                                                                                FILED
                                                                         Jun 10 2016, 8:54 am

                                                                                CLERK
                                                                          Indiana Supreme Court
                                                                             Court of Appeals
                                                                               and Tax Court




      ATTORNEY FOR APPELLANT                                     ATTORNEY FOR APPELLEE
      Norman L. Reed                                             Septtimous Taylor
      Indianapolis, Indiana                                      Owensboro, Kentucky



                                                  IN THE
          COURT OF APPEALS OF INDIANA

      Timothy A. Williamson,                                     June 10, 2016
      Appellant-Defendant,                                       Court of Appeals Case No.
                                                                 49A05-1506-MF-521
              v.                                                 Appeal from the Marion Superior
                                                                 Court
      U.S. Bank National Association,                            The Honorable Robert R. Altice,
      Appellee-Plaintiff.                                        Jr., Judge
                                                                 Trial Court Cause No.
                                                                 49D05-1405-MF-15742



      Pyle, Judge.


                                        Statement of the Case
[1]   Timothy A. Williamson (“Williamson”) appeals the trial court’s grant of

      summary judgment in favor of U.S. Bank National Association (“U.S. Bank”)

      on its mortgage foreclosure complaint. He also appeals the trial court’s denial

      of his motion to strike U.S. Bank’s summary judgment reply and second

      designation of evidence. He argues that the trial court abused its discretion

      Court of Appeals of Indiana | Opinion 49A05-1506-MF-521 | June 10, 2016                     Page 1 of 15
      when it denied his motion to strike because U.S. Bank’s reply and second

      designation of evidence were untimely. As for the trial court’s grant of

      summary judgment on U.S. Bank’s mortgage foreclosure complaint,

      Williamson asserts that there was a mistake of fact when he and U.S. Bank

      executed the underlying loan agreement and, accordingly, the trial court should

      have reformed or rescinded the agreement. Alternatively, he argues that the

      trial court erred in granting summary judgment on the mortgage foreclosure

      because the bank breached the mortgage agreement first and therefore could not

      recover under contractual principles.


[2]   Because we conclude that: (1) the trial court did not abuse its discretion in

      denying Williamson’s motion to strike because it was untimely; (2) the trial

      court did not err in granting summary judgment, we affirm the trial court’s

      decision.


[3]   We affirm.


                                                      Issues
              1. Whether the trial court abused its discretion when it denied
                 Williamson’s motion to strike U.S. Bank’s summary judgment
                 reply and second designation of evidence.

              2. Whether the trial court erred when it granted U.S. Bank’s
                 motion for summary judgment on the bank’s mortgage
                 foreclosure complaint.

                                                      Facts
[4]   On January 13, 2003, Williamson and his then-wife, Colette Williamson

      (Colette) (collectively, “the Williamsons”), executed a note in the amount of
      Court of Appeals of Indiana | Opinion 49A05-1506-MF-521 | June 10, 2016    Page 2 of 15
      $71,000.00 payable to Custom Mortgage, Inc. (“Custom Mortgage”) and

      secured the note by executing a mortgage on their residential property (“the

      Property”).1 They then delivered the note and mortgage to Mortgage Electronic

      Registration Systems, Inc. (“MERS”), who was acting as a nominee for

      Custom Mortgage.2


[5]   In June 2008, the Williamsons defaulted on their payments under the note and

