Court Opinion

ID: 4033549
Source: CourtListenerOpinion
Date Created: 2016-09-14 15:07:40.087582+00
Date Added: 2024-06-11T12:59:46.015265
License: Public Domain

FILED
                                                                         Sep 14 2016, 8:31 am

                                                                              CLERK
                                                                          Indiana Supreme Court
                                                                             Court of Appeals
                                                                               and Tax Court

      ATTORNEYS FOR APPELLANT                                   ATTORNEY FOR APPELLEE
      Michael J. Cork                                           Robert C. Beasley
      Jamie B. Dameron                                          Beasley Law Office
      Bamberger, Foreman, Oswald & Hahn,                        Muncie, Indiana
      LLP
      Indianapolis, Indiana

                                                  IN THE
          COURT OF APPEALS OF INDIANA

      Bayview Loan Servicing, LLC,                              September 14, 2016
      Appellant-Plaintiff and Counter-                          Court of Appeals Case No.
      Defendant,                                                18A02-1508-MI-1191
             v.                                                 Appeal from the Delaware Circuit
                                                                Court
      Golden Foods, Inc., and Lewis                             The Honorable Thomas A.
      R. Coulter,                                               Cannon, Jr., Judge
      Appellees-Defendants and                                  Trial Court Cause No.
      Counterclaimants.                                         18C05-1011-MI-39

      Pyle, Judge.

                                        Statement of the Case
[1]   Bayview Loan Servicing LLC (“Bayview”) appeals the trial court’s order

      entering judgment in favor of Golden Foods, Inc., (“Golden Foods”) and Lewis

      Court of Appeals of Indiana | Opinion 18A02-1508-MI-1191| September 14, 2016                Page 1 of 28
      Coulter (“Coulter”) on Bayview’s mortgage foreclosure claim and Golden

      Food’s conversion counterclaim. Bayview argues that there is insufficient

      evidence that it intended: (1) for Golden Food’s mortgage to merge with the tax

      deed that Bayview purchased from M. Jewell, LLC (“Jewell”); and (2) to exert

      unauthorized control over Golden Foods’ property and monthly payments.

      Concluding that Bayview’s arguments are requests to reweigh the evidence and

      that there is sufficient evidence that Bayview intended both the merger and the

      exercise of unauthorized control, we affirm the trial court.

[2]   We affirm.

                                                      Issues
              1. Whether the trial court’s judgment in favor of Golden Foods
              on Bayview’s mortgage foreclosure claim is contrary to law; and

              2. Whether the trial court’s judgment in favor of Golden Goods
              on its conversion counterclaim is clearly erroneous.

                                                      Facts
[3]   Coulter is the president and sole shareholder of Golden Foods, which is an

      Indiana Corporation. In 1988, he executed an adjustable rate note with

      Industrial Trust and Savings Bank, (“the Note”). To secure payment for the

      $113,800.00 Note, Golden Foods executed a mortgage against a commercial

      property on Madison Street (“Madison Street Property”) in Muncie, which

      Colter operated as a restaurant. As further security for Golden Foods’

      indebtedness under the Note, Coulter and Golden Foods executed a mortgage

      Court of Appeals of Indiana | Opinion 18A02-1508-MI-1191| September 14, 2016   Page 2 of 28
      against Coulter’s home on Oliver Drive, (“Oliver Drive Mortgage”).1 Both

      mortgages were assigned to Bayview in 2005.2

[4]   By 2008, Golden Foods had reduced the balance of the Note to $42,822.77.

      However, Golden Foods had become delinquent in the payment of real estate

      taxes on the Madison Street Property, which had been vacant and non-income

      producing since 2006. In April 2008, Golden Foods advised Bayview that it

      was unable to pay the $22,000.000 in overdue taxes on the property. A

      Bayview representative recommended that Coulter: (1) submit a letter of

      hardship; and (2) request that Bayview advance him the money to pay the

      delinquent taxes and modify his mortgage payment to include the advance.

      Coulter explained that he did not know if he could afford a payment

      modification because the only money he had available to make his current

      mortgage payment was his monthly retirement income. Coulter also advised

      the Bayview representative that he was making repairs on the property in order

      to sell it. In December 2008, Coulter sent Bayview a hardship letter, which

      stated that Coulter’s only income available to pay the mortgage loan was from

      Social Security.

      1
         Although the Oliver Street Mortgage named Golden Foods as the mortgagor, Golden Foods did not hold
      title to the Oliver Street Property.
      2
        Bayview is a Delaware limited liability company with a Florida mailing address that has over 1,700
      employees and services over 120,000 mortgage loans at any given time.

      Court of Appeals of Indiana | Opinion 18A02-1508-MI-1191| September 14, 2016                   Page 3 of 28
[5]   Three months later, Bayview decided not to advance Coulter the funds to pay

      the delinquent taxes. Rather, Bayview decided that it would attempt to work

      out a tax capitalization agreement with Golden Foods. Meanwhile, because of

      the delinquent taxes, the Madison Street Property was offered at a Fall 2008 tax

      sale. M. Jewell, LLC (“Jewell”) purchased the tax sale certificate for the

      Madison Street Property for $8,001.00. Jewell sent notice of the sale to Golden

      Foods, which immediately notified Bayview of the situation. Jewell, however,

      did not send the required notice to Bayview. The redemption period was

      scheduled to expire on January 6, 2009.

[6]   Following the tax sale, Bayview completed an internal assessment to identify,

      value, and prioritize its options regarding the Madison Street Property, which

      included loan modification, foreclosure, or acquiring the property as real estate

      owned property (“REO property”).3 Bayview’s internal valuation of the

      Madison Street Property was $140,000.00, and Bayview had received a broker’s

      price opinion that the property was in a “hot pocket area with potential.” (BLS-

      412).4 Bayview’s assessment disclosed that the best option for Bayview was to

      capitalize the taxes and enter into a loan modification agreement with Golden

      Foods. The net present value of this scenario to Bayview was $84,676.15. The

      3
        Real estate owned property is property acquired by the lender in satisfaction of a debt, usually through
      foreclosure. BLACK’S LAW DICTIONARY 1292 (8th ed. 2004).
      4
          The first two volumes of exhibits are paginated using “BLS-.”

