MEMORANDUM DECISION
Pursuant to Ind. Appellate Rule 65(D), this
Memorandum Decision shall not be regarded as
FILED
precedent or cited before any court except for the Apr 19 2017, 9:42 am
purpose of establishing the defense of res judicata,
CLERK
collateral estoppel, or the law of the case. Indiana Supreme Court
Court of Appeals
and Tax Court
APPELLANTS PRO SE ATTORNEYS FOR APPELLEE
Michael Francis David J. Jurkiewicz
Carmen Jay Francis Christina M. Bruno
Indianapolis, Indiana Bose McKinney & Evans LLP
Indianapolis, Indiana
IN THE
COURT OF APPEALS OF INDIANA
Michael Francis and Carmen Jay April 19, 2017
Francis, Court of Appeals Case No.
49A02-1604-MF-830
Appellants-Defendants,
Appeal from the Marion Superior
Court
v.
The Honorable Timothy W. Oakes,
Judge
EMC Mortgage, LLC, successor
by merger to EMC Mortgage Trial Court Cause No.
49D02-0706-MF-23133
Corporation,
Appellee-Plaintiff.
Bradford, Judge.
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Case Summary
[1] In 1994, Appellants-Defendants Michael and Carmen Jay Francis executed a
promissory note (“the Note”) and a mortgage (“the Mortgage,” collectively,
“the Loan Documents”) on their Indianapolis home (“the Property”) in favor
Accubanc Mortgage Corporation. When the Note matured in 2001, the
Francises failed to satisfy the outstanding balance. By 2007, the Loan
Documents had been assigned to EMC Mortgage Corporation, who filed suit to
foreclose on the Mortgage. Eventually, EMC Mortgage Corporation was
succeeded by merger by Appellee-Plaintiff EMC Mortgage, LLC (“EMC”). In
2016, the trial court granted EMC’s summary judgment motion, ordered the
sale of the property to satisfy the Francises’ debt, and denied the Francises’
counterclaims.
[2] The Francises argue that (1) EMC lacks standing to enforce the Loan
Documents, (2) EMC’s foreclosure action is barred by the applicable statute of
limitations, (3) the entire case was disposed by a 2012 order withdrawing the
case from the trial court in which it was originally filed, (4) the trial court
erroneously denied the Francises the opportunity to respond to an EMC motion
for partial summary judgment, and (5) the trial court erroneously failed to
conduct a hearing on EMC’s claims before entering judgment in its favor.
Because we find the Francises’ claims to lack merit, we affirm.
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Facts and Procedural History
[3] On October 26, 1994, the Francises owned the Property at 4904 North Winston
Drive in Indianapolis and executed, in Accubanc’s favor, the Note (in the
amount of $113,200.00) and the Mortgage, granting Accubanc a security
interest in the Property. Pursuant to the terms of the Note, the maturity date,
on which all outstanding amounts became due and payable, was November 1,
2001. The Mortgage was recorded in the Marion County Recorder’s Office on
November 1, 1994. Accubanc later assigned the Note to Bank United of Texas,
FSB, and, on February 1, 1997, also assigned the Mortgage to Bank United.
Washington Mutual Bank, FA, successor by merger to Bank United, assigned
the Loan Documents to EMC Mortgage Corporation on December 22, 2003.
On August 13, 2013, in response to the Francises’ claims that the Mortgage had
been assigned to the Federal National Mortgage Association (“FNMA”),
FNMA quit-claim assigned any interest it may have had in the Mortgage to
EMC Mortgage Corporation (“the 2013 Assignment”). At some point, EMC
Mortgage Corporation was succeeded in merger by EMC, and the trial court
granted EMC’s motion to substitute plaintiff on September 15, 2015.
[4] Meanwhile, the Francises had failed to pay the outstanding balance on the Note
when it came due on November 1, 2001. On May 29, 2007, EMC Mortgage
Corporation filed a complaint to foreclose on the Mortgage due to the
Francises’ failure to make payments pursuant to the Note. On September 17,
2007, the Francises filed their answer, affirmative defenses, and counterclaims.
On April 9, 2012, EMC Mortgage Corporation filed a motion to strike or for
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partial summary judgment as to certain claims and a designation of evidence.
