Hepburn v. Tri-County Bank

weigh islature to the wisdom legisla- legislation

tion. The merely must William B. bear HEPBURN and Lois M. a rational legitimate Hepburn, relation to a gov- Appellants- Wilbur purpose. ernmental The Indiana Defendants, stat- ute seeks to adoptions, facilitate instead v. placements, endless foster care for BANK, Appellee- TRI-COUNTY placed children outside parental their Plaintiff. homes period extended of time. Accordingly, it sets a fifteen-month No. 54A01-0507-CV-327. benchmark after judicial which the sys- tem becomes involved the automatic Appeals Court of of Indiana. filing petition of a parental terminate Feb. 2006. rights. Although filing of such a petition certainly not a matter to be Rehearing Denied May lightly, taken it does bear a rational

relation to very the State's legitimate

interest promoting adoptions of chil-

dren who have been removed from their

parental homes for periods extended

time. The Indiana ... statute does not

violate the Due Process Clause.

Phelps v. Sybinsky, (internal

(Ind.Ct.App.2000) citations omit

ted), trans. denied. We agree with the

Phelps Court and reaffirm holding its 81-385-2-4.5(a)(@2)(B) §

Indiana Code does

not violate the Due Process Clause.

Conclusion presented

The MCOFC clear and con-

vincing evidence that there is a reasonable

probability that the conditions leading to

T.P.'s removal from Castro will not be

remedied and that termination of Castro's

parental rights inis T.P.'s best interests.

Furthermore, Castro was not denied due

process of during law the CHINS/termi-

nation proceeding. Finally, Indiana's scheme

CHINS/termination does not vio-

late the Due Process Clause.

Affirmed.

ROBB, J., MATHIAS, J., concur. Rosenthal, Lafayette,

David A. Ap- for pellants. Miller,

Gregory Crawfordsville, H. Appellee.

OPINION MAY, Judge. M. Hepburn

Lois Wilbur and Wil liam Hepburn appeal the trial court's grant summary judgment to Tri-County Bank. They raise one appeal, issue on which we restate as whether the 2002, Lois in signed which indicated it was "unsecured," was nevertheless secured mortgages 1998, 1999, she had and 2002 because those earlier executed mortgages dragnet included clauses.1 We affirm. brief, reply Hepburns their argument assert In cedural in their initial brief to this granting summary trial court judg- erred in court, appeal. it is waived for waiver, Notwithstanding the Tri-County ment to our review of "[nJeither Bank because Complaint Summary nor the Motion for the record indicates the Bank did raise the Judgment claimed that each se- summary judgment: issue in its motion for pursuant cured the dragnet a 14. That Lois and William have failed to provision (Re- mortgage," contained in such on Account 90605, Nos. 96389, 96116, pay 3), therefore, ply they Br. and "had no Tri-County, and 96552 owed to all of which respond notice to to such claim first made at guarantee accounts are secured Lois' hearing Summary Judgment.'"' on and, therefore, are further secured said Appellants permitted are present new against above-referenced briefs, arguments and, reply therefore, in their argu- Mortgaged Property, by rea- appellant ment an fails to raise in his initial son of her and William's default on said appeal. brief is waived for See Felsher v. Tri-County, other accounts owed to Lois is Evansville, in default under said above-referenced Univ. 593 n. 6 (Ind.2001); promissory 46(C) ("No Ind.App. regarding the same clause gage contained No. 90276 that secured Note as did and Other Indebtedness" "Renewal mortgage con farmland. The with her (Id. above. at mortgage quoted first the following language: tains the removed). 32) (emphasis Indebtedness. and Other 2. Renewal any and all also secures

