Court Opinion

ID: 4434517
Source: CourtListenerOpinion
Date Created: 2019-08-29 15:04:01.934848+00
Date Added: 2024-06-11T14:53:10.884070
License: Public Domain

MEMORANDUM DECISION
Pursuant to Ind. Appellate Rule 65(D),
this Memorandum Decision shall not be                                     FILED
regarded as precedent or cited before any                            Aug 29 2019, 7:06 am

court except for the purpose of establishing                              CLERK
the defense of res judicata, collateral                               Indiana Supreme Court
                                                                         Court of Appeals
                                                                           and Tax Court
estoppel, or the law of the case.

ATTORNEY FOR APPELLANT                                   ATTORNEY FOR APPELLEE
Paul B. Poracky                                          EDWARD P. GRIMMER
Koransky, Bouwer & Poracky, P.C.                         Vincent P. Antaki
Dyer, Indiana                                            Reminger Co., LPA
                                                         Indianapolis, Indiana

                                           IN THE
    COURT OF APPEALS OF INDIANA

Centier Bank,                                            August 29, 2019
Appellant-Defendant,                                     Court of Appeals Case No.
                                                         19A-PL-337
        v.                                               Appeal from the Lake Superior
                                                         Court
Bruce and Sybil Scheffer,                                The Honorable Bruce D. Parent,
Appellees-Plaintiffs,                                    Judge

and                                                      Trial Court Cause No.
                                                         45D11-1212-PL-106
Edward P. Grimmer,
Appellee-Intervenor.

Bradford, Judge.

Court of Appeals of Indiana | Memorandum Decision 19A-PL-337 | August 29, 2019                Page 1 of 11
                                          Case Summary
[1]   This is the third appeal in the litigation between Centier Bank and Bruce and

      Sybil Scheffer (“the Scheffers”). In the prior proceedings, it became clear that

      there was never a good faith basis for the Scheffers to have proceeded with the

      lawsuit and attorney’s fees were awarded to Centier. On remand, the trial court

      ordered the Scheffers to pay $68,731.98 in trial attorney’s fees and $31,911.60 in

      appellate attorney’s fees, for a total of $100,643.56. The trial court initially

      determining that the Scheffers’ counsel, Edward P. Grimmer, should be jointly

      liable for the fees. However, after considering the Scheffers’ motion to correct

      error, the trial court determined that Grimmer should not be jointly liable.

      Centier challenges the trial court’s order on appeal, arguing that the trial court

      abused its discretion by relieving Grimmer of joint liability for the fee award.

      Concluding that the trial court did not abuse its discretion in this regard, we

      affirm the judgment of the trial court and deny Centier’s request for additional

      appellate attorney’s fees.

                            Facts and Procedural History
[2]   The facts and procedural history, as set forth in our opinion in the second

      appeal in this case, are as follows:

              In December 2012, the Scheffers filed a complaint against
              Centier alleging that they had obtained a loan from Centier’s
              predecessor, The First Bank of Whiting, in 1985 for the purchase
              of residential real property located on Wexford Road in
              Valparaiso, Porter County, Indiana, and that the loan had been

      Court of Appeals of Indiana | Memorandum Decision 19A-PL-337 | August 29, 2019   Page 2 of 11
        secured by a mortgage on the real property and by an assignment
        of insurance policies on the Scheffers’ lives. The life insurance
        policy assignments, which were dated in November of 1985 and
        attached to the complaint, provide: “It is understood that this
        assignment is for the sole purpose of using the policy as collateral
        security for existing or future loans made by the assignee to the
        owner.” Appellants’ Appendix Volume 2 at 35–36. The
        Scheffers alleged “[t]hat mortgage loan was the only loan that
        Scheffer had personally with Centier at that time of November
        1985,” “[t]he assignments were not given or received as collateral
        for any loan or debt obligation other than that mortgage loan on
        that residential property,” and they paid Centier “all remaining
        balances on that mortgage loan on or about December 17, 2010.”
        Id. at 31. The Scheffers requested a judgment including an order
        that Centier execute releases of the assignments of the life
        insurance policies.

        Centier filed an answer denying that the life insurance policy
        assignments related in any way to a mortgage loan on residential
        real estate. Centier also stated that it entered into a mortgage and
        note on Wexford Road property in 2002 and that the loan had
        been paid off in December 2010, and it denied that the loan dealt
        with any type of mortgage or loan arrangement dating back to
        1985. Centier also answered that it had not released the
        assignments of the life insurance policies because the loan
        obligations for which they served as collateral had not been
        satisfied.

