Melody Barrows v. Crossroads Bank (mem. dec.) ( 2020 )

MEMORANDUM DECISION
Pursuant to Ind. Appellate Rule 65(D),
this Memorandum Decision shall not be FILED
regarded as precedent or cited before any Nov 30 2020, 11:34 am
court except for the purpose of establishing CLERK
the defense of res judicata, collateral Indiana Supreme Court
Court of Appeals
and Tax Court
estoppel, or the law of the case.
ATTORNEY FOR APPELLANT ATTORNEYS FOR APPELLEE
Kristina L. Lynn Mark A. Frantz
Lynn Law Office, P.C. M. Josh Petruniw
Wabash, Indiana Downs Tandy & Petruniw, P.C.
Wabash, Indiana
IN THE
COURT OF APPEALS OF INDIANA
Melody Barrows, November 30, 2020
Appellant, Court of Appeals Case No.
20A-MF-978
v. Appeal from the Miami Circuit
Court
Crossroads Bank, The Honorable Timothy P. Spahr,
Appellee. Judge
Trial Court Cause No.
52C01-1803-MF-51
Brown, Judge.
Court of Appeals of Indiana | Memorandum Decision 20A-MF-978 | November 30, 2020 Page 1 of 11
[1] Melody Barrows appeals the trial court’s entry of a decree of foreclosure and
judgment in favor of Crossroads Bank (“Crossroads”). We affirm.
Facts and Procedural History
[2] Barrows executed a promissory note dated May 30, 2012, evidencing a loan
from Crossroads to her in the original principal amount of $23,250 (the “Note”)
and a mortgage (the “Mortgage”) granting Crossroads a security interest in
certain real property located at 213 S. Wabash St., Peru, Miami County,
Indiana (the “Property”) to secure repayment of the loan. Barrows used the
Property as a rental property.
[3] Crossroads sent a letter dated November 7, 2017, to Barrows stating she was in
default for failure to make payments, the amount of the default was $413.06,
and, if the default was not cured within thirty days, the entire amount owed
under the Note would be immediately due and payable. Crossroads sent a
letter dated November 9, 2017, to Barrows stating it was accelerating payment
on the Note, the Note was in default because she was in default of her
payments, and the payoff amount as of that date was $22,880.12. According to
Barrows, she never received the letters. 1 Barrows made a payment of $687.92
on December 26, 2017.
1
The Note and Mortgage included an address for Barrows of 2063 N St Rd 9, Peru, Indiana. The November
7th and 9th letters were addressed to Barrows at 2063 N St Rd 9 and identified the address of the Property as
“231” South Wabash Street. Barrows testified that her physical address was 2063 North State Road 19, there
was no mail receptacle at her residence, and her mailing address was P.O. Box 271, Peru, Indiana. Kathy
Roberts, a Vice President of Collections at Crossroads, indicated “the mailing address for this loan was the
Court of Appeals of Indiana | Memorandum Decision 20A-MF-978 | November 30, 2020 Page 2 of 11
[4] On March 2, 2018, Crossroads filed a Complaint on Promissory Note and to
Foreclose Mortgage. 2 An entry in the chronological case summary (“CCS”) on
October 12, 2018, indicates that Crossroads filed a Second Motion for
Summary Judgment. Barrows filed a response, and the court held a hearing.
On May 5, 2019, the court issued an Order Entering Partial Summary
Judgment in Favor of the Plaintiff. With respect to whether Barrows was in
default, the court found that acceleration of the amount due was merited and
foreclosure of the Mortgage should be ordered and granted partial summary
judgment. The court further found there was a genuine issue of material fact
with respect to the amount owed by Barrows and set an evidentiary hearing.
On December 9, 2019, the court held an evidentiary hearing at which the court
admitted documentary evidence and heard testimony from Vice President
Kathy Roberts, Crossroads’s attorney, and Barrows.
[5] On January 29, 2020, the court issued a decree of foreclosure. The court noted
that it had previously entered partial summary judgment in favor of Crossroads
and that Barrows argued the entry should be set aside. It also noted the
provisions of the Note and Mortgage and the letter indicating Crossroads was
P.O. Box in Peru,” Crossroads had been informed there was no receptacle to receive mail at Barrows’s home
address, and the letters were sent to 2063 North State Road 19. Transcript Volume II at 75.
