Indiana Commercial Foreclosure Law

Contractual Waiver Of Right To Jury Trial

Secured lenders involved in litigation in Indiana may know that loan enforcement lawsuits they file never get set for a jury trial.  The recent decision in Pringle v. Garcia, 2009 U.S. Dist. LEXIS 47112 (N.D. Ind. 2009) (.pdf) helps explain why.

Jury trial vs. bench trial.  A “jury trial” is a “trial of matter or cause before a jury as opposed to trial before judge.”  Black’s Law Dictionary.  In Indiana, juries consist of six residents of a particular county who are at least 18 years of age.  The right to a trial by jury is protected by the Bill of Rights and Indiana’s state constitution.  According to Black’s, a “trial by jury” is “a trial in which the issues of fact are to be determined by the verdict of the jury . . ..” 

On the other hand, a “court trial” a/k/a “bench trial” is simply a “trial held before [a] judge sitting without a jury; jury waived trial.”  In other words, the trial court judge makes determinations of both law and fact and decides the case on his or her own.  From a secured lender’s perspective, the conventional wisdom is that cases involving bench/court trials will conclude more quickly and will be resolved more inexpensively than jury trials.   

Motion to strike jury demand.  In Pringle, the plaintiff filed a complaint against the defendants seeking money damages (under certain loan documents), replevin, the foreclosure of a security interest and the appointment of a receiver.  One of the loan documents was a Guaranty and Collateral Agreement, which included a specific provision entitled “Waiver of Jury Trial” that detailed the parties’ expressed waiver of any right to a trial by jury in legal proceedings to enforce the agreement.  The defendants filed an answer to the complaint in which they requested a jury trial.  The plaintiffs responded by filing a motion to strike the jury demand,  claiming that the defendants waived their right to a jury trial under the Guaranty and Collateral Agreement. 

Waiver.  Here is what Judge Cherry said about the applicable law:

The Seventh Amendment provides a right to jury trial in any civil suit in which the amount in controversy exceeds twenty dollars.  U.S. CONST., Amend. VII.  However, a party may contract to waive its right to a jury trial without having to show extra negotiation or evidence of voluntariness beyond what is required to make the rest of the contract legally effective . . ..  Indiana courts have, however, upheld numerous contractual provisions that, in one way or another, limit the legal avenues available to a party when such provisions are freely negotiated and not unjust or unreasonable. . . .

The Judge found that there was no indication the defendants were unsophisticated parties or that they did not have the opportunity to read the Guaranty and Collateral Agreement.  The jury trial waiver provision was written such that it drew more attention to it than the rest of the contract.  Moreover, the provision was mutual as to all parties, and the overall agreement itself appeared to be enforceable.  As such, the Court held that the waiver of jury trial clause was valid and enforceable since “the agreement to resolve a dispute in a bench trial is no less valid than the rest of the contract in which the agreement appears . . ..”  The point here is that, under Indiana law, the constitutional right to a jury trial can be waived in civil cases by a written agreement.

Equitable vs. legal remedy.  Without getting too bogged down in legalese, the Pringle case also explains that certain cases by their very nature will not result in a jury trial.  “The right to a jury trial embraces all suits in which legal rights are adjudicated, as opposed to actions where equitable rights alone are at issue and equitable remedies are sought.”  If an equitable remedy is at issue, there can be no jury trial, regardless of whether it has been waived by agreement.  One example of an equitable remedy would be the foreclosure of a real estate mortgage.  In Pringle, Count III of plaintiff’s complaint requested the appointment of a receiver, which is “a remedy that is equitable in nature, and defendants have no right to a jury trial on [such] claim.”  One example of a legal remedy would be the money damages sought in an action for breach of a promissory note.  

Replevin carved out.  Pringle had one interesting result.  Count II of the plaintiff’s complaint was for replevin and dealt with the foreclosure of a chattel (non-real estate) mortgage.  Click here to learn more about replevin in Indiana.  The Court noted that, under Indiana law, an action for replevin was an action at law as opposed to an action in equity.  Thus the right to a jury trial applied, and the Court declined to strike the jury demand as to that count.  I’m frankly not sure why the waiver clause in the Guaranty and Collateral Agreement did not apply to the replevin count, but my assumption is that the Judge concluded the clause did not clearly and unambiguously apply to the replevin aspect of the case.   

If lenders want a jury trial waived as to the entirety of their loan enforcement action, the loan documents should spell out very clearly that the borrowers and guarantors are waiving their right to a jury trial as to any and all loan enforcement-related legal proceedings.  Such written contract provisions generally are enforceable in Indiana. 

Marion County (Indianapolis) Local Rule: Mandatory Settlement Conferences In Mortgage Foreclosure Cases

Marion County has issued a new local rule, which I understand is already in effect, relating to mandatory settlement conferences.  The rule is limited to owner-occupied residential cases and does not apply to commercial real estate foreclosures.  It will be interesting to see whether, or to what extent, this procedural change will help with the residential foreclosure crisis. 

It's my understanding Indiana's General Assembly is considering a foreclosure-related bill that would include a similar rule, which bill conceivably could eclipse Marion County's new rule.  See, House Bill 1633.      

You can access copies of the Marion County rule and related forms by clicking on these links:    

- LR49 TR85 Rule 231

- Notice and Order for Settlement Conference

- Borrower Financial Information

- Confirmation of Attendance at Settlement Conference

I'd like to thank Kelly Angelmeyer, Director of Operations for the Marion Superior Court, for providing copies of these materials to me.

Writ Of Assistance: Timing And Other Practical Tips

This will expand upon my March 2, 2007 and April 28, 2008 posts relating to Indiana Trial Rule 70(A) writs of assistance, a tool secured lenders can use when they've acquired a sheriff's deed but have been unable to secure possession of the property.  Essentially, a writ of assistance is the method by which one can evict those unlawfully on, or in control of, the real estate.  The prior posts dealt with how writs of assistance can and should be executed.  The subject of today's post is more practical in nature.  The question is how quickly can the writ be executed or, in other words, once one triggers the process, how long will it take before the eviction occurs. 

