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Date Of Sheriff Sale Fee Increase Varying By County

In follow-up to my post on Monday the 27th - County Sheriff Sale Fees Increasing to $300 - it appears the actual date upon which the fee increase will apply may vary by county.  The quote below is an email to local lawyers I received from the Marion County Civil Sheriff's Office on the matter:

We are starting to get questions regarding the increase in the User fee that was effective on July 1st.

Our Attorney reads the new law as the effective date of the increase to be when the praecipe was filed. So the User fee will increase for Marion County once we see that the praecipe date is after July 1st. Looks like increase of user fee will start with some sales in September.

We heard other counties in the state have already raised theirs. All depends on how each county interprets the new law.

Always check with county officials and websites to confirm the local process because in Indiana Sheriff's Sales: Local Rules, Customs and Practices Control.  The fee increase is an example of this.

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Part of my practice includes representing parties in connection with sheriff’s sales. If you need assistance with a similar matter, please call me at 317-639-6151 or email me at john.waller@dinsmore.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.


County Sheriff Sale Fees Increasing to $300

I've been peppered with emails from various Indiana county sheriff's departments advising that the foreclosure sale fees are about to increase to $300.  This is consistent with the enactment of House Bill 1048, about which I wrote back in March:  Upcoming Changes To Indiana Sheriff's Sales.  Please re-read that post for information about other rules that become effective July 1st.

NOTE:  See follow-up post, Date Of Sheriff Sale Fee Increase Varying By County

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Part of my practice includes representing parties in connection with sheriff’s sales. If you need assistance with a similar matter, please call me at 317-639-6151 or email me at john.waller@dinsmore.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.


Presumption Of Ownership Through Tenants By The Entirety Can Be Rebutted By Contract

Lesson. Since ownership of real estate by a husband and wife creates a presumption of a tenancy by the entirety, typically a creditor cannot collect the debt of one spouse from the marital real estate. However, the presumption is rebuttable by a contract that states otherwise or that implies otherwise – potentially opening the door to collecting the debt from the debtor spouse’s interest in the real estate.

Case cite. Fund Recovery Servs. LLC v. Wolfe 2022 U.S. Dist. LEXIS 28754 (N.D. Ind. Feb. 17 2022)

Legal issue. Whether a fraudulent transfer case against husband and wife should be dismissed because they held the subject real estate jointly.

Vital facts. Creditor alleged that Husband transferred his interest in real estate that he held jointly with Wife such that Wife become the sole owner. The transfer occurred after entities for which Husband was a personal guarantor filed bankruptcy. The Court’s opinion does not mention anything about the language in any of the deeds, nor is there any discussion of why Husband transferred title to Wife.

Procedural history. Creditor filed suit against Husband and Wife seeking to collect the debt Husband owed to Creditor. Specifically, Creditor claimed the conveyance should be set aside because the real estate transfer violated Indiana’s Uniform Fraudulent Transfer Act (IFTA). Defendants filed a motion to dismiss the Complaint for a failure to state a claim for relief.

Key rules.

Certain transfers made by a debtor are voidable as to a creditor if the transfer was made with intent to hinder, delay, or defraud the creditor. Ind. Code. 32-18-2-14(a)(1).

A transfer can also be voidable “if the transferor did not receive reasonable value for the transfer and the debtor was engaged in a business for which his remaining assets were unreasonably small in relation to that business, or the transferor incurred debts beyond his ability to pay.” Ind. Code § 32-18-2-14(a)(2).

The IFTA also provides that a transfer is voidable if the claim arose before the transfer, if the debtor made it without “receiving reasonably equivalent value,” and if the debtor was insolvent at the time or became insolvent as a result of the transfer. Ind. Code. § 32-18-2-15.

Tenants by the entirety is a form of ownership of real estate in Indiana that is reserved for husband and wife “based on the legal fiction that a husband and wife are a single entity.” The nature of the ownership protects real estate from being seized to satisfy the debts of only one of the spouses.