2
The record does not include the complaint. The chronological case summary (“CCS”) states service was
made on Barrows by the Miami County Sheriff and “to all other Defendants” by certified mail. Appellant’s
Appendix Volume II at 2. The CCS also indicates Crossroads filed a motion for default and summary
judgment in July 2018, Barrows filed a response, and on August 24, 2018, the court issued an order denying
Crossroads’s motion for summary judgment as to Barrows and granting it as to defendants Kathy Bunker,
Wayne Bunker, and the Miami County Health Department.
Court of Appeals of Indiana | Memorandum Decision 20A-MF-978 | November 30, 2020 Page 3 of 11
accelerating payment of the Note, that Crossroads had incurred charges in
obtaining insurance coverage for the Property, and that Barrows did not make
payment until on or about December 26, 2017. The court found:
Even if Barrows did not ever receive the November 9, 2017 letter,
that does not immunize her from the foreclosure of the mortgage and
entry of judgment in favor of Crossroads. The facts of this case are
sufficiently similar to the facts in Otto v. Park Garden Assocs., 612
N.E.2d 135 (Ind. Ct. App. 1993), reh’g denied, [trans. denied,] a case in
which a lender was granted a foreclosure of a mortgage that had been
signed by the debtor[.] The designated evidence shows that
Defendant Barrows waived presentment and demand for payment,
Crossroads reserved the right to invoke the acceleration clause
without notice to Barrows, Defendant Barrows was in default at the
time that the acceleration took place (for not making monthly
payments in a timely fashion and for failing to provide proof of
maintenance of insurance protecting the subject real estate, to name
just two of the reasons), and the parties’ written agreements
contained non-waiver language benefiting Crossroads.
[] After having reviewed all of the designated evidence once again,
the Court concludes that partial summary judgment was properly
granted in favor of Crossroads; hence, the Court sustains its prior
ruling in that regard.
Appellant’s Appendix Volume II at 17. The court determined that Barrows
owed Crossroads $28,778.86 and would receive a credit for any amounts she
paid after December 5, 2019. Barrows filed a Motion to Correct Error and/or
Motion for Relief From Judgment, which the court denied.
Court of Appeals of Indiana | Memorandum Decision 20A-MF-978 | November 30, 2020 Page 4 of 11
Discussion
[6] Barrows challenges the trial court’s order of foreclosure and the amount of the
judgment. To the extent she challenges the trial court’s partial summary
judgment ruling, summary judgment is appropriate only where there is no
genuine issue of material fact and the moving party is entitled to judgment as a
matter of law. Mangold ex rel. Mangold v. Ind. Dep’t of Natural Res., 756 N.E.2d
970, 973 (Ind. 2001). We may affirm the trial court’s ruling on any grounds
supported by the Indiana Trial Rule 56 materials. Catt v. Bd. of Comm’rs of Knox
Cnty., 779 N.E.2d 1, 3 (Ind. 2002).
[7] To the extent Barrows argues the judgment is clearly erroneous, in reviewing
findings of fact and conclusions of law, we apply a two-tiered standard of
review by first determining whether the evidence supports the findings and then
whether the findings support the judgment. Bayview Loan Servicing, LLC v.
Golden Foods, Inc., 59 N.E.3d 1056, 1066 (Ind. Ct. App. 2016). Findings are
clearly erroneous when the record contains no facts to support them either
directly or by inference, and a judgment is clearly erroneous if it applies the
wrong legal standard to properly found facts. Id. at 1066-1067. To determine a
finding or conclusion is clearly erroneous, our review of the evidence must
leave us with the firm conviction that a mistake has been made. Id. at 1067.
Further, a party appealing from a negative judgment will prevail only if the
party establishes the judgment is contrary to law. See id. A judgment is
contrary to law when the evidence is without conflict and all reasonable
Court of Appeals of Indiana | Memorandum Decision 20A-MF-978 | November 30, 2020 Page 5 of 11
inferences to be drawn from the evidence lead only to one conclusion but the
trial court reached a different conclusion. Id.
A. Acceleration
[8] Barrows first asserts that her payment of $687.92 on December 26, 2017, cured
her default and that, based on Crossroads’s acceptance of the payment and
application of it to the balance due, there is doubt as to its intentions to
accelerate the Note and the decree of foreclosure must be reversed.
