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A bank’s request to dismiss a long-dormant civil lawsuit for failure to prosecute was untimely, but a trial court was correct in entering summary judgment for the bank based on the doctrine of laches, the Court of Appeals of Indiana affirmed Wednesday.
According to court records, the lawsuit centers around a 2010 real estate transaction.
First Merchants Bank N.A., in a related underlying action, sought to enforce a promissory note against Treslong Dairy LLC, which had been secured by a security agreement that had granted the bank a security interest in all of Treslong Dairy’s haylage and silage.
On May 27, 2010, the Benton Circuit Court ordered the bank to sell the collateral.
In August 2010, the bank sold the collateral for an amount less than the full judgment owed to the bank. Jeffrey Foster, Kathie Foster and the Earl Goodwine Trust, who were junior lienholders, received nothing from the sale.
Then on Jan. 31, 2011, both Fosters and the trust filed a complaint against the bank concerning the collateral sale. The bank filed an answer in May 2011.
What followed were several periods of inactivity in the lawsuit, with the appellate court noting the case remained dormant from Oct. 13, 2011, through Oct. 5, 2012, and from July 2014 through June 2018.
“Then, nothing happened until June 20, 2018 when an attorney for [the Bank] withdrew. One more year passed before another withdrawal motion was filed on April 30, 2019. Three more years passed until May 17, 2022 when a new counsel entered his appearance for [the Appellants] and asked for a case management conference. … The case management request initiated a new round of attorney withdrawals until finally, [the Bank] filed a Motion for Summary Judgment on August 12, 2022,” according to the appellate court.
On Dec. 19, 2022, the trial court entered summary judgment in favor of the bank, finding that dismissal was appropriate due to the Fosters and the trust’s failure to prosecute the action.
The appellants then filed a motion to correct error, which the trial court denied on Feb. 2, 2023.
They appealed the trial court’s order granting the bank’s motion for summary judgment following the denial of their motion to correct error.
The Court of Appeals affirmed the trial court’s ruling, finding that the designated evidence demonstrated the Fosters and the trust should be barred from continuing the pursuit of their claims against the bank pursuant to the doctrine of laches.
Judge Cale Bradford wrote the opinion for the appellate court.
Bradford noted that, in its motion for summary judgment, the bank argued that dismissal of the action was appropriate pursuant to Trial Rule 41(E) because the appellants had failed to diligently pursue their claims.
The appellate judge acknowledged that it was undisputed that there have been multiple, lengthy periods of inaction in the case. Following the most recent period of inaction, the appellants resumed their prosecution of the case on May 17, 2022, by filing a motion for a case-management conference. The trial court granted the motion and the conference was scheduled for Aug. 22, 2022.
“The Bank did not file its motion for summary judgment, requesting a dismissal of the action, until August 12, 2022. In so far as the Bank’s motion sought dismissal for a failure to prosecute, the motion was untimely as it was not filed until after the Appellants had resumed their prosecution of the case,” Bradford wrote, adding that the appellate court agree with the Fosters and the trust that dismissal pursuant to Trial Rule 41(E) was inappropriate.
But the bank also argued that dismissal was warranted under the equitable doctrine of laches, and the COA agreed.
Bradford wrote that although the doctrine of laches is most commonly applied to cases in which a plaintiff has slept on their rights before initiating legal proceedings, it has also been applied to cases in which a plaintiff has slept on their rights after initiating legal proceedings.
He noted that the trial court acknowledged the bank’s laches argument but found that it “simply need not address the issue of laches having dismissed the case under Trial Rule 41.”
But the appellate court concluded that the appellants should be barred by the doctrine of laches from continuing to pursue their claims against the bank.
“The Appellants engaged in long periods of delay, which resulted in prejudice to the Bank. The length of the delay, at approximately ten years, was so long that we have no trouble equating the length of the delay to a waiver or an abandonment by the Appellants of their claims against the Bank. Thus, the trial court did not err in granting the Bank’s motion for summary judgment,” Bradford wrote, citing Morgan v. Dickelman Ins. Agency, Inc., 202 N.E.3d 454 (Ind. Ct. App. 2022).
Judges Patricia Riley and Leanna Weissmann concurred.
The case is Jeffrey L. Foster, Kathie J. Foster, and The Earl Goodwine Trust v. First Merchants Bank, N.A., 23A-PL-473.
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