Court Opinion

ID: 3196416
Source: CourtListenerOpinion
Date Created: 2016-04-21 15:03:35.148999+00
Date Added: 2024-06-11T12:26:38.801059
License: Public Domain

MEMORANDUM DECISION                                                                        FILED
Pursuant to Ind. Appellate Rule 65(D),                                                 Apr 21 2016, 8:14 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.

ATTORNEYS FOR APPELLANTS                                 ATTORNEYS FOR APPELLEES
Alan K. Mills                                            Stephen M. Koers
Howard E. Kochell                                        Lewis and Wilkins, LLP
Jonathan D. Sundheimer                                   Indianapolis, Indiana
Barnes & Thornburg, LLP
Indianapolis, Indiana

                                           IN THE
    COURT OF APPEALS OF INDIANA

GCCFC 2006-GG7 Beachway                                  April 21, 2016
Drive, LLC,                                              Court of Appeals Case No.
Appellants-Plaintiffs,                                   49A02-1502-MF-109
                                                         Appeal from the Marion Superior
        v.                                               Court
                                                         The Honorable James B. Osborn,
William D. Boyce Trust 2350;                             Judge
William D. Boyce                                         Trial Court Cause No.
Testamentary Trust 3649; and                             49D14-1204-MF-13570
William D. Boyce Testamentary
Trust 3650,
Appellees-Defendants.

Pyle, Judge.

Court of Appeals of Indiana | Memorandum Decision 49A02-1502-MF-109 | April 21, 2016            Page 1 of 14
                                       Statement of the Case
[1]   GCCFC 2006-GG7 Beachway Drive, LLC (“Beachway Drive, LLC”) appeals

      the trial court’s order denying its second motion for summary judgment. It

      argues that the trial court should have granted summary judgment in its favor

      and awarded it the full extent of damages it was entitled to receive pursuant to

      its successful breach of contract and guaranty claims. However, because we

      find that Beachway Drive, LLC forfeited its appellate arguments by failing to

      file a timely notice of appeal, we dismiss.

[2]   We dismiss.

                                                     Issue
              Whether Beachway Drive, LLC forfeited its appeal of the trial
              court’s motion for summary judgment.

                                                     Facts
[3]   On March 16, 2006, Boyce Trust Properties 2350, LLC; Boyce Trust Properties

      3649, LLC; and Boyce Trust Properties 3650, LLC (collectively, “the

      Borrowers”) executed a mortgage note (“Note”) in the amount of $2,000,000 in

      favor of Goldman Sachs Commercial Mortgage Capital, L.P. (“the Original

      Lender”). As security for the Note, the Borrowers executed a Mortgage and

      Security Agreement (“the Mortgage”) in favor of the Original Lender, in which

      they “irrevocably mortgaged, warranted, granted, bargained, sold, conveyed,

      transferred, pledged, set over, and assigned a security interest” in real property

      located on Beachway Drive in Indianapolis, Indiana (“the Property”). (App.

      Court of Appeals of Indiana | Memorandum Decision 49A02-1502-MF-109 | April 21, 2016   Page 2 of 14
218). That same day, three limited liability companies/trusts—William D.

Boyce Trust 2350; William D. Boyce Testamentary Trust 3649; and William D.

Boyce Testamentary Trust 3650 (collectively, “the Guarantors”)—executed a

Guaranty Agreement (“Guaranty Agreement”) with the Original Lender

wherein they agreed to be liable to the Original Lender for certain “Guaranteed

Obligations” regarding the Property. (App. 47). The Guaranty Agreement

defined the “Guaranteed Obligations” as:

        The obligations or liabilities of the Borrower[s] or Guarantor[s]
        to Lender for any loss, damage, cost, expense, liability, claim or
        other obligation incurred by Lender (including attorneys’ fees
        and costs reasonably incurred) arising out of or in connection
        with the following:

        (a) fraud, material misrepresentation, or willful misconduct by
        [the] Borrower[s] . . . .

