Pursuant to Ind. Appellate Rule 65(D), this
Memorandum Decision shall not be
                                                          May 23 2014, 7:31 am
regarded as precedent or cited before any
court except for the purpose of establishing
the defense of res judicata, collateral
estoppel, or the law of the case.


ATTORNEY FOR APPELLANT:                             ATTORNEY FOR APPELLEE:

JEFFRY G. PRICE                                     MATTHEW S. LOVE
Peru, Indiana                                       Feiwell & Hannoy, P.C.
                                                    Indianapolis, Indiana




                               IN THE
                     COURT OF APPEALS OF INDIANA

MICHAEL NERO,                                       )
                                                    )
       Appellant-Defendant,                         )
                                                    )
               vs.                                  )      No. 52A02-1312-MF-1017
                                                    )
CITIMORTGAGE, INC.,                                 )
                                                    )
       Appellee-Plaintiff.                          )


                      APPEAL FROM THE MIAMI SUPERIOR COURT
                          The Honorable Daniel C. Banina, Judge
                             Cause No. 52D02-1212-MF-436



                                           May 23, 2014


                MEMORANDUM DECISION - NOT FOR PUBLICATION


KIRSCH, Judge
      Michael Nero appeals from the trial court’s entry of summary judgment in favor of

Citimortgage, Inc. in its mortgage foreclosure action with respect to property Nero was

leasing with the option to purchase on contract from J.L. Morgan, Jr., the mortgagor.

      We affirm.

                      FACTS AND PROCEDURAL HISTORY

      On June 24, 2002, Morgan executed and delivered to Prime Rate Lending, Inc. a

promissory note in the original principal sum of $38,000.00. Prime Rate Lending is named

as the payee. On the same date, as security for repayment of the sums due and owing under

the promissory note, Morgan executed a mortgage granting a security interest in the

property at issue (“the mortgaged property”) to Prime Rate Lending. That mortgage was

recorded on July 2, 2002. The promissory note was later assigned to Citimortgage.

      Nero and Morgan executed an agreement for the lease with the option to purchase

the mortgaged property. The agreement was dated May 2, 2005, signed on June 25, 2005,

and recorded on June 9, 2006. Nero became aware sometime in 2009 that Morgan was not

making the mortgage payments to Citimortgage. On August 12, 2009, Nero and Morgan

signed a letter in which Morgan granted Nero permission to access his mortgage account,

make payments on that account, and inquire about the account. Nero then began making

payments directly to Citimortgage. Morgan died on April 19, 2010, and no estate was

opened.

      On December 20, 2012, Citimortgage filed a complaint on the promissory note to

foreclose on the mortgaged property. In the complaint, Citimortgage contended that it had

actual possession of the original promissory note, and the last payment Citimortgage had

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received was for the payment due on May 1, 2011. Although other defendants were named,

Citimortgage also named, in addition to Nero, the unknown heirs and devisees of Morgan

as defendants to the action to answer as to the interests they might have in the mortgaged

property.

       Nero filed an answer to the complaint, denying that Citimortgage was entitled to

foreclose upon the mortgaged property.        Citimortgage filed a motion for summary

judgment and decree of foreclosure, to which it attached an affidavit claiming that

Citimortgage was in actual possession of the original promissory note, and a publisher’s

certificate establishing the dates the notice of suit was published in the Peru Tribune. Nero

filed an affidavit in opposition to Citimortgage’s motion for summary judgment in which

he alleged that, after contacting Citimortgage, he made regular payments directly to

Citimortgage to be credited on that account. In support of that contention, Nero attached a

copy of a check made payable to Citimortgage in the amount of $1,580.30, dated December

14, 2009. Nero asserted that Citimortgage was not legally authorized to foreclose on the

mortgage because Nero had continued to pay the property taxes, kept the property insured,

and had been in possession of the real estate since May 2005.

       The trial court held a hearing on September 23, 2013, took the matter under

advisement, and subsequently entered its order granting summary judgment in favor of

Citimortgage on November 7, 2013. Nero now appeals.

                            DISCUSSION AND DECISION

       On appeal from a grant of summary judgment, our standard of review is the same

as that of the trial court. FLM, LLC v. Cincinnati Ins. Co., 973 N.E.2d 1167, 1173 (Ind.

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Ct. App. 2012) (citing Wilcox Mfg. Grp., Inc. v. Mktg. Servs. of Ind., Inc., 832 N.E.2d 559,

562 (Ind. Ct. App. 2005)), trans. denied. We stand in the shoes of the trial court and apply

a de novo standard of review. Id. (citing Cox v. N. Ind. Pub. Serv. Co., 848 N.E.2d 690,

695 (Ind. Ct. App. 2006)). Our review of a summary judgment motion is limited to those

materials designated to the trial court. Ind. Trial Rule 56(H); Robson v. Tex. E. Corp., 833

N.E.2d 461, 466 (Ind. Ct. App. 2005), trans. denied. Summary judgment is appropriate

only where the designated evidence shows there are no genuine issues of material fact and

the moving party is entitled to judgment as a matter of law. T.R. 56(C). For summary

judgment purposes, a fact is “material” if it bears on the ultimate resolution of relevant

issues. FLM, 973 N.E.2d at 1173. We view the pleadings and designated materials in the

light most favorable to the non-moving party. Id. Additionally, all facts and reasonable

inferences from those facts are construed in favor of the nonmoving party. Id. (citing

Troxel Equip. Co. v. Limberlost Bancshares, 833 N.E.2d 36, 40 (Ind. Ct. App. 2005), trans.

denied.)

