Court Opinion

ID: 2815290
Source: CourtListenerOpinion
Date Created: 2015-07-08 15:20:39.518189+00
Date Added: 2024-06-11T08:50:25.653646
License: Public Domain

Jul 08 2015, 8:53 am

ATTORNEYS FOR APPELLANT                                    ATTORNEY FOR APPELLEES
Jeffrey C. Gerish                                          Michael J. Lewinski
Plunkett Cooney                                            Ice Miller LLP
Bloomfield Hills, Michigan                                 Indianapolis, Indiana
Pamela A. Paige
J. Dustin Smith
Plunkett Cooney
Indianapolis, Indiana

                                            IN THE
    COURT OF APPEALS OF INDIANA

2513-2515 South Holt Road                                  July 8, 2015
Holdings, LLC,                                             Court of Appeals Case No.
                                                           49A02-1407-MF-525
Appellant-Plaintiff,
                                                           Appeal from the Marion Superior
        v.                                                 Court
                                                           The Honorable Cynthia J. Ayers,
                                                           Judge
Holt Road, LLC, Res Holt Road,
LLC, MSP Holt Road, LLC,                                   Cause No. 49D04-1307-MF-27337
K3D Holt Road, LLC, and Roll
& Hold Warehousing &
Distribution Corp.,
Appellees-Defendants.

Brown, Judge.

Court of Appeals of Indiana | Opinion 49A02-1407-MF-525 | July 8, 2015                      Page 1 of 17
[1]   2513-2515 South Holt Road Holdings, LLC (“Lender”) appeals the trial court’s

      Final Judgment Regarding Tax Refunds in favor of Holt Road, LLC, Res Holt

      Road, LLC, MSP Holt Road, LLC, K3D Holt Road, LLC, and Roll & Hold

      Warehousing & Distribution Corp. (collectively, “Borrowers”). Lender raises

      one issue, which we revise and restate as whether the court erred in ruling that

      the Lender is not entitled to recover certain property tax refunds received by

      Borrowers. We reverse and remand.1

                                       Facts and Procedural History

[2]   Borrowers were the record owners of real property located in Marion County

      commonly known as 2513-2515 South Holt Road, Indianapolis, Indiana (the

      “Real Estate”). On December 21, 2006, Borrowers executed and delivered to

      Wachovia Bank, National Association (“Wachovia”) a certain Promissory

      Note in the original principal amount of $5,094,240, which was amended by an

      Amendment to Promissory Note dated May 25, 2010 (collectively, the “Note”).

      In connection with the execution of the Note, Borrowers executed a Mortgage,

      Security Agreement and Fixture Filing dated December 21, 2006, and recorded

      January 3, 2007, and an Amendment to Mortgage, Security Agreement and

      Fixture Filing dated May 25, 2010, and recorded June 1, 2010 (collectively, the

      “Mortgage”). In addition, other documents related to the loan were executed

      including: (A) an Assignment of Leases and Rents dated December 21, 2006,

      1
       On June 22, 2015, we held oral argument in Indianapolis. We commend counsel for their effective
      advocacy.

      Court of Appeals of Indiana | Opinion 49A02-1407-MF-525 | July 8, 2015                      Page 2 of 17
      and recorded January 3, 2007; (B) a Lockbox Account and Security Agreement

      dated December 10, 2009; (C) a Cash Management Agreement dated

      December 10, 2009, which was amended by an Amendment to Cash

      Management Agreement dated May 25, 2010; and (D) an Amendment to Loan

      Documents dated May 25, 2010 (the Note, Mortgage, and documents listed in

      (A)-(D) collectively, the “Loan Documents”). Wachovia’s rights and interest in

      and by the Loan Documents were ultimately assigned to Lender through

      various assignments.

[3]   Borrowers defaulted under the terms of the Note by failing to make payments

      beginning in May 2013, and no loan payment has been made since April 2013.

      As of July 2013, there was due and owing to Lender under the Loan

      Documents the principal amount of $5,013,663.00, plus $70,464.25 in interest,

      $28,410.57 in default interest, $4,496.48 in late charges, $840.62 in property

      protective advances, $859,532.26 in prepayment premiums, $345.00 in

      administrative fees, and $5,414.37 in legal fees, less a combined escrow offset of

      $247,181.76. Thus, the total due was $5,735,984.79, plus interest at the default

      rate of 12.06 percent per annum accruing from and after July 1, 2013.

