Court of Appeals of Indiana | Mem orandum Decision 79A02

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### MEMORANDUM DECISION Pursuant to Ind. Appellate Rule 65(D), this Memorandum Decision shall not be regarded as precedent or cited before any court except for the purpose of establishing the defense of res judicata, collateral estoppel, or the law of the case.

A TTORNEY FOR A PPELLANT Duran L. Keller Keller Law Lafayette, Indiana A TTORNEY FOR A PPELLEE Thomas F. Little Power, Little, Little, & Little Law Firm Frankfort, Indiana



### I N T H E 

# COURT OF APPEALS OF INDIANA

James R. Cadwallader, IV , Appellant

- Petitioner ,

v. 

### James R. Cadwallader, III , Appellee

- Respondent. March 29, 2 019 Court of Appeals Ca se No. 79A02

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- 2614 Appeal from the Tippecanoe Circuit Court The Honorable Thomas H. Busch, Judge Trial Court Cause No. 79C01

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- 199

Pyle , Judge
.Court of Appeals of Indiana | Mem orandum Decision 79A02

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### S tatement of the Case

[1] This case involves an action to enforce a promissory note (“the Note”) and a mortgage (“the Mortgage”) execut e d by James R. Cadwallader IV (“Son”) in favor of his father, James R. Cadwallader III (“Father”). Son signed the Note in which he agreed to repay Father the $130,000.00 that Father had loaned him , and Son mort g aged his property at issue (“the Mortgaged Property”) to Father to secure payment of the note. Son failed to make any payment s on the note, and Father filed a complaint to foreclosure on the mortgage. Following a bench trial, t he trial court entere d an order of fore closure and judgment in favor of Father. The crux of Son ’ s argument on appeal is that t he trial court erred by entering the order of foreclosure in favor of Father . Concluding that there was

no error , we affirm the trial court ’ s judgment.

[2] We aff

irm

. 

### Issue Son raises multiple issues, which we consolidate and restate as: Whether the trial court erred by entering an order of foreclosure in favor of Father.Court of Appeals of Indiana | Mem orandum Decision 79A02

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### Facts 1

[3] In July 2007, Son , who lived in Indiana, purchased the Mortgaged Property , which was located at 2409 U

. S

. 231 in Lafayette. Son initially used the Mortgaged Property for his own business, which was a used car lot and car repair shop

. Son later rented the property out to a tenant to use as a car lot

.

[4] In August 2007, Son sought to purchase a property from a sheriff ’ s sale (“the Tax Sale Property” ) , which was located at 119 State Road 25 West in Lafayette. Son ’ s mother, grandmother, and aunt collectively loaned $72,000.00 to Son to purchase this property. 2 The money obtained from Son ’ s mother, grandmother, and aunt were secured by a promissory note. Father, who lived in Pennsylvania, contributed $130,000.00 to the purchase of the Tax Sale Property. Father loaned the money to Son and expected that Son would pay him back

. On August 7, 2007 , Son and Father purchased the Tax Sale Property for approximately $202, 0 00.00. Both Son ’ s and Father ’ s names were listed on the deed to the Tax Sale Property. They considered the purchase of this

1 We remind Son ’ s counsel that an Appellant ’ s statement of facts “shall be in a narrative form and shall not be a witness by witness summary of the testimony.” Ind. Appellate Rule 46(A)( 6)(c). Additionally, we note that Son reproduced a copy of the bench trial transcript and included it in his Appellant ’ s Appendix. Aside from this reproduction being “a waste of paper and unnecessarily bloating the record on appeal,” see Steve Silveus Ins., Inc. v. Goshert , 873 N.E.2d 165, 172 (Ind. Ct. App. 2007), it also violates Appellate Rule 50(F), which explicitly instructs that “parties should not reproduce any por tion of the Transcript in the Appendix” because the Transcript is transmitted to our Court pursuant to Appellate Rule 12(B).

