Court Opinion

ID: 9897340
Source: CourtListenerOpinion
Date Created: 2023-11-14 19:10:22.229996+00
Date Added: 2024-06-11T09:15:44.277394
License: Public Domain

FILED
                                                                           Jul 18 2023, 8:34 am

                                                                               CLERK
                                                                           Indiana Supreme Court
                                                                              Court of Appeals
                                                                                and Tax Court

ATTORNEY FOR APPELLANT                                     ATTORNEY FOR APPELLEES
Phillip A. Norman                                          David W. Stone IV
Phillip A. Norman P.C.                                     Stone Law Office & Legal
Valparaiso, Indiana                                        Research
                                                           Anderson, Indiana

                                            IN THE
    COURT OF APPEALS OF INDIANA

U.S. Bank National Association                             July 18, 2023
as Trustee for Manufactured                                Court of Appeals Case No.
Housing Contract                                           22A-MF-2184
Senior/Subordinate Pass-                                   Appeal from the
Through Certificate Trust 1998-                            Martin Circuit Court
7,                                                         The Honorable
Appellant-Plaintiff,                                       Lynne E. Ellis, Judge
                                                           Trial Court Cause No.
        v.                                                 51C01-2009-MF-174

Mary Sue Spencer and Phillip L.
Spencer,
Appellees-Defendants.

                                  Opinion by Judge Foley
                              Judges Vaidik and Tavitas concur.

Foley, Judge.

Court of Appeals of Indiana | Opinion 22A-MF-2184 | July 18, 2023                                  Page 1 of 22
[1]   This appeal arises from the third attempt to foreclose on real property located in

      Martin County, Indiana (“Real Estate”). The U.S. Bank National Association

      (“U.S. Bank”) 1 accepted a mortgage as collateral for the Real Estate and now

      seeks to foreclose. The Real Estate is presently owned by Mary Sue Spencer

      and Phillip L. Spencer (collectively “the Spencers”). Beginning in 2013, U.S.

      Bank filed a series of three foreclosure actions, the first two of which were

      dismissed upon motion by U.S. Bank, without prejudice and over the objection

      of the Spencers. In this most recent foreclosure action, U.S. Bank sought

      summary judgment. The trial court denied U.S. Bank’s motion and, after a

      bench trial, entered judgment in favor of the Spencers and against U.S. Bank.

      We conclude that the trial court erroneously denied U.S. Bank’s motion for

      summary judgment. Accordingly, we reverse, and remand with instructions to:

      (1) vacate the judgment; (2) enter partial summary judgment in favor U.S.

      Bank; and (3) conduct further proceedings consistent with this opinion.

      Facts and Procedural History
      I.         Prior Litigation

[2]   A summary of the prior foreclosure litigation regarding the Real Estate is in

      order before we proceed to the details of the case at bar. 2 The Real Estate’s

      legal description provides that it is approximately 12.47 acres and located in

      1
          For simplicity, U.S. Bank, shall also refer to any entity which held the note prior to U.S. Bank.
      2
        Indiana Evidence Rule 201 provides in part that a court may take judicial notice of “the existence of . . .
      records of a court of this state.” We avail ourselves of this rule for several of the following facts.

      Court of Appeals of Indiana | Opinion 22A-MF-2184 | July 18, 2023                                       Page 2 of 22
      Martin County, Indiana. 3 It is a portion of what was originally a larger parcel,

      owned by one Sarah Spencer beginning in 1962. The Real Estate was

      transferred via quitclaim deed to Sarah and Ryan Spencer in 1998. In June of

      that year, Sarah and Ryan Spencer executed a note, secured by the mortgage on

      the Real Estate and a security interest in a manufactured home located on the

      Real Estate. 4 The mortgage was serviced by Green Tree Financial Servicing

      Company in the sum of $40,811.01. 5

[3]   Ryan Spencer 6 conveyed his interest back to Sarah Spencer, who then conveyed

