Court Opinion

ID: 4196328
Source: CourtListenerOpinion
Date Created: 2017-08-16 16:05:48.770664+00
Date Added: 2024-06-11T09:23:45.222223
License: Public Domain

MEMORANDUM DECISION
Pursuant to Ind. Appellate Rule 65(D),                             FILED
this Memorandum Decision shall not be                          Aug 16 2017, 8:34 am
regarded as precedent or cited before any
                                                                   CLERK
court except for the purpose of establishing                   Indiana Supreme Court
                                                                  Court of Appeals
the defense of res judicata, collateral                             and Tax Court

estoppel, or the law of the case.

ATTORNEY FOR APPELLANT                                   ATTORNEY FOR APPELLEE
Eric E. Snouffer                                         Michael J. Lewinski
Fort Wayne, Indiana                                      Ice Miller LLP
                                                         Indianapolis, Indiana

                                          IN THE
    COURT OF APPEALS OF INDIANA

Chapel Ridge Investments, LLC,                           August 16, 2017
Appellant-Defendant,                                     Court of Appeals Case No.
                                                         02A05-1702-MF-261
        v.                                               Appeal from the Allen Superior
                                                         Court
U.S. Bank National Association,                          The Honorable Nancy E. Boyer,
As Trustee for the Registered                            Judge
Holders of ML-CFC                                        Trial Court Cause No.
Commercial Mortgage Trust                                02D01-1608-MF-512
2006-4, Commercial Mortgage
Pass-Through Certificates, Series
2006-4,
Appellee-Plaintiff.

Bailey, Judge.

Court of Appeals of Indiana | Memorandum Decision 02A05-1702-MF-261 | August 16, 2017   Page 1 of 13
                                          Case Summary
[1]   Chapel Ridge Investments, LLC (“Chapel Ridge”) appeals from the grant of

      summary judgment in favor of U.S. Bank National Association, as Trustee for

      the Registered Holders of ML-CFC Commercial Mortgage Trust 2006-4,

      Commercial Mortgage Pass-Through Certificates, Series 2006-4

      (“Noteholder”).

[2]   We affirm in part, reverse in part, and remand.

                                                   Issues
[3]   Chapel Ridge presents the following consolidated and restated issues:

              I.      Whether the trial court abused its discretion when it
                      altered a time limit under Trial Rule 56, giving Chapel
                      Ridge additional time to respond but not the full sixty days
                      that Chapel Ridge had sought; and

              II.     Whether the trial court abused its discretion in denying
                      Chapel Ridge’s motion to strike, and thereby
                      improvidently granted summary judgment.

                            Facts and Procedural History
[4]   On August 9, 2016, Noteholder filed a complaint against Chapel Ridge,

      alleging that Chapel Ridge had failed to pay a matured loan obligation secured

      Court of Appeals of Indiana | Memorandum Decision 02A05-1702-MF-261 | August 16, 2017   Page 2 of 13
      by a mortgage upon commercial property in Fort Wayne.1 A series of loan

      documents (“Loan Documents”) were attached to the complaint as exhibits,

      including a description of the real estate, a loan agreement, a promissory note, a

      mortgage agreement, and several assignment documents. Another attached

      exhibit was an affidavit from Jeff Coupe (“Coupe”) (the “First Coupe

      Affidavit”). Coupe averred that he was an asset manager at C-III Asset

      Management LLC (“C-III”), which was a special servicer of the loan on behalf

      of Noteholder. Coupe further averred that he had “personal knowledge of the

      types of records that C-III acquires and maintains in the ordinary course of

      business and of documents regarding C-III’s authority to act on behalf of

      Noteholder.” Appellant’s App. Vol. II at 116. Coupe also averred that each of

      the Loan Documents was a “true, correct, and authentic copy.” Id. at 116-17.

[5]   Chapel Ridge filed its answer on September 29, 2016, and Noteholder filed a

      motion for summary judgment on November 7, 2016. Attached to the motion

      was a second affidavit from Coupe (the “Second Coupe Affidavit”), as was an

      affidavit concerning attorney fees (the “Attorney Fee Affidavit”). These

      affidavits were designated in support of the motion. Noteholder also designated

      the First Coupe Affidavit and the Loan Documents, among other documents.

