Pat Fleming and Bob Steffan d/b/a Dr. Bob's RV Service v. Santander Consumer USA, Inc. and Gemb Lending, Inc.

• Court: Indiana Court of Appeals
• Decided: March 13, 2013
• Docket: 45A03-1206-PL-249
• Status: Unpublished

Opinion

Pursuant to Ind. Appellate Rule 65(D), this Memorandum Decision shall not be regarded as precedent or cited before any Mar 13 2013, 9:06 am court except for the purpose of establishing the defense of res judicata, collateral estoppel, or the law of the case.

ATTORNEY FOR APPELLANT: ATTORNEYS FOR APPELLEE:

ROBERT L. LEWIS FRANK D. OTTE Robert L. Lewis & Associates JENNIFER F. PERRY Gary, Indiana Clark, Quinn, Moses, Scott & Grahn, LLP Indianapolis, Indiana

IN THE COURT OF APPEALS OF INDIANA

PAT FLEMING and BOB STEFFAN ) d/b/a DR. BOB’S RV SERVICE ) ) Appellants-Petitioners, ) ) vs. ) No. 45A03-1206-PL-249 ) SANTANDER CONSUMER USA, INC. ) and GEMB LENDING, INC. ) ) Appellees-Respondents. )

APPEAL FROM THE LAKE SUPERIOR COURT The Honorable Gerald N. Svetanoff, Judge Cause No. 45D04-1110-PL-95

March 13, 2013

MEMORANDUM DECISION – NOT FOR PUBLICATION

BAKER, Judge When Pat Fleming (Owner) purchased a recreational vehicle (RV) from Danny

Taylor, he agreed to take over the terms of Taylor’s loan with GEMB Lending, Inc.

(Lender). However, neither Taylor nor Owner notified Lender of the change in

possession. When Taylor went bankrupt, Lender sought to recover possession of the RV

via a writ of replevin in Jasper County.

Meanwhile, Owner had nearly $70,000 of repairs performed by Bob Steffan d/b/a

Dr. Bob’s RV Service (Dr. Bob’s). When Owner and Dr. Bob’s (collectively, the

Lienholders) learned that Lender was attempting to recover possession of the RV, they

filed mechanic’s liens in Lake County and then moved to stay or set aside the writ of

replevin in Jasper County on the basis of the liens. The Jasper Superior Court refused to

stay or set aside the writ, and Lender eventually gained possession of the RV.

The Lienholders then filed a complaint in the Lake Superior Court to foreclose

upon the mechanic’s liens, and Lender moved to dismiss the complaint pursuant to

Indiana Trial Rule 12(b)(8),1 claiming that the Jasper Superior Court had already

determined the issue of lien priority. The trial court agreed and dismissed the complaint.

Concluding that the subject matter and remedies at issue before the Jasper

Superior Court and the Lake Superior Court were not substantially the same, we reverse

the judgment of the trial court and remand for additional proceedings.

1 Through Trial Rule 12(b)(8), a party can file a motion asserting the affirmative defense that “[t]he same action [is] pending in another state court in this state.” This Rule will be discussed further below. 2 FACTS

After Taylor financed the purchase of the RV, the original lienholder assigned its

interest to Lender. On or about August 25, 2007, Taylor entered into a contract to sell the

RV to Owner. Pursuant to the contract, Owner made a down payment of $13,000 and

assumed the responsibility for making the original loan payments on the RV directly to

Taylor. Owner was never substituted as a party in Taylor’s financing agreement with

Lender. After Owner took possession of the RV, he took it to Dr. Bob’s for repairs. Dr.

Bob’s made repairs to the RV totaling approximately $69,000. Dr. Bob’s also stored the

RV for Owner while he was out of the country on business.

At some point, Taylor petitioned for bankruptcy, indicating that he wished to

surrender the RV to Lender. Taylor received a discharge in bankruptcy in 2009.

On September 27, 2010, Lender filed a complaint for replevin against Taylor,

Owner, and Dr. Bob’s in the Jasper Superior Court seeking possession of the RV. Lender

claimed that its recovery agent had “tracked down” the RV to Dr. Bob’s. Appellants’

App. p. 14. Dr. Bob’s admitted possession of the RV but refused to provide Lender with

information of its whereabouts. Dr. Bob’s told Lender that there was an outstanding bill

in the amount of $40,000. On October 5, 2010, the Jasper Superior Court ordered that

Lender should have immediate possession of the RV.

