MEMORANDUM DECISION
Pursuant to Ind. Appellate Rule 65(D),
this Memorandum Decision shall not be                                 FILED
regarded as precedent or cited before any
                                                                  Jun 09 2017, 8:15 am
court except for the purpose of establishing
the defense of res judicata, collateral                               CLERK
                                                                  Indiana Supreme Court
estoppel, or the law of the case.                                    Court of Appeals
                                                                       and Tax Court




ATTORNEYS FOR APPELLANT                                  ATTORNEY FOR APPELLEE
Joe M. Duepner                                           Kurt V. Laker
Duepner Law LLC                                          Doyle & Foutty, P.C.
Noblesville, Indiana                                     Indianapolis, Indiana

Christopher P. Jeter
Massillamany & Jeter LLP
Fishers, Indiana



                                           IN THE
    COURT OF APPEALS OF INDIANA

Nathan E. Mylet,                                         June 9, 2017
Appellant-Defendant/Counterclaimant,                     Court of Appeals Case No.
                                                         29A02-1608-MF-2004
        v.                                               Interlocutory Appeal from the
                                                         Hamilton Superior Court
Santander Bank, N.A.,                                    The Honorable Steven R. Nation,
Appellee-Plaintiff/Counterclaim                          Judge
Defendant                                                The Honorable David K. Najjar,
                                                         Magistrate
                                                         Trial Court Cause No.
                                                         29D01-1411-MF-10776



Crone, Judge.



Court of Appeals of Indiana | Memorandum Decision 29A02-1608-MF-2004 | June 9, 2017       Page 1 of 6
                                             Case Summary
[1]   Nathan E. Mylet asked his mortgage lender, Santander Bank, N.A., about

      refinancing his mortgage loan. Mylet was told that he did not qualify for

      refinancing but could obtain a loan modification if he missed three mortgage

      payments. Mylet missed three payments, and Santander subsequently filed a

      mortgage foreclosure action against him. Mylet filed seven counterclaims

      against Santander. Santander filed a motion to dismiss for failure to state a

      claim, and the trial court dismissed all but one of Mylet’s counterclaims. On

      appeal, Mylet argues that the trial court erred in dismissing his negligence-

      related counterclaims. We disagree and therefore affirm.


                                 Facts and Procedural History
[2]   In November 2010, Mylet signed a promissory note to Santander for a loan to

      purchase a home in Sheridan. The loan was secured by a mortgage on the

      home. In April 2014, Mylet contacted Santander to ask about refinancing the

      loan to obtain a lower interest rate. Santander employee George Feliciano told

      Mylet that he did not qualify for refinancing because of his credit score but

      “that if he missed three months of mortgage payments he could obtain a loan

      modification which would include a lower interest rate.” Appellant’s App. Vol.

      3 at 39. Based on Feliciano’s advice, Mylet intentionally missed three

      payments. In July 2014, Santander sent Mylet a notice of default and intention

      to foreclose mortgage, and it later denied his request for a loan modification.

      Santander encouraged Mylet to go through the same process three more times,

      and each time his request for a loan modification was denied.

      Court of Appeals of Indiana | Memorandum Decision 29A02-1608-MF-2004 | June 9, 2017   Page 2 of 6
[3]   In November 2014, Santander filed a complaint on note and for foreclosure of

      mortgage. In October 2015, Mylet filed an amended answer and seven

      counterclaims, including fraud, negligent misrepresentation, and negligence.

      Santander filed a motion to dismiss for failure to state a claim pursuant to

      Indiana Trial Rule 12(B)(6). After a hearing, the trial court dismissed all

      counterclaims except fraud. This interlocutory appeal ensued.


                                     Discussion and Decision
[4]   Mylet contends that the trial court erred in dismissing his negligence-related

      counterclaims. “A motion to dismiss for failure to state a claim tests the legal

      sufficiency of a claim, not the facts supporting it.” Holleman v. Ind. Dep’t of

      Corr., 27 N.E.3d 293, 295 (Ind. Ct. App. 2015). We review de novo a trial

      court’s ruling on such a motion, and we must determine whether the allegations

      on the face of the counterclaims establish any set of circumstances under which

      Mylet would be entitled to relief. See id. (referring to complaint). We must

      review the counterclaims in the light most favorable to Mylet as the nonmoving

      party, with every inference in his favor. See id. (same). We will affirm a

      successful Trial Rule 12(B)(6) motion when a counterclaim states a set of facts

      that, even if true, would not support the requested relief. See Hammons v.

      Jenkins-Griffith, 764 N.E.2d 303, 305 (Ind. Ct. App. 2002) (same).


