Court Opinion

ID: 3161104
Source: CourtListenerOpinion
Date Created: 2015-12-09 16:10:18.456553+00
Date Added: 2024-06-11T11:58:10.773576
License: Public Domain

Dec 09 2015, 6:06 am

      ATTORNEYS FOR APPELLANT                                   ATTORNEY FOR APPELLEE
      Mark J. Crandley                                          Jon R. Pactor
      Barnes & Thornburg, LLP                                   Indianapolis, Indiana
      Indianapolis, Indiana

      Richard Brad Gonon
      Indianapolis, Indiana

                                                 IN THE
          COURT OF APPEALS OF INDIANA

      Michael Fish,                                             December 9, 2015
      Appellant,                                                Court of Appeals Cause No.
                                                                49A02-1502-MF-100
              v.                                                Appeal from the Marion Superior
                                                                Court
      2444 Acquisitions, LLC,                                   The Honorable Michael Keele,
      Appellee.                                                 Judge
                                                                Trial Court Cause No.
                                                                49D07-1103-MF-10806

      Barnes, Judge.

                                              Case Summary
[1]   Michael Fish appeals the trial court’s grant of a motion for relief from judgment

      filed by 2444 Acquisitions, LLC (“Acquisitions”). We reverse.

      Court of Appeals of Indiana | Opinion 49A02-1502-MF-100 | December 9, 2015                   Page 1 of 12
                                                      Issue
[2]   Fish raises several issues, one of which we find dispositive and restate as

      whether the trial court properly granted Acquisitions’s motion for relief from

      judgment.

                                                      Facts
[3]   Fish obtained a mortgage on properties owned by Acquisitions, and in March

      2011, Fish filed a complaint against Acquisitions and others to foreclose the

      mortgage. In July 2011, the parties entered into an agreed entry, which the trial

      court approved. The agreed entry granted Fish a judgment in the amount of

      $263,308.73 plus interest and foreclosed the mortgage.

[4]   At some point prior to the sheriff’s sale, Acquisitions apparently filed a

      bankruptcy action. In August 2014, Fish testified before the bankruptcy court.

      At the time, Fish testified that, prior to 2011, he transferred the mortgage to

      Indianapolis Restaurant Ventures, LLC, (“IRV”). According to Fish, Fish

      owned forty percent of IRV, and Ruben Pazmino’s family trust owned sixty

      percent of IRV. The bankruptcy court raised concerns over the mortgage being

      held by IRV but Fish holding the judgment of foreclosure.

[5]   In December 2014, Acquisitions filed a motion for relief from judgment of the

      foreclosure and agreed entry. Acquisitions argued in part that the judgment

      was void because “Plaintiff failed to accurately represent his interest in the

      mortgage and failed to name a necessary party who holds an interest in the

      Court of Appeals of Indiana | Opinion 49A02-1502-MF-100 | December 9, 2015   Page 2 of 12
      mortgage.” App. p. 9. Acquisitions requested that the judgment be vacated

      and set aside.

[6]   Fish filed an objection and argued that he did not “ever transfer to any other

      party his mortgage interest relative to said Judgment” and that he remained the

      real party in interest. Id. at 12. Fish also argued that the motion was based on

      misrepresentation and was not timely under Indiana Trial Rule 60(B). Fish

      further argued, with respect to Acquisitions’s position that the judgment was

      void, that the motion was not filed within a reasonable time pursuant to

      Indiana Trial Rule 60(B).

[7]   At a hearing on the motion for relief from judgment, Fish testified that, in 2010,

      Fish and Pazmino formed IRV and entered into an operating agreement. The

      purpose of IRV was to hold the mortgage on the properties at issue in this case.

      They later changed their minds about transferring the mortgage to IRV.

      According to Fish, Pazmino paid Fish, not IRV, $118,000 as an investment in

      the mortgage. Fish testified that he misspoke at the bankruptcy hearing.

[8]   The trial court found that Fish testified before the bankruptcy court that “he

      transferred the mortgage at issue in this case to another entity, [IRV], in late

      2010 or 2011.” App. p. 6. The trial court found that IRV was a real party in

      interest and should have been named as a party to this matter. Thus, the trial

      court found that “the judgment and agreed entry entered by the Court on or

      about July 5, 2011 is void and that Defendant’s verified motion for relief was

      filed within a reasonable time per Ind. Trial Rule 60(B).” Id. Fish now appeals.

