MEMORANDUM DECISION
Pursuant to Ind. Appellate Rule 65(D), this                     Apr 06 2015, 9:43 am
Memorandum Decision shall not be 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
Theodore L. Stacy                                        Rebecca H. Fischer
Valparaiso, Indiana                                      Laderer & Fischer, P.C.
                                                         South Bend, Indiana



                                             IN THE
    COURT OF APPEALS OF INDIANA

Kelli Alvarez                                            April 6, 2015
f/k/a Kelli Galanos,                                     Court of Appeals Case No.
                                                         46A03-1404-CC-129
Appellant-Defendant,
                                                         Appeal from the Laporte Superior
        v.                                               Court; The Honorable Jennifer L.
                                                         Koethe, Judge;
                                                         46D03-1205-CC-401
Horizon Bank, N.A.,
Appellee-Plaintiff.




May, Judge.




Court of Appeals of Indiana | Memorandum Decision 46A03-1404-CC-129 | April 6, 2015    Page 1 of 15
[1]   Kelli Alvarez f/k/a Kelli Galanos (Kelli) appeals judgment in favor of Horizon

      Bank, N.A. (Horizon). She presents three issues for our review, which we

      consolidate and restate as:


[2]   1.      Whether the court erred when it denied Kelli’s Motion to Dismiss based

      on Trial Rule 12(B)(1); and


[3]   2.      Whether the trial court abused its discretion when it entered summary

      judgment in favor of Horizon regarding Horizon’s original claim.


                                  Facts and Procedural History1
[4]   Kelli was married to George Galanos (George). Their divorce was final on

      May 18, 2011. As part of the divorce decree, George was awarded “all rights,

      title, interest, and exclusive use and possession” of all four properties the couple

      owned during their marriage. (App. at 56.) For each property, the court

      ordered, “[George] shall be responsible for and pay the outstanding mortgage(s)

      and utilities billed to the premises.” (Id.) Kelli was ordered to “execute and

      deliver to [George] a Quit Claim Deed” to each property within thirty days of

      the divorce decree. (Id.) One of those properties, located at 1915 Redwood

      Lane (Redwood Property) in Munster, Indiana, is the subject of the instant

      matter.




      1
       We held oral argument on this case on February 27, 2015, as part of the Women’s Bench Bar Retreat at
      Culver Cove in Culver, Indiana. We thank the Women’s Bench Bar for their hospitality and counsel for their
      presentations.

      Court of Appeals of Indiana | Memorandum Decision 46A03-1404-CC-129 | April 6, 2015           Page 2 of 15
[5]   During the divorce proceedings, George was also in the midst of bankruptcy

      proceedings, and the divorce court order noted George testified “he was

      confident that he would be able to pay the installment debt owed against the

      four properties through his bankruptcy plan. Additionally, [George] testified

      that he would sell the properties if this was not possible for any unforseen [sic]

      reason.” (Id. at 55.) One of the creditors in the bankruptcy proceedings was

      Horizon, which held a second mortgage on the Redwood Property. Horizon’s

      mortgage was created to secure a $150,000 promissory note.


[6]   On May 7, 2012, the bankruptcy court issued an “Agreed Order for Relief of

      Status as Co-Debtor” which stated:

              1.    On January 19, 2010, [George] filed a Bankruptcy Petition
              under Chapter 13 of the United States Bankruptcy Code.
              2.    The jurisdiction of this proceeding is invoked pursuant to 28
              U.S.C. § 151 and 1334. [sic]
              3.    On or about February 7, 2007, [Kelli] executed and delivered to
              Horizon a promissory note in the original principal amount of
              $150,000.00 (the “Note”).
              4.     In order to secure payment of the Note and other obligations
              contained in the Note, [Kelli] and [George] executed and delivered to
              Horizon on February 7, 2007 a second mortgage with respect to
              [Redwood Property].
              5.      As of September 30, 2009 the total amount owing on the Note
              was principal of $152,975.68 with interest accruing after that date at
              the rate of $38.71 per diem. The Note is in default for the June 2009
              payment and payments due thereafter.
              6.     Horizon wishes to file an action against [Kelli] to collect the
              Note, and has agreed to the entry of an order stripping its lien on
              [Redwood Property], in Adversary Proceeding No. 12-02008 filed by



      Court of Appeals of Indiana | Memorandum Decision 46A03-1404-CC-129 | April 6, 2015   Page 3 of 15
              [George], effective upon [George’s] completion of the Chapter 13 plan
              and the entry of discharge.
      (Id. at 20.)


