Nathan E. Mylet v. Santander Bank, N.A. (mem. dec.)
29A02-1608-MF-2004
| Ind. Ct. App. | Jun 9, 2017Background
- In 2010 Mylet obtained a mortgage from Santander secured by his Sheridan home.
- In April 2014 a Santander employee told Mylet he did not qualify to refinance due to his credit score but could get a loan modification if he missed three mortgage payments.
- Relying on that advice, Mylet intentionally missed three payments; Santander later denied his modification requests and filed foreclosure in November 2014.
- Mylet asserted seven counterclaims (including fraud, negligent misrepresentation, and negligence) in response; Santander moved to dismiss under Trial Rule 12(B)(6).
- The trial court dismissed all counterclaims except fraud; Mylet appealed the dismissal of his negligence-related claims.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether negligence and negligent-misrepresentation counterclaims survive a 12(B)(6) motion | Mylet: Santander’s statements advising him to miss payments and promising modification gave rise to tort claims and remedial relief (restore original mortgage/repair credit). | Santander: Alleged harms are purely economic and arise from the parties’ contractual relationship; tort claims are barred by economic loss rule and contract principles. | Court: Affirmed dismissal — negligence claims barred by the economic loss rule; Mylet did not invoke an applicable exception. |
| Whether contract principles, rather than tort law, should govern claims arising from lender-borrower communications | Mylet: (implicit) tort remedies appropriate for alleged misrepresentations. | Santander: Relationship and duties arise from contract; tort law should not displace contract allocation of risks. | Concurring opinion: Agreed in result; emphasized contract law prevents converting contract breaches into torts absent independent tort. |
Key Cases Cited
- Holleman v. Ind. Dep’t of Corr., 27 N.E.3d 293 (Ind. Ct. App. 2015) (standard of review for T.R. 12(B)(6) dismissal)
- Hammons v. Jenkins-Griffith, 764 N.E.2d 303 (Ind. Ct. App. 2002) (affirming dismissal when alleged facts cannot support requested relief)
- U.S. Bank, N.A. v. Integrity Land Title Corp., 929 N.E.2d 742 (Ind. 2010) (economic loss rule bars tort recovery for purely economic losses)
- Indianapolis–Marion Cty. Pub. Library v. Charlier Clark & Linard, P.C., 929 N.E.2d 722 (Ind. 2010) (defining economic loss rule and its scope)
- Greg Allen Const. Co. v. Estelle, 798 N.E.2d 171 (Ind. 2003) (parties’ contractual allocation of risks limits tort recovery; cannot convert contract breach into tort absent independent tort)
- Jaffri v. JPMorgan Chase Bank, N.A., 26 N.E.3d 635 (Ind. Ct. App. 2015) (applying principles limiting tort claims arising from contractual banking relationships)