      the Real Estate to Philip and Mary Sue Spencer, the Appellees, on February 10,

      2009. Sarah Spencer died three days later. On October 15, 2013, U.S. Bank

      3
       There was some confusion below as to the correct street address of the Real Estate, and the parties dedicate
      some briefing to that confusion. We do not address the matter. Suffice it to say:
            In order for a mortgage to be effective, it must contain a description of the land intended to be
            covered sufficient to identify it. The test for determining the sufficiency of a legal description is
            whether the tract intended to be mortgaged can be located with certainty by referring to the
            description.
      Samuels v. Garlick, 49 N.E.3d 1116, 1121 (Ind. Ct. App. 2016) (quoting Keybank Nat’l Ass’n v. NBD Bank, 699
      N.E.2d 322, 326 (Ind. Ct. App. 1998)). So long as the physical description of the property puts potentially
      interested parties on notice as to the boundaries and location of the property (and the parties here do not
      suggest otherwise), discrepancies regarding the street address are of no moment, and do not generate a
      genuine issue of material fact. Here, the metes and bounds legal description of the Real Estate in the various
      deeds and mortgage are consistent.
      4
        There are references in the record to a “mobile” home. And, while there may be no definitional difference
      between a mobile home and a manufactured home, the mortgage referred used the term “manufactured
      home” and the correct terminology, according to the U.S. Department of Housing and Urban Development
      (as of June 15, 1976), is “manufactured” home.
      https://www.hud.gov/program_offices/housing/rmra/mhs/faqs (last accessed May 31, 2023).
      5
       This company changed its name to “Ditech” and was eventually succeeded in the mortgage by Shellpoint
      Mortgage Servicing in approximately March 2020. Tr. Vol. II p. 22.
      6
       Ryan Spencer eventually declared bankruptcy and was discharged from any personal liability under the
      note or mortgage.

      Court of Appeals of Indiana | Opinion 22A-MF-2184 | July 18, 2023                                     Page 3 of 22
      filed a complaint alleging that the Spencers were in default and seeking to

      foreclose on the mortgage for the Real Estate under Cause Number 51C01-

      1310-MF-259 (“Foreclosure 1”). The Spencers filed an answer on October 25,

      2013. On December 18, 2014, U.S. Bank filed a motion to dismiss the action

      pursuant to Trial Rule 41(A)(1)(a), erroneously asserting that the Spencers had

      not filed an answer. 7 The trial court granted the motion the same day and

      without further explanation issued an order dismissing the action without

      prejudice.

[4]   Meanwhile, on December 2, 2014, sixteen days before its motion to dismiss in

      Foreclosure 1, U.S. Bank filed a second foreclosure action under Cause

      Number 51C01-1412-MF-301 (“Foreclosure 2”). 8 On December 18, 2014, the

      Spencers filed a motion to dismiss the case pursuant to Indiana Trial Rule

      12(B), given that there was already an identical pending action: Foreclosure 1.

      On December 29, 2014, the Spencers filed an objection to the U.S. Bank

      motion to dismiss in Foreclosure 1 (despite the fact that it had already been

      granted), noting that they had in fact filed an answer and the trial court’s order

      to dismiss the case should have been with prejudice. The trial court denied the

      objection on the basis that “the Defendants withdrew their Motion to Dismiss

      in [Foreclosure 2].” Appellant’s App. Vol. II p. 117. Notably, the trial court

      7
        It does not appear that there was any activity in the case between the filing of the answer and the filing of
      the motion to dismiss.
      8
        The record offers no clear explanation for why U.S. Bank filed a second action rather than merely pursuing
      its first.

      Court of Appeals of Indiana | Opinion 22A-MF-2184 | July 18, 2023                                    Page 4 of 22
      expressly indicated that the dismissal of Foreclosure 1 was to remain “without

      prejudice.” Id. And the chronological case summary in Foreclosure 2 shows

      an order entered by the trial court on January 7, 2015, ostensibly, via

      handwritten edits, denying the motion to dismiss as being moot due to the

      Spencers withdrawing the motion on December 29, 2014. 9

[5]   U.S. Bank filed a motion for summary judgment in Foreclosure 2 on May 29,

      2015. Nearly a year later, on April 27, 2016, the trial court filed an order sua

      sponte directing the parties to file a motion seeking a hearing or risk the trial

      court dismissing the action for failure to prosecute. U.S. Bank filed a response

      indicating that it was waiting for bankruptcy court proceedings concerning

      Ryan Spencer. 10 On December 16, 2016, the trial court held a summary

      judgment hearing. The parties agreed to attempt mediation, which

      subsequently failed. In the meantime, on January 5, 2017, the trial court

      entered an order denying U.S. Bank’s motion for summary judgment with

      respect to Count I of the complaint—which sought to foreclose the mortgage—

      but granted summary judgment on Count II, which sought replevin of the

      manufactured home. The result was, thus, a replevin judgment in favor of U.S.

      9
        This withdrawal must have occurred informally, as we see no entry for a hearing on this date or a filing to
      this effect.
      10
        Generally speaking, when a person files for bankruptcy, the court will enter an automatic stay preventing
      creditors from pursuing actions against the person while the bankruptcy proceedings are pending.

      Court of Appeals of Indiana | Opinion 22A-MF-2184 | July 18, 2023                                 Page 5 of 22
      Bank and against the manufactured home, and a remaining, pending claim with

      respect to the mortgage foreclosure.