      Court of Appeals of Indiana | Opinion 18A02-1508-MI-1191| September 14, 2016                       Page 4 of 28
      second best alternative for Bayview was to acquire the property as an REO

      property. The net present value of this scenario to Bayview was $54,504.12.

[7]   After considering the options, Bayview drafted and proposed a Loan

      Adjustment Agreement (LAA) to Golden Foods. Pursuant to the terms of the

      LAA, Golden Foods had to make a $1,000.00 down payment and a $1,218.55

      monthly payment.5 With the additional capitalization, Bayview agreed to

      redeem the Madison Street Property from the tax sale and include

      approximately $12,900.00 to fund the new escrow account for future taxes and

      insurance. Coulter signed the LAA individually and on behalf of Golden

      Foods and returned it to Bayview with the $1,000.00 fee on December 26, 2008.

      According to the LAA, which Bayview never signed, the first payment was due

      February 1, 2009.

[8]   In the meantime, although Bayview knew the redemption deadline for the

      Madison Street Property was January 6, 2009, Bayview failed to redeem the

      property. Therefore, Jewell immediately filed a petition for issuance of a tax

      deed. Realizing that if the tax sale was not set aside, Golden Foods would lose

      title, and Bayview would likely be liable for damages, Bayview hired Indiana

      counsel Jason Lueking (“Lueking”) to defend its interests and intervene in the

      tax sale proceeding. Lueking immediately noticed that Jewell had failed to give

      the required notice to Bayview. Therefore, both Bayview and Golden Foods

      5
        Although the LAA decreased Golden Foods’ monthly mortgage payment to Bayview from $859.67 to
      $396.50, the payment also included an $822.05 monthly escrow payment for taxes and insurance.

      Court of Appeals of Indiana | Opinion 18A02-1508-MI-1191| September 14, 2016           Page 5 of 28
       had the right to object to the issuance of the tax deed and to seek to set aside the

       tax sale. With these rights in mind, Lueking entered into negotiations with

       Jewell.

[9]    During the course of the negotiations, Lueking structured a deal to change

       Bayview’s status from mortgage lienholder of the Madison Street Property to

       fee simple owner. Specifically, Lueking’s settlement draft passed title of the

       Madison Street Property directly from Jewell to IB Property Holdings (“IB

       Property”), which is a subsidiary of Bayview that takes title to REO Properties

       acquired through either foreclosure or a deed in lieu of foreclosure.6 When title

       is passed to IB Property, the property is sold, and any sale proceeds are kept by

       the lender. This differs from a foreclosure where any excess funds become the

       property of the borrower. Lueking did not advise Golden Foods about these

       negotiations with Jewell or suggest that Golden Foods obtain counsel.

[10]   In April 2009, Bayview expressed concerns to Lueking about taking title to the

       Madison Street Property in its name or in the name of IB Property. Bayview

       was considering an alternative structure, which would have given the tax title

       deed directly to Jewell. Jewell would then have quitclaimed the property to

       6
         “A deed in lieu of foreclosure is an alternative to foreclosure. In a deed in lieu of foreclosure, the property
       owner gives the property to the lender voluntarily in exchange for the lender canceling the loan. The item
       transferred is the deed to the property. The lender promises not to initiate foreclosure proceedings and to
       terminate any foreclosure proceedings already underway. The lender may or may not agree to forgive any
       deficiency balance that results from the sale of the property.” www.bills.com/a-deed-in-lieu-of-foreclosure-
       vs-a-short-sale. (last visited 8/23/2016).

       Court of Appeals of Indiana | Opinion 18A02-1508-MI-1191| September 14, 2016                         Page 6 of 28
       Golden Foods. This alternative would have returned Bayview and Golden

       Foods to the relationship contemplated by the LAA. Lueking revised the

       settlement documents to reflect this structure for the transaction and provided

       them to Lawrence Halpern, Bayview’s vice president and in-house counsel

       (“Halpern”). However, these documents were never presented to Jewell.

[11]   Rather, in May 2009, Lueking sent a revised settlement agreement to Jewell.

       This agreement had the tax certificate and tax title deed going directly to

       Bayview. In an email, Lueking explained to Jewell’s attorney that the

       “transaction [was] similar to a deed in lieu of foreclosure from [Bayview’s]

       perspective.” (Bayview Ex. 49). Halpern was copied on Lueking’s email to

       Jewell’s attorney. Lueking understood that a deed in lieu of foreclosure meant

       that Bayview was acquiring title to and equity in the property rather than

       initiating foreclosure proceedings. Both Lueking and Bayview Vice President

       of Commercial Servicing, Jo Ann Snyder (“Snyder”),7 knew that a deed in lieu

       of foreclosure would extinguish Golden Foods’ underlying debt unless the

       parties contemporaneously executed documentation to establish a residual

       financial obligation on the borrower. However, no such documentation was

       ever prepared or submitted to Golden Foods.

[12]   On June 4, 2009, before finalizing the agreement with Jewell, Bayview ran

       another internal assessment, which revealed that the Madison Street Property

       7
         Snyder was not involved in the settlement negotiation process with Jewell. Rather her sole involvement in
       the case involved signing affidavits in support of Bayview’s summary judgment motion.

       Court of Appeals of Indiana | Opinion 18A02-1508-MI-1191| September 14, 2016                    Page 7 of 28
       had a present value of $64,933.74 to Bayview if Bayview took the property as

       an REO property. This value was based on Bayview’s $140,000 valuation of

       the Madison Street Property minus Bayview’s invested funds, which included

       the $42,822.77 mortgage principal at the time of the LAA and the $32,469.75

       paid to Jewell. Bayview Vice President Gyselle Piedra (“Piedra”) authorized

       the settlement agreement, which Bayview signed that day.

