49 N.E.3d 589
Ind. Ct. App.2015Background
- East Point (LLC) bought a 124-acre property from Fieldview in 2006; purchase was financed by PrivateBank loans: East Point (primary mortgage) $2.2M and Fieldview (secondary mortgage) $2.7M; several guarantors personally guaranteed East Point's loan.
- East Point obtained multiple written renewals extending maturity to September 15, 2010; loan included an interest-reserve/draw feature that had been used to pay interest and certain Fieldview payments.
- Negotiations occurred in Sept. 2010 for a further extension that East Point asserts was agreed orally on Sept. 10, 2010; no written renewal was executed and the bank later “scrapped” the proposal, sent demand letters, and sued on Feb. 15, 2011.
- Bank settled with some guarantors (Manhards and Barrett); those guarantors paid and agreed (inter alia) not to assist East Point in contesting foreclosure; remaining defendants were East Point, Fieldview, and Rusin. PREH later purchased the loan and moved for summary judgment in foreclosure.
- Defendants filed a response brief timely but uploaded designated evidence late (two days past agreed deadline) and belatedly filed a Declaration of Technical Difficulty; trial court excluded the late-designated evidence and granted summary judgment to PREH. Defendants appealed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Timeliness of Defendants’ designated evidence | Defendants missed the court-ordered deadline; late evidence should not be considered | E-filing technical difficulties prevented timely upload; notice was given at hearing and declared later | Held: Defendants’ designated evidence untimely; local rule required prompt declaration and multiple attempted filings; trial court properly excluded the materials |
| Whether an oral agreement renewed the loan (statute of frauds / choice of law) | Loan documents choose Illinois law; Illinois statute of frauds bars oral extensions/defenses | Oral renewal occurred Sept. 10, 2010; if Indiana law applied, the claim might survive under earlier ILLA case law | Held: Illinois statute of frauds is substantive and controls; oral renewal barred; defense fails |
| Whether Bank breached contract by failing to fund a draw request | Bank had no obligation under loan terms to fund draws for purposes alleged; draws were for interest reserve/use limitations govern | Bank previously funded draws; its refusal to fund fourth draw breached course of dealings | Held: No genuine issue of breach; loan use provisions and subordination preclude the asserted obligation; breach claim fails |
| Equitable defenses (unclean hands, abuse of process, tortious interference) | Bank/PREH acted within contractual and procedural rights; foreclosure is proper remedy | Bank engaged in wrongful conduct in negotiations, settled to frustrate East Point, and pursued foreclosure to obtain property for profit | Held: Equitable defenses rejected — negotiations, settlement with guarantors, and foreclosure filing were proper; no unclean hands or abuse/tortious interference shown |
Key Cases Cited
- Altevogt v. Brand, 963 N.E.2d 1146 (Ind. Ct. App.) (summary judgment standard and de novo review of legal questions)
- HomEq Servicing Corp. v. Baker, 883 N.E.2d 95 (Ind.) (bright-line rule on timing for responding to summary judgment and limits on extending deadlines)
- Miller v. Yedlowski, 916 N.E.2d 246 (Ind. Ct. App.) (nonmovant must comply with extensions and respond within any court-granted additional period)
- Sees v. Bank One, Ind., N.A., 839 N.E.2d 154 (Ind.) (interpretation of ILLA statute of frauds as applied historically)
- Cochran v. Ward, 29 N.E. 795 (Ind. App.) (statute of frauds treated as substantive and part of contract's character)
- Brown v. Buchmeier, 994 N.E.2d 291 (Ind. Ct. App.) (affidavit cannot create sham issues by contradicting prior deposition testimony)
- Gast v. Hall, 858 N.E.2d 154 (Ind. Ct. App.) (Trial Rule 56(E) limits conclusory affidavits; inadmissible conclusions disregarded)
- Nat'l City Bank v. Shortridge, 689 N.E.2d 1248 (Ind.) (abuse-of-process analysis and limits on improper process use)