L. Ray Yeager, and Phyllis L. Yeager v. Deutsche Bank National Trust Company, as Trustee of the Residential Asset Securitization Tust 2005-A1, Mortgage Pass-Through Certificates
2016 Ind. App. LEXIS 433
| Ind. Ct. App. | 2016Background
- In 2004 the Yeagers executed a mortgage and note; the mortgage was later assigned to Deutsche Bank, which sued for foreclosure after alleged default. A default judgment and foreclosure decree entered in 2012; the Bank later amended the complaint and the Yeagers answered.
- In March 2016 the Bank moved for a provisional order under Ind. Code § 32-30-10.5-8.6 requiring the Yeagers to continue monthly mortgage payments, pay taxes, and maintain insurance pending the action.
- The trial court issued a provisional order ex parte directing monthly payments equal to the Note amount ($1,871.61) and requiring proof of taxes and insurance; no hearing or inquiry into the Yeagers’ finances was held before entry.
- The Yeagers provided proof of taxes and insurance pursuant to the order and appealed the Provisional Order, arguing the court abused its discretion and violated procedural rules and due process by issuing the order without inquiry or hearing.
- The Court of Appeals reversed and remanded, concluding the trial court abused its discretion by failing to obtain information or hold a hearing to determine the Yeagers’ ability to pay under the statute.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the trial court abused its discretion by issuing a provisional order without inquiring into the debtor’s ability to pay under Ind. Code § 32-30-10.5-8.6 | Yeagers: statute, rules, and due process require notice/hearing or inquiry into ability to pay before ex parte provisional order | Bank: statute authorizes provisional order; no hearing required; order simply set payment at no more than mortgage obligation and did not implicate a protected interest | Reversed and remanded: court abused its discretion by issuing the order without obtaining information or holding a hearing to determine ability to pay; remand for further proceedings consistent with the statute |
Key Cases Cited
- In re Estate of Long, 804 N.E.2d 1176 (Ind. Ct. App.) (abuse of discretion standard)
- Hollingsworth v. Key Benefit Adm’rs, Inc., 658 N.E.2d 653 (Ind. Ct. App.) (abuse of discretion review)
- Nationstar Mortg., LLC v. Curatolo, 990 N.E.2d 491 (Ind. Ct. App.) (statutory purpose of Ind. Code ch. 32-30-10.5 to avoid unnecessary foreclosures and facilitate mortgage modification)
- United Rural Elec. Membership Corp. v. Indiana & Michigan Elec. Co., 549 N.E.2d 1019 (Ind.) (interpretation that permissive "may" is not mandatory)