ILNews

COA rules against bank in lien dispute

Back to TopCommentsE-mailPrintBookmark and Share

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.”
 

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. It was mentioned in the article that there have been numerous CLE events to train attorneys on e-filing. I would like someone to provide a list of those events, because I have not seen any such events in east central Indiana, and since Hamilton County is one of the counties where e-filing is mandatory, one would expect some instruction in this area. Come on, people, give some instruction, not just applause!

  2. This law is troubling in two respects: First, why wasn't the law reviewed "with the intention of getting all the facts surrounding the legislation and its actual impact on the marketplace" BEFORE it was passed and signed? Seems a bit backwards to me (even acknowledging that this is the Indiana state legislature we're talking about. Second, what is it with the laws in this state that seem to create artificial monopolies in various industries? Besides this one, the other law that comes to mind is the legislation that governed the granting of licenses to firms that wanted to set up craft distilleries. The licensing was limited to only those entities that were already in the craft beer brewing business. Republicans in this state talk a big game when it comes to being "business friendly". They're friendly alright . . . to certain businesses.

  3. Gretchen, Asia, Roberto, Tonia, Shannon, Cheri, Nicholas, Sondra, Carey, Laura ... my heart breaks for you, reaching out in a forum in which you are ignored by a professional suffering through both compassion fatigue and the love of filthy lucre. Most if not all of you seek a warm blooded Hoosier attorney unafraid to take on the government and plead that government officials have acted unconstitutionally to try to save a family and/or rescue children in need and/or press individual rights against the Leviathan state. I know an attorney from Kansas who has taken such cases across the country, arguing before half of the federal courts of appeal and presenting cases to the US S.Ct. numerous times seeking cert. Unfortunately, due to his zeal for the constitutional rights of peasants and willingness to confront powerful government bureaucrats seemingly violating the same ... he was denied character and fitness certification to join the Indiana bar, even after he was cleared to sit for, and passed, both the bar exam and ethics exam. And was even admitted to the Indiana federal bar! NOW KNOW THIS .... you will face headwinds and difficulties in locating a zealously motivated Hoosier attorney to face off against powerful government agents who violate the constitution, for those who do so tend to end up as marginalized as Paul Odgen, who was driven from the profession. So beware, many are mere expensive lapdogs, the kind of breed who will gladly take a large retainer, but then fail to press against the status quo and powers that be when told to heel to. It is a common belief among some in Indiana that those attorneys who truly fight the power and rigorously confront corruption often end up, actually or metaphorically, in real life or at least as to their careers, as dead as the late, great Gary Welch. All of that said, I wish you the very best in finding a Hoosier attorney with a fighting spirit to press your rights as far as you can, for you do have rights against government actors, no matter what said actors may tell you otherwise. Attorneys outside the elitist camp are often better fighters that those owing the powers that be for their salaries, corner offices and end of year bonuses. So do not be afraid to retain a green horn or unconnected lawyer, many of them are fine men and woman who are yet untainted by the "unique" Hoosier system.

  4. I am not the John below. He is a journalist and talk show host who knows me through my years working in Kansas government. I did no ask John to post the note below ...

  5. "...not those committed in the heat of an argument." If I ever see a man physically abusing a woman or a child and I'm close enough to intercede I will not ask him why he is abusing her/him. I will give him a split second to cease his attack and put his hands in the air while I call the police. If he continues, I will still call the police but to report, "Man down with a gunshot wound,"instead.

ADVERTISEMENT