East Point Business Park, LLC, Fieldview Properties, LLC, and Karen Rusin, Appellants-Defendants,
Private Real Estate Holdings, LLC, Appellee-Plaintiff
[Copyrighted Material Omitted]
from the Lake Superior Court. The Honorable John M. Sedia,
Judge. Trial Court Cause No. 45D01-1102-MF-40.
FOR APPELLANT FIELDVIEW PROPERTIES, LLC AND KAREN RUSIN:
David J. Tipton, Densborn Blachly, LLP, Indianapolis,
FOR APPELLANT EAST POINT BUSINESS PARK, LLC: Geoffrey G.
Giorgi, Giorgi & Bebekoski, LLC, Merillville, Indiana.
FOR APPELLEE: Megan L. Craig, John R. Craig, Craig, Craig &
Maroc, LLC, Crown Point, Indiana.
Judge. Baker, J., and Bailey, J., concur.
Appellants-Defendants East Point Business Park, LLC ("
East Point" ), Fieldview Properties, LLC, ("
Fieldview" ) and Karen Rusin (" Rusin" )
(collectively " the Defendants" ) challenge the
Lake Superior Court's grant of summary judgment in favor
of Appellee-Plaintiff Private Real Estate Holdings, LLC
(" PREH" ), in PREH's foreclosure action
against the Defendants.
and Procedural History
East Point is a limited liability company formed for the
purpose of acquiring a 124-acre parcel of real estate ("
the Property" ) in Crown Point, Indiana, and developing
a business park for lease and eventual sale. The members of
East Point are Fieldview and another group called Investors
of East Point, LLC (" IEP" ). IEP owns a 70%
interest in East Point and Fieldview a 30% interest. While
Rusin is the sole owner of Fieldview, IEP is owned by:
Michael Barrett (" Barrett), who owns a 50% interest;
Sheridan Investors, LLC (" Sheridan" ), which owns
a 25% interest; and Lake Charles Investors, LLC (" Lake
Charles" ), which owns the remaining 25% interest.
Sheridan is itself owned by Don and Pat Manhard, and Lake
Charles by Pete and Lynn Manhard. Accordingly, Barrett owns a
35% interest in East Point, and Sheridan and Lake Charles
each own a 17.5% interest.
On May 1, 2006, East Point purchased the Property from
Fieldview for a purchase price of $4.9 million. The purchase
was financed by loans from Private-Bank (" the
Bank" ), an Illinois bank based in Chicago. East Point
borrowed $2.2 million, and Fieldview borrowed $2.7 million.
The loans were secured by promissory notes and mortgages on
the Property. East Point's mortgage was listed as a
primary mortgage, and Fieldview's mortgage
was listed as a secondary mortgage. In addition, Rusin,
Barrett, and the Manhards all personally guaranteed the loan
to East Point.
During the development of the Property, East Point received
three loan renewals from the Bank, each extending the
maturity date of the East Point loan. The first renewal
extended the maturity date to March 15, 2009; the second
renewal extended the maturity date to March 15, 2010; and the
third renewal extended the maturity date to September 15,
2010. This renewal process also involved two
other loans involving the Manhards, and the Bank desired to
keep the Manhards as clients.
East Point's loan had an " interest reserve"
feature that allowed East Point to borrow from the loan
commitment to pay the interest due on the loan, thereby
increasing the balance of the loan. East Point did this to
fund development costs and to pay Fieldview's two yearly
loan payments of $32,500. Although the East Point loan was
not formally tied to other loans via cross-collateralization,
the Bank viewed the East Point loan together with the loans
to Barrett and the Manhards for purposes of determining the
Bank's aggregate credit exposure.
The Bank funded East Point's first draw request in 2009,
and East Point used the money from this draw to make three
$32,500 payments on the Fieldview loans. The Bank also funded
two other draw requests, the last being a $33,000 draw to pay
the March 2010 Fieldview mortgage payment, which was funded
on March 15, 2010, the maturity date of the East Point loan,
which was later extended to September 15, 2010, as noted
In July 2010, the Bank and East Point discussed the loan.
East Point wanted the Bank to extend the maturity date once
again. The Bank proposed that $500,000 of debt from one of
the other Manhard loans be transferred to the East Point
loan, the reason being that the loan-to-value ratio of one of
the Manhard loans was too high, whereas the loan-to-value
ratio of the East Point loan was within the Bank's
underwriting criteria. One of East Point's agents, Tom
Sherman (" Sherman" ), told the Bank that shifting
this debt was a problem because the East Point loan involved
Barrett and Rusin in addition to the Manhards. The Bank
responded that it had issues with a long-term loan renewal on
the East Point loan because Barrett had an unrelated loan on
property with an outstanding tax payment.
