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Indiana Judgment Lien (10 Years) and Judgment Enforcement (20 Years) Statutes Of Limitation

Lesson.  Even though a ten-year judgment lien may expire, a judgment creditor still may enforce the judgment itself for at least another ten years.

Case cite.  Webb v. Yeager, 52 N.E.3d 30 (Ind. Ct. App. 2016).

Legal issue.  Whether a judgment creditor’s civil complaint to enforce a criminal restitution judgment was barred by the ten-year statute of limitations. 

Vital facts.  On May 3, 2004, Yeager (judgment creditor) obtained a criminal judgment against Webb (judgment debtor).  The judgment was for restitution, arising out of a theft, for about $21,000.  Later, the criminal system made a mistake, and the record showed that the judgment had been paid.  (The details aren’t pertinent here.)  Ten years and nine days later, on May 12, 2014, the judgment creditor filed an action in civil court to collect the prior judgment, which had not been paid. 

Procedural history.  The trial court granted summary judgment for the judgment creditor, and the judgment debtor appealed. 

Key rules.  Ind. Code 35-50-5-3 governs criminal restitution orders and provides that an order “is a judgment lien….”  Indiana case law holds that a restitution judgment is the practical equivalent of a civil money judgment and can be enforced in the same manner. 

By statute, a judgment lien expires after ten years.  I.C. 34-55-9-2As I wrote here in November of 2008, an underlying judgment and a resulting judgment lien are two different things.  Judgments themselves survive for twenty years.  I.C. 34-11-2-12.  In fact, a judgment never truly expires.  It’s simply presumed to be satisfied after twenty years.  But, that presumption can be rebutted.  

Holding.  The Court of Appeals in Webb concluded that, given the passing of the full ten years, the judgment lien had expired.  Nevertheless, the judgment creditor still could enforce the judgment because the judgment had not expired by the time he filed his complaint. 

Policy/rationale.  I gather that the heart of the Webb dispute surrounded the meaning of the criminal restitution statute.  The language of the statute uses the terminology “judgment lien,” instead of describing the restitution order simply as a “judgment.”  For example, I.C. 35-50-5-3(b) says that the restitution order may be enforced “in the same manner as a judgment lien created in a civil proceeding.”  One interpretation of this could be that the order, and thus the ability to collect, expires after ten years.  Relying on prior Indiana precedent, the Court didn’t see it that way. 

Related posts. 

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I sometimes represent judgment creditors involved in lien priority and collection matters.  If you need assistance with a similar issue, please call me at 317-639-6151 or email me at john.waller@woodenmclaughlin.com.  Also, don’t forget that you can follow me on Twitter @JohnDWaller or on LinkedIn, or you can subscribe to posts via RSS or email as noted on my home page.


Defective Legal Description Will Not Necessarily Invalidate Mortgage

Lesson.  As long as the legal description within the mortgage sufficiently describes real estate owned by the mortgagor, the mortgage itself will be valid, even if the legal description is flawed in other respects. 

Case cite.  Samuels v. Garlick, 49 N.E.3d 1116 (Ind. Ct. App. 2016).

Legal issue.  Whether a mortgage is invalid if the legal description of the mortgaged property has defects.    

Vital facts.  Samuels involved a lien priority dispute between two mortgagees.  There was no question that Mortgage 1 was recorded three years before Mortgage 2.  The complicating factor surrounded the legal description contained in Mortgage 1.  The opinion details the history of the subject real estate and the problems surrounding how the deeds and the two competing mortgages described the real estate.  The legals involved both “metes and bounds” descriptions and descriptions by lot after the owners subdivided the property.  In sum, Mortgage 1 (a) described some property that the mortgagors no longer owned, (b) did not describe some of property at issue and (c) described only certain portions of two of the lots at issue.  In short, the mortgage “both over- and under-described the mortgaged property.”  The second mortgagee contented that, with these defects, it was “impossible to determine which property was intended to be mortgaged.”  

Procedural history.  The trial court granted summary judgment for the first mortgagee, and concluded that Mortgage 1 was valid and senior to Mortgage 2 but “only as to that part [of the real estate] covered by the legal description in its mortgage.” 

Key rules. 

  • Generally, in Indiana, to charge subsequent parties with notice, a “mortgage must … contain an accurate legal description of the property.” 
  • “In order for a mortgage to be effective, it must contain a description of the land intended to be covered sufficiently to identify it.”  The test for determining the sufficiency of the description “is whether the tract intended to be mortgaged can be located with certainty by referring to the description.”
  • Indiana case law stands for the proposition that “the fact that the described premises encompasses more real estate than is owned by the mortgagors is relevant only to the issue of whether there is a valid and enforceable lien on the non-owned premises; it does not impair the validity of the lien on the mortgaged premises.” 