[4]   The loan evidenced by the Note is a limited recourse loan and specifically

      provides in § 3.6, titled “Exculpation,” as follows:

              (a) Borrower shall be liable upon the indebtedness evidenced hereby
              and for the other obligations arising under the Loan Documents to the
              full extent (but only to the extent) of the security therefor, the same
              being all properties (whether real or personal), rights, estates and
              interests now or at any time hereafter securing the payment of this

      Court of Appeals of Indiana | Opinion 49A02-1407-MF-525 | July 8, 2015        Page 3 of 17
         Note and/or the other obligations of Borrower under the Loan
         Documents (collectively, the “Property”);
         (b) if a default occurs in the timely and proper payment of all or any
         part of such indebtedness evidenced hereby or in the timely and proper
         performance of the other obligations of Borrower under the Loan
         Documents, any judicial proceedings brought by Lender against
         Borrower shall be limited to the preservation, enforcement and
         foreclosure, or any thereof, of the liens, security titles, estates,
         assignments, rights and security interests now or at any time hereafter
         securing the payment of this Note and/or the other obligations of
         Borrower under the Loan Documents, and no attachment, execution
         or other writ of process shall be sought, issued or levied upon any
         assets, properties or funds of Borrower other than the Property, except
         with respect to the liability described below in this section; and
         (c) in the event of a foreclosure of such liens, security titles, estates,
         assignments, rights or security interests securing the payment of this
         Note and/or the other obligations of Borrower under the Loan
         Documents, no judgment for any deficiency upon the indebtedness
         evidenced hereby shall be sought or obtained by Lender against
         Borrower, except with respect to the liability described below in this
         section; provided, however, that notwithstanding the foregoing
         provisions of this section, Borrower shall be fully and personally liable
         and subject to legal action . . . (v) for rents, issues, profits and revenues
         of all or any portion of the Property received or applicable to a period
         after the occurrence of any Event of Default hereunder or under the
         Loan Documents which are not either applied to the ordinary and
         necessary expenses of owning and operating the Property or paid to
         Lender . . . .[2]

2
  Subsection (c) contains a recitation of numerous potential acts by which the Borrowers could become fully
and personally liable. The parties agree that none of the provisions contained in subsection (c) are applicable
in this case.

Court of Appeals of Indiana | Opinion 49A02-1407-MF-525 | July 8, 2015                             Page 4 of 17
Appellant’s Appendix at 40-41. The Mortgage contains a number of categories

of “Property” that secure the loan listed as Paragraphs (A)-(P) and specifically

includes the following:

        . . . BORROWER HEREBY IRREVOCABLY MORTGAGES,
        GRANTS, BARGAINS, SELLS, CONVEYS, TRANSFERS,
        PLEDGES, SETS OVER AND ASSIGNS . . . all of Borrower’s
        estate, right, title and interest in, to and under any and all of the
        following described property, whether now owned or hereafter
        acquired by Borrower (collectively, the “Property”):
                                                *****
        (H) All leases . . . license, concessions and occupancy agreements of
        all or any part of the Premises or the Improvements . . . now or
        hereafter entered into and all rents, royalties, issues, profits, bonus
        money, revenue, income, rights and other benefits (collectively, the
        “Rents and Profits”) of the Premises or the Improvements, now or
        hereafter arising from the use or enjoyment of all or any portion
        thereof or from any present or future Lease or other agreement
        pertaining thereto or arising from any of the Leases or any of the
        General Intangibles (as hereinafter defined) . . . subject, however, to
        the provisions contained in Section 2.7 hereinbelow; . . .
                                                *****
        (K) All present and future funds . . . claims, general intangibles
        (including, without limitation, trademarks, trade names, service marks
        and symbols now or hereafter used in connection with any part of the
        Premises or the Improvements, all names by which the Premises or the
        Improvements may be operated or known, all rights to carry on
        business under such names, and all rights, interest and privileges which
        Borrower has or may have as developer or declarant under any
        covenants, restrictions or declarations now or hereafter relating to the
        Premises or the Improvements) and all notes or chattel paper now or
        hereafter arising from or by virtue of any transactions related to the
        Premises or the Improvements (collectively, the “General Intangibles”);
        ...
                                                *****

Court of Appeals of Indiana | Opinion 49A02-1407-MF-525 | July 8, 2015            Page 5 of 17
                 (P) All other or greater rights and interests of every nature in the
                 Premises or the Improvements and in the possession or use thereof and
                 income therefrom, whether now owned or hereafter acquired by
                 Borrower.

