Court Opinion

ID: 4308638
Source: CourtListenerOpinion
Date Created: 2018-08-30 15:08:43.972251+00
Date Added: 2024-06-11T14:42:57.083563
License: Public Domain

MEMORANDUM DECISION
                                                                               FILED
Pursuant to Ind. Appellate Rule 65(D), this
                                                                          Aug 30 2018, 9:09 am
Memorandum Decision shall not be regarded as
precedent or cited before any court except for the                             CLERK
                                                                           Indiana Supreme Court
purpose of establishing the defense of res judicata,                          Court of Appeals
                                                                                and Tax Court
collateral estoppel, or the law of the case.

APPELLANT PRO SE                                       ATTORNEYS FOR APPELLEE BAYVIEW
Mathis Franklin, Jr.                                   LOAN SERVICING, LLC
Lorain, Ohio                                           Marcel C. Duhamel
                                                       Vorys, Sater, Seymour and Pease LLP
                                                       Cleveland, Ohio
                                                       John S. (Jay) Mercer
                                                       Mercer Belanger, P.C.
                                                       Indianapolis, Indiana
                                                       ATTORNEYS FOR APPELLEE M&M
                                                       MORTGAGE, INC.
                                                       Carly A. Brandenburg
                                                       Abigail Lambert
                                                       Eichhorn & Eichhorn, LLP
                                                       Hammond, Indiana

                                             IN THE
    COURT OF APPEALS OF INDIANA

Mathis Franklin, Jr.,                                      August 30, 2018
Appellant-Plaintiff,                                       Court of Appeals Case No.
                                                           17A-PL-3058
        v.                                                 Appeal from the Lake Superior
                                                           Court
Bayview Loan Servicing, LLC,                               The Honorable John M. Sedia,
and M&M Mortgage, Inc.,                                    Judge
Appellees-Defendants.                                      Trial Court Cause No.
                                                           45D01-1505-PL-42

Court of Appeals of Indiana | Memorandum Decision 17A-PL-3058 | August 30, 2018                    Page 1 of 13
      Bradford, Judge

                                          Case Summary
[1]   In 2005, Mathis Franklin, Jr., obtained a loan which was secured by real

      property he owned in Gary (“the Property”). Rights to collect the loan and the

      associated mortgage were eventually assigned to Bayview Loan Servicing,

      LLC. Bayview had a contract with M&M Mortgage, Inc., to inspect property

      and protect collateral. M&M subcontracted its obligations to Bayview to

      Advanced Property Preservation, Inc. In 2012, Franklin failed to make

      required loan payments, resulting in Bayview filing a foreclosure action in

      December of 2013. In February and March of 2014, Advanced entered the

      Property, either securing and winterizing it (according to Bayview and M&M)

      or causing significant damage (according to Franklin).

[2]   In May of 2005, Franklin filed suit against Bayview and eventually M&M,

      making several claims all based on Advanced’s alleged vandalism of the

      Property. Bayview and M&M moved for summary judgment contending, inter

      alia, that unrebutted designated evidence showed that Advanced was an

      independent contractor as to both of them, thereby shielding Bayview and

      M&M from liability. The trial court entered summary judgment in favor of

      Bayview and M&M, an entry that Franklin contends was erroneous. Because

      we disagree, we affirm.

                            Facts and Procedural History
      Court of Appeals of Indiana | Memorandum Decision 17A-PL-3058 | August 30, 2018   Page 2 of 13
[3]   In 1976, Franklin purchased the Property, located at 801 East 49th Avenue in

      Gary and obtained a license that allowed him to operate a retail establishment,

      a restaurant, and/or a bar and sell packaged liquor on the site. On August 23,

      2005, Franklin executed an adjustable rate promissory note (“the Note”) in

      favor of InterBay Funding, LLC, secured by a mortgage on the Property (“the

      Mortgage”). On August 28, 2006, InterBay assigned the Mortgage to Bayview,

      which currently has physical possession of the Note. The Mortgage authorizes

      Bayview to enter the Property and take any actions it deems necessary to

      protect its interest in the Property upon an event of default, which includes

      failing to make payments pursuant to the Note.