[13]   That same day, Bayview employee, Juan Gonzalez (“Gonzalez”), told Coulter

       that Bayview was going to pay the delinquent taxes on the Madison Street

       Property and that Coulter could proceed with his plans to sell it. Four days

       later, Gonzalez told Coulter that the taxes had been paid but did not mention

       that Bayview had taken title to the property. Bayview also continued to send

       Golden Foods monthly LAA statements.

[14]   The very next day, the agreed order directing the tax deed to be issued was

       entered, and the tax deed was issued to Bayview on July 8, 2009. In August

       2009, Gonzales issued an order to secure the unoccupied Madison Street

       Property, winterize the pipes, and change the locks. Bayview still did not

       advise Coulter that it had acquired title to the property. Golden Foods began

       making the $1,218.55 per month LAA payments in November 2009. Golden

       Foods made ten payments on the LAA, all of which Bayview accepted even

       though Bayview had never signed the LAA.

[15]   Golden Foods did not learn that Bayview had acquired title to the Madison

       Street Property until Bayview filed a complaint to quiet title to the property in

       Court of Appeals of Indiana | Opinion 18A02-1508-MI-1191| September 14, 2016   Page 8 of 28
       November 2010. In the complaint, Bayview stated that in July 2009, Bayview

       had obtained a tax deed to the Madison Street Property and had recorded it.

       Bayview alleged that its interest and title to this property was “superior to all

       persons who have an interest therein,” and that the purpose of the action was to

       “quiet title to the Real Estate as against the world.” (App. 2).

[16]   Golden Foods filed an answer wherein it alleged that Bayview had represented

       to Golden Foods that Bayview had redeemed the Madison Street Property and

       that Bayview had accepted Golden Foods’ $1,218.55 monthly payments

       pursuant to the LAA. Golden Foods also alleged that Bayview had covertly

       acquired title to the Madison Street Property without notifying Golden Foods.

       Golden Foods raised the affirmative defenses of actual and constructive fraud,

       unjust enrichment, and estoppel. Golden Foods also filed a counterclaim

       alleging that Bayview breached its agreement to redeem the real estate;

       breached its duties as Golden Foods’ agent; committed criminal conversion

       when it exerted unauthorized control over Golden Foods’ funds and rights in

       the Madison Street Property; and fraudulently procured the tax deed.

[17]   In May 2012, Bayview filed a second amended complaint wherein it added

       Coulter as a defendant and added mortgage foreclosure of both Madison Street

       and Oliver Street Properties and related claims. The following month, Golden

       Foods responded as follows:

               71. [Bayview] converted and exerted unauthorized control over
               the rights of Golden Foods in the Madison Street Real Estate by

       Court of Appeals of Indiana | Opinion 18A02-1508-MI-1191| September 14, 2016   Page 9 of 28
               failing to redeem the Madison Street Real Estate and acquiring
               title for itself.

                                                 *        *        *

               73. The Plaintiff has further converted and exercised
               unauthorized control over the monies paid to [Bayview] by
               Golden Foods since December 15, 2008.

       (App. 103).

[18]   In March 2013, Bayview filed a motion for partial summary judgment on the

       grounds that there were no genuine issues as to any material fact with respect to

       Bayview’s quiet title action and Golden Foods’ criminal conversion action.

       The trial court granted Bayview’s motion on the quiet title claim but denied the

       motion on Golden Foods’ conversion claim.

[19]   In March 2015, the trial court held a bench trial on the remaining claims, which

       included Bayview’s mortgage foreclosure claim and Golden Foods’ conversion

       claim. Bayview did not call its two senior managers, Halpern and Piedra, to

       testify. After a trial that included the evidence set forth above, the trial court

       issued a detailed twenty-seven-page order with 168 findings of fact and

       conclusions, which provides in relevant part as follows:

                                  Conversion of Madison Street Property

                                                  *        *        *

               70. So to summarize the actions of Bayview in connection with
               the Tax Sale Proceedings:

       Court of Appeals of Indiana | Opinion 18A02-1508-MI-1191| September 14, 2016   Page 10 of 28
                 a. Bayview had breached its undertaking to redeem the
                 Madison Street Property by the redemption deadline, and
                 was faced with the prospect of not only losing its lien, but
                 incurring liability to Golden Foods;

                 b. Since there was a statutory defect in the tax sale
                 proceedings, both Bayview and Golden Foods had the
                 right to have it set aside;

                 c. Bayview told Coulter they would look into it, and
                 waive late charges until the matter was resolved;

                 d. Lueking, as Bayview’s counsel, then undertook
                 settlement negotiations;

                 e. Lueking knew that Golden Foods was a party, and
                 should have been served with documents filed in the Tax
                 Sale Proceeding, but he failed to do so;

                 f. Although Lueking felt that the interests of Golden
                 Foods and Bayview were initially aligned, he soon
                 determined that they had become adverse when Bayview
                 began contemplating taking title without notice to Golden
                 Foods and Coulter; however, Lueking never advised
                 Coulter or Golden Foods to engage separate counsel;

                 g. Once the financial terms were established for the
                 settlement with M. Jewell, Lueking and Bayview knew
                 that the settlement structure was up to them and within
                 their control;

                 h. Lueking knew of settlement structures that were
                 available and would have preserved the
                 mortgagor/mortgagee relationship and the terms in the

Court of Appeals of Indiana | Opinion 18A02-1508-MI-1191| September 14, 2016   Page 11 of 28
                 proposed LAA; however, these structures were rejected in
                 favor of Bayview acquiring title in its own name;

                 i. Bayview took title to the Madison Street Property,
                 without providing Golden Foods with any documentation
                 of the transaction;

                 j. Bayview assured Golden Foods that the tax situation
                 had been resolved, but did not discuss that Bayview had
                 taken title; and

                 k. This result was in the best interests of Bayview, and
                 contrary to the best interests of its former borrower,
                 Golden Foods.

        71. Bayview was acting in a dominant position – from a
        knowledge, financial strength, and control point of view. This
        position was exploited for its own benefit.

        72. Lueking and Halpern knew or should have known that
        Bayview had no legal right to take title to the Madison Street
        Property without notice, and without due process.

