120 N.E.3d 560
Ind. Ct. App.2019Background
- In 2005 Trust 08-1292 sold property to Trust 08-3923; Beachwalk (with Moss as a beneficiary/partner) executed promissory notes and two mortgages in favor of Trust 08-1292 and Moss, but the mortgages were not recorded at closing.
- In 2012 Beachwalk/related entity filed Chapter 11 and an adversary action seeking to avoid the unrecorded mortgages; Moss discovered the mortgages were unrecorded and faced unsecured-creditor status.
- Moss sued Ticor/Chicago Title and Horizon in LaPorte Superior Court in 2013 alleging failure to record mortgages, negligence, breach of fiduciary duty, and related claims. That action was dismissed and then the parties stipulated to dismissal with prejudice on January 5, 2015, with a limited reservation: Moss could file claims in a specific bankruptcy case (Case No. 12-32540-hcd).
- Moss filed claims in the bankruptcy proceeding on January 2, 2015; those claims were later dismissed and Moss did not appeal that dismissal.
- In October 2017 Moss filed a new state-court complaint asserting essentially the same claims; Chicago Title moved to dismiss under Trial Rule 12(B)(6) (res judicata) attaching the prior dismissal order, and Horizon moved under 12(B)(8). The trial court denied Horizon’s motion, granted Chicago Title’s, and dismissed the 2017 suit with prejudice.
- Moss appealed, arguing (1) the court erred by not converting Chicago Title’s 12(B)(6) motion into a Rule 56 summary-judgment motion when it considered attachments, and (2) the 2013 dismissal did not bar the 2017 suit because the stipulation reserved his rights to pursue claims outside the referenced bankruptcy case.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the trial court had to convert a 12(B)(6) motion to a Rule 56 summary-judgment motion when it considered attachments | Moss: attachments rendered the motion "outside the pleadings," requiring conversion and an opportunity to present summary-judgment materials | Chicago Title: the attachments were judicially-noticeable court records, not matters outside the pleadings, so no conversion was required | Court: No conversion required; judicially-noticeable records may be considered on a 12(B)(6) motion |
| Whether the 2017 lawsuit is barred by res judicata given the 2015 dismissal with prejudice and limited reservation | Moss: the stipulation reserved his right to pursue claims in bankruptcy and implicitly allowed future state-court actions if bankruptcy did not fully adjudicate claims | Defendants: the stipulation unambiguously reserved only Moss’s right to file claims in that particular bankruptcy case; dismissal with prejudice bars further litigation on those claims | Court: The stipulation’s plain language limited the reservation to the specified bankruptcy case; dismissal with prejudice bars the 2017 action |
Key Cases Cited
- Lanni v. Nat’l Collegiate Athletic Ass’n, 989 N.E.2d 791 (Ind. Ct. App. 2013) (failure to notify conversion to summary judgment can be reversible error if prejudice shown)
- Davis ex rel. Davis v. Ford Motor Co., 747 N.E.2d 1146 (Ind. Ct. App. 2001) (on 12(B)(6) court may consider pleadings and facts of which it may take judicial notice)
- Fox v. Nichter Constr. Co., 978 N.E.2d 1171 (Ind. Ct. App. 2012) (dismissal with prejudice is a merits dismissal and has res judicata effect)
- Kithcart v. Metro. Life Ins. Co., 62 F. Supp. 93 (W.D. Mo. 1944) (illustrative federal authority taking judicial notice of public records on motion to dismiss)
- Henson v. CSC Credit Servs., 29 F.3d 280 (7th Cir. 1994) (federal precedent that matters of public record may be considered on a motion to dismiss without converting to summary judgment)