Michael Francis and Carmen Francis v. Fannie Mae, Fannie Mae as Trustee for Securitized Trust Fannie Mae Guaranteed Remic Pass-Through Certifications 1995-16 Trust (mem. dec.) ( 2018 )

MEMORANDUM DECISION
Pursuant to Ind. Appellate Rule 65(D), FILED
this Memorandum Decision shall not be Nov 26 2018, 5:54 am
regarded as precedent or cited before any
CLERK
court except for the purpose of establishing Indiana Supreme Court
Court of Appeals
the defense of res judicata, collateral and Tax Court
estoppel, or the law of the case.
APPELLANTS PRO SE ATTORNEYS FOR APPELLEES
Michael Francis John W. Woodard, Jr.
Carmen Francis Jordan M. White
Indianapolis, Indiana Wyatt, Tarrant & Combs, LLP
Louisville, Kentucky
IN THE
COURT OF APPEALS OF INDIANA
Michael Francis and Carmen November 26, 2018
Francis, Court of Appeals Case No.
Appellants-Plaintiffs, 18A-CT-8
Appeal from the Marion Superior
v. Court
The Honorable Gary L. Miller,
Fannie Mae, Fannie Mae as Judge
Trustee for Securitized Trust Trial Court Cause No.
Fannie Mae Guaranteed Remic 49D03-1708-CT-31921
Pass-Through Certifications
1995-16 Trust, JPMorgan Chase
Bank, N.A., EMC Mortgage,
LLC f/k/a EMC Mortgage
Corporation, EMC Mortgage
Corporation, Homesales, LLC,
et. al.,
Appellees-Defendants.
Court of Appeals of Indiana | Memorandum Decision 18A-CT-8 | November 26, 2018 Page 1 of 11
Mathias, Judge.
[1] Michael and Carmen Francis (“the Francises”) appeal the Marion Superior
Court’s dismissal of their complaint against Fannie Mae, Fannie Mae as
Trustee, EMC Mortgage LLC, JP Morgan Chase Bank N.A. and Homesales,
LLC (collectively “the Defendants”). Concluding that the Francises are barred
from relitigating claims raised in a prior action under the doctrine of res judicata,
we affirm the dismissal of their complaint.
Facts and Procedural History
[2] The Francises previously owned residential property in Marion County, subject
to a real estate mortgage held by Accubanc (“the Property”). The facts
underlying the disposition of the Property were related in a prior appeal:
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
Court of Appeals of Indiana | Memorandum Decision 18A-CT-8 | November 26, 2018 Page 2 of 11
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.
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 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.
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 [] 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.
Court of Appeals of Indiana | Memorandum Decision 18A-CT-8 | November 26, 2018 Page 3 of 11
Francis v. EMC Mortgage, LLC, No. 49A02-1604-MF-830, slip op. at 1–2 (Ind.
Ct. App. Apr. 19, 2017), trans. denied. The Property was sold, and a Sheriff’s
Deed was issued in February 2017.
[3] The Francises filed bankruptcy proceedings and initiated an adversary
proceeding in the United States Bankruptcy Court for the Southern District of
Indiana seeking almost $200,000 in damages from EMC Mortgage for an
allegedly improper foreclosure. The Bankruptcy Court dismissed the adversary
proceeding for lack of jurisdiction over a state foreclosure action. The Francises
appealed the decision to the United States District Court for the Southern
District of Indiana, and the bankruptcy court’s decision was affirmed.
Appellees’ App. pp. 70–73.
[4] Thereafter, on August 18, 2017, the Francises filed a “Complaint for Lack of
Standing to Foreclose, Fraud in the Concealment, Fraud in the Inducement,
Unconscionable Contract, Breach of Contract, Breach of Fiduciary Duty, Quiet
Title, Slander of Title, Temporary Restraining Order/Injunctive Relief and Jury
Demand.” Appellees’ App. pp. 77–99. The Francises named as defendants
Accubanc, Fannie Mae, EMC Mortgage (a former subsidiary of JP Morgan
Chase Bank, N.A.), and Homesales, LLC. In the complaint, the Francises
alleged that the Defendants had no right to foreclose on the real estate because
the Defendants each failed “to perfect any security interest in the Real Property
collateral, or cannot prove to the court they have a valid interest as a real party
in interest to the underlying Mortgage.” Id. at 86. On October 10, 2017, the
Court of Appeals of Indiana | Memorandum Decision 18A-CT-8 | November 26, 2018 Page 4 of 11
Francises moved to file an amended complaint; the trial court denied the
motion on October 16, 2017.
[5] On October 30, 2017, the Defendants filed a motion to dismiss the Francises’
complaint on grounds that the claims are barred under principles of res judicata.
On October 31, 2017, the trial court granted the Defendants’ motion to dismiss
and ordered that each of the Defendants be dismissed from the action, with
prejudice.
