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02/16/88 L. PHILLIPS REAMES AND CARL E. NEWBERRY v.

Filed: February 16, 1988.

L. PHILLIPS REAMES AND CARL E. NEWBERRY, APPELLANTS (DEFENDANTS BELOW),
v.
DOLLAR SAVINGS ASSOCIATION, APPELLEE (THIRD PARTY DEFENDANT BELOW), AND COMMERCEAMERICA BANKING COMPANY; LIBERTY NATIONAL BANK AND TRUST COMPANY OF LOUISVILLE; FIRST STATE BANK OF PINEVILLE; INDIANA FIRST NATIONAL BANK; THE TITLE INSURANCE COMPANY OF MINNESOTA; MOTEL RESORTS, LTD.; AND JOHN P. CARSON, (PLAINTIFFS BELOW).



Appeal from the Scott Circuit Court, The Honorable James D. Kleopfer, Judge, Cause No. 86-C-213

Ratliff, C.j., Staton, J., concurs. Robertson, J., Dissents with separate opinion.

Author: Ratliff

RATLIFF, C.J.

STATEMENT OF THE CASE

L. Phillips Reames and Carl E. Newberry appeal a Scott Circuit Court order dismissing their third party complaint against Dollar Savings Association for lack of personal jurisdiction. We affirm.

FACTS

Reames and Newberry are the original general partners in Louisville Inn, Ltd., a Georgia limited partnership. In January of 1985, Dollar Savings, a Pennsylvania institution, made a loan to Louisville Inn. As security for the loan, Louisville Inn was to assign unconditionally to Dollar certain investor notes. Dollar took as additional security a second mortgage on certain real estate located in Indiana. The contract was negotiated in Pennsylvania and, except for a brief visit to the real estate by Dollar's representatives, all aspects of the contract took place outside of Indiana.

Louisville Inn subsequently entered into numerous agreements with Motel Resorts and John Carson pursuant to which Louisville Inn was to make payments to Motel Resorts. The agreements were secured by a third mortgage on the same parcel of Indiana property. As part of the transaction, Reames and Newberry gave Motel Resorts a guaranty of payment. The guaranty provided that absent any default by Louisville Inn, Motel Resorts would surrender and cancel the guaranty either upon payment in full or upon release of Dollar's second mortgage on the property, whichever occurred first.

In October of 1985, Dollar and Louisville Inn entered into an agreement pursuant to which Louisville Inn was to pay Dollar $250,000 and deliver to Dollar $762,500 in investor notes. Dollar agreed that within five days after such payment and delivery of the notes, it would release its second mortgage on the Indiana real estate.

On August 8, 1986, Motel Resorts, John Carson and their assignees filed an action in Clark Superior Court[Footnote 1] against Reames and Newberry after Louisville Inn defaulted on its obligations. Reames and Newberry filed a third party complaint against Dollar for money damages resulting from Louisville Inn's exposure to liability to the original plaintiffs under the guaranty. Reames and Newberry claimed that Dollar wrongfully refused to release the second mortgage following delivery of the investor notes and that this refusal resulted in potential liability to Motel Resorts, Carson and their assignees under the guaranty. Dollar filed a motion to dismiss the third party complaint pursuant to Ind. Rules of Procedure, Trial Rule 12(B)(2) for lack of personal jurisdiction. The motion was granted following a hearing, and this appeal immediately followed.

ISSUE

Reames and Newberry present a single issue for our review:

Did the trial court err in granting Dollar's motion to dismiss the third party complaint for lack ...


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