        73. Bayview actively and purposely concealed the fact that it had
        taken title to the Madison Street Property from Coulter and
        Golden Foods. It must be remembered that key decision makers
        for Bayview – Lueking and Halpern – are attorneys, with
        expertise in the area of real estate and mortgage lending – and
        they were fully aware of the nature of the relationship that
        existed between the parties and the precarious situation created
        by Bayview’s failure to timely redeem the taxes. Although the
        initial failure to serve Golden Foods in the Tax Sale Proceeding
        may have been inadvertent, by the time they were making the
        decision to take title, they were fully aware that Golden Foods
        had no knowledge of their contemplated actions, and they quite
        clearly decided to keep it that way.

Court of Appeals of Indiana | Opinion 18A02-1508-MI-1191| September 14, 2016   Page 12 of 28
        74. After they had acquired title, Bayview continued to mislead
        Coulter and Golden Foods. When Gonzalez called Coulter in
        June after they had signed the settlement agreement, all he said
        was that the taxes had been taken care of – there was no mention
        that Bayview had also taken title.

        75. Bayview continued to send routine documents to Golden
        Foods, creating the impression that they had made good on their
        obligations to redeem the taxes. They sent year end interest and
        real estate tax statements, and monthly statements. From all
        appearances, Coulter and Golden Foods had every reason to
        believe the mortgage and the LAA were in effect. Until, of
        course, Bayview filed for Quiet Title.

        76. Bayview converted the rights of Golden Foods in and to the
        Madison Street Property. It was in control of the settlement
        structure. They contemplated a structure that would have
        maintained title in Golden Foods together with the equity
        therein. They rejected this structure and instead used a structure
        to take title for itself.

                      Statutory Elements of Theft and Conversion

                                       *       *        *

        82. The evidence before the Court establishes that Bayview
        knowingly or intentionally exercised unauthorized control over
        Golden Foods’ rights and interest in the Madison Street Property
        by acquiring title for itself without the knowledge or consent of
        Coulter or Golden Foods when it had the control, the ability, and
        the duty, on identical financial terms, to structure the M. Jewell
        settlement so as to preserve the mortgagor/mortgagee
        relationship under the terms of the LAA.

        83. Golden Foods is entitled to recover under the Crime Victim’s
        Recovery Act (“CVRA”) an amount not to exceed three (3) times
        the actual damages suffered, together with the costs of the action
        and reasonable attorney fees. Ind. Code 34-24-3-1.

Court of Appeals of Indiana | Opinion 18A02-1508-MI-1191| September 14, 2016   Page 13 of 28
                                          *        *        *

        88. [T]he Court . . . adopts a market value for the Madison
        Street Property at the time of taking by Bayview of $147,500.00.

        89. [T]he ‘invested’ amount of Bayview was the unpaid principal
        as recited in the LAA of $42,822.77, and the settlement paid to
        M. Jewell of $32,469.75, for a total of $75,292.52. Accordingly,
        the value of equity converted by Bayview is $72,207.00, and
        Golden Foods is entitled to judgment in this amount.

        90. Golden Foods is also entitled to recover Enhanced Damages
        under the CVRA in the amount of $50,000.

                  Merger and Extinguishment of Note and Mortgage

        91. Bayview has continued to pursue its original claim to Quiet
        Title, and a partial summary judgment of Quiet Title has been
        entered in favor of Bayview.

        92. Bayview nonetheless seeks foreclosure of the mortgage on
        the Madison Street Property and the mortgage on the Oliver
        Street Property, and judgments on the Note and Guaranty for
        any deficiency.

        93. All of these requests are contrary to the understanding of
        Halpern and Lueking, attorneys sophisticated in real estate
        lending law, that the Tax Title Deed was being treated as a deed
        of lieu of foreclosure with no intended residual financial
        obligation on the part of Coulter or Golden Foods.

        94. Notwithstanding, Bayview claims that it was not their intent
        for there to be a merger of the mortgage and indebtedness into
        the Tax Title Deed. There is no credible evidence to support this.

                                          *        *        *

        97. Here, there is abundant, compelling evidence that this is
        exactly what Bayview intended to accomplish – acquire title as a
        deed in lieu of foreclosure, with no residual financial obligation

Court of Appeals of Indiana | Opinion 18A02-1508-MI-1191| September 14, 2016   Page 14 of 28
        for Golden Foods, and secure its right, title and interest as
        superior to all persons, including Coulter and Golden Foods.

        98. There is simply no evidence to support the anti-merger
        contention of Bayview. The only evidence before the Court is
        that Bayveiw was acting and intended to act as the title owner,
        not mortgagee, by taking the Tax Deed as similar to a deed in
        lieu of foreclosure, and not requiring any additional
        documentation to preserve a future claim for residual liability
        against Golden Foods and Coulter.

        99. This intent is further established by Bayview securing
        possession of the property and changing locks, and asserting
        since the date that the Tax Deed was issued that Bayview’s right,
        title, and interests in the Madison Street Property were superior
        to all other persons, including Golden Foods and Coulter. . . .
        Bayview’s consistent claim that its right, title and interest is
        superior to any interest of Golden Foods is inherently
        inconsistent with the “anti-merger” argument of Bayview that the
        mortgagor/mortgagee relationship was presented such that
        Golden Foods held title, and Bayview held only a lien.

        100. Bayview also acted as owner, not mortgagee, after it
        acquired title. On August 21, 2009, Gonzalez issued orders to
        “SECURE THE ABOVE PROPERTY, CHANGE LOCKS
        AND WINTERIZE.” Trial Ex. 17 BLS-36. . . . There is no
        indication that anyone at Bayview first attempted to contact
        Golden Foods, a necessary predicate to entering upon the
        premises if Bayview was acting under the terms of the mortgage
        as it now claims. . . .

                                          *        *        *

        105. Without so much as an advance telephone call to Coulter,
        Bayview then filed this Quiet Title action on November 29, 2010.
        It did not sue as mortgagee.

