us-bank-trust-national-association-as-trustee-of-american-homeowener ( 2015 )

MEMORANDUM DECISION
Pursuant to Ind. Appellate Rule 65(D), Sep 18 2015, 9:11 am
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 APPELLANT ATTORNEY FOR APPELLEE
Scott J. Fandre WELLS
Krieg DeVault LLP Thomas B. Trent
Mishawaka, Indiana Rothberg Logan & Warsco LLP
Fort Wayne, Indiana
IN THE
COURT OF APPEALS OF INDIANA
U.S. Bank Trust National September 18, 2015
Association, as Trustee of Court of Appeals Case No.
American Homeowner 02A05-1503-MI-122
Preservation Trust Series 2014A, Appeal from the Allen Circuit
Appellant-Intervenor Court
The Honorable Thomas J. Felts,
Rex A. Wells, Judge
Appellee-Petitioner, Trial Court Cause No.
02C01-1411-MI-853
v.
Tera Klutz, not individually but
as Auditor of Allen County; and
Susan Orth, not individually but
as Treasurer of Allen County,
Appellees-Respondents
Court of Appeals of Indiana | Memorandum Decision 02A05-1503-MI-122 | September 18, 2015 Page 1 of 5
Baker, Judge.
[1] A tax sale of a parcel of real estate left surplus funds totaling over $11,000. The
current holder of the deed to the real estate petitioned for an award of the
surplus funds. U.S. Bank Trust National Association (U.S. Bank) filed a
motion to intervene, claiming that it was the current mortgage holder of the
property and that it was entitled to the surplusage. The trial court denied the
motion to intervene. We reverse that order, finding that U.S. Bank has claimed
a sufficient interest to be entitled to intervene in the litigation. We express no
opinion about U.S. Bank’s substantive right to the surplus funds. Instead, we
remand to the trial court so that it may determine which entity is entitled to
receive those funds.
Facts
[2] At the heart of this appeal is a dispute regarding the chain of title and the
identity of the current mortgage holder of a parcel of real estate located in Allen
County (the Real Estate). A tax sale of the Real Estate took place on October
2, 2013.1 Following the tax sale and payment of delinquent taxes, a surplus
remained totaling $11,298.84.
1
The tax purchaser is not a party to this appeal.
Court of Appeals of Indiana | Memorandum Decision 02A05-1503-MI-122 | September 18, 2015 Page 2 of 5
[3] On February 1, 2014, Vera Pattern executed a quitclaim deed for the Real
Estate; selling it to Eilatan Financial, Inc. (Eilatan), for $500. Rex Wells is the
president of Eilatan.
[4] At some point after the one-year redemption period had expired, a tax deed to
the Real Estate was issued to Eilatan. On November 5, 2014, Wells filed a
petition requesting that the tax sale surplus be awarded to Eilatan. On
November 13, 2014, the trial court granted the petition.
[5] On November 21, 2014, U.S. Bank filed a motion to intervene and set aside the
order granting Eilatan’s petition. U.S. Bank alleged that it was the holder of a
mortgage on the Real Estate and, as such, that it was entitled to the surplus
funds. Following a hearing, the trial court summarily denied U.S. Bank’s
motion to intervene on February 23, 2014, and reaffirmed its order granting
Eilatan’s petition. U.S. Bank now appeals.
Discussion and Decision
[6] U.S. Bank contends that the trial court erroneously granted its motion to
intervene. We review a trial court’s order on a motion to intervene for an abuse
of discretion. Hedrich Petroleum Corp. v. Radford, 773 N.E.2d 319, 324 (Ind. Ct.
App. 2002). When reviewing the trial court’s order, the facts alleged in the
motion to intervene must be taken as true in the absence of sham or fraud.
United of Omaha v. Hieber, 653 N.E.2d 83, 88 (Ind. Ct. App. 1995); E.N. Maisel &
Assocs. v. Canden Corp., 398 N.E.2d 1366, 1367-68 (Ind. Ct. App. 1980).
Court of Appeals of Indiana | Memorandum Decision 02A05-1503-MI-122 | September 18, 2015 Page 3 of 5
[7] Indiana Trial Rule 24(A)(2) provides that a party may intervene as of right in
pending litigation when:
the applicant claims an interest relating to a property, fund or
transaction which is the subject of the action and he is so situated
that the disposition of the action may as a practical matter impair
or impede his ability to protect his interest in the property, fund
or transaction, unless the applicant’s interest is adequately
represented by existing parties.
The only issue in this appeal is whether U.S. Bank has sufficiently claimed an
interest related to the Real Estate. To meet that burden, it must show that it has
an interest recognized by law that is related to the subject of the action where
intervention is sought. State ex rel. Prosser v. Ind. Waste Sys., Inc., 603 N.E.2d
181, 187 (Ind. Ct. App. 1992).
[8] In this case, U.S. Bank has put forth a chain of title that would render it the
current holder of a mortgage on the Real Estate. Wells concedes that if U.S.
Bank is the current mortgage holder, it would be entitled to the surplus funds.
Wells argues, however, that there are at least three other possible chains of title
that lead to a conclusion that an entity other than U.S. Bank is the current
mortgage holder. As such, Wells insists that the trial court properly denied the
motion to intervene.
[9] This argument improperly conflates the issue of whether intervention should be
permitted with the issue of whether, in fact, U.S. Bank is the current mortgage
holder. U.S. Bank does not need to prove its claim on the merits to be entitled
to intervene; it merely needs to claim an interest in the Real Estate. Then, upon
Court of Appeals of Indiana | Memorandum Decision 02A05-1503-MI-122 | September 18, 2015 Page 4 of 5
intervention, it will be required to prove its claims to be entitled to the surplus
funds. There is no basis in the record to conclude that fraud or sham was
present in U.S. Bank’s claims; therefore, we must take the statements made in
its motion to intervene as true. Taking those as true, we find that U.S. Bank
has sufficiently claimed an interest in the Real Estate to be entitled to intervene
in the litigation. Therefore, we reverse the trial court’s denial of the motion to
intervene and its order awarding the surplus funds to Eilatan.
[10] U.S. Bank asks that we determine as a matter of law that it is entitled to the
surplus funds. We decline to do so. There are questions of fact and law
regarding the chain of title to the Real Estate that we are unable to resolve with
the record before us. Therefore, we remand to the trial court for further
proceedings.
[11] The judgment of the trial court is reversed and remanded for further
proceedings consistent with this opinion.
Bailey, J., and Mathias, J., concur.
Court of Appeals of Indiana | Memorandum Decision 02A05-1503-MI-122 | September 18, 2015 Page 5 of 5