      A hearing on the motion was set for January 5, 2017.

      1
          Noteholder also sought appointment of a receiver, and a receiver was subsequently appointed.

      Court of Appeals of Indiana | Memorandum Decision 02A05-1702-MF-261 | August 16, 2017              Page 3 of 13
[6]    On December 12, 2016, Chapel Ridge filed a motion seeking a sixty-day

       enlargement of time to respond to Noteholder’s motion for summary judgment.

       Chapel Ridge sought the additional time—through February 10, 2017—because

       Chapel Ridge had “not had sufficient opportunity to conduct discovery.” Id. at

       164. Noteholder opposed the motion, stating that it did not object to a shorter

       extension—up to January 3, 2017—that would preserve the January 5 hearing

       date. The trial court gave Chapel Ridge an extension to Noteholder’s suggested

       date of January 3, 2017.

[7]    On January 3, 2017, Chapel Ridge filed a motion to strike, raising challenges to

       the First Coupe Affidavit, the Second Coupe Affidavit, and the Attorney Fee

       Affidavit. Along with the motion to strike, Chapel Ridge filed a response to

       Noteholder’s motion for summary judgment, arguing that without the

       challenged averments, Noteholder was not entitled to summary judgment.

[8]    Following a hearing on January 5, 2017, the trial court denied Chapel Ridge’s

       motion to strike and granted summary judgment in favor of Noteholder.

[9]    This appeal ensued.

                                  Discussion and Decision
                               Alteration of Time to Respond
[10]   Trial Rule 56 governs summary judgment proceedings. Pursuant to the rule, a

       party has thirty days “after service of the motion to serve a response and any

       opposing affidavits.” Ind. Trial Rule 56(C). However, “for cause found” and

       Court of Appeals of Indiana | Memorandum Decision 02A05-1702-MF-261 | August 16, 2017   Page 4 of 13
       “upon motion made within the applicable time limit,” the trial court “may alter

       any time limit set forth” in Trial Rule 56. T.R. 56(I). We review a decision to

       alter a Trial Rule 56 time limit for an abuse of discretion, Logan v. Royer, 848

       N.E.2d 1157, 1160 (Ind. Ct. App. 2006), which occurs when the decision is

       against the logic and effect of the facts and circumstances before the trial court.

       Mitchell v. 10th & The Bypass, LLC, 3 N.E.3d 967, 970 (Ind. 2014).

[11]   Chapel Ridge contends that the trial court erred by granting some, but not all,

       of the additional time it requested for discovery purposes. Although Chapel

       Ridge focuses its argument on whether a longer extension would have

       prejudiced Noteholder, Chapel Ridge has not identified any prejudice that it

       suffered because it needed additional time. Indeed, Noteholder points out—

       and Chapel Ridge does not dispute—that Chapel Ridge made no discovery

       requests before seeking an extension and made no discovery requests after

       obtaining an extension. Thus, even assuming arguendo that Chapel Ridge has

       identified error, reversal would not be warranted. See T.R. 61 (“The court at

       every stage of the proceeding must disregard any error or defect in the

       proceeding which does not affect the substantial rights of the parties.”).

                     Evidentiary Basis for Summary Judgment
[12]   Chapel Ridge argues that the trial court improvidently granted summary

       judgment by relying on averments that it should have stricken. We review the

       denial of a motion to strike for an abuse of discretion. H.M. v. State, 65 N.E.3d

       1054, 1057 (Ind. Ct. App. 2016), trans. denied. With respect to summary

       Court of Appeals of Indiana | Memorandum Decision 02A05-1702-MF-261 | August 16, 2017   Page 5 of 13
       judgment, we review the decision “de novo, applying the same standard as the

       trial court: summary judgment is appropriate only where ‘the designated

       evidentiary matter shows that there is no genuine issue as to any material fact

       and that the moving party is entitled to a judgment as a matter of law.’” Young

       v. Hood’s Gardens, Inc., 24 N.E.3d 421, 423-24 (Ind. 2015) (quoting T.R. 56(C)).