On May 7, 2012, the Francises filed a praecipe for withdrawal pursuant to
Indiana Trial Rule 53.1, and on May 25, 2012, the Indiana Supreme Court
vested jurisdiction in Marion Superior Court Judge Timothy W. Oakes. On
May 20, 2013, the trial court granted EMC Mortgage Corporation’s partial
summary judgment motion.
[5] On October 23, 2013, EMC Mortgage Corporation moved for leave to amend
its complaint, seeking to incorporate the 2013 Assignment, which motion the
trial court granted. On May 28, 2015, EMC Mortgage Corporation filed a
summary judgment motion on its complaint. On February 8, 2016, the trial
court held a hearing on what was now EMC’s summary judgment motion, at
which EMC appeared through counsel and Carmen Jay Francis appeared in
person. On February 17, 2016, the trial court granted EMC’s summary
judgment motion, entered in rem judgment against the Property in in the sum of
$248,709.74, ordered that the Property be sold to satisfy the judgment, and
entered judgment in favor of EMC on all of the Francises’ remaining
counterclaims.
Discussion and Decision
[6] The Francises appeal from the trial court’s February 17, 2016, grant of
summary judgment in favor of EMC. When reviewing the grant or denial of a
summary judgment motion, we apply the same standard as the trial court.
Merchs. Nat’l Bank v. Simrell’s Sports Bar & Grill, Inc., 741 N.E.2d 383, 386 (Ind.
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Ct. App. 2000). Summary judgment is appropriate only where the evidence
shows there is no genuine issue of material fact and the moving party is entitled
to a judgment as a matter of law. Id.; Ind. Trial Rule 56(C). All facts and
reasonable inferences drawn from those facts are construed in favor of the
nonmoving party. Merchs. Nat’l Bank, 741 N.E.2d at 386. To prevail on a
motion for summary judgment, a party must demonstrate that the undisputed
material facts negate at least one element of the other party’s claim. Id. Once
the moving party has met this burden with a prima facie showing, the burden
shifts to the nonmoving party to establish that a genuine issue does in fact exist.
Id. The party appealing the summary judgment bears the burden of persuading
us that the trial court erred. Id. The Francises seem to make the following
arguments:1 EMC’s designated evidence has failed to establish that it is entitled
to enforce the Loan Documents, EMC’s December 12, 2013, amended
complaint is barred by the applicable statute of limitations, the case was
“disposed of” by the Indiana Supreme Court’s 2012 ruling on their praecipe for
withdrawal, they were denied the opportunity to respond to the EMC motion
for partial summary judgment, and the trial court erroneously failed to conduct
a hearing on EMC’s summary judgment motion.
1
EMC also contends that all of the Francises’ claims should be rejected for failure to present cogent
arguments. It is well settled that we will not consider an appellant’s assertion on appeal when he or she has
not presented cogent argument supported by authority and references to the record as required by the rules.
Thacker v. Wentzel, 797 N.E.2d 342, 345 (Ind. Ct. App. 2003). We will not become an advocate for a party,
and we will not address arguments that are either inappropriate, too poorly developed, or improperly
expressed to be understood. Id. Although not artfully presented, we believe that the Francises’ arguments
are sufficiently developed to address on the merits.
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I. EMC’s Standing to Enforce the Loan Documents
A. Whether EMC May Enforce the
Loan Documents in General
[7] Although EMC offers many reasons why it may enforce the Loan Documents,
the narrowest ground on which we might resolve this issue is its argument that
the Francises do not have standing to challenge its right to enforce based on an
allegedly faulty chain of assignment. Although the issue does not seem to have
been squarely addressed in Indiana, “[c]ourts have routinely found that a debtor
may not challenge an assignment between an assignor and assignee.” Bridge v.
Aames Capital Corp., 2010 WL 3834059, at *3 (N.D. Ohio Sept. 29, 2010); see
also, e.g., Liu v. T&H Mack, Inc., 191 F.3d 790, 797 (7th Cir. 1999) (concluding
that party to underlying contract lacks standing to “attack any problems with
the reassignment” of that contract), RICHARD A. LORD, 29 WILLISTON ON
CONTRACTS § 74:50 (4th Ed.) (“[T]he debtor has no legal defense [based on
invalidity of the assignment] … for it cannot be assumed that the assignee is
desirous of avoiding the assignment.”).