[¶9] On September 8, 2010, East Point
submitted another draw request to the Bank for $32,500 to pay
the Fieldview loan payment. Although the loan had not yet
matured, and funds were available in the loan commitment, the
Bank did not fund the draw request, nor did the Bank respond
to the request or provide East Point with an explanation of
the failure to fund the requested draw.
On September 10, 2010, five days before the maturity date of
the East Point loan, Sherman and Tom Manhard met with the
Bank's loan officers. The East Point offer was modified
to include payment of Barrett's outstanding property
taxes. East Point's proposal also included transferring
$300,000 of debt to East Point with an eighteen-month
extension of the maturity date with an option for an
additional eighteen-month extension. It also proposed
eliminating the interest reserve and draw feature, thereby
requiring East Point to make its payments from funds other
than the loan itself.
East Point contends that the Bank agreed to this renewal, as
evidenced by the Bank's asset report, which states:
" Pape and Ahern [the Bank's agents] met with [the]
Manhards on 09/10/10 and they have agreed to [the] plan above
and bank needs to formalize the proposal above."
Appellants' App. p. 1350. However, the alleged renewal
agreement was never reduced to writing.
On November 29, 2010, the Bank made an internal report
indicating that it was " scrapping" the proposed
East Point loan renewal. On December 10, 2010, the Bank sent
a demand letter to East Point and its guarantors, declaring
that the loan was in default due to the maturation date
having passed, and demanded payment of the balance of the
loan within ten days. The Bank subsequently presented a
pre-negotiation agreement to East Point and its guarantors,
which contained a provision stating, " Borrower
acknowledges and agrees that Lender is not in default under
any of Lender's obligations contained in the Loan
Documents," and " Borrower acknowledges and agrees
that Lender has . . . performed all of Lender's
obligations and agreements . . . that all actions taken to
date by Lender . . . have been reasonable . . . in good
faith, and within lender's rights under the loan
documents and applicable law." Appellants' App. pp.
1216, 1218. East Point and its guarantors refused to sign
this agreement and sent a revised version of the agreement to
the Bank. The Bank never signed the revised agreement and
filed suit against East Point and its guarantors on February
After filing suit, the Bank made a joint forbearance proposal
to East Point and two of the other Manhard loans. The
Bank's proposal called for cross-defaults among the three
loans and their guarantors, and called for Fieldview to
assign its mortgage to the Bank as security for Rusin's
guarantee of the East Point loan. The borrowers rejected the
The Bank subsequently settled with the Manhards and Barrett
under agreements that provided that the Manhards and Barrett
would pay $350,000 to settle their liability with the Bank as
guarantors of the East Point loan. One provision of the
settlement agreements provided that the Manhards and Barrett,
or any entity they controlled:
Shall not, directly or indirectly, provide any loans, capital
contributions or financial assistance to East Point,
Fieldview or IEP; contest, delay, hinder, interfere with or
otherwise affect the prosecution of the Foreclosure Action;
provide any assistance to East Point in contesting, delaying
or hindering the Foreclosure
Action; consent to, approve or acquiesce in any amendment to
the Operating Agreement of East Point or IEP which is in any
manner adverse to the Bank; and sell, assign, transfer,
encumber or consent to any transfer of any interest in East
Point or IEP.
App. pp. 1223, 1362, 1371. After signing the settlement
agreements, Barrett and the Manhards notified Rusin that they
were resigning their management roles at East Point. On
September 26, 2011, the Bank dismissed Barrett and the
Manhards from the suit. The remaining defendants were East
Point, Fieldview, and Rusin. Since Rusin was the sole owner
of Fieldview, and Fieldview the only non-settling owner of
East Point, the remaining defendant is effectively Rusin.
Fieldview filed a counterclaim on May 18, 2011, alleging
tortious interference with the contract and inducement of
breach of contract, breach of contract, and abuse of process.
Fieldview also sought to foreclose on its secondary mortgage
on the Property.
On September 27, 2012, the Bank sold the East Point loan to
PREH, who was substituted as the plaintiff. On July 20, 2013,
PREH filed a motion for summary judgment. The trial court
granted the Defendants several extensions of time to file a
reply to PREH's motion for summary judgment. The last of
the trial court's orders on the subject provided that
" Defendants' Response to the Motion for Summary
Judgment shall be due three (3) days after the conclusion of
the deposition of Private Bank and Trust, Co., unless
otherwise agreed by the Parties or Ordered by the
Court." Appellants' App. pp. 636-37. The
Defendants' counsel then filed a Notice to the Court of
Agreed Briefing Schedule on Motion for Summary Judgment.