[7]   On May 30, 2012, Horizon filed the cause against Kelli that underlies this

      appeal, a “Complaint on Promissory Note” alleging Kelli was “in default under

      the terms of the [Promissory Note] in that she has failed to make the payment

      due for June 2009 or any month after.” (Id. at 16.) Horizon noted in its

      complaint the bankruptcy court’s order allowing Horizon to file a claim against

      Kelli, and asked for a judgment against Kelli of “$190,497.52, together with

      accrued interest after May 11, 2012, plus Horizon’s cost of collection, including

      reasonable attorney fees, the costs of this action and all other just and proper

      relief in the premises.” (Id. at 17.)


[8]   On August 20, 2012, Horizon filed a Motion for Summary Judgment, and the

      trial court set a hearing on the matter for October 29, 2012. On August 24,

      2012, Kelli filed a Motion to Dismiss for Lack of Subject Matter Jurisdiction.

      Horizon responded, and on November 1, 2012, the trial court denied Kelli’s

      Motion to Dismiss.


[9]   On December 4, Kelli filed her response to Horizon’s Motion for Summary

      Judgment and added a counterclaim alleging constructive fraud. Horizon

      moved to dismiss Kelli’s counterclaim on December 20, and on December 28,

      the trial court entered final judgment in favor of Horizon without addressing

      Kelli’s counterclaim.



      Court of Appeals of Indiana | Memorandum Decision 46A03-1404-CC-129 | April 6, 2015   Page 4 of 15
[10]   On January 10, 2013, Kelli responded to Horizon’s motion to dismiss her

       counterclaim. On January 28, Kelli filed a motion to correct error regarding the

       trial court’s December 28 judgment. After a hearing, the trial court denied

       Kelli’s motion to correct error and decided, based on the pleadings, that

       Horizon’s motion to dismiss would be more properly considered a motion for

       summary judgment. It directed the parties to designate evidentiary materials in

       support of their arguments.


[11]   Kelli appealed the denial of her motion to correct error, and we dismissed her

       appeal as untimely. See Alvarez v. Horizon Bank, N.A., 46A03-1304-CC-155 (Ind.

       Ct. App. December 11, 2013) (Alvarez’s appeal was untimely because she did

       not appeal a final judgment; Judge May’s concurrence reasoned the appeal

       should be dismissed because, while it was interlocutory in nature because it

       involved the payment of money, Alvarez did not file her appeal within thirty

       days of the summary judgment for Horizon). On January 8, 2014, the trial

       court entered summary judgment for Horizon on Kelli’s counterclaim.


                                      Discussion and Decision
                                      1.      Kelli’s Motion to Dismiss

[12]   The standard for reviewing a ruling on a motion to dismiss for lack of subject

       matter jurisdiction depends on whether the trial court resolved disputed facts

       and, if so, whether it conducted an evidentiary hearing or ruled on a paper

       record. Johnson v. Patriotic Fireworks, Inc. 871 N.E.2d 989, 992 (Ind. Ct. App.

       1997). If the facts before the trial court are not disputed, the question of subject


       Court of Appeals of Indiana | Memorandum Decision 46A03-1404-CC-129 | April 6, 2015   Page 5 of 15
       matter jurisdiction is one of law that we review de novo. Id. Likewise, if the

       facts are disputed but the trial court rules on a paper record, the standard of

       review is also de novo. Id.