      mortgage. On January 6, 2009, Custom Mortgage assigned its rights to the note

      and mortgage to U.S. Bank, and three days later, U.S. Bank filed a mortgage

      foreclosure action against the Williamsons.3 On February 27, 2009, the trial

      court entered a default judgment against them and concluded that they owed

      $73,364.50 under the mortgage.4 The Marion County Sheriff’s Department

      (“Sheriff’s Department”) scheduled a sheriff’s sale of the Property for




      1
        Williamson and Colette are now divorced. The court entered an in rem default judgment against Colette on
      April 29, 2015. Because she was a party below, she is listed as a party on appeal, but she did not file a
      separate brief or challenge her default judgment. See Ind. Appellate Rule 17(A).
      2
       Our supreme court described MERS in detail in Citimortgage, Inc. v. Barabas, 975 N.E.2d 805, 809 (Ind.
      2012), reh’g denied. It explained that: “In the mid-1990s, . . . a consortium of investment banks created
      [MERS]. MERS maintains ‘a computer database designed to track servicing and ownership rights of
      mortgage loans anywhere in the United States.’ MERS member banks list MERS as both ‘nominee’ for
      Lender and as ‘mortgagee’ on their mortgage documents.” Id. (internal citations omitted).
      3
       The assignment that is a part of the record was dated January 27, 2014 and recorded February 10, 2014, not
      January 6, 2009. However, in its 2009 mortgage foreclosure claim, U.S. Bank asserts that the assignment
      occurred on January 6, 2009. Although these dates seem incongruent, they are credible within the context of
      MERS’ operational structure. In Citimortgage, Inc., our supreme court explained that “MERS member banks
      can [] buy and sell [a] note among themselves without recording an assignment of the mortgage. In the event
      of default, MERS simply assigns the mortgage to whichever member bank currently owns the note, and that
      bank forecloses on the borrower.” Citimortgage, Inc., 975 N.E.2d at 809 (internal citations omitted).
      4
        This amount included $66,049.03 in principal; $3,368.51 in interest accrued to February 17, 2009, and
      interest at a rate of $11.54 per day thereafter; $2,946.96 in costs, expenses, and advances; and $1,000.00 in
      attorney fees.

      Court of Appeals of Indiana | Opinion 49A05-1506-MF-521 | June 10, 2016                             Page 3 of 15
      September 16, 2009, and U.S. Bank submitted a written bid to buy it at the sale.

      However, on September 15, the day before the sale, U.S. Bank notified its

      counsel that it was negotiating a plan with the Williamsons to resolve their

      mortgage arrearage. Accordingly, U.S. Bank’s counsel then sent a notice to the

      Sheriff’s Department requesting it to cancel the sale.


[6]   In spite of U.S. Bank’s notice, the Sheriff’s Department inadvertently held the

      sheriff’s sale the next day, and U.S. Bank’s previously submitted bid was the

      highest bid. As a result, the Sheriff’s Department executed a deed for the

      Property to U.S. Bank and recorded the deed in the Marion County Recorder’s

      Office. U.S. Bank later discovered the mistake and, on December 10, 2009,

      moved for the trial court to set aside the sheriff’s sale and to vacate the sheriff’s

      deed. The trial court granted the motion on December 11, 2009 and ordered

      the deed vacated.


[7]   A year later, on December 20, 2010, the Williamsons and U.S. Bank executed a

      loan modification agreement (“Modification Agreement”) amending the note

      and mortgage. In the Modification Agreement, the Williamsons agreed to pay

      $82,261.09 at a yearly rate of four percent, starting December 1, 2010. They

      then made timely payments from December 2010 until October 2013.

      However, sometime during that time period, Williamson discovered that his

      name had previously been removed from the deed to the Property.


[8]   In October 2013, a U.S. Bank representative contacted Williamson and

      informed him that his escrow account was in arrears and that there was not


      Court of Appeals of Indiana | Opinion 49A05-1506-MF-521 | June 10, 2016     Page 4 of 15
       enough money in the account to pay the property taxes on the Property.

       Williamson told the representative that he would not pay the arrearage or make

       any further mortgage payments until U.S. Bank assured him that his name was

       back on the deed for the home. As a result, on December 19, 2013, the bank

       submitted an affidavit in aid of title to the Marion County Assessor reaffirming

       that the court had vacated U.S. Bank’s title to the Property and that the title

       should be restored to Williamson. Nevertheless, Williamson did not make any

       further mortgage payments.


[9]    On February 14, 2014, U.S. Bank notified Williamson that he was again in

       default on his mortgage, but Williamson continued to miss payments.