This 8, 2002, William executed August On extensions, modifications, renewals, sub- (Fd. 42.) $80,000.00. at No. 96552 for Note stitutions, of the Note replacements and "ADDITIONAL TERMS" In the This also any part thereof. or "Security agreement Note indicates: Mortgagee payment the secures receivable, inven- equipment, [sic] account and advances to any obligations future accounts, assignment and an tory, deposit extent as such Mortgagor to the same Hepburn, B. policy on William of insurance and advances were obligations future $/8/2002, dated and mortage and [sic] of this on the date of. execution made Hepburn dated by Lois guaranty (it understood that Mortgage being day, Lois exe- The same 8/8/2002." any obligation to Mortgagee is not under farm, mortgage on her and cuted the third except spe- as any make future advances the same "Renew- mortgage contained the Note). All such cifically set forth the in the Indebtedness" clause al and Other payable obligations and advances future addition, Tri- In other two from valua- shall be without relief herein laws, and with at- appraisement which Lois County guaranty, tion prepared collec- torney's and other costs of fees executed. by Mortgagee. tion incurred provides: guaranty The

(Id. 17.) unconditionally guaran- absolutely I and 14, 1999, Lois and William January On and performance you payment Tri tee to the by which Note No. executed appendix, re- pages their Plaintiff's number addressing one issue: "whether 51(C). quired by App. Their failure R. Defendants['] debt secure pursuant (Id. 88-91.) Accordingly, Guaranty." review, to a our and rules hindered follow those opportunity "to did have appellate rules. urge to review the we counsel 3.) (Reply respond Br. at to such claim." pages sequentially numbered 3. We in their brief Hepburns failed to include 2. The identify pages Appendix Appellant's being appealed. Ind. copy See of the order by our numbers. ('The 46(A)(10) in- Appellate Rule brief shall opinion, written memorandum clude appear to contain Appendix does findings of fact and conclusions decision or equipment alleged- security agreement for ap- relating raised on to the issues thereon ly in 1997. consecutively executed They peal."). also failed debt, every every type of each and an affidavit from a Vice President of Tri- description, may County that the borrower which stated: now or at time the future owe Rodger Winger, A. affirms and states as you, up principal to the amount of follows: $400,000.00 interest, plus accrued attor- 1. That he is the Vice President of neys' fees collection costs referable Tri-County Bank & Trust Company. (when law), permitted by thereto and all 2. That he has access and control of agreed paid other amounts be under all concerning promissory records agreements evidencing all the debt and notes, mortgages, security commercial securing payment of the debt. You agreements, guaranty notice, may, apply guaranty without this Defendants, William B. Hepburn you to such debts of the borrower and Lois M. Hepburn. Wilbur may select from time to time. 4.[sic] amounts owed to Tri- included a see- County Bank Company by & Trust tion where the bank could indicate whether Defendants are as follows: was "secured" or "unse- $20,083.49, a. Account plus #90276: cured," and the Bank marked the box for per diem interest at the rate of $3.71407 "unsecured." 9/22/04; from 24, 2008, February

On William $91,455.01, b. Account # 90605: plus Tri-County another Note with Bank. This per diem interest at the rate of Note indicates it is a renewal of 9/22/04; Loan No. from $14.24426 $12,301.00, 96552; "96389" for and it indicates it is $78,251.90, c. Account # plus "separately by ... security agree- secured per diem interest at the rate of ment for dated accounts receiv- 7/5/2002 9/22/04; from $15.62172 (Id. 56.) able." at day, same Wil- $13,889.97, d. Account #96389: plus liam also executed a Note for Loan No. per diem interest at the rate of $2.81898 $168,061.00. 96116 for This Note indicates 9/22/04; from it is by: "assignment secured of [illegible] $176,564.18, e. Account #96116: rights to accounts receivable from William plus per diem interest at the rate of H. building Block's renovation under seeu- 9/22/04, from for a total in- $37.30960 rity agreement dated 5/9/02 debtedness owed Tri-County in the (/d. by dated Hepburn." 5/9/02 $383,244.55, amount plus of per diem 60.) interest at the rate of from $73.70863 9/22/04, 14, 2004, plus attorney's On fees and costs. Tri-County October Bank complaint filed a against Hepburns, 79.) (App. at alleging William had defaulted on his Hepburns' The response Tri-County's requesting Notes and foreclosure on the summary motion for judgment acknowl- Hepburns The "admitted to edged "that no issues of material fact exist allegations all except the amount of the entered," judgment may be but debt and demand the was se- judgment claimed that should not be en- by cured existing mortgages." (Appel- (Fd. 81.) tered pled "as Plaintiff." 2.) lant's Br. at Rather, Hepburns' asserted: summary motion for Lois M. Hepburn Wilbur owned cer- filed judgment designated estate, sup- evidence in subject tain real of the Mort- port of that motion. Included therein was gages dated securing unpaid an 1/14/99