        The Scheffers moved for summary judgment and designated their
        own affidavit which alleged that they had owned life insurance
        policies since 1985 and had assigned the policies as collateral on
        a promissory note and mortgage on their residential property in
        1985. The Scheffers did not designate any documentary evidence
        of a 1985 residential mortgage or loan with Centier or its
        predecessor. Centier filed a response and cross-motion for
        summary judgment and designated the affidavit of Brian Miller,
        a vice-president for Centier, which stated that Centier had a
Court of Appeals of Indiana | Memorandum Decision 19A-PL-337 | August 29, 2019   Page 3 of 11
        business relationship with the Scheffers and Scheffer, Inc., dating
        before 1985; Centier did not have a residential mortgage loan on
        the Wexford Road property at that time; in 1985 the Scheffers as
        owners of Scheffer, Inc., assigned several life insurance policies
        to Centier as the assignee for the benefit of the commercial loan
        relationship between the parties; and that the first residential
        mortgage relationship between Centier and the Scheffers
        regarding Wexford Road occurred in 2002. The trial court
        granted Centier’s cross-motion for summary judgment and
        denied the Scheffers’ motion for summary judgment. The
        Scheffers appealed, and Centier cross-appealed.

        On March 12, 2015, this Court issued a memorandum decision
        which reversed the trial court’s entry of summary judgment. See
        Scheffer v. Centier Bank, No. 45A03-1410-PL-367, 2015 WL
1142940 (Ind. Ct. App. Mar. 12, 2015).… We concluded that
        the Scheffers’ affidavit, although lacking any documentary
        support, “was enough to create a genuine issue as to whether the
        assignments related to a 1985 mortgage on their personal
        residence rather than loans to their business, Scheffer, Inc.,” and
        that consequently summary judgment was improper. Id. at 5.
        We remanded to the trial court for further proceedings. Id.

        The trial court held a bench trial over several days in July and
        August of 2017 at which it admitted documentary evidence and
        testimony. The Scheffers introduced the life insurance policy
        assignments which indicated they were executed by them in
        November of 1985. The Scheffers also introduced a promissory
        note dated September 18, 2002, signed by them evidencing a loan
        from Centier in the original principal amount of $225,000 and a
        satisfaction of mortgage dated December 20, 2010, executed by
        Centier stating that this mortgage had been fully paid and
        satisfied and was released.

                                                ****

Court of Appeals of Indiana | Memorandum Decision 19A-PL-337 | August 29, 2019   Page 4 of 11
        Centier’s counsel then introduced exhibits containing a warranty
        deed, a mortgage, and a satisfaction of mortgage, and the court
        admitted the exhibits. The warranty deed, dated July 22, 1985,
        evidences the conveyance of the Wexford Road property to the
        Scheffers, and a file-stamp on the deed indicates it was recorded
        with the Porter County Recorder on July 25, 1985. The
        mortgage was signed by the Scheffers and granted a security
        interest in the Wexford Road property to Indiana Federal
        Savings and Loan Association as the mortgagee to secure
        repayment of a debt of $175,000, and a file-stamp on the
        mortgage indicates it was recorded with the Porter County
        Recorder on July 25, 1985. Finally, the satisfaction of mortgage,
        dated January 19, 1987, states that the debt secured by the
        mortgage executed by the Scheffers in favor of Indiana Federal
        Savings and Loan Association in July of 1985 was paid and the
        mortgage was released.

                                                ****

        Bruce acknowledged that the allegation in his complaint that he
        obtained a loan from the First Bank of Whiting in 1985 for the
        purchase of the residential property on Wexford Road was a
        mistake. He also indicated that the allegation that Centier
        required the Scheffers to assign the life insurance policies as a
        term of that loan was a mistake.… When asked “I just want to
        make sure I understand. You’re not claiming in 2002 there
        actually is a residential mortgage with Centier Bank that there
        were life insurance assignments made at that time, are you,”
        Bruce answered “I'm not—no longer claiming that.” Id. at 158–
        159.

        Centier filed a motion for judgment on the evidence. The motion
        asserted that there is no evidence that the Scheffers had a
        residential mortgage loan on their Wexford Road property with
        First Bank of Whiting at any time during 1985, that the Scheffers
        had a residential mortgage loan contract with Indiana Federal
        Savings and Loan Association on the house which transaction

Court of Appeals of Indiana | Memorandum Decision 19A-PL-337 | August 29, 2019   Page 5 of 11
        was consummated in July 1985, and that the life insurance
        assignments were given for commercial loans because those were
        the only type of loans the Scheffers had with First Bank of
        Whiting in 1985.

        On August 17, 2017, the trial court issued an order granting
        Centier’s motion for judgment on the evidence, providing in part:

                                                ****

                 11. The Court was somewhat astonished when Mr.
                 Scheffer acknowledged that the mortgage on the
                 Wexler property was with Indiana Federal Savings
                 and he had made a mistake.