        (b) physical waste knowingly committed on the Mortgaged
        Property by [the] Borrower[s]; damage to the Mortgaged
        Property as a result of the intentional misconduct or gross
        negligence of [the] Borrower[s] . . . or the removal of any portion
        of the Mortgaged Property in violation of the terms of the Loan
        Documents whenever an Event of Default exists;

        (c) . . . failure to pay any valid Taxes . . . mechanic’s liens,
        materialmen’s liens or other liens on any portion of the
        Mortgaged Property . . . .

        (d) all reasonable legal costs and expenses (including reasonable
        attorneys’ fees) reasonably incurred by [the Original] Lender in
        connection with litigation or other legal proceedings involving
        the collection or enforcement of the Loan . . .

        (e) the material breach of any representation, warranty, covenant
        or indemnification provision in that certain Environmental and
Court of Appeals of Indiana | Memorandum Decision 49A02-1502-MF-109 | April 21, 2016   Page 3 of 14
        Hazardous Substance Indemnification Agreement of even [sic]
        date herewith given by [the] Borrower[s] to [the Original Lender]
        or in the Mortgage concerning environmental laws, hazardous
        substances or asbestos;

        (f) any and all loss, damage, cost, expense, liability, claim or
        other obligation incurred or suffered by [the Original Lender] by
        reason of, arising out of or related to mold, mildew, fungus,
        mushroom, spores or other microorganism of any type . . . .

        (g) the misapplication or conversion by [the] Borrower[s] of (A)
        any insurance proceeds paid to [the] Borrower[s] by reason of
        any loss, damage, or destruction to the Mortgaged Property, (B)
        any awards or other amounts received by [the] Borrower[s] in
        connection with the condemnation of all or a portion of the
        Mortgaged Property, or (C) any Rents while an Event of Default
        exists;

                                               *****

        (i) [The] Borrower[s’] failure to pay [the Original] Lender the
        amounts, if any, due and owing [to the Original Lender]
        pursuant to Paragraph 17(C) of the Mortgage;1 and

        (j) Borrower[s’] failure to maintain any one or more of the
        Policies required under Paragraph 2 of the terms of the Mortgage
        or to pay or provide the amount of any one or more insurance
        deductible in excess of $25,000.00 following a Casualty or other
        insured event or claim. . . .

(App. 47-48). Finally, among other documents, the Borrowers also granted,

transferred, and assigned to the Original Lender all rights, interests, and estates

to the leases and rents from the tenants of the Property in an assignment of rents

1
 The parties did not include a copy of the Mortgage in either of their Appendices. Accordingly, we do not
know what Paragraph 17(C) of the Mortgage said.

Court of Appeals of Indiana | Memorandum Decision 49A02-1502-MF-109 | April 21, 2016           Page 4 of 14
      (“Assignment of Rents”). The Mortgage was recorded on March 24, 2006 in

      the Office of the Recorder of Marion County, Indiana.

[4]   Subsequently, in 2006, the Original Lender assigned its rights to the Note, the

      Mortgage, the Assignment of Rents, and the Guaranty, among other

      instruments concerning the Mortgage and the Property (collectively, “the Loan

      Documents”) to LaSalle Bank National Association, as Trustee for the

      Registered Holders of Greenwich Capital Commercial Funding Corp.,

      Commercial Mortgage Trust 2006-GG7, Commercial Mortgage Pass-Through

      Certificates, Series 2006-GG7 (“the First Assignee”). The First Assignee, in

      turn, assigned its rights to the Loan Documents to Bank of America National

      Association, as Trustee for the Registered Holders of Greenwich Capital

      Commercial Funding Corp., Commercial Mortgage Trust 2006-GG7,

      Commercial Mortgage Pass-Through Certificates, Series 2006-GG7 (“the

      Second Assignee”) in October 2010. That same month, the Borrowers ceased

      to make monthly mortgage payments to the Second Assignee and ceased to pay

      the Original Lenders the rents they received from the tenants on the Property as

      required by the Assignment of Rents. As a result, the Second Assignee sent a

      notice of default to the Borrowers and Guarantors on July 20, 2011. The

      Borrowers never resumed paying the amounts they owed under the Loan

      Documents.

