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Technical Notice Irregularity Doesn’t Invalidate Sheriff’s Sale In Recent Case

There are all sorts of technical requirements associated with a sheriff’s sale in Indiana.  Ind. Code § 32-29-7-3(c)-(h) outlines some of them, including the notice rules.  The county civil sheriff’s offices typically handle many of the requirements after the lender praecipes for a sale.  Although lenders and counsel should undertake reasonable efforts to monitor and assist the sheriff, the fact is that you’re at the mercy of the sheriff to ensure that certain procedures are followed.  Seemingly 99.9% of the time the sheriffs do their jobs and do them well. 

The challenge.  From time to time, borrowers will challenge the legitimacy of a sheriff’s sale.  Gee v. Green Tree Servicing, LLC, 2010 Ind. App. LEXIS 1904 (Ind. Ct. App. 2010) (click and save for .pdf) is one of those cases.  The borrower/mortgagor specifically attacked the validity of the notice given.  The issue was: 

Whether the sheriff’s sale was procedurally deficient because the sheriff posted notice of the sale not at the permanent county courthouse but at the county’s temporary court offices.

The irregularity.  About the time that the sheriff’s sale was to occur in Gee, repairs were ongoing at the Grant County courthouse.  Three of Grant County’s four courts had relocated to temporary courtrooms in another county office building.  A bulletin board was located next to the door to the temporary courtroom.  The employee of the county sheriff’s department, who was responsible for conducting sheriff’s sales and arranging for statutory notice of such sales, testified that, after the court moved, she began posting statutory notice on the bulletin board at the temporary courtroom rather than the bulletin board at the courthouse.  Indeed for a period of time notices were not published on the permanent courthouse bulletin board. 

The rule.  The controlling statute is Ind. Code § 32-29-7-3(e), which states:

The sheriff also shall post written or printed notices of the sale at the door of the courthouse of each county in which the real estate is located. 

The operative statutory language in Gee was “at the door of the courthouse.” 

What’s a courthouse?  The opinion tackled the question of what the word “courthouse” means.  Is it a particular building or is it any building housing trial courts?  Indiana statutes do not define the term.  The Court turned to Black’s Law Dictionary, which defined a courthouse as the “building where the judge or judges convene to adjudicate disputes and administer justice.”  Based on that definition, the Court concluded that the “plain meaning of the statute applies to the temporary courtrooms . . ..”  The Court of Appeals therefore affirmed the trial court’s holding that, under the circumstances, the sheriff substantially complied with Ind. Code § 32-29-7-3(e) and that the borrower’s motion to set aside the sale should be denied.  The sale was not “procedurally irregular.”

Cover the bases.  As a side note, the Court posed the question of whether the sheriff should have posted notice of the sale at both the temporary courtroom and the permanent courthouse.  Because the borrower did not officially raise that issue in her appeal, the Court did not address it.  But, it seems to be advisable for sheriffs to post notices at all functioning courthouses in the county.  Indeed, Grant County began to post notices at both locations due to the challenge in Gee.

Gee is a reminder that there are a number of hoops through which a lender and a civil sheriff’s office must jump in order to perfect a sheriff’s sale.  Gee also illustrates that the General Assembly has built into Indiana’s judicial/statutory mortgage foreclosure system several procedural protections for borrowers/mortgagors that, by design, cause the real estate repossession process to take time.