Court Opinion

ID: 7075597
Source: CourtListenerOpinion
Date Created: 2022-07-24 08:12:49.346855+00
Date Added: 2024-06-11T16:12:45.322784
License: Public Domain

NAJAM, Judge,
concurring in result in part and concurring in part.
I concur in result on the first issue. The majority holds that Countrywide continued to litigate its claim against Good Neighbor in the mortgage foreclosure after it clearly became frivolous. See Ind. Code § 34-52-1-1. But I believe that the trial court was correct when it granted Good Neighbor's motion for attorney's fees and concluded as a matter of law that *1057Good Neighbor "should not have been joined as a party in this action." Appellant's App. at 41. Good Neighbor is entitled to attorney's fees not because Countrywide's claim became frivolous after Good Neighbor had dismissed its small claim action against Rood, but because Countrywide's action against Good Neighbor was groundless from its inception. See Ind.Code § 34-52-1-1(1).
At no time was Good Neighbor a necessary or proper party to the mortgage foreclosure. Countrywide contends that because Good Neighbor "had a pending small claims action [against Rood] at the time that Countrywide filed its foreclosure action," Good Neighbor "had an inchoate interest in the real property at issue." Brief of Appellant at 15. Throughout its briefs, Countrywide alleges that the small claims action gave Good Neighbor "a potential interest" in the real estate. I cannot agree.
Good Neighbor had no interest in the property at the time Countrywide filed the mortgage foreclosure. At best, Good Neighbor had nothing more than an unliq-uidated claim. At the time Countrywide filed the mortgage foreclosure, Good Neighbor's small claim against Rood was pending and had not been reduced to judgment. Thus, the small claim was lis pen-dens and was not a lien on the real estate.
Even if Good Neighbor's judgment had been entered, the judgment lien would have attached after Countrywide had filed its mortgage foreclosure. See Mid-West Federal Savings Bank v. Kerlin, 672 N.E.2d 82, 85-86 (Ind.Ct.App.1996) (judgment creditors were not proper parties to mortgage foreclosure where judgment attached after date foreclosure was filed), trans. denied. And that judgment would have been subordinate to Countrywide's mortgage, and Good Neighbor's judgment lien would have been extinguished by the judgment and decree of foreclosure by operation of law. See id. at 86-87 (explaining how filing of foreclosure action serves as notice to pendent lite claims and, absent intervention, judgment on properly recorded mortgage extinguishes existing pendent lite claims). In fact, Good Neighbor could only have become a proper party to the mortgage foreclosure if, after obtaining a small claims judgment, it had moved to intervene. See id. at 87.
In sum, the trial court did not abuse its discretion when it awarded attorney's fees to Good Neighbor. Countrywide's claim against Good Neighbor was groundless from its inception. Because the trial court correctly determined that Good Neighbor should not have been joined as a party as a matter of law, I concur in result on that issue. Regarding the second issue, I concur with the majority's remand for a determination of appellate attorney's fees under Indiana Appellate Rule 66(E).