Priority of Purchase-Money Mortgage

Priority of Purchase-Money Mortgage Under Indiana law, a “purchase-money mortgage” is given as security for a loan used by the mortgagor (buyer) to acquire legal title to a property.  Indiana Code § 32-29-1-4 provides that “[a] mortgage granted by a purchaser to secure purchase-money has priority over a prior judgment against the purchaser.”  Therefore, if a mortgage is considered a purchase-money mortgage, it has priority over a previously recorded judgment lien. This issue was recently addressed by the Indiana Court of Appeals. In Amici Resources, LLC; et al. v. The Alan D. Nelson Living Trust; et al. (http://www.in.gov/judiciary/opinions/pdf/01191602cjb.pdf), Sabine Matthies (“Matthies”) obtained a judgment against Solid Foundation Investment Properties, Inc. (“SFIP”) in December 2012.  In April 2013, SFIP purchased real estate in Indianapolis.  SFIP financed the purchase of the property through a loan from The Alan D. Nelson Living Trust (the “Trust”), and SFIP executed a promissory note and mortgage in favor of the Trust to evidence and secure repayment of that loan.  At the time of the closing, SFIP also entered into an agreement with Amici Resources, LLC (“Amici”) whereby Amici agreed to finance renovations and improvements to the property with a loan to be secured by a second mortgage against the property. Matthies brought an action to enforce her judgment lien, and argued that her judgment lien should be deemed “senior”, or “first”, among all of the liens. Matthies argued that the Trust’s mortgage was not a purchase-money mortgage because it was signed the day before SFIP closed on the purchase of the real estate.  If the Court had agreed with Mattheis, her lien would have been...

Mediation? Arbitration? Same Thing, Right?

Mediation? Arbitration? Same Thing, Right? There is often some confusion on the part of business clients concerning the differences between mediation and arbitration.  Some people tend to use the terms interchangeably, but in actuality mediation and arbitration are quite different. In a mediation, typically the parties hire a third party “neutral” person who, while she may be a lawyer, does not need to be in order to help facilitate settlement discussions.  Sometimes the attorneys involved will suggest a mediation as a way to have their clients listen to a neutral third party describe the strengths of the opponent’s case and the weaknesses of their own client’s case so that the parties can try to reach a resolution before incurring significant costs.  As previously noted in this blog, you are not sacrificing anything legally by engaging in mediation or other forms of settlement negotiations.  That is because if the case does not settle at mediation, any judge or jury who ultimately tries the case in court will never hear what offers of compromise may have been made by the parties. It is important to remember that in a mediation, the mediator makes no decisions.  Rather, all of the ultimate decisions about whether to settle, and for how much, are left to the parties.  The mediator cannot force a settlement on anyone.  The mediator can make suggestions, and the parties can agree on different ways to mediate.  However, ultimately it is up to the parties to decide if the case will settle or not.  This is one of the big advantages of mediation, because the parties control their own destinies.  After...

Understanding Bank Garnishments under Indiana Law

Understanding Bank Garnishments under Indiana Law Once you have obtained a money judgment against a party, Indiana law provides a number of different methods for collecting that judgment.  While many of these collection options involve selling garnishable real estate and/or personal property that can take time and involve expenses such as auction costs, the most efficient means of collection involves assets that are already liquid, including amounts held in checking and savings accounts at financial institutions such as banks or credit unions. The first step for garnishing deposit accounts is determining where the debtor has (or may have) deposit accounts.  Examining prior financial statements and cancelled checks from the debtor is likely to provide this information, to the extent that such documents are available.  The judgment creditor can also determine the location of bank accounts by serving written discovery requests on the debtor or orally examining the debtor at a proceedings supplemental hearing.  It can also be beneficial to just “go fishing” and send bank interrogatories to a number of financial institutions at which it is conceivable that the debtor maintains an account.  The expense of such a fishing expedition is minimal ($5.00 per judgment debtor per financial institution) while the benefit of finding an account can be substantial.  Focusing on financial institutions with locations near the judgment debtor’s residence or place of business or that otherwise have a significant presence in a particular community should provide a reasonable likelihood of success for the judgment creditor. Once the judgment holder determines the financial institutions that may have deposit accounts for the debtor, the judgment holder must send garnishment interrogatories...

Judges Are People Too

Judges Are People Too We recently encountered another situation where we were reminded that regardless of what the law may be; a contract may say; or what the court orders may have been to that point in the case, ultimately the decision on how to enforce those things comes from a judge who has his or her own human emotions.  Before a recent hearing, we were having a discussion with our witness about the fact that there are really two aspects to the law: the legal side and the human side.  Interestingly, the witness thought that the human side is supposed to be left “out there on the sidewalk”.  For those of us who have tried a number of cases through a jury trial or to a judge, we know that is not at all the case.  Cases can be won or lost based upon the strength or likeability (or lack thereof) of a particular witness.  Cases also can be lost because even though the law allows for a certain remedy, the judge is just not willing to enforce that under particular circumstances. In our recent circumstances, there was a widow who had been represented by an elderly lawyer, and the lawyer had fallen ill.  The judge therefore had some concern about how much she had been advised about what had been going on.  Therefore, even though by the various court orders that had been entered, and even though all of the i’s had been dotted and t’s crossed, the judge was reluctant to enter the order that we were requesting until she felt comfortable the widow had retained...

Suited Up!

We are taking donations at our location on Monument Circle until January 15th! Read more about the program here: http://www.theindianalawyer.com/indybar-start-the-new-year-with-a-clean-closet-and-help-local-students-suit-up/PARAMS/article/38966...
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