[6]   U.S. Bank then filed a renewed motion for summary judgment on April 26,

      2017. The trial court denied the motion on June 29, 2017, finding that there

      was a genuine issue of material fact with respect to the location of the Real

      Estate. On July 14, 2017, a telephonic status conference resulted in the trial

      court instructing U.S. Bank to file an affidavit or supporting documentation for

      the addresses associated with the Real Estate. U.S. Bank filed a motion for an

      extension of time to comply with that order on September 13, 2017, and then a

      second motion for an extension of time on November 9, 2017. Then, on

      January 18, 2018, U.S. Bank withdrew its renewed motion for summary

      judgment (even though it had apparently already been denied). The January

      18, 2018, motion indicated that U.S. Bank had learned of a legal

      description/title claim issue, and, therefore, “summary judgment for

      foreclosure of the real estate/land [was] not appropriate at [that] time.”

      Appellant’s App. Vol. II p. 156. The trial court granted the motion the same

      day.

[7]   Nothing happened for approximately eighteen months, at which point U.S.

      Bank filed a “Motion of Voluntary Dismissal” on July 11, 2019, requesting

      dismissal of the cause without prejudice under Trial Rule 41(A)(2). Id. at 158.

      The trial court granted U.S. Bank’s dismissal, without prejudice, by order

      issued July 12, 2019. Five days later, the Spencers filed their “Response to

      Motion of Voluntary Dismissal[,]” and again argued that the dismissal should

      Court of Appeals of Indiana | Opinion 22A-MF-2184 | July 18, 2023        Page 6 of 22
      be with prejudice, given that U.S. Bank had not complied with court orders

      during the course of the litigation and was not entitled to a dismissal without

      prejudice. The trial court took no action on the Spencers objection to the

      dismissal. 11

      II.     Present Case

[8]   Over a year later, on September 25, 2020, U.S. Bank filed its third attempt to

      foreclose the mortgage on the Real Estate. Rather than seeking to reinstate

      Foreclosure 2, U.S. Bank filed a new “In Rem Complaint for Foreclosure of

      Note and Mortgage.” Id. at 16. The Spencers filed an answer on October 13,

      2020. Another year passed before U.S. Bank filed another motion for summary

      judgment on September 21, 2021. After a hearing on the motion, the trial court

      denied the motion for summary judgment on December 1, 2021, in an order

      containing no findings of fact or conclusions of law. The case then went to a

      bench trial, after which the trial court found for the Spencers, holding that

      “[b]ased upon the foregoing Findings of Fact and Conclusions of Law, [U.S.

      Bank] is precluded from foreclosing the 12.47 acres owned by [the Spencers].”

      Id. at 14.

[9]   Pertinent to this appeal are three of the trial court’s conclusions of law:

              Consequently, based upon the Facts as stated above relating to
              the prior two (2) cases [and Trial Rule 41], the instant case was

      11
        We consider the post-judgment objection to essentially be a motion to reconsider. Under Trial Rule
      53.4(B) any such motions not ruled upon within five days are deemed denied.

      Court of Appeals of Indiana | Opinion 22A-MF-2184 | July 18, 2023                              Page 7 of 22
               barred by prejudice when the Plaintiff’s Notice of Voluntary
               Dismissal filed in [MF-301] was filed 7/11/2019.

               ....

               Indiana Code 26-1-9.1-620 (g) states: “In a consumer transaction,
               a secured party may not accept collateral in partial satisfaction of
               the obligation it secures.” Because [U.S. Bank] accepted
               collateral for the mortgage in the form of the mobile home, they
               had to accept it in full satisfaction of the obligation, and since
               they received the mobile home in the previous judgment, the
               obligation has been satisfied.

               ....

               [U.S. Bank] has sought foreclosure of the 12.47 acres in equity,
               but, it has not done equity at all, nor does [U.S. Bank] have clean
               hands. [U.S. Bank] filed multiple lawsuits, voluntarily dismissed
               the 2014 case because it could not provide an appropriate address
               for the property secured by the mortgage, secured a judgment in
               rem against the mobile home, failed and refused to sell the
               mobile home in 2017, failed to make claims for vandalism of the
               mobile home, which was or clearly should have been disclosed
               by the inspections, and in short acted with unclean hands
               throughout the matter.

       Id. at 15–16. U.S. Bank now appeals.

       Discussion and Decision
[10]   U.S. Bank seeks two alternative forms of relief. First, it requests that we reverse

       the trial court’s order denying its motion for summary judgment and order the

       trial court to enter summary judgment in favor of U.S. Bank. If we decline to

       Court of Appeals of Indiana | Opinion 22A-MF-2184 | July 18, 2023          Page 8 of 22
       do so, U.S. Bank asks that we reverse the final judgment as clearly erroneous.

       Resolving the case by granting the first relief requested, we need not reach the

       matter of the second.

