MEMORANDUM DECISION
Pursuant to Ind. Appellate Rule 65(D),                            Nov 25 2015, 8:55 am
this 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.


ATTORNEYS FOR APPELLANTS                                ATTORNEYS FOR APPELLEE
Andrew J. Thompson                                      Neal Bailen
Richard W. Barrett                                      Bruce Paul
Thompson Law Office, LLC                                Stites & Harbison PLLC
Indianapolis, Indiana                                   Jeffersonville, Indiana



                                          IN THE
    COURT OF APPEALS OF INDIANA

Gary Pennington and Sherry                              November 25, 2015
Pennington,                                             Court of Appeals Case No.
Appellants-Defendants,                                  55A01-1503-MF-114
                                                        Appeal from the Morgan County
        v.                                              Circuit Court
                                                        The Honorable Matthew G.
U.S. Bank National Association,                         Hanson, Judge
as Trustee for Master Asset                             Trial Court Cause No.
Backed Securities Trust 2005-                           55C01-1305-MF-820
WF1,
Appellee-Plaintiff.




Bradford, Judge.



                                   Case Summary
Court of Appeals of Indiana | Memorandum Decision 55A01-1503-MF-114 |November 25, 2015   Page 1 of 9
[1]   In 2005, Appellants-Defendants Gary and Sherry Pennington (“the

      Penningtons”) obtained a home loan from Homeland Mortgage Company

      (“Homeland”). The Penningtons executed a mortgage in favor of Mortgage

      Electornic Registration Systems (“MERS”) as nominee for Homeland.

      Homeland subsequently endorsed the promissory note evidencing the loan

      (“the Note”) to Wells Fargo Bank. The Penningtons defaulted on the loan in

      2011. In 2012, the mortgage was assigned to Appellee-Plaintiff U.S. Bank

      National Association (“U.S. Bank”). U.S. Bank also took possession of the

      Note endorsed in blank by Wells Fargo. In 2013, U.S. Bank filed a foreclosure

      action against the Penningtons. Ultimately, the trial court awarded summary

      judgment in favor of U.S. Bank against the Penningtons. On appeal, the

      Penningtons argue that there are genuine issues of material fact regarding the

      propriety of the Note and whether U.S. Bank is the holder of the Note. We

      affirm.



                            Facts and Procedural History
[2]   On February 11, 2005, the Penningtons obtained a loan from Homeland to

      purchase a home in Mooresville, Indiana. To evidence the loan, the

      Penningtons executed a promissory note (“the Note”) in favor of Homeland in

      the amount of $272,000.00. The Penningtons also executed a mortgage in favor

      of MERS as nominee for Homeland. The Note was then endorsed to Wells

      Fargo. The Penningtons ceased making their monthly mortgage payments in

      November of 2011 and, on January 17, 2012, Wells Fargo sent the Penningtons


      Court of Appeals of Indiana | Memorandum Decision 55A01-1503-MF-114 |November 25, 2015   Page 2 of 9
      notice of their default. The mortgage was assigned to U.S. Bank on March 8,

      2012.


[3]   U.S. Bank filed a foreclosure action against the Penningtons on May 3, 2013.

      U.S. Bank’s complaint alleged that it was the holder of the Note and the

      mortgage and so was entitled to enforce the instruments. Included with the

      complaint was a corporate assignment showing transfer of the mortgage from

      MERS to U.S. Bank as well as a copy of the Note endorsed in blank by Wells

      Fargo.


[4]   On November 18, 2014, U.S. Bank filed a motion for summary judgment. The

      Penningtons subsequently requested, and were granted, additional time to

      respond to the motion in order to complete additional discovery. On January

      26, 2015, the Penningtons filed a motion to compel discovery and a motion

      seeking a second extension of time to respond to U.S. Bank’s summary

      judgment motion. The trial court denied both motions on February 3, 2015.

      On February 11, 2015, the Pennington’s filed a motion requesting a summary

      judgment hearing which the trial court denied on February 19.


[5]   In support of its motion for summary judgment, U.S. Bank submitted an

      affidavit of Kimberly Ann Mueggenberg, a Vice President of Loan

      Documentation for Wells Fargo. Mueggenberg avowed that, “according to

      Wells Fargo’s business records, [U.S. Bank], directly or through an agent, has

      possession of the Promissory Note at issue…. The Promissory Note has been

      endorsed in blank.” Appellants’ App. p. 47. Mueggenberg also avowed that


      Court of Appeals of Indiana | Memorandum Decision 55A01-1503-MF-114 |November 25, 2015   Page 3 of 9
      the Penningtons had defaulted on the Note by failing to make monthly

      payments since November of 2011. U.S. Bank also offered the affidavit of its

      attorney, Leanne S. Titus, in which Titus avowed that her firm had possession

      of the original Note, which was endorsed in blank. On February 26, 2015, the

      trial court granted summary judgment in favor of U.S. Bank.



