FILED Mar 06 2025, 8:38 am
CLERK Indiana Supreme Court Court of Appeals and Tax Court
IN THE
Court of Appeals of Indiana WBL SPO II, LLC, Appellant-Plaintiff
v.
G&I Realty, LLC, Alpha Mechanical Service, Inc., Dubois County Treasurer, Unknown Occupant of 1208 Jackson Street, Unknown Occupant of 1280 3rd Avenue, Unknown Occupant of 1409 Vine Street, Unknown Occupant of 420 East 14th Street, Appellees-Defendants
March 6, 2025 Court of Appeals Case No. 24A-MF-2353 Appeal from the Dubois Superior Court The Honorable Anthony D. Quinn, Judge Trial Court Cause No. 19D01-2107-MF-361
Court of Appeals of Indiana | Opinion 24A-MF-2353 | March 6, 2025 Page 1 of 7 Opinion by Judge Mathias Judges Foley and Felix concur.
Mathias, Judge.
[1] WBL SPO II, LLC (“WBL”) holds a note of indebtedness as well as a mortgage
that secures the debt underlying that note. The mortgage is on real properties
owned by G&I Realty, LLC (“G&I”), although G&I is not the debtor. 1 The
mortgage’s plain terms state that it exists to guarantee the payment in full of the
debt underlying the note.
[2] The debtor eventually obtained a discharge of its obligation to pay the debt in
bankruptcy proceedings. Meanwhile, WBL attempted to obtain in state court
an in rem judgment and foreclosure on the real properties secured by the
mortgage. The trial court entered summary judgment for G&I on that
complaint under the theory that the discharge of the debtor by the bankruptcy
court left the mortgage without a debt to secure.
[3] The bankruptcy court’s discharge of the debtor from its obligation to pay the
debt is not applicable to G&I, a guarantor of that same debt and a nonparty to
the bankruptcy proceedings. Further, although the bankruptcy court discharged
the debtor’s obligation to repay the debt, there is no evidence in this record that
1 No other named parties participate in this appeal.
Court of Appeals of Indiana | Opinion 24A-MF-2353 | March 6, 2025 Page 2 of 7 WBL has received full satisfaction of the indebtedness, which is what the
mortgage secures.
[4] Accordingly, the trial court erred when it entered summary judgment for G&I
and when it denied WBL’s motion for summary judgment. We therefore
reverse the trial court’s judgment and remand for further proceedings consistent
with this opinion.
Facts and Procedural History [5] In December 2019, Gudorf Supply Company, Inc. (“Debtor”), an Indiana
corporation, executed a promissory note and associated documents (the
“Note”) with Axos Bank, a Nevada business, in which the Bank agreed to lend
$273,000 to Debtor in exchange for Debtor’s promise to repay that indebtedness
with interest. In order to help Debtor obtain that loan, G&I, an Indiana limited
liability company, agreed to provide the Bank with a mortgage on four parcels
of real property owned by G&I in Dubois County (the “Mortgage”).
[6] The terms of the Mortgage expressly state that it exists to “guarantee[ Debtor’s]
payment” on the Note. 2 Appellant’s App. Vol. 2, p. 40. The Mortgage likewise
expressly states that, “upon the indefeasible satisfaction in full of the Debt
provided in the [Note] in a timely manner, these presents and the estate hereby
2 G&I repeatedly asserts on appeal that it is not a guarantor of the Note. See, e.g., Appellee’s Br. at 12. G&I’s assertions are not supported by the text of the Mortgage or cogent reasoning, and we do not consider them. See Ind. Appellate Rule 46(A)(8)(a). G&I also asserts that WBL seeks to use the bankruptcy code to create an obligation against G&I without G&I’s consent. That assertion is also not cogent. WBL seeks to enforce the Mortgage voluntarily executed by G&I.
Court of Appeals of Indiana | Opinion 24A-MF-2353 | March 6, 2025 Page 3 of 7 granted shall cease, terminate[,] and be void.” Id. at 42 (emphasis added). All
documents were properly recorded, and, through various assignments, WBL
became the holder of both the Note and Mortgage.