[9] In Otto v. Park Garden Assocs., the lender brought a foreclosure action against the
borrowers, and the trial court granted partial summary judgment. 612 N.E.2d
135, 137 (Ind. Ct. App. 1993), reh’g denied, trans. denied. On appeal, the
borrowers argued summary judgment was improper because they were entitled
to notice before acceleration of the promissory note. Id. at 138. To determine
whether the lender was required to give notice before accelerating the note, this
Court reviewed the terms of the promissory note and mortgage. We observed
the promissory note stated “[i]f default is made in the payment . . . then, in any
such events, or at any time, thereafter, the entire principal of this Note . . . shall
at the election of the holder, and without relief from valuation or appraisement
laws, become immediately due and payable” and “[t]he undersigned . . . waive
demand, presentment for payment, notice of dishonor, protest and notice of
protest. . . .” Id. We noted the mortgage stated “[i]n the event of any event of
default [the lender] may declare all indebtedness secured hereby to be due and
Court of Appeals of Indiana | Memorandum Decision 20A-MF-978 | November 30, 2020 Page 6 of 11
payable and the same shall thereupon become due and payable without any
presentment, demand, protest or notice of any kind.” Id. at 139. We then held:
We see no language in these documents indicating an obligation upon
[the lender] to notify the [borrowers] of its intent to accelerate the
note. According to the clear language of these documents, the
[borrowers] promised to pay the remaining principal balance in event
of default without demand or notice of acceleration. By making these
promises, the only notice the [borrowers] were entitled to—should
they default—was [the lender’s] foreclosure action itself.
Id. We affirmed the entry of partial summary judgment. Id.
[10] Here, the record reveals that Crossroads accelerated the total balance owed on
the Note on or about November 9, 2017. Barrows does not dispute that, at that
time, she was delinquent in her payments under the Note and thus in default.
While the November 7, 2017 letter indicated Barrows could cure her default
within thirty days, Barrows never received the letter and thus did not rely on it,
and in any event she did not make a payment within the thirty-day period.
Further, the record reveals, and Barrows does not challenge, that the Miami
County Sheriff served her with Crossroads’s Complaint on Promissory Note
and to Foreclose Mortgage. Barrows does not point to a provision of the Note
or Mortgage which required that Crossroads provide her with notice of, or an
opportunity to cure, her default for failure to make timely payment prior to
accelerating the total balance owed or the indebtedness. To the contrary, the
Mortgage expressly provided that, upon “an Event of Default and at any time
thereafter, [Crossroads], at [its] option, may exercise any one or more of the
following rights and remedies . . . [:] Accelerate Indebtedness. [Crossroads]
Court of Appeals of Indiana | Memorandum Decision 20A-MF-978 | November 30, 2020 Page 7 of 11
shall have the right at its option without notice to [Barrows] to declare the entire
Indebtedness immediately due and payable, including any prepayment penalty
that [Barrows] would be required to pay.” Appellant’s Appendix Volume II at
31-32 (emphasis added). The Mortgage also states “[Barrows] understands
[Crossroads] will not give up any of [its] rights under this Mortgage unless [it]
does so in writing,” “[t]he fact that [Crossroads] delays or omits to exercise any
right will not mean that [it] has given up that right,” and “[Barrows] waives
presentment, demand for payment, protest, and notice of dishonor.” Id. at 33-
34. Further, the Note provided that, “[u]pon default, [Crossroads] may declare
the entire unpaid principal balance under this Note and all accrued unpaid
interest immediately due, and then I will pay that amount,” “the indebtedness
will be repaid without relief from any Indiana or other valuation and
appraisement laws,” and “I . . . waive presentment, demand for payment, and
notice of dishonor.” Id. at 22-23. Barrows has not shown that Crossroads
failed to comply with the terms of the loan documents. See Otto, 612 N.E.2d at
138-139. 3 Based on the record and Barrows’s arguments, we conclude reversal
on this basis is not warranted.
B. Amount Owed
3
Barrows cites INB Banking Co. v. Opportunity Options, Inc., in which this Court stated a mortgagee’s election
to accelerate a note must be clear and unequivocal and found the letter at issue was not clear and unequivocal
or provided the required notice. See 598 N.E.2d 580, 584 (Ind. Ct. App. 1992), reh’g denied, trans. denied.
