Court Opinion

ID: 4270586
Source: CourtListenerOpinion
Date Created: 2018-04-27 15:07:04.554427+00
Date Added: 2024-06-11T14:32:20.997358
License: Public Domain

MEMORANDUM DECISION
                                                                          FILED
Pursuant to Ind. Appellate Rule 65(D),
                                                                      Apr 27 2018, 5:27 am
this Memorandum Decision shall not be
regarded as precedent or cited before any                                 CLERK
                                                                      Indiana Supreme Court
court except for the purpose of establishing                             Court of Appeals
                                                                           and Tax Court

the defense of res judicata, collateral
estoppel, or the law of the case.

ATTORNEY FOR APPELLANT                                   ATTORNEYS FOR APPELLEE
Andrew J. Thompson                                       Timothy J. Abeska
Thompson Law Office, LLC                                 Barnes & Thornburg LLP
Indianapolis, Indiana                                    South Bend, Indiana
                                                         Alice J. Springer
                                                         Barnes & Thornburg LLP
                                                         Elkhart, Indiana

                                           IN THE
    COURT OF APPEALS OF INDIANA

John E. Gray, Jr. and Tammera                            April 27, 2018
M. Gray,                                                 Court of Appeals Case No.
Appellants-Defendants,                                   20A03-1612-MF-2885
                                                         Appeal from the Elkhart Superior
        v.                                               Court
                                                         The Honorable Stephen R.
Wells Fargo Bank, NA,                                    Bowers, Judge
Appellee-Plaintiff.                                      Trial Court Cause No.
                                                         20D02-1006-MF-257

Pyle, Judge.

Court of Appeals of Indiana | Memorandum Decision 20A03-1612-MF-2885| April 27, 2018          Page 1 of 12
                                       Statement of the Case
[1]   John E. Gray, Jr., and Tammera M. Gray (collectively, “the Grays”) appeal:

      (1) the trial court’s denial of their motion to amend their counterclaim in a

      mortgage foreclosure proceeding; and (2) the trial court’s grant of partial

      summary judgment on their original counterclaim in favor of the claimant,

      Wells Fargo Bank, N.A. (“Wells Fargo”). Because we conclude that: (1) the

      trial court did not abuse its discretion when it denied the Grays’ motion to

      amend their counterclaim as their requested amendment was futile; and (2) the

      trial court did not err in granting summary judgment because there were no

      genuine issues of material fact, we affirm the trial court’s decision.

[2]   We affirm.

                                                    Issues
              1. Whether the trial court abused its discretion when it denied the
                 Grays’ motion to amend their counterclaim.

              2. Whether the trial court erred when it granted partial summary
                 judgment in favor of Wells Fargo.

                                                     Facts
[3]   On December 3, 2002, the Grays executed a promissory note (“Note”) to Wells

      Fargo Home Mortgage in the amount of $175,500.00. As collateral for the

      Note, they also executed a mortgage (“Mortgage”) on their home in Elkhart,

      Indiana.

      Court of Appeals of Indiana | Memorandum Decision 20A03-1612-MF-2885| April 27, 2018   Page 2 of 12
[4]   Several years later, on June 24, 2010, Wells Fargo filed a complaint to foreclose

      the Mortgage. The Grays filed their answer and a counterclaim in which they

      raised two breach of contract claims and an abuse of process claim. In their

      first breach of contract claim, they alleged that they had entered into a contract

      with Wells Fargo in 2009, in which Wells Fargo had agreed to forbear on their

      Mortgage payments if the Grays paid $531.00. According to the Grays, they

      complied with this agreement by paying $531.00, but Wells Fargo breached the

      agreement when it nevertheless filed its foreclosure complaint.

[5]   In their second breach of contract claim, the Grays alleged that, after they had

      paid the $531.00, Wells Fargo had told them that it would consider the

      mortgage payments current if they paid an additional $2,531.00. The Grays

      claimed that they paid the $2,531.00, yet Well Fargo proceeded with its

      mortgage foreclosure claim.

[6]   These two breaches of contract were the basis for the Grays’ abuse of process

      claim. Specifically, the Grays argued that Wells Fargo had wrongfully brought

      its foreclosure action “for the ulterior and wrongful purpose of increasing their

      [sic] profit after reaching several agreements for repayment of the mortgage,

      accepting the agreed upon funds and then determining that additional profit

      could be made by breaching the agreement and suing the [Grays].” (Wells

      Fargo’s App. Vol. 2 at 60).

[7]   During discovery, Wells Fargo served the Grays with a request for admissions.

      In their response to the request for admissions, the Grays admitted that they did

      Court of Appeals of Indiana | Memorandum Decision 20A03-1612-MF-2885| April 27, 2018   Page 3 of 12
      not have a copy of the agreements in which Wells Fargo had allegedly agreed to

      forbear on the mortgage payments if the Grays paid $531.00 and consider the

      mortgage payments current if the Grays paid $2,531.00.