[7] In July 2020, Debtor defaulted on the Note. WBL notified Debtor of the default
and demanded an acceleration of the entire unpaid balance of Debtor’s
obligations. WBL likewise notified G&I of its obligation to secure the debt.
Debtor did not remedy the default and instead sought relief under the United
States Bankruptcy Code. WBL, meanwhile, filed its complaint in state court
against G&I for an in rem judgment and foreclosure on the real properties
secured by the Mortgage, although, when WBL learned of Debtor’s bankruptcy
proceedings, WBL moved to stay the state court proceedings. G&I was not a
party to the bankruptcy proceedings.
[8] Debtor eventually obtained a judgment from the bankruptcy court that
discharged Debtor from its obligation to pay the debt underlying the Note,
among other things. WBL responded by moving to dismiss Debtor from the
state court proceedings, which the trial court granted. G&I and WBL then filed
competing motions for summary judgment. The trial court denied WBL’s
motion without a hearing and, after a hearing, granted G&I’s motion. WBL
filed a motion to correct error, which the trial court also denied.
[9] This appeal ensued.
Court of Appeals of Indiana | Opinion 24A-MF-2353 | March 6, 2025 Page 4 of 7 Discussion and Decision [10] WBL appeals the trial court’s grant of summary judgment to G&I and the
court’s denial of its motion for summary judgment. Our standard of review is
well settled:
When this Court reviews a grant or denial of a motion for summary judgment, we “stand in the shoes of the trial court.” Summary judgment is appropriate “if the designated evidentiary matter shows that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law.” We will draw all reasonable inferences in favor of the non- moving party. We review summary judgment de novo.
Arrendale v. Am. Imaging & MRI, LLC, 183 N.E.3d 1064, 1067-68 (Ind. 2022)
(citations omitted). Questions of law, such as those here, present legal questions
that are particularly apt for summary judgment. See, e.g., Erie Indem. Co. v. Estate
of Harris, 99 N.E.3d 625, 629 (Ind. 2018). Further, that the parties have filed
cross-motions for summary judgment neither alters our standard of review nor
changes our analysis—we consider each motion separately to determine
whether the moving party is entitled to judgment as a matter of law. Id.
[11] The trial court erred in entering summary judgment for G&I, which the court
did on the theory that the bankruptcy court’s discharge of Debtor from its
obligation to pay the debt underlying the Note left the Mortgage with no debt to
secure. As the Supreme Court of the United States recently made clear, “the
bankruptcy code does not authorize a release . . . that . . . discharge[s] claims
against a nondebtor without the consent of affected claimants.” Harrington v.
Court of Appeals of Indiana | Opinion 24A-MF-2353 | March 6, 2025 Page 5 of 7 Purdue Pharma L.P., 603 U.S. 204, 227 (2024). That is, a bankruptcy court’s
order confirming a debtor’s reorganization plan “discharges the debtor from any
debt that arose before the date of such confirmation,” but that discharge
“operates only for the benefit of the debtor against its creditors and does not
Free access — add to your briefcase to read the full text and ask questions with AI
FILED Mar 06 2025, 8:38 am
CLERK Indiana Supreme Court Court of Appeals and Tax Court
IN THE
Court of Appeals of Indiana WBL SPO II, LLC, Appellant-Plaintiff
v.
G&I Realty, LLC, Alpha Mechanical Service, Inc., Dubois County Treasurer, Unknown Occupant of 1208 Jackson Street, Unknown Occupant of 1280 3rd Avenue, Unknown Occupant of 1409 Vine Street, Unknown Occupant of 420 East 14th Street, Appellees-Defendants
March 6, 2025 Court of Appeals Case No. 24A-MF-2353 Appeal from the Dubois Superior Court The Honorable Anthony D. Quinn, Judge Trial Court Cause No. 19D01-2107-MF-361
Court of Appeals of Indiana | Opinion 24A-MF-2353 | March 6, 2025 Page 1 of 7 Opinion by Judge Mathias Judges Foley and Felix concur.
Mathias, Judge.