      Id. at 62, 64.

[5]   On July 12, 2013, Lender filed its Complaint For Judgment and Foreclosure of

      Commercial Mortgage and Security Interest against Borrowers.3 Borrowers

      acknowledged that default had occurred and cooperated with Lender in having

      a receiver appointed over the Real Estate in October 2013, and on January 24,

      2014, the court issued a Consent Order Granting In Rem Judgment and Decree

      of Foreclosure of the Real Estate (the “Foreclosure Decree”). In the

      Foreclosure Decree, the court specifically found:

                 The parties agree that absent liability under Paragraph 3.6 (c) of the
                 Note (the “Limited Recourse Provisions”), [Lender’s] collection of its
                 judgment herein shall be limited to the Mortgaged Property and no
                 judgment for any deficiency, if any, shall be pursued by [Lender] or
                 entered by the Court against any Defendant, guarantor, indemnitor, or
                 any individual member, owner or partner of any of the [Borrowers].
                 Nothing herein precludes [Lender] from seeking a judgment on the
                 deficiency, if any, against [Borrowers] or any guarantors, if [Lender]
                 later determines liability exists under the Limited Recourse Provisions.

      3
          The Complaint is not contained in the record on appeal.

      Court of Appeals of Indiana | Opinion 49A02-1407-MF-525 | July 8, 2015            Page 6 of 17
      Appellees’ Appendix at 34. The Real Estate was subsequently sold to Lender at

      a Sheriff’s sale for $2.7 million, or less than the amount in the Foreclosure

      Decree, thereby resulting in a deficiency.

[6]   Meanwhile, in November 2013, while the foreclosure proceedings were

      pending, Borrowers notified Lender that they had obtained $307,193.76 from

      the Marion County Treasurer as a refund from an appeal of real estate taxes

      relating to tax years 2008-2011 (the “Tax Refunds”).4 The parties disputed

      whether the Tax Refunds should be distributed to Borrowers or Lender,

      Borrowers deposited said Tax Refunds into an escrow account with the court,

      and on December 9, 2013, the parties filed briefs on the issue. On May 14,

      2014, the court held a hearing on the issue and heard argument, and at the

      conclusion of the hearing it asked the parties to submit proposed orders. On

      July 3, 2014, the court issued its Final Judgment Regarding Tax Refunds (the

      “Final Judgment”) in which it concluded that the Tax Refunds should be

      retained by Borrowers. The Final Judgment stated in part:

              7. [Borrowers] asserted that none of the loan documents explicitly
              gave [Lender] a security interest in the Tax Refunds. In the
              alternative, [Lender] contended that the Tax Refunds, although not
              referenced in the loan documents and notwithstanding the lack of
              specific language, should have been included, as a part of their security
              interest, under the definition of “general intangibles.”

      4
       Specifically, Borrowers were refunded various amounts corresponding with the following tax years: (A)
      $93,512.72 for tax year 2008; (B) $78,410.31 for tax year 2009; (C) $73,684.48 for tax year 2010; and (D)
      $69,674.45 for tax year 2011. The subtotal amount for those refunds of $315,281.96 was reduced by
      $8,088.20 for legal costs, resulting in a refund of $307,193.76.