       Accordingly, U.S. Bank filed a complaint requesting to foreclose the mortgage

       on May 13, 2014. It then filed a motion for summary judgment on September

       10, 2014. In its motion, it argued that the trial court should grant summary

       judgment because no genuine issues of material fact remained regarding

       whether Williamson had breached the terms of the mortgage.


[10]   On December 9, 2014, Williamson filed a response objecting to the bank’s

       motion for summary judgment. Attached to his response, Williamson

       designated an affidavit in which he averred that he had not known that his

       name had been taken off of the deed for the Property when he signed the

       Modification Agreement. He recounted his version of the events preceding his

       loan default, stating that:

               Shortly after I signed [the] [M]odification [A]greement, [my ex-
               wife and I] did our taxes for the year and noticed that we had lost

       Court of Appeals of Indiana | Opinion 49A05-1506-MF-521 | June 10, 2016   Page 5 of 15
               our homestead exemption for our home. Therefore, I contacted
               U.S. Bank in order to find out what was going on with my
               homestead exemption. At that time a representative from U.S.
               Bank informed me that [my and my ex-wife’s names] had been
               taken off of the deed for the home and U.S. Bank’s name was
               now on the deed as the owner. The representative then informed
               me that I was on an eighteen (18) month probation period and
               that after eighteen (18) months U.S. Bank would review the
               account and would put my name back on the Home if all my
               payments had been made on time.


       (Appellant’s App. 72). Williamson also claimed in his affidavit that, after this

       contact with U.S. Bank, he had gone to the Marion County Auditor’s Office

       “on multiple occasions” to file for his homestead exemption and had been

       denied each time. (Appellant’s App. 72).


[11]   Based on this designated affidavit, Williamson argued in his summary

       judgment response that the trial court should not grant summary judgment to

       U.S. Bank because there were still genuine issues of material fact for the

       factfinder to resolve, including whether: (1) Williamson would have entered

       into the Modification Agreement if he had known his name had been taken off

       of the deed; and (2) U.S. Bank had breached the Modification Agreement first

       by taking his name off of the deed. He requested that the trial court reform or

       rescind the Modification Agreement based on his/the parties’ mistaken belief(s)

       that his name was on the deed at the time that they executed the Modification

       Agreement.


[12]   Five months later, on May 14, 2015, U.S. Bank filed a reply to Williamson’s

       response (“Reply”) and designated additional evidence (“May 14, 2015
       Court of Appeals of Indiana | Opinion 49A05-1506-MF-521 | June 10, 2016   Page 6 of 15
       designated evidence”). This additional evidence included, in relevant part,

       Williamson’s deposition transcript and a copy of his mortgage servicing file.


[13]   Two weeks later, on May 28, 2015, the trial court held a hearing on U.S. Bank’s

       summary judgment motion. The morning of the hearing, Williamson filed a

       motion to strike U.S. Bank’s Reply and May 14, 2015 designated evidence,

       arguing that they were untimely and prejudicial. The trial court denied the

       motion to strike, concluding that it was untimely as Williamson had filed it the

       same day as the hearing. The trial court then conducted the hearing and

       granted summary judgment in U.S. Bank’s favor. It ordered the mortgage

       foreclosed and ruled that U.S. Bank could recover, in rem:


               the sum of $79,366.67 together with interest at the rate of $8.46
               per day from July 11, 2014, to the date of payment, plus any and
               all advances by [U.S. Bank] for real estate taxes, assessments,
               insurance premiums, maintenance and costs, escrow fees, and all
               other advances which [U.S. Bank] must pay to preserve the
               [Property] and [U.S. Bank’s] right therein, incurred during the
               pendency of this action and costs of this action, plus reasonable
               attorney fees of $1,500.00, all without relief from valuation and
               appraisement laws.


       (Appellant’s App. 8). Williamson now appeals the trial court’s denial of his

       motion to strike and grant of summary judgment in U.S. Bank’s favor.