2 Son ’ s mother and grandmother each loaned Son $11,000.00, and his aunt loaned him $50,000.00.Court of Appeals of Indiana | Mem orandum Decision 79A02

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property a s a partnership venture. They did not cre ate a formal business entity , nor did they have a written contract defining the partnership relationship.

[5] Thereafter, in J uly 2008 , Father and Son obtained a mortgage on the Tax Sale Property from Lafayette Bank and Trust (“ the Bank ”) for $220,000.00. Son then paid back his mother, grandmother, and aunt the money that they had loaned him. Father and Son agreed that Son would find a tenant to rent the Tax Sale Property, that Son would manage the property, and that the mortgage to the Bank would be paid from the rental income. Son got a tenant 3 for the Tax Sale Property , and he paid the mortgage with funds from the rental

.

[6] In November 2009, Son and Father went to an attorney , asking him to draft a note and mortgage on the Mortgaged Property with Father as the lender and Son as the borrower

. On December 10, 2009, Son signed the Note and Mortgage , which provided as follows :

3 The tenant used the Tax Sale Prope rty as a used car lot.Court of Appeals of Indiana | Mem orandum Decision 79A02

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( Ex. Vol. at 7

- 8, 10 ). Thus, pursuant to the Note, Son agreed to pay Father $130,000.00 for a loan of the same amount, and he secured it by granting Father a mortgage on the Mortgaged Property. The parties recorded the Mortgage with the county recorder.

[7] In the summer of 2011, t he tenant on the Tax Sale Property left, and Son was unable to find another tenant. Son got behind in the mortgage payments to theCourt of Appeals of Indiana | Mem orandum Decision 79A02

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Bank. In September 2011 , the Bank filed a complaint for foreclosure on the mortgage for the Tax Sale Property. The Tax Sale Property was sold sometime thereafter in a private sale. 4 Father paid the remaining deficiency to the Bank , and the foreclosure proceeding on the Tax Sale Property was d ismissed in 2013

.

[8] In December 2011, Son failed to make an annual payment on the Note for the Mortgaged Property. He also failed to make an annual payment in December 2012. Around that same time, Father and Son had a falling out and , thereafter, they had “[m]inimal” communication. (Tr. Vol. 2 at 143). In 2013, Father went to Lafayette to see Son, but Son would not talk to him. Son again failed to make an annual payment on the Note for the Mortgaged Property in December 2013.

[9] In October 2014, Father filed a complaint to foreclose on the N ote and the
M ortgage on the Mortgaged Property

. 5 Father alleged that Son had defaulted

on the Note and Mortgage on the Mortgaged Property by failing to make any payments as required

. Father sought a judgment ordering the sheriff to sell the Mortgaged Property to obtain the “out standing unpaid principal balance” plus interest and expenses , and he sought “all other relief just and proper in the premises.” (App. Vol. 2 at 19).

4 The parties could not recall the date the Tax Sale Property was sold.

5 Father later filed two amended complaints.Court of Appeals of Indiana | Mem orandum Decision 79A02

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[10] On July 27, 2017, the trial court held a bench trial. Father and Son both testified and submitted exhibits. Father contended that the Note and Mortgage

were a n e n forceable contract to repay Father $130,000.00 and that Son had signed these documents but failed to make the required payments as set out in the Note. Father testified that he and Son had the Note and Mortgage drawn
up to secure his $130,000.00 loan to S on and to help protect Son from any potential lawsuits against the Mortgaged Property.

[11] Son acknow ledged that he had s igned the Note and Mortgage, but he claimed that the y were a “sham

. ” (Tr. Vol. 2 at 129). Son ’ s main defense was that the Note and Mortgage were “never i ntended to be enforced.” (Tr. Vol. 2 at 129). Son also argued that the Note and Mortgage were not valid because there was no consideration

. In the alternative, Son argued that , even if the Note and Mortgage were valid , Father had f ailed to provide Son with notice of acceleration as set forth in the Note. T he trial court noted that Son ’ s argument about the lack of notice of acceleration was somewhat contrary to his main assertion that the Note and M ortgage were never meant to be enf orced . The trial court pointed out that the remedy for that argument would be to enforce the Note and Mortgage and for Son to bring his mortgage payments up to date

.