       A trial court’s grant of summary judgment is clothed with a presumption of validity,

and the party who lost in the trial court has the burden of demonstrating that the grant of

summary judgment was erroneous. Id. Where a trial court enters specific findings and

conclusions, they offer insight into the rationale for the trial court’s judgment and facilitate

appellate review, but are not binding upon this court. Id. We will affirm upon any theory

or basis supported by the designated materials. Id. When a trial court grants summary

judgment, we carefully scrutinize that determination to ensure that a party was not

improperly prevented from having his or her day in court. Id.

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       Nero claims that the trial court erred by entering summary judgment when there

were genuine issues of material fact regarding payments that he made to Citimortgage,

there was no determination of the identity of Morgan’s heirs, and where Citimortgage had

unclean hands. Citimortgage counters by arguing that Nero, who was not a party to the

promissory note or mortgage, lacked standing to raise his assertions, which appear to be

based on breach-of-contract principles. In the alternative, Citimortgage claims that the trial

court’s judgment should stand because Nero has failed to raise a genuine issue of material

fact precluding summary judgment.

       Nero was not a party to the promissory note or the mortgage; therefore, his rights

and what would be beneficial to him were not contemplated by those documents. See OEC-

Diasonics, Inc. v. Major, 674 N.E.2d 1312, 1314-15 (Ind. 1996) (generally only parties to

contract or those in privity have rights). Nonetheless, Citimortgage named Nero as a

defendant to answer to his interest in the mortgaged property.              Thus, we reject

Citimortgage’s challenge of Nero’s standing in this appeal. See Allstate Ins. Co. v. Hayes,

499 N.W.2d 743, 749 (Mich. 1993) (plaintiff could not challenge standing of defendant

plaintiff named in complaint).

       Therefore, we address Nero’s claims on appeal. In doing so, consistent with our

standard of review, we look to the designated evidence. Nero alleges that he was given

permission to access Morgan’s mortgage account, make payments, and make inquiries.

Nevertheless, there is no evidence that the parties to the mortgage and promissory note

changed or were affected by this agreement. Additionally, the evidence shows Nero

submitted a check made payable to Citimortgage in the amount of $1,580.30 dated

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December 14, 2009. Citimortgage’s complaint alleges that no payments were received or

made after the payment due on May 1, 2011. Nero has designated no evidence to the

contrary to raise a genuine issue of material fact that payments were made after that date.

Instead, Nero has stated in his affidavit that payments were regularly made after the

December 13, 2009 payment. While we accept that as true, Nero has failed to establish

that payments were made after the date alleged in the complaint.

       In Otto v. Park Garden Associations, 612 N.E.2d 135 (Ind. Ct. App. 1992), we

discussed the evidence required to show the existence of a genuine issue of material fact in

a mortgage foreclosure action. This case is distinguishable, however, because unlike the

present case, Otto involves the parties to the promissory note and mortgage agreement.

Notwithstanding that distinction, in Otto, after noting that the mortgagees designated

evidence to show the note, the debt, and consistently late payments as evidence of default,

we observed the following about the mortgagors’ burden once that showing has been made:

       At this point, it was up to Ottos to set forth specific facts demonstrating the
       existence of genuinely disputed issues which would preclude summary
       judgment. The Ottos did nothing of the sort. Instead, the Ottos merely
       asserted in their reply (without providing any evidence) that at the time they
       received Park Gardens’ acceleration notice, the Ottos were not in default.
       They did not include cancelled checks or any other evidence which would
       have allowed the trial court to find that the issue of default should be decided
       at trial. It was up to the trial court to determine, based on the undisputed
       facts before it, the ultimate fact of default based on evidence presented by
       the parties. Therefore, Ottos’ conclusory statements did not constitute the
       type of factual showing necessary under T.R. 56(E) to avoid summary
       judgment.
612 N.E.2d at 139.

       Here, Citimortgage designated the promissory note, the mortgage, an affidavit

acknowledging actual possession of the original note, and an affidavit from the vice-

                                              6
president of document control at Citimortgage, setting forth the remaining principal

balance, interest due, pre-acceleration late charges, escrow-deficiency real estate taxes, and

hazard insurance paid. In response, Nero submitted an affidavit denying that he was in

default of his contract with Morgan, confirming that with Morgan’s consent Nero was

making payments directly to Citimortgage, attaching a copy of the December 2009 check

to Citimortgage, and averring that he continued to make mortgage payments after

December 2009, made property tax payments, and kept the mortgaged property insured.

