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No Service On Calvin Hair = Void Judgment Against Hair Calvin

Lesson.  Before obtaining a foreclosure judgment, make sure you perfect service of process against all defendants. 

Case cite.  Hair v. Deutsche Bank, 18 N.E.3d 1019 (Ind. Ct. App. 2014).

Legal issue.  Whether a foreclosure judgment in favor of the lender/mortgagee was void as to a junior lien holder due to ineffectual service of process.   

Vital facts.  Hair obtained a judgment against Adejare in 2006 that resulted in judgment lien on Adejare’s real estate.  In 2002, Adejare granted to Deutsche a mortgage on the same property.  Deutsche filed a foreclosure action in 2011 and served Hair via publication.  Deutsche’s lawyers had tried to serve Hair by using the name “Hair Calvin,” which was consistent with how his judgment had been docketed by the county clerk.  His actual name was “Calvin Hair”, however, and his address was readily ascertainable through internet searches using that name.  Hair did not respond to Deutsche’s suit, and the trial court issued judgment, which included a decree terminating Hair’s judgment lien.  Deutsche bought the property at a sheriff’s sale in 2012 and quickly sold it to a third party. 

Procedural history.  In 2013, Hair filed a motion to set aside the foreclosure judgment.  He claimed that service of process by publication was not warranted and that the court entered judgment against him without first having personal jurisdiction.  The trial court denied the motion, and Hair appealed.

Key rules. 

  • Upon obtaining a judgment by an Indiana county court, a plaintiff automatically obtains a judgment lien against any real estate the defendant owns in that county.  Ind. Code 34-55-9-2
  • Junior lien holders in mortgaged property must be named in a foreclosure action before the judgment will be binding on them. 
  • Trial Rule 4.13(A) deals with service by publication, and the law generally requires “due diligence in attempting to locate a [junior lien holder] before proceeding with a foreclosure by publication only.”
  • A “void” judgment may be attacked through Trial Rule 60(B)(6).  If a judgment is void, the party seeking to set it aside is not required to demonstrate the so-called “meritorious defense” to such judgment. 

Holding.  The Indiana Court of Appeals in Hair reversed the trial court’s denial of Hair’s motion to set aside judgment.  “Hair’s judgment lien … still exists….”

Policy/rationale.  The opinion in Hair goes into great detail about how and why Deutsche should have figured out that it was suing Calvin Hair instead of Hair Calvin and that Deutsche should have served Hair personally instead of by publication.  In the final analysis, the Court concluded that Deutsche failed to give Hair proper notice of the foreclosure proceedings.    

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