Court Opinion

ID: 9897336
Source: CourtListenerOpinion
Date Created: 2023-11-14 19:10:19.162694+00
Date Added: 2024-06-11T09:15:53.522741
License: Public Domain

FILED
                                                                            Jul 20 2023, 9:04 am

                                                                                CLERK
                                                                            Indiana Supreme Court
                                                                               Court of Appeals
                                                                                 and Tax Court

ATTORNEYS FOR APPELLANT
Martin A. Brown
Julia M Andrews
Bleeker, Brodey, & Andrews
Indianapolis, Indiana

                                             IN THE
     COURT OF APPEALS OF INDIANA

H & S Financial, Inc., as                                   July 20, 2023
assignee of Absolute Resolutions                            Court of Appeals Case No.
Corp. as assignee of C1                                     23A-SC-154
Professional Training Center,                               Appeal from the Warren Township
Appellant-Defendant,                                        Small Claims Court of Marion
                                                            County
        v.                                                  The Honorable Garland E. Graves,
                                                            Judge
Donald Parnell,                                             Trial Court Cause No.
Appellee-Plaintiff.                                         49K06-0301-SC-365

                                 Opinion by Judge Bailey
                           Judges Tavitas and Kenworthy concur.

Bailey, Judge.

Court of Appeals of Indiana | Opinion 23A-SC-154 | July 20, 2023                                    Page 1 of 10
      Case Summary
[1]   H & S Financial, Inc. (“H & S”), purportedly the assignee of a judgment owned

      by Absolute Resolution Corporation,1 as the assignee of C1 Professional

      Trucking Center (“C1 Center”), appeals the denial of its motion to correct error.

      The motion challenged an order of the Warren Township Small Claims Court,

      which precluded H & S from pursuing proceedings supplemental to enforce a

      2003 small claims judgment obtained by C1 Center against Donald Parnell.

[2]   H & S articulates a single issue: whether Indiana law provides for a statute of

      limitations applicable to proceedings supplemental. Because H & S has not

      been substituted as a party and there has been no determination that H & S is a

      plaintiff owning the described judgment against the defendant, thus permitted

      by Indiana Trial Rule 69(E) to pursue proceedings supplemental, we dismiss the

      purported appeal.2

      1
        In 1887, our Indiana Supreme Court described such debt: “A judgment is a ‘debt of record,’ and, whether
      foreign or domestic, an action may be maintained thereon for the recovery of such debt, even where it might
      appear that the collection thereof could be enforced by execution issued thereon out of the proper court. The
      owner of a judgment may enforce its collection by the process of the court wherein it was rendered, or he
      may, if he so elect, use his judgment as a cause of action, and bring suit thereon in the same court, or any
      court of competent jurisdiction, and prosecute such suit to final judgment.” Becknell v. Becknell, 110 Ind. 42,
      10 N.E. 414, 416 (Ind. 1887) (citations omitted).
      2
        Indiana Trial Rule 17 requires that “[e]very action shall be prosecuted in the name of the real party in
      interest.” A real party in interest is the person who is the true owner of the right sought to be enforced.
      Hammes v. Brumley, 659 N.E.2d 1021, 1030 (Ind. 1995). Trial Rule 25(C) provides for substitution of a party
      in some circumstances: “In case of any transfer of interest, the action may be continued by or against the
      original party, unless the court upon motion directs the person to whom the interest is transferred to be
      substituted in the action or joined with the original party.”

      Court of Appeals of Indiana | Opinion 23A-SC-154 | July 20, 2023                                   Page 2 of 10
      Facts and Procedural History
[3]   On February 13, 2003, C1 Center obtained a default judgment against Parnell,

      then identified as an Ohio resident,3 in the amount of $1,010.16. Six days later,

      C1 Center initiated proceedings supplemental. The Chronological Case

      Summary includes no return of information upon garnishment inquiries after

      2004.

[4]   On May 27, 2022, counsel for H & S filed an appearance and also filed an

      unverified “Motion to Plaintiff Change” [sic]. (App. Vol. II, pg. 7.) H & S

      attached to the motion two pages, each labeled “Bill of Sale and Assignment.”