[13]   In her Motion to Dismiss, Kelli argued:

               1.     That Kelli was married to [George] during the time the alleged
               promissory note upon which [Horizon] now sues was allegedly
               executed.
               2.    That by its own terms, the alleged promissory note was secured
               by a mortgage lien on [Redwood Property].
               3.     That after making the alleged promissory note, Kelli and
               George’s marriage was dissolved pursuant to court order entered in
               cause number 46D02-0911-DR-373, on May 18, 2011, by the Special
               Judge then sitting in LaPorte Superior Court Number 2. The decree is
               attached hereto as “Defendant 1”. [sic]
               4.      That the dissolution decree assigned the rights and duties of the
               parties as well as divided all marital property including the rights to the
               real estate serving as security interest for the alleged promissory note;
               and, also assigned the obligations on that alleged debt upon which
               Horizon now sues.
               5.      That the dissolution decree ordered Kelli to assign to George all
               of her rights in the real property that is cited as security for the alleged
               promissory note (as that real property is identified within the alleged
               note, 1915 Redwood Lane) in exchange for George’s assumption of
               debt on that property and for all other consideration and obligations
               contemplated and ordered in the decree.
               6.     That Horizon is well aware of the dissolution of the marriage of
               Kelli and George, having litigated the issue of relief from stay with
               George regarding the alleged promissory note and its alleged security
               known as 1915 Redwood Lane in the bankruptcy court.
               7.     That Horizon and George entered into an agreed order
               (“agreed order”) regarding the alleged promissory note secured by
               1915 Redwood Lane as evidenced by the exhibits attached to
               Horizon’s complaint.

       Court of Appeals of Indiana | Memorandum Decision 46A03-1404-CC-129 | April 6, 2015   Page 6 of 15
               8.      That Kelli was not a party to Horizon and George’s agreement
               or their agreed order.
               9.     That the agreed order entered into between George and
               Horizon in the bankruptcy court releases Horizon’s mortgage lien on
               [Redwood Property], in exchange for George consenting to Horizon’s
               pursuit of Kelli for payment of the alleged promissory note secured by
               the same real estate Kelli was ordered by the dissolution court to
               convey to George who was ordered to assume the debt thereon.
               10.     That the agreed order did not create in Horizon any new rights
               or remedies superior to those previously decided by the dissolution
               court, but merely released Horizon from the automatic stay against
               prosecution of its alleged interests regarding the alleged promissory
               note.
               11.     That the exchange of interests between George and Horizon via
               their agreed order did not modify the dissolution decree containing
               and ordering the property settlement between George and Kelli.
               12.     That Horizon is, however, attempting to use its agreement with
               George to work a modification of the marital dissolution order,
               specifically the former real property and the debt attaching to it,
               without Kelli’s consent; and, more importantly, without the
               knowledge or consent of the dissolution court.
               13.     That Horizon’s complaint in this action seeks to convert its
               agreement with George into an enforceable right of collection against
               Kelli, which is nothing more than a collateral attack on the marital
               dissolution order and its property settlement.
       (App. at 41-44.)


[14]   In support of her argument for dismissal, Kelli cited Fackler v. Powell, 839

       N.E.2d 165 (Ind. 2005). In Fackler, the parties were divorced, and as part of the

       dissolution, Powell, the husband, was to assign payment of a promissory note

       and mortgage to Fackler, the wife. Fackler sued Powell, contending she was

       owed a lump sum of $103,000.00. Powell moved to dismiss the action, arguing

       the dissolution court had exclusive jurisdiction over the matter. The trial court

       Court of Appeals of Indiana | Memorandum Decision 46A03-1404-CC-129 | April 6, 2015   Page 7 of 15
       disagreed, and granted summary judgment in favor of Fackler. On appeal we

       agreed the trial court had jurisdiction over the matter.


[15]   Our Indiana Supreme Court reversed, holding the property settlement was

       within the exclusive jurisdiction of the dissolution court. It noted:

               In her brief and in oral argument, Fackler maintained that her claim of
               entitlement to the $103,000 was brought both against Powell and
               Powell’s “Living Trust, two separate legal entities. The Family Court
               which issued the [dissolution decree] would not have had personal
               jurisdiction or subject matter jurisdiction over the non-party to the
               divorce action, that being the Living Trust.” Appellant’s Br. in Resp.
               to Pet. to Trans. at 9. Fackler did not present any authority for this
               proposition in her brief; at oral argument, she cited Miller v. Partridge,
               734 N.E.2d 1061, 1064 (Ind. Ct. App. 2000), and Kiltz v. Kiltz, 708
               N.E.2d 600, 602 (Ind. Ct. App. 1999), transfer denied, 726 N.E.2d 302.
               These cases both address the question of whether a child designated in
               a property settlement agreement as the beneficiary of a parent’s life
               insurance policy is a third-party beneficiary of the settlement
               agreement, entitled to enforce the designation. But neither case
               involved a claim by one of the parties to the dissolution nor addressed
               the propriety of bringing such a claim in a court other than the
               dissolution court. Fackler has not persuaded us that it would have
               been improper to join the Living Trust in an enforcement action in the
               Dissolution Court or that she would not have been able otherwise to
               enforce a judgment obtained from the Dissolution Court against the
               Living Trust.
       Id. at 170.


[16]   In her motion, Kelli argued, pursuant to Fackler:

               14.    That the court issuing Kelli and George’s dissolution decree has
               exclusive and continuing jurisdiction to interpret and adjudicate all
               property issues designated within and emanating from the dissolution
               decree. Fackler v. Powerl, [sic] 839 NE 2d 165 (S. Ct. Ind. 2005). [sic]



       Court of Appeals of Indiana | Memorandum Decision 46A03-1404-CC-129 | April 6, 2015   Page 8 of 15
                15.     That the alleged promissory note, the real property securing it,
                and the rights and obligations between George and Kelli regarding that
                real property and its debt are issues that “emanate” from the
                dissolution decree, which allocated the rights, property, and
                obligations of the parties.
                16.     That this court did not issue the dissolution decree dissolving
                Kelli and George’s marriage; and, therefore lacks subject matter
                jurisdiction over Horizon’s collateral attack on the dissolution decree.
                Id.
                17.    That the issues alleged by Horizon, and pursuant to its deal
                with George, concern the division of marital property and the division
                of marital obligations on debt secured by that marital property. Id.
                18.     That Horizon’s choice of this forum to litigate the rights and
                obligations of the parties to the marital dissolution according to the
                terms of the agreement Horizon reached in its agreement with George,
                is a collateral attack upon the dissolution decree entered by the
                dissolution court, which divided the property cited as security for the
                alleged promissory note upon which Horizon now sued. Id. At [sic]
                168-169.
       (App. at 44-45.)


[17]   Fackler does not control, because Horizon was not a party to the dissolution

       action and Kelli was liable for the Promissory Note regardless of the dissolution

       court’s order. In Hazifotis v. Citizens Federal Savings and Loan, 505 N.E.2d 445,

       447 (Ind. Ct. App. 1986), Citizens Federal Savings and Loan sued Hazifotis for

       nonpayment of a debt he thought he had transferred to another person when

       Hazifotis sold his interest in a business to his business partner, Thureanos. We

       noted:

                As part of the transaction, Hazifotis intended that Thureanos would
                assume his outstanding mortgage explaining his desire to Dominic
                Cefali, president of Gary Federal [a subsidiary of Citizens Federal
                Savings and Loan]. However, there were no further discussions

       Court of Appeals of Indiana | Memorandum Decision 46A03-1404-CC-129 | April 6, 2015   Page 9 of 15
               because interest rates were too high. No paperwork was prepared to
               effect an assumption nor was Gary Federal’s permission sought.
               When Hazifotis completed the sale he knew that there had been no
               transfer of his obligation. Thureanos never assumed the mortgage.
               Only the Gary Federal Board could approve an assumption and as a
               matter of policy, such an assumption would never release the original
               obligor.
[18]   Id. at 447. We held: “The conveyance by a mortgagor of the mortgaged

       premises to another does not exonerate him from personal liability for the debt

       secured.” Id.


[19]   Additionally, the trial court did not err, as Horizon noted the “divorce decree

       itself acknowledges that Kelli remained liable on the Note until George

       refinanced the Note . . . Horizon never agreed to a refinancing of the Note.

       Horizon could not be ordered by the divorce court to refinance the Note.”

