L. Ray Yeager, and Phyllis L. Yeager, Appellants-Defendants,
Deutsche Bank National Trust Company, as Trustee of the Residential Asset Securitization Trust 2005-A1, Mortgage Pass-Through Certificates, Series 2005-A Under the Pooling and Servicing Agreement Dated March 1, 2005, Appellee-Plaintiff.
from the Floyd Superior Court Trial Court Cause No.
22D01-1201-MF-20, The Honorable Susan L. Orth, Judge
Attorney for Appellants Harry B. O'Donnell IV
Attorneys for Appellee Tammy L. Ortman Jennifer S. Ortman
Lewis & Kappes, P.C.
In this interlocutory appeal, L. Ray Yeager and Phyllis L.
Yeager (collectively, the "Yeagers") appeal the
trial court's provisional order for payment of mortgage,
taxes, and insurance premiums (the "Provisional
Order") in a foreclosure action. The Yeagers raise one
issue which we revise and restate as whether the court abused
its discretion by failing to conduct an inquiry into the
Yeagers' ability to pay prior to issuing the Provisional
Order. We reverse and remand.
and Procedural History
On November 5, 2004, the Yeagers executed a promissory note
(the "Note") in favor of First Bank, Inc. promising
to make monthly principal and interest payments of $1,
871.61, and a mortgage (the "Mortgage") granting a
security interest in their residential real estate in Floyd
County, Indiana (the "Real Estate") in favor of
First Bank, Inc. and Mortgage Electronic Registration
Systems, Inc. as nominee for First Bank. An assignment of
Mortgage, dated July 13, 2011, and recorded on July 21, 2011,
assigned the Mortgage to Deutsche Bank (the
"Bank"). On January 30, 2012, the Bank filed a
complaint for Foreclosure of Note and Mortgage alleging that
the Yeagers defaulted on the Note for failure to make
payment. A default judgment and decree of foreclosure was
entered against the Yeagers on July 10, 2012.
On February 21, 2014, the Bank filed a motion for leave to
amend the entry of default judgment and decree of foreclosure
to correct an error in the legal description of the Real
Estate. On August 26, 2015, the Bank, with leave of the
court, filed an amended complaint, which revised the legal
description of the Real Estate and identified additional
necessary parties holding a record interest in the Real
Estate. On October 9, 2015, the Yeagers filed an answer to
the amended complaint.
On March 4, 2016, the Bank filed a Motion For Payment of
Mortgage, Taxes, and Insurance Premiums. In its motion, the
Bank requested that the court issue a provisional order
requiring the Yeagers to make payments in the amount of $1,
871.61 on the Note and Mortgage and citing Ind. Code §
motion also requested that the court order the Yeagers to
make property tax payments, to provide proof of payment of
insurance premiums, and to provide proof of a hazard
insurance policy. On March 8, 2016, the court issued a
Provisional Order which granted the Bank's request, and
ordered the Yeagers to pay $1, 871.61 per month and to
provide proof of payment of property taxes and proof of
insurance. On March 18, 2016, pursuant to the Provisional
Order, the Yeagers provided proof of payment of property
taxes and proof of insurance. The Yeagers now appeal the
court's Provisional Order.
The issue is whether the trial court abused its discretion by
failing to conduct an inquiry into the Yeagers' ability
to pay prior to issuing the Provisional Order. We generally
review interlocutory orders under an abuse of discretion
standard. In re Estate of Long, 804 N.E.2d 1176,
1178 (Ind.Ct.App. 2004); Hollingsworth v. Key Benefit
Adm'rs, Inc., 658 N.E.2d 653, 655 (Ind.Ct.App.
1995), reh'g denied, trans. denied.
"'An abuse of discretion may occur if the trial
court's decision is clearly against the logic and effect
of the facts and circumstances before the court, or if the
trial court has misinterpreted the law.'" In re
Estate of Long, 804 N.E.2d at 1178 (quoting
Hollingsworth, 658 N.E.2d at 655 (internal citation
The Yeagers argue that Ind. Code § 32-30-10.5-8.6, the
Indiana Rules of Trial Procedure, Floyd County Local Rules,
and principles of due process do not allow for the entry of
an ex parte Provisional Order. They point out that, contrary
to the Indiana Rules of Trial Procedure and Floyd County
Local Rules, the Bank's motion was not accompanied with
any notice of hearing, that, contrary to the Floyd County
Local Rules, the trial court did not set a hearing on the
matter nor did the Bank request one, the court issued the
Provisional Order without providing the Yeagers time to
respond to the Bank's motion, and the trial court did not
modify the Bank's proposed order or explain its reasoning
for not holding a hearing.
The Bank argues that the Provisional Order did not require a
hearing, that entry of the Provisional Order was
"specifically authorized by statute, " and that the
court's issuance of the Provisional Order, without a
hearing, is neither a due process violation nor an abuse of
discretion. Appellee's Brief at 8. It maintains that the
Provisional Order "did nothing more than direct such
matters as permitted by statute, " specifically,
ordering the Yeagers to pay an amount that does not exceed
their monthly obligation under the Note and Mortgage.
Id. at 10. The Bank also asserts that neither the
Indiana Rules of Trial Procedure nor the Floyd County Local
Rules require a hearing prior to the entry of a provisional
order under the statute. The Bank further contends that a
hearing was not required to satisfy due process of law
because "no protected interest is implicated, " and
the Yeagers failed to "identify injuries to person,
property, or reputation" due to the Provisional Order.
Id. at 13, 15. In reply, the Yeagers contend that
the statute does not contain a provision which
"'permits' or allows for consideration or entry
of a provisional order under I.C. 32-30-10.5-8.6(b) ex
parte, " and that the court should have held a
hearing on the Bank's motion. Appellant's Reply Brief
Ind. Code § ...