Barbara v. Pringle, 2013 U.S. Dist. LEXIS 167024 (.pdf), discussed last week, involved a replevin claim. The borrowers pledged a security interest in all relevant personal property owned by the companies. The lender sought to recover such non-real estate property pledged as collateral for the loans.
Security interest. The lender in Barbara established a security interest in the collateral described in the guaranty agreement pursuant to Indiana Code § 26-1-9.1-203, which security interest had been perfected by the filing of financing statements with the Indiana Secretary of State. The Court then noted “it is black letter law that, upon default, a secured creditor has the right to take possession of the collateral securing its claim.” The Court basically said that the plaintiff lender should prevail on the replevin claim.
But. The Court, on summary judgment, concluded that summary judgment could not be entered for the borrower because the requisite affidavit supporting the replevin action had not been submitted. In Indiana, a replevin claim is successful “if the plaintiff proves her right to title or possession of the property, proves that the property is unlawfully detained, and proves that the defendant wrongfully holds possession of the property.”
Affidavit. Before a replevin order could be issued, the lender needed to comply with Indiana law requiring the filing of an affidavit that describes the property at issue and states:
- the plaintiff is the owner of the property or is lawfully entitled to possession,
- the property has not been taken for a tax assessment or fine pursuant to statute; seized under an execution or attachment against the property of the plaintiff, or if seized, it is by statute exempt from seizure,
- the property has been wrongfully taken and is unlawfully detained by the defendant,
- the estimated value of the property, and
- the county in which the property is being detained.
See, Ind. Code §§ 32-35-2-3 and 4. Since the plaintiff lender did not provide the affidavit, the Court was unable to grant summary judgment at that time.
Lenders and their loan enforcement counsel should remember the replevin affidavit when filing a motion for summary judgment. The affidavit should address each of the five matters above. Without such evidence, the motion will be denied.