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COA rules against bank in lien dispute

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Wells Fargo Bank could not convince the Indiana Court of Appeals to reverse default judgment entered against it in favor of two companies trying to foreclose on mechanic’s liens. The court also had a warning for litigants when filing amended complaints.

John E. Smith Builders Inc. and Isley’s Plumbing Inc. performed work on the home of Heather Stone after it sustained damage in a fire. Her home was mortgaged through Washington Mutual. The mortgage was later acquired by JP Morgan Chase Bank in 2008.

Smith Builders filed a complaint to foreclose on its mechanic’s lien on the homeowner’s property; Isley filed a cross-claim seeking to foreclose on its claimed mechanic’s lien. Smith Builders later entered bankruptcy and Edward Echert was substituted as a party in interest.

The trial court granted default judgments in October 2012 in favor of Dechert and Isley and against Washington Mutual and determined Isley’s mechanic’s lien held priority over Dechert’s. In April 2013, the mortgage was transferred to Wells Fargo, which sought to have the judgment set aside under Trial Rule 60(B)(4).

In Wells Fargo Bank, N.A. v. Edward P. Dechert, Trustee of the Bankruptcy Estate of John E. Smith and Isley's Plumbing, Inc., 34A02-1311-PL-980, the Court of Appeals affirmed the judgment, rejecting the bank’s claim that Dechert’s decision to file a second amended complaint and Isley’s response to that complaint resulted in the automatic vacation of the default judgments entered against the bank. None of the amended pleadings undermined any basis upon which the default judgments against the bank were issued.

The judges also rejected Wells Fargo’s claims that certain pleadings were not properly served upon the bank and that default judgments should be set aside because Indiana courts disfavor default judgments and windfalls.
 
“However, we note that Dechert’s decision to file the first amended complaint was inappropriate,’’ Judge L. Mark Bailey wrote. “Here, where service had been accomplished, the appropriate procedure for Dechert to follow was to establish that service of process (in whatever form) had been completed upon Washington Mutual, and then to move for default judgment under Trial Rule 55—without filing a complaint alleging additional facts not necessary to proof of the merits of the case. Because the allegations in the first amended complaint do not differ on the elements of the causes of action, there was fair notice of Dechert’s claims upon which the trial court could enter a default judgment, and there was a nine-month delay between that judgment and Wells Fargo’s appearance in the case.

“Parties who pursue a similar procedure may not find themselves in a similar position, however, particularly with respect to changes in substantive allegations entitling a party to relief. Litigants are, therefore, warned accordingly.”
 

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  1. Can I get this form on line,if not where can I obtain one. I am eligible.

  2. What a fine example of the best of the Hoosier tradition! How sad that the AP has to include partisan snark in the obit for this great American patriot and adventurer.

  3. Why are all these lawyers yakking to the media about pending matters? Trial by media? What the devil happened to not making extrajudicial statements? The system is falling apart.

  4. It is a sad story indeed as this couple has been only in survival mode, NOT found guilty with Ponzi, shaken down for 5 years and pursued by prosecution that has been ignited by a civil suit with very deep pockets wrenched in their bitterness...It has been said that many of us are breaking an average of 300 federal laws a day without even knowing it. Structuring laws, & civilForfeiture laws are among the scariest that need to be restructured or repealed . These laws were initially created for drug Lords and laundering money and now reach over that line. Here you have a couple that took out their own money, not drug money, not laundering. Yes...Many upset that they lost money...but how much did they make before it all fell apart? No one ask that question? A civil suit against Williams was awarded because he has no more money to fight...they pushed for a break in order...they took all his belongings...even underwear, shoes and clothes? who does that? What allows that? Maybe if you had the picture of him purchasing a jacket at the Goodwill just to go to court the next day...his enemy may be satisfied? But not likely...bitterness is a master. For happy ending lovers, you will be happy to know they have a faith that has changed their world and a solid love that many of us can only dream about. They will spend their time in federal jail for taking their money from their account, but at the end of the day they have loyal friends, a true love and a hope of a new life in time...and none of that can be bought or taken That is the real story.

  5. Could be his email did something especially heinous, really over the top like questioning Ind S.Ct. officials or accusing JLAP of being the political correctness police.

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