Court Opinion

ID: 4405919
Source: CourtListenerOpinion
Date Created: 2019-06-12 15:04:25.356178+00
Date Added: 2024-06-11T07:49:55.511093
License: Public Domain

FILED
                                                                         Jun 12 2019, 9:41 am

                                                                              CLERK
                                                                          Indiana Supreme Court
                                                                             Court of Appeals
                                                                               and Tax Court

      ATTORNEY FOR APPELLANTS                                    ATTORNEYS FOR APPELLEE
      Robert R. Faulkner                                         David J. Jurkiewicz
      Evansville, Indiana                                        Nathan T. Danielson
                                                                 Christina M. Bruno
                                                                 Bose McKinney & Evans LLP
                                                                 Indianapolis, Indiana

                                                  IN THE
          COURT OF APPEALS OF INDIANA

      Dean Blair and Paula Blair,                                June 12, 2019
      Appellants/Cross-Appellees-                                Court of Appeals Case No.
      Defendants/Counterclaimants,                               18A-MF-808
                                                                 Appeal from the
              v.                                                 Vanderburgh Superior Court
                                                                 The Honorable
      EMC Mortgage, LLC,                                         Richard G. D’Amour, Judge
      Appellee/Cross-Appellant-                                  Trial Court Cause No.
      Plaintiff/Counterclaim Defendant.                          82D07-1207-MF-3333

      Kirsch, Judge.

[1]   Dean and Paula Blair (“the Blairs”) appeal the trial court’s order that foreclosed

      their interest in two mortgaged properties and that entered a money judgment

      for EMC Mortgage, LLC (“EMC”). The Blairs raise eight issues, but we reach

      Court of Appeals of Indiana | Opinion 18A-MF-808 | June 12, 2019                            Page 1 of 20
      only one: whether the trial court erred in granting only partial relief to the

      Blairs on their statute-of-limitations defense.1

[2]   On cross appeal, EMC raises one issue: whether the trial court erred in not

      entering summary judgment for EMC where the Blairs’ request for more time

      to respond to EMC’s motion for summary judgment was not timely.

[3]   We reverse.

                                    Facts and Procedural History
[4]   On December 21, 1992, the Blairs signed a promissory note in the principal

      amount of $110,300.00 in favor of United Companies Lending Corporation

      (“UCLC”) (“the Note”). Appellants’ App. Vol. 2 at 57-60. The Note contained

      an optional acceleration clause, which allowed UCLC to decide whether to

      accelerate the loan balance following a default. Id. at 58. The Note was

      secured by a mortgage (“the Mortgage”) on two properties, one at 916

      Wortman Road, Evansville, Indiana and the other at 2237 Herbert Avenue,

      Evansville, Indiana. Id. at 62; Tr. Vol. II at 23-24. The Mortgage gave UCLC

      the option to accelerate the Mortgage upon default of the Note. Appellants’ App.

      Vol. 2 at 64-65. On November 17, 1993, the Blairs sued UCLC and its agent,

      John Ash (“Ash”), alleging breach of contract and various torts, including fraud

      1
       To the extent that the trial court granted relief to the Blairs on their statute-of-limitations defense, EMC
      does not challenge that ruling. Appellee’s Br. at 32.

      Court of Appeals of Indiana | Opinion 18A-MF-808 | June 12, 2019                                     Page 2 of 20
      and intentional infliction of emotional distress (“the Ash lawsuit”). Appellants’

      App. Vol. 3 at 15-23, 95.

[5]   The monthly installment payment on the Note was $1,469.36. Tr. Vol. II at 48-

      49. After making regular payments on the Note for approximately two-and-

      one-half years, the Blairs defaulted, making their last payment on June 19,

      1995. Id. at 35-36. On August 27, 1997, the Blairs filed a Chapter 13

      bankruptcy case (“the Blair Bankruptcy”), which automatically stayed the Ash

      lawsuit. Appellants’ App. Vol. 3 at 24. On December 16, 1997, the bankruptcy

      court lifted the bankruptcy stay as to UCLC, allowing it to proceed with its

      foreclosure action in state court. Id. at 24-25. On October 31, 1998, the trial

      court in the Ash lawsuit granted UCLC leave to file its counterclaim for

      foreclosure against the Blairs. Id. at 96.

