Court Opinion

ID: 4308642
Source: CourtListenerOpinion
Date Created: 2018-08-30 15:08:46.779178+00
Date Added: 2024-06-11T14:42:57.238088
License: Public Domain

MEMORANDUM DECISION
      Pursuant to Ind. Appellate Rule 65(D),                                      FILED
      this Memorandum Decision shall not be
                                                                             Aug 30 2018, 10:07 am
      regarded as precedent or cited before any
      court except for the purpose of establishing                                CLERK
                                                                              Indiana Supreme Court
      the defense of res judicata, collateral                                    Court of Appeals
                                                                                   and Tax Court
      estoppel, or the law of the case.

      ATTORNEYS FOR APPELLANT                                  APPELLEE – PRO SE
      Margaret M. Christensen                                  Ranee S. Rathee
      Mark R. Molter                                           Indianapolis, Indiana
      Bingham Greenebaum Doll LLP
      Indianapolis, Indiana

                                                 IN THE
          COURT OF APPEALS OF INDIANA

      Butler Terrace Homeowners                                August 30, 2018
      Association, Inc.,                                       Court of Appeals Case No.
      Appellant-Cross-claim Plaintiff,                         18A-MF-675
                                                               Appeal from the Marion Superior
              v.                                               Court
                                                               The Honorable David J. Dreyer,
      Ranee S. Rathee,                                         Judge
      Appellee-Cross-claim Defendant.                          Trial Court Cause No.
                                                               49D10-1504-MF-14333

      Najam, Judge.

                                       Statement of the Case
[1]   The Butler Terrace Homeowners Association, Inc. (“the HOA”) appeals the

      trial court’s order in which the court granted a motion for relief from judgment

      Court of Appeals of Indiana | Memorandum Decision 18A-MF-675 | August 30, 2018                  Page 1 of 14
      filed by Ranee S. Rathee, which modified the court’s prior entry of summary

      judgment for the HOA.1 The HOA raises two issues for our review, which we

      restate as follows:

                1.     Whether the trial court abused its discretion under Indiana
                Trial Rule 60(B) when it granted Rathee’s motion for relief from
                judgment.

                2.      Whether the HOA preserved for appellate review its
                argument that the court’s modified order, which stayed a pending
                sheriff’s sale on Rathee’s condominium in order to give the
                parties an opportunity to reach a financial settlement, violated
                Indiana’s horizonal property laws, Ind. Code §§ 35-25-1-1 to -9-2
                (2018), or Indiana’s mortgage foreclosure statutes, I.C. §§ 32-29-
                7-0.2 to -14.

[2]   We affirm.

                                     Facts and Procedural History
[3]   In April of 2015, JPMorgan Chase Bank, N.A. (“Chase”) filed a complaint

      against Rathee to foreclose on its mortgage lien on Rathee’s condominium in

      Indianapolis. The complaint named the HOA and other lienholders junior to

      Chase as defendants along with Rathee. The HOA cross-claimed against

      Rathee for unpaid dues. As of June 1, 2015, the HOA alleged that Rathee

      owed $1,219.60 in unpaid dues, late fees, and interest. The HOA noted that,

      pursuant to its rights under the bylaws to which Rathee’s condominium was

      1
          JPMorgan Chase Bank, the original plaintiff below, does not participate in this appeal.

      Court of Appeals of Indiana | Memorandum Decision 18A-MF-675 | August 30, 2018                Page 2 of 14
      subject, the HOA was also entitled to recover attorney’s fees and costs

      associated with the collection of the unpaid dues; that the sums owed to the

      HOA by Rathee were a lien against the condominium on which the HOA was

      entitled to foreclose; and that the HOA was also entitled to a personal judgment

      against Rathee for all unpaid amounts.

[4]   Rathee hired bankruptcy counsel and, on three separate occasions, filed for

      bankruptcy. However, the bankruptcy court eventually dismissed each of

      Rathee’s three cases, never approved a final payment plan, and barred Rathee

      “from filing another bankruptcy case” for 180 days following its last dismissal.

      Appellant’s App. Vol. 2 at 165. The bankruptcy court also lifted its stay on the

      foreclosure action in the trial court, and, on June 20, 2016, the trial court

      entered judgment for Chase and directed Rathee’s condominium be sold at a

      sheriff’s sale.

[5]   In August, before a sheriff’s sale of the condominium had occurred, the HOA

      moved for summary judgment against Rathee for her unpaid dues to the HOA.