                 12. His mistake was the very foundation of [the
                 Scheffers’] claim. The Court finds it difficult to
                 believe that such a successful businessman would not
                 have accurate knowledge of his personal financial
                 dealings.

                 13. Upon Mr. Scheffer’s testimony, the Court would
                 have expected [the Scheffers] to come to Court today
                 and dismiss their claim.

                 14. [The Scheffers] have failed to sustain their burden
                 of proof in their case in chief and judgment on the
                 evidence is appropriate.

                 15. This matter has pended since 2012 and has
                 involved much court time and a great amount of
                 attorney time and expense to both [the Scheffers] and
                 [Centier].

                 16. There was never a good faith basis to have
                 proceeded with this lawsuit as no 1985 residential
                 mortgage contract with First Bank of Whiting ever
                 existed.

Court of Appeals of Indiana | Memorandum Decision 19A-PL-337 | August 29, 2019   Page 6 of 11
                       17. The Court finds that [the Scheffers] brought this
                       action in bad faith, and continued to maintain the
                       action when it became clearly apparent that it was
                       frivolous, unreasonable and groundless.

              Appellants’ Appendix at 24–26. Centier submitted an attorney
              fee request together with an affidavit of attorney fees and costs.
              The court issued an order awarding attorney fees to Centier in
              the amount of $68,731.98.

      Scheffer v. Centier Bank, 101 N.E.3d 815, 817–22 (Ind. Ct. App. 2018) (“Scheffer

      II”).

[3]   The Scheffers appealed, claiming that the trial court erred in granting Centier’s

      motion for judgment on the evidence. We affirmed, concluding that the record

      demonstrated that (1) the Scheffers intended to secure the repayment of the

      loans advanced to them and their companies by Centier’s predecessor and (2)

      “it was not [the Scheffers’] intent that the policies would secure solely the

      repayment of personal or residential debts which did not exist at the time and

      would not exist for seventeen years.” Id. at 825. The Scheffers also claimed

      that the trial court erred in ordering them to pay attorney’s fees. Again, we

      affirmed, concluding that the evidence supported the trial court’s determination

      that there was never a good faith basis to have proceeding with this lawsuit as

      no 1985 residential mortgage with Centier’s predecessor ever existed. Id. at

      826.

[4]   We also considered Centier’s request for appellate attorney’s fees, concluding as

      follows:

      Court of Appeals of Indiana | Memorandum Decision 19A-PL-337 | August 29, 2019   Page 7 of 11
              Centier has shown, based on the evidence as set forth above and
              in the record, that the Scheffers’ appeal with respect to the trial
              court’s ruling on its motion for judgment on the evidence is
              meritless. We remand for a determination of a reasonable
              appellate attorney fee award under these circumstances. We
              decline to require the trial court to order that the Scheffers’
              attorney be held jointly responsible for an attorney fee award in
              favor of Centier.

      Id. at 827.

[5]   On November 28, 2018, the trial court imposed appellate attorney’s fees “in the

      sum of $31,911.60, which shall be added to the outstanding judgment in the

      amount of $68,731.98, for a total sum of $100,643.56.” Appellant’s App. Vol.

      II pp. 194–95. The trial court ordered that “the [Scheffers’] attorney, Edward P.

      Grimmer, shall be jointly responsible with the plaintiffs for the judgment

      entered herein.” Appellant’s App. Vol. II p. 195. The Scheffers filed a motion

      to correct error, alleging that the November 28, 2018 order contained four

      errors: (1) trial court erred by finding Grimmer jointly and severally liable on

      remand because the only question on remand was the amount of appellate

      attorney’s fees to be imposed; (2) the trial court “went beyond the motions,

      beyond the briefing, and without any evidence about what might be held

      reasonable fees, which denied the Scheffers and their attorney due process to

      contest the award of $31,911.60;” (3) “there is no common law or statutory

      authority for the award post-judgment collection fees recoverable;” and (4) the

      trial court abused its discretion by imposing a duty upon Grimmer that was

      outside the scope of his ability or power. Appellant’s App. Vol. II pp. 196–97.

      Court of Appeals of Indiana | Memorandum Decision 19A-PL-337 | August 29, 2019   Page 8 of 11
      On January 15, 2019, the trial court granted the motion to correct error and

      amended the November 28, 2018 order by eliminating its prior order that

      Grimmer be jointly and severally liable for payment of the fees, making the

      Scheffers solely liable for payment of the sum of $100,643.56 plus interest.

                                 Discussion and Decision
                                 I. Motion to Correct Error
[6]   Centier challenges the trial court’s decision to grant the Scheffers’ motion to

      correct error. Specifically, it argues that the trial court abused its discretion by

      relieving Grimmer of liability for payment of the attorney’s fees. “A trial court

      has discretion to grant or deny a motion to correct error and we reverse its

      decision only for an abuse of that discretion.” Hawkins v. Cannon, 826 N.E.2d
658, 661 (Ind. Ct. App. 2005), trans. denied. “An abuse of discretion occurs

      when the trial court’s decision is against the logic and effect of the facts and

      circumstances before the court or if the court has misinterpreted the law.” Id.