On October 21, 2010, the Lienholders filed mechanic’s liens against Taylor and

Lender in Lake County. On November 8, 2010, Owner filed a “Verified Motion to Set

Aside or Stay Immediate Possession Order” in the Jasper Superior Court, stating that

3 given the mechanic’s liens, the order for immediate possession “effectively deprives the

Defendants of their statutory rights to protect their financial interest in the property.”

Appellants’ App. p. 19-20. On December 3, 2010, Owner’s motion was denied.

On January 6, 2011, Lender filed an “Emergency Motion for Replevin” in the

Jasper Superior Court, claiming that the Lienholders were uncooperative in its attempts to

retrieve the RV and that the RV was in “immediate danger of concealment, removal from

Indiana, or sale to an innocent purchaser by Defendants.” Id. at 32. An emergency

hearing was held on January 11, 2011, and Lender’s motion was granted.

By October 2011, Lender still had not recovered possession of the RV. On

October 6, 2011, Lender moved for an amended replevin order directing any Indiana

Sheriff to obtain the RV and to deliver it to Lender.

On October 18, 2011, the Lienholders jointly filed a complaint to foreclose their

mechanic’s liens in the Lake Superior Court. Service was made on Santander Consumer

USA, Inc. (Santander) on November 8, 2011,2 but the attempted service on Lender was

unsuccessful. On November 21, 2011, Santander and Lender filed a motion for

enlargement of time to answer the complaint. This motion was granted, allowing both

Santander and Lender until December 21, 2011, to respond to the complaint.

On October 26, 2011, the Lienholders filed a second motion to stay enforcement

of the replevin order in the Jasper Superior Court. On November 22, 2011, the motion

was denied, and Lender’s motion for an amended replevin order was granted.

2 Neither party explains how Santander is related to the case. 4 On December 15, 2011, Santander and Lender jointly filed a motion to dismiss the

Lake County complaint to foreclose upon the mechanic’s liens under Trial Rule 12(b)(8),

claiming in part that the issues previously heard by the Jasper Superior Court regarding

the two motions to stay were substantially the same issue, as both related to lienholder

priority. On March 14, 2012, the Lake Superior Court held a hearing on the motion to

dismiss. After hearing arguments from both sides, the trial court granted the motion to

dismiss pursuant to Trial Rule 12(b)(8).

On April 13, 2012, Lender and Santander filed a motion to correct errors. On May

4, 2012, the motion to correct errors was denied. The Lienholders now appeal.

DISCUSSION AND DECISION

The Lienholders contend that the trial court erred by dismissing the complaint to

foreclose upon their mechanic’s liens. More particularly, they argue that: (1) the motion

to dismiss was not timely filed; and (2) even if the motion was timely filed, the Trial Rule

12(b)(8) dismissal was nevertheless unwarranted because the Lake County complaint

involved sufficiently distinct issues from the Jasper County litigation. We find the

second issue dispositive and accordingly need not address whether the motion to dismiss

was timely filed.3

3 Lender and Santander assert that the Lienholders waived the timeliness issue by failing to raise it at the trial level and that, because they had received an extension of time to respond to the complaint, this issue is frivolous for the Lienholders to raise on appeal. Accordingly, Lender and Santander request attorney fees pursuant to Indiana Appellate Rule 66(E) for the time spent addressing this issue. This request is hereby denied. 5 Trial Rule 12(b)(8) allows for the dismissal of a cause of action when “[t]he same

action [is] pending in another state court . . . .” Because this determination is a matter of

law, we review it de novo. Beatty v. Liberty Mut. Ins. Grp., 893 N.E.2d 1079, 1084 (Ind.

Ct. App. 2008).