      Because Rathee’s bankruptcy counsel did not represent her in the trial court, 2

      the HOA mailed its motion for summary judgment to Rathee’s home address. 3

      2
          There is no dispute that Rathee had notice of the complaint and cross-claim against her.
      3
        The HOA asserts on appeal that it mailed its motion for summary judgment to Rathee by way of certified
      mail, but the certified mail receipts included in the record on appeal do not demonstrate an August 2016
      mailing date. See Appellant’s App. Vol. 2 at 166-68. Rather, the receipts suggest that the HOA did not send
      any of the summary judgment documents to Rathee by way of certified mail until July of 2017, and it is not
      clear from the record that the motion for summary judgment itself was sent at that time. In any event, insofar
      as the trial court may have based its modification order on Rathee’s purported lack of notice, we do not
      consider it.

      Court of Appeals of Indiana | Memorandum Decision 18A-MF-675 | August 30, 2018                   Page 3 of 14
      In its motion, the HOA sought $12,886.13 for unpaid dues and interest. The

      HOA also sought an additional sum for attorney’s fees and costs. The HOA

      requested a personal judgment against Rathee along with any proceeds that

      remained from the sheriff’s sale to pay it as a junior lienholder. Rathee did not

      respond to the HOA’s motion for summary judgment and, on September 20,

      the trial court granted the HOA’s motion.4

[6]   However, in February of 2017, Chase informed the court that Rathee had paid

      her outstanding debt to Chase in full. As such, Chase moved to dismiss its

      complaint and the June 2016 decree of foreclosure. The court granted Chase’s

      motion and ordered that the HOA’s claims “remain on the court’s active

      docket” as “pending.”5 Id. at 127.

[7]   In July the court set a summary judgment briefing schedule on the HOA’s

      August 2016 motion for summary judgment. The record on appeal does not

      reflect that the HOA objected or otherwise informed the court of the September

      2016 order granting the HOA’s motion for summary judgment. Instead, the

      court and the HOA proceeded as if the August motion for summary judgment

      was still pending.

      4
       We note that the CCS does not reflect the trial court’s September 20 grant of summary judgment for the
      HOA. See id. at 11-12, 120.
      5
          The HOA did not object to the court’s February order to vacate the sheriff’s sale.

      Court of Appeals of Indiana | Memorandum Decision 18A-MF-675 | August 30, 2018                Page 4 of 14
[8]    Thereafter, the HOA filed a supplemental designation of evidence in which it

       alleged that Rathee owed the HOA $27,349.82 as of June 13, 2017. That

       amount included $9,736.50 in “legal fees and expenses” related to the

       foreclosure action as well as two of Rathee’s three bankruptcy cases. Id. at 132.

       The amount also included $5,760 in property manager fees, which were

       described as fees “incurred . . . due to the work and efforts performed . . . in

       dealing with the collection of the unpaid [d]ues . . . .”6 Id.

[9]    Rathee again did not respond to the summary judgment proceedings and, on

       October 2, the trial court entered summary judgment for the HOA. In

       particular, the court granted the HOA a personal judgment against Rathee in

       the amount of $27,349.82 as of June 13 plus any additional amounts that

       accrued thereafter in accordance with the HOA bylaws; the court foreclosed the

       HOA’s lien on the condominium; and the court ordered the condominium to be

       sold at a sheriff’s sale. The condominium was subsequently scheduled to be

       sold on January 17, 2018.

[10]   On December 11, 2017, Rathee, proceeding pro se, filed a document she

       captioned as an “Affidavit.” Id. at 151. In that document, she stated that she

       had been represented by attorneys in the bankruptcy cases and did “not

       6
         Although the HOA defends its assessments of fees and costs on appeal, it does not argue that the trial court
       abused its discretion when it later modified the summary judgment order to reduce the sum Rathee owed to
       the HOA. See Appellant’s Br. at 36-40.

       Court of Appeals of Indiana | Memorandum Decision 18A-MF-675 | August 30, 2018                    Page 5 of 14
       understand why” they were not notified7 of the summary judgment proceedings

       in the trial court. Id. at 152. She then stated that, although she “agree[d] I owe

       [the HOA] home owners dues, late fees, etc., I do not agree with the amount of

       $27,349.82.” Id. And Rathee requested that the court “STOP the

       FORECLOSURE SALE.” Id. (capitalization in original). The HOA filed a

       response and characterized Rathee’s “Affidavit” as a motion for relief from

       judgment under Indiana Trial Rule 60(B). See id. at 160.