        106. Bayview initiated this action in a single count as a “MI”
        action (and not “MF”) to Quiet Title to the Madison Street
Court of Appeals of Indiana | Opinion 18A02-1508-MI-1191| September 14, 2016   Page 15 of 28
        Property in November 2010. Lueking claims that he did not also
        sue on the Note and LAA to keep the case “simple.”

        107. Lueking also expected that, if Bayview prevailed in its quiet
        title action, Bayview would have sold the property as an REO
        property, “they would have the money,” and then “closed the
        file.” Tr. 559-60. This of course is the same result as taking the
        property by way of a deed in lieu of foreclosure.

        108. The court finds and concludes that the 1988 mortgage and
        note were merged into the Tax Deed as a matter of law.

        109. This further discharged Coulter as guarantor, and
        discharged the purported Oliver Street Mortgage.

        110. Bayview would not be entitled to foreclose on the Oliver
        Street Mortgage in any event. Said mortgage was improperly
        executed, and was not signed by Coulter as Mortgagor and
        owner of the property – rather, Golden Foods signed in such
        capacity and it did not hold title to the property.

                               Conversion of Coulter’s Funds

                                          *        *        *

        112. [I]t appeared to Coulter and Golden Foods that Bayview
        had made good on its promise to “take care of the situation,” and
        once notified in June 2009, that it had been resolved, began
        making monthly payments in the amount of $1,218.55. Golden
        Foods made ten payments that were accepted by Bayview in
        2009 and 2010. . . .

        113. Despite the fact that Bayview considered that it had
        acquired title as comparable to a deed in lieu, secured possession
        of the property, failed to sign the Loan Adjustment Agreement,
        and otherwise acted as owner of the property, it continued to
        send documents to Golden Foods as if the Loan Adjustment
        Agreement had been executed and Golden Foods was still the
        title holder. To the extent Golden Foods was willing to make

Court of Appeals of Indiana | Opinion 18A02-1508-MI-1191| September 14, 2016   Page 16 of 28
        monthly payments, ignorant of the fact that the Loan Adjustment
        Agreement had never been signed, Bayview profited and was not
        at risk as it held title to the property.

        114. The passage of time was also beneficial to Bayview.
        Lueking knew Golden Foods’ appeal rights were limited to 60
        days from issuance of the Tax Deed, but that it could be
        extended up to 2 years if “due process” implications were
        involved. Tr. 557.

        115. As shown above, the Note and Mortgage were merged and
        extinguished by the acts of Bayview, and the LAA was never in
        effect and was never even signed by Bayview. (Trial Ex. 72,
        Request for Admission No. 3, admits that never signed) By
        nonetheless sending monthly notices, Bayview was inducing
        Coulter to make payments under false pretenses.

        116. Bayview exerted unauthorized control over Coulter’s funds
        through false pretenses.

        117. Coulter is entitled to judgment against Bayview for the
        funds converted, $12,185.50.

        118. Under the CVRA, Coulter is also entitled to recover costs
        and attorney fees.

        119. Coulter is also entitled to recover enhanced damages under
        the CVRA in the amount of $24,000.00.

                             Failure to Call Halpern and Piedra

        120. As noted above, the only two (2) senior officers of Bayview
        that were involved from the time Bayview decided to take title
        and up until it filed suit to quiet title were Piedra and Halpern.

        121. Snyder was not involved until asked to sign affidavits in this
        litigation. Bayview deliberately chose to rely on a witness with
        no personal knowledge of the events leading up [to] this
        litigation.

Court of Appeals of Indiana | Opinion 18A02-1508-MI-1191| September 14, 2016   Page 17 of 28
        122. Piedra and Halpern were the only senior officers with
        personal knowledge of the decisions that were made on behalf of
        Bayview but were not called, even though they are still employed
        by Bayview.

        123. If such was the case, these officers could have been called to
        testify that they did not intend for the Tax Deed to constitute a
        deed in lieu of foreclosure, and that they intended that the Note,
        Mortgage, and unsigned LAA to be the governing documents
        between the parties. They were not called to so testify. No one
        with personal knowledge of Bayview’s intent testified that there were any
        funds due to Bayview from Golden Foods.

                                          *        *        *

        127. The failure to call Halpern and/or Piedra raises an
        inference that their testimony would have been adverse to the
        positions asserted by Bayview herein.

                                          *        *        *

                                              Judgment

        It is Therefore Ordered, Adjudged and Decreed that judgment is
        entered in favor of Golden Foods and against Bayview on
        Golden Foods’ claim that Bayview converted the rights and
        interest of Golden Foods in the Madison Street Property, and
        Golden Foods shall have and recover against Bayview a
        judgment in the amount of $72,207.00 in compensatory damages,
        and $50.000.00 in additional damages under Ind. Code 34-24-3-
        1.

        It is Further Ordered, Adjudged and Decreed that judgment is
        entered in favor of Coulter and against Bayview on Coulter’s
        claim that Bayview converted the monthly payments made by
        him, and Coulter shall have and recover against Bayview
        judgment in the amount of $12,185.50 in compensatory damages,
        and $24,000 in additional damages under Ind. Code 34-24-3-1.

Court of Appeals of Indiana | Opinion 18A02-1508-MI-1191| September 14, 2016   Page 18 of 28
                                                 *        *        *

               It is Further Ordered, Adjudged and Decreed that judgment is
               entered against Bayview and in favor of Golden Foods on all
               other claims of Bayview, and Bayview is Ordered to execute a
               Release of the Oliver Street Mortgage within thirty (30) days of
               the date hereof.

       (App. 57-84). Bayview now appeals.

                                                     Decision
[20]   Bayview appeals the judgment in favor of Golden Foods and argues that: (1)

       the trial court’s judgment in favor of Golden Foods on Bayview’s mortgage

       foreclosure claim is contrary to law; and (2) the trial court’s judgment that

       Bayview converted Golden Foods’ rights and interest in the Madison Street

       Property and Coulter’s monthly payments on the LAA is clearly erroneous.

       We address each of its contentions in turn.

