U.S. Bank Trust National Association, as Trustee of American Homeowener Preservation Trust Series 2014A, Rex A. Wells v. Tera Klutz and Susan Orth (mem. dec.)

• Court: Indiana Court of Appeals
• Decided: September 18, 2015
• Docket: 02A05-1503-MI-122
• Status: Published

Opinion

MEMORANDUM DECISION Pursuant to Ind. Appellate Rule 65(D), Sep 18 2015, 9:11 am 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 APPELLANT ATTORNEY FOR APPELLEE Scott J. Fandre WELLS Krieg DeVault LLP Thomas B. Trent Mishawaka, Indiana Rothberg Logan & Warsco LLP Fort Wayne, Indiana

IN THE COURT OF APPEALS OF INDIANA

U.S. Bank Trust National September 18, 2015 Association, as Trustee of Court of Appeals Case No. American Homeowner 02A05-1503-MI-122 Preservation Trust Series 2014A, Appeal from the Allen Circuit Appellant-Intervenor Court The Honorable Thomas J. Felts, Rex A. Wells, Judge Appellee-Petitioner, Trial Court Cause No. 02C01-1411-MI-853 v.

Tera Klutz, not individually but as Auditor of Allen County; and Susan Orth, not individually but as Treasurer of Allen County, Appellees-Respondents

Court of Appeals of Indiana | Memorandum Decision 02A05-1503-MI-122 | September 18, 2015 Page 1 of 5 Baker, Judge.

[1] A tax sale of a parcel of real estate left surplus funds totaling over $11,000. The

current holder of the deed to the real estate petitioned for an award of the

surplus funds. U.S. Bank Trust National Association (U.S. Bank) filed a

motion to intervene, claiming that it was the current mortgage holder of the

property and that it was entitled to the surplusage. The trial court denied the

motion to intervene. We reverse that order, finding that U.S. Bank has claimed

a sufficient interest to be entitled to intervene in the litigation. We express no

opinion about U.S. Bank’s substantive right to the surplus funds. Instead, we

remand to the trial court so that it may determine which entity is entitled to

receive those funds.

Facts [2] At the heart of this appeal is a dispute regarding the chain of title and the

identity of the current mortgage holder of a parcel of real estate located in Allen

County (the Real Estate). A tax sale of the Real Estate took place on October

2, 2013.1 Following the tax sale and payment of delinquent taxes, a surplus

remained totaling $11,298.84.

1 The tax purchaser is not a party to this appeal.

Court of Appeals of Indiana | Memorandum Decision 02A05-1503-MI-122 | September 18, 2015 Page 2 of 5 [3] On February 1, 2014, Vera Pattern executed a quitclaim deed for the Real

Estate; selling it to Eilatan Financial, Inc. (Eilatan), for $500. Rex Wells is the

president of Eilatan.

[4] At some point after the one-year redemption period had expired, a tax deed to

the Real Estate was issued to Eilatan. On November 5, 2014, Wells filed a

petition requesting that the tax sale surplus be awarded to Eilatan. On

November 13, 2014, the trial court granted the petition.

[5] On November 21, 2014, U.S. Bank filed a motion to intervene and set aside the

order granting Eilatan’s petition. U.S. Bank alleged that it was the holder of a

mortgage on the Real Estate and, as such, that it was entitled to the surplus

funds. Following a hearing, the trial court summarily denied U.S. Bank’s

motion to intervene on February 23, 2014, and reaffirmed its order granting

Eilatan’s petition. U.S. Bank now appeals.

Discussion and Decision [6] U.S. Bank contends that the trial court erroneously granted its motion to

intervene. We review a trial court’s order on a motion to intervene for an abuse

of discretion. Hedrich Petroleum Corp. v. Radford, 773 N.E.2d 319, 324 (Ind. Ct.

App. 2002). When reviewing the trial court’s order, the facts alleged in the

motion to intervene must be taken as true in the absence of sham or fraud.

United of Omaha v. Hieber, 653 N.E.2d 83, 88 (Ind. Ct. App. 1995); E.N. Maisel &

Assocs. v. Canden Corp., 398 N.E.2d 1366, 1367-68 (Ind. Ct. App. 1980).

Court of Appeals of Indiana | Memorandum Decision 02A05-1503-MI-122 | September 18, 2015 Page 3 of 5 [7] Indiana Trial Rule 24(A)(2) provides that a party may intervene as of right in

pending litigation when:

the applicant claims an interest relating to a property, fund or transaction which is the subject of the action and he is so situated that the disposition of the action may as a practical matter impair or impede his ability to protect his interest in the property, fund or transaction, unless the applicant’s interest is adequately represented by existing parties.

The only issue in this appeal is whether U.S. Bank has sufficiently claimed an

interest related to the Real Estate. To meet that burden, it must show that it has

an interest recognized by law that is related to the subject of the action where

intervention is sought. State ex rel. Prosser v. Ind. Waste Sys., Inc., 603 N.E.2d

181, 187 (Ind. Ct. App. 1992).

[8] In this case, U.S. Bank has put forth a chain of title that would render it the

current holder of a mortgage on the Real Estate. Wells concedes that if U.S.

Bank is the current mortgage holder, it would be entitled to the surplus funds.

Wells argues, however, that there are at least three other possible chains of title

that lead to a conclusion that an entity other than U.S. Bank is the current

mortgage holder. As such, Wells insists that the trial court properly denied the

motion to intervene.

[9] This argument improperly conflates the issue of whether intervention should be

permitted with the issue of whether, in fact, U.S. Bank is the current mortgage

holder. U.S. Bank does not need to prove its claim on the merits to be entitled

to intervene; it merely needs to claim an interest in the Real Estate. Then, upon Court of Appeals of Indiana | Memorandum Decision 02A05-1503-MI-122 | September 18, 2015 Page 4 of 5 intervention, it will be required to prove its claims to be entitled to the surplus

funds. There is no basis in the record to conclude that fraud or sham was

present in U.S. Bank’s claims; therefore, we must take the statements made in

its motion to intervene as true. Taking those as true, we find that U.S. Bank

has sufficiently claimed an interest in the Real Estate to be entitled to intervene

in the litigation. Therefore, we reverse the trial court’s denial of the motion to

intervene and its order awarding the surplus funds to Eilatan.

[10] U.S. Bank asks that we determine as a matter of law that it is entitled to the

surplus funds. We decline to do so. There are questions of fact and law

regarding the chain of title to the Real Estate that we are unable to resolve with

the record before us. Therefore, we remand to the trial court for further

proceedings.

[11] The judgment of the trial court is reversed and remanded for further

proceedings consistent with this opinion.

Bailey, J., and Mathias, J., concur.

Court of Appeals of Indiana | Memorandum Decision 02A05-1503-MI-122 | September 18, 2015 Page 5 of 5