       The initial burden is on the movant to demonstrate the absence of any genuine

       issue of material fact. Schoettmer v. Wright, 992 N.E.2d 702, 705-06 (Ind. 2013).

       Once that showing is made, the burden shifts to the non-movant to come

       forward with contrary evidence showing the existence of an issue for the trier of

       fact. Hughley v. State, 15 N.E.3d 1000, 1003 (Ind. 2014). In determining

       whether the moving party is entitled to summary judgment, “[w]e consider only

       those materials properly designated pursuant to Trial Rule 56 and construe all

       factual inferences and resolve all doubts . . . in favor of the non-moving party.”

       Young, 24 N.E.3d at 424.

                                            Coupe Affidavits
[13]   Chapel Ridge contends that the Coupe Affidavits fail to comply with Trial Rule

       56(E). Pursuant to this rule, “[s]upporting and opposing affidavits shall be

       made on personal knowledge, shall set forth such facts as would be admissible

       in evidence, and shall show affirmatively that the affiant is competent to testify

       to the matters stated therein.” T.R. 56(E). To comply with Trial Rule 56(E),

       “affidavits . . . must present admissible evidence that should follow substantially

       the same form as though the affiant were giving testimony in court.” Guzik v.

       Town of St. John, 875 N.E.2d 258, 265 (Ind. Ct. App. 2007), trans. denied. “The

       Court of Appeals of Indiana | Memorandum Decision 02A05-1702-MF-261 | August 16, 2017   Page 6 of 13
       requirements of Trial Rule 56(E) are mandatory” and “a court considering a

       motion for summary judgment should disregard inadmissible information

       contained in supporting or opposing affidavits.” Id.

                                             Personal Knowledge

[14]   Chapel Ridge first contends that the trial court should have stricken the Coupe

       Affidavits because “neither affidavit was based on personal knowledge.”

       Appellant’s Br. at 11. Chapel Ridge directs us to the following passage

       contained in each affidavit:

               I am an Asset Manager at C-III Asset Management LLC, a
               Delaware limited liability company, in its capacity as special
               servicer pursuant to that certain Pooling and Servicing
               Agreement dated December 1, 2006 (“C-III”). C-III is servicing
               the loan on behalf of Noteholder. I have personal knowledge of
               the type of records that C-III acquires and maintains in the
               ordinary course of business and of documents regarding C-III’s
               authority to act on behalf of Noteholder.

       Appellant’s App. Vol. II at 115-16, 148-49. Chapel Ridge argues that the

       “personal knowledge” requirement was not met because Coupe does not

       “establish that he has any knowledge specifically regarding the Chapel Ridge

       transaction [or] that he reviewed documents involved in the Chapel Ridge

       transaction.” Appellant’s Br. at 12. In other words, Chapel Ridge contends

       that “Coupe’s knowledge is limited only to the types of documents maintained

       by C-III” and “only regarding its authority to act on behalf of Noteholder.” Id.

       Court of Appeals of Indiana | Memorandum Decision 02A05-1702-MF-261 | August 16, 2017   Page 7 of 13
[15]   “‘An affidavit need not contain an explicit recital of personal knowledge when

       it can be reasonably inferred from its contents that the material parts thereof are

       within the affiant’s personal knowledge.’” DeLage Landen Fin. Servs., Inc. v.

       Cmty. Mental Health Ctr., Inc., 965 N.E.2d 693, 701 (Ind. Ct. App. 2012)

       (quoting Decker v. Zengler, 883 N.E.2d 839, 844 (Ind. Ct. App. 2008), trans.

       denied), trans. denied; see Ind. Evidence Rule 602 (“Evidence to prove personal

       knowledge may consist of the witness’s own testimony.”). Moreover, “a

       witness’s personal knowledge of a situation can be inferred from his or her

       position or relationship to the fact set forth in his or her testimony or affidavit.”

       Riviera Plaza Investments, LLC v. Wells Fargo Bank, N.A., 10 N.E.3d 541, 550 (Ind.

