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Division of judgment in failed care facility financing affirmed

May 31, 2016

A former Indiana lawmaker and his business partners must pay a pro rata share of a deficiency judgment over defaulted financing for a rehabilitation care facility in Liberty, Indiana, the Court of Appeals affirmed Tuesday.

Former Indiana Rep. Eric Turner, R-Cicero; his brother, Kyle; Larry M. New, president of Heritage Medical Group Inc.; and other guarantors reaffirmed in 2004 they were jointly and severally liable for a loan for the Sycamore Springs Rehabilitation Centre obtained by T3 Investments Corp., which Eric Turner once led. Foreclosure proceedings began in 2005. Firstar Bank won a judgment of about $2.2 million.

Sycamore Springs was sold at a sheriff’s sale in 2008, but it didn’t satisfy the debt, and the bank won a deficiency judgment of more than $865,000 against T3. The investment company paid the judgment then filed a complaint for contributions against the guarantors. The trial court found the remaining guarantors – Eric and Kyle Turner, New, Heritage and T3 — each responsible for one-fifth of the judgment, a little more than $173,000 each.

“We agree with the trial court that consideration is not present between T3 and the Appellants to support the existence of a contractual relationship between them, and that, accordingly, the release contained in the Settlement Agreement is not applicable to T3’s contribution claim," Judge Elaine Brown wrote for the panel.

The case is Larry M. New, and Heritage Medical Group, Inc., f/k/a Heritage Medical Services, Inc. v. T3 Investments Corporation, 18A02-1508-PL-1161.
 

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