ILNews

Court rules on post-merger bank foreclosure rights

Back to TopCommentsE-mailPrintBookmark and Share

The Indiana Court of Appeals ruled that a federal statute provides the authority for a bank that survives after a merger to enforce the promissory note and mortgage established by a predecessor bank.

In CFS, LLC and Charles Blackwelder v. Bank of America, Successor in Interest to LaSalle Bank Midwest National Association, No. 29A02-1105-MF-436, the Indiana Court of Appeals affirmed a ruling by Hamilton Circuit Judge Paul Felix that granted summary judgment in favor of Bank of America.

The case involves a promissory note and construction mortgage that CFS obtained in June 2007 in exchange for a $982,500 loan from LaSalle Bank Midwest National Association. Christopher Blackwelder executed a personal guaranty of the debt, but in August 2004 Bank of America – which had merged with and was a successor-in-interest to LaSalle – filed a mortgage foreclosure complaint alleging the loan was in default. CFS admitted to the debt but asserted it didn’t have any knowledge of the merger or Bank of America’s role as successor and right to collect the balance.

Bank of America moved for summary judgment on grounds that it had merged and had the authority to collect the debt or foreclose, and after a December 2010 hearing the trial judge took the matter under advisement. He initially declined summary judgment after the bank couldn’t provide any caselaw authority proving a successor-in-interest is sufficient to prove ownership, but he later granted summary judgment when Bank of America filed a motion to correct error that cited a federal statute providing that authority.

The bank cited 12 U.S.C. § 215a(e) that outlines the corporate existence of each merging bank and how all rights, franchises and interests of the individual merging banks are transferred to the successor merged bank without any deed or other transfer being needed.

Although the bank referenced a copy of the merger certificate and no factual dispute existed that a merger had occurred, Bank of America didn’t include a copy of that merger certificate. The trial court granted its judgment of foreclosure and decree of sale in the bank’s favor in April 2011. Appealing, CFS alleged the trial court granted summary judgment only after improperly considering “new evidence” about that federal statute.

The Court of Appeals ruled that Bank of America didn’t have to attach a copy of the merger when there was no factual dispute it had happened, and that the federal statute wasn’t “new evidence” presented to the trial court. The appellate panel found that no genuine issue of material fact existed about the merger and that summary judgment was properly granted to Bank of America.

 

ADVERTISEMENT

Post a comment to this story

COMMENTS POLICY
We reserve the right to remove any post that we feel is obscene, profane, vulgar, racist, sexually explicit, abusive, or hateful.
 
You are legally responsible for what you post and your anonymity is not guaranteed.
 
Posts that insult, defame, threaten, harass or abuse other readers or people mentioned in Indiana Lawyer editorial content are also subject to removal. Please respect the privacy of individuals and refrain from posting personal information.
 
No solicitations, spamming or advertisements are allowed. Readers may post links to other informational websites that are relevant to the topic at hand, but please do not link to objectionable material.
 
We may remove messages that are unrelated to the topic, encourage illegal activity, use all capital letters or are unreadable.
 

Messages that are flagged by readers as objectionable will be reviewed and may or may not be removed. Please do not flag a post simply because you disagree with it.

Sponsored by
ADVERTISEMENT
Subscribe to Indiana Lawyer
  1. Indiana's seatbelt law is not punishable as a crime. It is an infraction. Apparently some of our Circuit judges have deemed settled law inapplicable if it fails to fit their litmus test of political correctness. Extrapolating to redefine terms of behavior in a violation of immigration law to the entire body of criminal law leaves a smorgasbord of opportunity for judicial mischief.

  2. I wonder if $10 diversions for failure to wear seat belts are considered moral turpitude in federal immigration law like they are under Indiana law? Anyone know?

  3. What a fine article, thank you! I can testify firsthand and by detailed legal reports (at end of this note) as to the dire consequences of rejecting this truth from the fine article above: "The inclusion and expansion of this right [to jury] in Indiana’s Constitution is a clear reflection of our state’s intention to emphasize the importance of every Hoosier’s right to make their case in front of a jury of their peers." Over $20? Every Hoosier? Well then how about when your very vocation is on the line? How about instead of a jury of peers, one faces a bevy of political appointees, mini-czars, who care less about due process of the law than the real czars did? Instead of trial by jury, trial by ideological ordeal run by Orwellian agents? Well that is built into more than a few administrative law committees of the Ind S.Ct., and it is now being weaponized, as is revealed in articles posted at this ezine, to root out post moderns heresies like refusal to stand and pledge allegiance to all things politically correct. My career was burned at the stake for not so saluting, but I think I was just one of the early logs. Due, at least in part, to the removal of the jury from bar admission and bar discipline cases, many more fires will soon be lit. Perhaps one awaits you, dear heretic? Oh, at that Ind. article 12 plank about a remedy at law for every damage done ... ah, well, the founders evidently meant only for those damages done not by the government itself, rabid statists that they were. (Yes, that was sarcasm.) My written reports available here: Denied petition for cert (this time around): http://tinyurl.com/zdmawmw Denied petition for cert (from the 2009 denial and five year banishment): http://tinyurl.com/zcypybh Related, not written by me: Amicus brief: http://tinyurl.com/hvh7qgp

  4. Justice has finally been served. So glad that Dr. Ley can finally sleep peacefully at night knowing the truth has finally come to the surface.

  5. While this right is guaranteed by our Constitution, it has in recent years been hampered by insurance companies, i.e.; the practice of the plaintiff's own insurance company intervening in an action and filing a lien against any proceeds paid to their insured. In essence, causing an additional financial hurdle for a plaintiff to overcome at trial in terms of overall award. In a very real sense an injured party in exercise of their right to trial by jury may be the only party in a cause that would end up with zero compensation.

ADVERTISEMENT