                                                    Decision
[14]   On appeal, Williamson raises two arguments: (1) that the trial court abused its

       discretion when it denied his motion to strike U.S. Bank’s Reply and May 14,


       Court of Appeals of Indiana | Opinion 49A05-1506-MF-521 | June 10, 2016   Page 7 of 15
       2015 designated evidence; and (2) that the trial court erred when it granted U.S.

       Bank’s motion for summary judgment. We will address each of these

       arguments in turn.


       1. Motion to Strike

[15]   First, Williamson challenges the trial court’s denial of his motion to strike. He

       does not address the trial court’s conclusion that the motion was untimely

       because it was filed the day of the hearing. Instead, he focuses on the merits of

       the argument he raised in his motion to strike—that U.S. Bank’s Reply and

       May 14, 2015 designated evidence were untimely. We review a decision

       regarding a motion to strike for an abuse of discretion. Allstate Ins. Co. v.

       Hatfield, 28 N.E.3d 247, 248 (Ind. Ct. App. 2015). We will determine that a

       trial court has abused its discretion when the trial court’s decision is clearly

       against the logic and effect of the facts and circumstances before it. Id.


[16]   Regardless of the merits of Williamson’s argument in his motion to strike, we

       conclude that the trial court did not abuse its discretion in denying his motion

       because it was untimely. The sequence of events in this case occurred as

       follows:


               September 10, 2014 – U.S. Bank filed its motion for summary
               judgment and its designated evidence.

               December 9, 2014 – Williamson filed his response to U.S. Bank’s
               motion for summary judgment and his designated evidence.

               May 14, 2015 – U.S. Bank filed its Reply and May 14, 2015
               designated evidence.


       Court of Appeals of Indiana | Opinion 49A05-1506-MF-521 | June 10, 2016      Page 8 of 15
               May 28, 2015 – The trial court held a summary judgment hearing,
               and Williamson moved to strike U.S. Bank’s Reply and May 14,
               2015 designated evidence. The trial court denied Williamson’s
               motion.


       Williamson filed the motion the day of the summary judgment hearing, which

       meant that—as the trial court commented at the hearing—neither U.S. Bank

       nor the trial court had an opportunity to review the motion before the hearing.

       The trial court also noted that it was reluctant to continue the hearing because it

       had been set for a long time, and U.S. Bank’s counsel had traveled from

       Kentucky to be there. We have previously noted that the trial court must

       balance the need for an efficient judicial system with the judicial preference for

       deciding disputes on the merits. Munster Cmty. Hosp. v. Bernacke, 874 N.E.2d

       611, 613 (Ind. Ct. App. 2007). In light of these circumstances we conclude that

       the trial court did not abuse its discretion in determining that Williamson’s

       motion was untimely. Thus, we need not address the substantive merits of his

       motion to strike.


       2. Summary Judgment

[17]   Next, Williamson argues that the trial court erred when it granted summary

       judgment in favor of U.S. Bank on its mortgage foreclosure complaint. He

       contends that a mistake of fact had existed when he and U.S. Bank executed the

       Modification Agreement because he had believed that his name was on the

       deed to the Property when it was not. Citing contractual remedies for when

       there is a mistake of fact in executing a contract, Williamson asserts that he

       would not have signed the agreement if he had known his name was not on the

       Court of Appeals of Indiana | Opinion 49A05-1506-MF-521 | June 10, 2016   Page 9 of 15
       deed and that the trial court should have reformed or rescinded the

       Modification Agreement to reflect that fact. See Lunsford v. Deutsche Bank Trust

       Co., 996 N.E.2d 815, 822 (Ind. Ct. App. 2013) (noting that loan documents,

       including a note and mortgage “are contracts and subject to the rules of contract

       construction”); Carlson v. Sweeney, Dabagia, Donoghue, Thorne, James & Pagos, 895

       N.E.2d 1191, 1199 (Ind. 2008) (holding that a document may be reformed on

       grounds of mistake upon clear and convincing evidence of both the mistake and

       the original intent of the parties), reh’g denied; Norwood v. Erie R. Co., 53 N.E.2d

       189, 190 (Ind. Ct. App. 1944) (stating that contracts induced by fraud or

       mistake may be rescinded as voidable). Alternatively, Williamson argues that

       the trial court should not have granted summary judgment on the mortgage

       foreclosure because U.S. Bank breached the mortgage agreement first by

       removing his name from the deed without notifying him.