[5]   Through additional assignments, Beachway Drive, LLC became the “rightful

      holder of all right, title, and interest in” the Loan Documents on February 7,

      2012. (App. 227). On April 3, 2012, it filed a complaint against the Borrowers

      Court of Appeals of Indiana | Memorandum Decision 49A02-1502-MF-109 | April 21, 2016   Page 5 of 14
      and Guarantors, raising claims of, and seeking: Count I, breach of contract by

      the Borrowers; Count II, breach of Guaranty by the Guarantors; Count III,

      replevin; Count IV, foreclosure of the mortgage; and Count IV, immediate

      appointment of a receiver. Then, on September 26, 2012, Beachway Drive,

      LLC filed a motion for summary judgment and a decree of foreclosure, arguing

      that summary judgment was warranted on all of the counts because there were

      no genuine issues of material fact left for the trial court to decide.

[6]   The trial court granted summary judgment in favor of Beachway Drive, LLC

      on all of the counts in its complaint on May 16, 2013. It stated that its

      judgments on all of the counts were “final judgment[s].” (App. 234-36). With

      respect to the breach of contract claim, the court found that the amount “due

      and owing” under the loan totaled $2,248,322.63, plus and including various

      other fees. (App. 229). It defined the $2,248,322.63 owed, “plus any other

      indebtedness with interest, attorneys’ fees, costs, and expenses, and third party

      fees and appraisals continuing to accrue on the unpaid balance, less any credits

      due and owing to the Borrowers” as “the Indebtedness.” (App. 230). It also

      found that Beachway Drive, LLC continued to incur “expenses under the Loan

      Documents [due to the breach of contract,] including and without limitation,

      attorneys’ fees, costs, and expenses, all of which [Beachway Drive, LLC] was

      entitled to recover.” It defined these expenses as “Additional Costs.” (App.

      230).

[7]   With respect to the Guarantors and the breach of guaranty count of the

      complaint, the trial court found that:

      Court of Appeals of Indiana | Memorandum Decision 49A02-1502-MF-109 | April 21, 2016   Page 6 of 14
        69. Pursuant to the Guaranty, the Guarantors irrevocably and
        unconditionally guaranteed the payment and performance of the
        Guaranteed Obligations, which includes, inter alia, the
        obligations or liabilities of the Borrowers to the Plaintiff for any
        loss, damage, cost, expense, liability, claim or other obligation
        incurred by the Plaintiff for, inter alia: (i) all reasonable legal
        costs and expenses reasonably incurred by the Plaintiff in
        connection with litigation or other legal proceedings involving
        the collection or enforcement of the Loan; and (ii) the
        misapplication or conversion by the Borrowers of any rents while
        an event of default exists.

                                              *****

        81. The Borrowers have converted the rents received from the
        Mortgaged Property, exercising dominion over the rents to the
        exclusion of and in defiance of the rights of the Plaintiff.

        82. The Borrowers have withheld, and continue to withhold, the
        rents received from the Mortgaged Property from the Plaintiff.

                                              *****

        86. As a result of the Borrowers’ default under the Loan
        Documents, the Guarantors are liable pursuant to, inter alia,
        Article 1 of the Guaranty.

                                              *****

        88. By continuing to collect rents from the Mortgaged Property
        on and after October 1, 2010 and not paying the Plaintiff the
        Monthly Payments, the Borrowers misapplied the rents while an
        event of default existed.

        89. The Guarantors have failed to pay the amounts due and
        owing under the terms of the Guaranty.

        90. The Guarantors are liable for no less than the monthly
        Payments due and owing to the Plaintiff from September 2010

Court of Appeals of Indiana | Memorandum Decision 49A02-1502-MF-109 | April 21, 2016   Page 7 of 14
              through September 1, 2012, which amounts to no less than Three
              Hundred Two Thousand Six Hundred Seventy-Four and 50/100
              Dollars ($302,674.50).