However, unlike the loan documents in this case and in Otto, the loan documents in INB Banking Co. were
determined to require written notice of default and that the notice allow thirty days to cure. See id.
Court of Appeals of Indiana | Memorandum Decision 20A-MF-978 | November 30, 2020 Page 8 of 11
[11] Barrows further argues the payment history reflected a balance due of
$13,267.35 on December 2, 2019, and “[t]here was simply no substantial
evidence of probative value to support the judgment of $28,778.86 as of
December 5, 2019.” Appellant’s Brief at 12. In her statement of facts, she
states “[t]he loan history also included fees that had been incurred by
Crossroads throughout the life of the loan, such as insurance, attorney’s fees,
title searches and real estate taxes” and “[t]hose charges already show up in the
loan history.” Id. at 8.
[12] The trial court’s order set forth the following calculation to determine the total
amount that Barrows owed Crossroads as of December 5, 2019:
Principal (as of December 5, 2019) $ 13,267.35
Late Charges $ 167.18
Property Preservation (Insurance and Real Estate Taxes) $ 1,975.49
Title Searches $ 408.00
Attorney Fees for Cause No. 52D01-1407-MI-000246 $ 5,085.33[4]
Attorney Fees for Cause No. 52C01-1803-MF-000051 $ 7,875.51
Total $ 28,778.86
Appellant’s Appendix Volume II at 19.
[13] The record reveals that Crossroads presented, as Plaintiff’s Exhibit No. 3, an
account snapshot or payment history with respect to Barrows’s loan which
reflected the initial entry of the loan proceeds in 2012 and reductions of the
4
Roberts testified that Crossroads incurred attorney fees with respect to a complaint to foreclose a mechanics
lien by a cleanup company which was ultimately dismissed.
Court of Appeals of Indiana | Memorandum Decision 20A-MF-978 | November 30, 2020 Page 9 of 11
principal loan balance due to payments received. The payment history showed
a loan balance of $13,267.35 as of December 5, 2019. Crossroads further
presented, as Plaintiff’s Exhibit No. 4, a spreadsheet summarizing the insurance
coverage, property tax, attorney fee, and lien search expenses it incurred with
respect to the loan and the Property. The spreadsheet included a total for taxes
paid of $698, insurance payments totaling $1,277.49, and a total for lien
searches of $408. It also shows attorney fees incurred over the term of the loan,
and Crossroads’s attorney testified as to his customary rate and anticipated time
for the hearing and his anticipated post-hearing services. Crossroads presented
a schedule showing accrued but unpaid late fees totaling $167.18. Crossroads
also presented receipts and letters to document the expenses. Barrows does not
challenge the expense summaries, the reasonableness of the expenses, or the
supportive documentation. To the extent Barrows states the expenses incurred
by Crossroads “already show up in the loan history,” Appellant’s Brief at 8, we
note Barrows does not develop an argument and does not point to the payment
history to show that the expenses incurred by Crossroads increased the total
principal loan balance or that the loan balance as of December 5, 2019 of
$13,267.35 already accounted for these expenses. The court heard Roberts
testify that the column labeled “Balance” on the payment history admitted as
Plaintiff’s Exhibit No. 3 showed only the principal loan balance. The trial court
noted “[s]o, you’ve listed some figures on Plaintiff’s Exhibit four . . . attorney
fees, InsurMark, [] lien searches, real estate taxes” and asked “are all those
amounts to be added to the principal amount on Exhibit three in order to
determine what’s owed,” and Roberts responded “[t]hey do not go to principal.
Court of Appeals of Indiana | Memorandum Decision 20A-MF-978 | November 30, 2020 Page 10 of 11
We’re not allowed to add anything to principal.” Transcript Volume II at 83.
The court asked if the full amounts listed on Plaintiff’s Exhibit No. 4 were still
owed, and Roberts answered affirmatively. Our review of the evidence does
not leave us with the firm conviction that a mistake has been made, and we
cannot say that all reasonable inferences to be drawn from the evidence lead
only to one conclusion but the trial court reached a different conclusion.
[14] For the foregoing reasons, we affirm the trial court.
[15] Affirmed.
Robb, J., and Crone, J., concur.
Court of Appeals of Indiana | Memorandum Decision 20A-MF-978 | November 30, 2020 Page 11 of 11