[4]   Bayview entered into a service agreement dated April 1, 2011 (“the Service

      Agreement”) with M&M, in which M&M agreed to inspect and take actions to

      protect Bayview’s interest in collateral. Franklin defaulted on the Note by

      failing to make the payment due November 1, 2012. On June 17, 2013, M&M

      subcontracted its obligations under the Service Agreement to Advanced

      pursuant to a vendor contract (“the Vendor Contract”). Bayview has had no

      contractual relationship with Advanced at any point.

[5]   On December 20, 2013, Bayview filed a foreclosure action against Franklin.

      On February 10, 2014, Advanced retained an independent locksmith and

      entered and inspected the Property. Advanced allegedly performed work to

      winterize and preserve the Property on February 24, February 27, February 28,

      March 3, March 7, March 8, and March 11, 2014. On March 28, 2014,

      Franklin petitioned for Chapter 13 bankruptcy in the United States Bankruptcy

      Court of Appeals of Indiana | Memorandum Decision 17A-PL-3058 | August 30, 2018   Page 3 of 13
      Court for the Northern District of Indiana. Advanced did not enter the

      Property after Franklin filed his bankruptcy petition.

[6]   On May 5, 2015, Franklin filed suit against Bayview. On November 6, 2015,

      Franklin filed an amended action adding M&M to the suit, alleging breach of

      contract by Bayview and violation of the Indiana Crime Victims Relief Act,

      negligence, conversion, and trespass to chattel by Bayview and M&M. All

      claims are based on the damage allegedly caused by Advanced when it entered

      the Property in February and March of 2014. On June 5, 2017, and July 27,

      2017, respectively, M&M and Bayview moved for summary judgment.

[7]   Bayview designated an affidavit from its Vice President of Litigation Jo Ann

      Snyder in which she averred, inter alia, that Bayview authorized M&M to

      secure the Property but exerted no control over its work and played no role in

      selecting, training, or supervising any of the persons M&M chose to engage.

      Bayview also designated the Service Agreement, which provides, in part, as

      follows:

              2. Services to Be Performed. The Service Provider shall perform
                 the services described in Exhibit A (the “Services”) as an
                 independent contractor on an exclusive basis. Unless stated
                 explicitly, nothing contained herein shall be deemed to create
                 any partnership, joint venture, or relationship of principal and
                 agent between the Parties hereto or any of their affiliates or
                 subsidiaries, or to provide either Party with any right, power
                 or authority, whether express or implied to create any such
                 duty or obligation on behalf of the other Party. Such Services
                 shall be rendered in a professional manner and shall meet
                 acceptable quality measurements, performance levels, and

      Court of Appeals of Indiana | Memorandum Decision 17A-PL-3058 | August 30, 2018   Page 4 of 13
                     other standards as the Parties may agree to in writing from
                     time to time.
      Bayview’s App. Vol. II pp. 81–82.

[8]   M&M designated an affidavit from its Vice President of Operations Armando

      Sanz in which he averred, inter alia, that it hired Advanced as an independent

      contractor to perform property inspections, preservation, and winterization, and

      that M&M did not exert control over Advanced’s methods and played no role

      in selecting, training, supervising, inspecting, or otherwise managing the

      persons Advanced chose to engage for its work. M&M also designated an

      affidavit from Advanced’s co-owner Paul Strout,1 in which he averred that

      Advanced was an independent contractor as to M&M and that M&M did not

      exert any control over Advanced’s methods of performing its work.

[9]   Finally, M&M designated the Vendor Contract, which provides, in part, as

      follows:

                 1. INDEPENDENT CONTRACTOR. Vendor and M&M
                    agree that at all times Vendor is operating as an independent
                    contractor. Nothing in this Agreement is intended, nor shall
                    anything in this Agreement be construed, to create a joint
                    venture, partnership, agency, or employment relationship
                    between Vendor and M&M. Vendor shall conduct Vendor
                    business under Vendor’s own name as an independent
                    contractor, and shall not hold Vendor out as an agent,
                    partner, or employee of M&M. Vendor shall have no right,
                    power, or authority to create any contract or obligation,