      (App. 230-33).

[8]   As a result of these findings, the trial court ordered the following in regard to

      Count II:

              [A] final judgment is hereby entered in favor of the Plaintiff and
              against the Guarantors, jointly and severally, on Count II of the
              Complaint (breach of guaranty), in personam, in an amount not
              less than the loss, liability, cost, expense, claim, or other
              obligation incurred by the Plaintiff, pursuant to Article 1 of the
              Guaranty, plus: (a) the amount of mortgage payments, which
              the Borrowers collected in rent on and after September 1, 2010
              through September 1, 2012 and failed to pay to the Plaintiff, in
              an amount no less than Three Hundred Two Thousand Six
              Hundred Seventy-Four and 50/100 Dollars ($302,674.50); (b)
              costs of collection including, but not limited to, attorneys’ fees
              and costs of Fifty-Two Thousand One Hundred Forty-Two and
              49/100 Dollars ($52,142.49) through August 31, 2012 and other
              attorneys’ fees and costs incurred thereafter; and (c) any other
              amounts whatsoever payable under the Guaranty or applicable
              law[.]

      (App. 235) (emphasis added). The trial court also specified that Beachway

      Drive, LLC had fourteen days after the judgment to file “supplemental

      affidavits and any supplemental documentation setting forth the updated

      amounts of the Indebtedness and attorneys’ fees and costs incurred by

      [Beachway Drive, LLC] through the date of the supplemental filings[.]” (App.

      237). It further stated that “any objection to the amounts set forth in the

      supplemental filings filed by [Beachway Drive, LLC] [had to] be filed within
      Court of Appeals of Indiana | Memorandum Decision 49A02-1502-MF-109 | April 21, 2016   Page 8 of 14
       seven (7) days of the supplemental filing[.]” (App. 238). Beachway Drive,

       LLC did not file any supplemental affidavits or documentation within fourteen

       days of the judgment.2

[9]    Instead, on June 18, 2013, two months after the “final judgment” order,

       Beachway Drive, LLC filed a motion, which it titled a second motion for

       summary judgment, arguing that the trial court had failed to determine the

       specific amount of damages the Guarantors owed Beachway Drive, LLC.3

       (App. 235). It argued that the Guarantors were liable for the entire

       Indebtedness—as the trial court defined the term in its summary judgment

       order on Count I—which amounted to $2,452,657.87, plus other costs and fees.

       Beachway Drive, LLC acknowledged that if it was “successful in obtaining

       judgment,” for “the entire Indebtedness against the Guarantors,” it could not

       also collect the $354,816.99 that the trial court had already awarded it and

       receive a double recovery. (App. 240).

[10]   The Guarantors filed a motion to strike Beachway Drive, LLC’s second motion

       for summary judgment on the ground that the trial court’s judgment on the first

       2
         Beachway Drive also failed to file a notice of appeal of the trial court’s ruling. The Borrowers and
       Guarantors filed a notice of appeal on June 17, 2013. In their notice of appeal, they stated that the appeal
       was “from a final judgment.” (Appellee’s App. 10). However, on October 21, 2013, the Borrowers and
       Guarantors moved to dismiss their appeal, stating that they had reviewed the transcript in the matter and no
       longer wished to appeal. The trial court granted their motion.
       3
         Attached to this second motion for summary judgment, Beachway Drive, LLC designated evidence,
       including a supplemental affidavit. In this affidavit, the affiant presented evidence to support an additional
       breach of contract argument that Beachway Drive, LLC had failed to raise in its complaint or in its first
       motion for summary judgment.

       Court of Appeals of Indiana | Memorandum Decision 49A02-1502-MF-109 | April 21, 2016                Page 9 of 14
       motion for summary judgment had been final and had resolved all of the claims

       between all of the parties. On April 15, 2014, the trial court denied this motion

       to strike. On August 28, 2014, it entered a general judgment denying the

       second motion for summary judgment.