[11]   The court held oral argument on Rathee’s motion on January 4, 2018. During

       that argument, counsel for the HOA asserted that the amount Rathee currently

       owed the HOA was now in excess of $45,000. Rathee informed the court that

       she “want[ed] to keep this property” and that she could immediately pay

       $10,000 to the HOA. Tr. at 10. However, while she also indicated that she

       would be willing and able to pay the summary judgment amount of $27,349.82,

       she disputed that that amount was an accurate assessment of the amount she

       owed the HOA. She further declared that the rate at which the HOA’s fees

       against her were escalating was “arbitrar[y]” and “like extortion.” Id. at 12.

[12]   On January 9, the court granted Rathee’s motion for relief from judgment

       under Indiana Trial Rules 60(B)(1) and 60(B)(8)8 and modified the October

       7
           She also claimed that she was not notified, but we do not consider that assertion on appeal.
       8
         The court also cited Trial Rule 60(B)(4) in its order, but as Rathee had not been served by publication we
       agree with the HOA that that provision was plainly inapplicable to Rathee’s motion. See Ind. Trial Rule
       60(B)(4). And as we decide this appeal under Trial Rule 60(B)(1), we need not consider the court’s exercise
       of discretion under Rule 60(B)(8).

       Court of Appeals of Indiana | Memorandum Decision 18A-MF-675 | August 30, 2018                     Page 6 of 14
2017 order on summary judgment. In particular, the court modified the

October 2017 order on summary judgment as follows:

        6. Rathee adequately shows . . . circumstances sufficient to set
        aside current judgment under Trial Rule 60(B)(1) . . . and (8).

        7. The record shows the following amounts are due and owing at
        this time:

                a.       Unpaid dues                       $7480.00

                b.       Special assessment                [$]1098.00

                c.       Late fees                         [$]2550.00

                d.       Interest                          [$]3702.00

        8. The record fails to sufficiently show basis for claiming
        property manager fees.

        9. The records fails to sufficiently show basis for claiming
        attorney’s fees for as many as eight (8) attorneys in this matter,
        nor propriety of claiming attorney’s fees for bankruptcy matters.

        10. [The HOA’s] most recent attorney’s fees affidavit . . . claims
        $11,126.50.

        11. Under Trial Rule 60(B)(8), it is just to modify the judgment
        to include the amounts in Paragraph 6[] and $10,000 in
        attorney’s fees, equaling $24,830.00.

Court of Appeals of Indiana | Memorandum Decision 18A-MF-675 | August 30, 2018   Page 7 of 14
               12. Sheriff’s sale is vacated and stayed until further order of the
               Court.

               13. Rathee shall immediately pay $10,000 to [the HOA].

               14. The matter is referred for settlement conference under the
               Indiana mortgage foreclosure procedure.

       Appellant’s App. Vol. 2 at 16-17.

[13]   Following the court’s modification of the order on summary judgment, the

       HOA filed a motion to correct error. In that motion, the HOA argued for the

       first time that Rathee was not entitled to her motion for relief from judgment

       because she had unclean hands. The HOA further argued, again, for the first

       time, that granting the relief requested by Rathee and staying the sheriff’s sale

       was contrary to law. The HOA’s motion to correct error was deemed denied

       thereafter, and this appeal ensued.

                                      Discussion and Decision
                                Issue One: Indiana Trial Rule 60(B)(1)

[14]   On appeal, the HOA first asserts that the trial court abused its discretion when

       it granted Rathee’s motion for relief from judgment under Indiana Trial Rule

       60(B)(1). Trial Rule 60(B) provides, in relevant part, that “[o]n motion and

       upon such terms as are just the court may relieve a party . . . from a

       judgment . . . for the following reasons: (1) mistake, surprise, or excusable

       neglect . . . .” A movant for relief from judgment under Trial Rule 60(B)(1)

       “must allege a meritorious claim or defense.”
       Court of Appeals of Indiana | Memorandum Decision 18A-MF-675 | August 30, 2018   Page 8 of 14
[15]   As we have explained:

               A Trial Rule 60(B)(1) motion does not attack the substantive,
               legal merits of a judgment, but rather addresses the procedural,
               equitable grounds justifying the relief from . . . a judgment.
               Moreover, a Trial Rule 60(B)(1) motion is addressed to the trial
               court’s equitable discretion, with the burden on the movant to
               affirmatively demonstrate that relief is necessary and just.

