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Justices split over how to determine a lawsuit is equitable

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The Indiana Supreme Court has expanded on a previous decision to create a multi-pronged inquiry to determine whether a suit is essentially equitable, a move that causes two justices to worry the new test may often foreclose a defendant’s right to a jury on distinct and severable legal claims.

U.S. Bank initiated a foreclosure action against Mary Beth and Perry Lucas. The couple asserted numerous legal defenses and claims against the bank and the loan servicer, and asked for a jury trial on these defenses and claims. The trial court denied the request, holding the Lucases’ counterclaims and related legal claims were drawn into equity.

The Indiana Court of Appeals reversed and ordered the trial court to grant the Lucases’ request for a jury trial. It relied on Songer v. Civitas Bank, 771 N.E.2d 61 (Ind. 2002), unable to conclude that the essential features of this case were equitable.

The justices took another look at their Songer decision, which noted that the inclusion of an equitable claim, without anything more, couldn’t justify drawing the whole case into equity, and that a court should look at the “essential features of a suit.” The majority concluded that an examination of the substance and character of the complaint, the rights and interests involved, and the relief requested is not the endpoint of the inquiry, but a multi-pronged inquiry should be used to figure out whether a suit is essentially equitable.

Justice Steven David wrote for the majority in Mary Beth Lucas and Perry Lucas v. U.S. Bank, N.A., as Trustee for the C-Bass Mortgage Loan Asset-Backed Certificates, Series 2006-MH-1, No. 28S01-1102-CV-78, “If equitable and legal causes of action or defenses are present in the same lawsuit, the court must examine several factors of each joined claim — its substance and character, the rights and interests involved, and the relief requested. After that examination, the trial court must decide whether core questions presented in any of the joined legal claims significantly overlap with the subject matter that invokes the equitable jurisdiction of the court. If so, equity subsumes those particular legal claims to obtain more final and effectual relief for the parties despite the presence of peripheral questions of a legal nature. Conversely, the unrelated legal claims are entitled to a trial by jury.”

The majority concluded that the core issues presented by the Lucases’ legal defenses and claims as compared to the core issues presented by the foreclosure action show that they are closely intertwined with each other.

“We wholeheartedly recognize that the Indiana Constitution protects the right to a trial by jury for legal claims when the essential features of a civil suit are not equitable, and we do not narrow that right. But the essential features of this suit are equitable,” wrote the justice.

Justices Brent Dickson and Robert Rucker dissented because of concerns that Thursday’s decision dilutes the teachings of Songer.

“Instead of focusing simply on whether multiple causes of action are ‘distinct and severable,’ the standard prescribed in Songer, the majority superimposes a further test — whether the legal claims "significantly overlap" with the subject matter of the original equitable claim. In my view, this new test may often foreclose a defendant's right to a jury trial on distinct and severable legal claims. I prefer that the analysis prescribed by Songer be followed without modification with the result that the defendants should not be deprived of their right to jury trial as to their purely legal claims that are sufficiently distinct and severable from the equitable foreclosure action,” wrote Justice Dickson.
 

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  1. Living in South Bend, I travel to Michigan a lot. Virtually every gas station sells cold beer there. Many sell the hard stuff too. Doesn't seem to be a big deal there.

  2. Mr. Ricker, how foolish of you to think that by complying with the law you would be ok. Don't you know that Indiana is a state that welcomes monopolies, and that Indiana's legislature is the one entity in this state that believes monopolistic practices (such as those engaged in by Indiana Association of Beverage Retailers) make Indiana a "business-friendly" state? How can you not see this????

  3. Actually, and most strikingly, the ruling failed to address the central issue to the whole case: Namely, Black Knight/LPS, who was NEVER a party to the State court litigation, and who is under a 2013 consent judgment in Indiana (where it has stipulated to the forgery of loan documents, the ones specifically at issue in my case)never disclosed itself in State court or remediated the forged loan documents as was REQUIRED of them by the CJ. In essence, what the court is willfully ignoring, is that it is setting a precedent that the supplier of a defective product, one whom is under a consent judgment stipulating to such, and under obligation to remediate said defective product, can: 1.) Ignore the CJ 2.) Allow counsel to commit fraud on the state court 3.) Then try to hide behind Rooker Feldman doctrine as a bar to being held culpable in federal court. The problem here is the court is in direct conflict with its own ruling(s) in Johnson v. Pushpin Holdings & Iqbal- 780 F.3d 728, at 730 “What Johnson adds - what the defendants in this suit have failed to appreciate—is that federal courts retain jurisdiction to award damages for fraud that imposes extrajudicial injury. The Supreme Court drew that very line in Exxon Mobil ... Iqbal alleges that the defendants conducted a racketeering enterprise that predates the state court’s judgments ...but Exxon Mobil shows that the Rooker Feldman doctrine asks what injury the plaintiff asks the federal court to redress, not whether the injury is “intertwined” with something else …Because Iqbal seeks damages for activity that (he alleges) predates the state litigation and caused injury independently of it, the Rooker-Feldman doctrine does not block this suit. It must be reinstated.” So, as I already noted to others, I now have the chance to bring my case to SCOTUS; the ruling by Wood & Posner is flawed on numerous levels,BUT most troubling is the fact that the authors KNOW it's a flawed ruling and choose to ignore the flaws for one simple reason: The courts have decided to agree with former AG Eric Holder that national banks "Are too big to fail" and must win at any cost-even that of due process, case precedent, & the truth....Let's see if SCOTUS wants a bite at the apple.

  4. I am in NJ & just found out that there is a judgment against me in an action by Driver's Solutions LLC in IN. I was never served with any Court pleadings, etc. and the only thing that I can find out is that they were using an old Staten Island NY address for me. I have been in NJ for over 20 years and cannot get any response from Drivers Solutions in IN. They have a different lawyer now. I need to get this vacated or stopped - it is now almost double & at 18%. Any help would be appreciated. Thank you.

  5. I am in NJ & just found out that there is a judgment against me in an action by Driver's Solutions LLC in IN. I was never served with any Court pleadings, etc. and the only thing that I can find out is that they were using an old Staten Island NY address for me. I have been in NJ for over 20 years and cannot get any response from Drivers Solutions in IN. They have a different lawyer now. I need to get this vacated or stopped - it is now almost double & at 18%. Any help would be appreciated. Thank you.

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