[6]   UCLC filed for Chapter 11 bankruptcy on March 1, 1999 (“the UCLC

      bankruptcy”). Id. at 28; 96-97. On July 20, 2000, the Note and Mortgage were

      assigned to EMC. Appellants’ App. Vol. 2 at 67. About six weeks later, on

      September 23, 2000, the bankruptcy court entered an order approving an asset

      purchase agreement involving many of UCLC’s assets, including the Note and

      Mortgage in this case. Id. at 106-11. When EMC bought the Note and

      Mortgage on September 23, 2000, the Ash lawsuit and the Blair bankruptcy

      were still pending. Id. at 95-99. On October 2, 2003, the Blairs obtained their

      bankruptcy discharge. Appellants’ App. Vol. 3 at 78.

      Court of Appeals of Indiana | Opinion 18A-MF-808 | June 12, 2019         Page 3 of 20
[7]   Meanwhile, Ash failed to appear in the Ash lawsuit to contest his liability, and

      on March 14, 2007, the Blairs obtained a default judgment against him for

      $300,000.00. Id. at 97-98, 126. Although it had purchased the Note from

      UCLC in 2000, EMC was never named as a defendant in the Ash lawsuit. Id.

      at 95-99. On June 19, 2007, six years after the Note and Mortgage were

      assigned to EMC, EMC recorded the assignments. Appellants’ App. Vol. 2 at 67.

[8]   On June 18, 2009, nearly six years after the Blairs received their bankruptcy

      discharge, EMC sought to reopen the Blairs’ bankruptcy by filing a “Complaint

      for Declaratory Judgment,” asking the bankruptcy court to clarify the extent,

      validity, and priority of EMC’s lien, as well as the impact of the Blairs’ partial

      bankruptcy discharge on EMC’s ability to collect the indebtedness due under

      the Note and Mortgage. Appellants’ App. Vol. 3 at 75.

[9]   On January 6, 2012, EMC and the Blairs filed a Joint Stipulation and Joint

      Motion to dismiss EMC’s Complaint for Declaratory Judgment, stipulating the

      following:

              a. The lien provided for by the terms of the Mortgage survives
              and is unaffected by the Blair Bankruptcy;

              b. The Note and Mortgage at issue herein were not discharged in
              the [Blair] Bankruptcy;

              ...

      Court of Appeals of Indiana | Opinion 18A-MF-808 | June 12, 2019           Page 4 of 20
               e. There has been no determination in the Blair Bankruptcy if
               EMC Mortgage is the true party in interest as it relates to the
               enforcement of the Note and Mortgage[.]

       Id. at 84-85.

[10]   JPMorgan Chase Bank, N.A. (“Chase”) began servicing the loan for EMC on

       April 1, 2011, and, three days later sent the Blairs a default notice. Pl.’s Ex. 4 at

       52. The notice gave the Blairs an opportunity to cure their loan defaults and

       informed them that the entire loan balance would be accelerated, and

       foreclosure proceedings would begin if the Blairs did not do so. Id. at 53.

[11]   On July 5, 2012, EMC filed its foreclosure lawsuit. Appellants’ App. Vol. 2 at 5,

       50. EMC sought a personal judgment against the Blairs for the outstanding

       principal balance, interest, attorney fees, expenses, and costs and a judgment

       declaring that EMC’s Mortgage is a valid and enforceable first priority lien

       against the mortgaged properties. Id. at 52-53.

[12]   On September 27, 2012, the Blairs filed their answer to the complaint and

       raised affirmative defenses and counterclaims. The Blairs alleged that the

       assignment of the Note and Mortgage from the original lender, UCLC, to EMC

       was void because the assignment occurred almost two months before the

       bankruptcy court authorized the sale of UCLC’s assets to EMC:

               According to Exhibit 1 to the EMC bankruptcy complaint,
               UCLC assigned the note and mortgage . . . almost two months
               prior to the date of the only order of the UCLC Delaware
               Bankruptcy Court which could have approved the transfer.

