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COA affirms use of equitable subrogation

April 30, 2012

The Indiana Court of Appeals affirmed the trial court’s decision to award title over a disputed piece of property, but reversed regarding the order the defendant pay the plaintiff’s attorney fees.

Lori Eifrid filed claims against Daniel Millikan for foreclosure, specific performance and promissory estoppel regarding a certain parcel of real property. The trial court applied the doctrine of equitable subrogation and awarded the property to Eifrid.

The property in question is a parcel of land directly to the south of Eifrid’s parcel (Parcel A), which is referred to as the Triangle. Without it, Eifrid’s ingress and egress to the cul-de-sac is effectively prevented. Millikan owns property adjacent to Eifrid’s property.

In 2001, Millikan’s brother executed a warranty deed transferring and conveying Eifrid’s parcel and the Triangle to Roger Maxey. Those two pieces were identified as single parcels of property. Maxey got a mortgage on those properties. Maxey agreed to swap with Millikan the Triangle for a 4-foot-wide strip of land just east of Parcel A.  Eventually, Maxey executed a warranty deed in lieu of foreclosure in favor of the Secretary of Veterans’ Affairs on Parcel A and the Triangle, which then sold the property to Eifrid in 2006. She was given a deed that said Parcel A and the Triangle were a single tract, so she believed she was buying land that included access to the cul-de-sac.

Eifrid learned of the issues caused by the attempted “swap” of the properties between Millikan and Maxey when she received notice that a mortgage company was seeking to foreclose on the strip, which is a 4-foot-wide strip of land directly east of Parcel A. She sought to foreclose on the mortgage on the strip, and she purchased the land at a sheriff’s sale. She then filed her complaint of foreclosure, specific performance and promissory estoppel against Millikan for a determination that her legal title to the Triangle is superior to any right, title or interest Millikan might claim and that Millikan exchange the Triangle for the strip of land.

The trial court originally gave Millikan clear title to the Triangle and Eifrid title to the strip. She filed a motion to correct error, which the trial court granted. It then ruled in favor of Eifrid and awarded her legal title of the Triangle. It also ordered Millikan pay Eifrid’s attorney fees even though it did not find he committed fraud.

In Daniel P. Millikan v. Lori A. Eifrid, No. 92A03-1109-PL-433, the COA affirmed, finding the trial court did not err in determining that the doctrine of equitable subrogation applied in these circumstances. There is no showing that Eifrid or the SVA are culpably negligent in failing to discover the improper swap of the property, wrote Judge John Baker.

The trial court did abuse its discretion in ordering Millikan to pay Eifrid’s attorney fees because it did not find Millikan committed fraud or conversion and there’s no statement that Millikan was litigating the matter in bad faith. The judges remanded with instructions to vacate the award of attorney fees.

 

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