Indiana Judgment Lien (10 Years) and Judgment Enforcement (20 Years) Statutes Of Limitation
Does A Deed-In-Lieu Of Foreclosure Automatically Release A Borrower From Personal Liability?

Sampling Of Indiana Deed Law, And Judgment Lien Attachment Issues

Lesson.  A judgment lien on real estate attaches only to the judgment debtor’s ownership interest in the real estate. If the property is owned by tenants in common, and one of the tenants is not a judgment debtor, then the lien will not impact the innocent party’s partial interest.

Case cite.  Underwood v. Bunger, 52 N.E.3d 829 (Ind. Ct. App. 2016).

Legal issue.  Whether and to what extent a judgment creditor had a valid, enforceable lien against a partial interest in real estate.

Vital facts. This case involved the interpretation of a warranty deed granted to three people. Two of the three, Kinney and Fulford, were married. A judgment creditor obtained a money judgment against Kinney and the third grantee under the deed, Underwood, but not Fulford. Later, Kinney died.

Procedural history.  The trial court granted summary judgment in favor of the judgment creditor. The court concluded that Underwood and Kinney each owned fifty percent of the real estate but that that the judgment lien attached only to Underwood’s interest.

Key rules. Indiana has three forms of concurrent ownership of real estate: (1) joint tenancy, (2) tenancy in common and (3) tenancy by the entirety.

    Tenancy by the entirety exists only between married spouses and creates ownership as a single unit. Upon death of one, the survivor holds the original grant. In other words, the transfer of title automatically occurs between the spouses upon death. Generally, if the contract to purchase the real estate or the deed itself contains no qualifying words, the married grantees hold the estate as tenants by the entirety.

    Tenancy in common is property held by two or more persons by distinct titles. They are united only by their right to possess the property, and their rights and interests are not held jointly. Black’s Law Dictionary advises that, unlike joint tenancy (see below) or tenancy by the entirety, “the interest of a tenant in common does not terminate” upon death.

    Joint tenancy was not discussed in Underwood. Black’s Law Dictionary defines this form of concurrent ownership as follows:

Joint tenants have one and the same interest, accruing by one and the same conveyance, commencing at one and the same time, and held by one and the same undivided possession. The primary incident of joint tenancy is survivorship, by which the entire tenancy on the decease of any joint tenant remains to the survivors, and at length of the last survivor.

    Resolving uncertainties.  When a married couple buys real estate jointly with a third party, the spouses take a one-half interest as tenants by the entireties, and the third party will take an undivided one-half interest as a joint tenant. The exception is if the language in the deed expresses an intent to hold otherwise. Furthermore, in Indiana, if there are words in the deed that qualify or define the estate conveyed “as to make it apparent that the parties intended the grantees to hold as tenants in common, such intention will prevail….” But as to a married couple, “all doubts are resolved in favor of estates by the entireties and against joint estates.”

Holding.  The Indiana Court of Appeals affirmed the trial court. Kinney and Fulford took their interest in the real estate as tenants by the entireties. It followed that Kinney’s interest in the real estate passed directly to Fulford, and not Kinney’s estate, upon Kinney’s death. Ind. Code 32-17-3-1. The ruling implied that Fulford’s interest in the real estate was not subject to the judgment lien.  See, Execution Upon Indiana Real Estate Owned As “Tenancy By The Entireties.”

Policy/rationale.  The Underwood opinion addressed the question of whether Underwood, Kinney and Fulford were three distinct tenants in common even though Kinney and Fulford were married. The Court held that the deed identified the couple’s relationship as spousal, even though the language in the deed also included the phrase “tenants-in-common.” The Court reasoned that the language did not overcome the presumption in favor of tenancies by the entirety because Kinney and Fulford were married and because the deed referred to them as husband and wife. “If the grantor had intended to create a tenancy in common among Underwood, Kinney, and Fulford, then the deed could have omitted the reference to Kinney and Fulford as husband and wife.”

Related posts.

Judgment Lien Principles Courtesy of Indiana Supreme Court


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 [email protected].  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.