APPEAL FROM THE ST. JOSEPH CIRCUIT COURT, The Honorable John W. Montgomery, Judge, Cause No. R-4899
Hoffman, J. Garrard, P.j., and Miller, P.j., Concur.
The First Interstate Bank of Northern Indiana (the Bank) appeals the trial court's grant of summary judgment in favor of defendants, Delcamp, Inc., Ronald and Audrey Delcamp individually, and Michiana Mack, Inc. (collectively referred to as Michiana Mack). This action was initiated on February 19, 1986, by the Bank's complaint seeking to collect on two notes that were due and payable. The trial court found that the Bank had been fully paid, and on appeal the Bank raises only one issue, namely: whether summary judgment was improper because there is a genuine issue of material fact regarding whether the Bank has been fully paid.
Michiana Mack, a truck dealership located in South Bend, Indiana, was indebted to the Bank on two notes, as of the date of summary judgment the total amount due, including collection costs and attorney fees, was $341,886.96.[Footnote 1] As security for the notes the Bank held interests in Michiana Mack's accounts receivables and parts inventory. The notes were also personally guaranteed by Ronald and Audrey Delcamp.
At some point before February 19, 1986, the Bank, for reasons not germane to this appeal, felt itself insecure about repayment. The Bank then exercised its option to accelerate the notes' due dates and began employing various methods to obtain immediate repayment. On February 18 and 19 the Bank exercised its right of setoff against the accounts Michiana Mack maintained at the Bank. The Bank obtained $123.789.84 through this remedy. Next the Bank sent letters to Michiana Mack's account debtors and ultimately collected $124.473.74 from them. Additionally, the Bank attached and sole Michiana Mack's parts inventory for $131,000.00. Adding these amounts, the Bank had collected $379,263.58 by March 24, 1986.
By March 24 the Bank had applied enough of the collected funds so that its accounts showed zero balances on both loans. A Bank clerk, apparently acting out of habit or mistake stamped each note as paid.
This situation was complicated on May 7, 1986 when the Deutsche Credit Corporation (Deutsche) filed suit against the Bank in the United States District Court. Deutsche was the floor plan financer for Michiana Mack's inventory of Iveco trucks. According to Deutsche's security agreement, each time Michiana Mack sold an Iveco truck the proceeds were to be directly remitted to Deutsche. Instead, as Deutsche's complaint alleged, Michiana Mack had deposited $73,271.64 of proceeds into its own accounts at the Bank. These accounts were the ones that the Bank setoff against Michiana Mack's debt. Deutsche claimed priority in the accounts because it held a perfected purchase money security interest which extended to proceeds. On May 22, the Bank filed its answer to Deutsche's complaint in which the Bank admitted liability for $34,358.89 and contested the rest of Deutsche's claim.
Michiana Mack filed for summary judgment, in the present case, in July. Simply stated, the motion argued that the Bank had collected $379,263.58 to cover a debt of $341,886.96 and that the Bank's own records showed the notes had been paid. Predictably, the Bank responded with affidavits and documents that averred most of the above facts and a memorandum of law that argued that the Bank had not been fully paid because of its admitted and contingent liability to Deutsche. On September 22, 1986 the trial court issued its findings and entered summary judgment in favor of Michiana Mack.
Summary judgment is appropriate only if there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law.
Ind. Rules of Procedure, Trial Rule 56(C);
Taylor-Chalmers, Inc. v. Bd. of Com'rs (1985), Ind.App., 474 N.E.2d 531.
A genuine issue exists if the trial court is required to resolve disputed facts or weigh evidence to reach a decision and a fact is material if its existence is decisive to the action, or if its existence or non-existence facilitates resolution of the case. Anderson v. State Farm Mut. Ins. Co. (1984), Ind.App., 471 N.E.2d 1170.
In this case the sole issue raised is whether the Bank has been paid in full and therefore, the Bank's receipt or non-receipt of full payment is the central material fact; dispositive of this action. Analysis of the relevant case-law demonstrates that the issues being litigated in the pending District Court action also involve a fact material to this case, ...