Recent experience.  Last Fall, I tried a contested residential foreclosure case in Marion Superior Court (Indianapolis) and, with the help of my colleague Jeff Hammond, prevailed on all issues.  A sheriff's sale occurred, and our client obtained a sheriff's deed to the property at the sale.  The defendant/borrower refused to vacate the premises, so we initiated writ of assistance proceedings with the Marion County Civil Sheriff's Office.  Here is a brief summary of the steps involved:

1. A $100 fee had to be paid;
2. The sheriff sent a letter to the borrower, almost immediately, informing the borrower that she had ten days to vacate the property;
3. About three days after the mailing of the letter, a deputy went to the property and posted a notice on the front door informing the borrower that she must vacate;
4. On about the eleventh day, a deputy went back out to the property to determine whether it had been vacated; since in our case it was not, the sheriff scheduled a "move out date"; the sheriff determined the move out date by the volume of move out orders, usually seven to fourteen days later;
5. Before the move out date, we (the plaintiff) had to contract with, and schedule, a bonded mover and locksmith to be present (a client represented had to be scheduled to be present at the move); and
6. On the move out date, a deputy was present to ensure the borrower vacated all persons from the property and stayed to oversee the removal of the personal property and the changing of the locks. 

All told, in our case, it took twenty-nine days to evict the borrower and repossess the property. 

Remember, this was in Marion County, and, as noted in my April 14, 2008 post Indiana Sheriff's Sales - Local Rules, Customs and Practices Control, there are ninety-two counties in Indiana and thus ninety-two different sets of applicable rules.  As such, the timing may and likely will vary from county to county.   

Skip a step.  With the standard language we built into the post-trial order signed by the judge, we were not required to separately file for a writ of assistance in order to trigger the process.  According to the Marion County Sheriff, the order had already provided the office with the authority to proceed.  Here's what our order said:

Immediately after the sale and foreclosure, the Sheriff of Marion County, Indiana shall execute and deliver to the purchaser a deed of conveyance to the Real Estate and upon the request of the purchaser, shall eject and remove [defendant/borrower] and any party claiming from or through her that occupies any part of the Real Estate, and shall remove therefrom the personal property of any such person or entity and shall, in all other respects, deliver and place the purchaser in possession.

I would encourage the use of such language as it should enable one to bypass a step in the process.

Commercial cases too.  At the end of the day, in the vast majority of commercial mortgage foreclosure actions, the borrower will cooperate and surrender the property.  Having said that, one never knows when a unique case will arise in which a secured lender may need to resort to the remedy of a writ of assistance.  Thanks to Jeff Hammond for his input into this post.   

No Answer To Complaint = No Lien On Property

My June 18 post theorized that summary judgment may be preferable to a default judgment in commercial foreclosure proceedings.  The May 23 decision by the Court of Appeals in Irmscher Suppliers v. Capital Crossing, 887 N.E.2d 97 (Ind. Ct. App. 2008) (Irmscher.pdf) supports the notion that an Ind. Trial Rule 56 motion for summary judgment is appropriate against a party eligible to be defaulted.  Specifically, Irmscher illustrates how a competing lien holder’s failure to answer another lien holder’s complaint can result in a summary judgment that negates the competing lien. 

Capital Crossing’s complaint.  Irmscher, a contractor, recorded a mechanic’s lien on the subject property on September 25, 2006.  Capital Crossing, a mortgage lender, recorded a mortgage lien on the subject property on March 6, 2006.  Part of the Court’s opinion deals with the fact that Irmscher and Capital Crossing had each filed their own foreclosure lawsuits within a few weeks of one another.  That procedural wrangling is not particularly relevant to this blog, however.  What is relevant is that, in the suit filed by Capital Crossing, Capital Crossing named Irmscher as a defendant to answer as to its interest in the real estate.  Because Capital Crossing recorded its mortgage before Irmscher recorded its mechanic’s lien, Capital Crossing alleged that the mechanic’s lien was subject and subordinate to the mortgage.  (That may or may not be true – see my July 3, 2007 post “Construction Mortgage vs. Mechanic’s Lien:  Win, Lose or Draw?” and my follow-up post “Lien Priority Follow-up:  The Operative Statutes.”  As you’ll see, we’ll never know who was right in Irmscher.) 

Irmscher’s response, or lack thereof.  Counsel for Irmscher appeared in Capital Crossing’s foreclosure case, but Irmscher never filed an answer to the complaint.  Capital Crossing filed a motion for summary judgment seeking, among other things, a determination that its mortgage lien was a first lien on the subject real estate.  (This is the tactic discussed in my June 18 post.)  Although Irmscher filed a brief in opposition to the motion and a designation of evidence, the Court did not address any evidence in the opinion.  The Court merely mentioned Irmscher’s statement in its brief that the case should be decided in the separate foreclosure action filed by Irmscher.  In any event, counsel for Irmscher did not appear at the hearing on Capital Crossing’s summary judgment motion.  The trial court entered a judgment of foreclosure and decree of sale, finding that Irmscher had no interest in the subject property.  Irmscher appealed. 

Silence equals admission.  On appeal, Irmscher contended that the trial court erred when it found Irmscher had no interest in the real estate.  No so fast, said the Court of Appeals:  “Irmscher did not file an answer to Capital Crossing’s amended complaint and therefore admitted, at the very least, to the superiority of Capital Crossing’s mortgage.”  The Court cited an Indiana Supreme Court decision from 1886:

As applicable however, to a suit to foreclose a mortgage, and other kindred suits in the nature of a proceeding in rem, where a party is made a defendant to answer as to his supposed or possible, but unknown or undefined, interest in the property, we think that, as against him, a default ought to be construed as an admission that, at the time he failed to appear as required, he had no interest in the property in question, and hence as conclusive of any prior claim of interest or title adverse to the plaintiff. 

Ouch.  When a plaintiff lien holder files an action and asserts facts placing the validity, priority and amount of a mortgage lien in issue, a named defendant must file an answer to assert whatever interest it has in the property.  If it fails to do so, the lien of the defendant will be extinguished as a matter of law.  In Irmscher, the Court of Appeals held “in this case, although Irmscher’s counsel entered an appearance, Irmscher failed to file an answer asserting whatever interest it had in the property.  As such, we conclude that the trial court did not err in finding that Irmscher had no interest in the property.” 

Today’s lesson.  The Irmscher opinion is useful to both junior and senior lenders.  If you have a junior lien and are named as a defendant in a senior lien holder’s lawsuit, you need to appear in the action and answer the complaint to assert your interest in the subject real estate.  If you don’t, you can kiss your lien goodbye.  On the flip side, in instances where a defendant has not answered the complaint, senior lien holders involved in Indiana enforcement actions can cite to Irmscher in their summary judgment briefs to persuade the trial court that the defendant’s lien should be extinguished as a matter of law.