      Court of Appeals of Indiana | Opinion 49A02-1407-MF-525 | July 8, 2015                           Page 7 of 17
        8. Ind. Code § 26-1-9.1-102(42) provides: “General intangible” means
        any personal property, including things in action, other than accounts,
        chattel paper, commercial tort claims, deposit accounts, documents,
        goods, instruments, investment property, letter-of-credit rights, letters
        of credit, money, and oil, gas, or other minerals before extraction. The
        term includes payment intangibles and software.” [sic] While [Lender]
        lists numerous bankruptcy cases which include tax refunds under the
        general intangible definition, the instant case is not a bankruptcy; it is a
        case involving the default of a limited recourse loan. The precedent
        supplied by [Lender] concerning bankruptcy “general intangible”
        concepts are inapplicable to this case.
        9. [Lender] also claimed that the Lock Box Agreement and Cash
        Management Agreement, in its comprehensive restrictions on the use
        of rents collected by [Borrowers], served to capture all monies received
        by [Borrowers] after Default. The Lock Box Agreement covered “all
        rents and profits to be deposited in the “Cash Collateral Account”.
        [sic] [Lender] argued that the Lockbox Agreement “simply gave
        [Lender] more control over the already secured funds.” However, the
        Tax Refunds were not rents or profits and therefore would not have
        been placed into the Lock Box.
        10. [Borrowers] further argued that they should be able to keep the tax
        refunds returned to them by the Marion County Treasurer because it
        was money they never should have paid in the first place and that the
        refunds represented personal funds not subject to seizure by [Lender]
        in this limited recourse transaction.
        11. To counter that argument, [Lender] contended that [Borrowers]
        agreed “they would be liable for ‘rents, issues, profits, and revenues of
        all or any portion of the Property received or applicable to a period
        after the occurrence of any Event of Default hereunder or of owning
        and operating the Property or paid to Lender …” However, their
        interpretation of that language did not account for the fact that the Tax
        Refunds were received after the 2013 Event of Default, but were
        accrued before the default, the refunds were not truly income of the
        property but were, instead, a reimbursement of monies paid from rent.
        Tax refunds were never proffered to secure the payment of this Note
        and/or any other obligations of Borrower pursuant to the loan
        agreement.

Court of Appeals of Indiana | Opinion 49A02-1407-MF-525 | July 8, 2015            Page 8 of 17
              12. [Lender] further argued that even if the Court found no security
              interest in the Tax Refunds, good public policy should not allow
              [Borrowers] to walk away from its loan obligations, with money in
              hand, since the loan was in default. But for the restrictive language in
              the limited recourse agreement, [Lender] would be correct, policy-
              wise. However, the parties bargained for certain limited recourse
              terms and the contract did not include a provision for [Lender] to own
              a security interest in a tax refund returned to [Borrowers] after a
              default.
              13. In order to include the Tax Refunds in the definition of security,
              the Court would be obliged to rewrite the contract when the parties did
              not negotiate for the inclusion of such refunds. . . .

      Id. at 8-10.

[7]   On July 21, 2014, the parties agreed to a Consent Order to Maintain Funds

      Pending Appeal in which Borrowers were ordered to place the Tax Refunds in

      an interest bearing account and not withdraw or disburse any of the funds

      “pending resolution of the Appeal, an agreement between the parties, or further

      order of the Court.” Id. at 13.

                                                    Discussion

[8]   The issue is whether the court erred in ruling that Lender is not entitled to

      recover the Tax Refunds. The trial court entered findings of fact and

      conclusions thereon pursuant to Ind. Trial Rule 52(A). We may not set aside

      the findings or judgment unless they are clearly erroneous. Menard, Inc. v. Dage-

      MTI, Inc., 726 N.E.2d 1206, 1210 (Ind. 2000), reh’g denied. In our review, we

      first consider whether the evidence supports the factual findings. Id. Second,

      we consider whether the findings support the judgment. Id. “Findings are

      Court of Appeals of Indiana | Opinion 49A02-1407-MF-525 | July 8, 2015         Page 9 of 17
      clearly erroneous only when the record contains no facts to support them either

      directly or by inference.” Quillen v. Quillen, 671 N.E.2d 98, 102 (Ind. 1996). A

      judgment is clearly erroneous if it relies on an incorrect legal standard. Menard,
726 N.E.2d at 1210. We give due regard to the trial court’s ability to assess the

      credibility of witnesses. Id. While we defer substantially to findings of fact, we

      do not do so to conclusions of law. Id. We do not reweigh the evidence; rather

      we consider the evidence most favorable to the judgment with all reasonable

      inferences drawn in favor of the judgment. Yoon v. Yoon, 711 N.E.2d 1265,

      1268 (Ind. 1999). We evaluate questions of law de novo and owe no deference

      to a trial court’s determination of such questions. Kwolek v. Swickard, 944
N.E.2d 564, 570 (Ind. Ct. App. 2011) (citing McCauley v. Harris, 928 N.E.2d
309, 313 (Ind. Ct. App. 2010), reh’g denied, trans. denied), trans. denied.