       (App. at 75.) Finally, the terms of the Note Kelli signed indicated:

               CHOICE OF VENUE. If there is a lawsuit, I agree upon Lender’s
               request to submit to the jurisdiction of the courts of LaPorte County,
               State of Indiana.
                                                     *****
               GENERAL PROVISIONS….. Upon any change in the terms of this
               Note, and unless otherwise expressly stated in writing, no party who
               signs this Note, whether as a maker, guarantor, accommodation maker
               or endorser shall be released from liability.
       (Id. at 75-76.) Accordingly, the trial court did not err when it denied Kelli’s

       motion to dismiss because Horizon’s action was properly filed in the trial court,

       as Horizon was not under the jurisdiction of the dissolution court, as Kelli

       asserted.



       Court of Appeals of Indiana | Memorandum Decision 46A03-1404-CC-129 | April 6, 2015   Page 10 of 15
                                         2.       Summary Judgment

[20]   We review summary judgment de novo, applying the same standard as the trial

       court. Hughley v. State, 15 N.E.3d 1000, 1003 (Ind. 2014). Drawing all

       reasonable inferences in favor of the non-moving party, we will find summary

       judgment appropriate if the designated evidence shows there is no genuine issue

       as to any material fact and the moving party is entitled to judgment as a matter

       of law. Id. A fact is material if its resolution would affect the outcome of the

       case, and an issue is genuine if a trier of fact is required to resolve the parties’

       differing accounts of the truth, or if the undisputed material facts support

       conflicting reasonable inferences. Id.


[21]   The initial burden is on the summary-judgment movant to demonstrate there is

       no genuine issue of fact as to a determinative issue, at which point the burden

       shifts to the non-movant to come forward with evidence showing there is an

       issue for the trier of fact. Id. While the non-moving party has the burden on

       appeal of persuading us a summary judgment was erroneous, we carefully

       assess the trial court’s decision to ensure the non-movant was not improperly

       denied his day in court. Id.


[22]   Our summary judgment policies aim to protect a party’s day in court. Id.

       While federal practice permits the moving party to merely show that the party

       carrying the burden of proof lacks evidence on a necessary element, we impose a

       more onerous burden -- to affirmatively negate an opponent’s claim. Id. That

       permits summary judgment to “be precluded by as little as a non-movant’s

       ‘mere designation of a self-serving affidavit.’” Id. (quoting Deuitch v. Fleming,
       Court of Appeals of Indiana | Memorandum Decision 46A03-1404-CC-129 | April 6, 2015   Page 11 of 15
       746 N.E.2d 993, 1000 (Ind. Ct. App. 2001), trans. denied). Summary judgment

       is not a summary trial, and it is not appropriate just because the non-movant

       appears unlikely to prevail at trial. Id. at 1003-04. We “consciously err[] on the

       side of letting marginal cases proceed to trial on the merits, rather than risk

       short-circuiting meritorious claims.” Id. at 1004.


[23]   Horizon argued in its motion for summary judgment there was no genuine

       issue of material fact and it was entitled to judgment as a matter of law. It

       designated as evidence an Affidavit in Proof of Damages, and Affidavit of Non-

       Military Status, Affidavit of Attorney Fees, and Designation of Proof. After her

       Motion to Dismiss was denied, Kelli filed a response to Horizon’s motion,

       reasserting lack of jurisdiction over the matter, and arguing:

               Horizon’s action against Kelli constitutes an equitable foreclosure and
               foreclosure at law of her mortgage interest in Redwood Lane without
               offering her a recourse of redemption in violation of Indiana law, and
               in violation of the mortgage foreclosure notice provisions in Indiana
               Code 32-30-10.5, and the requirement of strict foreclosure. Patterson v.
               Grace, 661 NE 2d 580, 586 (Ind. Ct. App. 1996). [sic]
[24]   (App. at 107.) Kelli designated as evidence the marital dissolution order

       attached to her Motion to Dismiss and a copy of the mortgage securing the

       promissory note.


[25]   The trial court granted summary judgment for Horizon, finding “no genuine

       issues as to the material facts alleged in Horizon’s Complaint and that Horizon

       is entitled to judgment as a matter of law.” (Id. at 10.) The trial court ordered




       Court of Appeals of Indiana | Memorandum Decision 46A03-1404-CC-129 | April 6, 2015   Page 12 of 15
       Kelli to pay Horizon $190,644.96 “plus interest accruing after May 12, 2012.”