       Court of Appeals of Indiana | Opinion 18A-MF-808 | June 12, 2019            Page 5 of 20
               ....

               Even if UCLC had ever been the real party in interest, its
               attempted transfer to EMC is void because, at the time it was
               made, it had not been authorized by the Delaware Bankruptcy
               Court.

       Id. at 73, 75.

[13]   On May 1, 2014, EMC filed a motion for summary judgment on its complaint

       and the Blairs’ counterclaim with supporting designated evidence and

       supporting brief. Appellants’ App. Vol. 2 at 9; Appellee’s App. Vol. II at 3, 7, 29.

       Neither EMC’s motion for summary judgment, nor its supporting brief

       addressed the Blairs’ counterclaim that UCLC’s assignment of the Mortgage

       and the Note was void because it was made two months before the bankruptcy

       court approved the sale of UCLC’s assets to EMC. Appellee’s App. Vol. II at 7-

       28.

[14]   On June 4, 2014, the trial court made a docket entry indicating that the Blairs

       had failed to file a timely response to EMC’s motion for summary judgment

       and that summary judgment was granted to EMC. Appellants’ App. Vol. 2 at 9.

       On June 5, 2014, the Blairs filed a motion seeking additional time to respond to

       EMC’s May 1, 2014 summary judgment motion. Id. Despite previously

       indicating that EMC was granted summary judgment, the trial court, on June 5,

       2014, granted the Blairs’ request for more time to respond to EMC’s motion for

       summary judgment. Id. at 10. On June 12, 2014, EMC tendered a proposed

       summary judgment order, but the trial court did not enter it. Id. On December

       Court of Appeals of Indiana | Opinion 18A-MF-808 | June 12, 2019              Page 6 of 20
       18, 2014, the Blairs filed their response to EMC’s motion for summary

       judgment and filed their own motion for summary judgment. Id. at 12. On the

       same day, the trial court gave leave to the Blairs to amend their answer by

       interlineation, allowing the Blairs to raise a statute-of-limitations defense. Id. at

       12, 131. On January 27, 2016, the trial court denied both motions for summary

       judgment. Id. at 15.

[15]   On June 16, 2016, EMC filed an in rem motion for summary judgment, together

       with supporting designated evidence. Id. at 18. On August 18, 2016, the Blairs

       filed their (1) response to EMC’s in rem summary judgment motion, and (2)

       their own motion for summary judgment, together with a supporting

       designation of evidence. Id. at 19.

[16]   On October 6, 2016, the trial court entered an order holding that EMC’s

       complaint was barred by the applicable statute of limitations. Id. at 134-72.

       The order also denied the Blairs’ motion for summary judgment. On

       November 7, 2016, EMC filed a motion to correct error. Id. at 20. On

       February 3, 2017, the trial court granted the motion, thus reversing its ruling on

       the statute of limitations issue and setting the matter for trial. Id. at 21.

[17]   The trial court conducted a bench trial on January 2, 2018. Tr. Vol. II at 1.

       Albert Smith, Jr. (“Smith”), a mortgage banking research officer for Chase, was

       the sole witness to testify on behalf of EMC. Id. at 15-64; 119-22. Smith

       testified that as of December 7, 2017, the total payoff amount for the Note was

       $493,333.81. Id. at 34.

       Court of Appeals of Indiana | Opinion 18A-MF-808 | June 12, 2019                Page 7 of 20
[18]   Smith also testified that EMC sought clarification about the status of the loan

       by filing a declaratory action in the Blair Bankruptcy case. Id. at 29. EMC filed

       that action on June 18, 2009, almost six years after the Blairs received their

       partial discharge in bankruptcy court. Appellants’ App. Vol. 3 at 75. Smith did

       not explain why EMC waited six years after the Blairs’ partial bankruptcy

       discharge to seek such clarification.