      1
          Strout also averred that Advanced had closed its doors in October of 2016.

      Court of Appeals of Indiana | Memorandum Decision 17A-PL-3058 | August 30, 2018   Page 5 of 13
              whether express or implied, on behalf of, in the name of, or
              binding upon us, our customer[s], their investor[s] and/or its
              agents and/or assigns.
Bayview’s App. Vol. II pp. 92–93. On August 25, 2017, Franklin filed a motion

in opposition to Bayview’s and M&M’s summary judgment motions. Although

the record is not entirely clear, Franklin appears to have designated and

attached to this motion an affidavit sworn by him on August 22, 2017, which

included the following averments:

        21.      There is a genuine issue between the parties as to the
                 following facts material to this action:
                 A. The “Vendor Contract and Master Agreement”
                 executed between M&M and Advanced fails to show that
                 M&M lacked the authority to control the details of
                 Advanced’s work as said agreement is clearly redacted.
                 B. M&M exerted control over Advanced with respect to
                 the details of performing this work.
                 C. The Gary Property has been continually in business
                 and never been vacant or abandoned.
                 D The electric water and gas utilities to the Gary Property
                 have never been shut off.
                 E. The acts performed by Advanced caused injury to
                 others because precautions were not taken.
                 F. The acts performed by Advanced constituted criminal
                 mischief, violation of the automatic stay in my
                 bankruptcy, breach of contract, negligence, and trespass to
                 chattels.
                 G. Advanced’s actions were, at least for a time,
                 authorized by M&M to preserve properties, related to the
                 service for which it was employed in preserving properties,

Court of Appeals of Indiana | Memorandum Decision 17A-PL-3058 | August 30, 2018   Page 6 of 13
                        and motivated to an extent by M&M[‘s] interests, and
                        Bayview Loan Services’ interests.
       Appellant’s App. Vol. II p. 103.

[10]   On November 29, 2017, the trial court held a hearing on the summary

       judgment motions and granted them the next day in an order that provides, in

       part, as follows:

               Bayview and M&M have filed Motions for Summary Judgment
               against Franklin, arguing that any issues related to the [Property]
               were brought about by Advanced, who as an independent
               contractor was solely liable for any trespass, theft or damage.
               ….
               M&M and Bayview have met the initial burden of demonstrating
               the absence of a genuine issue of material fact as their designated
               materials show that Advanced was, indeed, an independent
               contractor, had broad discretion to control the work it performed,
               and was not trained, selected nor supervised by M&M or
               Bayview. A principal cannot be held liable for the negligence or,
               for that matter, intentional acts of an independent contractor,
               Bagley v. Insight Communications Co., L.P., 658 N.E.2d 584 (Ind.
               1995); Prest-O-Lite Co. v. Skeel, 106 N.E. 365 (Ind. 1914); City of
               Logansport v. Dick, 70 Ond. 65 (Ind[.] 1880); Eagle Machine Co.,
               Inc. v. American District Telegraph Co., 140 N.E.2d 756 (Ind. Ct.
               App. 1957).
               Having come forward and demonstrated the absence of a genuine
               issue of material fact that Advanced, as an independent
               contractor, is solely liable for any damages that Franklin may
               have suffered, Franklin must come forward with contrary
               evidence showing an issue for the trier of fact.
               He has come forward with argument as to applicability of the five
               exceptions to the general rule set forth in Bagley, id.: (1) where
               the contract requires the performance of intrinsically dangerous

       Court of Appeals of Indiana | Memorandum Decision 17A-PL-3058 | August 30, 2018   Page 7 of 13
               work; (2) where the principal is by law or contract charged with
               performing the specific duty; (3) where the act will create a
               nuisance; (4) where the act to be performed will probably cause
               injury to others unless due precaution is taken; and (5) where the
               act to be performed is illegal, 658 N.E.2d at 586; and speculation
               over whether or not Advanced was merely deemed to be an
               independent contractor by M&M but, in reality, its employees
               were employees of M&M who were subject to M&M’s total
               control, thereby subjecting M&M to liability for their wrongful
               acts.
               However, Franklin offers no designated materials that would
               demonstrate that any of the Bagley exceptions apply or that
               Advanced’s status as an independent contractor was a subterfuge.
               Under the designated materials that have been provided, it is
               uncontroverted that Advanced was an independent contractor
               hired by M&M pursuant to its contract with Bayview to inspect
               and winterize the [Property] during the foreclosure process. This
               was not inherently dangerous work, M&M and Bayview were
               not charged by law or contract with Franklin to perform
               inspection and winterization, no nuisance would be created by
               performing inspection and winterization, the acts of inspection
               and winterization will not probably cause injury to others, and
               inspection and winterization of real estate is certainly not an
               illegal act.
       Appellee Bayview’s App. p 2.