[11]   “[A] party seeking review of denial of a summary judgment motion must

       ordinarily do so by way of interlocutory appeal.” Bd. of Trustees of Ball State

       Univ. v. Strain, 771 N.E.2d 78, 81 (Ind. Ct. App. 2002) (citing Keith v. Mendus,

       661 N.E.2d 26, 35 (Ind. Ct. App. 1996), trans. denied). “Yet, once final

       judgment is entered following trial, the ultimate determination of the trier of

       fact upon the merits of the claim has occurred, and the interlocutory nature of

       the denial of summary judgment terminates.” Id. “Accordingly, 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.” Id. (internal quotation omitted).

[12]   “‘When this Court reviews a grant or denial of a motion for summary

       judgment, we stand in the shoes of the trial court.’” Minser v. DeKalb Cnty. Plan

       Comm’n, 170 N.E.3d 1093, 1098 (Ind. Ct. App. 2021) (quoting Burton v. Benner,

       140 N.E.3d 848, 851 (Ind. 2020)). “Summary judgment is appropriate ‘if the

       designated evidentiary matter shows that there is no genuine issue as to any

       material fact and that the moving party is entitled to a judgment as a matter of

       law.’” Id. (quoting Murray v. Indianapolis Pub. Schs., 128 N.E.3d 450, 452 (Ind.

       2019)); see also Ind. Trial Rule 56(C).

       Court of Appeals of Indiana | Opinion 22A-MF-2184 | July 18, 2023          Page 9 of 22
[13]   The summary judgment movant invokes the burden of making a prima facie

       showing that there is no issue of material fact and that it is entitled to judgment

       as a matter of law. Burton, 140 N.E.3d at 851. The burden shifts to the non-

       moving party which must then show the existence of a genuine issue of material

       fact. Id. On appellate review, we resolve “[a]ny doubt as to any facts or

       inferences to be drawn therefrom . . . in favor of the non-moving party.” Id.

[14]   We review the trial court’s ruling on a motion for summary judgment de novo,

       and we take “care to ensure that no party is denied his day in court.” Schoettmer

       v. Wright, 992 N.E.2d 702, 706 (Ind. 2013). “We limit our review to the

       materials designated at the trial level.” Gunderson v. State, Ind. Dep’t of Nat. Res.,

       90 N.E.3d 1171, 1175 (Ind. 2018), cert. denied.

[15]   Ordinarily, when a trial court enters findings at the summary judgment stage,

       we note that such findings may aid our review, but do not bind us. See, e.g., In

       re Supervised Estate of Kent, 99 N.E.3d 634, 637 (Ind. 2018). As we noted supra,

       the trial court did not enter any findings of fact or conclusions of law when it

       denied U.S. Bank’s motion for summary judgment. It did enter such findings as

       part of its final judgment. With that posture in mind, we elect to undertake an

       examination of the trial court’s reasoning as described in its final judgment.

       The trial court’s ultimate findings potentially provide insight into its reasoning

       in denying the motion for summary judgment, and, thus, consideration of those

       findings will be instructive. Additionally, the final judgment provides a ready-

       made frame of reference which aids in the organization of our de novo review.

       Court of Appeals of Indiana | Opinion 22A-MF-2184 | July 18, 2023           Page 10 of 22
[16]   The trial court offered three bases for granting judgment in favor of the

       Spencers. First, the trial court held that, under Indiana Code Section 26-1-9.1-

       620(g), the Spencers’ mortgage obligation was satisfied in full via the replevin

       judgment against the manufactured home. Second, the trial court held that

       U.S. Bank came to the latest foreclosure action with unclean hands. And third,

       the trial court held that the instant case is barred on the basis of the voluntary

       motion for dismissal filed in Foreclosure 2 pursuant to Trial Rule 41(A)(1)(a). 12

       We find it illuminative to consider why each of these three bases is

       unpersuasive, and, after examining them, ultimately turning to the reasons why

       U.S. Bank is entitled to judgment as a matter of law.

       I.       Collateral as Full Satisfaction of Obligation

[17]   “The Indiana General Assembly [has] adopted the [Uniform Commercial

       Code,]” as codified in Title 26 Article 1 of the Indiana Code (Uniform

       Commercial Code). EngineAir, Inc. v. Centra Credit Union, 107 N.E.3d 1061,

       1066 (Ind. Ct. App. 2018). Part of that Article provided one of the bases for the

       trial court’s decision. Indiana Code Section 26-1-9.1-620(g) provides: “In a

       consumer transaction, a secured party may not accept collateral in partial

       satisfaction of the obligation it secures.” From this, the trial court deduces that

       the manufactured home must have been accepted in full satisfaction of the

       mortgage obligation when U.S. Bank obtained the replevin judgment against

       12
         These bases are listed non-consecutively relative to the trial court’s order, but in order of which bases are
       easiest to address on appeal.

       Court of Appeals of Indiana | Opinion 22A-MF-2184 | July 18, 2023                                  Page 11 of 22
       the manufactured home. Therefore, the reasoning goes, U.S. Bank may not

       foreclose: the Spencers do not owe them anything.

