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COA reverses in foreclosure dispute

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The Indiana Court of Appeals reversed the denial of a couple’s motion for relief from judgment and request for attorney fees in a foreclosure dispute, finding the couple established the party seeking to foreclose on their property acted in bad faith.

Through a business transaction, John Nowak gave Brett Gibson a promissory note in the amount of $350,000 for stock. To secure payment of the note, Nowak granted Gibson a second mortgage against his home in Indianapolis and against his vacation property in Michigan. Irwin Mortgage Corp. held a prior mortgage on the Indiana real estate. Nowak sold the Indiana property six months later to Thomas and Elizabeth Neu. A title search did not reveal Gibson’s mortgage on the property.

Nowak defaulted on the promissory note to Gibson, so Gibson sought to foreclose on the Indiana and Michigan properties. Gibson obtained a judgment foreclosure in the Michigan case and purchased the property at a public auction. When Gibson filed a motion in 2007 requesting the Indiana trial court grant him a foreclosure judgment against the Neus’ property, he mentioned the Michigan property but did not say that a sheriff’s sale had taken place and he was the winning bidder.

The Indiana trial court eventually entered a judgment of foreclosure against the Indiana property in favor of Gibson for more than $380,000 plus interest, attorney fees and costs. The trial court also denied the Neus’ request for a sheriff’s sale. The Indiana Supreme Court affirmed. The Neus then filed a motion for relief from judgment and for attorney fees, asking the court to deem Gibson’s foreclosure decree fully satisfied because Gibson had reduced his promissory note to judgment in Michigan and bid the full amount of that judgment to acquire his Michigan collateral at a sheriff’s sale.

After deducting the amount of Gibson’s bid to purchase the Michigan real estate, the trial court ordered the balance due on his judgment was $74,716.

In Thomas A. Neu and Elizabeth A. Neu, and Wells Fargo Bank, N.A. v. Brett Gibson, No. 49A02-1109-MF-842, the appellate court found that the proceedings dealing with the Indiana property became fully satisfied when Gibson got the foreclosure judgment on the Michigan property and submitted a full credit bid based on the same promissory note that was the basis of the Indiana foreclosure proceedings. The judges also found the Neus established bad faith when Gibson failed to disclose the Michigan foreclosure judgment and sheriff’s sale. They ordered the trial court determine reasonable attorney fees in favor of the Neus starting from Aug. 8, 2007, the date of the Michigan sheriff’s sale.


 

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  1. I work with some older lawyers in the 70s, 80s, and they are sharp as tacks compared to the foggy minded, undisciplined, inexperienced, listless & aimless "youths" being churned out by the diploma mill law schools by the tens of thousands. A client is generally lucky to land a lawyer who has decided to stay in practice a long time. Young people shouldn't kid themselves. Experience is golden especially in something like law. When you start out as a new lawyer you are about as powerful as a babe in the cradle. Whereas the silver halo of age usually crowns someone who can strike like thunder.

  2. YES I WENT THROUGH THIS BEFORE IN A DIFFERENT SITUATION WITH MY YOUNGEST SON PEOPLE NEED TO LEAVE US ALONE WITH DCS IF WE ARE NOT HURTING OR NEGLECT OUR CHILDREN WHY ARE THEY EVEN CALLED OUT AND THE PEOPLE MAKING FALSE REPORTS NEED TO GO TO JAIL AND HAVE A CLASS D FELONY ON THERE RECORD TO SEE HOW IT FEELS. I WENT THREW ALOT WHEN HE WAS TAKEN WHAT ELSE DOES THESE SCHOOL WANT ME TO SERVE 25 YEARS TO LIFE ON LIES THERE TELLING OR EVEN LE SAME THING LIED TO THE COUNTY PROSECUTOR JUST SO I WOULD GET ARRESTED AND GET TIME HE THOUGHT AND IT TURNED OUT I DID WHAT I HAD TO DO NOT PROUD OF WHAT HAPPEN AND SHOULD KNOW ABOUT SEEKING MEDICAL ATTENTION FOR MY CHILD I AM DISABLED AND SICK OF GETTING TREATED BADLY HOW WOULD THEY LIKE IT IF I CALLED APS ON THEM FOR A CHANGE THEN THEY CAN COME AND ARREST THEM RIGHT OUT OF THE SCHOOL. NOW WE ARE HOMELESS AND THE CHILDREN ARE STAYING WITH A RELATIVE AND GUARDIAN AND THE SCHOOL WON'T LET THEM GO TO SCHOOL THERE BUT WANT THEM TO GO TO SCHOOL WHERE BULLYING IS ALLOWED REAL SMART THINKING ON A SCHOOL STAFF.

  3. Family court judges never fail to surprise me with their irrational thinking. First of all any man who abuses his wife is not fit to be a parent. A man who can't control his anger should not be allowed around his child unsupervised period. Just because he's never been convicted of abusing his child doesn't mean he won't and maybe he hasn't but a man that has such poor judgement and control is not fit to parent without oversight - only a moron would think otherwise. Secondly, why should the mother have to pay? He's the one who made the poor decisions to abuse and he should be the one to pay the price - monetarily and otherwise. Yes it's sad that the little girl may be deprived of her father, but really what kind of father is he - the one that abuses her mother the one that can't even step up and do what's necessary on his own instead the abused mother is to pay for him???? What is this Judge thinking? Another example of how this world rewards bad behavior and punishes those who do right. Way to go Judge - NOT.

  4. Right on. Legalize it. We can take billions away from the drug cartels and help reduce violence in central America and more unwanted illegal immigration all in one fell swoop. cut taxes on the savings from needless incarcerations. On and stop eroding our fourth amendment freedom or whatever's left of it.

  5. "...a switch from crop production to hog production "does not constitute a significant change."??? REALLY?!?! Any judge that cannot see a significant difference between a plant and an animal needs to find another line of work.

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