Kenneth D. Hunter v. ETrade Bank ( 2013 )

Pursuant to Ind.Appellate Rule 65(D),
this Memorandum Decision shall not Nov 27 2013, 5:42 am
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.
APPELLANT PRO SE: ATTORNEY FOR APPELLEE:
KENNETH D. HUNTER BRYAN K. REDMOND
Franklin, Indiana Feiwell & Hannoy, P.C.
Indianapolis, Indiana
IN THE
COURT OF APPEALS OF INDIANA
KENNETH D. HUNTER, )
)
Appellant-Petitioner, )
)
vs. ) No. 41A01-1208-MF-352
)
E*TRADE BANK, )
)
Appellee-Respondent. )
APPEAL FROM THE JOHNSON SUPERIOR COURT
The Honorable David N. Riggins, Special Judge
Cause No. 41D03-1008-MF-399
November 27, 2013
MEMORANDUM DECISION – NOT FOR PUBLICATION
BARNES, Judge
Case Summary
Kenneth Hunter appeals the trial court’s entry of summary judgment in favor of
E*Trade Bank (“E*Trade”). We affirm.
Issues
Hunter raises three issues, which we restate as:
I. whether the trial court properly denied his motion to
dismiss;
II. whether the trial court properly denied his motion to
recuse; and
III. whether the trial court properly entered summary
judgment in favor of E*Trade.
Facts
On March 17, 2006, Hunter executed a promissory note to Home Loan Center,
Inc., d/b/a Lending Tree Loans (“Lending Tree”) in the amount of $85,000. To secure
repayment of that note, Hunter executed a mortgage pursuant to which Mortgage
Electronic Registration Systems, Inc., as nominee for Lending Tree was granted a
security interest in a parcel of property in Franklin. This mortgage was recorded on June
12, 2006.
On August 30, 2010, E*Trade Financial filed a complaint to enforce the
promissory note executed by Hunter and to foreclose on the mortgage. The complaint
alleged that Hunter had defaulted by failing to pay the monthly mortgage payment after
January 25, 2010.
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On September 20, 2010, Hunter filed a pro se motion to dismiss asserting that
E*Trade Financial failed to prove standing. Among other things, Hunter claimed that
E*Trade Financial had not proved it was in possession of the promissory note and
mortgage and, as such, was not entitled to enforce the instruments. On October 22, 2010,
the trial court, by Douglas B. Cummins, acting as a temporary judge, denied Hunter’s
motion to dismiss.1
On December 12, 2011, Hunter filed a motion to dismiss for failure to prosecute
pursuant to Indiana Trial Rule 41(E). On February 16, 2012, E*Trade Financial moved
to substitute E*Trade as the plaintiff, responded to Hunter’s motion to dismiss, and
moved for summary judgment. On February 28, 2012, Hunter replied, again challenging
E*Trade’s ability to enforce the promissory note and to foreclose on the mortgage.
Hunter also filed a motion to set aside the order denying his 2010 motion to dismiss in
which he asserted that Judge Cummins had not been sworn in at the time the order was
signed. Judge Lance D. Hamner of Johnson Superior Court 3 denied this motion on the
same day.
On March 28, 2012, Hunter filed a motion to reconsider the denial of the motion
to set aside. That same day, Hunter also filed a motion for the recusal of Judge Hamner
and for the appointment of a special judge. On April 23, 2012, Judge Hamner recused
and ordered that a special judge be selected pursuant to the local rules. Judge David N.
Riggins of Shelby Superior Court 2 was appointed as special judge. On July 6, 2012,
1
This order was not referenced in the chronological case summary until a November 30, 2011 nunc pro
tunc entry.
3
Hunter filed a motion to order the appointment of Judge Riggins invalid and for the
referral of the case to our supreme court.
At a July 19, 2012 hearing on all pending motions, Hunter challenged Judge
Riggins’s appointment and, upon the trial court’s denial of Hunter’s motion, Hunter
refused to further participate in the hearing. E*Trade made arguments regarding its
motion for summary judgment and presented the trial court with the original note and
mortgage, at which point Hunter left the hearing. Following the hearing, the trial court
granted E*Trade’s motion for summary judgment, entered judgment in favor of E*Trade,
and issued a decree of foreclosure. Hunter now appeals.