[18]   We disagree with the trial court’s reasoning based on the following statute:

                If a security agreement covers both personal and real property, a
                secured party may proceed:

                         (1) under IC 26-1-9.1-601 through IC 26-1-9.1-628 as to the
                         personal property without prejudicing any rights with
                         respect to the real property; or

                         (2) as to both the personal property and the real property
                         in accordance with the rights with respect to the real
                         property, in which case the other provisions of IC 26-1-9.1-
                         601 through IC 26-1-9.1-628 do not apply.

       I.C. § 26-1-9.1-604(a); see also Petz v. Est. of Petz, 467 N.E.2d 780, 782 (Ind. Ct.

       App. 1984) (holding that because the security interest involved both real and

       personal property it was governed by the real property law and Article 9 of the

       Uniform Commercial Code was inapplicable). 13 Here, the security agreement

       covers both the manufactured home (which is personalty) and the Real Estate.

       See Appellant’s App. Vol. II p. 30. U.S. Bank chose to proceed—in the second

       litigation—against both the Real Estate and the personalty, prevailing in the

       latter and voluntarily dismissing with respect to the former. Thus, Section 620

       13
         Article 9 of the Uniform Commercial Code was repealed by the General Assembly in 2000 and replaced
       with Article 9.1. The pertinent statutory text, however, has not been materially altered for purposes of this
       case.

       Court of Appeals of Indiana | Opinion 22A-MF-2184 | July 18, 2023                                 Page 12 of 22
       does not apply to the instant matter and cannot serve as a sufficient basis for

       concluding that the U.S. Bank was precluded from foreclosing on the Real

       Estate.

       II.     Unclean Hands

[19]   We next address the trial court’s conclusion that U.S. Bank “acted with unclean

       hands throughout the matter.” Appellant’s App. Vol. II p. 16. “An action to

       foreclose a mortgage is essentially equitable in nature.” U.S. Bank, Nat. Ass’n v.

       Miller, 44 N.E.3d 730, 740 (Ind. Ct. App. 2015) (citing Deutsche Bank Nat’l Tr.

       Co. v. Mark Dill Plumbing Co., 903 N.E.2d 166, 168 (Ind. Ct. App. 2009)).

       Accordingly, “trial courts have ‘full discretion to fashion equitable remedies

       that are complete and fair to all parties involved.’” Deutsche Bank, 903 N.E. 2d

       at 168 (quoting Porter v. Bankers Tr. Co. of Cal., N.A., 773 N.E.2d 901, 909 (Ind.

       Ct. App. 2002)).

[20]   “The unclean-hands doctrine is an equitable tenet that demands one who seeks

       equitable relief to be free of wrongdoing in the matter before the court.” Kahn v.

       Baker, 36 N.E.3d 1103, 1116 (Ind. Ct. App. 2015) (citing Coppolillo v. Cort, 947

       N.E.2d 994, 1000 (Ind. Ct. App. 2011)), trans denied. “The purpose of the

       unclean-hands doctrine is to prevent a party from reaping benefits from his or

       her misconduct.” Id. at 1116–17. “For the doctrine of unclean hands to apply,

       the alleged wrongdoing must be intentional and must have an immediate and

       necessary relation to the matter being litigated.” Id. 1117. “The doctrine of

       unclean hands is not favored by the courts and must be applied with reluctance

       and scrutiny.” Id.
       Court of Appeals of Indiana | Opinion 22A-MF-2184 | July 18, 2023        Page 13 of 22
[21]   We cannot agree with the trial court’s conclusion that the evidence supports the

       inference that U.S. Bank comes to the instant matter with unclean hands. First,

       we note that the Spencers did not raise the unclean hands doctrine as a defense

       in their answer to the complaint, though it does appear that they raised it during

       the bench trial. Second, the trial court’s analysis regarding unclean hands

       appears to stray beyond the boundaries of the evidentiary record. Third, as we

       explain infra, U.S. Bank is in its current position at least in part because of

       discretionary determinations made by the trial court. And fourth and finally,

       though U.S. Bank’s conduct in the prior cases was no model of efficient

       litigation practices, we do not find factual support that its actions constitute

       intentional misconduct.

       III.     Trial Rule 4114

[22]   Finally, we turn to the trial court’s conclusion that the instant case is barred by

       Indiana Trial Rule 41. For its conclusion, the trial court relied upon subsection

       (A), which provides:

                (A) Voluntary dismissal: Effect thereof.

                         (1) By plaintiff—By stipulation. Subject to contrary
                         provisions of these rules or of any statute, an action may
                         be dismissed by the plaintiff without order of court:

       14
         Though the Spencers did not raise unclean hands or Indiana Code Section 26-1-9.1-620(g) at the summary
       judgment stage, we note that they did raise a version of the Rule 41 argument in their response to the motion
       for summary judgment.