      Id. at 8-9. Facially, the documents indicate that – pursuant to California law –

      Driver Solutions, Inc. d/b/a C1 Professional Training Center assigned its

      judgment against Parnell to Absolute Resolutions Corporation on March 1,

      2004, and the latter assigned its judgment to H & S one week later.4

[5]   On July 13, 2022, the small claims court conducted a hearing at which Parnell

      did not appear, but counsel for H & S appeared. Neither counsel nor the trial

      court directly addressed the “Motion to Plaintiff Change.” H & S did not

      request that its motion be treated as a motion for substitution of a party; nor did

      H & S proffer testimony, affidavits, or an evidentiary exhibit. On the same day,

      3
          Service upon Parnell was eventually made in the State of Florida.
      4
        The latter of the documents bears what appears to be a California public notary stamp. The other bears a
      signature purporting to be that of an Indiana notary public but bears no notary stamp.

      Court of Appeals of Indiana | Opinion 23A-SC-154 | July 20, 2023                                Page 3 of 10
      the small claims court issued an order captioned to reflect C1 Center as the

      Plaintiff. The order stated in pertinent part: “The statute of limitations to

      execute on the judgment would had [sic] expired on February 13, 2013.” (July

      13, 2022, Order at 1.) The order also stated – in error – that the motion before

      the court was one for leave to renew the judgment. Although the order did not

      directly address party substitution, it effectively precluded H & S from initiating

      proceedings supplemental against Parnell.

[6]   H & S filed a motion to correct error, and a hearing was conducted on

      November 2, 2022. On December 23, the small claims court issued an order

      which characterized its July 13, 2022, ruling as an “order denying Plaintiff’s

      request to substitute party, denying the Plaintiff’s request for renewal of

      judgment, and denying the Plaintiff’s request to file of [sic] a proceeding

      supplemental.” (Appealed Order at 1.) In pertinent part, the order on motion

      to correct error provides:

              The Court finds that the Plaintiff’s reliance on Indiana Code 34-
              11-2-12 is improper, because Indiana Code 34-11-2-12 applies to
              judgments issued by courts of record. On May 1, 2003, when
              this Court granted the judgment, the Warren Township Small
              Claims Court was not a court of record, therefore Indiana Code
              34-11-2-12 does not apply to this cause of action. The statute of
              limitation to execute on the judgment would have expired on
              September 22, 2014, and the Plaintiff failed to renew the
              judgment prior to the expiration.

              The Court finds that the Plaintiff failed to present evidence of
              collection activities during the lapse of ten (10) years. The court
              finds that the judgment in this cause of action has expired.

      Court of Appeals of Indiana | Opinion 23A-SC-154 | July 20, 2023              Page 4 of 10
              The Court finds that the Plaintiff filed a Motion for a Proceeding
              Supplemental under Indiana Trial Rule 69(E) for a judgment that
              was expired. Indiana Trial Rule 69(E) requires that the Plaintiff
              must have a judgment that is collectable. The Court denies the
              Plaintiff’s Motion for Proceedings Supplemental because the
              judgment was not renewed pursuant to Indiana code 34-55-9-2.

      (Appealed Order at 2.) H & S then initiated an appeal, captioning its brief to

      identify itself as the plaintiff-appellant, a successive assignee of C1 Center.

      Discussion and Decision
[7]   At the outset, we observe that Parnell has not filed an appellee’s brief. When

      an appellee fails to submit a brief, we do not undertake the burden of

      developing arguments for the appellee, and we apply a less stringent standard of

      review. Jenkins v. Jenkins, 17 N.E.3d 350, 351 (Ind. Ct. App. 2014). As such,

      we may reverse if the appellant establishes prima facie error, which is error at

      first sight, on first appearance, or on the face of it. Id. at 351-52. Nonetheless,

      we are obligated to correctly apply the law to the facts in order to determine

      whether reversal is required. Id. at 352.

