Michael Fancis and Carmen Jay Francis v. EMC Mortgage, LLC, successor by merger to EMC Mortgage Corporation (mem. dec.)
49A02-1604-MF-830
Ind. Ct. App.Apr 19, 2017Background
- In 1994 Michael and Carmen Jay Francis executed a promissory note and mortgage on their Indianapolis home; the note matured November 1, 2001 and was unpaid.
- The loan and mortgage were assigned through several entities, ultimately to EMC Mortgage Corporation and then successor-by-merger EMC Mortgage, LLC (EMC).
- EMC filed a foreclosure complaint in 2007; the Francises answered and asserted counterclaims. EMC moved for partial summary judgment in 2012 and later for full summary judgment; the trial court granted summary judgment to EMC on February 17, 2016, entering in rem judgment and ordering sale of the property.
- The Francises appealed, arguing lack of standing to enforce the Loan Documents, statute-of-limitations bar, that the case was disposed by a 2012 withdrawal/praecipe, denial of opportunity to respond to a partial-summary-judgment motion, and lack of a hearing before judgment.
- The Court of Appeals affirmed, rejecting challenges to EMC’s standing, holding the amended complaint related back to the original filing (so was timely), finding no jurisdictional defect from the praecipe, and concluding the Francises were not denied hearings or opportunity to be heard.
Issues
| Issue | Plaintiff's Argument (EMC) | Defendant's Argument (Francis) | Held |
|---|---|---|---|
| Standing to enforce Loan Documents | EMC: valid possession/authority to enforce; borrower cannot attack assignment chain | Francises: chain of assignment flawed; EMC not authorized in Indiana | Held: Borrowers lack standing to challenge assignment between assignors and assignees; EMC may enforce the loan |
| Foreign-corp authorization to sue in Indiana | EMC: enforcement of mortgage is excepted from "transacting business" rule | Francises: EMC lacked certificate of authority or collection-agency registration | Held: Enforcement of mortgages falls within statutory exceptions; certificate of authority irrelevant |
| Statute of limitations on foreclosure | EMC: original 2007 complaint timely; amended complaint relates back under T.R. 15(C) | Francises: 2013 amended complaint filed after 10-year limit from maturity | Held: Amended complaint relates back to 2007 filing; not time-barred |
| Effect of praecipe for withdrawal / CCS showing "disposed" | EMC: case was only withdrawn for reassignment and later redocketed | Francises: 2012 praecipe/CCS entry disposed the case, depriving court jurisdiction | Held: CCS ‘‘disposed’’ entry reflected withdrawal and reassignment; case was redocketed and jurisdiction proper |
| Denial of opportunity to be heard / hearing on summary judgment | EMC: hearings were held (including Feb 8, 2016); no default judgment sought | Francises: not served on alleged 2013 motion; denied opportunity to respond; hearing invalid without Michael Francis | Held: Record shows no 2013 motion or hearing error; February 2016 hearing occurred; no deprivation proven |
Key Cases Cited
- Merchants National Bank v. Simrell's Sports Bar & Grill, Inc., 741 N.E.2d 383 (Ind. Ct. App. 2000) (summary-judgment standard review and burdens)
- Liu v. T & H Mack, Inc., 191 F.3d 790 (7th Cir. 1999) (party to underlying contract lacks standing to attack reassignment)
- Ifert v. Miller, 138 B.R. 159 (Bankr. E.D. Pa. 1992) (debtor has no cognizable interest to challenge third-party assignment)
- Vanco v. Sportsmax, Inc., 448 N.E.2d 1198 (Ind. Ct. App. 1983) (foreign corporation incapacity to sue is affirmative defense)
- Thacker v. Wentzel, 797 N.E.2d 342 (Ind. Ct. App. 2003) (appellate court will not consider undeveloped or unsupported arguments)