Indiana Court Decisions-May 27–June 9, 2015

7th Circuit Court of Appeals

June 2

Post Conviction – Death Sentence Reversal

Tommy R. Pruitt v. Ron Neal, Superintendent, Indiana State Prison

13-1880

The death sentence imposed on a man for killing Morgan County Deputy Sheriff Daniel Starnes in 2001 has been reversed by the 7th Circuit Court of Appeals.

Tommy R. Pruitt’s conviction and sentence were upheld by the Indiana Supreme Court, but the federal panel remanded his case for a new penalty-phase proceeding.

“We conclude that Pruitt has established that he is intellectually disabled and categorically ineligible for the death penalty and that trial counsel were ineffective in their investigation and presentation of evidence that Pruitt suffered from schizophrenia,” Circuit Judge John Tinder wrote for the panel. “We therefore reverse the district court’s judgment and remand for further proceedings not inconsistent with this opinion.”

The trial court heard evidence of Pruitt’s mental state at sentencing but determined that the aggravating factor that he shot and killed a law enforcement officer in the line of duty outweighed any mitigating factors.

But in a 55-page opinion that traced the history of Pruitt’s IQ tests and intellectual ability to his elementary school days, Tinder wrote, “The Indiana Supreme Court made an unreasonable determination of fact in concluding that Pruitt’s work history, school history, and other evidence supported the finding that Pruitt failed to establish significantly subaverage intellectual functioning. Rather, the clear and convincing weight of the evidence establishes that Pruitt suffers from significantly subaverage intellectual functioning.”

“Pruitt’s trial counsel’s failure to investigate Pruitt’s mental illness fell below an objective standard of reasonableness. Trial counsel knew that shortly after Pruitt was arrested for killing Deputy Starnes, a (Department of Correction) psychiatrist had diagnosed Pruitt with ‘schizophrenia, chronic undifferentiated type compensated residual,’ which meant that he had been schizophrenic ‘at one time’ but was not ‘actively schizophrenic’ at the time of the diagnosis. Counsel knew that the psychiatrist had prescribed Pruitt Trilafon, an anti-psychotic medication,” Tinder wrote.

The defense’s own expert recommended Pruitt be evaluated by an expert in psychosis, “But trial counsel did not contact such an expert to have Pruitt evaluated, and counsel offered no reason for failing to do so,” he wrote. “… Pruitt has shown that he was prejudiced by counsel’s ineffectiveness.”

Indiana Supreme Court

June 2

Civil Tort – Negligence/Expert Witness

Rebecca Stafford, Individually and as Surviving Parent of Drayden Powell, Deceased, and Drayden Powell, Deceased v. James E. Szymanowski, M.D. and Gyn, Ltd., Inc.

89S01-1502-CT-64

The Indiana Supreme Court reinstated a medical malpractice case against a Richmond doctor accused of failing to meet the standard of care in examining a pregnant woman whose child subsequently was stillborn.

The court reversed summary judgment in favor of Dr. James E. Szymanowski that had been affirmed by the Indiana Court of Appeals.

“Finding a genuine issue of material fact regarding Dr. Szymanowski’s negligence raised by the patient’s designated expert medical testimony, we reverse the grant of summary judgment,” Justice Brent Dickson wrote. The court let stand the summary judgment order in favor of Gyn, Ltd. Inc.

Rebecca Stafford claims a biophysical profile was incorrectly performed or interpreted incorrectly days before the stillbirth. Testimony of her expert witness creates an issue for the jury, even though a medical review panel determined Szymanowski met the appropriate standard of care.

Justices also affirmed the denial of a damages award under the Child Wrongful Death Statute.

Indiana Tax Court

June 3

Tax – Business Income

Pinnacle Entertainment, Inc. v. Indiana Department of State Revenue

49T10-1206-TA-34

The Indiana Department of State Revenue scored a partial victory in Tax Court when the court granted the agency’s motion for summary judgment regarding whether I.C. 6-3-2-2.2 applied in its taxing of a portion of the gain generated by a Las Vegas-based corporation’s sale of a horse racetrack and card club to an out-of-state company. But there are issues of material fact as to whether the department correctly classified Pinnacle Entertainment’s gain as business income.

Pinnacle and Churchill Downs Inc. entered into an asset purchase agreement in 1999 in which Pinnacle would sell a racetrack and card club in California to Churchill Downs for $140 million in cash. The amount was placed in an escrow account and distributed to Pinnacle in two installments. Pinnacle reported its gain from the sale under the installment method for federal income tax purposes.