“When an action is pending before a court of competent jurisdiction, other courts

must defer to that court’s extant authority over the case. Courts observe this deference in

the interests of fairness to litigants, comity between and among the courts of this state,

and judicial efficiency.” State ex rel. Meade v. Marshall Superior Court II, 644 N.E.2d

87, 88-89 (Ind. 1994). Based on this principle, Trial Rule 12(b)(8) allows for dismissal

of an action where another court has already assumed jurisdiction over substantially the

same parties, subject matter, and remedies at issue in the instant case. Id. In other words,

“‘two courts may not simultaneously exercise jurisdiction over what amounts to the same

case.’” Kozlowski v. Dordieski, 849 N.E.2d 535, 537 (Ind. 2006) (quoting Centex Home

Equity Corp. v. Robinson, 776 N.E.2d 935, 945 (Ind. Ct. App. 2002)).

In the instant case in the Lake Superior Court, the parties are unquestionably the

same as they were in the Jasper Superior Court except that Santander is a party in Lake

County where it was not in Jasper County. And it is true that in the Jasper County case,

the Lienholders repeatedly raised the existence of their mechanic’s liens in an attempt to

have the writ of replevin stayed or set aside. Appellants’ App. p. 19-20, 41-42.

However, we disagree with Santander and Lender that “the Jasper Superior Court’s

6 possession orders and denials of [the] Motions to Stay necessarily resolved the issue of

the priority of the parties’ liens.” Appellees’ Br. p. 8.

To obtain a writ of replevin, Lender was required in part to show to the Jasper

Superior Court: (1) that it was the owner of the RV or otherwise lawfully entitled to its

possession; (2) that the property had not been taken to pay state debts or under an

execution or attachment against Lender’s property; and (3) that the property had been

wrongfully taken or unlawfully detained by the Lienholders. Ind. Code § 32-35-2-4.

On the other hand, to obtain the mechanic’s liens, the Lienholders were each

required to file the notices of their liens “in the recorder’s office of the county where: (1)

the towing, repair, service, or maintenance work was performed; or (2) the storage,

supplies, or accessories were furnished” within sixty days of the services being

performed. Ind. Code § 32-33-10-6(a), (d). To foreclose upon the liens, the Lienholders

were required to file a complaint within one year of the initial lien filing “in the circuit or

superior court of the county where the motor vehicle . . . is located.” I.C. § 32-33-10-8.

Only in the broadest sense is the subject matter of these two actions the same—

two sides attempting to protect their financial interests in one RV. Moreover, the

remedies sought by the two actions are not substantially the same. Rather, taking the

statutes together, it is apparent that the purpose of Lender’s replevin action was to regain

possession of the RV, which had been surrendered to it in Taylor’s bankruptcy

proceedings. Conversely, the purpose of the mechanic’s lien foreclosure action is to

ensure that the Lienholders are reimbursed for the reasonable amount of their services

7 upon the RV. Although the Lienholders attempted to assert their liens in the Jasper

County proceedings to stay or set aside the writ of replevin, they had not yet foreclosed

upon their liens at that point. As a result, the Jasper Superior Court did not necessarily

rule upon the priority of the mechanic’s liens as they had no relationship to Lender’s right

to immediate possession of the RV.

Moreover, we cannot say that the Lienholders should have attempted to foreclose

upon their liens in a counterclaim against Lender in the Jasper Superior Court. Indiana

Code section 32-33-10-8 requires such foreclosure actions to be filed in the county where

the property is located. Thus, because Dr. Bob’s was allegedly storing the RV in Lake

County throughout the Jasper County proceedings, the foreclosure could only be filed in

Lake County per statute. Appellants’ App. p. 42; see Grimm v. Rhoades, 129 Ind. App.

1, 7, 149 N.E.2d 847, 850 (1958) (stating that the statute governing mechanic’s liens

must be strictly construed because it was enacted in derogation of the common law).

Based on these considerations, we cannot conclude that the causes of action in the

Jasper Superior Court and the Lake Superior Court are substantially the same such that a

Trial Rule 12(b)(8) dismissal was warranted. Accordingly, we reverse the judgment of

the trial court. That said, however, to the extent that the Jasper Superior Court did in fact

address and decide any issues of lien priority, those decisions would be res judicata in the

present case. Wedel v. Am. Elec. Power Serv. Corp., 681 N.E.2d 1122, 1131 (Ind. Ct.

App. 1997).

8 The judgment of the trial court is reversed, and the cause is remanded for

additional proceedings consistent with this opinion.

RILEY, J., and BARNES, J., concur.