[6] On November 29, 2017, the Francises filed a motion to correct error claiming
that the trial court erred in granting the motion to dismiss before the Francises
could respond. The motion to correct error was denied on December 4, 2017.
The Francises now appeal.
Standard of Review
[7] The Francises appeal the trial court’s dismissal of their complaint. We review
de novo the trial court’s ruling on a motion to dismiss under Indiana Trial Rule
12(B)(6). Caesars Riverboat Casino, LLC v. Kephart, 934 N.E.2d 1120, 1122 (Ind.
2010). “Such a motion tests the legal sufficiency of a claim, not the facts
supporting it.” Id. “Viewing the complaint in the light most favorable to the
non-moving party, we must determine whether the complaint states any facts
on which the trial court could have granted relief.” Id. “If a complaint states a
set of facts that, even if true, would not support the relief requested, we will
affirm the dismissal.” McPeek v. McCardle, 888 N.E.2d 171, 174 (Ind. 2008). We
may affirm the grant of a motion to dismiss if it is sustainable on any theory. Id.Court of Appeals of Indiana | Memorandum Decision 18A-CT-8 | November 26, 2018 Page 5 of 11
[8] The Francises have proceeded pro se throughout these proceedings. We
therefore observe that a pro se litigant is held to the same standards as a trained
attorney and is afforded no inherent leniency simply by virtue of being self-
represented. Zavodnik v. Harper, 17 N.E.3d 259, 266 (Ind. 2014).
Discussion and Decision
[9] The Francises appeal the dismissal of their complaint and denial of their motion
to correct error. They continue to argue that EMC Mortgage cannot be
represented by counsel or participate in this action because the company is
“defunct” and does not do business in Indiana. See Appellants’ Br. at 44–45.
And they continue to challenge Accubanc’s assignment of their mortgage to
another financial institution, which eventually resulted in assignment of the
Francises’ mortgage to EMC Mortgage.
[10] The Francises raised these claims in a prior appeal. See Francis, No. 49A02-
1604-MF-830, slip op. at 1. In that case, we observed that a debtor may not
challenge an assignment between an assignor and assignee. Id. at 2. We also
held 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 [] 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.
Court of Appeals of Indiana | Memorandum Decision 18A-CT-8 | November 26, 2018 Page 6 of 11
Id. at 3.
[11] In that appeal, the Francises also argued that “EMC could 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.” Id.
However, “‘securing or collecting debts or enforcing mortgages and security
interests in property securing the debts’” does not constitute transacting
business in the State of Indiana. Id. (quoting Ind. Code § 23-1-49-2(b)(8)).
Therefore, we held that the “Francises have failed to establish that EMC cannot
enforce its rights pursuant to the Loan Documents.” Id.[12] The doctrine of res judicata bars the Francises’ latest attempt to raise these same
arguments. Res judicata serves to prevent repetitious litigation of disputes that
are essentially the same. Hilliard v. Jacobs, 957 N.E.2d 1043, 1046 (Ind. Ct. App.
2011) (citing MicroVote General Corp. v. Ind. Election Comm'n, 924 N.E.2d 184,
191 (Ind. Ct. App. 2010)), trans. denied. The doctrine of res judicata has two
distinct components: claim preclusion and issue preclusion.1 Id. (citing Dawson
v. Estate of Ott, 796 N.E.2d 1190, 1195 (Ind. Ct. App. 2003)). “Claim preclusion
applies where a final judgment on the merits has been rendered which acts as a
complete bar to a subsequent action on the same issue or claim between those
1
“Issue preclusion, also referred to as collateral estoppel, bars the subsequent relitigation of the same fact or
issue where the fact or issue was necessarily adjudicated in a former suit and the same fact or issue is
presented in a subsequent action.” Dev. Servs. Alternatives, Inc. v. Ind. Family & Soc. Servs. Admin., 915 N.E.2d
169, 179 (Ind. Ct. App. 2009) (quoting In re Adoption of Baby W., 796 N.E.2d 364, 373 (Ind. Ct. App. 2003),
trans. denied), trans. denied.
Court of Appeals of Indiana | Memorandum Decision 18A-CT-8 | November 26, 2018 Page 7 of 11
parties and their privies.” Dev. Servs. Alternatives, Inc. v. Ind. Family & Soc. Servs.
Admin., 915 N.E.2d 169, 179 (Ind. Ct. App. 2009) (quoting In re Adoption of
Baby W., 796 N.E.2d 364, 373 (Ind. Ct. App. 2003), trans. denied), trans. denied.
The following four requirements must be satisfied for claim
preclusion to apply as a bar to a subsequent action: (1) the former
judgment must have been rendered by a court of competent
jurisdiction; (2) the former judgment must have been rendered on
the merits; (3) the matter now in issue was, or could have been,
determined in the prior action; and (4) the controversy
adjudicated in the former action must have been between the
parties to the present suit or their privies.