                                  Discussion and Decision
                                              Standard of Review

[11]   When reviewing the grant or denial of a summary judgment motion, we apply

       the same standard as the trial court. Merchs. Nat’l Bank v. Simrell’s Sports Bar &

       Grill, Inc., 741 N.E.2d 383, 386 (Ind. Ct. App. 2000). Summary judgment is

       Court of Appeals of Indiana | Memorandum Decision 17A-PL-3058 | August 30, 2018   Page 8 of 13
       appropriate only where the evidence shows there is no genuine issue of material

       fact and the moving party is entitled to a judgment as a matter of law. Id.; Ind.

       Trial Rule 56(C). All facts and reasonable inferences drawn from those facts

       are construed in favor of the nonmoving party. Merchs. Nat’l Bank, 741 N.E.2d

       at 386. To prevail on a motion for summary judgment, a party must

       demonstrate that the undisputed material facts negate at least one element of

       the other party’s claim. Id. Once the moving party has met this burden with a

       prima facie showing, the burden shifts to the nonmoving party to establish that a

       genuine issue does in fact exist. Id. The party appealing the summary

       judgment bears the burden of persuading us that the trial court erred. Id.

[12]   Franklin made several claims in the trial court, all of which were ultimately

       based on damage allegedly caused by Advanced when it entered the Property in

       February and March of 2014.2 Both Bayview and M&M contend that they are

       shielded from any possible liability in this case, however, because the

       designated evidence establishes that Advanced was an independent contractor

       with respect to both Appellees.

                The general rule is that one is not liable for the acts or negligence
                of another, unless the relation of master and servants exists
                between them; and that where an injury has been done by a party

       2
         Franklin also directly or impliedly alleges other improprieties which are not relevant to this appeal, such as
       an alleged failure to properly serve him in the foreclosure action against the Property and what we can only
       interpret as insinuations of insurance fraud committed by Bayview. We will not address these allegations
       directly. Franklin makes other allegations of impropriety, including that Advanced illegally entered the
       Property in violation of a bankruptcy stay and that designated photographic evidence shows the appellees
       destroying the Property. While some of these allegations are, perhaps, marginally related to the claims raised
       in this appeal, there are wholly unsupported by the record and we will not address them further.

       Court of Appeals of Indiana | Memorandum Decision 17A-PL-3058 | August 30, 2018                    Page 9 of 13
               exercising an independent employment, the person employing
               him will not be liable in damages for injury or death resulting
               from the wrongful acts or omissions of such person, or of the
               servants of such party.
       Allison v. Huber, Hunt & Nichols, Inc., 173 Ind. App. 41, 43, 362 N.E.2d 193, 195

       (1977).

               However, five exceptions [to the general rule] have been
               recognized for more than half a century. See, e.g., Bogard v. Mac’s
               Restaurant (1988), Ind. App., 530 N.E.2d 776; Denneau v. Indiana
               & Michigan Elec. Co. (1971), 150 Ind. App. 615, 277 N.E.2d 8;
               Scott Constr. Co. v. Cobb (1928), 86 Ind. App. 699, 703, 159 N.E.
               763. The exceptions are: (1) where the contract requires the
               performance of intrinsically dangerous work; (2) where the
               principal is by law or contract charged with performing the
               specific duty; (3) where the act will create a nuisance; (4) where
               the act to be performed will probably cause injury to others
               unless due precaution is taken; and (5) where the act to be
               performed is illegal. Perry v. Northern Ind. Pub. Serv. Co. (1982),
               Ind. App., 433 N.E.2d 44, 47.
       Bagley, 658 N.E.2d at 586.

[13]   Bayview designated evidence in the form of the Snyder affidavit and the Service

       Agreement that M&M was an independent contractor as to Bayview, and there

       is no dispute that Bayview never had a contractual relationship with Advanced.