[12] Son also argued that Father was not entitled to any payment from Son because they had been involved in a partnership for the Tax Sale Property

. Son suggested that Father ’ s $130,000.00 was a loss that he would have to sustain as part of the partnership that had ended with the sale of the Tax Sale Property. When cross

- examining Father, Son ’ s counsel extensively question ed Father toCourt of Appeals of Indiana | Mem orandum Decision 79A02

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establish that Father and Son had purchased the Tax Sale Property as a partnership venture. Son also testified that he and Father had a partnership for the Tax Sale Property only , and he acknowledged that the par tnership had ended with the sale of the Tax Sale Property. The trial court noted that the partnership issue and the winding up of the partnership had not been raised in the pleadings but had been raised during the trial , and it noted that the evidence showed there was no longer an active partnership because the Tax Sale Property had been sold

. At the end of the trial, Son ’ s counsel requested to make a closing argument about the existence of a partnership. However, the trial court ins tructed the parties to submit proposed findings and conclusions that included a discussion o f the partnership

.

[13] A few days after the trial, Son sought and was granted permission to supplement the record with three exhibits. 6 Thereafter, the parties submi tted the ir proposed findings and conclusions , which included argument on partnership

. 7 In addition to the order of foreclosure, Father requested that the

6 The three exhibits consisted of copies of three checks issued by Son and cashed by the respective payees

. The first check, dated July 31, 2008 , was issued to Father for the amount of $99,999.00. The second check , dated July 17, 2008, was issued to Son ’ s grandmother in the amount of $5,000.00 . The third check, dated July 17, 2008, was issued to Son ’ s grand mother in the amount of $6,000.00.

7 Father contends that Son did not file proposed findings and conclusions and filed a motion to st rike the inclusion of Son ’ s proposed findings and conclusion in his Appellant ’ s Appendix. The chronological case summary (“CCS” ) contains an entry, dated October 2, 2017 , that indicates that Son filed an “ Objection to Plaintiff, Father ’ s [P] roposed [F] indings [o]f Fact and Conclusions of Law

. ” (App. Vol. 2 at 11). In response to Father ’ s motion to strike, Son provided doc umentation to show that he had filed and the trial court had accepted his proposed findings and conclusions on October 2, 2017

. By an order , issued on the same date as this memorandum decision, we deny Father ’ s motion to strike.Court of Appeals of Indiana | Mem orandum Decision 79A02

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trial court find that the winding up of the partnership had been completed and that the partnership w as terminated.

[14] The trial court entered judgment in favor of Father and ordered foreclosure on the mortgage of the Mortgaged Property. The trial court explicitly rejected
Son ’ s defenses regarding lack of consideration and notice of acceleration. The trial court concluded that “the consideration for the Note and Mortgage was a clarification of the parties ’ financial obligations to each other[.]” (App. Vol. 2 at 15). The trial court ruled that Father would be allowed to list the Mortgaged Proper ty at a sheriff

’ s sale “ t o collect the $130,000.00 principal owing on the Note” and explained that any funds above the $130,000.00 collected at the foreclosure sale would be distributed to Son. (App. Vol. 2 at 16). The trial court also determined that “[ t]he winding up of the partnership between [Father] and [Son] [wa]s complete” and ordered that the “partnership is terminated.” (App. Vol. 2 at 16 ). Son now appeals.