[8] As the United States Bankruptcy Court for the Eastern District of Pennsylvania
has reasoned,
[The underlying contract] is between [Debtor] and [Assignor].
[Assignor’s] assignment contract is between [Assignor] and
[Assignee]. The two contracts are completely separate from one
another. As a result of the assignment of the contract, [Debtor’s]
rights and duties under the [underlying] contract remain the
same: The only change is to whom those duties are owed….
[Debtor] was not a party to [the assignment], nor has a
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cognizable interest in it. Therefore, [Debtor] has no right to step
into [Assignor’s] shoes to raise [its] contract rights against
[Assignee]. [Debtor] has no more right than a complete stranger
to raise [Assignor’s] rights under the assignment contract.
Ifert v. Miller, 138 B.R. 159, 166 n.13 (E.D. Pa. 1992).
[9] We find the above authority to be persuasive and adopt the proposition that a
borrower does not have standing to challenge an allegedly invalid assignment of
the right to collect the borrower’s debt. Regardless of any assignments of the
Note, the Francises’ rights and duties remained the same. Even assuming,
arguendo, that there is some conflict regarding who actually possesses the right
to enforce the Loan Documents, that is between the various claimants to the
that right and does not involve the Francises. The Francises do not have
standing to challenge an allegedly invalid assignment of the Loan Documents
to EMC.
B. Whether EMC May Enforce the
Loan Documents in Indiana
[10] The Francises also argue that EMC may not enforce its rights pursuant to the
Loan Documents because it is not authorized to conduct business in Indiana as
either a foreign business or a collection agency.
A foreign corporation may not “transact business” in Indiana
until it obtains a certificate of authority from the secretary of
state. Ind. Code § 23-1-49-1(a). Indiana Code § 23-1-49-2(a)
further states that a foreign corporation transacting business in
Indiana without a certificate of authority may not maintain a
proceeding in any court in Indiana until it obtains a certificate of
authority.
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….
A foreign corporation’s incapacity to sue must be plead and
proven as an affirmative defense under Trial Rules 9(A) and
8(C). Vanco v. Sportsmax, Inc., 448 N.E.2d 1198, 1200 (Ind. Ct.
App. 1983).
Lackmond Prod., Inc. v. Constr. Supply, Inc., 691 N.E.2d 494, 495-96 (Ind. Ct.
App. 1998). Indiana Code section 23-1-49-2(b), however, contains a non-
exhaustive list of activities that do not constitute “transacting business” in the
State of Indiana and includes “[s]ecuring or collecting debts or enforcing
mortgages and security interests in property securing the debts.” Ind. Code §
23-1-49-2(b)(8). Because the act of enforcing rights pursuant to the Loan
Documents does not constitute transacting business, whether EMC has secured
a certificate of authority is irrelevant. The Francises have failed to establish that
EMC cannot enforce its rights pursuant to the Loan Documents.
II. Statute of Limitations
[11] The Francises also appear to argue that EMC’s amended complaint is barred by
application of the relevant statute of limitations for mortgage foreclosures,
which requires that such actions be brought within ten years of the date of the
final payment. See Ind. Code § 32-28-4-1(b) (“An action may not be brought in
the courts of Indiana to foreclose a mortgage or enforce a vendor’s lien reserved
by a person to secure the payment of an obligation secured by the mortgage or
vendor’s lien if the last installment of the debt secured by the mortgage or
vendor’s lien, as shown by the record of the mortgage or vendor’s lien, has been
due more than ten (10) years.”). Furthermore, Indiana Rule of Trial Procedure
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15(C) provides, in part, that “[w]henever the claim or defense asserted in the
amended pleading arose out of the conduct, transaction, or occurrence set forth
or attempted to be set forth in the original pleading, the amendment relates back
to the date of the original pleading.”