       Ct. App. 2014). Further, we have previously recognized that the personal

       knowledge of an asset manager can be “inferable from his position and from his

       possession of [loan documents].” Am. Mgmt., Inc. v. MIF Realty, L.P., 666

       N.E.2d 424, 429 n.2 (Ind. Ct. App. 1996).

[16]   Here, Coupe did not expressly state that he had personally reviewed the Loan

       Documents. However, in the First Coupe Affidavit, Coupe drew information

       from each of the Loan Documents—including applicable dates, party names,

       and instrument numbers—as Coupe narrated the background of the loan and

       verified the authenticity of each document. Moreover, in the Second Coupe

       Affidavit, Coupe itemized amounts allegedly owed to Noteholder. Ultimately,

       given Coupe’s position as an asset manager at the entity servicing the loan,

       Coupe’s possession of the Loan Documents, and the content of Coupe’s

       Court of Appeals of Indiana | Memorandum Decision 02A05-1702-MF-261 | August 16, 2017   Page 8 of 13
       affidavits, it is reasonable to infer that Coupe had the requisite personal

       knowledge to testify concerning the loan.

                                       Failure to Attach Documents

[17]   Chapel Ridge next argues that the trial court should have stricken paragraph

       three of the Second Coupe Affidavit because Coupe’s averments referred to

       documents that were not attached to the affidavit, contrary to Trial Rule 56(E).

[18]   In addition to requiring personal knowledge, Trial Rule 56(E) provides that

       “[s]worn or certified copies not previously self-authenticated of all papers or

       parts thereof referred to in an affidavit shall be attached thereto or served

       therewith.” Here, the challenged paragraph states that “[a]ccording to the

       books and records of C-III, Chapel Ridge is indebted to the Noteholder in at

       least the following amounts,” and Coupe then provides a table of amounts.

       Appellant’s App. Vol. II at 149. We agree with Chapel Ridge that the affidavit

       refers to documents, triggering additional obligations under Trial Rule 56(E).

       Thus, because the Second Coupe Affidavit does not include sworn or certified

       copies of the referenced documents, and the documents were not previously

       self-authenticated, the affidavit does not comply with the rule. See Seth v.

       Midland Funding, LLC, 997 N.E.2d 1139, 1143 (Ind. Ct. App. 2013) (“Because

       Degel explicitly states that her affidavit is based upon her personal knowledge

       of facts obtained from business records maintained by Midland, she was

       required to attach to her affidavit sworn, certified, or self-authenticated copies

       of any of the business records she relied upon.”). The trial court therefore erred

       Court of Appeals of Indiana | Memorandum Decision 02A05-1702-MF-261 | August 16, 2017   Page 9 of 13
       when it failed to strike paragraph three from the Second Coupe Affidavit, and

       we accordingly disregard the averments therein in conducting our review.

                                              Legal Conclusions

[19]   Chapel Ridge next directs our attention to several paragraphs of the First Coupe

       Affidavit, contending that the paragraphs contain inadmissible legal

       conclusions that should have been stricken. See Evid. R. 704 (“Witnesses may

       not testify to . . . legal conclusions.”). With respect to paragraphs 15, 17, 18,

       and 20, the allegations therein are independently established by the Loan

       Documents. Moreover, paragraph 22 relates to the appointment of a receiver, a

       matter that was resolved with Chapel Ridge’s consent and that is otherwise not

       relevant to the appeal. The remaining challenges are to paragraphs 13 and 14.

[20]   Paragraph 13 states: “Chapel Ridge has defaulted on its obligations under the

       Loan Documents by, among other things, failure to meet its payment

       obligations under the Loan Documents.” Appellant’s App. Vol. II at 118.

       Paragraph 14 states: “Despite notice and demand for payment, Chapel Ridge

       has failed to cure its defaults.” Id. Although Chapel Ridge characterizes these

       allegations as inadmissible legal conclusions, we disagree. Rather, these are

       admissible factual allegations drawn from the personal knowledge of the asset

       manager, and the trial court did not err in failing to strike these paragraphs.