### Decision

[15] Son overarching argument is that the trial court erred by entering the order of foreclosure on the Mortgaged Property in favor of Father. Son asserts tha t : (1) the Mortgage was not supported by consideration; (2) Father failed to provide
him with notice of acceleration ; and (3) the trial court erred by making aCourt of Appeals of Indiana | Mem orandum Decision 79A02

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determination regarding the winding up and termination of the partnership on the Tax Sale Property

. 8

[16] Before we address Son ’ s arguments, we note that the trial court entered written findings and conclusions pursuant to Trial Rule 52 and that, under such circumstances, o ur standard of review is well

- settled:
We must first determine whether the evidence supports the findings of fact and then whether the findings support the judgment. We will not reverse the trial court ’ s findin gs and judgment unless they are clearly erroneous. Findings of fact are clearly erroneous when the record lacks any facts or reasonable inferences from the evidence to support them. The judgment is clearly erroneous when it is unsupported by the findings of fact and conclusions entered on the findings. In making these determinations, we will neither reweigh the evidence nor judge witness credibility, considering only the evidence favorable to the judgment and all reasonable inferences therefrom.

While we defer substantially to findings of fact, we do not do so for conclusions of law. We apply a de novo standard of review to conclusions of law and owe no deference to the trial court ’ s determination of such questions.

8 Son also argues that the trial court erred by denying his Trial Rule 41(B) motion for involuntary dismissal. Following Father ’ s presentation of evidence, Son moved for “directed verdict[,]” arguing that the Note and Mortgage were “never intended to be enforced” and that there was no consideration for them. (Tr. Vol. 2 at 92, 93). The trial court denied Son ’ motion. On appeal, Son makes only a general assertion that the trial court erred by denying his motion. Because Son makes no cogent argument showing how the trial court ’ s denial of his Trial Rule 41(B) motion was erroneous, we conclude that he has waived appellate review of the argument. See Ind. Appellate Rule 46(A)(8)(a).Court of Appeals of Indiana | Mem orandum Decision 79A02

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Gates v. Houston , 897 N.E.2d 532, 534

- 3 5 (Ind. Ct. App. 2008) (citation omitted). Where, as here, the trial court sua sponte entered findings and conclusions, we will apply a general judgment standard of review for any issue not covered by the findings, and we will affirm the judgment on any legal theory supported by the evidence. Jackson v. Luellen Farms, Inc. , 877 N.E.2d 848, 853 (Ind. Ct. App. 2007)

. “[U] nless the evidence viewed in a light most favorable to the trial court leads uncontrovertibly to a conclusion opposite to the one reache d, we will not reverse the determination of the trial court. ” Hansford v. Maplewood Station Bus. Park , 621 N.E.2d 347, 350 (Ind. Ct. App. 1993) (internal citations omitted) , reh ’ g denied

.

[17] We now turn to Son’ s first argument. Son asserts that the re was no consideration to support the Mortgage and that the trial court ’s conclusion that consideration existed was clearly erroneous. He argues that the trial court’s conclusion disregarded the law that “[ p]ast acts cannot be used for future considerati on[.]” (Son’s Br. 14)

.

[18] We recognize that “[a] s a general rule, past consideration that imposed no obligation when it was furnished will not support a subsequent promise.” 6 Ind. Law Encyc. Contracts § 19. See also Jackson , 877 N.E.2d at 858 (explaining that “[p] ast consideration can generally not support a new obligation or promise”); Brown v. Addington, 114 Ind.App. 404, 408, 52 N.E.2d 640, 641 (1944) (“If a person has been benefited in the past by some act or forbearance for which he incurred no legal liability and afterwards, whether from good feeling or interested motives, he makes a promise to the person by whose act orCourt of Appeals of Indiana | Mem orandum Decision 79A02

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forbearance he has benefited, and that promise is made on no other consideration than the past benefit, it is gratuitous and cannot be enforced.” ).

[19] However , in regard to consideration for a mortgage, we have explained as follows:
A mortgage must be supported by consideration to be enforceable. Any consideration which will sustain a promise to pay will suffice. It is not necessary tha t the obligee actually give anything of value to the obligor, and sufficient consideration will be found if it is shown that the mortgagee suffered any damage, inconvenience, detriment or loss, or that he extended any forebearance in reliance upon the mort gage. Consideration exists if it is shown that any right, profit, benefit accrued to the mortgagor, or that responsibility was suffered or undertaken by another. A pre

- existing debt or liability is sufficient consideration to support a mortgage given as security, and there need not be a new consideration at the time of making the mortgage.
Huntingburg Prod. Credit Ass ’ n v. Griese , 456 N.E.2d 448, 451

- 52 (Ind. Ct. App. 1983) (emphasis added and internal citations omitted).