[9]   “When interpreting a contract, our paramount goal is to ascertain and

      effectuate the intent of the parties.” Stewart v. TT Commercial One, LLC, 911
N.E.2d 51, 56 (Ind. Ct. App. 2009), trans. denied. “Interpretation of a contract

      is a pure question of law and is reviewed de novo.” Dunn v. Meridian Mut. Ins.

      Co., 836 N.E.2d 249, 252 (Ind. 2005). If a contract’s terms are clear and

      unambiguous, courts must give those terms their clear and ordinary meaning.

      Id. Courts should interpret a contract so as to harmonize its provisions, rather

      than place them in conflict. Id. “We will make all attempts to construe the

      language of a contract so as not to render any words, phrases, or terms

      ineffective or meaningless.” Rogers v. Lockard, 767 N.E.2d 982, 992 (Ind. Ct.

      App. 2002). “A contract will be found to be ambiguous only if reasonable

      Court of Appeals of Indiana | Opinion 49A02-1407-MF-525 | July 8, 2015        Page 10 of 17
       persons would differ as to the meaning of its terms.” Beam v. Wausau Ins. Co.,

       765 N.E.2d 524, 528 (Ind. 2002), reh’g denied. “When a contract’s terms are

       ambiguous or uncertain and its interpretation requires extrinsic evidence, its

       construction is a matter for the factfinder.” Johnson v. Johnson, 920 N.E.2d 253,

       256 (Ind. 2010).

[10]   Lender argues that the security interest described in the Loan Documents

       employs language which is extremely broad and extends to any money having

       any connection with the premises. Lender specifically points to § 3.6(a) of the

       Note and Paragraphs (K) and (P) of “Property” from the Mortgage and argues

       that “[t]he clear intent of the parties in connection with the Mortgage was to

       allow [Lender] to recover any money having anything to do with the Real

       Estate in the event of a default.” Appellant’s Brief at 11. Lender argues that

       Borrowers and the court “placed too much emphasis on the limited-recourse

       nature of the Note” and that “[t]he fact that the Note is limited recourse means

       only that [Lender] cannot seize on assets that are unrelated to the Real Estate,

       or that otherwise do not constitute collateral.” Id. at 12.

[11]   Lender directs our attention to four categories of Property described in the

       Mortgage as alternative bases for reversal. The first three categories are

       described in Paragraph (K). Specifically, Lender argues that the Tax Refunds

       “clearly constitute[] ‘funds,’” under that paragraph and cites to various

       dictionary definitions, including “available pecuniary resources” and

       “[a]vailable money; ready cash: short on funds.” Appellant’s Brief at 13 (quoting

       MERRIAM-WEBSTER’S COLLEGIATE DICTIONARY (10th ed. 2001); AMERICAN

       Court of Appeals of Indiana | Opinion 49A02-1407-MF-525 | July 8, 2015   Page 11 of 17
       HERITAGE (4th ed. 2006)). Lender maintains that Borrowers and the court

       have each characterized the Tax Refunds as “funds” and asserts that “there can

       be no serious argument that the [Tax Refunds] do not constitute ‘funds’ under

       the plain, ordinary meaning of that word.” Id. at 14. Lender further maintains

       that the Tax Refunds “clearly meet[] the description ‘now or hereafter arising

       from or by virtue of any transactions related to the premises,’” and it notes that

       “transaction” is defined as “an exchange or transfer of goods, services, or funds

       . . . .” Id. Lender next asserts that it has a security interest in the Tax Refunds

       because their interest extends to “claims” under Paragraph (K), arguing that

       “[e]ven before the tax refund was issued to [Borrowers], it constituted a ‘claim’

       to which [Lender] held a security interest” which “clearly arose from or by

       virtue of a transaction related to the Premises.” Id. at 15. Lender notes that

       Ind. Code § 6-8.1-9-1 provides that “a person seeking a tax refund ‘may file a

       claim for a refund with the department.’” Id. Lender further asserts that if this

       court decides that the Tax Refunds do not “constitute ‘funds’ or ‘money,’ then

       it most certainly constitutes a ‘general intangible’” and cites to certain

       bankruptcy cases which find that tax refunds qualify as general intangibles. Id.

       at 17. Finally, Lender argues that Paragraph (P) operates as “a catch-all

       provision” and grants Lender a security interest in the Tax Refunds should the

       language of Paragraph (K) not apply. Id. at 18.