[8]   On March 8, 2016, Wells Fargo filed a motion for partial summary judgment

      seeking summary judgment on only the Grays’ counterclaims. It argued that

      there were no genuine issues of material fact on the breach of contract claims

      because the Grays had admitted that they did not have copies of the agreements

      that Wells Fargo had allegedly violated. As for the Grays’ abuse of process

      claim, Wells Fargo asserted that there were no genuine issues of material fact

      because the evidence demonstrated that it had used the judicial process properly

      to enforce its legal right to foreclose the mortgage.

[9]   On March 9, 2016, the Grays moved for leave to amend their abuse of process

      counterclaim to allege that Wells Fargo had engaged in a banned practice of

      “dual tracking”—a practice “wherein the creditor is forbidden to move

      mortgage litigation forward while a completed loan modification application is

      pending and under consideration.” (The Grays’ App. Vol. 4 at 4-5). The Grays

      also sought to add an abuse of process allegation that Wells Fargo had taken

      their $2,531.00 payment but failed to return it or credit it to their account.1

      1
        At the hearing, the Grays later argued that Wells Fargo did return the payment four years after it was paid.
      However, this detail does not affect our analysis, so we will examine the Grays’ argument as it was stated in
      their proposed amendment.

      Court of Appeals of Indiana | Memorandum Decision 20A03-1612-MF-2885| April 27, 2018              Page 4 of 12
[10]   The trial court conducted a hearing on Wells Fargo’s motion for partial

       summary judgment and the Grays’ motion to amend their counterclaim on

       June 16, 2016. At the hearing, the Grays conceded that the trial court should

       grant Wells Fargo’s motion for partial summary judgment on their breach of

       contract claims. Thereafter, the court entered an order denying the Grays’

       motion to amend their counterclaim, reasoning that their proposed amendment

       was futile because the claims they wished to add were untimely. The trial court

       also granted summary judgment in favor of Wells Fargo on all of the Grays’

       original counterclaims, including the original abuse of process claim. In

       support of its grant of summary judgment on the abuse of process claim, the

       trial court reasoned that there was no evidence that Wells Fargo had used the

       judicial process for an illegitimate purpose. The Grays now appeal.

                                                   Decision
[11]   On appeal, the Grays argue that the trial court: (1) abused its discretion when it

       denied their motion to amend their counterclaim; and (2) erred when it granted

       Wells Fargo’s motion for summary judgment on their original abuse of process

       counterclaim. We will address each of these issues in turn.

       1. Motion to Amend

[12]   First, the Grays argue that the trial court abused its discretion when it denied

       their motion to amend their abuse of process counterclaim to allege that Wells

       Fargo had engaged in “dual tracking” and had wrongfully withheld their

       $2,531.00 payment. Indiana Trial Rule 15 governs the amendment of pleadings

       and provides, in pertinent part:
       Court of Appeals of Indiana | Memorandum Decision 20A03-1612-MF-2885| April 27, 2018   Page 5 of 12
               A party may amend his pleading once as a matter of course at
               any time before a responsive pleading is served or, if the pleading
               is one to which no responsive pleading is permitted, and the
               action has not been placed upon the trial calendar, he may so
               amend it at any time within thirty [30] days after it is served.
               Otherwise a party may amend his pleading only by leave of court
               or by written consent of the adverse party; and leave shall be
               given when justice so requires.

[13]   Wells Fargo filed a responsive pleading to the Grays’ counterclaim and also

       declined to consent to the Grays’ proposed amendment. Accordingly, the

       Grays may only amend their pleading “by leave of court.” T.R. 15. In such

       circumstances, the trial court “retains broad discretion in granting or denying

       amendments to pleadings, and we will reverse only upon a showing of abuse of

       that discretion.” MAPCO Coal, Inc. v. Godwin, 786 N.E.2d 769, 777 (Ind. Ct.

       App. 2003). “‘In determining whether an abuse has occurred, we look to a

       number of factors, which include undue delay, bad faith, or dilatory motive on

       the part of the movant, repeated failure to cure deficiency by amendment

       previously allowed, undue prejudice to the opposing party by virtue of the

       amendment, and futility of the amendment.’” Id. (quoting Nyby v. Waste Mgmt.,

       Inc. 725 N.E.2d 905 (Ind. Ct. App. 2000), trans. denied) (internal quotations

       omitted).

