On rehearing, COA reaffirms dismissal of promissory note default litigation

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The Indiana Court of Appeals has reaffirmed the dismissal of a complaint brought for missed payments on a promissory note, granting rehearing for the limited purpose of addressing the issue of waiver.

In December 2018, the COA upheld the dismissal of Collins Asset Group, LLC’s complaint against Alkhemer Alialy, who defaulted on payments on a $60,000 promissory note. CAG’s complaint was time-barred, the appellate court said, because the company did not file it until 2016, but Alialy had stopped making payments in 2008. Thus, the cause of action accrued in 2008, so the 2016 litigation was outside the six-year statute of limitations.

Also in a footnote, the Court of Appeals determined CAG had waived its argument that Indiana Code section 26-1-3.1-118 governed the case because CAG failed to raise the issue in the Hamilton Superior Court. Collins sought rehearing on that footnote and pointed to case law “noting that even though the argument was not brought before the trial court, ‘[t]he crucial factor … in determining whether [the plaintiff] may interject what appears to be a new issue into the appeal is whether [the defendant] had unequivocal notice of the existence of the issue and, therefore, had an opportunity to defend against it.”

“However, at the time we issued our opinion, a review of the record revealed that CAG’s counsel had asserted in his memorandum in opposition to Alialy’s motion to dismiss that ‘the statute of limitations to collect the entire debt does not begin to run immediately upon the debtor’s default, but when the creditor exercises the optional acceleration clause,’” Judge Patricia Riley wrote on rehearing on Friday. CAG had sent a notice of acceleration to Alialy in October 2016. “CAG’s counsel never specifically mentioned I.C. section 26-1-3.1-118, and only partially paraphrased it in his memorandum. He never raised the argument during the hearing.”

Therefore, Riley said CAG’s “casual references” to a “partial argument” that did not specifically reference the statute were not sufficient to put Alialy on notice of the argument under I.C. 26-1-3.1-118 and, thus, could not warrant appellate analysis.

The opinion in Collins Asset Group, LLC v. Alkhemer Alialy, 18A-CC-1160, was reaffirmed in all other respects.

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