Lead Opinion
Aрpellant-defendant Bonnie Stevens appeals from a denial of her T.R. 60(B)(1) motion for relief from judgment following a grant of summary judgment in favor of ap-pellees-co-defendants/cross-plaintiffs Michael Brooks Butler and Angie L. Butler; Susan B. Thomas and Kris B. Thomas (collectively all of the above appellees are referred to as "purchаsers"). Stevens and the Indiana Real Estate Commission ("Commission")
The designated evidentiary matter discloses that Stevens is an Indiana licensed real estate broker. Between August 1991 and December 1991, she represented to the purchаsers
Stevens failed to initiate closing procedures on the real estate. A subsequent investigation revealed that Stevens did not yet have title to the properties. Rather, she was in the process of purchasing them on land contract from others. Upon discovering this, the purchasers requested a refund of their earnest money deposits. Alternatively, they asked for conveyance of good title to the properties. She did not do either.
Based on the above, the purchasers initiated proceedings against Stevens in the Kos-clusko Circuit Court. They filed three сount
At the request of the trial court, the purchasers preparеd a proposed order of summary judgment. This order, accepted by the trial court and entered on June 2, 1992, directed summary judgment in favor of the purchasers on all three counts as set forth in the cross-complaints. Stevens did not seek either a motion to correct error or direct appeal from this order.
In July 1992, after obtaining judgment against Stevеns, the purchasers notified the Commission, by letter, of their intention to seek recovery under the Fund. In September 1992, the purchasers then filed with the trial court verified applications for an order directing payment from the Fund.
On October 5, 1992, the Commission answered and objected to payment alleging the purchasers' failure to timely notify it, pursuant to IND. CODE § 25-834.1-7-7 (1988 Ed.), of their рending actions against Stevens. On November 5, 1992, the court granted the purchasers' motions and ordered payment from the Fund.
On November 13, 1992, Stevens filed a TR. 60(B)(1) motion for relief from the judgment. Along with this motion, Stevens filed a motion to reconsider the order of payment. Both motions were denied. This appeal ensued.
Stevens raises two issues on appeal. As restated, they are:
(1) whether the trial court abused its discretion in failing tо grant Stevens' T.R. 60(B)(1) motion; and
(2) whether the trial court erred in granting the purchasers' motions for recovery from the Fund.
On appeal, the Commission argues its position as to issue (2) only.
Stevens contends the trial court erred in failing to grant her T.R. 60(B)(1) motion for relief from judgment. Our review 'of this matter is limited to whether the trial court abused its discretion. Waddell v. Waddell (1992), Ind.App.,
TR. 60(B) provides that relief from judgment may be granted for "(1) mistake, surprise, or excusable neglect." TR. 60(B)(1). To succeed on her claim, Stevens must successfully show not only that one of the abоve elements exists in the entry of summary judgment, but that a meritorious defense to the judgment exists as well. Waddell,
In her motion, Stevens alleged the form summary judgment submitted by the purchasers improperly included findings as to fraud, conversion and trеble damages which were not reflective of the trial court's verbal order. According to her, the trial court had orally ordered summary judgment on the breach of contract claim (Count I) only, but denied summary judgment as to the fraud (Count II) and conversion (Count III) claims. As her meritorious defense, Stevens argued the designated evidentiary matter did not support eithеr a finding of fraud or conversion as a matter of law.
The trial court accepted Stevens' proposition that a mistake had occurred and that summary judgment was not warranted on, either the fraud or conversion claims. Nonetheless, her motion was denied. Relying upon Ind. Trial Rule 56 subsections (C) and (H), the trial court found Stevens was not entitled to relief due to her failure to designate an issue of material fact in a timely manner, that is, in a response to the purchasers' motions.
For purposes of our review, we will assume, as the trial court did, a mistake was made in the entry of judgment. Thus, Stevens' need only establish a meritorious defense to the judgment.
"At the time of filing the motion or response, a party shall designate to the court all parts of pleadings, depositions, answers tо interrogatories, admissions, matters of judicial notice, and any other matters on which it relies for purposes of the motion. A party opposing the motion shall also designate to the court each material issue of fact which that party asserts precludes entry of summary judgment and the evidence relevant thereto...." (Emphasis added.)
T.R. 56(C). Subsection (H) further provides:
"No judgment rendered on this motion shall be reversed on the ground that there is a genuine issue of material fact unless the material fact and the evidence relevant thereto shall have been specifically designated to the trial court."
T.R. 56(H).
The initial burden is on the party seeking summary judgment to show the propriety of granting the motion. Babinchak v. Town of Chestertоn (1992), Ind.App.,
The essential elements of actual fraud are: (1) a material representation of past or existing fact which (2) is made with knowledge or reckless ignorance of its falsity (3) which causes reliance to the detriment of the person relying upon it. Ryan v. Chayes Virginia, Inc. (1990), Ind.App.,
Stevens also disputes the entry of summary judgment as to the claims of conversion. To constitute the tort of conversion, there must be an appropriation of the personal property of another. National Fleet Supply, Inc. v. Fairchild (1983), Ind.App.,
In Kopis, the appellant, Kopis, received a $40,000.00 deposit towards the purchase of certain property. The parties neither agreed to set up аn escrow account nor to deliver the money to a third party for safekeeping. Ko-pis commingled the deposit with other unrelated accounts and refused to refund the money when the real estate deal collapsed.
In reversing the trial court's finding that Kopis committed criminal conversion, this Court held the commingled funds had ceased to bе a separate, specifically identifiable chattel and plaintiffs no longer had a property
As in Kopis, the designated eviden-tiary matter does not disclose the funds were to be placed in an escrow account, were to be forwarded to a third party for safekeeping, or that a possessory interest in those specific funds would be maintained by the purchasers. To the contrary, likе in Kopis, the funds forwarded to Stevens were in the nature of earnest money deposits which were to be applied to the final purchase price, with the balance due at delivery of the respective warranty deeds. Consequently, as in Kopis, Stevens' refusal to refund the purchasers deposits amount to a refusal to pay her debts. However, her actions do not support a claim for conversion as a matter of law.