[14]   Here, the trial court concluded that it was futile for the Grays to amend their

       abuse of process claim because the allegations they wished to add were no

       longer viable claims. The court noted that a cause of action for an abuse of

       process accrues when the act complained of is committed and carries a two-year

       Court of Appeals of Indiana | Memorandum Decision 20A03-1612-MF-2885| April 27, 2018   Page 6 of 12
       statute of limitations. See Yoost v. Zalcberg, 925 N.E.2d 763, 771 (Ind. Ct. App.

       2010), reh’g denied, trans. denied. The acts that the Grays challenged in their

       proposed amendment were Wells Fargo’s act of filing a foreclosure action while

       a loan modification application was pending and Wells Fargo’s alleged failure

       to give credit to the Grays for the $2,531.00 payment they had made or to

       return the payment. Because these actions occurred in 2010, the trial court

       concluded that the statute of limitations on the Grays’ proposed abuse of

       process amendment had already run by the time that they moved to amend

       their counterclaim six years later in 2016. Thus, the proposed amendment was

       futile.

[15]   The Grays challenge this conclusion by asserting that Wells Fargo’s failure to

       credit or return their $2,531.00 payment was a continuing wrong that tolled the

       statute of limitations for the abuse of process counterclaim. Courts have

       recognized two categories of cases in which the continuing wrong doctrine

       applies:

                 “The first includes cases in which the original violation occurred
                 outside the statute of limitations, but is closely related to other
                 violations that are not time-barred. In such cases, recovery may
                 be had for all violations, on the theory that they are part of one,
                 continuing violation.

                 The second type of continuing violation is one in which an initial
                 violation, outside of the statute of limitations, is repeated later; in
                 this case, each violation begins the limitations period anew, and
                 recovery may be had for at least those violations that occurred
                 within the period of limitations.”

       Court of Appeals of Indiana | Memorandum Decision 20A03-1612-MF-2885| April 27, 2018   Page 7 of 12
       Yoost, 925 N.E.2d at 771 (quoting Marion Cty. v. State, 888 N.E.2d 292, 299

       (Ind. Ct. App. 2008) (citations omitted)). The doctrine of continuing wrong

       applies where an entire course of conduct combines to produce an injury. Id.

       When the doctrine attaches, the statute of limitations begins to run at the end of

       the continuing wrongful act. Id. “‘In order to apply the doctrine, the plaintiff

       must demonstrate that the alleged injury-producing conduct was of a

       continuous nature.’” Id. (quoting Palmer v. Gorecki, 844 N.E.2d 149, 156 (Ind.

       Ct. App. 2006), trans. denied). The continuing wrong doctrine is not an

       equitable doctrine but rather defines when an act took place. Id.

[16]   Here, the trial court cited to our decision in Yoost, in which we addressed a

       request to apply the continuing violation doctrine to an abuse of process claim.

       See Yoost, 925 N.E.2d at 771. In Yoost, Zalcberg filed a mortgage foreclosure

       claim against Yoost, and Yoost filed several counterclaims against Zalcberg. Id.

       at 767. Zalcberg later amended his complaint to argue that Yoost’s

       counterclaims were fraudulent and an abuse of process. Id. However, the trial

       court granted Yoost’s summary judgment argument that the abuse of process

       counterclaim was untimely. Id.

[17]   On appeal, Zalcberg argued that his abuse of process claim was not untimely

       because the continuing wrong doctrine applied. Id. at 771. In our decision, we

       declined to apply the continuing wrong doctrine to an abuse of process claim,

       noting that no Indiana appellate court had ever done so. Id. We also reasoned

       that the injury of which Zalcberg complained was Yoost’s act of filing his

       counterclaim. See id. We declined to find a continuing injury for that act
       Court of Appeals of Indiana | Memorandum Decision 20A03-1612-MF-2885| April 27, 2018   Page 8 of 12
       “[d]espite the fact that Yoost’s general maintenance of his lawsuit may arguably

       continue to impact Zalcberg.” Id.

[18]   In the instant case, the Grays have not directed us to any cases since Yoost in

       which a court has applied the continuing wrong doctrine to an abuse of process

       claim. Accordingly, as in Yoost, we decline to apply the continuing wrong

       doctrine here. We also note that, as in Yoost, even if the Grays have suffered a

       continuing impact related to their loss of $2,531.00, that continuing impact was

       based on one injury—Wells Fargo’s alleged failure to credit their account or

       return the payment when the bank received it. Such an injury does not fall into

       either of the two categories of cases in which the continuing wrong doctrine

       applies. See Yoost, 925 N.E.2d at 771.

[19]   Because we find that the continuing wrong doctrine does not apply here, we

       agree with the trial court that the abuse of process claims the Grays wished to

       add were not timely, and, therefore, their requested amendment was futile.

       Accordingly, we conclude that the trial court did not abuse its discretion when

       it denied the Grays’ motion to amend their counterclaim. 2 See MAPCO Coal,

       Inc., 786 N.E.2d at 777 (noting that futility of an amendment is a factor in

       determining whether the trial court abused its discretion in denying a motion to

       amend a pleading).