[8]   After a hearing at which H & S presented no evidence showing that it owned

      the judgment at issue, the trial court effectively denied H & S’s motion by

      entering an order that still listed C1 Center as the named plaintiff. In this order,

      the trial court erred in stating that a statute of limitation expired ten years after

      the judgment was obtained. In the order denying the motion to correct error,

      the trial court again erroneously stated that the statute of limitations to execute

      Court of Appeals of Indiana | Opinion 23A-SC-154 | July 20, 2023             Page 5 of 10
       on the judgment had expired and noted that no party had renewed the

       judgment.

[9]    Indiana Code Section 34-55-9-2(2), referenced by the small claims court,

       provides that all final judgments for the recovery of money constitute a lien

       upon real estate and chattels real until the expiration of ten years after the

       judgment is issued.5 Judgment liens expire after ten years. Id. Prior to that, a

       judgment lien automatically attaches to the judgment debtor’s real property

       located in the county where the judgment was entered or is subsequently filed.

       See id; Lewis v. Rex Metal Craft, Inc., 831 N.E.2d 812, 822 (Ind. Ct. App. 2005)

       (Mathias, J., concurring). The judgment itself, however, is still valid, and

       proceedings supplemental are available to enforce the judgment, for another ten

       years. See Lewis, 831 N.E.2d at 822.

[10]   After a period of twenty years, a judgment is presumed to be satisfied. Indiana

       Code section 34-11-2-12 provides that “[e]very judgment and decree of any

       court of record of the United States, of Indiana, or of any other state shall be

       5
           Specifically, Indiana Code Section 34-55-9-2 provides:

                  All final judgments for the recovery of money or costs in the circuit court and other courts of record
                  of general original jurisdiction in Indiana, whether state or federal, constitute a lien upon real estate
                  and chattels real liable to execution in the county where the judgment has been duly entered and
                  indexed in the judgment docket as provided by law:
                      (1) after the time the judgment was entered and indexed; and
                      (2) until the expiration of ten (10) years after the rendition of the judgment;
                  exclusive of any time during which the party was restrained from proceeding on the lien by an
                  appeal, an injunction, the death of the defendant, or the agreement of the parties entered of record.

       Court of Appeals of Indiana | Opinion 23A-SC-154 | July 20, 2023                                        Page 6 of 10
       considered satisfied after the expiration of twenty (20) years.” We have long

       held, however, that this statue does not “destroy” a judgment twenty years after

       it was entered. Lewis, 831 N.E.2d at 818 (citing Odell v. Green, 121 N.E. 791

       (Ind. Ct. App. 1919) (citing predecessor statute), denying reh’g). Instead, this

       statute merely creates a presumption that the judgment has been satisfied after a

       period of twenty years. Id. at 818-19. Thereafter, a judgment holder may still

       seek to satisfy a judgment. Id. The judgment debtor may then avail himself or

       herself “of the presumption of satisfaction of a judgment upon the passage of

       twenty years” by pleading the defense of payment. Id. Only if the judgment

       debtor has done so does the burden shift to the judgment holder to rebut this

       presumption. See id. Thus, the presumption that a judgment has been satisfied

       must be pleaded and, if so pleaded, may be rebutted. Id.

[11]   Even though judgments do not expire, i.e., are not destroyed, by the passage of

       twenty years, “most sophisticated judgment creditors,” will ‘“renew’ their

       judgments shortly before the expiration of the first (and each successive) decade

       after judgment.” Id. at 822 (Mathias, J., concurring). Such renewals “may take

       place ad infinitum.” Id.

[12]   C1 Center did not renew its judgment and did not seek leave of court to execute

       the judgment against Parnell’s real estate. H & S did not renew the judgment it

       claims to now own. Instead, shortly less than twenty years after the judgment

       was entered, H & S attempted to insert itself into the present case by, inartfully,

       filing a “Motion to Plaintiff Change.” (App. Vol. II, pg. 7.)