[20] Son’s challenge to the trial cou rt’s determination on consideration is premised on his assertion that he never personally owe d Father the $130,000

. 00

. Son contends that Father pa id the $130 ,000 .00 to the partnership for the Tax Sale Property and that Father w as to get repaid that amount only if there were rental proceeds of the Tax Sale Property and not by him individually. At trial, however, the trial court heard and saw the evidence and the witnesses’ testimony , including Father’s testimony that the $130,000 .00 was a loan t hat
Son was expected to repay

. Additionally, Son signed the Note, in which heCourt of Appeals of Indiana | Mem orandum Decision 79A02

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stated that he had received a “loan” for $130,000.00 and pr omised to pay it back . ( Father’s Ex. 3). Because the evidence supports a finding that the $130,000.00 was a pre

- existing debt , we conclude that there was sufficient consideration to support the Mortgage. See Huntingburg Prod. Credit Ass’n , 456 N.E.2d at 4 51 (explaining that “[a] pre - existing debt or liability is sufficient consideration to support a mortgage given as security, an d there need not be a new consideration at the time of making the mortgage ) ; see also Jackson , 877 N.E.2d at 853 ( explaining that our Court will affirm the judgment on any legal theory supported by the evidence )

.

[21] Next , we address Son’s argument that the trial court should not have enforced the Note and Mortgage because Father failed to provide him with notice of acceleration as set out in paragraph 6(C) of the Note. When Son raised this argument as a defense at trial, the trial court noted that this argu ment about the lack of notice of acceleration was somewhat contrary to his main assertion that the Note and Mortgage were never meant to be enforced. In its findings and conclusions, the trial court reject ed the notice of acceleration defense , noting that Son had “disclaimed the validity of the Note and Mortgage

. ” (App. Vol. 2 at 15).

[22] To determine whether Father was required to give a notice of acceleration, we must look to the language of the relevant agreements executed by the parties.
See Otto v. Park Garden Associates , 612 N.E.2d 135, 138 (Ind. Ct. App. 1993) , reh’g denied

, trans. denied

. When const ruing contract s , we will read them as a whole and will construe the language therein so as not to render any words,Court of Appeals of Indiana | Mem orandum Decision 79A02

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phrases, or terms ineffective or meani ngless

. State Farm Fire & Cas. Co. v. Riddell Nat. Bank , 984 N.E.2d 655, 658 (Ind. Ct. App. 2013), trans. denied

. Additionally, unambiguous provisions will be given their plain and ordinary meaning and will be conclusive upon the parties and upon the cou rts

. Id. at 567.

[23] H ere , Son signed the Note and Mortgage on the same day, December 10, 2009, and promised to pay Father $130,000.00 for a loan of the same amount

. P aragraph 6(B) of the Note provided that Son would be “in default” if he “d[id] not pay the full amount of each annual payment on the date it [wa]s due[.]” (Father’s Ex. 3 ). The Note further provided as follows:

6. BORROWER ’ S FAILURE TO PAY AS REQUIRED
* * * * * (C) Notice of Default If I am in default, the Note Holder may send me a writte n notice telling me that if I do not pay the overdue amount by a certain date, the Note Holder may require me to pay immediately the full amount of principal which has not been paid and all interest that I owe on that amount. That date must be at least 30 days after the date on which the notice is delivered or mailed to
me. * * * * *
9. WAIVERS
I . . . waive the rights of presentment and notice of dishonor. “Presentment ” means the right to require the Note Holder to demand payment of amounts due. “Notice ofCourt of Appeals of Indiana | Mem orandum Decision 79A02

