84 N.E.3d 1211
Ind. Ct. App.2017Background
- Fish loaned money to 2444 Acquisitions and obtained a mortgage; a 2011 foreclosure judgment in Fish’s favor created a lien on the subject properties.
- Fish initiated tax-sale proceedings; tax-sale surplus funds were generated and became the subject of competing claims.
- 2444 Acquisitions filed Chapter 11 bankruptcies twice; in 2014 Fish filed an adversary turnover complaint in bankruptcy and the bankruptcy court ordered the auditor to deliver the surplus to 2444 Acquisitions’ counsel to hold in trust pending further order.
- The bankruptcy court later approved interim attorney fees paid from those funds; the bankruptcy case and related adversary proceeding were dismissed in February 2016.
- After dismissal, counsel released the funds to 2444 Acquisitions; Fish then sued in state trial court by motion for turnover of the tax-sale surplus.
- The trial court granted Fish’s turnover motion, finding Fish had the superior interest and equity required disbursement to him; 2444 Acquisitions appealed.
Issues
| Issue | Plaintiff's Argument (Fish) | Defendant's Argument (2444 Acquisitions) | Held |
|---|---|---|---|
| Whether the trial court properly ordered turnover of tax-sale surplus funds | Fish argued he has a substantial, recorded property interest (mortgage and foreclosure judgment) and thus may petition the trial court for surplus funds; equity favors him over 2444 | 2444 argued Fish used the wrong procedural vehicle (should use T.R. 69/proceedings supplemental), was estopped or waived by bankruptcy proceedings, and the trial court failed to account for prior disbursements and third-party claims | Court held Fish entitled to pursue surplus in trial court; procedural form was acceptable, bankruptcy did not adjudicate ownership finally, no waiver, and equity required disbursement to Fish |
Key Cases Cited
- Beneficial Ind., Inc. v. Joy Props., LLC, 942 N.E.2d 889 (Ind. Ct. App. 2011) (tax-sale surplus claims are essentially declaratory-judgment actions and equitable in nature)
- Brewer v. EMC Mortg. Corp., 743 N.E.2d 322 (Ind. Ct. App. 2001) (mortgagee is a person with a substantial property interest of public record who may seek surplus)
- CANA Investments, LLC v. Fansler, 832 N.E.2d 1103 (Ind. Ct. App. 2005) (only certain parties may use the administrative surplus-claim procedure; others may pursue surplus in court)
- In re 2005 Tax Sale Parcel No. 24006-001-0022-01, 898 N.E.2d 349 (Ind. Ct. App. 2008) (statutory framework for tax sales and surplus distribution)
- Indianapolis Downs, LLC v. Herr, 834 N.E.2d 699 (Ind. Ct. App. 2005) (elements and fairness considerations for applying collateral estoppel)
- Ember v. Ember, 720 N.E.2d 436 (Ind. Ct. App. 1999) (standard of review for findings and conclusions)
- Lafayette Car Wash, Inc. v. Boes, 282 N.E.2d 837 (Ind. 1972) (definition and elements of waiver)
- Pohle v. Cheatham, 724 N.E.2d 655 (Ind. Ct. App. 2000) (silence/acquiescence does not constitute waiver absent duty to act)