Bryant Edward Duty Sr. v. The CIT Group/Consumer Finance, Inc., Northwood Investments, LLC
86 N.E.3d 214
| Ind. Ct. App. | 2017Background
- In 2005 Duty executed a promissory note and mortgage (the Loan Documents) in favor of Wilmington Finance to purchase his South Bend house.
- A foreclosure action was filed in March 2009 (apparently by CIT Group); a foreclosure judgment was entered July 1, 2009.
- The Mortgage was assigned during the relevant period to various entities; U.S. Bank later appeared as holder.
- Duty filed for bankruptcy in 2009, which stayed sale for several years; a motion for relief from judgment was later filed challenging the enforcement chain.
- In March 2017 the trial court denied Duty’s T.R. 60(B)(8) motion and allowed U.S. Bank to proceed to sheriff’s sale; Northwood purchased the house at sale in August 2017.
- Duty appealed, arguing the entity that pursued foreclosure in 2009 lacked the right to enforce the Loan Documents because assignments were defective.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether debtor may obtain relief under T.R. 60(B)(8) by challenging alleged defective assignments of the mortgage/debt | Duty: the foreclosing party (CIT/U.S. Bank) lacked enforceable rights due to faulty assignments, so judgment is voidable and relief is warranted | Appellee: (implicitly) assignment defects are disputes among assignees/assignors and do not change debtor’s obligations; trial court discretion to deny relief | Court held Duty lacks standing to challenge assignments between assignor and assignee; T.R. 60(B)(8) relief denied |
Key Cases Cited
- Johnson Cty. Rural Elec. Membership Corp. v. Burnell, 484 N.E.2d 989 (Ind. Ct. App. 1985) (appellee’s failure to file brief relaxes appellant’s burden to show prima facie error)
- Gipson v. Gipson, 644 N.E.2d 876 (Ind. 1994) (standard for T.R. 60(B) relief; equitable discretion reviewable for abuse)
- Liu v. T & H Mack, Inc., 191 F.3d 790 (7th Cir. 1999) (party to underlying contract lacks standing to attack reassignment problems)
- Livonia Prop. Holdings, L.L.C. v. 12840-12976 Farmington Rd. Holdings, L.L.C., 717 F. Supp. 2d 724 (E.D. Mich. 2010) (borrower’s obligations remain; assignment validity is dispute among claimants)
- Ifert v. Miller, 138 B.R. 159 (E.D. Pa. 1992) (assignment and underlying contract are separate; obligor lacks cognizable interest in assignment and cannot raise assignor’s contractual claims)
- In re Holden, 2 N.E.2d 631 (N.Y. 1936) (assignor’s cause of action against assignee does not affect assignee’s legal title and cannot be raised by debtor)