In 2000, the company filed an Indiana adjusted gross income tax return that classified the gain as nonbusiness income.  The Department of State Revenue disagreed and reclassified the gain as business income, recalculated Pinnacle’s net operating losses, and assessed the company with additional adjusted gross income tax, interest and penalties for the 2006 and 2007 tax years.

The issue made it before the Tax Court in 2012, and both sides filed motions for partial summary judgment in 2013.

I.C. 6-3-2-2.2 states that “receipts from assets in the nature of loans or installment sales contracts that are primarily secured by or deal with real or tangible personal property are attributable to this state if the security or sale property is located in Indiana.” Pinnacle argued that none of its gain was derived from an Indiana source and it was involved in an installment sales contract. Senior Judge Thomas Fisher determined the asset purchase agreement was not an installment sales contract and granted summary judgment to the department, which had argued because the purchase agreement wasn’t an installment sales contract, the statute in question does not preclude the state’s ability to tax a portion of Pinnacle’s gain.

But there were genuine issues of material fact as to whether Pinnacle’s gains are business income, so the judge denied either party’s motion for summary judgment on this matter. The department’s evidence supported its claim that Pinnacle was in the business of buying and selling entertainment businesses. Pinnacle’s evidence averred that its business consisted of the operation of certain entertainment businesses, not the purchasing and selling of the businesses.

Fisher ordered the parties to file a joint case management plan with proposed order within 30 days.

Indiana Court of Appeals

May 27

Civil Tort – Medical Malpractice

Kathy L. Siner, Personal Representative of the Estate of Geraldine A. Siner, Deceased, and John T. Siner, prior Enduring Power of Attorney and Medical Representative of the Deceased v. Kindred Hospital Limited Partnership, et al.

49A05-1404-CT-165

An Indiana Court of Appeals judge found it troubling that a member of a medical review panel that unanimously found defendants breached their duty of care to a patient could later issue an affidavit in which he changed his mind relating to a doctor accused of medical malpractice.

Siblings Kathy and John Siner sued Kindred Hospital of Indianapolis, Dr. Mohammed Majid and several others for medical malpractice after their mother Geraldine Siner died. Geradline Siner, who suffered from Alzheimer’s disease and could no longer care for herself, had been admitted to Kindred Hospital. John Siner told the hospital repeatedly that his mother was to be a full code patient, but Kindred’s Ethics Committee decided to make her a No Code/Do Not Resuscitate patient. The siblings then moved their mother to Methodist Hospital, where she was immediately treated for a collapsed lung, infection and septic shock. Geraldine Siner died while at Methodist.

A medical review panel, which included Dr. James Krueger, unanimously determined that the defendants failed to comply with an appropriate standard of care and that their conduct may have been a factor of some damages, but not the death, of Geraldine Siner.

In the Siners’ medical malpractice complaint, Krueger submitted an affidavit in which he said he was able to further review the mother’s medical records after the panel issued its opinion and believed that the hospital and Majid met the standard of care because they defaulted to the judgment of IU Pulmonary and Critical Care, which directed Geraldine Siner’s care during her hospitalization at Kindred.

The defendants filed for summary judgment, which the trial court granted.

The Court of Appeals reversed regarding the hospital, finding an affidavit from the Siners’ expert, Dr. Timothy Pohlman, that the negligent DNR order “more likely than not resulted in damages and suffering” creates a material issue of fact. The majority noted it found Krueger’s affidavit suspect but irrelevant to its decision.

The majority affirmed summary judgment for Majid because the only evidence designated by the Siners was the medical review panel’s opinion, which said the defendants’ conduct “may” have been a factor in damages to Geraldine Siner.

Judge James Kirsch dissented on this issue.

“I find it troubling that a single member of a Medical Review Panel can undermine the work of the panel of which he was a part by an ex parte and conclusory affidavit executed months after the fact without procedural safeguards,” Kirsch wrote.

Disregarding Krueger’s affidavit, the medical review panel issued its opinion that Majid failed to comply with the appropriate standard of care, Kirsch wrote, and that process should not be “impeached or undermined months after it is concluded by an affidavit from a member of the panel” issued without the procedural safeguards mandated by statute.
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May 28

Criminal – Invasion of Privacy/Double Jeopardy

Tony Hatchett v. State of Indiana

49A02-1408-CR-561

A trial court did not abuse its discretion when it gave a jury instruction during an invasion of privacy trial, the Court of Appeals ruled, but the appeals court sua sponte did reverse one of two convictions because of double jeopardy.