In Indiana, A Summary Judgment Is Preferable To A Default Judgment

There are occasions when a defendant does not appear in a lien enforcement lawsuit or otherwise timely respond to the complaint.  Many of us intuitively consider the next step to be an application for default judgment pursuant to Indiana Trial Rule 55.  Recently, my colleague Chris Jacobson and I discussed the benefits of foregoing a T.R. 55 motion and proceeding directly with a T.R. 56 motion for summary judgment.  Secured lenders and their counsel should consider this approach in Indiana matters.

Is it proper?  The first question is whether a plaintiff can file a motion for summary judgment before an answer, or even an appearance, has been filed by a defendant.  The answer appears to be yes.  T.R. 56(A) states that “a  party seeking to recover upon a claim . . . may, at any time after the expiration of twenty (20) days from the commencement of the action . . . move . . . for summary judgment in his favor upon all or any part thereof.”  (Under T.R. 3, an action is commenced by the filing of a complaint, by paying the filing fee and by furnishing the clerk with the required copies of the complaint and summons.)  Nothing in T.R. 56 (or T.R. 55) suggests that a motion for summary judgment cannot be utilized when an application for default judgment could be.  Case law supports the notion that a T.R. 56 motion is appropriate against a party eligible to be defaulted.  Anderson v. The Broadmoor Corporation, 363 N.E.2d 1042 (Ind. Ct. App. 1977); see also, Royalty Vans v. Hill Brothers, 605 N.E.2d 1217, 1219 (Ind. Ct. App. 1993):

[Defendant] very well might have been vulnerable to the entry of a default judgment in this case . . . ..  However, the court clearly acted pursuant to [Plaintiff’s] motion for summary judgment and entered judgment only after [Plaintiff] had met its burden of demonstrating that there was no genuine issue of material fact for trial.

Is it better?  Applying for a default judgment is fairly quick and easy, and courts essentially focus only on whether there has been good service of process and whether the defendant has failed to timely respond to the complaint.  It’s sort of a technical knockout.  (See my post, “What If A Borrower Ignores A Lender’s Foreclosure Suit?”)  A summary judgment, while a bit more labor intensive to obtain, provides a more definitive result.  The court’s decision is on the merits.  The court in Anderson, 363 N.E.2d at 294-95 noted, for example:

A summary judgment qualifies as a final judgment and a trial court may award “the relief to which the party in whose favor it is rendered is entitled, even if the party has not demanded such relief in his pleadings.”  A T.R. 55 judgment is limited to the amount prayed for in the pleadings.   

In addition, Indiana courts are geared toward setting aside default judgments.  T.R. 55 has a specific subsection about setting aside a default and specifically refers to T.R. 60(B).  T.R. 60(B) also applies to summary judgments, but the cases we’ve reviewed show quite clearly that setting aside a summary judgment is a more difficult proposition.  Furthermore, Indiana has specific legal policies stating that default judgments are not favored.  There is a strong judicial preference for deciding cases on their merits and for giving litigants their day in court.  Summary judgments tend to meet those standards.  Default judgments tend not to.

Is notice documented?  An important matter, implicit in the Anderson opinion, is to prove that the defendant had notice of the summary judgment proceedings.  In instances of unrepresented parties, one way to do this is to provide the party, by certified mail, with copies of the motion and any order setting the matter for hearing.  (A hearing is not mandated by T.R. 56, unless a party requests one, but it is fairly common for Indiana trial courts to hold a hearing.)  Lender’s counsel then can attach the letter(s), with the certified mail return receipt(s), to an affidavit for submission to the court.  If the plaintiff can show that the defendant had actual notice of the proceedings, but failed to take any action, then such proof reduces dramatically the chances of setting aside the judgment in the trial court or overturning the judgment on appeal.  Conversely, the easiest way for a defendant to get a second chance is to convince a court that it did not know about a motion or a hearing. 

Think MSJ.  There is no right or wrong answer to the question of whether to pursue relief through a default judgment or a summary judgment.  The circumstances of the particular case should guide the decision.  A T.R. 55 default judgment arguably can occur more quickly and with less expense.  Having said that, a summary judgment, as opposed to default judgment, should result in more conclusive, definitive relief that is less prone to being set aside on technical grounds.  In such cases, the defendant’s recourse may be limited to an appeal, which should be futile if the undisputed facts and the law support the judgment.  Ultimately, my advice for secured lenders and their counsel is to bypass a default and to seek a summary judgment.  (For more on summary judgments in the foreclosure context, please see my post, “Motion For Summary What?”)

I would like to thank my colleague Chris Jacobson for her thoughts on this issue, and I would like to credit our summer associate, Julia Bochnowski, for assisting me with the research for this post, particularly while I was on vacation last week. 

PRO HAC VICE ADMISSION IN INDIANA AND THE ROLE OF LOCAL COUNSEL

I'm on vacation this week, so I'm re-posting one of my more popular articles, originally published January 1, 2007:

You’re an out-of-state lawyer with a client who needs to foreclose on property within Indiana.  You’re not licensed to practice in the state, and no one in your firm is admitted in Indiana.  You don’t want to relinquish control over the case, but instead wish to be in charge of representing your long-standing client in its important matter.  What you need is to be admitted pro hac vice in the Indiana court. 

More Latin.  “Pro hac vice” in English means “for this turn; for this one temporary occasion.”  Black’s Law Dictionary.  In the legal context, the phrase refers to the limited admission to practice in a court.  Admission pro hac vice is governed by the Indiana Rules for Admission to the Bar and the Discipline of Attorneys, including specifically Rule 3, which has been amended, effective January 1, 2007. 

The 7 hoops.  Indiana’s rules require prospective pro hac vice admitees to jump through a number of hoops.  Filings are required both with the Clerk of the Indiana Supreme Court and in the particular trial court.  Here’s what needs to be done:

1. Hire a member of the bar of the State of Indiana to act as co-counsel and ensure he or she has an appearance on file.
2. Pay the Clerk of the Indiana Supreme Court a registration fee of $105.  See, Rule 2(b).  (The registration fee must be paid annually until the proceeding has concluded.) 
3. Provide the Clerk with a copy of the Verified Petition for Temporary Admission that will be filed with the trial court. 
4. Procure from the Clerk a temporary admission attorney number and payment receipt. 
5. File a Verified Petition for Temporary Admission with the trial court, co-signed by Indiana co-counsel, setting forth the nine specific disclosures articulated in Rule 3, § 1(a)(4). 
6. Obtain from the trial court an order granting the verified petition.
7. File with the Clerk of the Indiana Supreme Court a notice that includes a statement of good standing issued by the highest court in each jurisdiction in which the attorney is admitted to practice law, a copy of the verified petition requesting temporary permission and a copy of the order granting the petition. 

