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Lodge v. Stout

Court of Appeals of Indiana

June 14, 2019

Flatrock River Lodge, Appellant-Plaintiff,
v.
Morris Stout and Tonia Sue Stout, Appellees-Defendants.

          Appeal from the Rush Circuit Court The Honorable David E. Northam, Judge Trial Court Cause No. 70C01-1609-CC-294

          ATTORNEY FOR APPELLANT Patrick C. Badell Badell & Wilson, P.C. Rushville, Indiana

          ATTORNEY FOR APPELLEES Jack A. Tandy Tandy Law, LLC Shelbyville, Indiana

          NAJAM, JUDGE

         Statement of the Case

         [¶1] Flatrock River Lodge ("Flatrock") appeals the trial court's order denying Flatrock's motion to execute on its judgment lien upon Morris Stout's interest in real estate previously owned by Morris and Tonia Stout as joint tenants with right of survivorship. Flatrock presents a single issue for our review, namely, whether Morris' interest in the real estate as a joint tenant was exempt from execution on Flatrock's judgment lien during his lifetime. Tonia counters that Flatrock's appeal was moot upon Morris' death when she became the sole owner of the real estate. We hold that Flatrock's appeal is not moot and that the real estate is not exempt from execution on the judgment lien.

         [¶2] We reverse.

         Facts and Procedural History

         [¶3] In 1985, Maurice and Lucille Stout deeded forty-six acres of real estate in Rush County to their son Morris and their granddaughter Tonia as joint tenants with right of survivorship ("the real estate"). On September 2, 2016, Flatrock, a health care provider, filed a complaint on account against Morris seeking judgment for a balance Morris owed Flatrock in the amount of $39, 238.28 plus attorney's fees. Flatrock also filed a notice of lis pendens with respect to the real estate in the Rush County Recorder's Office. On September 16, Tonia moved to intervene, and the trial court granted her motion. Thereafter, Flatrock and Morris entered into an agreed judgment, approved by the trial court on September 23, whereby judgment was entered against Morris and in favor of Flatrock in the amount of $40, 144.28. The Rush County Clerk entered the judgment in the record of judgments and orders ("RJO") on September 27.

         [¶4] On January 18, 2018, Flatrock filed a Trial Rule 69 motion for execution and foreclosure on the judgment lien. In response, Tonia filed a memorandum stating that, because she and Morris had acquired title to the real estate as joint tenants with right of survivorship, their joint interest should be treated like a tenancy by the entireties. Thus, Tonia asserted that Morris' interest in the real estate was exempt by statute from execution. Following a hearing on March 12, the court denied Flatrock's motion. Flatrock filed a motion to correct error, which the court also denied. On August 14, Flatrock filed a notice of appeal. And on October 14, Morris died.[1]

         Discussion and Decision

         [¶5] Flatrock contends that the trial court erred when it denied its motion to execute on the judgment lien. While the trial court did not state a reason for its denial, the parties agree that the trial court must have concluded that Morris' interest in the real estate was exempt by statute from execution. Where, as here, the relevant facts are not in dispute and the interpretation of a statute is at issue, such statutory interpretation presents a pure question of law, and our review is de novo. Clem v. Watts, 27 N.E.3d 789, 791 (Ind.Ct.App. 2015).

         [¶6] We first address Tonia's contention that, because Morris died in October 2018, this appeal is moot. Tonia maintains that because she was a joint tenant with right of survivorship in the real estate, Morris' interest in the real estate became hers at his death free and clear of any judgment lien. Tonia would disregard the fact, however, that Flatrock's money judgment against Morris became a lien on Morris' interest in the real estate when the Rush County Clerk entered the agreed judgment in the RJO on September 27, 2016, two years before Morris' death. See Arend v. Etsler, 737 N.E.2d 1173, 1175 (Ind.Ct.App. 2000) (stating that a money judgment becomes a lien on the debtor's real property when the judgment is recorded in the judgment docket in the county where the realty held by the debtor is located). Thus, Tonia takes Morris' interest in the real estate subject to Flatrock's judgment lien. Jones v. Chandler, 40 Ind. 588, 590 (1872). The lien was not extinguished at Morris' death, and this appeal is not moot.

         [¶7] The dispositive issue presented on appeal is whether Indiana Code Section 34-55-10-2(c)(5) (2018), which provides that "[a]ny interest that the debtor has in real estate held as a tenant by the entireties" is exempt from execution of a judgment lien, also exempts from execution an interest in real estate held as a joint tenant with right of survivorship. Flatrock contends that the trial court erred when it denied its motion to execute its judgment lien on the real estate. In particular, Flatrock maintains that, contrary to Tonia's assertion to the trial court, subsection 2(c)(5) of the exemption ...


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