[21]   The trial court entered findings of fact and conclusions thereon at Bayview’s

       request. In reviewing findings of fact and conclusions of law, we apply a two-

       tiered standard of review by first determining whether the evidence supports the

       findings and then whether the findings support the judgment. Weigel v. Weigel,

       24 N.E.3d 1007, 1010 (Ind. Ct. App. 2015), reh’g denied. The trial court’s

       findings and judgment will be set aside only if they are clearly erroneous.

       Barton v. Barton, 47 N.E.3d 368, 373 (Ind. Ct. App. 2015), trans. denied; see also

       Ind. Trial Rule 52(A) (“[T]he court on appeal shall not set aside the findings or

       judgment unless clearly erroneous, and due regard shall be given to the

       opportunity of the trial court to judge the credibility of the witnesses.”).

       Court of Appeals of Indiana | Opinion 18A02-1508-MI-1191| September 14, 2016   Page 19 of 28
       Findings are clearly erroneous when the record contains no facts to support

       them either directly or by inference. Campbell v. Campbell, 993 N.E.2d 2d 205,

       209 (Ind. Ct. App. 2013), trans. denied. A judgment is clearly erroneous if it

       applies the wrong legal standard to properly found facts. Id. To determine that

       a finding or conclusion is clearly erroneous, our review of the evidence must

       leave us with the firm conviction that a mistake has been made. Id.

       1. Mortgage Foreclosure

[22]   At the outset, we note that Bayview, the party with the burden of proof on the

       mortgage foreclosure claim, is appealing from a negative judgment on this issue

       and will prevail only if it establishes that the judgment is contrary to law. See

       Helmuth v. Distance Learning Sys. Ind. Inc., 837 N.E.2d 1085, 1089 (Ind. Ct. App.

       2005). A judgment is contrary to law when the evidence is without conflict and

       all reasonable inferences to be drawn from the evidence lead only to one

       conclusion but the trial court reached a different conclusion. Id.

[23]   The first issue is whether the trial court’s judgment in favor of Golden Foods on

       Bayview’s mortgage foreclosure claim is contrary to law. A typical real estate

       mortgage transaction includes two entities: (1) the mortgagee, which is

       typically a bank or mortgage company that holds the mortgage which serves as

       a lien on the property; and (2) the mortgagor, which is typically the homeowner

       who holds the legal title with the right of redemption. Citizens State Bank of New

       Castle v. Countryside Home Loans, Inc., 949 N.E.2d 1195, 1197 (Ind. 2011). When

       one of the entities acquires both the mortgage lien and the legal title to the

       property, the two interests are said to merge. Id. Specifically, the mortgage
       Court of Appeals of Indiana | Opinion 18A02-1508-MI-1191| September 14, 2016   Page 20 of 28
       merges with the legal title, and the mortgage lien is thereby extinguished. Id.

       The key factor in deciding whether merger has occurred is determining what the

       parties, primarily the mortgagee, intended. Deutsche Bank Nat’l Trust Co. v. Mark

       Dill Plumbing Co., 908 N.E.2d 1273, 1274 (Ind. Ct. App. 2009).8

[24]   Bayview argues that the trial court erred in “denying [its] mortgage foreclosure

       action.” (Bayview’s Br. 40). Specifically, Bayview argues that it “did not

       intend to merge the Madison Street Mortgage into its tax deed, so the trial

       court’s merger finding is clearly erroneous and legal error.” (Bayview’s Br. 40).

       Golden Foods responds that, “[t]here is overwhelming evidence that, just as the

       trial court found . . . , Bayview clearly intended to take title and extinguish the

       underlying mortgage and note when it surreptitiously acquired title.” (Golden

       Foods’ Br. 17).

[25]   Our review of the evidence reveals that after rejecting an alternative that would

       have returned Bayview and Golden Foods to the relationship contemplated by

       the LAA, Bayview sent a revised settlement agreement to Jewell in May 2009.

       In an accompanying email, Leuking explained to Jewell’s attorney that, from

       Bayview’s perspective, the transaction was similar to a deed in lieu of

       8
         Merger will not occur, however, and the lien will be preserved, where merger would harm
       the interests of the mortgagee. The underlying purpose of this anti-merger rule is to protect
       the mortgagee’s priority. Id. Specifically, the rule guarantees the mortgagee’s priority in any
       proceeds. Id. Therefore, where there are no junior lienholders, the anti-merger doctrine does
       not apply. American Family Mut. Ins. Co. v. Welton, 926 F. Supp. 811, 817 (S.D. Ind. 1996)
       (applying Indiana law). Because there are no junior lienholders in this case, the anti-merger
       rule does not apply.

       Court of Appeals of Indiana | Opinion 18A02-1508-MI-1191| September 14, 2016        Page 21 of 28
       foreclosure, where the property owner gives the property deed to the lender and

       the lender agrees not to initiate foreclosure proceedings. Both Leuking and a

       Bayview Vice President knew that the settlement agreement would extinguish

       Golden Foods’ underlying debt unless the parties contemporaneously executed

       documentation to establish a residual financial obligation on the borrower.

       However, no such documentation was ever prepared or submitted to Golden

       Foods. The month after the tax deed was issued to Bayview, Gonzalez issued

       an order to secure the Madison Street Property, which included changing the

       locks and winterizing the pipes. One year later, Bayview filed a complaint to

       quiet title to the property wherein it alleged that its interest and title to the

       property was superior to all, including Golden Foods and Coulter.