Tony Hatchett was convicted of two counts of Class A misdemeanor invasion of privacy, enhanced to Class D felonies because of a prior unrelated conviction, for calling Janetta Buckhalter, the mother of his child, from jail in violation of a no-contact order and protective order in effect.

Hatchett argued that the trial court abused its discretion when it instructed the jury on the law regarding invasion of privacy. Over Hatchett’s objection, the trial court accepted the state’s tendered jury instruction, which said, “When determining whether a party committed the act of invasion of privacy, we do not consider whether Ms. Buckhalter knowingly ignored the protective order but, rather, whether the defendant knowing[ly] violated the protective order.”

The state noted the issue of consent was brought up by several potential jurors during jury selection; Hatchett maintained he never contended that Buckhalter consented to the contact.

The COA disagreed that Hatchett did not imply Buckhalter had consented to his call because during cross-examination of her at trial, Hatchett’s counsel asked her about the number Hatchett called from jail. That number was a different number than what she had when the two were together, which implied she may have given her number to Hatchett.

Even if the trial court abused its discretion in giving the instruction, it did not prejudice Hatchett’s substantial rights as there was sufficient evidence to convict him of the crime.

But because the same telephone call was used as evidence to support that Hatchett violated both the protective order and the no-contact order, and the jury used the same evidence to establish the essential elements of both offenses, the judges sua sponte ordered one conviction vacated.
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May 29

Criminal – Sex Offender Registry

State of Indiana v. Scott Zerbe

49A05-1410-MI-463

A man who committed a sex crime in Michigan in 1992 and moved to Indiana in 2012 must put his name in the Indiana Sex Offender Registry created two years after his initial offense, a divided Court of Appeals panel ruled.

Judges Terry Crone and Elaine Brown reversed Marion Superior Judge Tim Oakes’ grant of Scott Zerbe’s petition to remove his name as a sex offender. “On appeal, the State argues that SORA is not an unconstitutional ex post facto law as applied to Zerbe,” Crone wrote.

“We agree: Zerbe had fair warning of SORA’s registration requirement before he moved to Indiana, and SORA imposed no additional punishment because he was already required to register in Michigan. Therefore, we reverse.”

Zerbe was convicted of criminal sexual conduct in the second degree in 1992 for sex acts with a 14-year-old, according to the record. He was released in 1999 and required to register as a sex offender in Michigan for 25 years.

The majority noted Indiana amended SORA in 2001 so that any person required to register as a sex offender elsewhere must register in Indiana. But dissenting Judge John Baker wrote that this change in law was of lesser consequence in the analysis and conflicted with precedent settled under Wallace v. State, 905 N.E.2d 371 (Ind. 2009), and similar cases.

“While I see the logic in the State’s position on this issue, as well as the majority’s decision, the case law could not be clearer,” Baker wrote. “Our Supreme Court, plus three panels of this Court, have plainly held that the date of primary importance is the date of the original conviction. … Therefore, I believe that requiring him to register as a sex offender would violate Indiana’s constitutional prohibition against ex post facto laws and would affirm the trial court’s judgment.”
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June 2

Civil Plenary – Local Government Reorganization

Town of Zionsville, Indiana v. Town of Whitestown, Indiana and Angel Badillo

06A01-1410-PL-432

Describing itself as having a “hybrid status,” Zionsville successfully argued it had the authority to reorganize with Perry Township and convinced the Indiana Court of Appeals to overturn a lower court’s order blocking its efforts to incorporate the township.

The reorganization ignited a feud between Zionsville and Whitestown which gave the Court of Appeals an invitation to consider, for the first time, the interpretation of provisions in the 2006 Government Modernization Act.

Whitestown introduced annexation ordinances for land within Perry Township immediately after the township and Zionsville adopted similar resolutions to consider incorporation in April 2014. About a month later, Zionsville and the township adopted the plans for reorganization which would eliminate Perry Township’s government and incorporate the government functions and offices into those of Zionsville.

Whitestown subsequently challenged the validity of the 2014 reorganization plan and won summary judgment.

On appeal, Zionsville claimed, in part, it was acting within statutory authority under either of two provisions of the Act, in Indiana Code 36-1.5-4/1(a). Whitestown countered that 36-1.5-4-1(a)(2) does not apply because Zionsville is a town, not a township.

Zionsville argued that it was a town/township hybrid status because of its 2010 reorganization with Eagle and Union townships. When it incorporated with these two townships, Zionsville said it continued to exercise the powers of a town while it gained the powers of a township.

