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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. What is the one thing the Hoosier legal status quo hates more than a whistleblower? A lawyer whistleblower taking on the system man to man. That must never be rewarded, must always, always, always be punished, lest the whole rotten tree be felled.

  2. I want to post this to keep this tread alive and hope more of David's former clients might come forward. In my case, this coward of a man represented me from June 2014 for a couple of months before I fired him. I knew something was wrong when he blatantly lied about what he had advised me in my contentious and unfortunate divorce trial. His impact on the proceedings cast a very long shadow and continues to impact me after a lengthy 19 month divorce. I would join a class action suit.

  3. The dispute in LB Indiana regarding lake front property rights is typical of most beach communities along our Great Lakes. Simply put, communication to non owners when visiting the lakefront would be beneficial. The Great Lakes are designated navigational waters (including shorelines). The high-water mark signifies the area one is able to navigate. This means you can walk, run, skip, etc. along the shores. You can't however loiter, camp, sunbath in front of someones property. Informational signs may be helpful to owners and visitors. Our Great Lakes are a treasure that should be enjoyed by all. PS We should all be concerned that the Long Beach, Indiana community is on septic systems.

  4. Dear Fan, let me help you correct the title to your post. "ACLU is [Left] most of the time" will render it accurate. Just google it if you doubt that I am, err, "right" about this: "By the mid-1930s, Roger Nash Baldwin had carved out a well-established reputation as America’s foremost civil libertarian. He was, at the same time, one of the nation’s leading figures in left-of-center circles. Founder and long time director of the American Civil Liberties Union, Baldwin was a firm Popular Fronter who believed that forces on the left side of the political spectrum should unite to ward off the threat posed by right-wing aggressors and to advance progressive causes. Baldwin’s expansive civil liberties perspective, coupled with his determined belief in the need for sweeping socioeconomic change, sometimes resulted in contradictory and controversial pronouncements. That made him something of a lightning rod for those who painted the ACLU with a red brush." http://www.harvardsquarelibrary.org/biographies/roger-baldwin-2/ "[George Soros underwrites the ACLU' which It supports open borders, has rushed to the defense of suspected terrorists and their abettors, and appointed former New Left terrorist Bernardine Dohrn to its Advisory Board." http://www.discoverthenetworks.org/viewSubCategory.asp?id=1237 "The creation of non-profit law firms ushered in an era of progressive public interest firms modeled after already established like the National Association for the Advancement of Colored People ("NAACP") and the American Civil Liberties Union ("ACLU") to advance progressive causes from the environmental protection to consumer advocacy." https://en.wikipedia.org/wiki/Cause_lawyering

  5. Mr. Foltz: Your comment that the ACLU is "one of the most wicked and evil organizations in existence today" clearly shows you have no real understanding of what the ACLU does for Americans. The fact that the state is paying out so much in legal fees to the ACLU is clear evidence the ACLU is doing something right, defending all of us from laws that are unconstitutional. The ACLU is the single largest advocacy group for the US Constitution. Every single citizen of the United States owes some level of debt to the ACLU for defending our rights.

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