COA affirms denial of second foreclosure settlement conference

A woman facing foreclosure won’t be awarded a second chance at a settlement conference after the case was officially closed due to her lack of response, the Indiana Court of Appeals affirmed Wednesday.

In June 2017, Nationstar Mortgage LLC initiated foreclosure on a mortgage secured by real property in Camby, naming Lisa El as the defendant.

Along with the complaint and summons, El received a document notifying her that she “may be entitled to a court-ordered settlement conference with her lender to negotiate an agreement that could allow her to avoid foreclosure.” It instructed her that she needed to notify the trial court of her desire for a settlement conference, which she did.

The Marion Superior Court granted El’s request for a settlement conference and scheduled both parties to appear in person in September 2017. Both parties received a notice and order to appear, including the date and location of the settlement conference. The notice also identified documents El would be required to bring to the conference, including documentation of her present and projected future income, expenses, assets and liabilities, pay stubs, bank statements, utility bills and tax returns.

When El did not appear during her requested scheduled conference, the trial court noted she also failed to submit documents to Nationstar required by the notice and order for settlement conference.

Nationstar then proceed with its foreclosure, filing for summary and default judgment, to which El did not respond. Summary and default judgment were granted to then Nationstar.

In February 2018, counsel for El filed an appearance and a second motion for settlement Conference. Her request acknowledged that a prior settlement conference had been held, and El asked the trial court to reschedule because she had applied for housing assistance as she had been told to do, but she “was not aware of what additional documents were required by [Nationstar]” and “was misinformed as to the Settlement Conference proceedings.”

The trial court denied her request, which the Indiana Court of appeals affirmed in Lisa M. El v. Nationstar Mortgage LLC, 18A-MF-338, stating the case had already been resolved.

El argued that the trial court should not have denied her second request for a settlement conference under Indiana Code section 32-30-10.5-10, because “[Section 10] does not preclude debtors from obtaining a second settlement conference.”

But the appellate court pointed out El’s position was only partially correct in that the statute “does not preclude” a second conference. It found the statute’s plain language provides that, in certain circumstances, the trial court “may order” the parties to reconvene a settlement conference.

“Here, El filed her Motion for Settlement Conference on February 5, 2018, which was approximately two months after the trial court entered its December 12, 2017 judgment in favor of Nationstar,” Judge James Kirsch wrote for the court. “Section 10 grants the trial court discretion to ‘reconvene’ the settlement conference, for cause, ‘at any time before judgment is entered.’”

Therefore, the appellate court concluded that the case was closed by the time El filed for a second conference, adding that even if the timing had been such that trial court still possessed the discretion to order the parties to reconvene, El still did not show cause that would entitle her to a reconvened conference.