[5]   “[U]nder longstanding Indiana law, a defendant is not liable under a tort theory

      for any purely economic loss caused by its negligence ….” U.S. Bank, N.A. v.

      Integrity Land Title Corp., 929 N.E.2d 742, 745 (Ind. 2010) (citation and


      Court of Appeals of Indiana | Memorandum Decision 29A02-1608-MF-2004 | June 9, 2017   Page 3 of 6
      quotation marks omitted). “This rule precluding tort liability for purely

      economic loss—that is, pecuniary loss unaccompanied by any property damage

      or personal injury (other than damage to the product or service itself)—has

      become known as the ‘economic loss rule’ ….” Indianapolis-Marion Cty. Pub.

      Library v. Charlier Clark & Linard, P.C., 929 N.E.2d 722, 727 (Ind. 2010). Mylet

      insists that the rule is inapplicable, arguing that he “seeks to be placed back in

      the position he was prior to Santander’s negligence, with his original mortgage,

      under its original terms, and with its original interest rate. He also seeks to

      have his credit repaired.” Appellant’s Reply Br. at 7. It appears that Mylet is

      conflating the nature of his losses, which are purely economic, with the

      remedies available to compensate him for those losses. The economic loss rule

      has certain exceptions, U.S. Bank, 929 N.E.2d at 745, but Mylet does not argue

      that any of them apply. Therefore, we affirm the trial court’s dismissal of his

      negligence-related counterclaims.


[6]   Affirmed.


      Altice, J., concurs.


      Riley, J., concurs in result with opinion.




      Court of Appeals of Indiana | Memorandum Decision 29A02-1608-MF-2004 | June 9, 2017   Page 4 of 6
                                                 IN THE
          COURT OF APPEALS OF INDIANA

      Nathan E. Mylet,                                         Court of Appeals Case No.
                                                               29A02-1608-MF-2004
      Appellant-Defendant/Counterclaim-
      Plaintiff,
              v.

      Santander Bank, N.A.,
      Appellee-Plaintiff/Counterclaim-
      Defendant.



      Riley, Judge, concurring in result

[7]   I concur in the result reached by the majority, but I write separately to express

      my view that this issue should be solved by using contract principles only. By

      relying on the tort theory of economic loss, I believe the majority opinion

      imparts an impression that Mylet has some basis to bring a claim sounding in

      negligence.


[8]   In his counterclaim, Mylet argued negligent misrepresentation, asserting that

      “Santander supplied false information to Mylet in the course of a relationship

      and/or transaction in which he had a pecuniary interest, namely, advising

      Mylet that he should miss mortgage payments and would be approved on

      multiple occasions for a loan modification and then subsequently denying him

      each and every time.” (Appellant’s App. Vol. III, p. 43). In addition, Mylet

      asserted negligence because “Santander by and through its agents breached [its]

      duty to advise Mylet to attempt a loan modification when he was not currently
      Court of Appeals of Indiana | Memorandum Decision 29A02-1608-MF-2004 | June 9, 2017   Page 5 of 6
      in default and then failed to advise Mylet of the risks associated with a loan

      modification[.]” (Appellant’s App. Vol. III, p. 44).


[9]   To the extent Mylet’s claim is sounding purely in ordinary negligence based on

      Santander’s conduct, I note that the relationship between the parties is based on

      contract. Our supreme court has held that, “[w]hen the parties have, by

      contract, arranged their respective risks of loss, . . . the tort law should not

      interfere.” Greg Allen Const. Co. v. Estelle, 798 N.E.2d 171, 175 (Ind. 2003); see

      also Jaffri v. JPMorgan Chase Bank, N.A., 26 N.E.3d 635, 638 (Ind. Ct. App.

      2015). In other words, “[t]he rule of law is that a party to a contract or its agent

      may be liable in tort to the other party for damages from negligence that would

      be actionable if there were no contract, but not otherwise.” Greg Allen Const.

      Co., 798 N.E.2d at 175. Unless there is evidence of an independent tort that

      would have existed if there was no contract between the parties, they “should

      not be permitted to expand that breach of contract into tort claims against either

      the principal or its agents by claiming negligence as the basis of that breach.”

      Id. In essence, this is what Mylet is attempting here: claiming that Santander

      negligently breached the contract. But for the loan made to Mylet in 2006,

      secured by the mortgage now held by Santander, there would be no relationship

      between these two parties and there would have been no communication

      between Mylet and Santander’s employees about refinancing the mortgage and

      skipping mortgage payments. Accordingly, I conclude that Mylet has no

      actionable claim.




      Court of Appeals of Indiana | Memorandum Decision 29A02-1608-MF-2004 | June 9, 2017   Page 6 of 6