      Court of Appeals of Indiana | Opinion 49A02-1502-MF-100 | December 9, 2015   Page 3 of 12
                                                    Analysis
[9]    Fish argues that the trial court abused its discretion by granting Acquisitions’s

       motion for relief from judgment under Indiana Trial Rule 60(B). The propriety

       of relief under Trial Rule 60(B) is a matter entrusted to the trial court’s equitable

       discretion. Citimortgage, Inc. v. Barabas, 975 N.E.2d 805, 812 (Ind. 2012). An

       abuse of that discretion may occur if the trial court’s decision is clearly against

       the logic and effect of the facts and circumstances before it or if the trial court

       has misinterpreted the law. Id. Although this court normally employs an abuse

       of discretion standard in reviewing a trial court’s ruling on a motion to set aside

       a judgment, when a motion for relief from judgment is made pursuant to Trial

       Rule 60(B)(6) alleging that the judgment is void, discretion on the part of the

       trial court is not employed because whether the judgment is void or valid is a

       question of law. Deutsche Bank Nat. Trust Co. v. Harris, 985 N.E.2d 804, 813

       (Ind. Ct. App. 2013). The burden is on the movant to establish grounds for

       Trial Rule 60(B) relief. In re Paternity of P.S.S., 934 N.E.2d 737, 740 (Ind. 2010).

[10]   Trial Rule 60(B) provides:

               On motion and upon such terms as are just the court may relieve
               a party or his legal representative from a judgment, including a
               judgment by default, for the following reasons:

                  (1)      mistake, surprise, or excusable neglect;

                  (2)      any ground for a motion to correct error, including
                           without limitation newly discovered evidence, which by

       Court of Appeals of Indiana | Opinion 49A02-1502-MF-100 | December 9, 2015   Page 4 of 12
                    due diligence could not have been discovered in time to
                    move for a motion to correct errors under Rule 59;

           (3)      fraud (whether heretofore denominated intrinsic or
                    extrinsic), misrepresentation, or other misconduct of an
                    adverse party;

           (4)      entry of default or judgment by default was entered
                    against such party who was served only by publication
                    and who was without actual knowledge of the action
                    and judgment, order or proceedings;

           (5)      except in the case of a divorce decree, the record fails to
                    show that such party was represented by a guardian or
                    other representative, and if the motion asserts and such
                    party proves that

                 (a)     at the time of the action he was an infant or
                         incompetent person, and

                 (b)     he was not in fact represented by a guardian or
                         other representative, and

                 (c)     the person against whom the judgment, order or
                         proceeding is being avoided procured the judgment
                         with notice of such infancy or incompetency, and,
                         as against a successor of such person, that such
                         successor acquired his rights therein with notice that
                         the judgment was procured against an infant or
                         incompetent, and

                 (d)     no appeal or other remedies allowed under this
                         subdivision have been taken or made by or on
                         behalf of the infant or incompetent person, and

Court of Appeals of Indiana | Opinion 49A02-1502-MF-100 | December 9, 2015    Page 5 of 12
                        (e)     the motion was made within ninety [90] days after
                                the disability was removed or a guardian was
                                appointed over his estate, and

                        (f)     the motion alleges a valid defense or claim;

               (6)      the judgment is void;

               (7)      the judgment has been satisfied, released, or discharged, or
                        a prior judgment upon which it is based has been reversed
                        or otherwise vacated, or it is no longer equitable that the
                        judgment should have prospective application; or

               (8)      any reason justifying relief from the operation of the
                        judgment, other than those reasons set forth in sub-
                        paragraphs (1), (2), (3), and (4).

               The motion shall be filed within a reasonable time for reasons
               (5), (6), (7), and (8), and not more than one year after the
               judgment, order or proceeding was entered or taken for reasons
               (1), (2), (3), and (4). A movant filing a motion for reasons (1),
               (2), (3), (4), and (8) must allege a meritorious claim or defense.
               A motion under this subdivision (B) does not affect the finality of
               a judgment or suspend its operation. This rule does not limit the
               power of a court to entertain an independent action to relieve a
               party from a judgment, order or proceeding or for fraud upon the
               court. Writs of coram nobis, coram vobis, audita querela, and
               bills of review and bills in the nature of a bill of review, are
               abolished, and the procedure for obtaining any relief from a
               judgment shall be by motion as prescribed in these rules or by an
               independent action.

[11]   Acquisitions’s motion was filed more than one year after the agreed judgment

       was entered. Consequently, Acquisitions could not be granted relief under

       Court of Appeals of Indiana | Opinion 49A02-1502-MF-100 | December 9, 2015   Page 6 of 12
       sections (1), (2), (3), or (4), which include relief based on fraud,

       misrepresentation, or other misconduct of an adverse party. Instead,

       Acquisitions argued in its motion for relief from judgment that it was entitled to

       relief because the judgment was “void.” App. p. 9.