[7]   In Scheffer II, we declined Centier’s request that we “require the trial court to

      order that the Scheffers’ attorney be held jointly responsible for an attorney fee

      award in favor of Centier.” 101 N.E.3d at 827. By declining Centier’s request,

      we left the question of whether Grimmer should be jointly responsible for the

      fee award to the trial court’s discretion. The trial court ultimately determined

      that Grimmer should not be jointly liable.

      Court of Appeals of Indiana | Memorandum Decision 19A-PL-337 | August 29, 2019   Page 9 of 11
[8]   Centier argues that the trial court abused its discretion in considering the

      motion to correct error. In making this argument, Centier asserts that because

      Grimmer was conflicted, he lacked standing to file the motion on behalf of the

      Scheffers. Essentially, Centier claims that “Grimmer should not have been

      allowed to file” the motion to correct error and the trial court should have

      disqualified Grimmer from filing motions and making arguments on behalf of

      the Scheffers because Grimmer had a conflict of interest as to whether the

      Scheffers should be solely or jointly liable for the fees. Appellant’s Br. p. 21. It

      is undisputed that at the time he filed the motion to correct error, Grimmer was

      the Scheffers’ counsel of record. While a conflict may have arisen during this

      representation that would warrant the termination of the attorney-client

      relationship, neither the Scheffers nor Grimmer had taken any steps to

      terminate their relationship prior to the filing of the motion to correct error.

      Further, while Centier argues that the trial court should not have ruled on the

      motion to correct error, Centier has cited to no relevant authority in support of

      this argument. In addition, nothing in the record suggests that the trial court

      had been divested of jurisdiction to rule on the motion.1 As such, we cannot

      1
        A review of relevant case law indicates that “[o]nce a trial court acquires jurisdiction, it retains jurisdiction
      until it enters a final judgment in the case.” Hubbard v. Hubbard, 690 N.E.2d 1219, 1221 (Ind. Ct. App. 1998).
      We have held that a trial court does not lose jurisdiction by committing prejudicial error, applying the wrong
      principle of law, or making an erroneous decision. Matter of Adoption of H.S., 483 N.E.2d 777, 781 (Ind. Ct.
      App. 1985). Likewise, the withdrawal of an attorney for a party does not affect the trial court’s jurisdiction
      over the party. State ex rel. Durham v. Marion Circuit Court, 240 Ind. 132, 136, 162 N.E.2d 505, 507 (1959).
      Further, our review of relevant authorities has revealed only three situations where a trial court is divested of
      jurisdiction. First, when a party files a motion for a change of judge pursuant to Trial Rule 76, the trial court
      “is divested of jurisdiction except to grant the change of venue or act on emergency matters.” Bedree v.
      DeGroote, 799 N.E.2d 1167, 1172 (Ind. Ct. App. 2003). Second, absent a few exceptions, a trial court is
      divested of jurisdiction following the death of one of the parties in divorce proceedings. Riggs v. Riggs, 77

      Court of Appeals of Indiana | Memorandum Decision 19A-PL-337 | August 29, 2019                       Page 10 of 11
       conclude that the trial court abused its discretion by considering a motion filed

       by counsel of record in a pending case before it.

[9]    Furthermore, in arguing that the trial court abused its discretion in granting the

       motion to correct error, Centier presents numerous allegations of attorney

       misconduct by Grimmer. While we acknowledge these allegations, we limit

       our review to the question of whether the trial court abused its discretion in

       granting the motion to correct error.

           II. Request for Additional Appellate Attorney’s Fees
[10]   Centier requests that this court impose an award of additional attorney’s fees. 2

       However, given our conclusion that the trial court did not abuse its discretion in

       granting the Scheffers’ motion to correct error, we decline this request because

       Centier’s contentions did not prevail on appeal. See Houston v. Booher, 647
N.E.2d 16, 22 (Ind. Ct. App. 1995) (“A losing party is not entitled to attorney

       fees.”).

[11]   The judgment of the trial court is affirmed.

       Vaidik, C.J., and Riley, J., concur.

       N.E.3d 792, 794 (Ind. Ct. App. 2017). Third, a trial court is largely divested of jurisdiction over a case
       following the initiation of an appeal. Clark v. State, 727 N.E.2d 18, 21 (Ind. Ct. App. 2000).
       2
         In making this request, Centier requests that we hold Grimmer solely liable for payment of these additional
       appellate attorney’s fees.

       Court of Appeals of Indiana | Memorandum Decision 19A-PL-337 | August 29, 2019                     Page 11 of 11