Once these steps are met, counsel may file an appearance in the trial court.

Further handling of the case.  Beware of Rule 3 § 1(d), which mandates that all papers filed in the cause of action be co-signed by the Indiana co-counsel.  On the other hand, unless ordered by the trial court, local counsel need not be personally present for court appearances.  Here is a .pdf of an excellent article entitled “Taking the Vice Out of Pro Hac Vice:  Temporary Admission and Local Counsel” from the October, 2006 issue of Res Gestae, the official publication of the Indiana State Bar Association: article.pdf.  Donald R. Lundberg, the Executive Secretary of the Indiana Supreme Court Disciplinary Commission, is the author.  The article describes the January 1, 2007 changes to the rules.  It also explains why Indiana co-counsel cannot be a “potted plant,” but instead must play a meaningful role in the case, particularly with written submissions.  In response to those who feel that Indiana’s procedural requirements for admission pro hac vice may be burdensome, Mr. Lundberg makes a great point:  “would you rather take the bar exam?”

The General and the Lieutenant.  My standard approach to serving as local counsel is based on the philosophy that, as with most cases, there needs to be a General and a Lieutenant.  Someone - one person – should be in charge, and others should follow that person’s orders.  Otherwise, the “too many cooks in the kitchen” syndrome develops, followed by reduced efficiency and increased costs to the client.  Usually, but not always, my primary purpose as local counsel is to support the out-of-state lawyer – to be a Lieutenant – regardless of the age or experience of the non-Indiana attorney.  Most good local counsel set their egos aside and do as little (or as much) as the lead counsel wants.  To me, the main objective of any out-of-state, lead attorney should be to hire a responsive, cost-effective role player with local knowledge of the law and procedures.  Certainly I’m always ready, willing and able to be lead counsel, and there are times when the referring attorney hires me to serve in that capacity.  But most of the time, out-of-state Generals simply want a local Lieutenant, which is fine with me.

I'm on vacation this week, so I'm re-posting one of my more popular articles, originally published January 1, 2007:

You’re an out-of-state lawyer with a client who needs to foreclose on property within Indiana.  You’re not licensed to practice in the state, and no one in your firm is admitted in Indiana.  You don’t want to relinquish control over the case, but instead wish to be in charge of representing your long-standing client in its important matter.  What you need is to be admitted pro hac vice in the Indiana court. 

More Latin.  “Pro hac vice” in English means “for this turn; for this one temporary occasion.”  Black’s Law Dictionary.  In the legal context, the phrase refers to the limited admission to practice in a court.  Admission pro hac vice is governed by the Indiana Rules for Admission to the Bar and the Discipline of Attorneys, including specifically Rule 3, which has been amended, effective January 1, 2007. 

The 7 hoops.  Indiana’s rules require prospective pro hac vice admitees to jump through a number of hoops.  Filings are required both with the Clerk of the Indiana Supreme Court and in the particular trial court.  Here’s what needs to be done:

1. Hire a member of the bar of the State of Indiana to act as co-counsel and ensure he or she has an appearance on file.
2. Pay the Clerk of the Indiana Supreme Court a registration fee of $105.  See, Rule 2(b).  (The registration fee must be paid annually until the proceeding has concluded.) 
3. Provide the Clerk with a copy of the Verified Petition for Temporary Admission that will be filed with the trial court. 
4. Procure from the Clerk a temporary admission attorney number and payment receipt. 
5. File a Verified Petition for Temporary Admission with the trial court, co-signed by Indiana co-counsel, setting forth the nine specific disclosures articulated in Rule 3, § 1(a)(4). 
6. Obtain from the trial court an order granting the verified petition.
7. File with the Clerk of the Indiana Supreme Court a notice that includes a statement of good standing issued by the highest court in each jurisdiction in which the attorney is admitted to practice law, a copy of the verified petition requesting temporary permission and a copy of the order granting the petition. 

Once these steps are met, counsel may file an appearance in the trial court.

Further handling of the case.  Beware of Rule 3 § 1(d), which mandates that all papers filed in the cause of action be co-signed by the Indiana co-counsel.  On the other hand, unless ordered by the trial court, local counsel need not be personally present for court appearances.  Here is a .pdf of an excellent article entitled “Taking the Vice Out of Pro Hac Vice:  Temporary Admission and Local Counsel” from the October, 2006 issue of Res Gestae, the official publication of the Indiana State Bar Association: article.pdf.  Donald R. Lundberg, the Executive Secretary of the Indiana Supreme Court Disciplinary Commission, is the author.  The article describes the January 1, 2007 changes to the rules.  It also explains why Indiana co-counsel cannot be a “potted plant,” but instead must play a meaningful role in the case, particularly with written submissions.  In response to those who feel that Indiana’s procedural requirements for admission pro hac vice may be burdensome, Mr. Lundberg makes a great point:  “would you rather take the bar exam?”

The General and the Lieutenant.  My standard approach to serving as local counsel is based on the philosophy that, as with most cases, there needs to be a General and a Lieutenant.  Someone - one person – should be in charge, and others should follow that person’s orders.  Otherwise, the “too many cooks in the kitchen” syndrome develops, followed by reduced efficiency and increased costs to the client.  Usually, but not always, my primary purpose as local counsel is to support the out-of-state lawyer – to be a Lieutenant – regardless of the age or experience of the non-Indiana attorney.  Most good local counsel set their egos aside and do as little (or as much) as the lead counsel wants.  To me, the main objective of any out-of-state, lead attorney should be to hire a responsive, cost-effective role player with local knowledge of the law and procedures.  Certainly I’m always ready, willing and able to be lead counsel, and there are times when the referring attorney hires me to serve in that capacity.  But most of the time, out-of-state Generals simply want a local Lieutenant, which is fine with me.

Seventh Circuit: Indiana Writs of Assistance Do Not Need To Be Executed In A Commercially-Reasonable Manner

This supplements my March 2, 2007 post:  The execution of a writ of assistance need not be "commercially reasonable."  Please click here for that post, which in part dealt with the federal district court's February 16, 2007 conclusion that Indiana Trial Rule 70(A) writs of assistance should be executed by the county sheriff immediately and without regard to commercially-reasonable standards.  The Seventh Circuit agreed with the opinion of Judge Tinder (who is, incidentally, now a Seventh Circuit Judge).