[1] WBL SPO II, LLC (“WBL”) holds a note of indebtedness as well as a mortgage
that secures the debt underlying that note. The mortgage is on real properties
owned by G&I Realty, LLC (“G&I”), although G&I is not the debtor. 1 The
mortgage’s plain terms state that it exists to guarantee the payment in full of the
debt underlying the note.
[2] The debtor eventually obtained a discharge of its obligation to pay the debt in
bankruptcy proceedings. Meanwhile, WBL attempted to obtain in state court
an in rem judgment and foreclosure on the real properties secured by the
mortgage. The trial court entered summary judgment for G&I on that
complaint under the theory that the discharge of the debtor by the bankruptcy
court left the mortgage without a debt to secure.
[3] The bankruptcy court’s discharge of the debtor from its obligation to pay the
debt is not applicable to G&I, a guarantor of that same debt and a nonparty to
the bankruptcy proceedings. Further, although the bankruptcy court discharged
the debtor’s obligation to repay the debt, there is no evidence in this record that
1 No other named parties participate in this appeal.
Court of Appeals of Indiana | Opinion 24A-MF-2353 | March 6, 2025 Page 2 of 7 WBL has received full satisfaction of the indebtedness, which is what the
mortgage secures.
[4] Accordingly, the trial court erred when it entered summary judgment for G&I
and when it denied WBL’s motion for summary judgment. We therefore
reverse the trial court’s judgment and remand for further proceedings consistent
with this opinion.
Facts and Procedural History [5] In December 2019, Gudorf Supply Company, Inc. (“Debtor”), an Indiana
corporation, executed a promissory note and associated documents (the
“Note”) with Axos Bank, a Nevada business, in which the Bank agreed to lend
$273,000 to Debtor in exchange for Debtor’s promise to repay that indebtedness
with interest. In order to help Debtor obtain that loan, G&I, an Indiana limited
liability company, agreed to provide the Bank with a mortgage on four parcels
of real property owned by G&I in Dubois County (the “Mortgage”).
[6] The terms of the Mortgage expressly state that it exists to “guarantee[ Debtor’s]
payment” on the Note. 2 Appellant’s App. Vol. 2, p. 40. The Mortgage likewise
expressly states that, “upon the indefeasible satisfaction in full of the Debt
provided in the [Note] in a timely manner, these presents and the estate hereby
2 G&I repeatedly asserts on appeal that it is not a guarantor of the Note. See, e.g., Appellee’s Br. at 12. G&I’s assertions are not supported by the text of the Mortgage or cogent reasoning, and we do not consider them. See Ind. Appellate Rule 46(A)(8)(a). G&I also asserts that WBL seeks to use the bankruptcy code to create an obligation against G&I without G&I’s consent. That assertion is also not cogent. WBL seeks to enforce the Mortgage voluntarily executed by G&I.
Court of Appeals of Indiana | Opinion 24A-MF-2353 | March 6, 2025 Page 3 of 7 granted shall cease, terminate[,] and be void.” Id. at 42 (emphasis added). All
documents were properly recorded, and, through various assignments, WBL
became the holder of both the Note and Mortgage.
[7] In July 2020, Debtor defaulted on the Note. WBL notified Debtor of the default
and demanded an acceleration of the entire unpaid balance of Debtor’s
obligations. WBL likewise notified G&I of its obligation to secure the debt.
Debtor did not remedy the default and instead sought relief under the United
States Bankruptcy Code. WBL, meanwhile, filed its complaint in state court
against G&I for an in rem judgment and foreclosure on the real properties
secured by the Mortgage, although, when WBL learned of Debtor’s bankruptcy
proceedings, WBL moved to stay the state court proceedings. G&I was not a
party to the bankruptcy proceedings.
[8] Debtor eventually obtained a judgment from the bankruptcy court that
discharged Debtor from its obligation to pay the debt underlying the Note,
among other things. WBL responded by moving to dismiss Debtor from the
state court proceedings, which the trial court granted. G&I and WBL then filed
competing motions for summary judgment. The trial court denied WBL’s
motion without a hearing and, after a hearing, granted G&I’s motion. WBL
filed a motion to correct error, which the trial court also denied.