Id. at 641. In this notice, the Defendants stated
that the parties had agreed that the Defendants' answer
brief to the motion for summary judgment would be due on
August 22, 2014, and that PREH's reply would be due on
August 29, 2014.
On August 22, 2014, the Defendants filed a joint brief
responding to PREH's motion for summary judgment.
However, the brief was not accompanied by any affidavits or
other designated evidence. Instead, the Defendants did not
file their designated evidence until December 24, 2014. The
Defendants also filed a motion to strike the affidavit of
PREH's principal Arshad Malik (" Malik" ) as
being contrary to his subsequent deposition testimony. PREH
filed a reply brief on August 29, 2014, in accordance to the
timeline set forth in the agreed briefing schedule.
Accompanying PREH's reply was a motion to strike the
The trial court held a summary judgment hearing on September
3, 2014. At the conclusion of the hearing, the trial court
took the matter under advisement and requested that the
parties submit proposed findings and conclusions, which the
parties subsequently did. On October 24, 2014, counsel for
Fieldview and Rusin filed a Declaration of Technical
Difficulty and Delay in filing Summary Judgment Motion
Evidence. On November 20, 2014, the trial court granted
PREH's motion for summary judgment and entered a decree
of foreclosure. The Defendants now appeal.
Judgment Standard of Review
Our standard for reviewing a trial court's order granting
a motion for summary judgment is well settled:
A trial court should grant a motion for summary judgment only
when the evidence shows that there is no genuine issue as to
any material fact and that the moving party is entitled to a
as a matter of law. The trial court's grant of a motion
for summary judgment comes to us cloaked with a presumption
of validity. An appellate court reviewing a trial court
summary judgment ruling likewise construes all facts and
reasonable inferences in favor of the non-moving party and
determines whether the moving party has shown from the
designated evidentiary matter that there is no genuine issue
as to any material fact and that it is entitled to judgment
as a matter of law. But a de novo standard of review applies
where the dispute is one of law rather than fact. We examine
only those materials designated to the trial court on the
motion for summary judgment. Our standard of review is not
altered by the fact that the parties filed cross motions for
summary judgment. Here, the trial court made findings of fact
and conclusions of law in support of its entry of summary
judgment. Although we are not bound by the trial court's
findings and conclusions, they aid our review by providing
reasons for the trial court's decision. We must affirm
the trial court's entry of summary judgment if it can be
sustained on any theory or basis in the record.
Altevogt v. Brand, 963 N.E.2d 1146, 1150
(Ind.Ct.App. 2012) (citations and internal quotations
Did the Defendants Timely File Designated Evidence?
Before addressing the merits of the Defendants'
arguments, we turn first to PREH's claim that the trial
court should not have considered any of the Defendants'
designated evidence because the evidence was not timely
filed. PREH claims that the Defendants' response to its
motion for summary judgment was due no later than May 30,
2014, which was the date listed in the trial court's
order entered on April 25, 2014, in which the court accepted
the parties' agreed motion to alter the due date of the
Defendants' response to summary judgment. PREH argues
that this was the last extension of time requested by the
Our review of the record, however, reveals that the trial
court entered several subsequent orders extending the date on
which the Defendants' response to PREH's motion for
summary judgment was due. Specifically, after PREH moved to
continue the summary judgment hearing, on May 21, 2014, the
Defendants filed an agreed motion requesting that the
Defendants' summary judgment response(s) be due no later
than June 30, 2014. The trial court granted this motion two
days later, giving the Defendants until June 30, 2014, to
file their materials in response to PREH's summary
Then again, on June 26, 2014, the Defendants filed another
agreed motion, with the consent of opposing counsel,
requesting that the trial court " alter the summary
judgment motion response date to July 17, 2014[.]"
Appellants' App. p. 627. The trial court granted this
motion the following day, ordering that: " The time for
Defendants' response to the summary judgment motion filed
by Private Real Estate Holdings LLC (" PREH') is
changed to July 17,2014[.]" Id. at 629-30.
Then, on July 16, 2014, the Defendants filed yet another
agreed motion seeking to extend the deadline for filing their
response to PREH's motion for summary judgment, this time
to July 23, 2014. The trial court granted this motion to
following day, ordering: " the time for Defendants'
response to the summary judgment motion filed by [PREH] is
changed to July 23, 2014[.]" Id. at 634.
That same day, July 17, 2014, however, the trial court issued
Order on Emergency Motion for Trial Rule 26(C)(2) Protective
Order, which ...