Indiana Lawrence Bank v. PSB Credit Services, Inc.

SULLIVAN, Judge,

concurring

I concur in the majority opinion except as to that portion which concludes that the marshaling order does not affect the judgment of foreclosure of the 1993 ILB lien upon the Duplex, the foreclosure sale itself, and the distribution of the proceeds of the sale.

The marshaling order required ILB to apply a portion of the $66,000 foreclosure proceeds to the 1988 ILB mortgage which was not the subject of foreclosure. Because the foreclosure only concerned the $77,000 debt represented by the 1993 mortgage, absent the marshaling order the entire $66,000 pro*576ceeds would have been applied to that debt. The effect of marshaling is to reduce the amount contemplated by the foreclosure decree which would be applied to the debt represented by that foreclosure. Regardless of whatever price the property sold for at the sale, by requiring a portion of those proceeds to be applied to a different obligation, the foreclosure decree and its contemplated results were affected.8

Notwithstanding this fact, the impact of marshaling upon the foreclosure decree is not prohibited. To hold otherwise would be to frustrate the very reason and equitable purposes of the marshaling doctrine. As well stated by the majority: “ILB cannot use its unique position as both a primary lien holder and a junior lien holder to recover more on its junior lien at the expense of PSB, as an intervening lien holder, than it would have otherwise been able to recover.” 706 N.E.2d at 575.

I therefore concur in the affirmance of the trial court’s marshaling order.

. While I accept the position of ILB that the decree foreclosing the 1993 lien was affected by the marshaling order, I note a seeming inconsistency in the arguments presented. On the one hand, ILB argues that its 1988 lien (primary lien) on the Office and its 1993 (junior lien) on the Duplex should be treated as one debt. (See App. Br. at 10) Yet in its argument to the effect that the foreclosure decree on the 1993 lien was final and unalterable, ILB seeks to exclude the 1988 lien from any consideration so that marshaling would be precluded.