Wyckford SK Realty, LLC v. JPMCC 2006-CIBC14-7777 Wyckford Ct LLC (mem. dec.)
49A04-1605-MF-1159
| Ind. Ct. App. | Jan 17, 2017Background
- Wyckford SK Realty (Wyckford) borrowed ~$8.13M in 2005 secured by a mortgage, assignment of rents, and an escrow agreement requiring monthly tax impound transfers from Wyckford’s operating account.
- In 2006 the property assessment jumped ~80%; Wyckford appealed the assessments for multiple years but the servicer (Bank/Master Servicer) estimated tax impounds based on the higher 2006 assessment and directed monthly transfers accordingly.
- From 2009–2012 Wyckford failed to keep sufficient funds in the operating account, producing shortfalls, late fees, and default interest. Loan administration later transferred to a Special Servicer.
- The Bank foreclosed in March 2015; the trial court granted summary judgment for the Bank in April 2016, entering a money judgment and decree of foreclosure that included $13,603.50 labeled as "Legal Fees."
- Wyckford appealed, arguing the Bank breached the escrow agreement by demanding tax payments based on its higher estimate (while Wyckford’s appeals of assessment were pending) and challenging the attorney-fee award as unsupported.
Issues
| Issue | Plaintiff's Argument (Bank) | Defendant's Argument (Wyckford) | Held |
|---|---|---|---|
| Whether Bank breached the Escrow Agreement by requiring tax impounds based on its estimate tied to the 2006 assessment | Bank: Agreement authorizes Bank to estimate taxes and require monthly one‑twelfth deposits; Wyckford agreed to impounds from operating account | Wyckford: Escrow language and statute (IC 6‑1.1‑15‑10) allowed it to pay only taxes based on the prior assessment while appeal pending; Bank’s estimate was not binding | Court: The contract gives Bank the power to estimate and require payments; no breach; summary judgment for Bank affirmed |
| Whether summary judgment was improper due to contract ambiguity | Wyckford: Ambiguity exists, requiring factual development | Bank: Contract is clear; summary judgment appropriate | Court: Contract unambiguous as to Bank’s estimation power; summary judgment proper |
| Whether trial court properly awarded $13,603.50 in attorney’s fees/legal costs without evidentiary support | Bank: Relied on an affidavit (allegedly) documenting fees; court may judicially notice reasonable fees | Wyckford: No designated evidence in record supports fee amount; award is unsupported | Court: Fee award was an abuse of discretion; record lacks identified affidavit; remand for hearing on attorney’s fees |
| Whether Wyckford waived claims by signing pre‑negotiation letter | Bank: Wyckford acknowledged no defaults/claims in pre‑negotiation letter | Wyckford: Negotiations terminated and the letter’s admissions were negated by termination | Court: Not necessary to resolve waiver here — court decided on contract interpretation and fee remand (letter discussed in notes but not dispositive) |
Key Cases Cited
- Kroger Co. v. Plonski, 930 N.E.2d 1 (Ind. 2010) (standard of review for summary judgment)
- Gill v. Evansville Sheet Metal Works, Inc., 970 N.E.2d 633 (Ind. 2012) (moving party’s burden on summary judgment)
- Mid State Bank v. 84 Lumber Co., 629 N.E.2d 909 (Ind. Ct. App. 1994) (contract construction and summary judgment)
- Bowen v. Monroe Guar. Ins. Co., 758 N.E.2d 976 (Ind. Ct. App. 2001) (avoid interpretations that render contract language meaningless)
- Berkemeier v. Rushville Nat. Bank, 438 N.E.2d 1054 (Ind. Ct. App. 1982) (attorney fee awards require evidentiary support except in routine small cases)