[26]   This evidence supports the trial court’s conclusion that Bayview intended to

       acquire title to the Madison Street Property as a deed in lieu of foreclosure with

       no residual obligation for Golden Foods. The evidence further supports the

       trial court’s conclusion that the Madison Street Mortgage merged into the tax

       deed. The trial court’s judgment is not contrary to law. 9

       9
          Bayview raises three additional arguments related to the merger issue. Specifically, Bayview
       first argues that the trial court erred in finding that Bayview’s failure to call Halpern and/or
       Piedra as witnesses at trial raised an inference that their testimony would have been adverse to
       Bayview’s position at trial. However, we need not address whether this finding is erroneous
       because we have held that “even an erroneous finding is not fatal to the trial court’s judgment
       if the remaining valid findings and conclusions support the judgment, rendering the erroneous
       finding superfluous and harmless as a matter of law.” Curley v. Lake Cnty. Bd. of Elections and
       Registration, 896 N.E.2d 24, 32 (Ind. Ct. App. 2008). Here, several of the trial court’s

       Court of Appeals of Indiana | Opinion 18A02-1508-MI-1191| September 14, 2016        Page 22 of 28
       2. Conversion

[27]   Bayview further argues that there is insufficient evidence to support the trial

       court’s conclusion that Bayview committed criminal conversion. Bayview’s

       argument is two-fold. Bayview first contends that “the trial court erred by

       applying a tort instead of a contract standard.” (Bayview’s Br. iii). Bayview

       further contends that even if tort law applies, there is insufficient evidence to

       support the trial court’s conclusion that it committed criminal conversion. We

       address each of Bayview’s contentions in turn.

[28]   Bayview first argues that Golden Foods is attempting to “‘up the ante’ by

       repackaging their breach of contract claim as one for criminal conversion.”

       (Bayview’s Br. 13). Bayview is correct that “a party may not restyle a breach-

       of-contract claim as a tort simply to obtain additional damages.” French-Tex

       remaining and uncontested conclusions independently support its judgment that the trial court
       did not err in ruling against Bayview on its mortgage foreclosure action.
       Bayview also argues that the trial court “committed legal error in finding Bayview’s Oliver
       Drive Mortgage [was] invalid due to a Scrivener’s Error.” (Bayview’s Br. 50). Again, we
       need not address whether this finding is erroneous because the trial court’s alternative finding
       that the merger of the mortgage and tax deed discharged the Oliver Street Mortgage, which
       Bayview does not contest, supports the demise of this mortgage. See id.
       Lastly, Bayview argues that the trial court erred in finding that none of the witnesses had
       personal knowledge of the amount due on the Madison Street Mortgage. Golden Foods
       responds that this was not a trial court finding. Rather, according to Golden Foods, the trial
       court found that no one with knowledge of Bayview’s intent testified that there were any funds
       due to Bayview from Golden Foods. We agree with Golden Foods and further conclude that
       even if the trial court had made such a finding, such information is irrelevant where Bayview
       does not challenge the amount of damages.

       Court of Appeals of Indiana | Opinion 18A02-1508-MI-1191| September 14, 2016         Page 23 of 28
       Cleaners, Inc. v. Cafaro Co., 893 N.E.2d 1156, 1167 (Ind. Ct. App. 2008). Tort

       law should not interfere where the source of a party’s duty to another arises

       from a contract. JPMCC 2006-CIBC14 Eads Parkway LLC v. DBL Axel, LLC, 977
N.E.2d 354, 364 (Ind. Ct. App. 2012), reh’g denied, trans. denied. The Indiana

       Legislature did not intend to criminalize bona fide contract disputes. Id. For

       example in French-Tex, a tenant alleged that its landlord had committed

       conversion by overcharging the tenant for its share of real estate taxes due

       under the lease. The trial court concluded, and this Court agreed, that the

       tenant’s claim constituted a bona fide contract dispute and not a claim for

       conversion. French-Tex, 893 N.E.2d at 1166-67.

[29]   However, to the extent that a plaintiff’s interests have been invaded beyond

       mere failure to fulfill contractual obligations, a tort remedy should be available.

       Greg Allen Const. Co. v. Estelle, 798 N.E.2d 171, 173 (Ind. 2003), reh’g denied. For

       example, in Auto Liquidation Center, Inc. v. Chaca, 47 N.E.3d 650 (Ind. Ct. App.

       2015), the Center repossessed Chaca’s car because it erroneously believed that

       Chaca had missed a payment. Only after the Center learned that Chaca was

       current on his payments, did it claim to have repossessed the car because Chaca

       had disconnected the vehicle’s GPS devices, which the Center had installed.

       After learning that the GPS was disconnected because it was damaging the car

       and that Chaca’s mechanic would re-install it, the Center refused to give Chaca

       either the car or his belongings. Based on these facts, this Court concluded that

       there was evidence that the “misunderstanding morphed into an intentional

       Court of Appeals of Indiana | Opinion 18A02-1508-MI-1191| September 14, 2016   Page 24 of 28
       unauthorized taking of [Chaca’s] property.” Id. at 655. We therefore affirmed

       the criminal conversion verdict against the Center. Id.

[30]   Here, Bayview and Golden Foods entered into a contractual relationship in

       2005 when mortgages were assigned to Bayview. After Golden Foods became

       delinquent on the Madison Street Property’s taxes, the property was purchased

       by Jewell at a tax sale. Bayview told Golden Foods it would redeem the

       property and subsequently discussed, drafted, and sent an LAA to Golden

       Foods. Although Golden Foods signed the LAA, Bayview never did. Then,

       when Bayview failed to timely redeem the property, and Jewell was issued the

       tax deed, Bayview entered into negotiations with Jewell regarding the property.

       Golden Foods was not a party to the negotiation or the settlement. Eventually,

       Bayview took title to the property without telling Golden Foods. Although

       Bayview had title to the property and had never signed the LAA, Bayview then

       accepted ten LAA payments from Golden Foods. This evidence reveals that

       Bayview went beyond merely failing to fulfill its contractual obligation, and that

       a tort remedy should be available. Stated differently, as in Chaca, the

       contractual relationship between Bayview and Golden Foods morphed into a

       tort.

[31]   Having concluded that tort law applies in this case, we now turn to Bayview’s

       argument that there is insufficient evidence to support the trial court’s

       conclusion that it committed criminal conversion. INDIANA CODE § 35-43-4-3

       provides that a “person who knowingly or intentionally exerts unauthorized

       Court of Appeals of Indiana | Opinion 18A02-1508-MI-1191| September 14, 2016   Page 25 of 28
       control over the property of another commits criminal conversion.” A person

       engages in conduct intentionally if, when he engages in the conduct, it is his

       conscious objective to do so. IND. CODE § 35-41-2-2. A person engages in

       conduct knowingly if, when he engages in the conduct, he is aware of a high

       probability that he is doing so. Id. Exerting control over property means to

       obtain, take, or possess property. IND. CODE § 35-42-4-1. Control is

       “unauthorized” if it is exerted without the other person’s consent, in a manner

       or to an extent other than to which the other party has consented, or by creating

       or confirming a false impression in the other person. I. C. § 35-43-4-1.

