Court Opinion

ID: 3207511
Source: CourtListenerOpinion
Date Created: 2016-05-27 15:03:37.32257+00
Date Added: 2024-06-11T14:29:01.495485
License: Public Domain

MEMORANDUM DECISION
                                                                                          FILED
Pursuant to Ind. Appellate Rule 65(D),                                            May 27 2016, 7:41 am

this Memorandum Decision shall not be                                                     CLERK
                                                                                      Indiana Supreme Court
regarded as precedent or cited before any                                                Court of Appeals
                                                                                           and Tax Court
court except for the purpose of establishing
the defense of res judicata, collateral
estoppel, or the law of the case.

ATTORNEY FOR APPELLANTS                                 ATTORNEY FOR APPELLEE
F. Harrison Green                                       Pamela A. Paige
Cincinnati, Ohio                                        Plunkett Cooney, P.C.
                                                        Indianapolis, Indiana

                                          IN THE
    COURT OF APPEALS OF INDIANA

The Lewallen Revocable Trust,                           May 27, 2016
et al.,                                                 Court of Appeals Case No.
Appellants-Defendants,                                  15A01-1511-MF-2049
                                                        Appeal from the Dearborn Circuit
        v.                                              Court
                                                        The Honorable James D.
Fifth Third Mortgage Company,                           Humphrey, Judge
Appellee-Plaintiff.                                     Trial Court Cause No.
                                                        15C01-1102-MF-38

Najam, Judge.

Court of Appeals of Indiana | Memorandum Decision 15A01-1511-MF-2049 | May 27, 2016              Page 1 of 7
                                         Statement of the Case
[1]   Randall Lewallen1 (“Randall”) appeals the trial court’s “Post-Appeal In Rem

      Judgment Entry and Decree of Foreclosure” granting Fifth Third Mortgage

      Company (“Fifth Third”) a decree of foreclosure on Randall’s one-half interest

      in the Lewallen Revocable Trust (“Trust”) property. On appeal, Randall raises

      three issues, which we consolidate and restate as follows: whether the law of

      the case doctrine precludes the trial court’s post-appeal order.

[2]   We reverse.

                                   Facts and Procedural History
[3]   On June 28, 2004, Hugh Lewallen (“Hugh”) and Kay Lewallen (“Kay”)

      created the Trust for the benefit of their son Randall, and Kay was appointed as

      the Trustee. On November 5, Hugh and Kay deeded their residence and real

      property (“the Property”) to the Trust. A few weeks later, Kay, as Trustee, took

      a $50,000 mortgage out on the Property with Fifth Third Bank.2 On December

      21, Kay, as Trustee, deeded a life estate in the Property to herself and Hugh,

      and she quitclaimed one-half of the remainder interest in the Property to the

      Trust and one-half of the remainder interest to Randall. Thus, Hugh and Kay

      1
       Both the Lewallen Revocable Trust (“Trust”) and Randall as an individual are listed as parties, but only
      Randall appeals since it is only his one-half interest in the property that is at issue.
      2
       The Trust Agreement granted the Trustee the right to borrow and secure payments of loans by pledging or
      mortgaging the Property in the Trust.

      Court of Appeals of Indiana | Memorandum Decision 15A01-1511-MF-2049 | May 27, 2016              Page 2 of 7
      had a life estate in the Property, the Trust had a one-half interest in the

      remainder, and Randall had the other one-half interest in the remainder.

[4]   On July 21, 2005, Kay, as Trustee, refinanced the $50,000 mortgage by

      executing and delivering a $100,000 Note (the “Note”) to Fifth Third, and she

      executed and delivered a mortgage on the Property to Fifth Third as security for

      the Note. Neither Randall nor Hugh nor Kay, as an individual, signed the

      mortgage. However, at some point after the July 21 closing, Hugh and Kay, as

      individuals, signed the mortgage, and someone3 signed Randall’s name to the

      mortgage. Randall never signed the Note or the mortgage, which was re-

      recorded on October 21, 2005.

[5]   Hugh and Kay died in 2010. At that point, one-half of the fee simple interest in

      the Property vested in the Trust, and the other half vested in Randall.

      However, under the terms of the Trust Agreement, the Trust’s one-half interest

      was bequeathed to Randall such that, following his parents’ deaths, he was both

      the Trustee and the sole beneficiary of the Trust.

[6]   On January 17, 2011, Fifth Third mailed notice of default on the mortgage to

      Hugh and Kay’s address and, on February 24, initiated foreclosure proceedings

      on the Property. Randall filed an answer and counter-claim alleging that Fifth

      Third had altered the mortgage by forging Randall’s signature, thereby voiding

      the mortgage as to him. It was uncontested that the proceeds received by Kay

      3
          There is no evidence of who signed Randall’s name to the mortgage.

      Court of Appeals of Indiana | Memorandum Decision 15A01-1511-MF-2049 | May 27, 2016   Page 3 of 7
      under the $100,000 Note were used to satisfy the original $50,000 Note and

      mortgage and to pay down over $20,000 in unsecured debts owed by Hugh and

      Kay. The balance of the $100,000, or $27,160.72, was deposited into Randall’s

      bank account. In its foreclosure action, Fifth Third claimed that it was entitled

      to foreclose on the entire Property, including Randall’s one-half interest, as the

      priority mortgage-holder under the doctrine of equitable subrogation. It did not

      contest that Randall never signed the Note or mortgage, but it claimed he was

      estopped from claiming an unburdened interest in the Property.

