Citimortgage, Inc. v. Shannon S. Barabas a/k/a Shannon Sheets Barabas, ReCasa Financial Group, LLC, and Rick A. Sanders
2012 Ind. LEXIS 802
Ind.2012Background
- Barabas had two mortgages on a Madison County home; MERS appeared as nominee for the lender on the first deed of trust and retained only bare legal title.
- ReCasa Financial foreclosed on Barabas’s second mortgage and obtained a default judgment after Barabas failed to respond.
- Citimortgage acquired an interest in the mortgage via an April 1, 2009 assignment from MERS and sought to intervene post-judgment.
- The trial court denied Citimortgage’s intervention and later reinstated the amended default judgment against Barabas.
- Citimortgage argued it was entitled to intervene and that the default judgment was void for lack of notice; the Court of Appeals initially affirmed, prompting transfer to the Indiana Supreme Court.
- Supreme Court reversed, holding Citimortgage had a cognizable interest via MERS agency, and that the default judgment was void for lack of notice as to Citimortgage; remanded to grant intervention and amend the judgment.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Citimortgage may intervene as of right. | Citimortgage has an interest via MERS and should intervene. | ReCasa contends no entitlement to intervene. | Yes; Citimortgage’s interest via MERS qualifies for intervention. |
| Whether MERS’s status renders Citimortgage entitled to notice for intervention. | Agency sufficiently ties Citimortgage to MERS to meet notice interests. | Notice requirements apply to the record lender only. | MERS’s agency creates rights enough to support notice for intervention. |
| Whether the default judgment was void for lack of personal jurisdiction as to Citimortgage. | Citimortgage did not receive proper notice; judgment void. | ReCasa argues notice was adequate by other means. | Yes; judgment void as to Citimortgage for lack of notice. |
| Whether Citimortgage’s motion to intervene was timely. | Delay was justified due to lack of notice. | Timeliness not satisfied. | Timely under extraordinary circumstances given lack of notice. |
Key Cases Cited
- State Farm Mut. Auto. Ins. Co. v. Hughes, 808 N.E.2d 112 (Ind. Ct. App. 2004) (intervention standards and Rule 60 considerations discussed)
- Wrinkles v. State, 749 N.E.2d 1179 (Ind. 2001) (standard of review for trial court decisions on such matters)
- McCullough v. Archbold Ladder Co., 605 N.E.2d 175 (Ind. 1993) (abuse of discretion standard for trial rulings)
- Powell v. State, 891 N.E.2d 1091 (Ind. Ct. App. 2008) (notice and service considerations in mortgage-related actions)
- Mortg. Elec. Registration Sys., Inc. v. Estrella, 390 F.3d 522 (7th Cir. 2004) (MERS as nominee; agency and foreclosure rights)