[12]   Borrowers argue that the Mortgage gives Lender a security interest in certain

       property which is “defined at great length, and with specificity, in the first three

       pages of the Mortgage” and that “[n]otably absent from the definition of

       Court of Appeals of Indiana | Opinion 49A02-1407-MF-525 | July 8, 2015       Page 12 of 17
       ‘Property’ is any mention of property tax refunds.” Appellees’ Brief at 10-11.

       Borrowers contend that the categories of Property in the Mortgage including

       funds, claims, or general intangibles “are qualified by the language: ‘arising

       from or by virtue of any transactions related to the Premises or the

       Improvements’” and that “[c]ontrary to [Lender’s] assumption, the refund of an

       overpayment of property taxes is not a ‘transaction’ related to the premises.” Id.

       at 16. They direct the court’s attention to the definition of “transaction” found

       in Black’s Law Dictionary and argue that “[t]he government’s obligation to

       refund an overpayment of taxes” does not meet the definition “in the traditional

       legal and commercial use of that term.” Id. They assert that “[i]t is not an act

       or instance of conducting business, let alone an act in the formation,

       performance, or discharge of a contract,” that “[i]t is not a business agreement

       or exchange,” and that it “is not an activity involving two or more persons.” Id.

       at 16-17. Borrowers also assert that if Paragraph (P) “was as broad as [Lender]

       argues, it would have the effect of making the bargained-for limited recourse

       essentially meaningless.” Id.

[13]   Borrowers specifically argue that the limited recourse nature of the obligation

       stated in § 3.6 of the Note prevents Lender from recovering the Tax Refunds to

       reduce any deficiency because the Property Tax Refunds are a personal asset

       which they would have retained had Marion County not erred in its original

       assessment, and accordingly the Loan Documents do not entitle Lender to

       collect those funds. They highlight the trial court’s conclusion that the Tax

       Refunds “were not truly income of the property but were[] instead a

       Court of Appeals of Indiana | Opinion 49A02-1407-MF-525 | July 8, 2015   Page 13 of 17
       reimbursement of monies paid from rent” and note further that the subsequent

       agreements in the Loan Documents did not alter this conclusion. Id.

       Borrowers assert that “[f]or example, even though rents are included in the

       definition of security, [they] had an absolute right to use rent income as they

       deemed appropriate – including distributions to themselves – at any time prior

       to an event of default” and that “[u]nder the Assignment, [Borrowers were]

       explicitly granted ‘a revocable license by Lender, to retain possession of the

       Leases and to collect, retain, use and distribute and enjoy the Rents unless and

       until there shall be an Event of Default . . . .” Id. at 19-20. They argue that it

       would have been inequitable for the trial court to ignore the clear intent of the

       Note to exclude personal assets from the security interest, and that Lender

       “received what it bargained for in the event of a default – ownership of the real

       estate and the benefit of rents collected after the default.” Id. at 21.

[14]   Lender responds that Borrowers implicitly concede that the tax refund

       constitutes ‘funds,’ and that Borrowers’ claim to the refund constituted a

       ‘claim,’ by presenting no argument to the contrary and instead challenging

       whether the issuance of the property tax refund constituted a ‘transaction,’

       which “is without merit on its face.” Appellant’s Reply Brief at 3-4. Lender

       maintains that the refund qualifies under the language of the Mortgage as

       “arising from or by virtue of any transactions related to the Premises” under the

       Black’s Law Dictionary definition of “transaction” suggested by Borrowers as

       “[s]omething performed or carried out” or “[a]ny activity involving two or

       more persons.” Id. at 4. Lender further asserts that “the use of the phrase ‘or

       Court of Appeals of Indiana | Opinion 49A02-1407-MF-525 | July 8, 2015     Page 14 of 17
       by virtue of’ . . . means that the [Tax Refunds] fall within the description so

       long as [Borrowers’] initial payment of the property taxes constituted a

       ‘transaction[s] related to the Premises’—which clearly it did.” Id. at 5.

