Court Opinion

ID: 9965093
Source: CourtListenerOpinion
Date Created: 2024-05-01 17:06:03.888569+00
Date Added: 2024-06-11T08:24:42.000453
License: Public Domain

IN THE

            Court of Appeals of Indiana
                                  Converging Capital, LLC,                 FILED
                                         Appellant-Plaintiff          May 01 2024, 9:59 am

                                                                           CLERK
                                                                       Indiana Supreme Court
                                                   v.                     Court of Appeals
                                                                            and Tax Court

                                        Kevin B. Steglich,
                                         Appellee-Defendant

                                             May 1, 2024
                                    Court of Appeals Case No.
                                          23A-CC-2854
                           Appeal from the LaGrange Circuit Court
                          The Honorable William R. Walz, IV, Judge
                                       Trial Court Cause No.
                                        44C01-0610-CC-055

                               Opinion by Judge Mathias
                          Judges Tavitas and Weissmann concur.

Court of Appeals of Indiana | Opinion 23A-CC-2854 | May 1, 2024      Page 1 of 8
      Mathias, Judge.

[1]   Converging Capital, LLC appeals the trial court’s order dismissing proceedings

      supplemental that Converging Capital had initiated against its judgment debtor,

      Kevin B. Steglich. Converging Capital raises a single issue for our review,

      namely, whether the trial court erred when it dismissed the proceedings

      supplemental on the ground that the proceedings were untimely.

[2]   Our case law is clear that there is no limitations period for the initiation of

      proceedings supplemental. We therefore reverse and remand for further

      proceedings.

      Facts and Procedural History
[3]   In October 2006, Resurgence Financial, LLC filed a complaint against Steglich.

      After Steglich had been served but failed to answer, in November, Resurgence

      sought and obtained a default judgment against him in the principal amount of

      $6,366.06. On several occasions in 2007, Resurgence initiated proceedings

      supplemental on that judgment, apparently to no avail.

[4]   Around June 2013, Resurgence assigned its judgment to Converging Capital.

      Converging Capital filed a notice of the assignment in the trial court under the

      original cause number. And, on July 14, 2022, Converging Capital initiated

      proceedings supplemental to collect on its judgment against Steglich. In

      September, Steglich appeared and moved to dismiss the proceedings

      supplemental as untimely. The trial court granted Steglich’s motion and denied

      Converging Capital’s ensuing motion to correct error.
      Court of Appeals of Indiana | Opinion 23A-CC-2854 | May 1, 2024             Page 2 of 8
[5]   This appeal ensued.

      Discussion and Decision
[6]   Converging Capital appeals the trial court’s dismissal of the proceedings

      supplemental. The trial court’s judgment turns on whether Indiana law imposes

      a limitations period on the initiation of proceedings supplemental, which is a

      question we will review de novo. See, e.g., Minges v. State, 192 N.E.3d 893, 896

      (Ind. 2022).

[7]   According to Steglich, Converging Capital’s initiation of the proceedings

      supplemental was “well past the ten-year statute of limitations” of Indiana

      Code section 34-11-2-11 (2022). Appellant’s App. Vol. 2, p. 8; see also Appellee’s

      Br. at 6. Steglich further accuses Converging Capital of “fail[ing] to renew the

      judgment” until after the supposed ten-year period had passed, contrary to

      Indiana Code section 34-55-1-2(a) (2022). Appellant’s App. Vol. 2, p. 8; see also

      Appellee’s Br. at 6.

[8]   At the time of the trial court’s judgment now on appeal, Indiana Code section

      34-11-2-11 (2022) stated:

              An action upon contracts in writing other than those for the
              payment of money, and including all mortgages other than
              chattel mortgages, deeds of trust, judgments of courts of record, and
              for the recovery of the possession of real estate, must be
              commenced within ten (10) years after the cause of action
              accrues.