Nero denied that Citimortgage was legally authorized to foreclose on the mortgaged

property. In sum, Nero failed to designate evidence to show that the mortgage was not in

default on June 1, 2011.

       Additionally, Nero challenges the trial court’s entry of summary judgment in the

absence of a determination of Morgan’s heirs. Nero correctly observes the general rule

that title to real estate vests immediately and absolutely in a person’s heirs upon death. See

Demma v. Forbes Lumber Co., 181 N.E.2d 253, 255 (Ind. Ct. App. 1962). His argument

continues though, that unless all of the record owners of the mortgaged property participate

in the action it is impossible to pass good title to mortgaged property at a mortgage

foreclosure sale. However, where there is no evidence of a mortgage foreclosure sale, as

in the present case, the argument is not ripe on appeal. The record reflects that because no

estate was opened by Morgan’s heirs after Morgan’s death, Citimortgage named the

unknown heirs of Morgan in its foreclosure complaint to answer to their interest in the

property. The record further reflects that those unknown heirs were served by publication

in the Peru Tribune. None of Morgan’s heirs answered Citimortgage’s complaint.

                                              7
       As we acknowledged in Deetz v. McGowan, 403 N.E.2d 1160, 1164 (Ind. Ct. App.

1980), upon the death of a mortgagor, the mortgagee may assert its specific lien as a claim

against the estate, or may waive the right to participate in the assets of the estate and rely

on the mortgage security in a foreclosure action to satisfy the debt. Mortgage foreclosure

actions are essentially equitable actions for the enforcement of a lien against property in

satisfaction of a debt. Songer v. Civitas Bank, 771 N.E.2d 61, 69 (Ind. 2002); Skendzel v.

Marshall, 261 Ind. 226, 240, 301 N.E.2d 641, 650 (1973). In Truitt v. Truitt, 38 Ind. 16,

26 (1871), our Supreme Court stated as follows:

       A party may take a decree for the foreclosure of a mortgage, or the
       enforcement of a mechanic’s lien, without a personal judgment over against
       the party liable. This was a proceeding in rem, to enforce a lien on the land,
       and we are unable to see how the defendants have been injured by the failure
       to take a personal judgment also.
Citimortgage elected to pursue a judgment in rem and named the unnamed heirs and

devisees of Morgan as defendants to answer to their interest in the property. We find no

error here and reject Nero’s claim that Citimortgage was required to open an estate.

       Nero’s final salvo against the summary judgment is his contention that he was the

equitable owner of the mortgaged property and that since Citimortgage was “in the best

position to avoid a loss [it] should bear it.” Appellant’s Br. at 13. Nero claims that the trial

court’s decision should be reversed because of its failure to fashion an equitable remedy in

light of the positions of the parties. Nero cites to City Savings Bank v. Eby Construction,

LLC, 954 N.E.2d 459 (Ind. Ct. App. 2011) in support of this position; however, that case

is inapposite. In City Savings Bank, we held that the trial court erred by disregarding

statutory directives related to the priority of mortgages over later-recorded mechanic’s liens


                                               8
on equitable and public policy grounds. City Sav. Bank, 954 N.E.2d at 466. The trial court

concluded that the mortgage holder, which sought foreclosure of its mortgages on

commercial property and claimed priority over the later-recorded mechanic’s lien filed by

a construction company, had come to the court with unclean hands. The construction

company contended that the mortgagee’s mortgages should not be given priority because

the mortgagee had allowed a subsequent promissory note and payment to a subsequent

contractor when the construction company, which possessed a recorded mechanic’s lien,

remained unpaid. Noting that equity follows the law, we held that the trial court had erred

by ignoring statutory and case law in favor of an equitable remedy. Id. at 465.

       Here, Citimortgage’s mortgage was recorded prior to the recording of the lease with

the option to purchase the mortgaged property. To the extent that Nero is contending that

Citimortgage had unclean hands by accepting mortgage payments from him, but then

seeking foreclosure of the mortgaged property, his argument is unpersuasive. Accepting

as true Nero’s uncontroverted statements that payments were made and received after

December 2009, he has failed to designate evidence showing that he made payments after

the date of default alleged and shown by Citimortgage. The trial court did not err by

following the law and refusing to exercise its discretion to fashion an equitable remedy.

       Nero urges us to direct the Indiana General Assembly to a perceived deficiency in

the Indiana Foreclosure Prevention Agreement statutes, Indiana Code chapter 32-30-10.5.

He contends that he is prevented from seeking relief via those statutes because a contract

buyer like himself does not fall within the statutory definition of debtor, which is limited

to the maker of the note secured by the mortgage. Citimortgage correctly observes that

                                             9
this issue is not relevant to the resolution of the issues presented in this appeal because

Morgan was the maker of the note secured by the mortgage. Thus, we offer no opinion on

the matter.

       Affirmed.

MAY, J., and BAILEY, J., concur.




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