later, and the date of the continued hearing, Dennis Ferguson ("Ferguson") filed an appearance for Morequity and an affidavit of a Morequity employee in support of the Motion for Relief from Judgment and Stay of Sheriff's Sale.

The hearing took place as scheduled on September 21, 2001. At the hearing, the parties again argued about whether Morequity's consent to judgment was based upon a mistake and/or excusable neglect. The trial court found that the parties had attempted to negotiate a settlement, but had failed to come to an agreement. The trial court also noted that the time for requesting an evidentiary hearing, and for filing responses and/or counter-responses had passed, and therefore, the hearing would proceed on only the matters of record as of May 29, 2001. The trial court excluded Morequity's affidavit in support of its motion that Ferguson attempted to file with the court that same day.

On October 5, 2001, the trial court entered its order denying Morequity's request for relief from judgment and stay of sheriff's sale. The trial court found that Morequity had failed to establish its entitlement to relief from judgment. It is from this order that Morequity appeals.

I. Standard of Review

KeyBank failed to file an appellate brief in this appeal. "When an appellee fails to file a brief, we may reverse the trial court's decision based on a showing of prima facie error." Newman v. Bernstein, 766 N.E.2d 8, 10 (Ind.Ct.App.2002) (citing Fagan v. Royer, 244 Ind. 377, 386-87, 193 N.E.2d 64, 69 (1963)). "Prima facie error means error `at first sight, on first appearance, or on the face of it.'" Id. (quoting Bd. of Trs. of Purdue Univ. v. Severson, 729 N.E.2d 1020, 1023 (Ind.Ct.App.2000),trans. denied). We will apply this standard of review to Morequity's appeal.

II. Exclusion of Morequity's Affidavit

Morequity first argues that the trial court abused its discretion when it refused to allow Morequity to file an affidavit in support of its motion for relief from judgment and stay of sheriff's sale on the same day as the hearing. "The admission and exclusion of evidence falls within the sound discretion of the trial court, and is reviewed only for abuse of discretion." Dunlap v. State, 761 N.E.2d 837, 841 (Ind. 2002) (citing Byers v. State, 709 N.E.2d 1024, 1028 (Ind.1999); Amburgey v. State, 696 N.E.2d 44, 45 (Ind.1998)). Additionally, when a motion for relief from judgment is based upon Indiana Trial Rule 60(B)(1), claiming that there was a mistake, surprise or excusable neglect requiring relief, the motion must be filed within one year of the judgment. Such movants must also allege a meritorious claim or defense. T.R. 60(B).

At the May 29, 2001 hearing, the trial court gave KeyBank thirty days from that date (or until June 28, 2001) to submit counter-affidavits and/or request an evidentiary hearing. The trial court then gave Morequity ten days after the thirty day time period to respond to any affidavits or evidence submitted by KeyBank. KeyBank was granted an extension of time within which to file any counter-affidavits or request an evidentiary hearing, until July 29, 2001. Therefore, Morequity in turn had until August 8, 2001 (ten days after KeyBank's thirty day deadline) within which to file any responsive affidavits or evidence. At no time prior to the September 21, 2001 hearing date did either party submit any affidavits or evidence.

The trial court, after granting KeyBank one extension of time to file counter-affidavits and granting one continuance, eventually heard arguments on Morequity's Motion for Relief from Judgment and Stay of Sheriff's Sale on September 21, 2001, approximately one year after the trial court granted KeyBank's Motion for Default Judgment and Decree of Foreclosure and approximately eight months after Morequity filed its Motion for Relief from Judgment and Stay of Sheriff's Sale. At this hearing, Morequity attempted to file an affidavit of an employee in support of its motion for relief. The trial court refused to admit the evidence into the record because at its hearing on May 29, 2001, it set deadlines for filing affidavits and evidence, which had long since passed by the time of the hearing in September, 2001. Under these facts and circumstances, we conclude that the trial court did not abuse its discretion...