Judges order proceedings on guarantors’ liability

The Indiana Court of Appeals affirmed in part and reversed in part a dispute between a company and its mortgage holder regarding how money received from the city of Lawrenceburg as part of a settlement should be applied to the mortgage.

JPMCC held the mortgage on property used by DBL Axel. In 2009, the city and DBL entered into a settlement agreement in which the city agreed to pay DBL to acquire a portion of the property, including a condemnation award of $224,600. DBL filed a complaint against JPMCC requesting a declaratory judgment as to how that money would be applied to its mortgage.

JPMCC learned of the $1,725,600 nuisance award DBL received and filed a 10-count counterclaim against DBL and the loan guarantors. Dearborn Superior Judge Jonathan Cleary ruled in favor of JPMCC on JPMCC’s breach of contract claims; entered judgment for DBL on JPMCC’s tort claims; judgment for the guarantors and against JPMCC on its breach of guaranty claims; and judgment against JPMCC on its request for summary judgment on DBL’s complaint for declaratory judgment.  

The Court of Appeals ruled that JPMCC met its burden of showing that it was entitled to summary judgment on DBL’s complaint for declaratory judgment, and DBL made no showing that a genuine issue of material fact precludes such judgment. Thus, the trial court erred when it denied JPMCC’s motion for summary judgment on DBL’s complaint for declaratory judgment, Judge Edward Najam wrote. The judges reversed and directed the court to enter final judgment for JPMCC on DBL’s complaint.

They also found JPMCC’s designated evidence failed to establish a genuine question of material fact on whether the tort claims were independent of the breach of contract claims. They were not, but even if they were, JPMCC would have no greater remedy against DBL than that which it has already received, Najam continued. The trial court did not err when it granted summary judgment to DBL and against JMPCC on the tort claims.

Finally, the Court of Appeals held that DBL misapplied the first two installments of the nuisance award, which is a condemnation award as a matter of law. DBL disbursed the first two installments to its members, attorneys and another company. It deposited the third installment with the trial court. Pursuant to the plain terms of the guaranty, the guarantors are liable to JPMCC for its losses arising out of DBL’s misapplication of those amounts.

The case goes back to Dearborn Superior Court to determine the amount of the guarantors’ liability to JPMCC.