[19]   On March 7, 2018, the trial court issued its final order. The court granted

       partial relief to the Blairs on their statute of limitations defense. The court ruled

       that EMC’s July 5, 2012 complaint violated the ten-year statute of limitations in

       Indiana Code section 34-11-2-11 for installment payments and unpaid interest

       that accrued before July 3, 2002, and for the escrow payments that EMC

       advanced before July 3, 2002. Appellants’ App. Vol. 2 at 42. As to the Note, the

       court ruled that EMC’s complaint violated the six-year statute of limitations in

       Indiana Code section 34-11-2-9 for delinquent payments before July 3, 2006.

       Id. at 43.

[20]   To the degree that the trial court denied the Blairs’ statute-of-limitations

       defense, it rejected the Blairs’ claim that EMC did not invoke the acceleration

       clause in a reasonable time:

               Indiana law is clear that “if an installment loan contract or
               promissory note has an optional acceleration clause, . . . a
               creditor may (but is not required) to declare all future
               installments on the loan immediately due and payable after a
               debtor’s default.” Smither v. Asset Acceptance, LLC, 919 N.E.2d
1153, 1160 (Ind. Ct. App. 2010). Furthermore, the Note in this

       Court of Appeals of Indiana | Opinion 18A-MF-808 | June 12, 2019           Page 8 of 20
               case explicitly provides that, “Even if, at time a time which I
               [Borrower] am in default, the Note Holder does not require me to
               pay immediately in full as described above, the Note Holder will
               still have a right to do so if I am in default at a later time.” Note,
               ¶ 6(D).

               ....

               And while it is true that “‘a party is not at liberty to stave off
               operation of the statute [of limitations] inordinately by failing to
               make demand,” Smither v. Asset Acceptance, LLC, 919 N.E.2d
1153, 1160 (Ind. Ct. App. 2010) (quoting Curry v. U.S. Small Bus.
               Admin., 679 F. Supp. 966, 969-70 (N.D. Cal. 1987), a person who
               fails to exercise an optional acceleration clause on an installment
               contract (where demand is not necessary to perfect a cause of
               action) is not “stav[ing] off operation of the statute of limitations
               . . .” Id. Rather, the statute of limitations begins to run on each
               individual installment as it becomes due, just as it would in any
               other installment contract absent acceleration.

       Id. at 38-39.

[21]   The March 7, 2018 final order entered judgment for EMC on the Mortgage in

       the amount of $193,359.00 plus prejudgment and post-judgment interest,

       attorney fees, and costs and entered judgment on the Note for EMC in the

       amount of $76,758.00 plus prejudgment and post-judgment interest, plus

       attorney fees and costs. Id. at 45. It also foreclosed the Mortgage and ordered a

       sheriff’s sale for both the Herbert Avenue and Wortman Road properties. Id.

       The Blairs now appeal, and EMC cross-appeals.

       Court of Appeals of Indiana | Opinion 18A-MF-808 | June 12, 2019            Page 9 of 20
                                       Discussion and Decision

                                        I.       EMC’s Cross Appeal
[22]   We first address EMC’s cross appeal because it raises a potentially dispositive

       issue. EMC argues that the trial court should have abided by its June 4, 2014

       entry, which entered summary judgment for EMC because the Blairs failed to

       file a timely request for more time to respond to EMC’s motion for summary

       judgment. EMC argues that, by allowing the case to proceed, the trial court

       violated a bright line rule that states that a trial court shall enter summary

       judgment for the movant when the non-movant fails to file a timely response or

       a timely request for more time to file a response. EMC concedes, however, that

       this bright line rule comes into play only when the movant has made a prima-

       facie showing that it is entitled to summary judgment. The Blairs respond that

       their request for more time to respond to EMC’s motion for summary judgment

       was timely because EMC served its motion to the wrong zip code and because

       the envelope in which EMC served its motion was post-marked five days later

       than the service date.

               Pursuant to Rule 56(C) of the Indiana Rules of Trial Procedure,
               summary judgment is appropriate when there are no genuine
               issues of material fact and when the moving party is entitled to
               judgment as a matter of law. On review of a trial court’s decision
               to grant or deny summary judgment, this Court applies the same
               standard as the trial court. We must determine whether there is a
               genuine issue of material fact requiring trial, and whether the
               moving party is entitled to judgment as a matter of law. Neither
               the trial court nor the reviewing court may look beyond the
               evidence specifically designated to the trial court.