[12]   Fish argues that a real party in interest claim does not render a judgment void.

       In general, “‘[a] void judgment is a nullity, and typically occurs where the court

       lacks subject matter or personal jurisdiction.’” Seleme v. JP Morgan Chase Bank,

       982 N.E.2d 299, 304 (Ind. Ct. App. 2012) (quoting 22B STEPHEN E. ARTHUR,

       INDIANA PRACTICE § 60.2 (2012)), trans. denied; see also Moore v. Terre Haute First

       Nat’l Bank, 582 N.E.2d 474, 477 (Ind. Ct. App. 1991) (“If a judgment is void,

       whether from faulty process or otherwise, a T.R. 60(B) claimant need not show

       a meritorious defense or claim.”).

[13]   The parties make no argument that personal jurisdiction or faulty process is an

       issue here. Rather, on appeal, Acquisitions claims that this “case does involve

       the court’s jurisdiction” and argues that the real party in interest requirement is

       comparable to standing. Acquisitions’s argument fails for several reasons.

       First, standing and the real party in interest rule are separate concepts. Hammes

       v. Brumley, 659 N.E.2d 1021, 1029 (Ind. 1995). “Standing refers to the question

       of whether a party has an actual demonstrable injury for purposes of a lawsuit.”

       Id. “A real party in interest, on the other hand, is the person who is the true

       owner of the right sought to be enforced.” Id. at 1030. The real party in interest

       “is entitled to the fruits of the action.” Id.

       Court of Appeals of Indiana | Opinion 49A02-1502-MF-100 | December 9, 2015   Page 7 of 12
[14]   Neither concept implicates subject matter jurisdiction. In K.S. v. State, 849
N.E.2d 538, 540 (Ind. 2006), our supreme court clarified:

                Like the rest of the nation’s courts, Indiana trial courts possess
                two kinds of “jurisdiction.” Subject matter jurisdiction is the
                power to hear and determine cases of the general class to which
                any particular proceeding belongs. Personal jurisdiction requires
                that appropriate process be effected over the parties. Where these
                two exist, a court’s decision may be set aside for legal error only
                through direct appeal and not through collateral attack. Other
                phrases recently common to Indiana practice, like “jurisdiction
                over a particular case,” confuse actual jurisdiction with legal
                error, and we will be better off ceasing such characterizations.

[15]   The K.S. court went on to explain, “Attorneys and judges alike frequently

       characterize a claim of procedural error as one of jurisdictional dimension.”

       K.S., 849 N.E.2d at 541. “‘The question of subject matter jurisdiction entails a

       determination of whether a court has jurisdiction over the general class of

       actions to which a particular case belongs.’” Id. at 542 (quoting Troxel v. Troxel,

       737 N.E.2d 745, 749 (Ind. 2000)). “Real jurisdictional problems would be, say,

       a juvenile delinquency adjudication entered in a small claims court, or a

       judgment rendered without any service of process. Thus, characterizing other

       sorts of procedural defects as ‘jurisdictional’ misapprehends the concepts.” 1 Id.

       1
         Acquisitions relies upon Pence v. State, 652 N.E.2d 486, 488 (Ind. 1995), which held “[t]he standing
       requirement is a limit on the court’s jurisdiction which restrains the judiciary to resolving real controversies in
       which the complaining party has a demonstrable injury.” However, Pence predated K.S., 849 N.E.2d at 540-
       42, which clarified jurisdiction concepts. Consequently, Pence is not persuasive here.

       Court of Appeals of Indiana | Opinion 49A02-1502-MF-100 | December 9, 2015                            Page 8 of 12
[16]   The trial court here clearly had jurisdiction over the general class of actions to

       which a particular case belongs, i.e., a foreclosure action. Consequently,

       subject matter jurisdiction is not implicated here. Rather, “a party’s legal

       capacity . . . to assert its claim” implicates legal error, not jurisdiction over the

       subject matter. Family Dev., Ltd. v. Steuben Cnty. Waste Watchers, Inc., 749
N.E.2d 1243, 1255 n.10 (Ind. Ct. App. 2001) (internal citations omitted). We

       reached a similar result in Warner v. Young America Volunteer Fire Department,

       164 Ind. App. 140, 326 N.E.2d 831 (1975). There, a defendant argued in a

       motion for relief from judgment that the plaintiff had filed its action as “The

       Young America Volunteer Fire Department,” but its true name was “Young

       America Vol. Fire Department, Inc.” Warner, 164 Ind. App. 147, 326 N.E.2d

       at 836. Although the defendant argued that the judgment was void, we held

       that the trial court had jurisdiction and that the plaintiff’s capacity to sue could

       not be raised for the first time in a motion for relief from judgment “under the

       guise that the judgment is void.” Id. at 149, 326 N.E.2d at 836; see also K.S. v.

