Mark Van Eaton and Cynthia Van Eaton Vallimont v. German American Bancorp

Opinion

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 FILED Aug 17 2012, 8:42 am judicata, collateral estoppel, or the law of the case. CLERK of the supreme court, court of appeals and tax court

ATTORNEY FOR APPELLANT: ATTORNEYS FOR APPELLEE:

C. WARREN NERZ MARILYN R. RATLIFF Nerz Walterman, P.C. KAY L. PECHIN Indianapolis, Indiana Evansville, Indiana

IN THE COURT OF APPEALS OF INDIANA

MARK VAN EATON and ) CYNTHIA VAN EATON VALLIMONT, ) ) Appellants, ) ) vs. ) No. 42A01-1111-MF-535 ) GERMAN AMERICAN BANCORP, ) ) Appellee. )

APPEAL FROM THE KNOX SUPERIOR COURT The Honorable W. Timothy Crowley, Judge Cause No. 42D01-1105-MF-13

August 17, 2012

MEMORANDUM DECISION – NOT FOR PUBLICATION

BARNES, Judge Case Summary

Mark Van Eaton and Cynthia Van Eaton Vallimont (“the Appellants”) appeal the

trial court’s order granting German American Bancorp’s (“GAB”) motion to sell real

estate. We reverse and remand.

Issue

The Appellants raise one issue on appeal, which we restate as whether the trial

court abused its discretion by granting GAB’s motion to sell real estate.

Facts

In August 2006, Seventy-Six, LLC, borrowed $1.5 million from GAB and secured

the loan with a mortgage on commercial real estate located at 2601 and 2603 Hart Street,

Vincennes (“the Property”). At the time the loan was issued, Seventy-Six was owned by

David Van Eaton (“David”) and his wife, Gloria Van Eaton. In 2007, however, their

interests in Seventy-Six were transferred in equal shares to their four children, Mark Van

Eaton, Cynthia Van Eaton Vallimont, Rebecca Van Eaton, and Deborah Van Eaton

Ward.

The operating agreement of Seventy-Six named David as its manager, and it

requires a seventy-five percent majority vote in order to take certain actions, including

selection of a new manager to whom owners may delegate authority. David passed away

in December 2011. Since then, it appears from the record that the four owners of

Seventy-Six have been unable to agree on a new manager to take over the day-to-day

activities of the company. 2 The underlying foreclosure action was filed in May 2011. In June 2011, BDE

Farms, LLC, offered $900,000 for the Property, and GAB thereafter moved for the

appointment of a receiver for the purpose of accepting BDE Farms’s offer.

Pursuant to Indiana Trial Rule 19(A), the Appellants filed a motion for joinder of

persons needed for just adjudication, and the trial court ordered them joined as

defendants. After a hearing, the trial court appointed a receiver and limited the receiver’s

authority in its order: “The Receiver is authorized and directed to accept the presently

pending offer to purchase the Receivership property from BDE Farms, LLC, for the sum

of $900,000. . . .” and “other than as set out above, and without further order of this court,

other than as necessary to comply with the conditions precedent to the obligations of

BDE Farms, LLC, to purchase the property. . . .[T]he Receiver shall have no authority to

do any acts in connection with the Receivership property. . . .” Appellant’s App. p. 5.

The Appellants, each twenty-five percent owners of Seventy-Six, filed an

interlocutory appeal of the trial court’s decision, raising the issue of whether the trial

court abused its discretion in appointing a receiver for the purpose of selling the real

estate at issue in the underlying foreclosure action. In a decision that was handed down

June 6, 2012, we concluded that the trial court could properly appoint a receiver over the

Property, but the trial court erred by giving the receiver the authority to sell the Property

at a private sale before a sheriff’s sale could take place. See Van Eaton, et al v. German

American Bancorp, No. 42A01-1108-MF-434, slip op. at 1 (Ind. Ct. App. June 6, 2012).

We remanded with instructions to amend the receivership order. Id. at 4. On September 3 13, 2011, while the case was on appeal to our court, GAB filed a motion to sell real

estate. Rebecca and Deborah have agreed to the sale. On October 25, 2011, the trial

court entered its order approving GAB’s joint motion to sell real estate, which gave the

receiver the ability to sell the Property to BDE Farms for $900,000. The Appellants now

appeal that order.

Analysis

The Appellants argue that the trial court abused its discretion by granting GAB’s

motion to sell real estate. First, we note that the trial court had no jurisdiction in this case

at the time it granted GAB’s motion. An appellate court acquires jurisdiction over a

matter on the date the completion of the clerk’s record is noted in the chronological case

summary. Ind. Appellate Rule 8. “Once an appeal has been perfected to the Court of

Appeals or the Supreme Court, the trial court has no further jurisdiction to act upon the

judgment appealed from until the appeal has been terminated.” Schumacher v.

Radiomaha, 619 N.E.2d 271,273 (Ind. 1993). “The rule does not promote form over

substance; it facilitates the orderly presentation and disposition of appeals and prevents

the confusing and awkward situation of having the trial and appellate courts

simultaneously reviewing the correctness of the judgment.” Donahue v. Watson, 413

N.E.2d 974, 976 (Ind. Ct. App. 1980).

Here, the trial court lost jurisdiction when the notice of completion of the clerk’s

record was filed on September 29, 2011. However, the trial court granted the motion on

October 25, 2011. The trial court’s ability to order sale of the real estate was clearly 4 dependent upon findings that were at issue on appeal. Thus, the trial court ruled on

GAB’s motion to sell real estate when it had no jurisdiction over the matter. The trial

court erred in its granting of GAB’s motion, and the lack of jurisdiction is dispositive in

this appeal.

Even if the trial court retained jurisdiction, its decision would still be in error. In

this second appeal, it is clearly apparent in light of our decision in the first appeal that the

trial court erred by granting GAB’s motion to sell real estate through a private agreement.

The Appellants’ statutory right of redemption entitles them to a public sheriff’s sale in

this foreclosure action. Wells Fargo Bank, N.A. v. Tippecanoe Assoc. LLC, 923 N.E.2d

423 (Ind. Ct. App. 2010), trans. denied. Also, even if Rebecca and Deborah have agreed

to this sale, the Seventy-Six operating agreement requires a seventy-five percent

majority-or three of the four Van Eaton children-to agree on the terms. Mark and

Cynthia did not agree to the sale.

Both parties also continue to argue about the validity of the trial court’s

appointment of a receiver. A second analysis of the trial court’s decision to appoint a

receiver is unnecessary. As previously determined in the initial appeal, the trial court

properly appointed a receiver but erred by granting him the authority to sell the real estate

privately prior to a sheriff’s sale. See Van Eaton, slip op. at 2. Similarly, the trial court

erred by granting GAB’s motion to sell the real estate, which gave the receiver the ability

to sell the property to BDE Farms.

5 Conclusion

The trial court erred by granting GAB’s motion to sell real estate. Therefore, we

reverse and remand to the trial court.

Reversed and remanded.

FRIEDLANDER, J., and MAY, J., concur.