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Setree v. River City Bank

Court of Appeals of Indiana

May 22, 2014

ROBERT R. SETREE, II, and BEVERLY L. SETREE, Appellants-Defendants,
v.
RIVER CITY BANK, Appellee-Plaintiff

APPEAL FROM THE CLARK CIRCUIT COURT. The Honorable Daniel E. Moore, Judge. Cause No. 10C01-1201-MF-69.

ATTORNEYS FOR APPELLANTS: ERIC C. BOHNET, Indianapolis, Indiana; NINAMARY BUBA MAGINNIS, Louisville, Kentucky.

ATTORNEY FOR APPELLEE: JASON A. LOPP, Wyatt Tarrant & Combs, LLP, New Albany, Indiana.

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

Page 31

OPINION

RILEY, Judge

STATEMENT OF THE CASE

Appellants-Defendants, Robert R. Setree, II and Beverly L. Setree (the Setrees), appeal the trial court's summary judgment in favor of Appellee-Plaintiff, River City Bank (River City), granting River City the right to foreclose on the Setrees' real estate.

We affirm.

ISSUES

The Setrees raise three issues on appeal, one of which we find dispositive and which we restate as: Whether principles of full faith and credit required the trial court to consider the judgments of a Kentucky court res judicata to the instant cause.

FACTS AND PROCEDURAL HISTORY

At all times relevant to this action, the Setrees were the owners of several pieces of real estate located in Kentucky and Indiana. On September 2, 2005, the Setrees executed a promissory note in favor of River City for the principal sum of $45,667.00. On October 4, 2006, the Setrees executed a second promissory note in favor of River City for the principal amount of $15,484.19. Both notes were secured by mortgages on real estate owned by the Setrees at 815 Holly Drive in Jeffersonville, Indiana and at 2095 Virginia Avenue and 5116 Roederer Drive in Louisville, Kentucky.

On November 2, 2007, the Setrees executed a third promissory note (2007 Note) by which they promised to pay River City the principal sum of $91,380.50. To secure payment on the 2007 Note, the Setrees gave River City a security interest in property located at 2061 Cardinal Lane, in

Page 32

Jeffersonville, Indiana (the Cardinal Lane Property), as well as the property located at 5116 Roederer Drive, in Louisville, Kentucky. Contemporaneously with the execution of the 2007 Note, the Setrees executed a mortgage in favor of River City on the Cardinal Lane Property. Pursuant to the provisions of the 2007 Note, the Setrees were required to pay all taxes related to the collateral securing it when due.

In 2009 and 2010, the Setrees omitted to pay Indiana real estate taxes on the Cardinal Lane Property, bringing the Setrees in default of the terms of their 2007 Note. As a result of their failure to pay the real estate taxes, the Cardinal Lane Property was sold at a tax sale in the fall of 2010. On September 29, 2011, River City paid $9,455.73 to redeem the Cardinal Lane Property from the tax buyer and an additional $3,116.55 in taxes to bring the delinquent real estate taxes current.

The mortgage securing the 2007 Note included a right to cure provision, which is triggered if a breach of one of the conditions of the Note is curable. Specifically, the clause states:

Right to Cure. If such a failure is curable and if [River City] has not given a notice of a breach of the same provision of this Mortgage within the preceding twelve (12) months, it may be cured (and no Event of Default will have occurred) if [the Setrees], after [River City] sends written notice demanding cure of such failure: (a) cures the failure within twenty (20) days; or (b) if the cure requires more than twenty (20) days, immediately initiates steps sufficient to cure the failure and ...

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