[18]   We review a grant of summary judgment de novo, applying the same standard

       as the trial court. Hughley v. State, 15 N.E.3d 1000, 1003 (Ind. 2014). We draw

       all reasonable inferences in favor of the non-moving party, and 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.




       Court of Appeals of Indiana | Opinion 49A05-1506-MF-521 | June 10, 2016    Page 10 of 15
[19]   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. Our review of a summary judgment motion is

       limited to those materials designated to the trial court. Dickes v. Felger, 981

       N.E.2d 559, 561 (Ind. Ct. App. 2012).


[20]   Here, U.S. Bank, the moving party in this summary judgment proceeding, was

       required to show through its designated evidence that it was entitled to

       summary judgment on its mortgage foreclosure complaint. The Indiana Code

       provides that “if a mortgagor defaults in the performance of any condition

       contained in a mortgage, the mortgagee or the mortgagee’s assigns may proceed

       in the circuit court of the county where the real estate is located to foreclose the

       equity of redemption contained in the mortgage.” 5 I.C. § 32-30-10-3. A

       “mortgage” is a “loan” or “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 another equivalent consensual security interest) that

       constitutes a first lien on a dwelling or on a residential real estate upon which a




       5
         This statute has been amended effective July 1, 2016, but we will apply the version of the statute in effect at
       the time U.S. Bank filed its complaint.

       Court of Appeals of Indiana | Opinion 49A05-1506-MF-521 | June 10, 2016                             Page 11 of 15
       dwelling is constructed or intended to be constructed.” I.C. § 32-30-10.5-5. A

       party that produces evidence of a demand note and mortgage establishes prima

       facie evidence supporting a mortgage foreclosure. See Creech v. LaPorte Prod.

       Credit Ass’n, 419 N.E.2d 1008, 1012 (Ind. Ct. App. 1981). Production of this

       evidence causes the burden to shift to the non-movant to prove payment of the

       note or any other affirmative defense to the foreclosure. See id. (“LPCA entered

       into evidence the demand note and the mortgage. At that point, LPCA had

       made a prima facie case. The burden then shifted to the Creechs to show

       payment of the note, [or] any other affirmative defense.”)


[21]   Here, U.S. Bank designated its demand note and mortgage as evidence, so the

       burden switched to Williamson to produce evidence raising a genuine issue of

       material fact regarding whether he had a valid defense to the foreclosure. See id.

       In his summary judgment response, Williamson did not dispute that he had not

       paid as required by the Modification Agreement. Instead, he raised the issue of

       whether his mortgage—the Modification Agreement—was enforceable. It is a

       well-established principle that “[w]here both parties [to a contract] share a

       common assumption about a vital fact upon which they based their bargain,

       and that assumption is false, the transaction may be avoided if because of the

       mistake a quite different exchange of values occurs from the exchange of values

       contemplated by the parties.” Tracy v. Morell, 948 N.E.2d 855, 864 (Ind. Ct.

       App. 2011). “There is no contract, because the minds of the parties have in fact

       never met.” Id. Williamson argues that he should not be held to the terms of

       the Modification Agreement, and therefore his mortgage should not have been


       Court of Appeals of Indiana | Opinion 49A05-1506-MF-521 | June 10, 2016   Page 12 of 15
       foreclosed, because he and/or U.S. Bank mistakenly believed the vital fact that

       his name was on the deed for the Property when they executed the

       Modification Agreement.


