Court Opinion

ID: 3165683
Source: CourtListenerOpinion
Date Created: 2015-12-28 16:03:39.647437+00
Date Added: 2024-06-11T12:17:01.266402
License: Public Domain

OPINION ON REHEARING                                                Dec 28 2015, 8:14 am

      ATTORNEY FOR APPELLANT                                    ATTORNEY FOR APPELLEE
      Michael L. Schultz                                        Howard Howe
      Parr Richey Obremskey Frandsen &                          Indianapolis, Indiana
      Patterson LLP
      Indianapolis, Indiana

                                                  IN THE
          COURT OF APPEALS OF INDIANA

      Douglas L. Krasnoff,                                      December 28, 2015
      Appellant,                                                Court of Appeals Case No.
                                                                49A04-1501-CC-3
              v.                                                Appeal from the Marion Superior
                                                                Court No. 11
      The Education Resources                                   The Honorable John F. Hanley,
      Institute,                                                Judge
      Appellee.                                                 Trial Court Cause No.
                                                                49D11-0408-CC-1450

      Bailey, Judge.

[1]   In a previous opinion, this Court affirmed the trial court’s judgment in favor of

      The Education Resources Institute (“TERI”) against Douglas Krasnoff

      (“Krasnoff”). Krasnoff v. The Education Resources Institute, No. 49A04-1501-CC-3

      (Ind. Ct. App. Sept. 24, 2015). Krasnoff filed a petition for rehearing. We

      Court of Appeals of Indiana | Opinion on Rehearing 49A04-1501-CC-3 | December 28, 2015     Page 1 of 4
      grant his petition for the sole purpose of clarifying our prior opinion so as to

      address Krasnoff’s concern on rehearing with respect to potential multiple

      inconsistent liabilities as a result of the judgment.

[2]   The trial court entered judgment in favor of TERI, whose status as a proper

      party to the action was recognized by this Court on the basis of ratification by

      TERI’s post-bankruptcy successor-in-interest, the TERI Plan Trust (“the

      Trust”). Krasnoff, No. 49A95-1501-CC-3, slip op. at 11. The Trust obtained the

      right to enforce the note against Krasnoff by virtue of its position as the last

      transferee in a series of assignments and transfers beginning with the loan’s

      originator, Society National Bank. Id. at 3. The Trust in turn conveyed its

      interest in the note to TERI Loan Holdings, LLC (“TERI Loan Holdings”).

      Appellant’s Br. at 2.

[3]   Krasnoff’s petition for rehearing states:

              As it stands, judgment has been entered against Krasnoff in favor of
              TERI, an entity that no longer even exists. Now, there is great risk to
              Krasnoff that, if he pays the judgment amount over to TERI, another
              entity—TERI Loan Holdings, LLC, the real party in interest here—
              will also seek to recover from Krasnoff on the very same obligation.
              What would stop them from doing so? They have no connection with
              this case whatsoever; they have not appeared or been represented by
              counsel; they are not bound by the judgment and have no obligation to
              release Krasnoff from his alleged obligation if he pays the judgment
              here. This is precisely the harm that Rule 17 is designed to avoid in
              the first place.
      Pet. for Reh’g at 6.

      Court of Appeals of Indiana | Opinion on Rehearing 49A04-1501-CC-3 | December 28, 2015   Page 2 of 4
[4]   The purpose of the standing and real party in interest requirements is “to

      prevent the filing of meritless and frivolous suits.” Reinking v. Metro. Bd. of

      Zoning Appeals of Marion Cnty., 671 N.E.2d 137, 140 (Ind. Ct. App. 1996).

[5]   Here, Krasnoff is concerned that TERI Loan Holdings will pursue a claim

      against him despite the entry of judgment in this case. We think his concern is

      misplaced. There is but one claim underlying the entirety of the litigation:

      Krasnoff’s liability on the promissory note. Judgment was entered against

      Krasnoff with respect to his liability on the note in litigation where TERI was

      ratified as a litigant. As a result, any effort on the part of TERI Loan Holdings

      to pursue a claim on the note would be subject to dismissal as res judicata—that

      is, the doctrine of claim preclusion would operate to avoid the multiple

      inconsistent liability of which Krasnoff now complains.

[6]   Claim preclusion “applies where a final judgment on the merits has been

      rendered and acts as a complete bar to a subsequent action on the same issue or

      claim between those parties and their privies.” Afolabi v. Atlantic Mortg. & Invest.

      Corp., 849 N.E.2d 1170, 1173 (Ind. Ct. App. 2006) (emphasis added). For a

      claim to be precluded, four requirements must be satisfied: (1) the judgment

      must have been rendered by a court of competent jurisdiction; (2) the judgment

      must have been rendered on the merits; (3) the matter at issue was or could

      have been determined in the prior action; and (4) the controversy adjudicated in

      the former action must have been between the parties to the suit or their privies.

      Id. (emphasis added).

      Court of Appeals of Indiana | Opinion on Rehearing 49A04-1501-CC-3 | December 28, 2015   Page 3 of 4
[7]   Here, TERI Loan Holdings was a transferee of TERI’s right to enforce the note

      on Krasnoff’s loan. Judgment on the merits was entered upon the note as a

      result of Krasnoff’s failure to pay the loan. Krasnoff is thus protected from

      subsequent litigation as to the question of his liability on the note to TERI Loan

      Holdings, the ultimate successor to TERI as holder of the note—that is, the last

      of TERI’s privies. Judgment for TERI precludes TERI Loan Holdings from

      pursuing another claim for liability on the note against Krasnoff. Therefore,

      Krasnoff’s concern with multiple judgments of liability for the same underlying

      obligation is misplaced.

[8]   Krasnoff also contends in a footnote that “[i]t is not clear how or to whom

      payment could even be made.” Pet’n at 6 n.2. The matter is far from vexing.

      We held in our prior opinion that the Trust ratified the action, and the Trust

      transferred its interest in the note to TERI Loan Holdings. Krasnoff would

      therefore make payment to TERI Loan Holdings or to its designee. This, too,

      would serve to resolve Krasnoff’s concerns with TERI Loan Holdings seeking a

      second judgment on the note.

[9]   Having clarified our prior opinion with respect to any subsequent liability

      Krasnoff may have had under the note, we reaffirm our decision in this case.

      Baker, J., and Mathias, J. concur.

      Court of Appeals of Indiana | Opinion on Rehearing 49A04-1501-CC-3 | December 28, 2015   Page 4 of 4