       Court of Appeals of Indiana | Opinion 18A-MF-808 | June 12, 2019           Page 10 of 20
               A party seeking summary judgment bears the burden to make prima
               facie showing that there are no genuine issues of material fact and
               that the party is entitled to judgment as a matter of law. Once
               the moving party satisfies this burden through evidence
               designated to the trial court pursuant to Trial Rule 56, the
               nonmoving party may not rest on its pleadings, but must
               designate specific facts demonstrating the existence of a genuine
               issue for trial.

       Coffman v. PSI Energy, Inc., 815 N.E.2d 522, 526 (Ind. Ct. App. 2004) (emphasis

       added) (internal citations omitted). If the non-movant fails to meet its

       responsive burden, a trial court shall enter summary judgment. Sheehan Constr.

       Co. v. Cont’l Cas. Co., 938 N.E.2d 685, 689 (Ind. 2010). “[A] party who fails to

       bring an interlocutory appeal from the denial of a motion for summary

       judgment may nevertheless pursue appellate review after the entry of final

       judgment.” Keith v. Mendus, 661 N.E.2d 26, 35 (Ind. Ct. App. 1996).

[23]   After a summary judgment motion is filed, “[a]n adverse party shall have thirty

       (30) days after service of the motion to serve a response and any opposing

       affidavits.” Ind. Trial Rule 56(C). The trial court may alter the time limits set

       forth in Trial Rule 56 “[f]or cause found . . . upon motion made within the

       applicable time limit.” Ind. Trial Rule 56(I). When service is accomplished by

       mail, three calendar days are added to an adverse party’s response deadline.

       Ind. Trial Rule 6(E).

[24]   EMC is correct that courts have no discretion to alter the time limits of Trial

       Rule 56, and courts cannot consider summary judgment filings made after the

       expiration of the time limitations set forth in Trial Rule 56. See Borsuk v. Town

       Court of Appeals of Indiana | Opinion 18A-MF-808 | June 12, 2019           Page 11 of 20
       of St. John, 820 N.E.2d 118, 123 n.5 (Ind. 2005) (“When a nonmoving party

       fails to respond to a motion for summary judgment within 30 days by either

       filing a response [or] requesting a continuance . . ., the trial court cannot

       consider summary judgment filings of that party subsequent to the 30-day

       period.”); see also Desai v. Croy, 805 N.E.2d 844, 848-49 (Ind. Ct. App. 2004).

       Thus, EMC contends that, because the Blairs did not file a timely response and

       because it made a prima-facie showing in its motion for summary judgment, the

       trial court should have adhered to its June 4, 2014 entry that EMC was entitled

       to summary judgment.

[25]   Here, we find that EMC was not entitled to summary judgment because it

       failed to make a prima-facie showing that summary judgment was proper.

       EMC failed to make this showing both here on appeal and in its motion,

       supporting brief, and designated evidence filed in the trial court. On appeal,

       EMC asserts that it made a prima-facie showing in the trial court, but its

       appellate brief does not summarize the claims in its foreclosure complaint,

       describe the allegations in its motion for summary judgment, point to relevant

       designated evidence, or make a legal argument as to why it was entitled to

       judgment as a matter of law. EMC’s appellate brief also fails to discuss the

       Blairs’ affirmative defenses and counterclaims upon which EMC also sought

       summary judgment. As a result, EMC fails to satisfy its burden to make a

       cogent argument in support of its claim that the trial court should have entered

       summary judgment for EMC. Thus, EMC has waived this issue. See Basic v.

       Amouri, 58 N.E.3d 980, 984 (Ind. Ct. App. 2016).

       Court of Appeals of Indiana | Opinion 18A-MF-808 | June 12, 2019           Page 12 of 20
[26]   Waiver notwithstanding, EMC’s motion for summary judgment, supporting

       brief, and designating materials did not establish a prima facie case that EMC

       was entitled to summary judgment. Its motion and supporting materials did

       not address the Blairs’ counterclaim that the assignment of Mortgage and Note

       from UCLC to EMC was void.