383 Lois, entities 16a; persons other or paragraph in set forth debt 2/18/02 in set forth unpaid balance filed a secured ...." Judgment summary error, Motion the trial motion to correct which 16b; securing an un- paragraph court denied. 8/8/02 16c. paragraph forth balance set paid were remaining notes ANDDECISION

The two DISCUSSION for which Lois M. Hepburn B. William purpose "The up signed guaranty Hepburn Wilbur litigation which there to terminate about Therefore, $400,000.00. Judg- dispute no material factual can be entered as follows: ment should be as a matter of law." which can be resolved B. against William Judgment 1. Services, Trucking Branham v. Celadon prayed. Hepburn amount Inc., (Ind.Ct.App. Judgment against Wilbur 2. M. (Ind. 2001), trans. denied 753 N.E.2d 16 prayed. in the amount Hepburn 56(C). 2001); A Ind. Trial Rule see also shall be 1/14/99 dispute is material it bears on factual the amount set foreclosed to secure of a relevant issue. ultimate resolution Summary Judg- in Motion for forth Williamson, N.E.2d Bushong v. 16a; paragraph ment (Ind.2003). genuine "A factual issue is to secure the be foreclosed 2/14/99 shall conclusively capable being if it is not in the Motion for Sum- amount set forth undisputed reference to foreclosed 16b; the paragraph mary Judgment facts." Id. shall be foreclosed mortgage of 8/8/02 of sum grant review the trial court's We set forth the Mo- secure the amount mary judgment applying the same stan Summary Judgment para- tion for Branham, applied. trial court dard the 16ec. graph any at 521. must resolve 744 N.E.2d We be fore- Security 4. interest shall . facts, there about or the inferences doubts for Notes under 16d and pay closed to from, favorable to the light most 16e. However, may we nonmoving party. Id. Attorney fees shall be allowed any summary judgment on the affirm the $1,750 Affi- per of the in the amount designated ory supported by the evidence counsel. davit of Plaintiff's Id. the movant to the trial court. Onee 81-82.) no fac forth evidence to demonstrate sets judg- hearing the court entered After a exist, the burden shifts to tual issues the Tri-County, concluding "the ment dem nonmoving party produce to evidence in favor of mortgages executed fact exists. Id. onstrating an issue of regard to her real estate by Lois with may simply not rest on nonmoving party ..., County all of which Montgomery designated he must have pleadings; secure the above-referenced trial court. Id. facts to the individually and against Lois judgments prove to has the burden Lois, appellant jointly severaily, and are and William it determined foreclosed, trial court erred when any relief of without hereby and (Fd. material fact were no issues of In addition it there appraisement." as a judgment to appellee was entitled "Tri-County's mortgage liens ordered Property supe- are Ins. against Mortgaged Farmers Mut. matter of law. Ind. (Ind Blaskie, 13, 15 liens, encumbrances, 727 N.E.2d Group v. other rior to all . Although the non-movant .Ct.App.2000) and interest asserted William claims of demonstrating bears the burden of other two loans to William that did not erroneous, summary judgment was we reference the trial carefully review the court's decision The Bank claims Lois' three mortgages to ensure that the non-movant was not are attached to all five the Notes be- wrongly day his or her denied court. (1) cause guaranty, executed the Inc., Guess, Kennedy v. promising pay she would all of William's (Ind.2004), reh'g denied. (2) Bank, debts to the and the three mort- gages following language: contain the Interpretation language 2. Renewal and Other Indebtedness. question a contract of law especially is a any This also secures and all suited for proceedings. renewals, extensions, modifications, Country Squire, Art L.L.C. v. Inland sub- (Ind. stitutions, and replacements of the Mortgage. Corp., 745 N.E.2d Note any part or Ct.App.2001). questions thereof. This We review of law also movo, secures the give payment Mortgagee de we no to therefore defer any interpretation. obligations ence to trial court's Id. advances to future Mortgagor to goal give Our to to the same extent as such effect the intent of obligations parties expressed within and advances were the four future made on the may corners of the document. Id. date execution this We not (it Mortgage being unambiguous language give construe understood that it clear, Mortgagee is not anything any obligation other than its under obvious make future advances meaning, may provisions except spe- and we not add placed Note). a contract that were there cifically set forth in All such Rather, parties. obligations future payable Id. we determine the advances herein shall be without meaning of a contract from an examination relief from valua- appraisement laws, tion or provisions, of all of with giving spe its without at- word, torney's cial fees and emphasis phrase para other costs of collec- tion incurred graph. Mortgagee. Id. We must a contract read as a may whole and not interpret individual 17) (italics added). (App. at According to sections in a manner would cause because each "also them to conflict. See Whitaker v. Brun secures the payment Mortgagee any to of ner, 288, 814 N.E.2d (Ind.Ct.App.2004) 294 obligations," future and because Lois's ("We accept interpretation must of the guaranty is a future obligation to the contract provisions, that harmonizes its Bank, guaranty Lois's is secured the rather places provisions than one that the Thus, mortgages on the farm. says the conflict."), trans. denied 831 N.E.2d 738 Bank, all unpaid of William's debts are (Ind.2005). farm, secured mortgages on Lois's and the Bank can collect the all balance of The Bank and the do not five Notes it when forecloses the three disagree about the material facts. The parties agree correctly the court foreclosed mortgages payment the three to secure of Lois claims the Bank waived the three Notes that were con opportunity to mortgages assert se temporaneously with each of those mort guaranty cured the guaranty because the However, gages. they agree do not a included section where the Bank could foreclosure of mortgages may those also indicate guaranty whether was "se be used to collect the amounts due on the (d. 28), cured" or "unsecured" and the