       Kmart Corp. v. Englebright, 719 N.E.2d 1249, 1254 (Ind. Ct. App. 1999)

       (citations omitted), trans. denied. In light of the equitable nature of a request

       under Trial Rule 60(B)(1), our standard of review is deferential:

               Our standard of review is limited to determining whether the trial
               court abused its discretion. An abuse of discretion may occur if
               the trial court’s decision is clearly against the logic and effect of
               the facts and circumstances before the court, or if the court has
               misinterpreted the law. . . . The trial court’s discretion is
               necessarily broad in this area because any determination of
               excusable neglect, surprise, or mistake must turn upon the unique
               factual background of each case. Moreover, no fixed rules or
               standards have been established because the circumstances of no
               two cases are alike. . . . Furthermore, reviewing the decision of
               the trial court, we will not reweigh the evidence or substitute our
               judgment for that of the trial court.

       Id. at 1253 (citations omitted).

[16]   Here, the HOA contends that Rathee failed to show mistake, surprise, or

       excusable neglect, and that she further failed to show a meritorious defense.

       The HOA also asserts that equity is unavailable to Rathee as she has unclean

       hands. We address each argument in turn.

       Court of Appeals of Indiana | Memorandum Decision 18A-MF-675 | August 30, 2018   Page 9 of 14
                                   Mistake, Surprise, or Excusable Neglect

[17]   We first consider the HOA’s argument that Rathee failed to satisfy Trial Rule

       60(B)(1). Much of the HOA’s argument on this issue flows from its reading of

       Rathee’s motion for relief from judgment, which the HOA reads to be premised

       on a claim that she lacked notice, to which the HOA responds by arguing that it

       satisfied its notice requirements under our trial rules. See Appellant’s Br. at 23-

       27. The HOA further addresses a comment in Rathee’s motion in which

       Rathee stated that she thought her settlement with Chase resolved all pending

       proceedings, which obviously that settlement did not do.

[18]   But the HOA fails to consider Rathee’s argument to the trial court that Rathee

       believed her bankruptcy counsel was also representing her in the trial court

       proceedings. In particular, Rathee asserted that she did not understand why her

       bankruptcy counsel had not been notified of the trial court proceedings, and a

       reasonable inference from that argument is that she thought that her bankruptcy

       counsel was representing her in the trial court, which is why she did not

       personally respond. Further, there is no dispute that the bankruptcy

       proceedings and the trial court proceedings were intimately intertwined, despite

       the apparently limited representation of Rathee’s bankruptcy counsel.

[19]   In granting Rathee’s motion for relief from judgment under Trial Rule 60(B)(1),

       the trial court broadly based its decision on Rathee having shown

       “circumstances sufficient” to justify that relief. Appellant’s App. Vol. 2 at 17.

       We are obliged to defer to the trial court’s exercise of its equitable discretion

       Court of Appeals of Indiana | Memorandum Decision 18A-MF-675 | August 30, 2018   Page 10 of 14
       under Trial Rule 60(B)(1) and are similarly obliged to construe the record on

       appeal in the manner most favorable to the trial court’s judgment. See Kmart,

       719 N.E.2d at 1254. In light of Rathee’s argument to the trial court, our

       standard of review, and the HOA’s failure to consider this basis for the trial

       court’s judgment in its brief on appeal, we cannot say that the trial court’s

       decision is clearly against the logic and effect of the facts and circumstances

       before the court or that the trial court abused its discretion when it concluded

       that Rathee had shown mistake, surprise, or excusable neglect under Trial Rule

       60(B)(1).

                                               Meritorious Defense

[20]   The HOA further asserts that, even if Rathee did demonstrate mistake, surprise,

       or excusable neglect, she failed to demonstrate a meritorious defense. Trial

       Rule 60(B)’s requirement that the movant demonstrate a meritorious defense is

       not a requirement that the movant “prove absolutely” her defense. State v. Van

       Keppel, 583 N.E.2d 161, 163 (Ind. Ct. App. 1991), trans. denied. Rather, a

       meritorious defense is “one that would lead to a different result if the case were

       tried on the merits.” Seleme v. JP Morgan Chase Bank, N.A., 982 N.E.2d 299, 304

       (Ind. Ct. App. 2012) (quotation marks omitted), trans. denied.