[27]   The Blairs’ counterclaim alleged:

               According to Exhibit 1 to the EMC bankruptcy complaint,
               UCLC assigned the note and mortgage . . . almost two months
               prior to the date of the only order of the UCLC Delaware
               Bankruptcy Court which could have approved the transfer.

               ....

               Even if UCLC had ever been the real party in interest, its
               attempted transfer to EMC is void because, at the time it was
               made, it had not been authorized by the Delaware Bankruptcy
               Court.

       Appellants’ App. Vol. 2 at 73, 75. Thus, because EMC did not make a prima-

       facie showing that it was entitled to summary judgment on the Blairs’

       counterclaim, the burden did not shift to the Blairs to designate facts

       demonstrating the existence of a genuine issue for trial and to demonstrate that

       EMC was not entitled to judgment as a matter of law. See Coffman, 815 N.E.2d

       at 526. Hence, the question of whether the Blairs’ request for more time to

       respond to the motion for summary judgment was timely was irrelevant.

       Court of Appeals of Indiana | Opinion 18A-MF-808 | June 12, 2019          Page 13 of 20
                                          II.      The Blairs’ Appeal
[28]   The trial court’s March 7, 2018 final order made specific findings of fact and

       conclusions thereon. In reviewing such an order, we apply a two-tiered

       standard of review, determining whether (1) the evidence supports the findings,

       and (2) the findings support the judgment. See Sullivan Builders & Design, Inc. v.

       Home Lumber of New Haven, Inc., 834 N.E.2d 129, 134 (Ind. Ct. App. 2005). We

       will set aside the trial court’s findings only if they are clearly erroneous. Id. A

       finding is clearly erroneous only if no facts in the record support the finding

       either directly or by inference. Id. We do not reweigh the evidence, and we

       consider the evidence most favorable to the judgment, drawing all reasonable

       inferences in favor of the judgment. Id. We need not defer to the trial court’s

       conclusions of law, however, and a judgment is clearly erroneous if it relies on

       an incorrect legal standard. See Freese v. Burns, 771 N.E.2d 697, 701 (Ind. Ct.

       App. 2002).

[29]   The Blairs argue that EMC’s foreclosure action is barred by the applicable

       statutes of limitations because EMC did not accelerate the Note and Mortgage

       within a reasonable time. The statute of limitations on a note is six years from

       the date that the cause of actions accrues, and the statute of limitations on a

       mortgage is ten years from the date the cause of action accrues. See Ind. Code §

       34-11-2-9; Ind. Code § 34-11-2-11. The Blairs observe that EMC filed its 2012

       foreclosure action approximately seventeen years after the Blairs made their last

       payment in 1995 and note that EMC filed its 2009 Complaint for Declaratory

       Judgment in the bankruptcy court to seek clarification about the status of the

       Court of Appeals of Indiana | Opinion 18A-MF-808 | June 12, 2019          Page 14 of 20
       Note and Mortgage more than eleven years after UCLC was granted relief from

       the automatic stay issued in the Blair Bankruptcy.

[30]   The purpose of a statute of limitation is to encourage the prompt presentation of

       claims. Perryman v. Motorist Mut. Ins. Co., 846 N.E.2d 683, 689 (Ind. Ct. App.

       2006). Statutes of limitation spare the courts from litigation of stale claims and

       prevent a person from defending a case after memories have faded, witnesses

       have died or disappeared, and evidence has been lost. Id.