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dishonor” means the right to require the Note Holder to give notice to other person that amou nts due have not been paid.
( Father’s Ex. 3) (emphasis added). The Mortgage, signed the same day as the Note, provides, in relevant part, as follows:
This mortgage is given to secure the performance of the provisions hereof and the payment of a certain Pr omissory Note dated December 10, 2009 , in the principal amount of One Hundred Thirty Thousand and 00/100 Dollars ($130,000.00). The full debit if not paid earlier, shall be due and payable on December 10, 2020.
The mo rtgagor expressly agree[s] to pay the sum of money above without relief from valuation or appraisement laws; and upon the failure to pay said note , or any part thereof, at maturity, or the interest thereon, or any part thereof, when due , . . . thence said note is to be due and collectible, and this mortgage may be foreclosed accordingly

. (Father’s Ex. 4) (emphasis added)

.

[24] The language used in paragraph 6(C) of the Note provides that , upon default by Son, Father “may” send Son a written notice telling him to pay the overdue

amount. T he use of the language “may” is permissive and not mandatory. See Stump v. St. Joseph Cty. Treasurer , 33 N.E.3d 360, 365 (Ind. Ct. App. 2015)

. The note also has a provision in which Son waived his right of presentment , thereby waiving his right to have Fath er demand payment. Additionally, the Mortgage provides that the “note is due and collectible ” and the “mortgage may be foreclosed” upon Son’s failure to pay “any part” of the Note when due. (Father’s Ex. 4). Base on the clear language in these documents , Father wasCourt of Appeals of Indiana | Mem orandum Decision 79A02

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not required to give Son notice of acceleration. See, e.g. , Otto , 612 N.E.2d at 139 (Ind. Ct. App. 1993) ( holding that the language of the note and mortgag e , including a waiver of presentment, showed that the mortgagee did not have an obligation to give a notice of acceleration to the mortgagor). Because the evidence viewed in a light most favorable to the trial court does not lead uncontrovertibly to a conclusion opposite to the one reached, we affirm the trial court’s judgment for fo reclosure in favor of Father

. See Hansford , 621 N.E.2d at 350 (explaining that “u nless the evidence viewed in a light most favorable to the trial court leads uncontrovertibly to a conclusion opposite to the one reached, we will not reverse the determinati on of the trial court” ).

[25] Lastly , we turn to Son’s argument that the trial court erred by making a determination regarding the winding up and termination of the partnership on the Tax Sale Property. He contends that the partnership issue “was not properly before the [trial] [c]ourt” because Father did not seek a dissolution of the partnership issue in his complaint. (Son’s Br. 22). Son does not argue that the substance of the trial court’s determination is erroneous , nor does he contend that the partnersh ip is still intact. Instead, he focuses on the procedural nature of notice pleading and asserts that the trial court should have refrained from making any determination regarding the partnership issue because “the partnership was not properly at issue[.]” (Son’s Br. 25). We will not address Son’s argument because he invited any alleged error. Under the doctrine of invited error, “‘a party may not take advantage of an error that []he commits, invites, or which is the natural consequence of h[is] own negl ect orCourt of Appeals of Indiana | Mem orandum Decision 79A02

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misconduct.’” Witte v. Mundy ex rel. Mundy , 820 N.E.2d 128, 13 3 (Ind. 2005) (quoting Evans v. Evans, 766 N.E.2d 1240, 1245 (Ind. Ct. App. 2002) . As noted in the facts above, Son raised the partnership issue during trial and precipitated the trial court’s determination on the issue. Because Son created the situation of which he now complains, he cannot now argue that the trial court’s determination was procedurally erroneous. See id. at 134. 9

[26] Affirmed.

Vai dik, C.J., and Barnes, Sr. J., co ncur.

9 Moreover, under the Uniform Partnership Act, a trial court may dissolve a partnership by decre e when “[a] partner . . . otherwise acts in matters relating to the partnership business so that it is not reasonably practicable to carry on the business in partnership with that partner” or when “[o]ther circumstances render a dissolution equitable.” I N D

. C ODE §§ 23

- 4

- 1

- 32(1)(d) and (f).