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 ProcedureBlack’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.