A unanimous Court of Appeals panel agreed. The court reversed the Boone Superior Court’s order granting summary judgment in favor of Whitestown and remanded with instructions.

“The Act neither expressly precludes Zionsville, having reorganized with and assumed the duties of a township, from functioning in a hybrid town/township capacity, nor from exercising the powers of a township when initiating a reorganization,” Judge L. Mark Bailey wrote for the court. “The provisions of Subsections 36-1.5-4-40.5(6) and (7) of the Act indicate that the legislature contemplated that reorganized political subdivisions involving a township and another structure of government would retain broad township powers: if the legislature had intended otherwise, there would have been no need to restrict a reorganized political subdivision from borrowing money for firefighting and other emergency services in the same manner as a township.”

The Court of Appeals declined to consider the effect of Zionsville’s reorganization plan on Whitestown’s effort to annex land for the municipality’s waste water treatment plant because that matter is the subject of another pending appeal.

Civil Plenary – Insurance/Class Action

Lincoln National Life Insurance Company v. Peter S. Bezich, individually and on behalf of a class of others similarly situated

02A04-1407-PL-319

A former policyholder’s class-action lawsuit claiming Lincoln National Life Insurance breached its contract was expanded by a Court of Appeals ruling.

Peter S. Bezich represents a class suing the insurer, claiming it overcharged Ensemble II policyholders in 30 states for administrative fees, for including non-mortality factors in determining the cost of insurance, and by failing to reduce the cost of insurance in response to improving mortality rates.

Allen Circuit Judge Thomas J. Felts ruled that only the latter of those claims could be certified for a class action. Both Lincoln National and Bezich appealed. Lincoln National wanted the lone claim class decertified, and Bezich argued all three claims should be certified as a class. The Court of Appeals sided with Bezich.

“Concluding that class certification for the purpose of determining liability is proper for each of Bezich’s three breach of contract claims, we affirm the trial court’s judgment as to Count 3, reverse as to Count 1 and Count 2, and remand for further proceedings,” Judge Margret Robb wrote for the panel.

The Ensemble II policies were sold between 1986 and 2008.
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June 3

Domestic Relation – Child Support

Francis M. Laux v. Pauletta Leann (Laux) Ferry

29A02-1410-DR-719

Because a trial court hearing a child support matter at first declined to impute the income of the stepfather to the child’s mother, but later treated their income as the same when it came to the cost of her child’s health insurance, the Indiana Court of Appeals partially reversed a Hamilton Superior Court’s 2014 ruling.

Francis M. Laux, a self-employed chiropractor, appealed the order on ex-wife Pauletta Ferry’s petition to modify his child support obligation. When the two divorced in 1999, Laux paid $1,000 a month in child support. In August 2013, Ferry sought modification of his obligation, providing evidence that in the four-year period preceding the hearing, Laux’s income averaged nearly $6,100 a week and at the time of the hearing, his average weekly income was close to $5,000. Ferry’s income declined during that period from nearly $3,000 per week to about $500 week. She was a real estate agent.

Ferry’s husband pays for the health insurance of her child with Laux. The trial court ordered Laux’s child support obligation increased to $443 a week, that he owed an increased amount retroactive to when Ferry first petitioned in 2013, and that she was to continue providing health insurance.

The Court of Appeals affirmed the trial court in all aspects except with regards to the health insurance. The trial court erroneously credited Ferry for the child’s health insurance payments that her husband makes directly from his paycheck. On all other matters, the trial court declined to impute stepfather’s income to Ferry.

“We have … found … that it was not erroneous for the trial court to decline to impute Stepfather’s income to Mother. In other words, it was not erroneous for the trial court to treat Stepfather and Mother as separate financial entities,” Judge John Baker wrote. “But the trial court then changed course and elected to treat Stepfather and Mother as the same, or coexistent, financial entities for the purpose of the cost of Child’s health insurance. We do not believe that this inconsistency can stand.”

The matter was remanded for the trial court to recalculate Ferry’s income with no credit for the child’s health insurance, Laux’s child support obligation given the adjustment to mother’s income, and his retroactive child support owed given the adjustment to his child support obligation.
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June 4

Civil Plenary – Adverse Possession

Tom Bonnell v. Ruby A. Cotner, Douglas Wayne Cotner, Arthur J. Johnson, Jimmy J. Johnson, and Jerry L. Johnson

66A03-1410-PL-372

The Indiana Court of Appeals ordered judgment entered in favor of two families on their claim for adverse possession over a disputed tract of land in Pulaski County. The judges found the trial court erred when it found two tax sales involving the disputed property divested the adverse holders of their title to the real property.