      (Emphases added.) And Indiana Code section 34-55-1-2(a) (2022) stated:

      Court of Appeals of Indiana | Opinion 23A-CC-2854 | May 1, 2024                 Page 3 of 8
                After the lapse of ten (10) years after:

                         (1) the entry of judgment; or

                         (2) issuing of an execution;

                an execution can be issued only on leave of court . . . .

       (Emphasis added.)

[9]    We have previously explained that those statutes do not apply to proceedings

       supplemental. Lewis v. Rex Metal Craft, Inc., 831 N.E.2d 812, 818, 820-21 (Ind.

       Ct. App. 2005). Indeed, in Lewis, the judgment creditor initiated proceedings

       supplemental twenty years after judgment had been entered. The judgment

       debtor moved to dismiss the proceedings supplemental as untimely, which

       motion the trial court denied.

[10]   On appeal, we affirmed because Indiana law does not impose any limitations

       period on the initiation of proceedings supplemental. Id. at 816-21. As we

       explained: “Because proceedings supplemental are a continuation of the original

       action, rather than an ‘action’ on a judgment of a court of record, they are not

       subject to the ten-year statute of limitations within Indiana Code Section 34-11-

       2-11.” Id. at 821 (footnote omitted). 1 We further stated:

       1
        In his brief, Steglich quotes our Supreme Court for the proposition that “a proceeding supplementary to
       execution is an independent action related to, but not part of, the original case in which the judgment sought

       Court of Appeals of Indiana | Opinion 23A-CC-2854 | May 1, 2024                                    Page 4 of 8
         there seems to be some confusion regarding execution and the
         equitable remedy of proceedings supplemental. Proceedings
         supplemental to execution are enforced by verified motion
         alleging that “the plaintiff owns the described judgment against
         the defendant” and that the “plaintiff has no cause to believe that
         levy of execution against the defendant will satisfy the
         judgment[.]” Ind. Trial Rule 69(E); see also Ind. Code §§ 34-55-8-
         1 through -9. The only issue presented in proceedings
         supplemental is that of affording the judgment-creditor relief to
         which she is entitled under the terms of the judgment. Nat’l Mut.
         Ins. Co. v. Sparks, 647 N.E.2d 375, 376-77 (Ind. Ct. App. 1995),
         trans. denied.

Id. at 817 (footnote omitted). Because proceedings supplemental are neither an

“action” nor an “execution,” the judgment creditor “need not have obtained

to be collected by the judgment creditor was rendered.” Appellee’s Br. at 7 (quoting Mitchell v. Godsey, 222
Ind. 527, 538, 53 N.E.2d 150, 154 (1944)). But Steglich’s selectively quoted language misrepresents what our
Supreme Court said. The full quote is as follows:
         This court has said that a proceeding supplementary to execution is an independent
         action related to, but not part of, the original case in which the judgment sought to be
         collected by the judgment creditor was rendered. Pounds et al v. Chatham, 1884, 96 Ind.
         342. This statement was made, however, in determining that the judgment, entered in the
         proceeding, was a final judgment within the meaning of our appeal statute. It has also
         been said by our Appellate Court that such a proceeding is an independent action in that
         the rights of the parties, as fixed in the original judgment, can not be affected or changed
         in the supplementary proceeding for the reason that the only issue presented by the
         supplementary proceeding is that of affording the judgment creditor that relief which he is
         entitled to under the terms of his judgment. Hobbs v. Town of Eaton, 1906, 38 Ind. App.
         628, 78 N.E. 333.
         In a broader sense, however, ‘a proceeding supplementary to execution is generally
         regarded as a proceeding in the original action and as much a means of enforcing the
         judgment as the ordinary writ of execution.’ 21 Am. Jur. § 658, p. 314. Certainly, where a
         proceeding supplementary to execution is filed in the same court, under the same title and
         cause number as the original action, such proceedings may be regarded as sufficiently a
         part of, or a continuation of, the original action as to entitle the court to take judicial
         knowledge of the records in the original action.
Mitchell, 53 N.E.2d at 154. We think the full quote above makes clear that Lewis is entirely consistent with
Mitchell.