Affirmed.  At issue was the timing of an eviction of a property owner after after an execution sale of the real estate.  The owner, Mr. Dempsey, cried foul because JP Morgan Chase refused to delay the eviction to allow Mr. Dempsey to attend a funeral.  Here's what the Seventh Circuit said regarding the appeal of that issue: 

We likewise agree with the district court that there is no merit to Dempsey’s claim that the writ of assistance was executed unfairly because Chase refused to delay the eviction to allow Dempsey to attend a funeral. Dempsey has provided no support whatsoever for his contention that the writ must be executed in a commercially reasonable manner. “A writ of assistance is an equitable remedy used to transfer real property, the title of which has been previously adjudicated, as a means of enforcing the court’s own decree” where the party that the writ is issued against has refused to obey that decree—like Dempsey did here. See TeWalt v. TeWalt, 421 N.E.2d 415, 418 (Ind. Ct. App. 1981); see also IND. R. TRIAL P. 70(A). Thus, it is not surprising that the sheriff has the “right and duty” to execute the writ immediately upon receiving it. 7 C.J.S. Writ of Assistance § 14. As the district court noted, “Dempsey could have avoided his trouble by moving out voluntarily and promptly when Chase obtained title to the property as opposed to forcing Chase to utilize the sheriff’s department to enforce the court’s decision.”

For a .pdf of the entire March 31, 2008 decision in Dempsey v. JP Morgan Chase, 2008 U.S. App. LEXIS 7707 (7th Cir. 2008) click here.pdf.

Tool for creditors.  Again, if you acquired title to real estate at a sheriff's sale and if the owner will not vacate voluntarily, your remedy is a writ of assistance.  Dempsey provides powerful legal precedent, favorable to creditors, associated with how Indiana writs of assistance can and should be executed.

What If A Borrower Ignores A Lender's Foreclosure Suit?

Can a borrower in default simply disregard a lawsuit?  Of course not.  If the plaintiff/lender properly serves the borrower with a Summons and the Complaint, and if the borrower/defendant takes no action, then the borrower will face a "default judgment."  A July 23, 2007 opinion from the U.S. District Court for the Northern District of Indiana in United States of America v. Sheetz, 2007 U.S. Dist. LEXIS 53918 illustrates this. 

Rules.  The procedural rule giving courts the power to enter default judgments is Rule 55.  Click here for the federal rule.  Click here for the Indiana rule.  The rules essentially are the same.  Sheetz is a federal court action and thus applies the federal version of the rule. 

The Sheetz opinion on page 2 outlines the following guidelines utilized by federal courts asked to enter a default judgment:

1. The entry of default is discretionary - a judgment call by the court.
2. Factors that will be considered include (a) the amount of money involved, (b) whether there are issues of fact, (c) whether substantial public importance is in question, (d) whether the default is "largely technical", (e) whether the plaintiff has been prejudiced by the delay caused by the defendant and (f) whether the grounds for default are "clearly established or are in doubt." 

(Indiana state courts articulate the guidelines slightly differently, and that case law will be the subject of a future post.)

Liability.  Sheetz was an easy call for Judge Simon.  The defendant borrower had defaulted on a student loan.  The circumstances satisfied each of the factors.  Given the lender's motion and supporting materials, there were no issues of fact, and the grounds were clearly established.  The default went beyond a mere technicality as three months had passed since the defendant was served.  "Defendant cannot be allowed to completely ignore this suit."  Id at 2.  Finally, the money involved was a relatively small figure (under 10k). 

Damages.  A lawsuit usually concerns a determination of two basic things:  liability and damages.  The first question is whether the borrower owes the money.  The second question surrounds the amount of money owed (and, in foreclosure cases, the nature and extent of the lien).  A motion for a default judgment is way to expedite those determinations.  The motion triggers the same two-step analysis. 

Sometimes, a court will grant a default judgment (determine liability) on the pleadings, without a hearing, but later conduct an evidentiary hearing to determine damages.  However, sometimes a court will determine damages immediately and without a hearing.  Sheetz is one of those cases.  At least in federal court, if damages are "capable of ascertainment from definite figures contained in the documentary evidence or in detailed affidavits," then a hearing isn't necessary.  The key is whether the court has the information it needs to calculate damages.  Id. at 3.  The plaintiff/lender in Sheetz (the United States) properly filed an affidavit (sworn written statement) outlining the debt and how the final amount should be calculated based on the loan documents.  Judge Simon saw no reason to hold a hearing, and the plaintiff got its final, enforceable judgment as to both liability and damages quickly and without a court appearance. 

When faced with a borrower ignoring a foreclosure suit, and after you've assured yourself that service of process has been perfected and the appropriate time has passed, you or your counsel should follow Rule 55 and the Sheetz road map to reduce your claim to a judgment quickly and with limited expense. 

THE EXECUTION OF A WRIT OF ASSISTANCE NEED NOT BE “COMMERCIALLY REASONABLE”

A recent federal court case addressed an Indiana writ of assistance, an infrequently-used yet useful tool for commercial lenders and judgment creditors who have acquired title to real estate at a sheriff’s sale but are having trouble getting possession.  The opinion, dated February 16, 2007, is from Judge Tinder of the Southern District of Indiana.  Here's a .pdf: DempseyOpinion.pdf.  The legal “drama” involved mortgagee Chase and mortgagor Dempsey.

Writ of assistance.  “Writ” is a fancy word for a court order “requiring the performance of a specified act, or giving authority to have it done.”  Black’s Law Dictionary.  A “writ of assistance” is a particular kind of court order “to transfer real property, the title of which has been previously adjudicated, as a means of enforcing the court’s own decree.”  Dempsey at 15.  In other words, the writ compels compliance with a prior order that directed action, such as the transfer of possession of real property. 

Indiana Trial Rule 70(A).  Writs of assistance are governed by T. R. 70(A), which states in part:  “When any order or judgment is for the delivery of possession, the party in whose favor it is entered is entitled to a writ of . . . assistance . . . directing the sheriff or other enforcement officer to deliver possession upon application to the clerk.”  Writs of assistance avoid the unnecessary expense and delay of the filing of a new lawsuit because the relief simply is triggered by an “application” (a motion) filed in the original action.  The application is a supplemental proceeding to enforce a prior court order.  The writ is enforced, in most cases, by the sheriff.  Harvey, Indiana Practice Series, Volume 4(A), Section 70.3.