Angelopoulos v. Angelopoulos, 2 N.E.3d 688, 696 (Ind. Ct. App. 2013), trans.
denied.
[13] The Francises’ claims in these proceedings are all related to the 2016 judgment
of foreclosure, a judgment rendered on the merits, which was issued in Marion
Superior Court and involved the same parties. The judgment was affirmed on
appeal, and in their current appellants’ brief, the Francises are attempting to
rehash the same arguments that our court addressed in that prior appeal. See
Francis, No. 49A02-1604-MF-830, slip op. at 2–4. Therefore, claim preclusion
applies, and the Francises are barred from relitigating the claims they raised in
the trial court and in this appeal.
Court of Appeals of Indiana | Memorandum Decision 18A-CT-8 | November 26, 2018 Page 8 of 11
[14] Moreover, throughout their brief, the Francises make specious claims and fail
to cite to the record or provide cogent reasoning in support of their claims.2 See
e.g. Appellants’ Br. at 37 (stating that “[a]lleged counsels for defunct EMC
Mortgage LLC, may have committed Fair Debt Collection Practice Act [] 15
U.S.C. §1692(e) violations against Francis that include a misleading and
confusing description of the amount of the debt”); id. at 47 (claiming that “[t]he
collection counsels may be in violation of the Indiana Criminal Code, Corrupt
Business Influence statute IC 35-46-6-1”); id. at 48 (arguing that “[t]he Trial
Court erred in allowing debt collection counsel to withhold exculpatory
evidence documents repeatedly without the threat of being sanctioned”).
[15] Indiana Appellate Rule 46(A)(8)(a) provides that the party’s argument must
“contain the contentions of the appellant on the issues presented, supported by
cogent reasoning. Each contention must be supported by citations to the
authorities, statutes, and the Appendix or parts of the Record on Appeal relied
on[.]” The Francises’ failure to comply with the foregoing waives their issues
for appellate review. See Dickes v. Feiger, 981 N.E.2d 559, 562 (Ind. Ct. App.
2012); see also Thacker v. Wentzel, 797 N.E.2d 342, 345 (Ind. Ct. App. 2003)
(clarifying that we will not become an advocate for a party and will not address
2
The Francises also argue that the “trial court erred by prejudicing Francis’[s] right to file Appeals by not
giving timely notice of Completion, discovered by Francis only by accident.” Appellants’ Br. at 49. Because
they were able to appeal the judgment, we are unable to fathom how the Francises’ right to appeal was
“prejudiced.”
Court of Appeals of Indiana | Memorandum Decision 18A-CT-8 | November 26, 2018 Page 9 of 11
arguments that are inappropriate, too poorly developed, or so improperly
expressed that they cannot be understood).
[16] Finally, EMC argues that the Francises are vexatious litigants and should be
sanctioned. Our courts may sanction abusive litigants because the state has a
legitimate interest in the preservation of valuable judicial and administrative
resources. Zavodnik, 17 N.E.3d at 264. Our supreme court has made clear that
“[t]he courts of this state, after due consideration of an abusive litigant’s entire
history, may fashion and impose reasonable conditions and restrictions . . . on
the litigant’s ability to commence or continue actions in this state that are
tailored to the litigant’s particular abusive practices.” Id. at 266. In Zavodnik,
our supreme court listed certain restrictions courts may place on abusive
litigants. Id. at 268–69. The court also observed that courts may award attorney
fees to prevailing parties and assess damages and other sanctions to parties who
engage in abusive tactics. Id. at 264–65.
[17] This appeal stems from the Francises’ second attempt to challenge the
foreclosure of their property in state court.3 The Francises have also attempted
to challenge the lender’s right to foreclose on their property in bankruptcy
proceedings in the United States District Court for the Southern District of
Indiana.
3
As we noted in footnote 2, the Francises also filed a separate appeal of the Marion Superior Court’s
dismissal of their most recent complaint against Defendant PNC Bank in Francis, et al. v. Accubanc Mortgage
Corporation, No. 18A-CT-596.
Court of Appeals of Indiana | Memorandum Decision 18A-CT-8 | November 26, 2018 Page 10 of 11
[18] The Francises initiated these proceedings after receiving a forensic accounting
of their mortgage, and they believed that the accounting supported their claims
that the trial court erred when it entered a judgment in favor of EMC Mortgage.
See Appellees’ App. pp. 77–99. For this reason, we decline to sanction the
Francises. However, in the future, a trial court would be well within its
discretion to impose sanctions on the Francises should they continue to
challenge the valid foreclosure of their former real estate.
Conclusion
[19] Concluding that the Francises are barred from raising the claims they have
raised in these proceedings under the doctrine of res judicata, we affirm the
dismissal of their complaint.
[20] Affirmed.
Bailey, J., and Bradford, J., concur.
Court of Appeals of Indiana | Memorandum Decision 18A-CT-8 | November 26, 2018 Page 11 of 11