[7]   On August 26, 2014, the trial court entered an order: (1) granting Fifth Third in

      rem judgment for the amount due on the Note, interest, late charges, fees,

      escrow balance, post-judgment interest, and other costs; (2) allowing Fifth

      Third to foreclose on the Trust’s one-half interest in the Property; (3) ordering

      the Sheriff to sell that interest; (4) allowing Fifth Third to “foreclose the first

      $27,160 of sheriff’s sale proceeds as to [Randall’s] one-half interest” in the

      Property because Randall was estopped from benefiting from the loan proceeds

      underlying the $100,000 Note and mortgage; (5) and denying Randall’s

      counter-claims. Amended Appellant’s App. at 265.

[8]   As an individual and as the Trustee, Randall timely appealed and, in Lewallen

      Revocable Trust v. Fifth Third Mortgage Co., No. 15A01-1409-MF-396, 2015 WL
3500462 (Ind. Ct. App. June 2, 2015), another panel of this court affirmed the

      trial court’s order as to the Trust’s one-half interest in the Property but reversed

      the trial court’s order as to Randall’s one-half interest. As to the latter, we held

      that Fifth Third was not entitled to invoke the equitable defense of estoppel

      Court of Appeals of Indiana | Memorandum Decision 15A01-1511-MF-2049 | May 27, 2016   Page 4 of 7
      because it had notice of Randall’s interest in the Property from the recorded

      quitclaim deed. Id. at *6. We also held that, in the absence of culpable

      negligence, Fifth Third was entitled under the doctrine of equitable subrogation

      to the priority position of the first mortgage-holder as to the $50,000 mortgage

      because Fifth Third had refinanced that mortgage. Id. at *7-8. However, that

      was not the end of our inquiry or our opinion. We then addressed alteration of

      the mortgage document and held that, because Randall’s name and signature

      were added to the mortgage without his consent or knowledge, the mortgage

      with respect to Randall’s one-half interest in the Property was void based on the

      material alteration—Randall’s forged signature—of the mortgage document.

      Id. at *9. Thus, we reversed the trial court’s decree of foreclosure with respect

      to Randall’s one-half interest in the property.

[9]   Although we did not remand this case for further proceedings, on October 7,

      2015, following certification of our decision, Fifth Third filed with the trial

      court a “Motion for Entry of Post-Appeal Judgment Entry and Decree of

      Foreclosure.” Amended Appellant’s App. at 12. On November 5, without any

      further evidence or proceedings, the trial court issued its “Post-Appeal In Rem

      Judgment Entry and Decree of Foreclosure” that, notwithstanding this court’s

      prior decision, granted Fifth Third a decree of foreclose on Randall’s one-half

      interest in the Property “pursuant to the doctrine of equitable subrogation for

      Court of Appeals of Indiana | Memorandum Decision 15A01-1511-MF-2049 | May 27, 2016   Page 5 of 7
       the first $50,781.05 of the sheriff’s sale proceeds.” Amended Appellant’s App.

       at 311. This appeal ensued.4

                                         Discussion and Decision
[10]   The trial court’s post-appeal order is barred by the “law of the case” doctrine,

       under which an appellate court determination of a legal issue is binding on the

       trial court and on the court of appeals in any subsequent appeal in the same

       case and involving substantially the same facts. Hopkins v. State, 782 N.E.2d
988, 990 (Ind. 2003). Every issue raised in this appeal was already decided by

       this court’s previous decision. Lewallen, 2015 WL 3500462. The panel in

       Lewallen clearly and specifically held that, although Fifth Third did have the

       priority position under the mortgage pursuant to the doctrine of equitable

       subrogation, Fifth Third could not foreclose on Randall’s one-half interest in

       the Property because the mortgage with respect to his interest was void due to

       the material alteration of the mortgage document—i.e., the forgery of Randall’s

       signature. Id. at *8.

[11]   It is true that “when new facts are elicited on remand which materially affect

       the questions at issue, the trial court may apply the law to the new facts.” Estate

       of Martin by Martin v. Consolidated Rail Corp., 667 N.E.2d 219, 220 (Ind. Ct. App.

       1996); see also Am. Fam. Mut. Ins. Co. v. Federated Mut. Ins. Co., 800 N.E.2d 1015,

       4
         Randall did not in the previous appeal, and does not in this appeal, challenge the trial court’s order in favor
       of Fifth Third on his counter-claims.

       Court of Appeals of Indiana | Memorandum Decision 15A01-1511-MF-2049 | May 27, 2016                  Page 6 of 7
       1021 (Ind. Ct. App. 2004) (noting that we apply the law of the case doctrine

       unless “the evidence after remand was in accordance with our instructions or

       did not alter a matter that had already been finally determined.”). Here, in the

       first appeal, we decided the issues raised in this case, and no additional facts or

       evidence were elicited after we issued our memorandum decision.

[12]   We (once again) reverse the trial court’s order granting Fifth Third a decree of

       foreclosure on Randall’s one-half interest in the Property, and we remand to the

       trial court with instructions to enter judgment in favor of Randall as to his one-

       half interest in the Property.

[13]   Reversed.

       Robb, J., and Crone, J., concur.

       Court of Appeals of Indiana | Memorandum Decision 15A01-1511-MF-2049 | May 27, 2016   Page 7 of 7