Tom Bonnell acquired a .75-acre tract of land in 2012 that was purchased in a 2011 tax sale by the Pulaski County Board of Commissioners. This land was between an old farm fence and the eastern border of parcels 3-11 in a subdivision.  Ruby A. Cotner, Douglas Wayne Cotner, Arthur J. Johnson, Jimmy J. Johnson, and Jerry L. Johnson (referred to collectively as the Cotners by the court) held title to parcels 8 and 9 and believed their land ran to the farm fence. Prior to the Cotners owning their land, the owners in 1968 built an outbuilding that lay in part on the .75-acre land. In 2010, the Cotners built an extension on the building, extending it about 22 feet past their eastern border.

When Bonnell acquired the land, the Cotners refused his offer to divide the land to allow each parcel to extend to the farm fence. The Cotners sued and claimed they held title by adverse possession to the land from their parcels’ eastern borders to the farm fence. Bonnell counterclaimed for ejectment.

The trial court ruled in favor of Bonnell, finding that although the Cotners demonstrated actual possession, use and control of the 35-foot strip that lies contiguous and adjacent to Cotners’ parcels, the fact that the land in question went up for sale in two tax sales defeats their claim of any good faith reasonable belief.

The judge did grant a prescriptive easement to the Cotners for the land on which the outbuilding sits.

The judges only addressed the Cotners’ claim: whether adverse holders of real property can be divested of their title by a subsequent tax sale of the property when the adverse holders’ title is premised on a reasonable and good faith – although mistaken – belief that they are paying the property taxes on the property.  This is an issue of first impression.

“Under the trial court’s interpretation of Indiana law, vested adverse holders may become divested of their property for failing to pay taxes despite reasonably believing in good faith that they are paying the appropriate taxes due. This conclusion is contrary to the adverse possession tax statute’s specific and explicit exception that adverse possession may occur in these circumstances. Accordingly, the trial court erred as a matter of law when it concluded that the Cotners’ vested title was ‘severed’ by the 1993 and 2011 tax sales,” Judge Edward Najam wrote.

“As the Cotners’ title, which, again, had vested in 1978, was never severed, neither the Board nor Bonnell took title to the disputed area from those tax sales. Hence, we reverse the trial court’s judgment and remand with instructions for the court to enter judgment for the Cotners on their claim for adverse possession over the disputed area.”

Criminal – Auto Theft/Double Jeopardy

Justin Brewer v. State of Indiana

82A05-1410-CR-458

A man who stole a car in Vanderburgh County, fled into Kentucky and then was arrested and charged with similar crimes of auto theft and fleeing police in both states had his Indiana auto theft conviction reversed by the Court of Appeals.

Justin Brewer stole a Dodge Challenger in Vanderburgh County. As Evansville police attempted to apprehend him, he took off and entered Kentucky. Police in Henderson, Kentucky, arrested Brewer after he crashed the car while fleeing from police.

He pleaded guilty in January 2014 in Kentucky to receiving stolen property and fleeing/evading the police, entered as felonies. In August 2014, Brewer was convicted in Indiana of Class D felonies auto theft and resisting law enforcement based on the same incident. He wanted the convictions vacated based on double jeopardy, but the trial court denied his motion.

The state conceded that Brewer’s Kentucky conviction for receiving stolen property prevented Indiana from prosecuting him for auto theft, so the judges ordered that conviction and sentence vacated.

But they denied Brewer’s claim that he could not be convicted of resisting law enforcement in Indiana since he was convicted of a similar charge in Kentucky. His act of fleeing Kentucky police was an offense wholly within the jurisdiction of Kentucky and Indiana has no jurisdiction to prosecute him for that act within Kentucky. The same is true for his fleeing from police in Indiana, so the double jeopardy statute does not prohibit Indiana’s prosecution of him for this offense.

Criminal – Robbery/Corrupt Business Influence

Ashonta Kenya Jackson v. State of Indiana

48A02-1409-CR-670

The majority on a Court of Appeals panel tossed out a man’s corrupt business influence conviction after finding his criminal activity did not pose a threat of future criminal conduct. But the dissenting judge noted the majority was inserting a new element into the Indiana statute that does not exist.

Ashonta Kenya Jackson was convicted of three counts of Class B felony robbery, one count of Class C felony corrupt business influence, and found to be a habitual offender. Jackson and other men robbed the same Anderson liquor store twice and a bank in October 2013. He received a 63-year executed sentence.