[31]   Actions to enforce promissory notes “must be commenced within six (6) years

       after the cause of action accrues.” Ind. Code § 34-11-2-9. Actions to foreclose

       mortgages “must be commenced within ten (10) years after the cause of action

       accrues.” Ind. Code § 34-11-2-11. The determination of when a cause of action

       accrues is generally a question of law. Imbody v. Fifth Third Bank, 12 N.E.3d
943, 945 (Ind. Ct. App. 2014). Where, as here, an installment contract contains

       an optional acceleration clause, the statute of limitations to collect the entire

       debt does not begin to run immediately upon the debtor’s default. See Smither,
919 N.E.2d at 1160. Instead, the statute generally begins to run only when the

       creditor exercises its option to accelerate. Imbody, 12 N.E.3d at 945. If an

       installment loan contract or promissory note has an optional acceleration

       clause, a creditor may declare all future installments on the loan immediately

       due and payable upon the debtor’s default. Id. However, “a party is not at

       liberty to stave off operation of the statute [of limitations] inordinately by failing

       to make demand.” Smither, 919 N.E.2d at 1160. In such cases, the time for

       demand is a reasonable time and a matter of the parties’ expectations. Id.

       Court of Appeals of Indiana | Opinion 18A-MF-808 | June 12, 2019           Page 15 of 20
[32]   We applied these principles in Heritage Acceptance Corp. v. Romine, 6 N.E.3d 460

       (Ind. Ct. App. 2014). In 2005, Romine bought a used Pontiac Firebird from

       Royal Motors on an installment contract. Id. at 461. The contract stated that

       Heritage would be Royal Motors’ assignee. Id. The contract included an

       acceleration clause, which allowed Royal Motors to demand immediate

       payment of all remaining payments upon Romine’s default. Id. at 462. Romine

       defaulted, making his last payment in May of 2007. Id. Six years later, in April

       of 2013, Heritage invoked the acceleration clause and demanded that Romine

       pay the entire amount owned. Id. Romine could not pay, and Heritage sued

       Romine in small claims court. The trial court entered judgment for Romine

       because Heritage did not commence its action within the four-year statute of

       limitations set forth in Indiana Code section 26-1-2-725. Id. at 464. Our court

       affirmed, concluding that Heritage did not invoke the acceleration clause within

       a reasonable time:

               Here, Heritage waited until early April 2013 to exercise its right
               to demand full payment under the optional acceleration clause.
               Romine had tendered his last payment almost six years earlier. . .
               . We conclude, as did the Court in Smither, that waiting after
               these events have occurred to exercise an optional acceleration
               clause is unreasonable. Thus, Heritage’s long-delayed attempt to
               exercise the acceleration clause did not prevent the four-year
               statute of limitations from taking effect, and its complaint is
               barred.

       Id. at 464.

       Court of Appeals of Indiana | Opinion 18A-MF-808 | June 12, 2019        Page 16 of 20
[33]   Heritage relied on Smither, 919 N.E.2d at 1153. Smither obtained a credit card

       from a bank and ran up a debt of $1,700.00 before he stopped making payments

       in February 2000. Id. The bank continued to send him monthly billing

       statements. Id. In December 2001, Asset Acceptance, LLC (“Asset”), bought

       the loan from the bank and in May of 2006, requested full payment of the debt

       under the contract’s optional acceleration clause and sued Smither. Id.

[34]   Asset prevailed on summary judgment, and Smither appealed. A panel of this

       court noted that the contract had an optional acceleration clause, but Asset did

       not exercise the clause until May 2006, by which time Smither had been in

       default for over six years and the statute of limitations had run. Id. at 1161.

       The court stated that “waiting until after the statute of limitations has passed

       following default before making demand for full and immediate payment of a

       debt is per se an unreasonable amount of time to invoke an optional

       acceleration clause and cannot be given effect.” Id. at 1161-62. The court also

       noted, “a party is not at liberty to stave off operation of the statute [of

       limitations] inordinately by failing to make demand.” Id. at 1161. Thus,

       Smither concluded that Asset’s long-delayed exercise of the acceleration clause

       did not prevent the statute of limitations from taking effect. Id. at 1162.

[35]   EMC attempts to distinguish Smither by arguing that it deals with significantly

       different facts, noting that the credit card account at issue in Smither was “more

       akin to an open account or unwritten contract than a promissory note or

       installment loan contract.” Appellee Br. at 36 (quoting Smither, 919 N.E.2d at

       1161). Accordingly, EMC posits, Smither found it unclear whether it “ought to
       Court of Appeals of Indiana | Opinion 18A-MF-808 | June 12, 2019              Page 17 of 20
       incorporate the law regarding optional acceleration clauses into this case.” Id.