Analysis
I. Motion to Dismiss2
Hunter argues that Judge Cummins was not authorized to deny his 2010 motion to
dismiss because he did not take the oath of temporary judge until the day after the order
was issued. In ruling on Hunter’s motion to set aside that order, the trial court found that
Judge Cummins took the oath of office on October 21, 2010, before denying Hunter’s
motion to dismiss, and that the notation dated October 23, 2010, on the order appointing
Judge Cummins temporary judge was made by the clerk upon her receipt of the order.
Thus, Judge Cummins was authorized to rule on the motion to dismiss.
2
E*Trade argues that we should not review this issue because Hunter did not include the denial of his
2010 motion to dismiss or the denial of his motion to set aside as orders being appealed in his notice of
appeal. However, because this issue relates to the recusal issue, we address it on the merits.
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Even if Judge Cummins’s oath of office was not timely, Hunter has not shown that
his substantial rights were prejudiced by the denial of the motion to dismiss. Indiana
Trial Rule 61 provides:
No error in either the admission or the exclusion of evidence
and no error or defect in any ruling or order in anything done
or omitted by the court or by any of the parties is ground for
granting relief under a motion to correct errors or for setting
aside a verdict or for vacating, modifying or otherwise
disturbing a judgment or order or for reversal on appeal,
unless refusal to take such action appears to the court
inconsistent with substantial justice. The court at every stage
of the proceeding must disregard any error or defect in the
proceeding which does not affect the substantial rights of the
parties.
Hunter argues that all subsequent hearings and proceedings were so overshadowed
by Judge Cummins’s order that he was denied due process. We do not agree that both
Judge Hamner and Judge Riggins “exhibited clear bias and prejudice” against Hunter
because of Judge Cummins’s purported lack of authority. Appellant’s Br. p. 20. This
assertion is simply not supported by the record. Further, Hunter has not established that
his motion to dismiss would have been or should have been granted had Judge
Cummins’s oath of office been timely. As such, even if Judge Cummins was not
authorized to rule on the motion to dismiss, we fail to see how the denial of the motion to
dismiss prejudiced Hunter’s substantial rights.
II. Motion to Recuse
Hunter argues that Judge Riggins should have recused himself because he violated
“his oath of office in the same manner which caused Johnson County Judge Hamner to
recuse . . . .” Appellant’s Br. p. 22. Apparently challenging the manner in which
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temporary judges are appointed in Shelby County, Hunter claims, “By the fact that both
judges were openly exposed challenged by [Hunter] as improperly engaging in allowing
persons to assume judicial duties in violation of the constitutions of both Indiana and the
United States of America, both judges should have recognized their potential for bias.”
Id. at 23.
On appeal, Hunter does not provide us with the appropriate standard of review or
direct us to the portions of the Indiana Code of Judicial Conduct that were purportedly
violated. He does, however, cite Bloomington Magazine, Inc. v. Kiang, 961 N.E.2d 61,
63 (Ind. Ct. App. 2012), which explains that a ruling upon a motion to recuse rests within
the sound discretion of the trial judge and will be reversed only upon a showing of abuse
of that discretion. “An abuse of discretion occurs when the trial court’s decision is
against the logic and effect of the facts and circumstances before it.” Kiang, 961 N.E.2d
at 63-64. When reviewing a trial judge’s decision not to disqualify himself or herself, we
presume that the trial judge is unbiased. Id. at 64. To overcome that presumption, the
appellant must demonstrate actual personal bias. Id. The mere appearance of bias and
partiality may require recusal if an objective person, knowledgeable of all the
circumstances, would have a rational basis for doubting the judge’s impartiality. Id.“Upon review of a judge’s failure to recuse, we will assume that a judge would have
complied with the obligation to recuse had there been any reasonable question concerning
impartiality, unless we discern circumstances which support a contrary conclusion.” Id.Quite simply, even if Judge Cummins had not been properly sworn in at the time
he denied Hunter’s motion to dismiss, Hunter has not established that Judge Riggins was
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actually biased or that an objective person knowledgeable of all the circumstances would
have a rational basis for doubting Judge Riggins’s impartiality in ruling on the pending
motions. Without more, Hunter has not established that Judge Riggins abused his
discretion when he denied Hunter’s motion to recuse.