Holding.  The Indiana Court of Appeals affirmed the summary judgment.  Mortgage 1 was a prior and superior lien as to that part of the real estate covered by its legal description.  The fact that the description may have been flawed did not render the entire mortgage invalid.    

Policy/rationale.  The Court concluded that it was not impossible to determine which property was intended to be mortgaged by Mortgage 1.  That mortgage, which was in the mortgagors’ chain of title, “put prospective purchasers or mortgagees on notice of an existing mortgage on property commonly known as 8611 West 96th Street, Zionsville – the same address shown on Lot 1 of Copper Ridge Secondary Plat, which [was] also in [the mortgagors’] chain of title.”  Mortgage 1’s metes and bounds description was a “facially valid legal description” with the “same geographic starting point as [the subdivision plat] and encompasse[d] the western 155 feet of said plat.”  The fact that the premises described in Mortgage 1 encompassed more or less real estate than was owned by the mortgagors did not impair the validity of the lien on the described premises that the mortgagors owned. 

Related posts. 

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I frequently represent judgment creditors and lenders, as well as their mortgage loan servicers, entangled in lien priority and title claim disputes.  If you need assistance with a similar matter, please call me at 317-639-6151 or email me at john.waller@woodenmclaughlin.com.  Also, don’t forget that you can follow me on Twitter @JohnDWaller or on LinkedIn, or you can subscribe to posts via RSS or email as noted on my home page.


Foreclosing Party, As Owner, May Evict Tenants In Breach

Secured lenders repossessing real estate collateral at a sheriff’s sale normally keep tenants in place to maintain income.  There are instances, however, when a plaintiff lender, or a third-party sheriff’s sale purchaser, may desire to evict a tenant.  Ellis v. M&I Bank, 960 N.E.2d 187 (Ind. Ct. App. 2011) sheds light on a new owner’s rights, following a sheriff’s sale, vis-à-vis tenants. 

Unusual circumstance.  In Ellis, a developer leased the subject real estate to tenants (husband and wife), but then defaulted on its line of credit.  As a result, the developer’s lender foreclosed and ultimately acquired the real estate at a sheriff’s sale.  The court’s decree of foreclosure was against the developer and the husband only, not the wife/co-tenant.  When the lender pursued a writ of assistance to evict the tenants, the wife asserted that her interest in the real estate had not been extinguished in the mortgage foreclosure case.  She was right.   

To terminate, name tenants.  The Court in Ellis noted that, in Indiana, the purchaser at a sheriff’s sale “steps into the shoes of the original holder of the real estate and takes such owner’s interest subject to all existing liens and claims against it.”  Because the lender did not make the wife a party to the foreclosure case, the sheriff’s sale could not be enforced against her.  This is because, in Indiana, “where a mortgagee knows or should know that a person has an interest in property upon which the mortgagee seeks to foreclose, but does not join that person as a party to the foreclosure action, and the interested person is unaware of the foreclosure action, the foreclosure does not abolish the person’s interest.”  See my 10/07/11 and 07/09/10 posts for more on this area of the law.  Because the wife was not named or served in the foreclosure action, the trial court found that her interest was not extinguished by the foreclosure judgment and that the lender’s interest in the real estate remained subject to her leasehold interest. 

How did the lender obtain possession of the real estate from the wife?

Option 1 – strict foreclosure.  One option available to the lender was to terminate the interest of the wife through a strict foreclosure action.  I have written about this remedy, including Indiana’s 2012 legislation, extensively.  Please click on the category Strict Foreclosure to your right for more.  The lender in Ellis did not pursue this option. 

Option 2 - eviction.  The lender elected, as the then-owner of the real estate, to pursue eviction based upon the subject lease agreement.  The eviction action was separate and distinct from the foreclosure action.  The evidence in Ellis was clear that the tenants had breached the lease and that the lender had the corresponding right to terminate.  The trial court entered an order of possession for the lender based on the lease, and the Court of Appeals affirmed. 

Plaintiff lenders, after the entry of the foreclosure decree and sheriff’s sale, usually can evict parties in possession of the subject real estate through the mechanism of a writ of assistance, about which I have written in the past, assuming the mortgage lien is senior to the possessory interest.  That remedy generally is effective only when the targets of the writ of assistance were made parties to the underlying action.  The rub in Ellis was that one of the parties in possession of the real estate (the wife) was not named in the case.  Rather than embarking on what may have been a relatively costly, complicated and lengthy strict foreclosure action, the lender in Ellis chose a simpler approach by filing a straightforward landlord/tenant eviction action based upon the terms of the subject lease.  This turned out to be a good solution to the problem caused by failing to name the wife.

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Part of my practice is to protect the interests of lenders in contested foreclosures.  If you need assistance with such matters in Indiana, please call me at 317-639-6151 or email me at john.waller@woodenmclaughlin.com.  Also, you can receive my blog posts on Twitter @JohnDWaller or on LinkedIn, or you can subscribe to posts via RSS or email as noted on my home page.