       2
           Based on this conclusion, we need not address the merits of the Grays’ dual tracking argument.

       Court of Appeals of Indiana | Memorandum Decision 20A03-1612-MF-2885| April 27, 2018                 Page 9 of 12
       2. Abuse of Process

[20]   Next, the Grays argue that the trial court erred when it granted Wells Fargo’s

       motion for summary judgment on their original counterclaim in favor of Wells

       Fargo. They do not challenge the trial court’s grant of summary judgment on

       their two breach of contract claims, so we will only address their argument that

       the trial court erred when it granted summary judgment on their abuse of

       process claim.

[21]   Preliminarily, we note that we review an order for summary judgment de novo,

       which is the same standard of review applied by the trial court. Miller v. Town

       Bd. Sellersburg, 88 N.E.3d 217, 218 (Ind. Ct. App. 2017). The moving party

       must “‘affirmatively negate an opponent’s claim’ by demonstrating that the

       designated evidence raises no genuine issue of material fact and that the moving

       party is entitled to judgment as a matter of law.” Id. (quoting Ind. Restorative

       Dentistry, P.C. v. Laven Ins. Agency, Inc., 27 N.E.3d 260, 264 (Ind. 2015), reh’g

       denied). The burden then shifts to the nonmoving party to demonstrate a

       genuine issue of material fact. Id. When deciding whether the trial court erred

       in granting summary judgment, we consider only the evidence that the parties

       specifically designated to the trial court. Id. We construe all factual inferences

       in favor of the nonmoving party and resolve all doubts regarding the existence

       of a material issue against the moving party. Id.

[22]   A party claiming abuse of process must show a misuse or misapplication of

       process for an end other than that which it was designed to accomplish.

       Court of Appeals of Indiana | Memorandum Decision 20A03-1612-MF-2885| April 27, 2018   Page 10 of 12
       Waterfield v. Waterfield, 61 N.E.3d 314, 328 (Ind. Ct. App. 2016), trans. denied.

       The two elements of abuse of process are: (1) ulterior purpose or motive; and

       (2) a willful misuse of process not proper in the regular conduct of the

       proceedings. Id. “There is no basis for an abuse of process claim if legal

       process is used to accomplish an outcome that the process was designed to

       accomplish. The purpose for which the process is used is the only thing of

       importance.” Id. “‘If a defendant’s acts are procedurally and substantively

       proper under the circumstances, then his intent is irrelevant.’” Donovan v.

       Hoosier Park, LLC, 84 N.E.3d 1198, 1209 (Ind. Ct. App. 2017) (quoting Watson

       v. Auto Advisors, Inc., 822 N.E.2d 1017, 1029 (Ind. Ct. App. 2005) (internal

       quotations omitted), trans. denied). Unlike a malicious prosecution action, an

       action for abuse of process does not necessarily require proof that the action

       was brought without probable cause or that the action terminated in favor of the

       party alleging abuse of process. Waterfield, 61 N.E.3d at 328.

[23]   The Grays argue that the trial court erred when it granted Wells Fargo’s motion

       for summary judgment on their abuse of process claim because it was an abuse

       of process for Wells Fargo to accept their payment of $2,531.00 yet continue its

       mortgage foreclosure action. However, Wells Fargo established in its motion

       for partial summary judgment that it had a contractual right to foreclose on the

       Grays’ mortgage when the Grays defaulted. The Grays did not designate any

       evidence that their $2,531.00 payment cured their default under the mortgage.

       Accordingly, Wells Fargo was using the mortgage foreclosure process for the

       outcome it was designed to accomplish—recovering the money owed under the

       Court of Appeals of Indiana | Memorandum Decision 20A03-1612-MF-2885| April 27, 2018   Page 11 of 12
       Note that was secured by the Mortgage. As this was a legitimate use of process,

       Wells Fargo did not commit an abuse of process. See E. Point Bus. park, LLC v.

       Private Real Estate Holdings, LLC, 49 N.E.3d 589, 605 (Ind. Ct. App. 2015)

       (holding that the use of the mortgage foreclosure process to secure repayment of

       a loan balance was a legitimate use of process, not an abuse of process). Any

       ulterior motive that Wells Fargo had when it requested the $2,531.00 payment

       is irrelevant. See id. (noting that any ulterior motive is irrelevant if a use of

       process is legitimate). Therefore, the trial court did not err when it granted

       Wells Fargo’s motion for summary judgment on the Grays’ abuse of process

       claim.

[24]   Affirmed.

       Riley, J., and Robb, J., concur.

       Court of Appeals of Indiana | Memorandum Decision 20A03-1612-MF-2885| April 27, 2018   Page 12 of 12