[21]   The HOA’s entire argument on this issue is that “Rathee not only failed to

       advance a meritorious defense[] but actually conceded liability” when she

       acknowledged that she owed some measure of damages to the HOA.

       Appellant’s Br. at 28 (emphases removed). We conclude that the HOA’s

       Court of Appeals of Indiana | Memorandum Decision 18A-MF-675 | August 30, 2018   Page 11 of 14
       argument on this issue is not supported by cogent reasoning. See Ind. Appellate

       Rule 46(A)(8)(a). Rathee never conceded the total sum sought by the HOA;

       indeed, Rathee unambiguously asserted that she “do[es] not agree with the

       amount” requested by the HOA in its motion for summary judgment, to say

       nothing of the HOA’s request for more than $45,000 at the January oral

       argument. Appellant’s App. Vol. 2 at 152. The HOA further does not address

       the fact that the trial court, in reconsidering the HOA’s evidence designated in

       support of summary judgment, reduced the amount of the judgment against

       Rathee, which produced a different result than the order on summary

       judgment. We conclude that the HOA failed to preserve its argument for our

       review. See App. R. 46(A)(8)(a).

                                                 Unclean Hands

[22]   We next turn to the HOA’s argument that equitable relief under Trial Rule

       60(B) is not available to Rathee because she has unclean hands. As our

       Supreme Court has said:

               The doctrine of unclean hands requires that he who seeks equity
               come into court with clean hands and closes the door of a court
               of equity to one tainted with inequitableness or bad faith relative
               to the matter in which he seeks relief, however improper may
               have been the behavior of the [other party].

       Woodruff v. Ind. Fam. & Soc. Servs. Admin., 964 N.E.2d 784, 792 n.5 (quotation

       marks and ellipses omitted).

       Court of Appeals of Indiana | Memorandum Decision 18A-MF-675 | August 30, 2018   Page 12 of 14
[23]   But the HOA did not present this argument to the trial court in response to

       Rathee’s motion for relief from judgment. See Appellant’s App. Vol. 2 at 157-

       61; Tr. at 3-6, 14-16. Rather, the HOA raised this purported issue for the first

       time in a motion to correct error following the trial court’s modification of the

       summary judgment order. See Appellant’s App. Vol. at 212. As such, the

       HOA’s argument was not timely.

[24]   Indiana’s case law has long made clear that a party who fails to raise arguments

       “in a timely manner” and “[i]nstead . . . waited until [it] filed [a] motion to

       correct error to raise them” waives those arguments for our review. Brown v.

       Lunsford, 63 N.E.3d 1057, 1061 (Ind. Ct. App. 2016) (citing Troxel v. Troxel, 737

       N.E.2d 745, 752 (Ind. 2000)). Accordingly, we hold that the HOA has waived

       its argument under the doctrine of unclean hands.

                            Issue Two: Whether The Trial Court Violated
                           Indiana Law When It Stayed The Sheriff’s Sale

[25]   We thus turn to the HOA’s argument that the trial court violated Indiana law

       when it stayed the pending sheriff’s sale. According to the HOA, the trial

       court’s order is contrary to Indiana’s horizontal property laws because, “[b]y

       vacating the Sheriff’s sale, the trial court violated the HOA’s contractual right to

       foreclose and impermissibly attempted to rewrite the parties’ contract.”

       Appellant’s Br. at 32-33. The HOA further asserts that the trial court’s order “is

       entirely inconsistent with the statutory scheme governing foreclosure . . . .” Id.

       at 33-34.

       Court of Appeals of Indiana | Memorandum Decision 18A-MF-675 | August 30, 2018   Page 13 of 14
[26]   The HOA’s statutory arguments are not properly before us on appeal. The

       HOA did not raise its statutory arguments to the trial court until its motion to

       correct error, even though in her motion for relief from judgment Rathee

       expressly asked the court to “STOP the FORECLOSURE SALE.” Appellant’s

       App. Vol at 152 (capitalization in original). As such, the HOA’s statutory

       arguments were untimely in the trial court and are not available for appellate

       review. Troxel, 737 N.E.2d at 752.

                                                   Conclusion

[27]   In sum, we affirm the trial court’s judgment.

[28]   Affirmed.

       Crone, J., and Pyle, J., concur.

       Court of Appeals of Indiana | Memorandum Decision 18A-MF-675 | August 30, 2018   Page 14 of 14