                                   Discussion and Decision
[6]   The Penningtons raise the following issues on appeal: (1) whether the trial court

      erred when it admitted Mueggenberg’s affidavit and the Note endorsed in blank

      and (2) whether U.S. Bank produced evidence showing that it is the real party

      in interest.1


                                          Standard of Review
[7]   On review of a trial court’s decision to grant or deny summary judgment, we

      apply the same standard as the trial court: summary judgment is appropriate

      only where the evidence shows there is no genuine issue of material fact and the

      moving party is entitled to a judgment as a matter of law. Row v. Holt, 864

      N.E.2d 1011, 1013 (Ind. 2007). “All inferences are to be drawn in favor of the

      non-moving party.” Id. The moving party bears the initial burden of proving

      the absence of a genuine issue of material fact and the appropriateness of



      1
       In their Statement of Issues, the Penningtons also list the following the issues for review: whether the trial
      court erred when it denied the Penningtons’ motion to compel discovery, and whether the trial court erred
      when it denied the Penningtons’ request for a summary judgment hearing. However, the Penningtons do not
      mention these issues in their argument section; therefore, we decline to address them.

      Court of Appeals of Indiana | Memorandum Decision 55A01-1503-MF-114 |November 25, 2015              Page 4 of 9
      judgment as a matter of law. City of Mishawaka v. Kvale, 810 N.E.2d 1129, 1132

      (Ind. Ct. App. 2004). Upon such showing, the party opposing summary

      judgment must respond by designating specific facts establishing a genuine issue

      for trial. Id.


               On appeal, a trial court’s grant of summary judgment is “clothed
               with a presumption of validity.” [Indiana Dep’t of State Revenue v.
               Caylor-Nickel Clinic, P.C., 587 N.E.2d 1311, 1312-13 (Ind. 1992)].
               The appellant bears the burden of proving that the trial court
               erred in determining that there are no genuine issues of material
               fact and that the moving party was entitled to judgment as a
               matter of law. Id.


      Rosi v. Bus. Furniture Corp., 615 N.E.2d 431, 434 (Ind. 1993).


                                     I. Admission of Evidence
[8]   The Penningtons claim that the trial court improperly admitted and relied on

      the version of the Note proffered by U.S. Bank which was endorsed in blank by

      Wells Fargo. Specifically, the Penningtons claim that because U.S. Bank did

      not provide specific evidence regarding the transfer of the note by Wells Fargo

      to U.S. Bank, the Note should have been excluded due to concerns about its

      trustworthiness pursuant to Indiana Evidence Rule 803(6)(E).2




      2
       The following are not excluded by the rule against hearsay, regardless of whether the declarant is available
      as a witness:
      ***
      (6) Records of a Regularly Conducted Activity. A record of an act, event, condition, opinion, or diagnosis if:

      Court of Appeals of Indiana | Memorandum Decision 55A01-1503-MF-114 |November 25, 2015             Page 5 of 9
[9]    The Penningtons also claim that the trial court erred by admitting

       Mueggenberg’s affidavit. The Pennington’s claim that Mueggenberg’s affidavit

       cannot be considered because it relies on her review of unspecified business

       records. Specifically, the Penningtons argue that Mueggenberg’s affidavit is

       based on unspecified Wells Fargo business records which were not attached to

       the affidavit in violation of Indiana Trial Rule 56(E). 3 The Penningtons claim

       that without Mueggenberg’s affidavit showing that U.S. Bank has possession of

       the Note, U.S. Bank cannot carry its burden to establish a prima facie showing

       that it is entitled to summary judgment.


[10]   “We review a trial court’s decision to admit or exclude evidence for an abuse of

       discretion. We will reverse such an exercise of discretion only when the

       decision is clearly against the logic and effect of the facts and the circumstances.

       Meyer v. Marine Builders, Inc., 797 N.E.2d 760, 767 (Ind. Ct. App. 2003)




       (A) the record was made at or near the time by — or from information transmitted by — someone with
       knowledge;
       (B) the record was kept in the course of a regularly conducted activity of a business, organization,
       occupation, or calling, whether or not for profit;
       (C) making the record was a regular practice of that activity;
       (D) all these conditions are shown by the testimony of the custodian or another qualified witness, or by a
       certification that complies with Rule 902(9) or (10) or with a statute permitting certification; and
       (E) neither the source of information nor the method or circumstances of preparation indicate a lack of
       trustworthiness.
       Ind. Evid. R. 803(6).
       3
         “Supporting and opposing affidavits shall be made on personal knowledge, shall set forth such facts as
       would be admissible in evidence, and shall show affirmatively that the affiant is competent to testify to the
       matters stated therein. Sworn or certified copies not previously self-authenticated of all papers or parts thereof
       referred to in an affidavit shall be attached thereto or served therewith.” Ind. T.R. 56(E).