III. Motion for Summary Judgment
Hunter argues that the grant of E*Trade’s motion for summary judgment was
improper. “Summary judgment is only appropriate when the moving party affirmatively
shows that there are no genuine issues of material fact with regard to a particular issue or
claim.” Holiday Hospitality Franchising, Inc. v. AMCO Ins. Co., 983 N.E.2d 574, 577
(Ind. 2013) (citing Ind. Trial Rule 56(C)). “The non-moving party then bears the burden
of coming forward with designated evidence showing the existence of a genuine issue of
material fact.” Id. We review these cases through the same lens and view all designated
evidence and reasonable inferences in a light most favorable to the non-moving party,
resolving any doubts against the moving party. Id. “We will affirm a trial court’s
summary judgment on any theory supported by the record.” Id. “When the facts are
undisputed, reversal is only appropriate if the trial court incorrectly applied the law to
those facts.”
Hunter challenges the assignment of the mortgage to E*Trade and argues that
E*Trade did not show that it owned the mortgage. Hunter argues that the loan was
assigned to Countrywide Home Loans (“Countrywide”) in 2006 and could not have been
assigned from Lending Tree to E*Trade in 2010. In support of this argument, Hunter
relies in part on a March 31, 2006 letter from Countrywide to Hunter indicating the
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servicing of his loan and the right to collect payments from him had been assigned, sold,
or transferred from Lending Tree to Countrywide.3 Even if this letter is sufficient to
create an issue of fact regarding the servicing of the loan in 2006, it does not create a
material issue of fact regarding the ownership of the loan at the time of the August 30,
2010 complaint because E*Trade designated evidence indicating that it held the original
promissory note and that the mortgage was assigned from Lending Tree to E*Trade
Financial on August 6, 2010.4 At the summary judgment hearing, counsel for E*Trade
presented the trial court and Hunter with the original promissory note and mortgage for
review, at which point Hunter left the hearing.5
Based on various provisions of the Uniform Commercial Code, E*Trade contends
that, when the promissory note was endorsed in blank, it was converted into a bearer
instrument and, because E*Trade had possession of the bearer instrument, it is a holder of
the instrument with standing to enforce it. See Ind. Code §§ 26-1-3.1-205(b); 26-1-3.1-
301(1); 26-1-1-201(20)(A); & 26-1-3.1-109(a). Hunter does not provide legal argument
disputing this point but contends that the mortgage and note appear to have been split,
with E*Trade arguably claiming to hold the note and Countrywide owning the mortgage.
3
Although E*Trade asserts that Hunter did not designate any evidence in response to its motion for
summary judgment, for purposes of this appeal, we consider the exhibits attached to Hunter’s response as
designated evidence.
4
E*Trade Financial assigned this mortgage to E*Trade on January 26, 2012.
5
The trial court noted, “given that Mr. Hunter has now left the Courtroom, uh, there’s no objection, uh,
to me considering these two (2) documents which were already in my file anyway, I believe.” Tr. p. 30.
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The designated evidence simply does not support Hunter’s claim that E*Trade did
not own the mortgage when it filed the complaint. Although Hunter’s designated
evidence shows that Countrywide was involved in the servicing of the loan, Hunter does
not direct us to any document indicating that Countrywide recorded an assignment of the
mortgage from Lending Tree. As Hunter acknowledged in his response to E*Trade’s
motion for summary judgment, when a mortgage is assigned, the assignee is statutorily
required to record that assignment. See Ind. Code § 32-29-1-8.
Further, E*Trade argues that, even if the mortgage was not properly assigned to
E*Trade, because it is entitled to enforce the promissory note, it is entitled to enforce the
mortgage. See Egbert v. Egbert, 226 Ind. 346, 351, 80 N.E.2d 104, 106 (1948) (“The
assignment of a note secured by mortgage operates pro tanto as an assignment of the
mortgage.”). Accordingly, E*Trade has established that there are no genuine issues of
material fact and that it is entitled to judgment as a matter of law. The trial court properly
granted summary judgment for E*Trade.
Conclusion
Hunter has not established that the denial of his motion to dismiss or the denial of
his motion to recuse was improper. Also, because there are no genuine issues of material
fact and E*Trade established it was entitled to judgment as a matter of law, the trial court
properly granted its motion for summary judgment. We affirm.
Affirmed.
CRONE, J., and PYLE, J., concur.
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