[22]   We are not persuaded by Williamson’s argument because we conclude that a

       mistake of fact did not exist when Williamson executed the Modification

       Agreement as he did have a valid deed to the Property at that time. Deeds to

       property exist within a “chain of title” that includes records or encumbrances

       relating to that property. See Szakaly v. Smith, 544 N.E.2d 490, 492 (Ind. 1989).

       There is not one single deed to a property whose name changes according to

       ownership, as Williamson implies. See id. Williamson acknowledges that his

       deed to the Property was valid and recorded prior to the inadvertent sheriff’s

       sale. He was then divested of ownership of the Property through the sheriff’s

       sale, but the trial court later set aside the sale and vacated the deed resulting

       from it. See Black’s Law Dictionary 1782 (10th ed. 2009) (defining “vacate” as

       “To nullify or cancel; make void”). Accordingly, there was nothing in the

       chain of title after Williamson’s properly recorded deed in the Property to divest

       him of ownership. The trial court’s order setting aside the sheriff’s sale and

       vacating U.S. Bank’s deed was issued December 11, 2009—over a year before

       Williamson and U.S. Bank executed the Modification Agreement on December

       20, 2010. Therefore, Williamson did have his name on the deed to the Property




       Court of Appeals of Indiana | Opinion 49A05-1506-MF-521 | June 10, 2016    Page 13 of 15
       when he executed the agreement, so there was no basis for the trial court to

       reform or rescind the agreement.6


[23]   Next, Williamson argues that the trial court should not have granted summary

       judgment in U.S. Bank’s favor because U.S. Bank breached the Modification

       Agreement first by removing his name from the deed for the Property. It is a

       general principle that “‘[a] party first guilty of a material breach of contract may

       not maintain an action against the other party or seek to enforce the contract

       against the other party should that party subsequently breach the contract.’”

       Klepper v. Ace American Ins. Co., 999 N.E.2d 86, 96 (Ind. Ct. App. 2013) (quoting

       Illiana Surgery & Med. Ctr., LLC v. STG Funding, Inc., 824 N.E.2d 388, 403 (Ind.

       Ct. App. 2005)), reh’g denied, trans. denied. However, we conclude that U.S.

       Bank did not breach the Modification Agreement prior to Williamson’s non-

       payment breach. As stated above, the inadvertent sheriff’s sale occurred on

       September 16, 2009, over a year before Williamson and U.S. Bank executed the

       Modification Agreement on December 20, 2010. U.S. Bank could not have




       6
         To the extent that Williamson implies that there was no evidence that the trial court’s order vacating U.S.
       Bank’s deed was ever recorded, we note that recording a title (or lack of title) does not establish ownership or
       have any effect on a deed’s validity. See Patterson v. Seavoy, 822 N.E.2d 206, 211 (Ind. Ct. App. 2005). As we
       stated in Patterson:

                It has long been recognized that the registration of a deed adds nothing to its effectiveness
                as a conveyance; all that it accomplishes is to impart notice. Indeed, [t]he purpose of the
                recording statute is to provide protection to subsequent purchasers, lessees, and
                mortgagees. That is, when multiple parties claim adverse interests in the same land, the
                date of recording provides a means to determine priority among those claims.

       Id. (internal citations omitted) (internal quotations omitted) (emphasis omitted).



       Court of Appeals of Indiana | Opinion 49A05-1506-MF-521 | June 10, 2016                            Page 14 of 15
       breached an agreement that did not exist at the time of the alleged breach.

       Accordingly, we do not find any merit to Williamson’s argument that U.S.

       Bank was guilty of the first material breach by removing his name from the

       deed.


[24]   Since Williamson does not otherwise dispute that he breached the Modification

       Agreement or that U.S. Bank was entitled to summary judgment on its

       mortgage foreclosure complaint, we conclude that the trial court did not err in

       granting summary judgment. There were no genuine issues of material fact

       remaining for a factfinder to resolve.


[25]   Affirmed.


       Baker, J., and Bradford, J., concur.




       Court of Appeals of Indiana | Opinion 49A05-1506-MF-521 | June 10, 2016   Page 15 of 15