The Dempsey circumstances.  The litigation concerned a property used by Dempsey and his professional service corporation as an office, which contained two additional rental units.  Chase held a mortgage on the property, but the underlying state court case was not a mortgage foreclosure action.  Chase became involved when a judgment creditor compelled a judicial sale of Dempsey’s building.  Chase ultimately purchased the property by bidding its indebtedness at the sheriff’s sale.  The problem was that Dempsey would not vacate the premises.  So, Chase petitioned the state court for a writ of assistance to take possession of the property.  Chase got the writ, and a Marion County Sheriff kicked Dempsey and his two tenants out.  In the subsequent federal court action, Dempsey contended that he should be awarded the property back, or at least compensated for the loss, due to the allegedly improper execution of the writ. 

Commercially unreasonable?  A few days before the July 19, 1995 eviction date, Dempsey left a phone message with Chase explaining that the visitation for his deceased cousin was July 19 and that the funeral was the next day.  Dempsey wanted more time.  His sympathy pleas were ignored, however.  In the federal court case, Dempsey argued it was “commercially unreasonable” for Chase not to wait a couple days before taking possession of the property.  Dempsey based his position on a standards found in Indiana’s Uniform Commercial Code.  For instance, one section in the Code requires the disposition of collateral after default to be done in a “commercially reasonable” manner.  I.C. 26-1-9.1-610.  The execution of a writ of assistance and the disposition of collateral are two different things, however.  Here, the sheriff already had disposed of the collateral via a sheriff’s sale.  Besides, Article 9.1 of the UCC “does not apply to writs of assistance anyway.”  Dempsey at 15, n.8.

Game over.  Judge Tinder held that there is no requirement to execute a writ of assistance in a commercially reasonable manner.  The sheriff has the “right and duty” to execute the writ immediately upon receiving it.”  Dempsey at 15.  Thus there was no obligation under Indiana law for Chase to wait a few extra days due to a death in Dempsey’s family.  “Chase’s right to the property had already been adjudicated.  Dempsey could have avoided his trouble by moving out voluntarily and promptly when Chase obtained title to the property as opposed to forcing Chase to utilize the Sheriff’s Department to enforce the court’s decision.”  Id.  The Dempsey decision is important because it rejects a reasonableness standard, or any standard for that matter, for the execution of writs of assistance.  Once the writ is issued, the party’s over.  The writ should be executed immediately.  In practice, execution will depend upon the availability of the civil sheriff, but execution will not depend upon the sob stories of the judgment debtor. 

Go get a writ.  If you’re a foreclosing commercial lender or judgment creditor, if you have a foreclosure decree, if you acquired the subject property at a sheriff’s sale and if the borrower/judgment debtor will not vacate the premises, your remedy in Indiana is a writ of assistance under T. R. 70(A).  The county sheriff has a duty to execute the writ immediately and without regard to commercially reasonable standards. 

THE COMMERCIAL LENDER’S 8-ITEM CARE PACKAGE FOR ITS FORECLOSURE ATTORNEY

As a secured lender, once you decide to foreclose on a business borrower’s loan collateral, you must provide certain information and documentation to your lawyer so he or she can file suit.  The more quickly you send this data, and the more thorough the data is, the more efficient your attorney can be in initiating the action. 

Care Package.  I recommend that lenders develop a practice of compiling a “care package” for their lawyers when assigning a non-performing loan for collection.  The package should include:

1.  Loan documents.  Each and every piece of paper documenting the loan needs to be forwarded.  This would include all promissory notes, mortgages, security agreements, amendments, modifications, assignments, etc.  Not only will the law firm need these materials to analyze the case, but Indiana Trial Rule 9.2(A) requires written instruments, upon which a cause of action is based, to be filed as exhibits to the Complaint.

2.  Defaults.  Although most defaults will be for non-payment, there may be other breaches of the loan documents.  All such defaults need to be identified in the Complaint.  To give your attorney a jump start on the default analysis, a listing of any and all contract breaches, with the operative dates and citations to loan document sections, will be useful. 

3.  Debt figures.  Even though the loss amount may change (increase) over time, the standard practice in Indiana is to specify the debt (damages) as of the filing of the Complaint.  These figures will include any losses recoverable under the loan documents, mainly the entire unpaid principal (assuming the debt is being accelerated), accrued interest and late fees.  A brief calculation of the figures should be explained, including relevant dates, interest rates, etc.

4.  Notice letter.  A copy of the notice and cure letter to the borrower should be provided, assuming that the loan documents required one and that you sent one.  Not only will your counsel need to evaluate the notice and cure element of the case, but it’s good practice to attach the letter as an exhibit to the Complaint.

5.  Title/UCC searches.  If you have a prior title insurance policy and/or UCC search, those materials should be sent with the care package.  Lenders could save some expense simply by ordering an update to the title policy from the same company.  Or, a separate title insurance company may provide a new commitment faster and more cheaply based on a prior policy.

6.  Environmental analysis.  If an environmental liability analysis has been performed, the report should be included in what you send to your counsel.

7.  Appraisals.  If the you had any collateral appraised in the weeks leading up to the decision to foreclose, the appraisal reports should be provided.  Knowing the present value of the collateral may be helpful in work-out negotiations or decisions regarding the disposition of the collateral.

8.  Contact information.  Current contact information for the borrower or, if applicable, the borrower’s counsel should be supplied.  It’s also a good idea to provide a copy of all correspondence between the lender and the borrower (or the borrower’s lawyer) related to pre-suit/work-out discussions.  This information will enable your counsel to understand better the nature of the dispute, and to hit the ground running with future communications.   

Efficiency.  Two things are saved when lenders and their counsel are efficient:  time and expense.  If, at the beginning of an assignment, your staff provides outside counsel with the care package I propose, law firms (at least mine) will initiate the foreclosure action quicker and for less money.  Delays and attorney’s fees can be avoided by bypassing the follow-up that usually is required in obtaining data from the lender – things that can be provided at the outset, even before the lender first contacts its attorney. 

PRO HAC VICE ADMISSION IN INDIANA AND THE ROLE OF LOCAL COUNSEL

You’re an out-of-state lawyer with a client who needs to foreclose on property within Indiana.  You’re not licensed to practice in the state, and no one in your firm is admitted in Indiana.  You don’t want to relinquish control over the case, but instead wish to be in charge of representing your long-standing client in its important matter.  What you need is to be admitted pro hac vice in the Indiana court. 

More Latin.  “Pro hac vice” in English means “for this turn; for this one temporary occasion.”  Black’s Law Dictionary.  In the legal context, the phrase refers to the limited admission to practice in a court.  Admission pro hac vice is governed by the Indiana Rules for Admission to the Bar and the Discipline of Attorneys, including specifically Rule 3, which has been amended, effective January 1, 2007. 