                                                       Decision

[15]   We begin with Lender’s contentions that the Tax Refunds are within its security

       interest because they qualify as “funds,” “claims,” or “general intangibles”

       under Paragraph (K) of the Mortgage, and we agree that the Tax Refunds

       qualify as “funds” under the plain and ordinary meaning of the term. As noted

       by Lender, the American Heritage Dictionary defines the term “funds” as

       “[a]vailable money; ready cash: short on funds.” AMERICAN HERITAGE

       DICTIONARY 712 (4th ed. 2006). Borrowers were issued a check for the Tax

       Refunds from the Marion County Treasurer in the amount of $307,193.76,

       which constituted money or funds available to them. Also, as observed by

       Lender, Borrowers do not articulate a reason why the Tax Refunds do not meet

       the plain and ordinary meaning of the term “funds.”

[16]   In order for the Tax Refunds to fall within Paragraph (K), though, such funds

       must have arisen “from or by virtue of any transactions related to the Premises

       or the Improvements.” First, to the extent the parties dispute the meaning of

       the term “transaction,” we observe that the Loan Documents themselves do not

       define the term. Black’s Law Dictionary defines transaction as follows:

               1. The act or an instance of conducting business or other dealings;
               esp., the formation, performance, or discharge of a contract. 2.
               Something performed or carried out; a business agreement or

       Court of Appeals of Indiana | Opinion 49A02-1407-MF-525 | July 8, 2015        Page 15 of 17
               exchange. 3. Any activity involving two or more persons. 4. Civil law.
               An agreement that is intended by the parties to prevent or end a
               dispute and in which they make reciprocal concessions. La. Civ. Code
               art. 3071.

       BLACK’S LAW DICTIONARY 1726 (10th ed. 2014).

[17]   Additionally, we observe that the Indiana Supreme Court has previously

       discussed the definition of “transaction” in the context of the meaning of that

       term for purposes of counterclaims:

               The word “transaction” has been defined as “the management or
               settlement of an affair,” Century Dict. “That which is done.”
               Webster’s Dict. “Transacting or conducting any business; negotiation;
               management; a proceeding.” Worcester’s Dict. “Transaction, as
               ordinarily employed, is understood to mean the doing or performing of
               some matter of business between two or more persons.” It is not
               confined to what is done in one day or at a single time or place.

       Muir v. Robinson, 205 Ind. 293, 299-300, 186 N.E. 289, 292 (1933); see also

       Middelkamp v. Hanewich, 173 Ind. App. 571, 588, 364 N.E.2d 1024, 1035 (1977)

       (“‘Transaction’ is a word of flexible meaning. It may comprehend a series of

       many occurrences, depending not so much upon their connection as upon their

       logical relationship.” (quoting Moore v. N.Y. Cotton Exchange, 270 U.S. 593, 610,

       46 S. Ct. 367, 371 (1926))).

[18]   Although the context in which the term “transaction” is different from that of

       Muir, we find the Court’s statements, relying on various dictionary definitions,

       to be instructive here. We find that the payment of property taxes is something

       “which is done,” falls within the scope of the management of an affair, and is

       Court of Appeals of Indiana | Opinion 49A02-1407-MF-525 | July 8, 2015      Page 16 of 17
       an activity involving two or more “persons,” the Borrowers and Marion County

       in this case, and thus we find such payment within the scope of the term

       “transaction” used in Paragraph (K). See also AMERICAN HERITAGE

       DICTIONARY 1831 (4th ed. 2006) (noting that the term “transaction” may be

       defined as “[t]he act of transacting or the fact of being transacted”).

[19]   Furthermore, we find that not only was the initial payment of property taxes a

       “transaction,” but it was also a transaction related to the Premises or the

       Improvements. Indeed, property tax assessments are based on the assessed

       value of the property. See Ind. Code § 6-1.1-2-3. The fact that Borrowers

       overpaid Marion County, and even that it was due to Marion County’s

       calculation, does not change our conclusion that such tax payments were

       related to the premises. Accordingly, we conclude that the Tax Refunds arose

       by virtue of the Borrowers’ previous property tax payments are transactions

       related to the premises, and are within Lender’s security interest provided by

       Paragraph (K).

                                                     Conclusion

[20]   For the foregoing reasons, we reverse the trial court’s judgment awarding

       receipt of the Tax Refunds to Borrowers and remand with instructions to enter

       judgment awarding receipt of the Tax Refunds to Lender.

[21]   Reversed and remanded.

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

       Court of Appeals of Indiana | Opinion 49A02-1407-MF-525 | July 8, 2015    Page 17 of 17