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A judgment lien against a Jefferson County property owner had expired in 2020, but a default judgment was still active, the Indiana Court of Appeals ruled Thursday in reversing and remanding to a trial court.
In July 2006, John Guadagnoli filed a complaint against Barbara Chitwood in Jefferson Circuit Court in “Cause 387.”
Guadagnoli filed a motion for default judgment, which was granted the same day, and which awarded Guadagnoli a judgment in the amount of $19,536.63, plus statutory interest and attorney fees.
Guadagnoli moved for proceedings supplemental, with a hearing held on July 21, 2008.
No further action was taken in the case until Jan. 22, 2020, when the parties appeared for a pre-trial conference, at which time the trial court set deadlines to submit discovery and dispositive motions.
Also, on Oct. 14, 2008, Guadagnoli filed his complaint to foreclose default judgment in a separate “Cause 699,” in which he requested the trial court to order his default judgment foreclosed against Chitwood, to enter judgment against Chitwood in the sum of $25,349.80, plus statutory interest and to order Chitwood’s real estate sold in satisfaction of his default judgment after satisfying any liens preceding the judgment.
Later that month, Chitwood filed Chapter 13 bankruptcy.
She subsequently moved to avoid the judgment lien and an order in this regard was entered by the bankruptcy court in January 2011.
Chitwood failed to pay her monthly obligations under her Chapter l3 bankruptcy, and the bankruptcy proceeding was subsequently dismissed.
On April 24, 2019, Guadagnoli filed a motion to re-establish judicial lien, due to the bankruptcy case having been dismissed by the United States Bankruptcy Court for the Southern District of Indiana on July 24, 2012.
Chitwood filed a motion to dismiss Cause 699.
Approximately one month later and after conducting a hearing, the trial court denied Chitwood’s motion to dismiss.
In its order, the trial court concluded that because “the enforcement of a judgment lien is a separate and distinct action from the execution of money judgment via proceeding supplemental,” Guadagnoli, “properly filed his Complaint to Foreclose Default Judgment here, separate and distinct from [Cause 387].”
The court added that because Guadagnoli’s “original default judgment was entered September 21, 2006,” his foreclosure action filed on Oct. 14, 2008, was “well within the statute of limitations. [Guadagnoli’s] [C]omplaint is therefore timely.”
In March 2023, Guadagnoli filed a motion for summary judgment, together with a memorandum in support and designation of evidence, arguing that the designated evidence established that no genuine issue of material fact existed and that Guadagnoli is entitled to a decree of foreclosure against Chitwood.
Chitwood contended that the entry of summary judgment was precluded because Guadagnoli had no standing to bring the “mortgage foreclosure action”; no judgment lien exists because “the judgment [in Cause 387] was vacated by implication”; and if “a valid judgment exists under [Cause 387], the time to enforce it has expired.”
The trial court summarily granted Guadagnoli’s motion, and entered judgment in his favor.
Chitwood appealed, arguing that there is a genuine issue of material fact as to whether the default judgment was set aside in Cause 387 and therefore cannot be used as the underlying judgment to support Guadagnoli’s complaint to foreclose judgment.
She further argued that “[t]he only explanation for the [c]ourt ordering discovery, dispositive motions, and responsive pleadings is [that] the default judgment under [Cause 387] was vacated.”
The Court of Appeals agreed and reversed, holding that genuine issues of material fact existed which preclude the entry of summary judgment in favor of Guadagnoli.
The appellate court remanded the case for further proceedings.
Judge Patricia Riley wrote the opinion for the appellate court.
Riley noted Chitwood’s allegation that “Guadagnoli filed a motion for summary judgment in the underlying case without designating any evidence or supporting affidavits.”
While Guadagnoli filed a designation of evidence together with his memorandum supporting the motion for summary judgment, no documents or affidavits were attached.
Riley wrote that without attacking the validity of the underlying default judgment, Chitwood first contended that there is a genuine issue of material fact as to whether the default judgment was set aside in Cause 387 and therefore cannot be used as the underlying judgment to support Guadagnoli’s complaint to foreclose judgment.
Pointing to the chronological case summary in Cause 387, Chitwood maintained that “[t]he only explanation for the [c]ourt ordering discovery, dispositive motions, and responsive pleadings is [that] the default judgment under [Cause 387] was vacated.”
“Contrary to Chitwood’s argument, the CCS does not indicate that the default judgment was set aside or that she had made any filings pursuant to Indiana Trial Rule 60 to commence the vacating of the default judgment. As Chitwood’s argument amounts to mere speculation, her contention ‘is insufficient to create a genuine issue of material fact to defeat summary judgment,’” Riley wrote.
Chitwood also argued that since the default judgment was granted on Sept. 21, 2006, and was not renewed within a 10-year period, the judgment expired on Sept. 21, 2016.
Riley wrote that, because Chitwood filed bankruptcy proceedings on Oct. 31, 2008, 11 U.S.C. § 362(a) provided for an automatic stay, restraining creditors, like Guadagnoli, with an injunction from taking actions against Chitwood and the property.
The bankruptcy proceeding was dismissed on July 24, 2012. Accordingly, as the proceedings were stayed for three years and nine months, Guadagnoli’s lien on Chitwood’s real property expired in June 2020.
Riley pointed out that, while the judgment lien has expired, Guadagnoli’s default judgment against Chitwood has not.
“And, as the designated evidence does not reflect that Guadagnoli renewed the judgment prior to the expiration of the judgment lien, he must obtain leave of the trial court in order to execute on the judgment,” Riley wrote in reversing the entry of summary judgment in favor of Guadagnoli and remanding the case.
Judges Elaine Brown and Peter Foley concurred.
The case is Barbara Chitwood v. John Guadagnoli, 23A-MF-2092.
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