       (Id.)2


[26]   On appeal, Kelli argues summary judgment was improper because she

       presented genuine issues of material fact in her response to Horizon’s Motion

       for Summary Judgment. She incorporates her arguments regarding the Motion

       to Dismiss. Regarding her foreclosure argument, Kelli asserts her rights as a

       mortgagor under Ind. Code chapter 32-30-10.5 and argues Horizon did not

       properly inform her as required by Ind. Code § 32-30-10.5-8 that the debt owed

       to Horizon was in default. She asserts, “[t]he deal that Horizon brokered with

       George affects Kelli’s rights under I.C. 32-30-10.5, and Horizon offered no

       evidence that it had complied with the notice provisions of the statute.” (Br. of

       Appellant at 20.)


[27]   However, Ind. Code chapter 32-30-10.5 does not apply to a promissory note,

       and the action filed against Kelli was not a foreclosure action, as evidenced by

       the cause number filed with the trial court, which “indicates that the action was

       filed as a civil collection matter (CC) and not a mortgage foreclosure (MF).”

       (Br. of Appellant at 14.)




       2
        Kelli filed a Motion to Correct Error, in which she argued the summary judgment was error because the
       order was not dispositive of all the issues before the court; it did not include judgment on Kelli’s
       counterclaim, the court’s order prejudged her counterclaim, and the court did not have jurisdiction over the
       matters before it. Kelli does not argue the trial court erred when it denied her Motion to Correct Error, and
       our standard of review for appeal of a Motion to Correct Error directs us to consider the underlying order,
       here the summary judgment for Horizon. See In re Paternity of H.H., 879 N.E.2d 1175, 1177 (Ind. Ct. App.
       2008) (review of motion to correct error includes review of underlying order).

       Court of Appeals of Indiana | Memorandum Decision 46A03-1404-CC-129 | April 6, 2015              Page 13 of 15
[28]   Horizon was not required to file foreclosure proceedings against Kelli, and

       could instead sue on the note and obtain a judgment. See National City Bank of

       Indiana v. Morris, 717 N.E.2d 934, 939 n.2 (Ind. Ct. App. 1999) (“Of course, a

       mortgagee is not obligated to seek foreclosure. She may sue on the note and

       obtain a judgment.”), trans. denied. The collection of the promissory note is not

       governed by Ind. Code chapter 32-30-10.5 because that chapter applies only to

       first mortgages, and the promissory note was a second mortgage on the

       Redwood Property. Ind. Code § 32-30-10.5-5 defines mortgage as a “loan” or

       a:

               consumer credit sale; that is or will be used by the debtor primarily for
               personal, family or household purposes and that is secured by a
               mortgage (or other consensual security interest) that constitutes a first
               lien on a dwelling or on residential real estate upon which a dwelling is
               constructed or intended to be constructed.
[29]   Finally, Ind. Code chapter 32-30-10.5 does not apply if “the mortgage is

       secured by a dwelling that is not occupied by the debtor as the debtor’s primary

       residence.” Ind. Code § 32-30-10.5-8(e). Kelli was not living in the Redwood

       Property when Horizon filed its claim, as she had been ordered to vacate the

       real estate thirty days after the divorce court entered its order on May 18, 2011. 3




       3
         Horizon also argues the trial court properly granted summary judgment in favor of Horizon with regard to
       Kelli’s counterclaim alleging constructive fraud. As Kelli makes no argument regarding that portion of the
       trial court’s order, we do not address it.

       Court of Appeals of Indiana | Memorandum Decision 46A03-1404-CC-129 | April 6, 2015           Page 14 of 15
[30]   As Kelli’s response to Horizon’s motion for summary judgment did not raise

       genuine issues of material fact, and her assertions of the law are incorrect, the

       trial court did not err when it granted summary judgment in favor of Horizon.


[31]   Affirmed.


       Riley, J., and Robb, J., concur.




       Court of Appeals of Indiana | Memorandum Decision 46A03-1404-CC-129 | April 6, 2015   Page 15 of 15
