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Court rules on post-merger bank foreclosure rights

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The Indiana Court of Appeals ruled that a federal statute provides the authority for a bank that survives after a merger to enforce the promissory note and mortgage established by a predecessor bank.

In CFS, LLC and Charles Blackwelder v. Bank of America, Successor in Interest to LaSalle Bank Midwest National Association, No. 29A02-1105-MF-436, the Indiana Court of Appeals affirmed a ruling by Hamilton Circuit Judge Paul Felix that granted summary judgment in favor of Bank of America.

The case involves a promissory note and construction mortgage that CFS obtained in June 2007 in exchange for a $982,500 loan from LaSalle Bank Midwest National Association. Christopher Blackwelder executed a personal guaranty of the debt, but in August 2004 Bank of America – which had merged with and was a successor-in-interest to LaSalle – filed a mortgage foreclosure complaint alleging the loan was in default. CFS admitted to the debt but asserted it didn’t have any knowledge of the merger or Bank of America’s role as successor and right to collect the balance.

Bank of America moved for summary judgment on grounds that it had merged and had the authority to collect the debt or foreclose, and after a December 2010 hearing the trial judge took the matter under advisement. He initially declined summary judgment after the bank couldn’t provide any caselaw authority proving a successor-in-interest is sufficient to prove ownership, but he later granted summary judgment when Bank of America filed a motion to correct error that cited a federal statute providing that authority.

The bank cited 12 U.S.C. § 215a(e) that outlines the corporate existence of each merging bank and how all rights, franchises and interests of the individual merging banks are transferred to the successor merged bank without any deed or other transfer being needed.

Although the bank referenced a copy of the merger certificate and no factual dispute existed that a merger had occurred, Bank of America didn’t include a copy of that merger certificate. The trial court granted its judgment of foreclosure and decree of sale in the bank’s favor in April 2011. Appealing, CFS alleged the trial court granted summary judgment only after improperly considering “new evidence” about that federal statute.

The Court of Appeals ruled that Bank of America didn’t have to attach a copy of the merger when there was no factual dispute it had happened, and that the federal statute wasn’t “new evidence” presented to the trial court. The appellate panel found that no genuine issue of material fact existed about the merger and that summary judgment was properly granted to Bank of America.

 

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  1. I gave tempparry guardship to a friend of my granddaughter in 2012. I went to prison. I had custody. My daughter went to prison to. We are out. My daughter gave me custody but can get her back. She was not order to give me custody . but now we want granddaughter back from friend. She's 14 now. What rights do we have

  2. This sure is not what most who value good governance consider the Rule of Law to entail: "In a letter dated March 2, which Brizzi forwarded to IBJ, the commission dismissed the grievance “on grounds that there is not reasonable cause to believe that you are guilty of misconduct.”" Yet two month later reasonable cause does exist? (Or is the commission forging ahead, the need for reasonable belief be damned? -- A seeming violation of the Rules of Profession Ethics on the part of the commission) Could the rule of law theory cause one to believe that an explanation is in order? Could it be that Hoosier attorneys live under Imperial Law (which is also a t-word that rhymes with infamy) in which the Platonic guardians can do no wrong and never owe the plebeian class any explanation for their powerful actions. (Might makes it right?) Could this be a case of politics directing the commission, as celebrated IU Mauer Professor (the late) Patrick Baude warned was happening 20 years ago in his controversial (whisteblowing) ethics lecture on a quite similar topic: http://www.repository.law.indiana.edu/cgi/viewcontent.cgi?article=1498&context=ilj

  3. I have a case presently pending cert review before the SCOTUS that reveals just how Indiana regulates the bar. I have been denied licensure for life for holding the wrong views and questioning the grand inquisitors as to their duties as to state and federal constitutional due process. True story: https://www.scribd.com/doc/299040839/2016Petitionforcert-to-SCOTUS Shorter, Amici brief serving to frame issue as misuse of govt licensure: https://www.scribd.com/doc/312841269/Thomas-More-Society-Amicus-Brown-v-Ind-Bd-of-Law-Examiners

  4. Here's an idea...how about we MORE heavily regulate the law schools to reduce the surplus of graduates, driving starting salaries up for those new grads, so that we can all pay our insane amount of student loans off in a reasonable amount of time and then be able to afford to do pro bono & low-fee work? I've got friends in other industries, radiology for example, and their schools accept a very limited number of students so there will never be a glut of new grads and everyone's pay stays high. For example, my radiologist friend's school accepted just six new students per year.

  5. I totally agree with John Smith.

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