[11]   Thereafter, on September 26, 2014, Beachway Drive, LLC filed a motion for

       the trial court to clarify its August 28, 2014 order. Beachway Drive, LLC

       argued that the trial court had failed to designate the undisputed facts in its

       second summary judgment order, which contravened Indiana Trial Rule 56(D).

       As a result, it requested that the trial court amend the order to include those

       facts and also to grant the additional relief Beachway Drive, LLC had requested

       against the Guarantors. On December 8, 2014, the trial court denied Beachway

       Drive, LLC’s motion to clarify, ruling that “this Court confirms all prior claims

       against all parties [have] been resolved and there is to be no further action on

       this case.” (App. 11) (emphasis in original).

[12]   Next, on December 30, 2014, Beachway Drive, LLC filed a motion to correct

       error in which it argued that the trial court had erred in holding that all claims

       against all of the parties had been resolved and in denying its motion to clarify.

       On January 26, 2015, the trial court held a hearing on the issue. The next day,

       it issued an order denying the motion to correct error. In its order, the court

       explained that it had denied Beachway Drive, LLC’s second motion for

       summary judgment because Beachway Drive, LLC had failed to follow the

       deadlines for requesting additional damages that the court had established in its

       May 16, 2013 summary judgment order, and, therefore, Beachway Drive,

       Court of Appeals of Indiana | Memorandum Decision 49A02-1502-MF-109 | April 21, 2016   Page 10 of 14
       LLC’s second motion for summary judgment requesting damages had been

       untimely. Beachway Drive, LLC now appeals.

                                                   Decision
[13]   On appeal, Beachway Drive, LLC argues that the trial court erred in denying its

       second motion for summary judgment and motions thereafter because in its first

       summary judgment order the trial court had failed to determine whether the

       Guarantors were liable for the Indebtedness owed by the borrowers and had

       failed to assess the full damages the Guarantors owed Beachway Drive, LLC.

       However, we conclude that the trial court’s first summary judgment order was

       final and, thus, Beachway Drive, LLC forfeited its claims by failing to file a

       timely notice of appeal of that order.

[14]   Under Indiana Appellate Rule 9(A), a party must file a notice of appeal of a

       trial court’s judgment within thirty (30) days of the final judgment or it will

       forfeit its claim. App. R. 9(A). Indiana Appellate Rule 2(H) provides that a

       judgment is final if, among other things, it “disposes of all claims as to all

       parties.” App. R. 2(H).

[15]   Beachway Drive, LLC argues that the trial court’s first summary judgment

       order was not final because the trial court did not rule on all of its damages and,

       therefore, did not dispose of all of the claims between the parties. It claims that

       the trial court should have determined whether the Guarantors were liable for

       the “Indebtedness,” as the trial court defined the term. However, the trial court

       did determine that the Guarantors were liable for part of the Indebtedness,

       Court of Appeals of Indiana | Memorandum Decision 49A02-1502-MF-109 | April 21, 2016   Page 11 of 14
       because it found them liable for the rents that the Borrowers had withheld from

       Beachway Drive, LLC. As stated above, the trial court stated that “the

       Indebtedness” included $2,248,322.63 “plus any other indebtedness with

       interest, attorneys’ fees, costs, and expenses, and third party fees and appraisals

       continuing to accrue on the unpaid balance, less any credits due and owing to

       the Borrowers.” (App. 230). The withheld rents qualified as “any other

       indebtedness” under this definition, as they were owed under the Loan

       Documents. (App. 230). Thus, the trial court did address the issue of whether

       the Guarantors were liable for the Indebtedness, and it found that they were

       liable for only part of it. Beachway Drive, LLC also seemingly recognized that

       the trial court had already awarded it a portion of the Indebtedness when it

       acknowledged that it could not recover the Indebtedness and the $302,674.50

       the trial court had awarded it.