385 mortgage." Citizens Bank & open-ended for "unsecured." marked the box Bank Gibson, 490 Washington Trust v. reasoning. Co. adopt to Lois's decline We (Ind.1986). 728, N.E.2d 730 "'a to guaranty promise A is in the construc- guiding principle "The debt, default, or miscar for the answer 'dragnet' mortgage clause a tion of a S-Mart, Inc. v. riage person."" of another is the determination of the intention Co., Ltd., 744 N.E.2d Sweetwater Coffee question frequently re- parties. Am. 580, (quoting 38 (Ind.Ct.App.2001) 585 whether, (1999)), solves itself into view of § 1 trans. de Guaranty 2D Jur. and the lan- surrounding cireumstances (Ind.2001). The 761 N.E.2d 416 nied guage employed mortgage, in the pay only if the required is guarantor security parties intended the Id. inter pay. debtor fails to We principal operate upon pre-existing a governing guaranty using a the rules pret subsequently created indebtedness of con interpretation the construction specifically not in the mort- of the described generally. Id. The terms tracts guar gage." a the extent of guaranty determine so liability and "should neither be antor's Enter., Nat'l Bank v. H.L.C. Merchants as to frustrate the narrowly interpreted Inc., 509, (Ind.Ct.App. 513 loosely nor so parties, intent of the obvious 1982) Annot., 172 A.L.R. (quoting guarantor of a interpreted as to relieve (1948)). A future 1080 secures Id. at liability fairly within its terms." fu provision a that such advances "when 585-86. lien, ture advances will be covered liability A will not be ex- guarantor's part original of the is made a constituent beyond the terms by implication tended Woodruff, agreement." (quoting Id. In re guarantor contract. A is of his or her (7th Cir.1959), cert. de F.2d law and is not bound a favorite v. Nat'l Sparrenberger nied sub nom. engage- terms of the beyond the strict 806, 4 City 80 S.Ct. U.S. Moreover, par- ment. (1960). L.Ed.2d 770 not extend to other ticular debt does Each three of the within the manifest indebtedness not following contained the sentence parties. intention of the Indebtedness" clause: "Renewal and Other (internal quotations citations and Id. at 586 payment also secures the "This omitted). obligations future Mortgagee it signed indicates extent Mortgagor to the same advances That indica- (App. "unsecured." advances obligations future such false, security agreement as no tion is of execution of this were made on the date to the directly was attached 17, 32, Mortgage (App. ...." alone, Standing guaranty guaranty. written more could not have been clause question is whether the unsecured. The future obli- encompasses any it broadly, as mortgages clauses dragnet to the Bank. Accord- gation may have indirectly. guaranty signed secure attach the mort- ingly, dragnet clauses guaranty. See to the later executed gages are valid Dragnet clauses Smith, in Indiana. Smith mortgages (dragnet real estate at 1064 clause 452 N.E.2d that court's conclusion supported trial 452 N.E.2d v. State Union promissory all future secured (Ind.Ct.App.1983). placement notes). in a creates "an dragnet clause argument, As a final Lois as "unsecured" manifests an affir- estopped Bank should be from attach serts the mative intention not to the mort- cireumstances, attached the asserting dragnet gages. clause these I Under mortgages guaranty. to the She claims would hold that the trial court erred in dragnet she know about the clause did not granting summary judgment for the Bank. but Bank should have known the A preprinted mortgages.