[12] The record indicates that the Note matured on November 1, 2001, which gave
the holder of the Loan Documents until October 31, 2011 to file a foreclosure
action. EMC’s predecessor in interest EMC Mortgage Corporation filed its
original complaint on May 29, 2007, well within the statutory period. EMC
Mortgage Corporation’s amended complaint was filed on December 12, 2013,
and, although it added exhibits that would tend to show a chain of assignment
from Accubanc to EMC Mortgage Corporation, is based on exactly the same
conduct as the original complaint, i.e., the Francises’ failure to pay off the Note
upon maturity. Because EMC Mortgage Corporation’s amended complaint
clearly relates back to its original complaint, the Francises have failed to
establish a violation of the applicable statute of limitations.
III. The Francises’ Other Arguments
[13] The Francises seem to argue that the record establishes that (1) the entire
lawsuit was resolved the Indiana Supreme Court’s 2012 ruling on their praecipe
of withdrawal, (2) the trial court erroneously deprived them of the opportunity
to present an argument, and (3) the trial court erred in not holding a hearing on
EMC’s summary judgment motion.
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A. Praecipe for Withdrawal
[14] The Francises argue that neither the trial court nor this court have jurisdiction
over this matter due to a May 15, 2012, notation on the chronological case
summary (“CCS”) indicating that the “case status is changed from open to
disposed.” Appellee’s App. Vol. II p. 14. It is apparent, however, that the case
was “disposed” of only in the sense that it was withdrawn from Marion Circuit
Court Judge Louis F. Rosenberg (upon the Francises’ motion) for the
appointment of a special judge. Indeed, the very next entry in the CCS reflects
an order from the Indiana Supreme Court vesting jurisdiction in Marion
Superior Court Judge Timothy W. Oakes, and an entry on July 3, 2012,
indicates that the case had been redocketed. The Francises’ claim in this regard
is without merit.
B. Deprivation of Opportunity to Present Argument
[15] The Francises argue that they were denied the opportunity to present argument
opposing an EMC Mortgage Corporation motion for partial summary
judgment. This argument is based on the following two entries in the CCS:
05/20/2013 Notice Issued
The court having read briefs and heard oral
arguments on Plaintiff’s; April 9, 2013 Motion for
Partial Summary Judgement [sic] hereby Grants
said Motion. Plaintiff to provide orders.
05/22/2013 Hearing Journal Entry
THE COURT HAVING READ BRIEFS AND
HEARD ORAL ARGUMENTS ON PLAINTIFF;
4/9/13 MOTION FOR PARTIAL SUMMARY
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JUDGMENT HEREBY GRANTS SAID
MOTION. PLAINTIFF TO PROVIDE ORDERS.
Judicial Officer: Oakes, Timothy Wayne
Hearing Date: 05/16/2013
Appellee’s App. Vol. II p. 18.
[16] The Francises argue that they were never served with an EMC Mortgage
Corporation motion for partial summary judgment allegedly filed on April 9,
2013, and were not notified to appear at any hearing held on May 16, 2013.
While this is true, that is only because the record clearly indicates that no such
motion was filed and no such hearing was held. A CCS entry also made on
May 22, 2013, corrects the typographical errors in the above two entries:
“Hearing Journal Entry/Per Jacket Entry: The Court having read Briefs and
heard oral arguments 11/29/12 on Plaintiff’s 4/9/12 Motion for Partial
Summary Judgment hereby GRANTS said Motion. Plaintiff to provide
Orders. File Stamp: 05/16/2013[.]” Appellee’s App. Vol. II p. 18. The
Francises point to nothing else in the record to support their argument, and,
therefore, have not established that they were denied the opportunity to be
heard on an EMC Mortgage Corporation motion for partial summary
judgment.
C. Whether the Trial Court Denied the Francises a Hearing
[17] Finally, the Francises argue that the trial court erroneously entered default
judgment against them without holding a hearing. First, although the Francises
rely on Trial Rule 55, which addresses default judgments, EMC did not seek
and was not granted default judgment against the Francises; Trial Rule 55
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simply has no bearing on this case. Moreover, the record clearly indicates that
the trial court did hold a hearing on EMC’s summary judgment motion on
February 8, 2016, which was attended by counsel for EMC and Carmen Jay
Francis. The Francises seem to argue that the hearing was somehow invalid
without Michael’s presence, but point to no authority that supports this
proposition. The Francises have failed to establish that the trial court
erroneously denied them a hearing.
[18] We affirm the judgment of the trial court.
Najam, J., and Riley, J., concur.
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