       Court of Appeals of Indiana | Memorandum Decision 02A05-1702-MF-261 | August 16, 2017   Page 10 of 13
                                       Attorney Fee Affidavit
[21]   Finally, Chapel Ridge challenges the trial court’s refusal to strike the Attorney

       Fee Affidavit. Chapel Ridge contends that the affidavit does not comply with

       Local Rule LR02-TR00-16, which provides:

               No order granting a request for attorney fees shall be made unless
               fees are allowable under applicable law and there has been
               evidence furnished by testimony or affidavit of the attorney. The
               testimony or affidavit shall describe the services rendered in order
               to establish to the Court’s satisfaction the amount of time
               expended (or to be expended in the matter), the fact that the
               services and time were or are reasonably necessary considering
               the nature and complexity of the matter, the experience or
               expertise of the attorney seeking an attorney fee award, the usual
               and customary charges, and the reasonableness of the requested
               fees. Judicial notice of reasonable fees shall not be taken. In any
               event, the award of attorney fees shall be within the sound
               discretion of the Court.

[22]   In the Attorney Fee Affidavit, counsel averred that Noteholder incurred

       $16,000 in attorney fees, representing approximately thirty-six hours of work at

       an average rate of $450 per hour. Counsel further averred that the

       representation “include[d], but [wa]s not limited to: contact and

       correspondence with the client; preparation of the Complaint; arrangements for

       the appointment of a Receiver; and preparation of the motion for summary

       judgment, supporting brief, and affidavits.” Appellant’s App. Vol. II at 152.

       Counsel also averred that Noteholder incurred $1,652.12 in expenses, which

       included “the filing fee, photocopies, and process of service expenses.” Id.

       Although Chapel Ridge contends that the Attorney Fee Affidavit lacked

       Court of Appeals of Indiana | Memorandum Decision 02A05-1702-MF-261 | August 16, 2017   Page 11 of 13
       sufficient “detail to ascertain the reasonableness of the request,” Appellant’s Br.

       at 15, we conclude that the information in the affidavit was sufficient to

       establish “to the Court’s satisfaction” that the request was reasonable. Thus,

       the trial court did not abuse its discretion in declining to strike the affidavit.

[23]   Having resolved Chapel Ridge’s arguments concerning its motion to strike, we

       now turn to Noteholder’s motion for summary judgment. Noteholder has

       established that Chapel Ridge has defaulted on its obligations to pay

       Noteholder under the loan. However, because we must disregard the improper

       averments in the Second Coupe Affidavit, we conclude that Noteholder has not

       demonstrated that it is entitled to summary judgment on the issue of damages

       due to Chapel Ridge’s non-payment of the loan. We therefore reverse that

       portion of the summary judgment order pertaining to those alleged damages.

       Consequently, there is no final foreclosure judgment, and so we reverse the

       order for a Sheriff’s sale. See Ind. Code § 32-29-7-7 (providing a right of

       redemption by “payment . . . of the amount of the judgment, interest, and costs

       for the payment or satisfaction of which the sale was ordered.”). Chapel Ridge

       has otherwise not demonstrated that the trial court erred in granting summary

       judgment. We therefore affirm the grant of summary judgment as to all other

       issues—including Noteholder’s entitlement to the fee award—and we remand

       for further proceedings.

       Court of Appeals of Indiana | Memorandum Decision 02A05-1702-MF-261 | August 16, 2017   Page 12 of 13
                                               Conclusion
[24]   Chapel Ridge has not demonstrated that it was prejudiced by the Trial Rule

       56(I) alteration of time, which we affirm. The trial court should have stricken a

       portion of the Second Coupe Affidavit, which was contrary to Trial Rule 56(E),

       but the trial court did not otherwise abuse its discretion in denying Chapel

       Ridge’s motion to strike. Disregarding the averments as to the amounts owed

       in the Second Coupe Affidavit, we reverse the grant of summary judgment with

       respect to damages due to non-payment of the loan. Because our reversal

       means there is no final foreclosure judgment, we reverse the order for a Sheriff’s

       sale. We affirm the grant of summary judgment in all other respects, and

       remand for further proceedings.

[25]   Affirmed in part, reversed in part, and remanded.

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

       Court of Appeals of Indiana | Memorandum Decision 02A05-1702-MF-261 | August 16, 2017   Page 13 of 13