       Court of Appeals of Indiana | Memorandum Decision 55A01-1503-MF-114 |November 25, 2015                 Page 6 of 9
       (citations omitted). In regards to the Pennington’s first claim, we see no reason

       to doubt the trustworthiness of the Note proffered by U.S. Bank, specifically

       whether it was in fact endorsed in blank. Both Mueggenberg and Titus asserted

       in their respective affidavits that Wells Fargo endorsed the Note in blank and,

       more importantly, the Note itself appears as such. The specific record of the

       transaction between the two entities is not necessary to establish that U.S. Bank

       is the holder of the Note, and therefore entitled to enforce the Note. See Ind.

       Code § 26-1-1-201(20) (“‘Holder’ means: (A) the person in possession of a

       negotiable instrument that is payable…to bearer); Ind. Code § 26-1-1-201(5)

       (“‘Bearer’ means the person…in possession of a negotiable

       instrument…endorsed in blank”). It was well within the trial court’s discretion

       to admit the Note.


[11]   Additionally, any error in the admission of Mueggenberg’s affidavit was

       harmless. “[A]dmission of evidence that is merely cumulative of other evidence

       amounts to harmless error as such admission does not affect a party’s

       substantial rights.” In re Paternity of H.R.M., 864 N.E.2d 442, 450-51 (Ind. Ct.

       App. 2007). U.S. Bank also provided an affidavit from its attorney, Titus,

       declaring that her firm had possession of the original Note which was endorsed

       in blank. U.S. Bank also supported its motion for summary judgment with the

       Pennington’s responses to U.S. Bank’s interrogatories in which the Penningtons

       admit that they had not tendered any mortgage payments since November of

       2011. As such, the information contained in Mueggenberg’s affidavit is

       cumulative and any error in its admission was harmless.


       Court of Appeals of Indiana | Memorandum Decision 55A01-1503-MF-114 |November 25, 2015   Page 7 of 9
                                    II. Real Party in Interest
[12]   The Penningtons essentially argue that there is a genuine issue of material fact

       regarding whether U.S. Bank is a real party in interest because U.S. Bank

       provided “inconsistent” versions of the Note and because the Penningtons

       question the propriety of the original endorsement of the Note. Appellants’

       App. p. 14. The Penningtons’ arguments on this issue are without merit.


[13]   First, the Penningtons argue that the date of the original endorsement by

       Homeland must be incorrect because the endorser was not in the same location

       as the Penningtons on the day they executed the Note despite the fact that the

       date of the endorsement and execution of the note are the same. However, the

       date of the original endorsement from Homeland to Wells Fargo has no

       relevance to the instant action. The Penningtons cite no authority, and we are

       aware of none, which stands for the proposition that an error in the date of an

       endorsement (especially one which does not involve any party to the action)

       could invalidate the endorsement or otherwise preclude U.S. Bank’s right to

       enforce the Note.


[14]   The Penningtons also argue that there is a genuine issue of material fact as to

       whether the Note was in fact endorsed to U.S. Bank because U.S. Bank

       “produced two inconsistent versions of the purported original note in discovery

       – one endorsed in blank [by Homeland], the other specially endorsed to Wells

       Fargo with no further endorsement.” Appellants’ App. p. 12. However, these

       are clearly not inconsistent versions of the Note; rather, they are simply


       Court of Appeals of Indiana | Memorandum Decision 55A01-1503-MF-114 |November 25, 2015   Page 8 of 9
       versions of the Note from various dates. The final version of the Note clearly

       indicates that Wells Fargo endorsed the Note in blank. As we discussed above,

       this endorsement made the Note bearer paper and so, as holder of the Note,

       U.S. Bank is entitled to enforce it.


[15]   U.S. Bank made a prima facie showing that they were entitled to judgment as a

       matter of law and the Penningtons failed to raise any issues of material fact in

       response. As such, the trial court did not err in awarding summary judgment in

       favor of U.S. Bank.


[16]   The judgment of the trial court is affirmed.


       Baker, J., and Pyle, J., concur.




       Court of Appeals of Indiana | Memorandum Decision 55A01-1503-MF-114 |November 25, 2015   Page 9 of 9
