Court Opinion

ID: 2787918
Source: CourtListenerOpinion
Date Created: 2015-03-20 15:04:43.334015+00
Date Added: 2024-06-11T11:28:44.751750
License: Public Domain

MEMORANDUM DECISION
                                                                           Mar 20 2015, 10:25 am

      Pursuant to Ind. Appellate Rule 65(D), this
      Memorandum Decision shall not be regarded as
      precedent or cited before any 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
      Johnny W. Ulmer                                          W. Russell Sanford
      Cataldo Law Offices, Inc.                                South Bend, Indiana
      Bristol, Indiana

                                                   IN THE
          COURT OF APPEALS OF INDIANA

      Mario L. Sims, Sr., and Tiffiny                          March 20, 2015
      Sims,                                                    Court of Appeals Case No.
                                                               71A05-1406-MF-283
      Appellants-Cross-Claimants,
                                                               Appeal from the
              v.                                               St. Joseph Superior Court
                                                               The Honorable Margot F. Reagan,
                                                               Judge
      John Tiffany,
                                                               Cause No. 71D04-1001-MF-164
      Appellee-Defendant.

      Kirsch, Judge.

[1]   Mario Sims, Sr., and Tiffiny Sims (“the Simses”) appeal the trial court’s denial

      of their motion for summary judgment and grant of John Tiffany’s (“Tiffany”)

      motion for summary judgment. On appeal, the Simses raise several issues, of

      which we find the following dispositive: whether John Tiffany’s debt arising

      from the Simes’s land contract was discharged in bankruptcy.

      Court of Appeals of Indiana | Memorandum Decision 71A05-1406-MF-283 | March 20, 2015         Page 1 of 4
[2]   We affirm.

                                 Facts and Procedural History
[3]   In 2008, the Simses entered into a land-sale contract with Tiffany, setting forth

      that the Simses would make monthly payments to Tiffany, who would in turn

      make mortgage payments to the bank that held the mortgage on the land (“the

      Bank”). The contract provided that the Simses could make mortgage payments

      directly to the Bank in lieu of the monthly payments under the contract if

      Tiffany was at any point unable to make the payments. In 2009, the Bank filed

      a foreclosure proceeding against both Tiffany and the Simses. At that point, the

      Simses had paid $26,000 in the form of a $12,000 down payment and ten

      monthly payments of $1,400 each.

[4]   The Simses attempted to assume the mortgage from Tiffany, but were unable to

      reach an agreement with the Bank. Subsequently, the Simses filed a cross-claim

      against Tiffany in the Bank’s foreclosure proceeding against Tiffany alleging,

      inter alia, that he had committed fraud by representing that he would make

      payments to the Bank on the Simses’ behalf and, thereafter, failing to do so.

[5]   Tiffany filed a petition in bankruptcy and was granted a discharge pursuant to

      Chapter 7 of the United States Bankruptcy Code1. Following the discharge, the

      Simses filed an adversary proceeding in bankruptcy court, alleging that the

      1
          11 U.S.C. § 727(b)

      Court of Appeals of Indiana | Memorandum Decision 71A05-1406-MF-283 | March 20, 2015   Page 2 of 4
      amount for which they were suing Tiffany was a non-dischargeable debt under

      11 U.S.C. § 523 (“Section 523”) because it was acquired via fraud. Tiffany and

      the Simses reached an agreement to settle the adversary proceeding under

      which Tiffany would issue the Simses a quitclaim deed to the property in

      exchange for the Simses stipulating to drop the adversary proceeding with

      prejudice. The agreement was executed and the proceeding was dismissed with

      prejudice on March 13, 2012.

[6]   After the adversary proceeding was dismissed, Tiffany and the Simses filed

      cross motions for summary judgment. The trial court granted Tiffany’s motion

      for summary judgment and denied the Simses’ motion, citing Tiffany’s

      discharge in bankruptcy. The trial court reasoned that absent any specific

      exemptions, Tiffany’s discharge in bankruptcy included the debt claimed by the

      Simses. The Simses now appeal.

                                     Discussion and Decision
[7]   Summary judgment is only proper where there is no genuine issue of material

      fact, and our standard of review is the same as it is for the trial court. Manley v.

      Sherer, 992 N.E.2d 670, 673 (Ind. 2013).

[8]   Tiffany’s discharge under Chapter 7 did not include any exceptions for any

      debts owed to the Simses. The Simses contend that Tiffany’s alleged debt is

      non-dischargeable as a matter of law and is excluded from Tiffany’s discharge.

      The Simses’ claim is without merit.

      Court of Appeals of Indiana | Memorandum Decision 71A05-1406-MF-283 | March 20, 2015   Page 3 of 4
[9]    Section 523 of the Bankruptcy Act states that a discharge under Chapter 7 does

       not discharge an individual debtor from any debt to the extent that debt was

       obtained by “false pretenses, a false representation, or actual fraud, other than a

       statement respecting the debtor’s or an insider’s financial condition.” 11 U.S.C.

       § 523(a)(2)(A).

[10]   Section 523 goes on to state that “the debtor shall be discharged from a debt of

       a kind specified in paragraph (2) . . . of subsection (a) . . . unless . . . the court

       determines such debt to be excepted from discharge.” 11 U.S.C. § 523(c)(1).

       Contrary to the Simses’ claim that Tiffany’s debt was non-dischargeable as a

       matter of law, the Bankruptcy Act specifically requires that such debts are

       discharged unless the Bankruptcy Court determines that it is non-dischargeable.

       Here, although the Simses commenced an adversary proceeding to determine

       the issue, but they agreed to dismiss it in exchange for a quitclaim deed to the

       property. As a result, there was no non-dischargeability determination by the

       bankruptcy court and the debt was discharged.

[11]   Because the debt owed by Tiffany to the Simses was discharged, summary

       judgment in favor of Tiffany was properly entered.

[12]   Affirmed.

       Friedlander, J., and Crone, J., concur.

       Court of Appeals of Indiana | Memorandum Decision 71A05-1406-MF-283 | March 20, 2015   Page 4 of 4