He appealed, arguing insufficient evidence to support his corrupt business influence conviction and his adjudication as a habitual offender. To prove this conviction, the state had to show that Jackson, through a pattern of racketeering activity, knowingly or intentionally acquired or maintained, either directly or indirectly, an interest in or control of U.S. currency from multiple armed robberies, I.C. 35-45-6-2(2). The statute does not expressly include an element of continuing the criminal conduct in the future, which is required under the federal Racketeer Influenced and Corruption Organizations Act.  But the majority, citing Waldon v. State, 829 N.E.2d 168, 176 (Ind. Ct. App. 2005), noted that the Indiana law is patterned after the federal Act.

Since the state did not prove Jackson’s criminal acts posed a threat of continued criminal activity, Judges Edward Najam and Ezra Friedlander reversed the corrupt business influence conviction.

Judge John Baker dissented on this point, noting that the Indiana General Assembly has never elected to adopt the continuity requirement announced in H.J. Inc. v. Nw. Bell Tel. Co., 492 U.S. 229, 238-39 (1989).

“I believe that to reverse a conviction for failure to prove an element that is nowhere to be found in the statute defining the crime requires us to engraft new words onto a statute. I do not believe it is our place to do so,” he wrote.

The panel unanimously affirmed the denial of Jackson’s request for a change of judge and agreed that the state presented sufficient evidence to support his habitual offender adjudication. But they sent the case back to the trial court to revise the sentencing order to indicate which conviction is enhanced by the habitual offender adjudication.
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June 9

Mortgage Foreclosure – Equitable Assignment

Merrillville 2548, Inc. successor to Merrillville GC 2548, Inc.v. BMO Harris Bank N.A. f/k/a Harris N.A., as the assignee of the Federal Deposit Insurance Corporation as the receiver for Amcore Bank

45A03-1409-MF-345

The Indiana Court of Appeals reversed the holding of a Lake County court that allowed the mortgage holder of a restaurant in Merrillville to immediately take possession of the parcel of land. Under Indiana law, the parcel should go into a sheriff’s sale, the majority held.

Merrillville 2548 Inc., referred to in the opinion as GC 2548, appealed the decision by the trial court that it had failed to establish equitable assignment of a lease had occurred. MCSS Merrillville LLC executed a promissory note and mortgage with a bank, which were later assigned to BMO Harris Bank N.A. The lease, which allowed for the operation of a Golden Corral, prohibited MCSS from assigning the lease or subletting the parcel. But for the majority of the time the mortgage was in place, GC 2548 has actually operated the restaurant. It was never made party to the lease and there was no assignment of rights under the lease from MCSS to GC 2548.  

In 2013, BMO Harris sued for breach of contract, to foreclose on the property and appointment of receiver. GC 2548 intervened, but the trial court ruled that the bank’s default judgment against borrower allowed it to foreclose on its interest in the parcel; Article 9.1 of the Indiana Uniform Commercial Code dictated the results of this case; and GC 2548 had 30 days to vacate the parcel.

The Court of Appeals concluded that GC 2548 had preserved its equitable assignment claim for appellate review, but that it failed to show the trial court erred in finding that equitable assignment of the lease did not occur. The judges pointed out that there is no evidence that GC 2548 made a single payment on the note, and the fact that the company had made improvements to the parcel does not necessarily support that it had taken over the parcel.

But the trial court erred in finding Article 9.1 of the UCC applies to leasehold mortgages. By ruling that it does, the trial court allowed for BMO Harris to immediately take possession of the parcel. But Article 9.1 does not include leaseholds on real property, so it does not apply to leasehold mortgages, Judge Cale Bradford wrote. A leasehold mortgage foreclosure is governed by Indiana statutory law regarding real estate mortgages, so I.C. 32-30-10 applies. The majority ordered the parcel of land to be placed in a sheriff’s sale, pursuant to I.C. 32-30-10.

Chief Judge Nancy Vaidik dissented on this issue, writing that GC 2548 is at best a month-to-month tenant, not a lessee or mortgagor, so it lacks any interest in the parcel that certain mortgage foreclosure proceedings are designed to protect.

“As a month-to-month tenant, GC 2548’s interest in the property was thirty days’ possession, and had there been no mortgage-foreclosure action, GC 2548 would have been entitled to thirty days’ notice before eviction, nothing more,” she wrote, noting she would affirm the bank’s right to take possession of the land in 30 days time.•