[16]   Nevertheless, as Beachway Drive, LLC notes, the trial court allowed for future

       assessment of additional damages in its summary judgment order. Specifically,

       the trial court noted that its damages calculation included only amounts

       accrued through September 1, 2012. It instructed Beachway Drive, LLC to file,

       within fourteen days, supplemental affidavits and documentation setting forth

       updated Indebtedness and attorney fees that had accrued after September 1,

       2012. Beachway Drive, LLC did not submit any supplemental affidavits or

       documentation within the following fourteen days. It now argues, though, that

       the trial court’s order was not final as it did not assess the full amount of

       Court of Appeals of Indiana | Memorandum Decision 49A02-1502-MF-109 | April 21, 2016   Page 12 of 14
       damages, including the amount of damages accrued between September 1, 2012

       and the supplemental findings. We disagree.

[17]   Instead, we conclude that Beachway Drive, LLC’s second motion for summary

       judgment and subsequent motions were improper attempts to revive its

       damages claims even though it had already failed to adhere to the trial court’s

       deadline regarding those claims. As we stated above, a judgment is final when

       it disposes of all claims as to all parties. The judgment became final when

       Beachway Drive, LLC failed to comply with the trial court’s deadline, because,

       at that point, there were no remaining damages claims for the trial court to

       assess. As a result, Beachway Drive, LLC then had thirty days to either file a

       notice of appeal or a motion to correct error. App. R. 9(A); T.R. 59(C). It did

       not file a motion to correct error until December 30, 2014—over a year and a

       half later—or a notice of appeal until February 25, 2015—almost two years

       later.

[18]   Even if we liberally construe Beachway Drive, LLC’s second motion for

       summary judgment as a motion to correct error, Beachway Drive, LLC did not

       file a timely notice of appeal. Pursuant to Indiana Trial Rule 53.3(A), if a trial

       court fails to set a motion to correct error for a hearing or to rule on the motion

       within forty-five days, it is deemed denied. The party then has thirty days after

       the motion is deemed denied to file a notice of appeal. T.R. 53.3(A). Here, the

       trial court did not rule on Beachway Drive, LLC’s motion or set it for hearing

       within forty-five days, so it was then deemed denied. Then, Beachway Drive,

       Court of Appeals of Indiana | Memorandum Decision 49A02-1502-MF-109 | April 21, 2016   Page 13 of 14
       LLC failed to file a notice of appeal within thirty days. Accordingly, Beachway

       Drive, LLC has forfeited its damages claim, and we will not consider it.

[19]   Notably, our supreme court recently clarified that we may restore a right of

       appeal that has been forfeited if there are “extraordinarily compelling reasons to

       do so.” In re Adoption of O.R., 16 N.E.3d 965, 971 (Ind. 2014). However, we do

       not find that Beachway Drive, LLC has extraordinarily compelling reasons for

       its belated appeal. The notice of appeal requirement serves the goal of ensuring

       the expeditious processing of appeals and the finality of judgments. Marlett v.

       State, 878 N.E.2d 860, 864 (Ind. Ct. App. 2007), trans. denied. Here, almost two

       years passed between the trial court’s original summary judgment order and

       Beachway Drive, LLC’s notice of appeal. Allowing Beachway Drive, LLC to

       challenge the trial court’s decision after such a delay would not serve the goals

       of expeditious processing of appeals or finality of judgments. Also, all of the

       post-summary judgment motions that Beachway Drive, LLC filed would not

       have been necessary if it had complied with the trial court’s original fourteen-

       day deadline. Beachway Drive, LLC is a sophisticated actor well aware of its

       legal responsibilities and was represented by a well-respected legal firm. Such

       sophisticated actors should be able to comply with trial court and trial rule

       deadlines. Accordingly, we will not restore Beachway Drive, LLC’s forfeited

       appeal to consider its claim.

[20]   Dismissed.

       Vaidik, C.J., and Robb, J., concur.

       Court of Appeals of Indiana | Memorandum Decision 49A02-1502-MF-109 | April 21, 2016   Page 14 of 14