       Court of Appeals of Indiana | Opinion 23A-SC-154 | July 20, 2023          Page 7 of 10
[13]   That said, H & S contends that the relevant issue is not whether a judgment lien

       on real property or chattels real expired pursuant to Indiana Code Section 34-

       55-9-2, but whether the holder of an equitable lien may conduct proceedings

       supplemental unrestricted by a statute of limitations. H & S directs our

       attention to the majority decision of Lewis, an appeal from the denial of a

       motion to invalidate an execution of judgment and rescind a garnishment order

       issued in 2004 to enforce a 1982 judgment. According to H & S, “the Lewis

       holding is clear that there was no statute of limitations that tolled [sic] [H & S]’s

       ability to file for proceedings supplemental.” Appellant’s Brief at 3.

[14]   The Lewis Court examined Indiana Code Section 34-55-1-2, entitled “Issuance

       after lapse of ten years,” which provides that, after the lapse of ten years after

       the entry of judgment or issuance of an execution, an execution can be issued

       only on leave of court. The Court determined that the foregoing was

       “inapplicable to proceedings supplemental.” 831 N.E.2d at 820. Also, Indiana

       Code Section 34-11-2-11 then provided in relevant part that an action upon

       judgments of courts of record must be commenced within ten years after the

       cause of action accrued. The Lewis Court held: “Because proceedings

       supplemental are a continuation of the original action, rather than an ‘action’ on

       a judgment of a court of record, they are not subject to the ten-year statute of

       limitations within Indiana Code Section 34-11-2-11.” Id at 821 (emphasis in

       original.) The validity of the underlying judgment has already been

       determined; accordingly, proceedings supplemental may progress without a

       showing that execution has commenced or would be unavailing. Id. at 817.

       Court of Appeals of Indiana | Opinion 23A-SC-154 | July 20, 2023           Page 8 of 10
[15]   Although the Lewis decision supports the statute-of-limitations argument

       advanced by H & S, we must observe that, in Lewis, proceedings supplemental

       were initiated by the judgment owner. Even if proceedings supplemental are

       chronologically available, they must be initiated by a judgment owner entitled

       to enforcement. Indiana Trial Rule 69(E) provides that “proceedings

       supplemental to execution may be enforced by verified motion or with

       affidavits in the court where the judgment is rendered” alleging that “the

       plaintiff owns the described judgment against the defendant” and that the

       “plaintiff has no cause to believe that levy of execution against the defendant

       will satisfy the judgment[.]” Here, in contrast to Lewis, plaintiff C1 Center was

       not pursuing proceedings supplemental.

[16]   H & S purports to own the judgment granted to C1 Center. But H & S filed no

       verified motion or affidavit to satisfy the requirements of Rule 69(E). To the

       extent that the small claims court addressed the “Motion to Plaintiff Change”

       as a motion for party substitution, the court clarified in its order on motion to

       correct error that it had, in effect, denied such a motion. At the hearings, H & S

       produced no affidavit, evidentiary exhibit, or sponsoring testimony. H & S has

       not specifically argued that the small claims court erroneously denied a motion

       for substitution; rather, H & S suggests that the small claims court acquiesced to

       an informal substitution by stating, in the hearing on motion to correct error,

       that it “understood” there had been assignment or “changing hands.” (Tr. Vol.

       II, pg. 9.) But there is no order for party substitution. H & S is not a plaintiff.

       There has been no determination that H & S met the requirements of Trial Rule

       Court of Appeals of Indiana | Opinion 23A-SC-154 | July 20, 2023           Page 9 of 10
       69(E), and, on this record, such a determination could not be made. We can

       afford to H & S – a non-party – no relief.

       Conclusion
[17]   H & S is not a party of record nor did H & S show entitlement, as “a plaintiff

       owning the described judgment against the defendant,” Trial Rule 69(E), to

       conduct proceedings supplemental to enforce a judgment against Parnell.

[18]   Dismissed.

       Tavitas, J., and Kenworthy, J., concur.

       Court of Appeals of Indiana | Opinion 23A-SC-154 | July 20, 2023       Page 10 of 10