The trial court correctly found that summary judgment was not appropriate as to the fraud and conversion claims. However, since the purchasers failed to meet their initial burden as is required under TR. 56(C), the burden did not shift to Stevens to designate an issue of material fаct. Summary judgment being inappropriate, Stevens established a meritorious defense. Consequently, the trial court abused its discretion in denying her T.R. 60(B)(1) motion based solely on her failure to designate an issue of material fact. See TR. 56(C) ("(summary judgment shall not be granted as of course because the opposing party fails to offer opposing affidavits оr evidence ..."; rather, "the court shall make its determination from the evidentiary matter designated to the court").
Next, relying upon the notice provision set forth in IND. CODE § 25-34.1-7-7, Stevens and the Commission argue the trial court erred in directing payment from the Fund. IND.CODE § 25-84.1-7-7, reads in pertinent part, "When any person commences an action for a judgment that may result in an order fоr payment from the fund, the person shall notify the commission in writing of the commencement of the action." (Emphasis added.)
As the purchasers correctly note, the Fund provisions speak of two separate actions: the underlying action addressing the wrongful acts of the licensee, and the action seeking an order directing payment from the Fund. Thе purchasers interpret the above language to require notice at the commencement of the action seeking an order of payment. The Commission and Stevens construe the same language to require notice of the commencement of the underlying claim, Le., the action for fraud and conversion.
Within the provisions of the Fund, the underlying action is referred to as "final judgment," or "judgment." See e.g. IND. CODE § 25-34.1-7-4 (1988 Ed.). The see-ond action is consistently termed "the action to recover from the real estate recovery fund," IND. CODE § 25-84.1-7-7, or in other instances, the filing of a verified application "for an order directing payment from (out of) the ... fund." See IND. CODE § 25-34.1-7-4(a); IND. CODE § 25-84.1-7-8 (1988 Ed.). Therefore, the interpretation of Stevens and the Commission is the correct one. Although the purchasers notified the Commission before they commenced the action seeking payment from the Fund, notice was untimely under IND. CODE § 25-34.1-7-7 as it was done only after obtaining summary judgment in the underlying action.
The Commission goes on to argue that failure to comply with IND. CODE § 25-34.1-7-7 acts as a complete bar to recovery frоm the Fund. However, unlike notice provisions found in statutes such as the Indiana Tort Claims Act, IND. CODE § 34-4-16.5-6 (claim against state is completely barred unless notice is filed with state agen-ey within 180 days of loss) (1998 Ed.), IND. CODE $ 25-34.1-7-7 does not expressly pro
Similar in many respects to a private insurance policy, the Fund acts as a form of public insurance providing monetary compensation for those who are harmed by the wrongful acts of Indiana licensed real estate brokers. The Commission, as insurer, is bound by the result of the underlying аction against one of its licensees. Thus, like a private insurer, it is intimately concerned with the same events and issues resulting in liability to a'licensee and ultimately a claim against itself. See Vernon Fire and Casualty Insurance Co. v. Matney (1976),
As in the context of private insurance litigation, adequate forewarning in the form of notice of the underlying claim, allows the Commission time to conduct an independent investigation into the allegations against its licenses, to intervene in the underlying aсtion to protect its rights.
The trial court erred in denying Stevens' T.R. 60(B)(1) motion and in ordering payment from the Fund. Therefore, the entry of summary judgment is reversed and the cause remanded for proceedings consistent with this opinion.
Reversed and remanded.
Notes
. The original action against Stevens was brought by Joseph Scott and Elsie Swanson on July 3, 1991, on a complaint to foreclose a real estate contract. The Butlers аnd both Thomases ~ entered into the dispute and filed their cross-claims against Stevens on July 26, 1991, restating allegations contained in previous actions against her filed in April 1991. The above causes were consolidated with another similarly situated co-defendant, Linda Bennett, in August 1991.
. Although the circumstances surrounding their transactions were nearly identical, the prоperty Stevens offered to the Butlers was not the same as the property offered to either Susan or Kris Thomas. Each transaction occurred separately and independently of the others.
. See also IND. CODE § 25-34.1-7-4(a) (setting limits of $20,000.00 per judgment and an aggregate lifetime limit of $50,000.00 as to any one licensee); IND. CODE § 25-34.1-7-5(b) (1988 Ed.) (allowing the court to join in one actiоn all claimants against one licensee); and IND. CODE § 25-34.1-7-8 (court may direct payment out of Fund only if it finds no collusion existed between licensee and claimant, the application was made within one year of termination of all proceedings, no property to satisfy claim is available, wrongful acts were due to actions of licensee, and claimant has diligently pursued all remedies against licensee).
. Although IND. CODE § 25-34.1-7-8 provides that "the commission shall be made a party defendant" to the action for an order of payment, nothing in the act expressly bars the Commission from also intervening in the underlying action, if it elects to do so. (Emphasis added.)
Dissenting Opinion
dissenting.
I respectfully dissent. Because Stevens did not file a mоtion to correct errors under Indiana Trial Rule 59 or a praccipe under Appellate Rule 2(A) within thirty (80) days of the date the trial court entered summary judgment, she forfeited her right to appeal. Specifically, the trial court entered summary judgment on June 2, 1992, but Stevens did not file a motion for relief from judgment until five months later, on November 13, 1992. The appeal should be dismissed for lack of jurisdiction. CNA Insurance Companies v. Vellucci (1992), Ind.App.,