Foreclosure case remanded over statutory violation

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A foreclosure dispute over a Middletown home is headed back to the trial court in Henry County after the Indiana Court of Appeals determined an order granting immediate possession of the home to its seller was erroneous.

In Richard A. Colvin v. George M. Taylor, 21A-MF-3, Richard and Julie Colvin agreed to purchase a home in Middletown from George Taylor for $75,000, with a 30-year mortgage. The parties entered the contract in 2006, but in March 2020, Taylor filed for forfeiture of the contract or, in the alternative, for foreclosure, claiming the Colvins had defaulted on their payments.

Taylor sought immediate possession of the house, but shortly after he filed his complaint, Indiana Gov. Eric Holcomb issued a moratorium on evictions and foreclosures due to the COVID-19 pandemic. The Henry Circuit Court thus stayed proceedings until that order was lifted, which occurred in August 2020.

In September, Taylor again filed for immediate possession of the home, and the trial court granted his motion on Dec. 7. Richard Colvin then filed an interlocutory appeal, and the Indiana Court of Appeals reversed.

In a unanimous opinion handed down Thursday, Judge Nancy Vaidik first noted the moratorium on evictions and foreclosures had been lifted on Aug. 14, about four months before the trial court granted Taylor’s motion. Thus, the court did not violate the moratorium, as Colvin argued.

Vaidik added in a footnote that federal foreclosure protections remain in place, but Colvin did not claim he was entitled to those.

But the COA panel agreed with Colvin that Taylor should have been required to “file[] with the court a written undertaking in an amount fixed by the court and executed by a surety” pursuant to Indiana Code § 32-30-3-6.

“In its order granting Taylor immediate possession of the real estate, the trial court stated it ‘accept[ed] the Plaintiff’s ownership of the premises as security for damages if the Court’s ruling entered hereby is in error, the same to be determined at the trial of this cause.’ But this is not what Section 32-30-3-6 requires,” Vaidik wrote. “Rather, it requires the plaintiff — here, Taylor — to ‘file[] with the court a written undertaking in an amount fixed by the court and executed by a surety to be approved by this court.’

“Richard has made a prima facie showing of error on this issue,” Vaidik concluded. “We therefore reverse the court’s immediate-possession order and remand this case to the trial court for further proceedings.”

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