[32]   A person who suffers a pecuniary loss as the result of a conversion pursuant to

       INDIANA CODE § 35-43-4-3 is entitled to bring a civil action under the Crime

       Victims Relief Act (“CVRA”) for damages in an amount not to exceed three

       times his actual damages, plus costs and attorney fees. I.C. § 34-24-3-1. The

       claimant need only prove the elements of the criminal conduct by a

       preponderance of the evidence. Wysocki v. Johnson, 18 N.E.3d 600, 606 (Ind.

       2014). Where a defendant’s conduct may constitute an intentional tort as well

       as lead to liability under the CVRA, the plaintiff is free to “place all [his] eggs in

       the CVRA basket and take [his] chances on the fact-finders’ assessment of

       criminality in exchange for the assurance of recovering costs and attorney fees if

       [he] prevail[s].” Id. at 605-06.10

       10
         This is what Golden Foods did in this case. Before trial, Golden Foods and Coulter withdrew the punitive
       damages claim and explained that they intended to pursue their right of recovery solely under the CVRA.

       Court of Appeals of Indiana | Opinion 18A02-1508-MI-1191| September 14, 2016                 Page 26 of 28
[33]   Bayview contends that that there is insufficient evidence that it committed

       criminal conversion of either the Madison Street Property or Golden Foods’

       LAA payments. Golden Foods and Coulter respond that the “evidence is

       overwhelming that Bayview knowingly and intentionally embarked upon a

       calculated course of conduct to surreptitiously take Golden Foods’ Madison

       Street Property for its own use and benefit, and then purposely create[] a false

       impression in Coulter and Golden Foods that the relationship contemplated by

       the LAA was in place in order to induce them to make monthly payments.”

       (Golden Foods’ Br. 27). According to Golden Foods, Bayview’s actions

       constitute conversion. We agree with Golden Foods.

[34]   Our review of the evidence reveals that after Jewell acquired the tax deed to the

       property, Bayview structured a deal to acquire the property and change

       Bayview’s status from mortgage lienholder to fee simple owner. Specifically,

       Leuking drafted a settlement agreement, which Piedra authorized, that passed

       the tax deed directly to Bayview. Four days later, Gonzalez told Coulter that

       the Madison Street Property taxes had been paid but failed to mention that

       Bayview had taken title to the property. In the meantime, Coulter, who

       believed that Bayview had settled the situation with Jewell and that the LAA

       was in effect, began making the $1,218.55 monthly payment to Bayview.

       Although Bayview now held title to the property and had never signed the

       LAA, Bayview accepted Coulter’s payments for ten months until it filed a

       complaint to quiet title to the property. This evidence supports the trial court’s

       Court of Appeals of Indiana | Opinion 18A02-1508-MI-1191| September 14, 2016   Page 27 of 28
       conclusion that Bayview converted the Madison Street Property as well as

       Coulter’s LAA payments. The trial court’s judgment is not clearly erroneous. 11

[35]   Affirmed.

[36]   Baker, J., and Bradford, J., concur.

       11
          Bayview also argues that because it did not commit criminal conversion, application of the Indiana
       [CVRA] is improper. Having concluded that there is sufficient evidence to support the trial court’s
       conclusion that Bayview committed criminal conversion, we need not address this issue. We further note
       that Bayview does not challenge the amount of damages awarded pursuant to this statute.

       Bayview raises two additional arguments that are related to the conversion issue. Specifically, Bayview first
       argues that the “trial court’s finding that Golden Foods was not guilty of unclean hands is clearly erroneous.”
       (Bayview’s Br. 25). Specifically, Bayview alleges that Golden Foods had unclean hands because Coulter
       misrepresented his income in his hardship letter to Bayview. The unclean hands doctrine is an equitable
       tenet that demands one who seeks equitable relief to be free of wrong doing in the matter before the court.
       Ruder v. Ohio Valley Wholesale, Inc.,736 N.E.2d 776, 780 (Ind. Ct. App. 2000). In addition, the alleged
       wrongdoing must have an immediate and necessary relation to the matter being litigated. Id. The purpose of
       the unclean hands doctrine is to prevent a party from reaping benefits from his misconduct. Id. at 781. Here,
       because Golden Foods was not seeking equitable relief, the unclean hands doctrine does not apply. Further,
       Coulter’s alleged misrepresentation regarding his income had no immediate and necessary relation to
       whether: (1) the mortgage and tax deed merged; or (2) Bayview committed criminal conversion. The
       unclean hands doctrine simply does not apply in this case, and the trial court’s finding in this regard is not
       clearly erroneous.

       Bayview also argues that the trial court erred in calculating Golden Foods’ equity in the Madison Street
       Property. Specifically, Bayview contends that the trial court “failed to take into account the outstanding
       interest due Bayview at the time of the LAA as well as the real estate taxes for 2008, payable in 2009.”
       (Bayview’s Br. 33-34). The total reduction sought by Bayview was $9,545.60, which included $7,200.90 in
       real estate taxes and $2,344.79 in interest and other fees. Bayview, however, has waived appellate review of
       this issue because it failed to raise it at trial. See McBride v. Monroe County Office of Family and Children, 798
N.E.2d 185, 194 (Ind. Ct. App. 2003) (explaining that an issue raised for the first time on appeal is waived).
       Wavier notwithstanding, we note that Leuking testified at trial that Delaware County had “agreed to go
       ahead and waive the 2008 [taxes] payable in 2009.” (Tr. 503). We find no error here.

       Court of Appeals of Indiana | Opinion 18A02-1508-MI-1191| September 14, 2016                         Page 28 of 28