In Indiana, ownership of real property by a husband and wife creates a presumption of a tenancy by the entirety that is rebuttable by either a contract hat states otherwise or that implies otherwise. Ind. Code § 32-17-3-1(d).

Holding. The Court denied the motion to dismiss.

Policy/rationale. Husband and Wife argued that, because the couple was married, the real estate was held as tenants in entirety and, as such, the real estate would not have been available to satisfy the debt of Husband. Further, Husband and Wife asserted that the Complaint did not allege facts necessary to overcome the presumption of an estate by the entireties. Creditor argued that it may be able to rebut the presumption by virtue of a contract for the purchase of the subject real estate. (The Court did not elaborate on the details of the contract, but clearly something did not sit well with the Court, which allowed the claims to proceed to the next phase of the case.)

Related posts.

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I represent parties involved in real estate-related disputes. If you need assistance with a similar matter, please call me at 317-639-6151 or email me at john.waller@dinsmore.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.


Lender’s Redirection Of Rents Does Not Constitute “Unclean Hands” When Supported By Loan Documents

Note: This is the fourth post about the 410 case, cited below, that grants a lender’s motion for summary judgment against a borrower (and other defendants), despite the defendants’ assertions of multiple defenses and counterclaims. For background and context, here are links to the prior three posts: May 6, May 20 and May 27.

Lesson. A lender’s demand for a tenant to redirect rents from the landlord/borrower will not trigger a claim for “unclean hands” when the action is supported by a loan document.

Case cite. Wilmington Tr. Nat'l Ass'n v. 410 S. Main St. LLC 2022 U.S. Dist. LEXIS 21288 (N.D. Ind. Feb. 7 2022).

Legal issue. Whether the doctrine of “unclean hands” precluded summary judgment for a lender in a commercial foreclosure action.

Vital facts. Following a loan default, Lender directed the commercial tenant of the mortgaged real estate to make rent payments directly to Lender instead of the borrower/landlord. The tenant evidently complied with the request. In turn, the absence of rental income apparently created a cash flow problem for the borrower that hampered Defendants’ ability to settle with Lender. The problem was that the borrower had previously entered into a Subordination, Non-Disturbance and Attornment Agreement (commonly called an SNDA) as part of the underlying loan documents. In the SNDA, the borrower consented to such direct payments and released the tenant from all liability to the borrower on account of any such payments. (Typically, an assignment of rents will contain similar rights in favor of a lender/mortgagee.)

Procedural history. In response to Lender’s motion for summary judgment, Defendants raised the “unclean hands” defense.

Key rules. The Court in 410 summarized Indiana state and federal court law regarding the doctrine of unclean hands:

The doctrine is designed to prevent a party that behaved inequitably or acted in bad faith from benefitting from that improper behavior. There is no exact formula for applying the doctrine and courts thus generally have discretion when determining whether to apply it. The doctrine is not favored under Indiana law "and must be applied with reluctance and scrutiny."

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For a defendant to successfully assert the doctrine in Indiana, the defendant generally must show that: 1) the plaintiff's misconduct was intentional; 2) the plaintiff's wrongdoing concerned the defendant and has an immediate and necessary relation to the matter in litigation; and 3) the defendant was injured because of the plaintiff's conduct.

Holding. The Court rejected the unclean hands defense and granted Lender’s motion for summary judgment. The Defendants have appealed the decision to the 7th Circuit Court of Appeals. I will follow-up as warranted.

Policy/rationale. Defendants contended that Lender “exacerbated” the loan default by taking the rents. The Court easily rejected the theory. The borrower could not, on the one hand, grant Lender rights to the rents in an SNDA while, on the other hand, claim misconduct in asserting such rights.

Related posts.

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I represent parties involved in disputes arising out of loans that are in default. If you need assistance with a similar matter, please call me at 317-639-6151 or email me at john.waller@dinsmore.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.