       Court of Appeals of Indiana | Opinion 22A-MF-2184 | July 18, 2023                               Page 14 of 22
                          (a) by filing a notice of dismissal at any time before
                          service by the adverse party of an answer or of a
                          motion for summary judgment, whichever first
                          occurs; or

                          (b) by filing a stipulation of dismissal signed by all
                          parties who have appeared in the action.

        Unless otherwise stated in the notice of dismissal or stipulation,
        the dismissal is without prejudice, except that a notice of
        dismissal operates as an adjudication upon the merits when filed
        by a plaintiff who has once dismissed in any court of the United
        States or of any state an action based on or including the same
        claim. The provisions of this subdivision shall not apply if the
        plaintiff in such action could not effectuate service of process, or
        otherwise procure adjudication on the merits.

                 (2) By order of court. Except as provided in subsection (1)
                 of this subdivision of this rule, an action shall not be
                 dismissed at the plaintiff’s instance save upon order of the
                 court and upon such terms and conditions as the court
                 deems proper. If a counterclaim or cross-claim has been
                 pleaded by a defendant prior to the service upon him of the
                 plaintiff’s motion to dismiss, the action shall not be
                 dismissed against the defendant’s objection unless the
                 counterclaim or cross-claim can remain pending for
                 independent adjudication by the court. Unless otherwise
                 specified in the order, a dismissal under this subsection is
                 without prejudice.

“The purpose of this rule is ‘to eliminate evils resulting from the absolute right

of a plaintiff to take a voluntary nonsuit at any stage in the proceedings before

Court of Appeals of Indiana | Opinion 22A-MF-2184 | July 18, 2023                  Page 15 of 22
       the pronouncement of judgment and after the defendant had incurred

       substantial expense or acquired substantial rights.’” Sevilla v. Lopez, 150 N.E.3d

       683, 686 (Ind. Ct. App. 2020) (quoting Rose v. Rose, 526 N.E.2d 231, 234 (Ind.

       Ct. App. 1988)), trans denied. “Generally, dismissals should be permitted

       ‘unless the defendant will suffer some legal prejudice other than the mere

       prospect of a second lawsuit.’” Id.

[23]   Specifically, the trial court, here, reasoned that the dismissal in Foreclosure 2

       met the criteria of Rule 41(A)(1)(a) and thus that dismissal was made with

       prejudice, even though the relevant order expressly states that Foreclosure 2

       was dismissed without prejudice. The trial court misconstrues which portion of

       Rule 41 governs the dismissal.

[24]   The language “except that a notice of dismissal operates as an adjudication

       upon the merits when filed by a plaintiff who has once dismissed in any court of

       the United States or of any state an action based on or including the same

       claim[,]” in Rule 41 is known as the ‘two-dismissal’ rule within the federal

       counterpart to Rule 41, which employs materially similar language. “The

       purpose of the ‘two dismissal’ rule, ‘pointed out in numerous decisions, is to

       prevent unreasonable abuse and harassment,’ [ ] ‘by plaintiff securing numerous

       dismissals without prejudice.’” Sutton Place Dev. Co. v. Abacus Mortg. Inv. Co.,

       826 F.2d 637, 640 (7th Cir. 1987) (quoting Am. Cyanamid Co. v. McGhee, 317

       F.2d 295, 297 (5th Cir. 1963)) cert. denied; 9 C. Wright & A. Miller, FEDERAL

       PRACTICE AND PROCEDURE § 2368, at 187 (1971) (footnote omitted)). “Rule

       41(a)(1) was intended to eliminate ‘the annoying of a defendant by being

       Court of Appeals of Indiana | Opinion 22A-MF-2184 | July 18, 2023        Page 16 of 22
       summoned into court in successive actions and then, if no settlement is arrived

       at, requiring him to permit the action to be dismissed and another one

       commenced at leisure[.]’” Cooter & Gell v. Hartmarx Corp., 496 U.S. 384, 397

       (1990) (quoting 2 American Bar Association, Proceedings of the Institute on

       Federal Rules, Cleveland, Ohio, 350 (1938)). Because we resolve the issue

       considering the plain language of the Rule, we need not reach the decision of

       whether to adopt federal courts’ two-dismissal rule.