The 7 hoops.  Indiana’s rules require prospective pro hac vice admitees to jump through a number of hoops.  Filings are required both with the Clerk of the Indiana Supreme Court and in the particular trial court.  Here’s what needs to be done:

1. Hire a member of the bar of the State of Indiana to act as co-counsel and ensure he or she has an appearance on file.
2. Pay the Clerk of the Indiana Supreme Court a registration fee of $105.  See, Rule 2(b).  (The registration fee must be paid annually until the proceeding has concluded.) 
3. Provide the Clerk with a copy of the Verified Petition for Temporary Admission that will be filed with the trial court. 
4. Procure from the Clerk a temporary admission attorney number and payment receipt. 
5. File a Verified Petition for Temporary Admission with the trial court, co-signed by Indiana co-counsel, setting forth the nine specific disclosures articulated in Rule 3, § 1(a)(4). 
6. Obtain from the trial court an order granting the verified petition.
7. File with the Clerk of the Indiana Supreme Court a notice that includes a statement of good standing issued by the highest court in each jurisdiction in which the attorney is admitted to practice law, a copy of the verified petition requesting temporary permission and a copy of the order granting the petition. 

Once these steps are met, counsel may file an appearance in the trial court.

Further handling of the case.  Beware of Rule 3 § 1(d), which mandates that all papers filed in the cause of action be co-signed by the Indiana co-counsel.  On the other hand, unless ordered by the trial court, local counsel need not be personally present for court appearances.  Here is a .pdf of an excellent article entitled “Taking the Vice Out of Pro Hac Vice:  Temporary Admission and Local Counsel” from the October, 2006 issue of Res Gestae, the official publication of the Indiana State Bar Association: article.pdf.  Donald R. Lundberg, the Executive Secretary of the Indiana Supreme Court Disciplinary Commission, is the author.  The article describes the January 1, 2007 changes to the rules.  It also explains why Indiana co-counsel cannot be a “potted plant,” but instead must play a meaningful role in the case, particularly with written submissions.  In response to those who feel that Indiana’s procedural requirements for admission pro hac vice may be burdensome, Mr. Lundberg makes a great point:  “would you rather take the bar exam?”

The General and the Lieutenant.  My standard approach to serving as local counsel is based on the philosophy that, as with most cases, there needs to be a General and a Lieutenant.  Someone - one person – should be in charge, and others should follow that person’s orders.  Otherwise, the “too many cooks in the kitchen” syndrome develops, followed by reduced efficiency and increased costs to the client.  Usually, but not always, my primary purpose as local counsel is to support the out-of-state lawyer – to be a Lieutenant – regardless of the age or experience of the non-Indiana attorney.  Most good local counsel set their egos aside and do as little (or as much) as the lead counsel wants.  To me, the main objective of any out-of-state, lead attorney should be to hire a responsive, cost-effective role player with local knowledge of the law and procedures.  Certainly I’m always ready, willing and able to be lead counsel, and there are times when the referring attorney hires me to serve in that capacity.  But most of the time, out-of-state Generals simply want a local Lieutenant, which is fine with me.

FILING DATE IS WHAT MATTERS WHEN DETERMINING PARTIES TO NAME IN MORTGAGE FORECLOSURE SUIT

When a lender makes the decision to foreclose on its borrower’s real estate collateral in Indiana, the lender must determine who, besides the borrower, claims an interest in the property.  That’s why a title policy (foreclosure) commitment is ordered before the filing of the case.  Clear title cannot be obtained upon a sheriff’s sale unless all lien holders are named as defendants in the suit (so that their interests can be foreclosed).  Recently, the Indiana Court of Appeals reminded us of why and when pre-suit title work must be updated.    

The rule.  In the December 8, 2006 opinion House v. First American Title Company, 2006 Ind. App. LEXIS 2472, the Court of Appeals addressed a dispute between the purchaser of residential real estate (after a sheriff’s sale) and his title insurance company.  Although the issues in the opinion have no real bearing on commercial foreclosure law, a rule cited by the Court in its decision does:  a foreclosure action’s filing date is the “only relevant date used to determine the proper parties to a mortgage foreclosure.”  Third-parties who secure an interest in the mortgaged property after the filing of the foreclosure complaint need not be named in the suit.  Note these comments from House: 

  Because the judgment of the Dearborn County Health Department
  did not attach until after the foreclosure action was commenced by
  the Bank of New York, any lien which arose as a result of the
  default judgment obtained by the health department was foreclosed
  by the foreclosure sale and therefore does not affect fee simple title
  to the real estate.

So, lenders need not continuously search title during the course of litigation and worry about adding new parties to their foreclosure complaint.  “The only relevant date” is the foreclosure action’s commencement date – the day the lender filed the complaint.   

Date down.  Invariably, there will be a gap between the completion of the preliminary title search and the initiation of the suit.  Conceivably, liens, etc. could arise during that time.  To cover the gap, lenders must “date down” (update) their title policy commitment to the day of the filing of the complaint.  House confirms that this is the only title update required, and I recommend that it be done shortly after the filing of the complaint.  If any interests arise during that period, the new lien holders must be added to the case.  Should the updated commitment uncover no new interests, the lender can be comfortable proceeding with the original cast of characters. 

MOTION FOR SUMMARY WHAT?

If you’ve heard colleagues or your lawyer mention a “motion for summary judgment” and wondered what exactly it was, allow me to shed some light on the subject in the context of an Indiana commercial foreclosure.  A motion is a request by a party for the trial judge to do something – in this case grant a summary judgment.  A summary judgment is an expedited final ruling by the judge on a claim of a party. 

The basics.  Here are some summary judgment nuts and bolts:

• Courts use summary judgment to address legal issues and reach legal conclusions when the facts are not disputed and only their legal meaning is in question.

• There are two critical elements of a successful motion for summary judgment:  (a) the evidentiary materials of record show that there is no genuine issue as to any material fact and (b) the party filing the motion is entitled to judgment as a matter of law.

• The purpose of summary judgment is to terminate litigation about which there can be no factual dispute and which may be determined as a matter of law. 

William F. Harvey, Indiana Practice Series, Volume 3A. 

Faster.  There is no real difference between a “judgment” and a “summary judgment.”  In both instances, the court adjudicates (determines) a claim or claims.  The main distinction between the two is this – a summary judgment avoids a trial.  A lender can repossess and therefore dispose of the collateral much faster (and with much less expense) than if it had to try the case.

