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Riviera Plaza Invs., LLC v. Wells Fargo Bank, N.A.

Court of Appeals of Indiana

May 15, 2014

RIVIERA PLAZA INVESTMENTS, LLC and HARESH SHAH, Appellants-Defendants,
v.
WELLS FARGO BANK, N.A., Appellee-Plaintiff

Page 542

APPEAL FROM THE ALLEN SUPERIOR COURT. The Honorable David J. Avery, Judge. Cause No. 02D01-1008-MF-720.

ATTORNEY FOR APPELLANT: AARON J. BUTLER, Fort Wayne, Indiana.

ATTORNEYS FOR APPELLEE: MARK D. GERTH, PETER A. VELDE, Kightlinger & Gray, LLP, Indianapolis, Indiana.

BRADFORD, Judge. RILEY, J., and ROBB, J., concur.

OPINION

BRADFORD, Judge.

CASE SUMMARY

On July 7, 2006, Appellant-Defendant Riviera Plaza Investments, LLC executed a fixed rate promissory note ("Note") by

Page 543

which it promised to pay Citibank N.A., a national banking association, successor, by merger, to Citibank, FSB, a federal savings bank ("Citibank") the sum of $2,925,000.00 plus interest. On that same date and in connection to the Note, Riviera also executed a mortgage on certain real estate owned by Riviera, and any improvements located thereon ("Mortgage"), and Appellant-Defendant Haresh Shah executed a loan guaranty ("Guaranty"). Riviera subsequently defaulted on the loan.

The Note, Mortgage, and Guaranty (collectively the "Loan Documents") were eventually assigned to Appellee-Plaintiff Wells Fargo Bank, N.A. ("Wells Fargo"), which then became involved in ongoing collection and foreclosure proceedings against Riviera and Shah (collectively, "Appellants"). On May 13, 2013, the trial court issued its order of judgment. With regard to Riviera, the trial court granted Wells Fargo's motion for summary judgment. With regard to Shah, the trial court entered judgment in favor of Wells Fargo and against Shah.

On appeal, Appellants contend that the trial court erred in finding in favor of Wells Fargo. Specifically, Appellants claim that the record does not support the trial court's determination that (1) the Loan Documents were properly assigned to Wells Fargo, (2) Wells Fargo was entitled to recover from Appellants, (3) the assignment of the right, title, and interest of the Loan Documents did not amount to a material alteration of the Loan Documents which would release Shah from his obligation under the Guaranty, and (4) Wells Fargo was entitled to an award of interest. Finding no error by the trial court, we affirm.

FACTS AND PROCEDURAL HISTORY[1]

On July 7, 2006, Riviera, by Shah, for value received, executed and delivered a Note by which it promised to pay Citibank the sum of $2,925,000.00 in monthly installment payments of principal plus interest in the sum of $19,166.33 per month at an annual rate of 6.85 percent. On the same date, Riviera, again by Shah, executed a Mortgage in order to secure the payment of the Note. Also on that date, Shah executed a Guaranty[2] in favor of Citibank. Pursuant to the terms of the Guaranty, Shah guaranteed the prompt, complete, and full payment and performance of Riviera's obligations in accordance with the terms of the Note.

Riviera failed to make the scheduled monthly payments on the Note. As a result of Riviera's failure to make the scheduled monthly payments on the Note, Citibank informed Riviera that it was in default and, on August 27, 2010, initiated foreclosure proceedings against Riviera. On October 28, 2010, Riviera filed a motion for judgment on the pleadings/objection to prosecution of case by a plaintiff who is not a

Page 544

real party in interest, claiming that Citibank had sold the loan at issue to a third party and was no longer the real party in interest. The trial court scheduled a hearing on Riviera's motion for November 23, 2010.

On November 17, 2010, LSREF2 Nova Investments, LLC (" Nova" ) filed an appearance and a request to be substituted as the plaintiff due to an assignment by Citibank to Nova of Citibank's right, title, and interest in the Loan Documents. The trial court scheduled a hearing on Nova's motion for the same time as the hearing that was previously scheduled for Riviera's motion for judgment on the pleadings. On November 22, 2010, Riviera informed the trial court that it did not object to Nova's motion to substitute. The trial court thereafter granted Nova's motion and vacated the hearings scheduled for November 23, 2010.

On December 14, 2010, Nova filed a motion for leave to amend its complaint to add Shah as an additional defendant based upon his execution of the Guaranty. The trial court issued an order stating that Nova's motion would be granted unless either Riviera or Shah objected within ten days. Neither Riviera nor Shah objected, and, on January 4, 2011, the trial court granted Nova's motion to amend its complaint to include Shah as an additional defendant.

On February 3, 2011, Appellants filed their answer to the amended complaint. Appellants did not deny or challenge the validity of Citibank's assignment of the Loan Documents to Nova in this pleading.

On February 9, 2011, Wells Fargo filed a request to be substituted as the plaintiff due to an assignment by Nova to Wells Fargo of Nova's right, title, and interest in the Loan Documents. Neither Riviera nor Shah objected to Wells Fargo's motion, and, on February 16, 2011, the trial court granted Wells Fargo's motion. Neither Riviera nor Shah took any subsequent steps to set aside the trial court's order or seek reconsideration of the order. In addition, neither Riviera nor Shah filed any subsequent pleadings in which they denied that Wells Fargo was the real party in interest or challenged the authenticity of the assignment.

Wells Fargo subsequently filed a motion for summary judgment which was denied by the trial court on November 21, 2011. On May 2, 2012, Riviera filed a bankruptcy petition. With respect to Riviera, the trial court stayed the case pending the conclusion of the bankruptcy proceedings. With respect to Shah, the trial court conducted an evidentiary hearing on June 19, 2012. Following the conclusion of the presentation of evidence, the trial court took the matter under advisement.

In October of 2012, Wells Fargo notified the trial court of the dismissal of Riviera's bankruptcy proceedings and filed a renewed motion for summary judgment. On November 12, 2012, the trial court conducted a hearing on Wells Fargo's motion for summary judgment. On May 13, 2013, the trial court issued its order of judgment. With regard to Riviera, the trial court granted Wells Fargo's motion for summary judgment. With regard to Shah, the trial court entered judgment in favor of Wells Fargo and against Shah. On July 15, 2013, the trial court entered a decree of foreclosure. This appeal follows.

DISCUSSION AND DECISION

I. Standard of Review

A. Summary Judgment Against Riviera

With respect to Riviera, the trial court granted Wells Fargo's motion for summary judgment.

Page 545

Pursuant to Rule 56(C) of the Indiana Rules of Trial Procedure, summary judgment is appropriate when there are no genuine issues of material fact and when the moving party is entitled to judgment as a matter of law. When reviewing a decision to grant summary judgment, this court applies the same standard as the trial court. Best Homes, Inc. v. Rainwater, 714 N.E.2d 702, 705 (Ind.Ct.App. 1999). We must determine whether there is a genuine issue of material fact requiring trial, and whether the moving party is entitled to judgment as a matter ...

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