[25]   Here, however, we conclude that the trial court erroneously applied some

       version of that rule. Though U.S. Bank’s motion in Foreclosure 2 was labelled

       as a motion for a voluntary dismissal, it failed to meet the criteria required by

       Rule 41(A)(1)(a), which governs dismissals that do not implicate the discretion

       of the trial court. By the time U.S. Bank asked for Foreclosure 2 to be

       dismissed, the matter had been litigated for years, an answer served, and

       multiple motions for summary judgment ruled upon. Thus, the dismissal was

       clearly beyond the purview of Rule (A)(1)(a) and, because the Spencers did not

       stipulate to the dismissal of Foreclosure 2 (to the contrary, they objected to said

       dismissal), Rule 41(A)(1)(b) does not apply either. See, e.g., Rose, 526 N.E.2d at

       235 (“Where a hearing has been conducted on an issue which goes to the merits

       of the controversy, voluntary dismissal is inappropriate.” (citing Harvey

       Aluminum, Inc. v. Am. Cyanamid Co., 203 F.2d 105, 107 (2nd Cir. 1953), cert.

       denied); Murray v. Conseco, Inc., 467 F.3d 602, 605 (7th Cir. 2006) (“Here, Rule

       41(a)(1) is not implicated because the motion was filed after the answer and was

       not signed by all parties.”).

       Court of Appeals of Indiana | Opinion 22A-MF-2184 | July 18, 2023         Page 17 of 22
[26]   Thus, Rule 41(A)(1) is inapplicable to the case at bar. Plainly, Foreclosure 2

       was actually dismissed under Rule 41(A)(2). U.S. Bank asked for leave to

       dismiss the action without prejudice, and the trial court granted the request. 15

       “[A] trial court’s grant of a plaintiff’s motion to voluntarily dismiss a suit

       ‘dissolves any and all interlocutory orders,’ puts the parties back into the

       position of the suit never having been filed, and renders any contested issues as

       to the dismissed claims moot.” Kenworthy v. Lyons Ins. & Real Est., Inc., 185

       N.E.3d 405, 411 (Ind. Ct. App. 2022) (quoting Fair Share Org. v. Kroger Co., 176

       N.E.2d 205, 211 (Ind. Ct. App. 1961)). Rule 41(A)(2) expressly provides that

       such a dismissal is subject to “such terms and conditions as the court deems

       proper.” Those terms and conditions might include a plaintiff’s diligence in

       prosecuting the action or in bringing a motion for voluntary dismissal without

       prejudice, or whether a hearing has been held on the merits of the case. See,

       e.g., Finke v. N. Ind. Pub. Serv. Co., 862 N.E.2d 266, 272 (Ind. Ct. App. 2006),

       trans. denied. And the primary concern when “determining the propriety of a

       voluntary dismissal is whether or not the party opposing the dismissal would be

       substantially prejudiced by dismissal.” Hidden Valley Lake Prop. Owners Ass’n v.

       HVL Utils., Inc., 445 N.E.2d 575, 576 (Ind. Ct. App. 1983) (citing Levin & Sons,

       Inc. v. Mathys, 409 N.E.2d 1195 (Ind. Ct. App. 1980)).

       15
          This falls shy of the common law act of retraxit, which requires a formal repudiation of one’s right to
       pursue a claim. “An open and voluntary renunciation by a plaintiff of his suit, a retraxit, operates as a
       dismissal with prejudice.” Hodge v. Johnson, 852 N.E.2d 650, 652 (Ind. Ct. App. 2006), trans. denied; see also
       Ilagan v. McAbee, 634 N.E.2d 827, 829 (Ind. Ct. App. 1994).

       Court of Appeals of Indiana | Opinion 22A-MF-2184 | July 18, 2023                                  Page 18 of 22
[27]   Of course, the propriety of that order of dismissal in Foreclosure 2—and, by

       extension, the question of whether the Spencers were prejudiced by the

       dismissal of a protracted legal action—is not before us now. And, indeed, the

       trial court did not announce its reasons for granting the motion to dismiss, nor

       did it issue any order in response to the Spencers’ objection to the motion to

       dismiss, thereby denying the objection. What is clear, however, is that the

       order to dismiss was expressly entered without prejudice. A dismissal without

       prejudice is not a judgment on the merits of the dismissed claims, and the

       dismissal does not bar a future case raising those same claims. See, e.g., Zaremba

       v. Nevarez, 898 N.E.2d 459, 463 (Ind. Ct. App. 2008). As we have already

       noted, “a trial court’s grant of a plaintiff’s motion to voluntarily dismiss a suit

       . . . puts the parties back into the position of the suit never having been filed

       . . . .” Kenworthy, 185 N.E.3d at 411 (internal quotation omitted). The parties

       stand as if the prior suit had never been filed, restored to their original positions,

       free to file the suit again. The Spencers offer no compelling reason to abrogate

       that long settled principle.

       IV.     Summary Judgment

[28]   Having dispatched three reasons for which U.S. Bank may be precluded from

       summary judgment—the three the trial court ultimately relied upon to grant

       judgment in favor of the Spencers—we turn to the de novo question of whether

       the trial court erred in denying U.S. Bank’s motion for summary judgment.