Rule 56.  Motions for summary judgment are governed by Rule 56 of the Indiana Rules of Trial Procedure.  Black’s Law Dictionary explains “summary judgment” as:  “Rule of Civil Procedure 56 permits any party to a civil action to move for a summary judgment on a claim . . . when he believes that there is no genuine issue of material fact and that he is entitled to prevail as a matter of law….”   A “genuine issue of material fact” for purposes of summary judgment is:

In determining what constitutes a genuine issue as to any material fact for purposes of summary judgment, an issue is ‘material’ if the facts alleged are such as to constitute a legal defense or are such nature as to affect the result of the action.  A fact is ‘material’ and precludes grant of summary judgment if proof of that fact would have effect of establishing or refuting one of essential elements of a cause of action or defense asserted by the parties, and would necessarily affect application of appropriate principle of law to the rights and obligations of the parties.  Black’s.

In a typical commercial foreclosure case, there are two fundamental issues for the court to determine:  (1) whether there has been a default under the operative loan documents and (2) what the damages are.  If there is no dispute as to either of those issues, lenders can file a motion for summary judgment. The borrower has thirty days within which to respond to the motion.  It is not unusual for this period to be extended for another thirty days or so.  The plaintiff lender then may file a reply brief, and the court thereafter usually will hold a hearing. 

Supporting materials.  In support of the motion, you need an affidavit (1) to authenticate the loan documents and establish a default and (2) to outline of the amount of money to which the lender is entitled.  Unless the borrower can demonstrate that no default has occurred or that the lender has miscalculated the amount of damages, the court will be compelled to enter summary judgment.  A properly-supported motion for summary judgment could result in the reduction of the lender’s claims to a money judgment/foreclosure decree within a few months.  A resolution of the claims will not be dependent upon the court’s availability to hold a trial, which takes several months if not years. 

The objective.  Should a defendant borrower appear in the suit and answer the complaint, the plaintiff lender will be confronted with a contested, or at least a delayed, foreclosure.  (If there is no appearance in the case or answer to the complaint, lenders can achieve an even quicker judgment by applying for a default judgment under Trial Rule 55.)  In order to turn collateral into cash as quickly as possible, and if a default judgment is unavailable, the lender and its counsel should aggressively pursue summary judgment.  But make sure there will be no factual disputes in connection with proving a default (a breach of the loan documents) or the amount of the debt.  If lenders take debatable or extreme positions as to either of those issues, the motion could be defeated, resulting in delays and compounding financial losses.

BASIC FORECLOSURE PROCESS/TIMING IN INDIANA

Need a handle on how long it will take to liquidate your borrower’s collateral in Indiana?  Since the foreclosure process officially starts with the filing of a complaint, my timelines start there.  A complaint cannot be filed until there has been a default under the terms of the real estate mortgage or personal property security agreement.  Needless to say, many weeks if not months might pass between the initial loan default and the decision to file suit. 

The timing of the foreclosure process largely depends upon whether and to what extent the borrower contests the proceeding:   

Uncontested Foreclosure:  4½ - 6 months minimum.  If a business debtor does not contest foreclosure (but will not agree to a deed in lieu), the process can move relatively quickly.  Here are the major steps and applicable ranges of time:

1. Filing of the Complaint
2. Service of process on the debtor:  occurs in 5-10 days unless service by publication
3. Application for default judgment:  can be sought 21-24 days after service of process
4. Entry of default judgment and decree of foreclosure:  should occur within approximately 30 days after the Application is filed
5. Praecipe for Sheriff’s sale, including notice of same:  by statute, cannot be filed until 3 months after the Complaint
6. Sheriff’s sale:  happens about 45-90 days from Praecipe, depending on the county

Contested Foreclosure:  6-9 months minimum.  Given the vagaries of litigation, it’s virtually impossible to conclusively estimate how long a contested foreclosure case may last.  Much depends upon how clear the default and the damages are.  Perhaps the most significant factor relates to the time associated with workout negotiations.  In that regard, each case is different.  Here are the main steps of a fairly quick contested foreclosure:

1. Filing of the Complaint
2. Service of process on the debtor:  occurs in 5-10 days unless service by publication
3. Appearance of debtor’s attorney and motion for one or more 30-day extensions of time to respond to the Complaint:  filed 20-23 days after service of process
4. Answer to Complaint:  filed 30 days after filing of Appearance and expiration of last motion for extension
5. Motion for summary judgment:  can be filed immediately after the filing of the Answer
6. Objection to motion for summary judgment:  due 30 days after the filing of the motion for summary judgment
7. Summary judgment hearing:  usually held 75-120 days after the motion is filed
8. Entry of judgment and decree of foreclosure:  occurs on day of hearing, or soon thereafter, unless the motion is vigorously contested with viable defenses
9. Praecipe for Sheriff’s sale:  can be submitted immediately after the entry of judgment assuming more than 3 months have passed since the complaint was filed
10. Sheriff’s sale:  takes place 45-90 days from Praecipe, depending on the county

Judicial sales.  Indiana law requires a judicial sale in order to foreclose a mortgage.  I.C. 32-29-7-4 is a nice option for creditors looking to expedite a sale.  The statute permits, under certain limited circumstances, the sheriff’s sale to be conducted by a private auctioneer on the civil sheriff’s behalf.  This may be advisable in counties without regularly-scheduled sheriff’s sales.  (I should note that, as to personal property security interests, UCC/Article 9.1 and/or the terms of a security agreement may allow the creditor to repossess the collateral without a sheriff’s sale.) 

Be prepared for delays.  Although the basic procedure is the same throughout Indiana, the timing can be impacted dramatically by the dockets of the individual courts and/or the schedules of the individual civil Sheriffs’ offices.  The periods described are the minimum time periods.  The actual time usually is longer.  This is especially true if there are multiple creditors named in the lawsuit.  Further, in contested cases involving debtors represented by counsel, opposing attorneys can prolong the process in a variety of ways, including multiple motions for extensions of time, requests for discovery and vigorous challenges to a motion for summary judgment.  In the event a trial must occur, a resolution of the case can be delayed several months if not years.  In addition, a bankruptcy can be filed up until the time when the Sheriff’s sale begins, and that can delay the foreclosure process indefinitely.

Depending on the goals of the lender, the lawyer representing the lender can push the case aggressively toward a sale.  Or, counsel can be more passive to give the parties time to assess whether a refinancing arrangement may be warranted.  The parties can settle, or the debtor can redeem - real estate / I.C. § 2-29-7-7; personal property / I.C. § 26-1-9.1-623 - right up to the sale or disposition of the collateral.  Debtors’ attorneys know this, so don’t be surprised if a borrower waits until the eve of sale either to file for bankruptcy protection, redeem or yield to the lender’s loan modification terms.