Court of Appeals of Indiana | Opinion 23A-CC-2854 | May 1, 2024                                     Page 5 of 8
       leave via Indiana Code Section 34-55-1-2 for an action beyond ten years” in

       order to initiate proceedings supplemental. Id. at 821.

[11]   The concurring opinion in Lewis made the timeframes that are usually relevant

       to proceedings supplemental even more clear:

               Throughout the ten-year period following judgment, a judgment
               lien attaches to the debtor’s real estate located in the county
               where the judgment was entered or is later filed. Ind. Code § 34-
               55-9-2 (1999); Arend v. Etsler, 737 N.E.2d 1173, 1175 (Ind. Ct.
               App. 2000) (the property subject to a judgment lien is linked to
               the real proper[t]y in the county where the judgment has been
               entered and indexed by the trial court); Muniz v. U.S., 129 Ind.
               App. 433, 441, 155 N.E.2d 140, 143 (1958) (in order to create a
               lien upon real estate, it is only necessary to enter and index the
               judgment in the county where the real estate is located). The
               purpose of the judgment lien is to protect subsequent purchasers
               of the encumbered property. Borgman v. Aikens, 681 N.E.2d 213,
               218 (Ind. Ct. App. 1997), trans. denied.

               During the eleventh through twentieth years after judgment, no
               lien exists as to the debtor’s real estate. Ind. Code § 34-55-9-2(2);
               Borgman, 681 N.E.2d at 219. However, with the permission of
               the court, execution against real estate may still issue, albeit
               without the benefit of a judgment lien. Ind. Code § 34-55-1-2;
               Williams v. Lyddick, 116 Ind. App. 206, 212, 62 N.E.2d 88, 89
               (1945). Proceedings supplemental are also available to a judgment
               creditor during the second decade. Ind. Code § 34-55-8-1.

               Because of the confusing complexity of execution and
               proceedings supplemental, and the added uncertainty caused by
               the two attendant decade-long time periods, most sophisticated
               judgment creditors “renew” their judgments shortly before the expiration
               of the first (and each successive) decade after judgment. See Hinds v.

       Court of Appeals of Indiana | Opinion 23A-CC-2854 | May 1, 2024                    Page 6 of 8
                McNair, 153 Ind. App. 473, 477, 287 N.E.2d 767, 769 (1972); see
                also Willette v. Gifford, 46 Ind. App. 185, 189, 92 N.E. 186, 187
                (1910) (the subsequent renewal of that judgment kept it alive).
                Such renewal actions may take place ad infinitum. Town of New
                Chicago v. First State Bank of Hobart, 90 Ind. App. 643, 644, 169
                N.E. 56, 57 (Ind. Ct. App. 1929).[ 2]

       Id. at 822-23 (Mathias, J., concurring) (emphases added; footnote omitted).

[12]   Accordingly, the trial court’s dismissal of Converging Capital’s proceedings

       supplemental as untimely is contrary to law. We reverse the trial court’s

       judgment and remand for further proceedings.

[13]   Reversed and remanded.

       Tavitas, J., and Weissmann, J., concur.

       ATTORNEY FOR APPELLANT
       Francis J. Cardis
       Hosto & Buchan, PLLC
       Little Rock, Arkansas

       ATTORNEYS FOR APPELLEE
       R. Larry Helmer
       Bryan W. Lewis

       2
         To renew a judgment, before the end of the first ten-year limitation period the judgment creditor files a new
       case alleging that it owns the judgment at issue. The complaint includes a certified copy of the judgment as
       an exhibit (or equivalent reference to the case in the Odyssey case management system). Thereupon, the
       judgment creditor obtains new service of process on, and judgment against, the debtor. Each such judgment
       serves as a new lien on property of the debtor.

       Court of Appeals of Indiana | Opinion 23A-CC-2854 | May 1, 2024                                     Page 7 of 8
Ernsberger & Helmer, P.C.
LaGrange, Indiana

Court of Appeals of Indiana | Opinion 23A-CC-2854 | May 1, 2024   Page 8 of 8