Seleme v. JP Morgan Chase (IN)
Summary: Participating in a court ordered telephone settlement conference does not constitute an appearance to a foreclosure proceeding. A lack of notice prior to resuming a foreclosure proceeding when it is agreed that the case will not be dismissed does not constitute fraud or misrepresentation or give rise to an excusable neglect defense.
Seleme v. JP Morgan Chase Bank, 982 N.E. 2d 299 (2012).
Facts: In 2010, Chase Home Finance LLC (“Chase”) initiated foreclosure proceedings on an Indiana property owned by Cynthia Seleme. The Sheriff left a copy of the summons at Seleme’s address on January 29, 2010. On February 22, 2010, the cause was assigned to a facilitator, who ordered the parties to attend a telephone conference on April 1, 2010. On April 28, 2010, the court entered an order indicating that the parties participated in the telephone conference and that the conference was continued to June 8, 2010, pursuant to a forbearance plan. The chronological case summary (“CSS”) indicated that Seleme was notified of the April 28, 2010 order on May 3, 2010; however, on July 12, 2010, the court issued an order titled “Order After Settlement Conference,” indicating that Seleme did not appear for the June 8, 2010 telephone conference. The CSS showed that Seleme was notified of this order on July 14, 2010. Chase filed a motion for default judgment and entry of foreclosure on September 26, 2011, alleging that no defendant had appeared or otherwise defended and the time within which a defendant must appear, answer or otherwise defend had expired and was not extended by the court. A judgment and decree for foreclosure was entered the same day.
On March 1, 2012, Seleme filed an appearance, and a motion for relief on March 5, 2012, alleging that Chase advised her that the foreclosure would be dismissed because Chase agreed to a forbearance and was working with her under the Home Affordable Modification Program (“HAMP”). Seleme attached a letter from April, 2010, indicating her approval to enter into a trial plan under the HAMP, but that the “existing loan and loan requirements remain in effect and unchanged during the trial period.” The trial court denied her motion for relief. On appeal, Seleme argued that pursuant to Rule 60(B), the default judgment may be set aside because (a) the default judgment was void because she was denied due process with respect to notice; and (b) Chase’s actions constituted fraud or misrepresentation that resulted in Seleme’s excusable neglect and an accord and satisfaction.
Holding: Affirmed. Seleme argued that participation in the April 1, 2010 telephone conference was an appearance, and under rule 55(B), “if the party against whom judgment by default it sought has appeared in the action, he shall be served with written notice of the application for judgment at least three days prior to the hearing on such application.” The local rules require that a party to an action appearing without an attorney shall give, and the Clerk shall note on the CSS a name, a mailing address, and phone number of the party to which notices and communications may be delivered by mail. An appearance form filed by Seleme never appeared in the record at any time prior to the March 1, 2012 appearance filed by Seleme’s attorney, therefore the Appellate court stated, Seleme’s mere participation at the telephone conference did not constitute an appearance.
As to Seleme’s argument for excusable neglect and an accord and satisfaction based on fraud or misrepresentation by Chase, the court did not find Seleme to have met the burden for grounds for relief. Under Trial Rule 60(B)(3) alleging fraud or misrepresentation, a party must show that (1) “the opposing party knew or should have known from the available information that the representation mad was false,” and (2) “the misrepresentation was made with respect to a material fact which would change the trial court’s judgment.” The record indicated that Seleme did not fulfill the requirements for HAMP by the end of the trial period and that she received a letter stating that the foreclosure process may resume without further notice. Furthermore, in August 2011, in a second attempt for a modification, Seleme sent Chase a HAMP request affidavit which stated that “any pending foreclosure action will not be dismissed and may be immediately resumed from the point at which it was suspended if I fail to comply with the terms and conditions of the program.” For these reasons, the appellate court affirmed the trial court’s decision.
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