Mario L. Sims, Sr., and Tiffiny Sims v. John Tiffany (mem. dec.)

• Court: Indiana Court of Appeals
• Decided: March 20, 2015
• Docket: 71A05-1406-MF-283
• Status: Published

Opinion

MEMORANDUM DECISION Mar 20 2015, 10:25 am

Pursuant to Ind. Appellate Rule 65(D), this Memorandum Decision shall not be regarded as precedent or cited before any court except for the purpose of establishing the defense of res judicata, collateral estoppel, or the law of the case.

ATTORNEY FOR APPELLANTS ATTORNEY FOR APPELLEE Johnny W. Ulmer W. Russell Sanford Cataldo Law Offices, Inc. South Bend, Indiana Bristol, Indiana

IN THE COURT OF APPEALS OF INDIANA

Mario L. Sims, Sr., and Tiffiny March 20, 2015 Sims, Court of Appeals Case No. 71A05-1406-MF-283 Appellants-Cross-Claimants, Appeal from the v. St. Joseph Superior Court The Honorable Margot F. Reagan, Judge John Tiffany, Cause No. 71D04-1001-MF-164 Appellee-Defendant.

Kirsch, Judge.

[1] Mario Sims, Sr., and Tiffiny Sims (“the Simses”) appeal the trial court’s denial

of their motion for summary judgment and grant of John Tiffany’s (“Tiffany”)

motion for summary judgment. On appeal, the Simses raise several issues, of

which we find the following dispositive: whether John Tiffany’s debt arising

from the Simes’s land contract was discharged in bankruptcy.

Court of Appeals of Indiana | Memorandum Decision 71A05-1406-MF-283 | March 20, 2015 Page 1 of 4 [2] We affirm.

Facts and Procedural History [3] In 2008, the Simses entered into a land-sale contract with Tiffany, setting forth

that the Simses would make monthly payments to Tiffany, who would in turn

make mortgage payments to the bank that held the mortgage on the land (“the

Bank”). The contract provided that the Simses could make mortgage payments

directly to the Bank in lieu of the monthly payments under the contract if

Tiffany was at any point unable to make the payments. In 2009, the Bank filed

a foreclosure proceeding against both Tiffany and the Simses. At that point, the

Simses had paid $26,000 in the form of a $12,000 down payment and ten

monthly payments of $1,400 each.

[4] The Simses attempted to assume the mortgage from Tiffany, but were unable to

reach an agreement with the Bank. Subsequently, the Simses filed a cross-claim

against Tiffany in the Bank’s foreclosure proceeding against Tiffany alleging,

inter alia, that he had committed fraud by representing that he would make

payments to the Bank on the Simses’ behalf and, thereafter, failing to do so.

[5] Tiffany filed a petition in bankruptcy and was granted a discharge pursuant to

Chapter 7 of the United States Bankruptcy Code1. Following the discharge, the

Simses filed an adversary proceeding in bankruptcy court, alleging that the

1 11 U.S.C. § 727(b)

Court of Appeals of Indiana | Memorandum Decision 71A05-1406-MF-283 | March 20, 2015 Page 2 of 4 amount for which they were suing Tiffany was a non-dischargeable debt under

11 U.S.C. § 523 (“Section 523”) because it was acquired via fraud. Tiffany and

the Simses reached an agreement to settle the adversary proceeding under

which Tiffany would issue the Simses a quitclaim deed to the property in

exchange for the Simses stipulating to drop the adversary proceeding with

prejudice. The agreement was executed and the proceeding was dismissed with

prejudice on March 13, 2012.

[6] After the adversary proceeding was dismissed, Tiffany and the Simses filed

cross motions for summary judgment. The trial court granted Tiffany’s motion

for summary judgment and denied the Simses’ motion, citing Tiffany’s

discharge in bankruptcy. The trial court reasoned that absent any specific

exemptions, Tiffany’s discharge in bankruptcy included the debt claimed by the

Simses. The Simses now appeal.

Discussion and Decision [7] Summary judgment is only proper where there is no genuine issue of material

fact, and our standard of review is the same as it is for the trial court. Manley v.

Sherer, 992 N.E.2d 670, 673 (Ind. 2013).

[8] Tiffany’s discharge under Chapter 7 did not include any exceptions for any

debts owed to the Simses. The Simses contend that Tiffany’s alleged debt is

non-dischargeable as a matter of law and is excluded from Tiffany’s discharge.

The Simses’ claim is without merit.

Court of Appeals of Indiana | Memorandum Decision 71A05-1406-MF-283 | March 20, 2015 Page 3 of 4 [9] Section 523 of the Bankruptcy Act states that a discharge under Chapter 7 does

not discharge an individual debtor from any debt to the extent that debt was

obtained by “false pretenses, a false representation, or actual fraud, other than a

statement respecting the debtor’s or an insider’s financial condition.” 11 U.S.C.

§ 523(a)(2)(A).

[10] Section 523 goes on to state that “the debtor shall be discharged from a debt of

a kind specified in paragraph (2) . . . of subsection (a) . . . unless . . . the court

determines such debt to be excepted from discharge.” 11 U.S.C. § 523(c)(1).

Contrary to the Simses’ claim that Tiffany’s debt was non-dischargeable as a

matter of law, the Bankruptcy Act specifically requires that such debts are

discharged unless the Bankruptcy Court determines that it is non-dischargeable.

Here, although the Simses commenced an adversary proceeding to determine

the issue, but they agreed to dismiss it in exchange for a quitclaim deed to the

property. As a result, there was no non-dischargeability determination by the

bankruptcy court and the debt was discharged.

[11] Because the debt owed by Tiffany to the Simses was discharged, summary

judgment in favor of Tiffany was properly entered.

[12] Affirmed.

Friedlander, J., and Crone, J., concur.

Court of Appeals of Indiana | Memorandum Decision 71A05-1406-MF-283 | March 20, 2015 Page 4 of 4