[9] This appeal ensued.
Court of Appeals of Indiana | Opinion 24A-MF-2353 | March 6, 2025 Page 4 of 7 Discussion and Decision [10] WBL appeals the trial court’s grant of summary judgment to G&I and the
court’s denial of its motion for summary judgment. Our standard of review is
well settled:
When this Court reviews a grant or denial of a motion for summary judgment, we “stand in the shoes of the trial court.” Summary judgment is appropriate “if the designated evidentiary matter shows that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law.” We will draw all reasonable inferences in favor of the non- moving party. We review summary judgment de novo.
Arrendale v. Am. Imaging & MRI, LLC, 183 N.E.3d 1064, 1067-68 (Ind. 2022)
(citations omitted). Questions of law, such as those here, present legal questions
that are particularly apt for summary judgment. See, e.g., Erie Indem. Co. v. Estate
of Harris, 99 N.E.3d 625, 629 (Ind. 2018). Further, that the parties have filed
cross-motions for summary judgment neither alters our standard of review nor
changes our analysis—we consider each motion separately to determine
whether the moving party is entitled to judgment as a matter of law. Id.
[11] The trial court erred in entering summary judgment for G&I, which the court
did on the theory that the bankruptcy court’s discharge of Debtor from its
obligation to pay the debt underlying the Note left the Mortgage with no debt to
secure. As the Supreme Court of the United States recently made clear, “the
bankruptcy code does not authorize a release . . . that . . . discharge[s] claims
against a nondebtor without the consent of affected claimants.” Harrington v.
Court of Appeals of Indiana | Opinion 24A-MF-2353 | March 6, 2025 Page 5 of 7 Purdue Pharma L.P., 603 U.S. 204, 227 (2024). That is, a bankruptcy court’s
order confirming a debtor’s reorganization plan “discharges the debtor from any
debt that arose before the date of such confirmation,” but that discharge
“operates only for the benefit of the debtor against its creditors and does not
affect the liability of any other entity.” Id. at 214-15 (emphasis added; quotation
marks omitted); see also McCullough v. CitiMortgage, Inc., 70 N.E.3d 820, 827
(Ind. 2017) (“discharge of debt has no bearing on the validity of [a] mortgage
lien”).
[12] G&I was not the debtor in the bankruptcy proceedings and was not even a
party to those proceedings. The bankruptcy court’s discharge of Debtor from its
obligation to pay the debt underlying the Note “operates only for the benefit” of
Debtor and “does not affect the liability” of G&I that may exist under the
Mortgage. Harrington, 603 U.S. at 214-15. The trial court therefore erred in
entering summary judgment for G&I.
[13] We thus consider WBL’s motion for summary judgment. In support of its
motion, WBL designated the Mortgage, which demonstrates on its face that it
secured the full debt underlying the Note. WBL’s designated evidence also
demonstrated that Debtor defaulted on its obligations under the Note and that
WBL sought to accelerate all of Debtor’s obligations under the Note due to that
default. It is also not disputed that neither Debtor nor G&I has cured the
default. And G&I’s arguments and designations against WBL’s motion for
summary judgment do not establish a genuine issue of material fact.
Court of Appeals of Indiana | Opinion 24A-MF-2353 | March 6, 2025 Page 6 of 7 [14] Accordingly, WBL is entitled to summary judgment on its complaint for an in
rem judgment and foreclosure against G&I. We reverse the trial court’s denial of
WBL’s motion for summary judgment, and we remand for further proceedings
consistent with this opinion.
[15] Reversed and remanded.
Foley, J., and Felix, J., concur.
ATTORNEYS FOR APPELLANT Aaron Rodgers Aaron Cole Reisenfeld & Associates, LLC Cincinnati, Ohio
ATTORNEYS FOR APPELLEE G&I REALTY, LLC Michael L. Einterz Michael L. Einterz, Jr. Einterz & Einterz Zionsville, Indiana
Court of Appeals of Indiana | Opinion 24A-MF-2353 | March 6, 2025 Page 7 of 7