       R.S., 669 N.E.2d 399, 404-05 (Ind. 1996) (holding that the failure to add a

       necessary party resulted in a voidable, but not void judgment).

[17]   We also note that Indiana Trial Rule 17 discusses real parties in interest and

       provides:

               No action shall be dismissed on the ground that it is not
               prosecuted in the name of the real party in interest until a

       Court of Appeals of Indiana | Opinion 49A02-1502-MF-100 | December 9, 2015   Page 9 of 12
               reasonable time after objection has been allowed for the real
               party in interest to ratify the action, or to be joined or substituted
               in the action. Such ratification, joinder, or substitution shall have
               the same effect as if the action had been commenced initially in
               the name of the real party in interest.

       Consequently, a real party in interest argument is capable of being waived,

       unlike a subject matter jurisdiction argument. See Town Council of New Harmony

       v. Parker, 726 N.E.2d 1217, 1223 n.8 (Ind. 2000) (holding that lack of subject

       matter jurisdiction cannot be waived), amended on reh’g in part, 737 N.E.2d 719

       (Ind. 2000).

[18]   We conclude that the agreed judgment is not void under Indiana Trial Rule

       60(B)(6). This is not a case where the trial court lacked subject matter or

       personal jurisdiction. Consequently, the trial court erred when it determined

       that Acquisitions was entitled to relief under Indiana Trial Rule 60(B)(6).

[19]   Acquisitions also argues that the trial court properly voided the judgment for

       misrepresentation, fraud, and fraud on the court. These allegations fall under

       Indiana Trial Rule 60(B)(3), and a motion requesting relief under Rule 60(B)(3)

       must be filed within one year of the judgment. Acquisitions’s motion was not

       timely under Rule 60(B)(3). See, e.g., In re Adoption of Infant Female Fitz, 778

       Court of Appeals of Indiana | Opinion 49A02-1502-MF-100 | December 9, 2015   Page 10 of 12
N.E.2d 432, 436 (Ind. Ct. App. 2002) (noting that a fraud on the court claim

       was subject to the one year time limit of Rule 60(B)). 2

[20]   Next, Acquisitions seems to argue that it was entitled to relief under Trial Rule

       60(B)(8), which provides for relief based on “any reason justifying relief from

       the operation of the judgment, other than those reasons set forth in sub-

       paragraphs (1), (2), (3), and (4).” Relief under Trial Rule 60(B)(8) is not limited

       by the one year after the judgment limitation; rather, it must be filed within a

       reasonable time. “[S]ubdivision (8) is not available if the grounds for relief

       properly belong in another of the enumerated subdivision of T.R. 60(B).”

       Weppler v. Stansbury, 694 N.E.2d 1173, 1176 (Ind. Ct. App. 1998). The grounds

       for relief here properly belong in Rule 60(B)(3) as a misrepresentation or fraud

       allegation. Acquisitions cannot bypass the one year time limitation by merely

       arguing that Rule 60(B)(8) applies.

[21]   Finally, Acquisitions also argues that, if we reverse the trial court’s order, we

       should remand for the trial court to redetermine the balance of the judgment.

       Acquisitions argued in its motion for relief from judgment that the post-

       judgment interest was incorrect and that Fish had misrepresented the amount

       paid by Acquisitions toward the mortgage balance. Both of these allegations

       2
         In Jahangirizadeh v. Pazouki, 27 N.E.3d 1178 (Ind. Ct. App. 2015), we discussed the three ways to bring a
       fraud on the court claim, which include a Trial Rule 60(B)(3) claim, an independent action for fraud, and
       invoking the inherent power of a court to set aside its judgment if procured by fraud on the court. There is no
       indication here that Acquisitions was bringing an independent action for fraud or invoking the trial court’s
       inherent power to set aside a judgment procured by fraud on the court.

       Court of Appeals of Indiana | Opinion 49A02-1502-MF-100 | December 9, 2015                       Page 11 of 12
       fall within Rule 60(B)’s one year time limitation. Consequently, these

       allegations do not warrant relief under Rule 60(B).

                                                  Conclusion
[22]   We reverse the trial court’s grant of Acquisitions’s motion for relief from

       judgment pursuant to Indiana Trial Rule 60(B).

[23]   Reversed.

[24]   Kirsch, J., and Najam, J., concur.

       Court of Appeals of Indiana | Opinion 49A02-1502-MF-100 | December 9, 2015   Page 12 of 12