       M&M designated the Sanz and Strout affidavits and the Vendor Contract, all of

       which tend to show that Advanced was an independent contractor as to M&M.

       The burden therefore shifted to Franklin to establish that a genuine issue of

       material fact exists as to Advanced’s status as an independent contractor. This

       Franklin has failed to do.

       Court of Appeals of Indiana | Memorandum Decision 17A-PL-3058 | August 30, 2018   Page 10 of 13
[14]   The only material designated by Franklin on this point is the conclusory

       statement in his affidavit that there is a genuine issue of material fact regarding

       whether M&M controlled Advanced’s work. This is a contention, however,

       not a fact, and it is well-settled that “[a]n affidavit submitted in support of a

       motion for summary judgment must contain facts that would be admissible in

       evidence.” Thomsen v. Musall, 713 N.E.2d 900, 900 (Ind. Ct. App. 1999) (citing

       Ind. Trial Rule 56(E)), opinion on reh’g, trans. denied. “‘Mere assertions of

       conclusions of law or opinions in an affidavit will not suffice.’” Id. (quoting

       Comfax Corp. v. N. Am. Van Lines, Inc., 638 N.E.2d 476, 481 (Ind. Ct. App.

       1994)). Because Franklin’s statement is nothing more than an assertion of a

       legal conclusion, it fails to generate a genuine issue of material fact as to

       Advanced’s status as an independent contractor. See id. (concluding that

       “Thomsen’s personal averments that ‘I complied with the standard of care in

       representing Mr. and Mrs. Musall’ and that ‘I did not cause any harm to Mr. or

       Mrs. Musall’ are mere assertions of conclusions of law or opinions [that] will

       not suffice to support a motion for summary judgment”).

[15]   Franklin also attacks Bayview’s designated evidence, contending that the

       Service Agreement, which was redacted to some extent for designation, does

       not tend to show that M&M was an independent contractor as to Bayview and

       will therefore not support the entry of summary judgment on that basis. First,

       the unredacted provisions of the Service Agreement clearly indicate that M&M

       was an independent contractor, and Franklin can offer only speculation that

       any of the redacted portions provide otherwise. Second, this argument ignores

       Court of Appeals of Indiana | Memorandum Decision 17A-PL-3058 | August 30, 2018   Page 11 of 13
       the Snyder affidavit, which clearly provides that M&M was an independent

       contractor over whose work Bayview had no control. Finally, even if Franklin

       is correct that M&M was not independent of Bayview, it would only get him

       halfway to the finish line, as it is Advanced’s alleged vandalism which is at the

       heart of his claims, not M&M’s.

[16]   Finally, Franklin argues that illegal acts allegedly performed by Advanced,

       namely vandalism and the violation of the automatic stay provisions of

       bankruptcy law, qualify for the fifth exception to the general rule that the

       principal is not liable for the acts of an independent contractor. Franklin

       somewhat misapprehends the operation of the exception, however. The

       exception only applies where the principal is attempting to isolate itself from the

       consequences of illegality by engaging an independent contractor to carry out

       the illegal activity on its behalf. Even if we assume, arguendo, that Advanced

       committed illegal acts, there is no designated evidence whatsoever that M&M

       or Bayview told Advanced to engage in any illegality. As the Bagley Court

       stated, “the five exceptions represent specific, limited situations in which the

       associated duties are considered non-delegable because public policy concerns

       militate against permitting an employer to absolve itself of all further

       responsibility by transferring its duties to an independent contractor.” 658

       N.E.2d at 588. Franklin has failed to establish that an exception to general rule

       of nonliability for the acts of an independent contractor applies in this case.

       Because we agree with the trial court that the designated evidence establishes

       Court of Appeals of Indiana | Memorandum Decision 17A-PL-3058 | August 30, 2018   Page 12 of 13
       Advanced’s status as an independent contractor, we affirm its entry of summary

       judgment in favor of Bayview and M&M.

[17]   We affirm the judgment of the trial court.

       Vaidik, C.J., and Pyle, J., concur.

       Court of Appeals of Indiana | Memorandum Decision 17A-PL-3058 | August 30, 2018   Page 13 of 13