[29]   “‘A mortgage is an interest in real property that secures a creditor’s right to

       repayment.’” U.S. Bank Tr. Nat’l Ass’n as Tr. of Am. Homeowner Pres. Tr. Series
       Court of Appeals of Indiana | Opinion 22A-MF-2184 | July 18, 2023          Page 19 of 22
       2015 A+ v. Dugger, 193 N.E.3d 1015, 1019–20 (Ind. Ct. App. 2022) (quoting

       McCullough v. CitiMortgage, Inc., 70 N.E.3d 820, 827 (Ind. 2017)) (internal

       quotation omitted). “Accordingly, an action to foreclose a mortgage is an in

       rem (i.e., against the property) proceeding.” Id. (citing Dipert v. Killingbeck, 124

       Ind. App. 18, 112 N.E.2d 306 (1953); 20 Ind. Law Encyc. Mortgages § 149

       (2022)). Nevertheless, “[u]pon a debtor’s default, in addition to the remedy of

       an in rem action of foreclosure, a creditor may sue to establish the debtor’s in

       personam (i.e., personal) liability for any deficiency on the debt and may enforce

       a judgment against the debtor’s personal assets.” Id. (citing McCullough, 70

       N.E.3d 820.)

[30]   Thus, in order to prevail on its summary judgment motion, U.S. Bank must

       demonstrate that the Spencers were in default under the terms of the note and

       mortgage. It may then recover in accordance with the terms of the mortgage

       instrument. “The basic requirements for a contract are offer, acceptance,

       consideration, and a meeting of the minds between the contracting parties on all

       essential elements or terms of the transaction.” Paul Terrault & Gary Cmty. Sch.

       Corp. v. Scheere, 200 N.E.3d 490, 495 (Ind. Ct. App. 2022) (citing Jernas v. Gumz,

       53 N.E.3d 434, 444 (Ind. Ct. App. 2016), trans. denied). Once the terms are

       agreed upon, a party violating those terms may be sued for breach of contract.

       Here, the parties do not appear to contest that the Spencers were in default,

       and, thus, in violation of the mortgage instrument’s terms. See Appellant’s Br.

       p. 9 (“After December 13, 2013, no further payments or credits were made.”);

       Appellee’s Br. p. 5 (“The Bank’s statement of facts is acceptable . . . .”). We

       Court of Appeals of Indiana | Opinion 22A-MF-2184 | July 18, 2023          Page 20 of 22
       find nothing in the designated evidence to suggest that the Spencers were in fact

       making the required payments and complying with their obligations under the

       note and mortgage. U.S. Bank made a prima facie case of default, and the

       Spencers offered no rebuttal. Thus, U.S. Bank is entitled to partial summary

       judgment on its foreclosure action.

[31]   Where the parties do disagree is on the amount owed, or damages. The

       Spencers identify a series of inconsistencies, unexplained charges, and a

       disparity between the amount of the loan and amount U.S. Bank claims it is

       owed that the Spencers say is not accounted for by the interest rate. U.S. Bank

       responds that the primary inconsistency identified is between an affidavit of

       debt, 16 and a prior affidavit from a foreclosure specialist filed in one of the prior

       litigations. Those factors are of no moment, however, as they go to the weight

       of the evidence, not to the question of the existence of a genuine issue of

       material fact. Moreover, given U.S. Bank’s repeated delays and multiple

       lawsuits, we also find that there is a genuine issue of material fact with respect

       to how much it is entitled to as far as “reasonable costs incur[ed] to collect [the]

       debt.” Appellant’s App. Vol. II p. 23. The mortgage terms further dictate that

       any attorney’s fees recovered must also be “reasonable.” Id. In short, the

       correct amounts owed under the note and mortgage is not conclusively dictated

       16
          The Spencers unsuccessfully sought to have the affidavit of debt stricken from the designated evidence.
       Attached to the motion was the conflicting affidavit from the previous case. Appellant’s App. Vol. II p. 89.
       The Spencers also designated the conflicting affidavit as evidence, flatly belying U.S. Bank’s claim that if the
       Spencers “had evidence that the current total due and owing on Ryan Spencer’s loan should be different, they
       failed to designate it.” Appellant’s Reply Br. p. 6.

       Court of Appeals of Indiana | Opinion 22A-MF-2184 | July 18, 2023                                 Page 21 of 22
       by the designated evidence. 17 That amount must be determined by further

       proceedings.

[32]   Accordingly, we reverse and remand with instructions to the trial court to

       vacate the judgment, enter a new order granting partial summary judgment to

       U.S. Bank on its foreclosure, and conduct further proceedings consistent with

       this opinion.

[33]   Reversed and remanded.

[34]   Vaidik, J., and Tavitas, J., concur.

       17
          A witness for U.S. Bank also indicated at trial that U.S. Bank would be willing to waive some of the fees
       listed in the designated evidence.

       Court of Appeals of Indiana | Opinion 22A-MF-2184 | July 18, 2023                                Page 22 of 22