MEMORANDUM DECISION
Mar 20 2015, 10:25 am
Pursuant to Ind. Appellate Rule 65(D), this
Memorandum Decision shall not be regarded as
precedent or cited before any court except for the
purpose of establishing the defense of res judicata,
collateral estoppel, or the law of the case.
ATTORNEY FOR APPELLANTS ATTORNEY FOR APPELLEE
Johnny W. Ulmer W. Russell Sanford
Cataldo Law Offices, Inc. South Bend, Indiana
Bristol, Indiana
IN THE
COURT OF APPEALS OF INDIANA
Mario L. Sims, Sr., and Tiffiny March 20, 2015
Sims, Court of Appeals Case No.
71A05-1406-MF-283
Appellants-Cross-Claimants,
Appeal from the
v. St. Joseph Superior Court
The Honorable Margot F. Reagan,
Judge
John Tiffany,
Cause No. 71D04-1001-MF-164
Appellee-Defendant.
Kirsch, Judge.
[1] Mario Sims, Sr., and Tiffiny Sims (“the Simses”) appeal the trial court’s denial
of their motion for summary judgment and grant of John Tiffany’s (“Tiffany”)
motion for summary judgment. On appeal, the Simses raise several issues, of
which we find the following dispositive: whether John Tiffany’s debt arising
from the Simes’s land contract was discharged in bankruptcy.
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[2] We affirm.
Facts and Procedural History
[3] In 2008, the Simses entered into a land-sale contract with Tiffany, setting forth
that the Simses would make monthly payments to Tiffany, who would in turn
make mortgage payments to the bank that held the mortgage on the land (“the
Bank”). The contract provided that the Simses could make mortgage payments
directly to the Bank in lieu of the monthly payments under the contract if
Tiffany was at any point unable to make the payments. In 2009, the Bank filed
a foreclosure proceeding against both Tiffany and the Simses. At that point, the
Simses had paid $26,000 in the form of a $12,000 down payment and ten
monthly payments of $1,400 each.
[4] The Simses attempted to assume the mortgage from Tiffany, but were unable to
reach an agreement with the Bank. Subsequently, the Simses filed a cross-claim
against Tiffany in the Bank’s foreclosure proceeding against Tiffany alleging,
inter alia, that he had committed fraud by representing that he would make
payments to the Bank on the Simses’ behalf and, thereafter, failing to do so.
[5] Tiffany filed a petition in bankruptcy and was granted a discharge pursuant to
Chapter 7 of the United States Bankruptcy Code1. Following the discharge, the
Simses filed an adversary proceeding in bankruptcy court, alleging that the
1
11 U.S.C. § 727(b)
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amount for which they were suing Tiffany was a non-dischargeable debt under
11 U.S.C. § 523 (“Section 523”) because it was acquired via fraud. Tiffany and
the Simses reached an agreement to settle the adversary proceeding under
which Tiffany would issue the Simses a quitclaim deed to the property in
exchange for the Simses stipulating to drop the adversary proceeding with
prejudice. The agreement was executed and the proceeding was dismissed with
prejudice on March 13, 2012.
[6] After the adversary proceeding was dismissed, Tiffany and the Simses filed
cross motions for summary judgment. The trial court granted Tiffany’s motion
for summary judgment and denied the Simses’ motion, citing Tiffany’s
discharge in bankruptcy. The trial court reasoned that absent any specific
exemptions, Tiffany’s discharge in bankruptcy included the debt claimed by the
Simses. The Simses now appeal.
Discussion and Decision
[7] Summary judgment is only proper where there is no genuine issue of material
fact, and our standard of review is the same as it is for the trial court. Manley v.
Sherer, 992 N.E.2d 670, 673 (Ind. 2013).
[8] Tiffany’s discharge under Chapter 7 did not include any exceptions for any
debts owed to the Simses. The Simses contend that Tiffany’s alleged debt is
non-dischargeable as a matter of law and is excluded from Tiffany’s discharge.
The Simses’ claim is without merit.
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[9] Section 523 of the Bankruptcy Act states that a discharge under Chapter 7 does
not discharge an individual debtor from any debt to the extent that debt was
obtained by “false pretenses, a false representation, or actual fraud, other than a
statement respecting the debtor’s or an insider’s financial condition.” 11 U.S.C.
§ 523(a)(2)(A).
[10] Section 523 goes on to state that “the debtor shall be discharged from a debt of
a kind specified in paragraph (2) . . . of subsection (a) . . . unless . . . the court
determines such debt to be excepted from discharge.” 11 U.S.C. § 523(c)(1).
Contrary to the Simses’ claim that Tiffany’s debt was non-dischargeable as a
matter of law, the Bankruptcy Act specifically requires that such debts are
discharged unless the Bankruptcy Court determines that it is non-dischargeable.
Here, although the Simses commenced an adversary proceeding to determine
the issue, but they agreed to dismiss it in exchange for a quitclaim deed to the
property. As a result, there was no non-dischargeability determination by the
bankruptcy court and the debt was discharged.
[11] Because the debt owed by Tiffany to the Simses was discharged, summary
judgment in favor of Tiffany was properly entered.
[12] Affirmed.
Friedlander, J., and Crone, J., concur.
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