       (quoting Smither, 919 N.E.2d at 1161).

[36]   We disagree with EMC’s contention that Smither does not apply here because a

       panel of this court recently applied Smither to a case involving a mortgage and

       promissory note, as does the case before us today. See Stroud v. Stone, No. 18A-

       CC-1722, 2019 WL 1496836 (Ind. Ct. App. Apr. 5, 2019). In Stroud, Stone on

       April 29, 2003, deeded two properties, including a mobile home park, to

       Heartland Homestead LLC (“HH LLC”). Id. at *2. Stroud was one of two

       partners in HH LLC. Id. Fifth Third Bank (“Fifth Third”) financed part of the

       purchase price and took a first mortgage on the properties. Id. Stone received

       cash at the closing and a $100,000.00 promissory note. Id. The promissory

       note contained an acceleration clause. Id. at *3. The promissory note was

       secured by an “Open-End” Mortgage, which, despite that designation, required

       the specified amount for installment payments of $833.33 per month beginning

       June 1, 2003 until the amount was paid in full by the maturity date of July 1,

       2013. Id. Because the mobile home park was not as profitable as Stroud had

       hoped, he made his last payment in May of 2008, and Fifth Third filed a

       foreclosure action on October 31, 2008. Id. To avoid foreclosure, Stroud

       hatched a complicated scheme that would eventually result in creation of the

       Heartland Land Trust (“the Trust”), which would buy the properties from Fifth

       Third. Id. at *3-*6. Those efforts fell through, and on February 23, 2016, Stone

       initiated an action on the promissory note, suing Stroud, HH LLC, and the

       Trust for, inter alia, repayment of the promissory note. Id. at *14. In finding

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       that Stone did not file suit within a reasonable time and that his action on the

       promissory note was time barred, the Stroud panel observed that Stone waited

       nearly eight years after Stroud had defaulted to demand payment, two years

       beyond the six-year statute of limitations under Indiana Code section 34-11-2-9.

       Id. This was a period the court found was “a per se unreasonable amount of

       time to wait before invoking an acceleration clause.” Id. (quoting Smither, 919
N.E.2d at 1161-62).

[37]   Guided by Stroud, we find that EMC delayed an unreasonable amount of time

       by waiting until April of 2011 to invoke the acceleration clause. Tr. Vol. II at

       35-36. Sixteen years earlier, in June of 1995, the Blairs had defaulted. Pl.’s Ex.

       4 at 52. In December of 1997, the bankruptcy court lifted the stay that had

       prevented UCLC from seeking foreclosure against the Blairs, and in August of

       1998, the trial court in the Ash lawsuit had granted leave to UCLC to pursue a

       foreclosure action. Appellants’ App. Vol. 3 at 24-25, 96. The rights to the Note

       and the Mortgage were assigned to EMC in 2000. Appellants’ App. Vol. 2 at 67.

       At that time, EMC could have taken its first steps to pursue its rights under the

       Note and Mortgage, but it did not. Considering that the Blairs had defaulted

       five years earlier, this would have been the prudent course for EMC to have

       taken.

[38]   Even more puzzling is EMC’s decision to wait until June of 2009 to file its

       Complaint for Declaratory Judgment. Appellants’ App. Vol. 3 at 75. This was

       nearly six years after the Blairs received their bankruptcy discharge. Id. at 78.

       During his trial testimony on behalf of EMC, Smith did not explain why EMC

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       waited six years to seek such clarification. On appeal, EMC likewise offers no

       explanation for this delay. EMC’s decision to wait six years after the Blairs

       received their partial bankruptcy discharge to seek clarification about the status

       of the Note and Mortgage was unreasonable, and this delay did not prevent the

       statutes of limitations from taking effect. See Heritage Acceptance Corp., 6 N.E.3d

       at 464. EMC waited an unreasonable time to accelerate its Note and Mortgage.

       By doing so and by failing to make demand within a reasonable time, its rights

       are time-barred. Smither, 919 N.E.2d at 1160.

[39]   Reversed.

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

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