clause in its was

party asserting equitable estoppel must "(1) knowledge lack of

demonstrate: knowledge

of the means of the facts (2) question, upon reliance the conduct (8) party estopped,

of the action based change thereon of such a character as to STAINBROOK, Rep David As Personal position City its prejudicially." Crown resentative of the Estate of Howard County, Point v. Lake Stainbrook, Deceased, Appellant- W. (Ind.1987). Lois cannot demonstrate she Defendant, knowledge had no "means of as to the question" facts in because she three v.

mortgages containing dragnet clause LOW, Appellee-Plaintiff. Trent Accordingly, equitable estop- issue. her , No. 40A05-0505-CV-257. pel argument fails. The trial court not err when it en- did Court of Appeals Indiana. tered Feb. 2006. Bank.

Affirmed.

KIRSCH, C.J., concurs.

ROBB, J., opinion. dissents with

ROBB, Judge, dissenting. majority adopt declines to Lois' rea-

soning opportu- that the Bank waived the

nity to assert secured the

guaranty because the Bank marked the I agree "unsecured." with Lois thus, must respectfully dissent. agree

I that dragnet clauses

mortgages could have attached the mort-

gages guaranty, to the later-executed language quite of the clauses is broad. However, Op.

See at 385. the mere fact they necessarily could have does not they

mean that dragnet have to. The gives priority

clause in future advances to desires,

the Bank if the Bank but not does

require it. That the Bank marked the notes see also R. brief."). reply new issues shall be raised in the Moreover, 8, 2005, (App. April on Hepburns pro- Because the did not raise this filed a brief $116,750.00 to them. County loaned Un AND PROCEDURAL FACTS HISTORY TERMS" the Note "ADDITIONAL der mortgage on real estate provides: "2nd married. Lois is are William Montgomery 1/14/99, owner of farmland in the amount of the sole dated $116750.00 a business. County. owns window William Indiana, County, Montgomery acquired owned and hereafter equipment November On dated security agreement Bank Note No. 90276 Tri-County under with 14.3 $40,000.00. (App. at borrow 29) (capitalization re 11/07/97." a day assigned she same moved). day Lois executed That same proceeds cash rent security interest farm, mort on her which second farm and executed of her from the rental

Case Details

Case Name: Hepburn v. Tri-County Bank

Court Name: Indiana Court of Appeals

Date Published: Feb 13, 2006

Citation: 842 N.E.2d 378

Docket Number: 54A01-0507-CV-327

Court Abbreviation: Ind. Ct. App.