Judgment affirmed for bank in mortgage foreclosure

The Indiana Court of Appeals has affirmed an award of summary judgment for a bank and trust company in a mortgage foreclosure case brought by a Noblesville couple, rejecting the couple’s evidentiary challenges.

Ashfaq and Azra Hussain borrowed $221,937.26 from Salin Bank and Trust Company in 2008, obtaining a mortgage on property in Noblesville. The couple was required to make 180 payments of $2,104.42 per month until the last payment in September 2023.

Salin charged the Hussains a $20 non-sufficient funds fee that it applied to the principal of the loan after the account had insufficient funds to cover a check tendered by the Hussains for fees to secure the loan. The couple paid only $1,500 of their first payment, acquiring another NSF and late fee, which began to pile up over the next several years.

Salin filed a complaint on the note and to foreclose on the mortgage in early 2012, seeking judgment against the Hussains, who later that year filed for Chapter 13 Bankruptcy protection. The couple then made full or partial payments directly to Salin in addition to the payments made on an arrearage account through a bankruptcy trustee until May 2015.

When their bankruptcy case was dismissed, Salin filed a motion for summary judgment, claiming the undisputed facts established it was entitled to judgment as a matter of law, and that the property should be sold. The Hussains argued Salin was not entitled to foreclosure because the designated evidence showed the bank had materially breached the terms of the note before the Hussains had committed any breach.

The Hamilton Superior Court granted summary judgment in Salin’s favor on the issue of liability but determined material facts existed in dispute as to the proper measure of damages.

During a subsequent damages hearing, the trial court overruled the Hussains’ objections to the admission of certain exhibits, finding the documents fell within the business records exception to the hearsay rule and were properly authenticated. Salin ultimately was awarded damages in the amount of $242,718.47.

The Indiana Court of Appeals affirmed in Ashfaq Hussain and Azra Hussain v. Salin Bank & Turst Company and Indiana Department of Revenue, 19A-MF-1786, first finding that the trial court did not err in admitting affidavits from John Frieburg, an employee of Horizon Bank, or Marie McDonnell, the couple’s mortgage fraud and forensic analyst.

The COA disagreed with the Hussains’ contention that Frieburg’s affidavit failed to satisfy the requirements of Trial Rule 56(E) and that McDonnell’s affidavit presented a genuine issue of material fact as to whether Salin was the first to breach the agreement when it added the $20 NSF fee to the principal due on the loan.

Additionally, the appellate panel agreed with the trial court that Ken Blugh, loan department head at Horizon, laid the proper foundation for the admission of the documents under the business exception to the hearsay rule. Horizon is Salin’s successor, as the two banks merged.

Citing Williams v. Unifund CCR, LLC, 70 N.E.3d 375 (Ind. Ct. App. 2017), and Holmes v. Nat’l Collegiate Student Loan Trust, 94 N.E.3d 722, 725 (Ind. Ct. App. 2018), the Hussain’s argued Blough was not qualified to lay the foundation for the admission of the documents because he worked for Horizon and not directly for Salin.

“Unlike the circumstances in these two cases where the witnesses were attempting to lay a foundation for the records of another business that had sold its accounts, Blough was testifying on behalf of a company for whom he worked that had merged with another,” Judge Robert Altice wrote. “As Salin no longer exists, Horizon is vested with all the rights, duties and records that previously were Salin’s.

“… Notwithstanding these exhibits and Blough’s testimony, we also note that the Hussains’ payment history was attached to McDonnell’s affidavit as part of their designated evidence,” Altice continued. “Inasmuch as these records that included an amortization of the payments were already made a part of the record, the Hussains cannot be heard to complain that the trial court erred in admitting these documents.”

Thus, the appellate panel let stand the damages award.