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68 Legal Industry Update State Focus INDIANA INDIANA COURTS PROCLAIM PREFERENCE FOR TRIALS By: Andrew C. Clark and Stephanie A. Reinhart-Rock, MDK Title Agency In recent years the Indiana summary judg- ment standard has been subjected to some criticism and debate about whether Indiana should adopt a softened standard that is more in line with the federal standard or maintain the heightened requirements. On September 9, 2014 the Supreme Court of Indiana affirmed the heightened standard in Hughley v. State. 1 In In- diana, a party seeking summary judgment must negate an element of the other party's claim or establish an affirmative defense to the claim with undisputed evidence. is differs from the fed- eral standard wherein a party seeking summary judgment can simply assert that the other party has no admissible evidence to support its claims, also known as the "No Evidence Standard." e Supreme Court has made a deliber- ate decision to stand by Indiana's heightened standard for summary judgments, citing the desire to err on the side of letting even marginal cases proceed to trial on the merits rather than short-circuiting meritorious claims at the sum- mary judgment level. Specifically, the supreme court noted that defeating summary judgment requires only a genuine issue of material fact– not necessarily a "persuasive" one. 2 e court cites that an issue is genuine if a trier of fact is required to resolve the parties' differing accounts of the truth.3 Even perfunctory and self-serving affidavits may defeat summary judgment if the affidavit creates a dispute as to a material ele- ment of the case. While the supreme court rec- ognizes the possibility that self-serving affidavits may have little or no probative value, it dismisses this concern finding that the monetary liability for affidavits presented in bad faith or solely for the purpose of delay, in addition to the prospect of contempt against any offending party or at- torney is sufficient to deter bad faith filings. 4 While Hughley involved a criminal for- feiture matter, the precedent dictated by this decision is certain to be felt by Plaintiffs in state court foreclosure proceedings, wherein obtain- ing judgment by means of the state's summary judgment process has become the relative norm for resolving typical unsubstantiated borrower contests. For example, under this standard, it appears that a defendant-borrower who files nothing more than affidavit stating that all of his payments have been made may be granted his day in court to prove up that statement, whereas lower courts had previously held that such a self serving statement, without any additional facts to support the statement would not preclude the grant of summary judgment. In light of this decision, Plaintiffs' servicers can expect to see an increased trial docket and need for witness testimony for matters previ- ously considered routine for foreclosure actions. Plaintiffs' servicers may also choose to explore proactive use of available discovery methods as a means of eliminating factual disputes prior to requesting summary judgment. e increased time and expense associated with this height- ened standard is certain to provide additional stresses to loan servicers and plaintiffs' counsel who are routinely charged with balancing an ex- peditious foreclosure process and a cost efficient litigation strategy. 1 15 N.E.3d 1000. 2 Id. at 1004. 3 Id. 4 Id. at 1005. OHIO SUPREME COURT OF OHIO ANSWERS LINGERING STANDING QUESTION By: Andrew C. Clark, MDK Title Agency e Supreme Court of Ohio recently reviewed whether a defendant can raise lack of standing as part of a motion for relief from judgment where the defendant failed to appeal the underlying foreclosure judgment. 1 In Bank of America, N.A. v. Kuchta, the Court answered this question in the negative and determined that the failure to appeal the judgment prevented further litigation on the issue of standing. is case provides long awaited guidance regarding the finality of judg- ments in light of the Supreme Court of Ohio's 2012 decision in Federal Home Loan Mortgage Corporation v. Schwartzwald. 2 In Schwartzwald, the Supreme Court held that a party commencing litigation "must have standing to sue in order to present a judiciable controversy and invoke the jurisdiction of the common pleas court." 3 e court went on to state "a lack of stand- ing at the outset of litigation cannot be cured by receipt of an assignment of the claim or by substi- tution of the real party in interest." 4 Importantly, the Schwartzwald opinion did not include any language regarding potential retroactive applica- tion to foreclosure judgments which had become final in the days, months, or even years prior to the court's opinion. e potential retroactivity of Schwartzwald, prompted concern that proper- ties, which had been sold pursuant to otherwise final foreclosure judgments, would be exposed to extensive post-foreclosure title risk if the underly- ing judgment could be vacated though a motion for relief from judgment. In Kuchta, the foreclosure complaint was filed on June 1, 2010 and the borrowers failed to appeal the granting of plaintiff's unopposed motion for summary judgment. Plaintiff's standing was premised on an assignment of mortgage executed nine days after the complaint was filed, which is contrary to the standing requirements set forth in Schwartzwald requiring the assignment to be executed prior to complaint filing. ree months after the judgment was entered, the borrowers filed a motion for relief from judgment alleging that the plaintiff lacked standing that the trial court denied. e Ninth District Court of Ap- peals reversed the trial court's judgment based on Schwartzwald and certified the instant conflict of law appeal to the Supreme Court. e supreme court's ruling focuses on the distinction between a court's subject matter juris- diction, and a plaintiff's standing to commence an action. Specifically, the court affirmed that where a court possesses subject-matter jurisdiction, "any error in the invocation or exercise of jurisdiction over a particular case cause a judgment to be voidable rather than void." 5 e court went on to emphasize that Schwartzwald, a direct appeal, was of "limited applicability to the attempted col- lateral attack" 6 presented in this case. Ultimately, the Kuchta Court held that "[l] ack of standing is certainly a fundamental flaw that would require a court to dismiss the action, Schwartzwald at paragraph 40, and any judg- ment on the merits would be subject to reversal on appeal. But, a particular party's standing, or lack thereof, does not affect the subject-matter jurisdiction of the court in which they party is attempting to obtain relief." 7 is opinion clarifies that a judgment entered in favor of a party who lacked standing is not void, but is voidable upon a timely direct appeal. is holding resolves a significant REO title concern by clarifying the limited applicability of Schwartzwald and pre- serving the finality of foreclosure judgments. 1 Bank of Am., N.A. v. Kuchta, 2014-Ohio-4275.2 134 Ohio St.3d 13; 979 N.E.2d 1214; 2012-Ohio-5017.3 Id. at 22.4 Id. 5 Kuchta, at ¶19; citing Pratts v. Hurley, 2004-Ohio-1980 at ¶12.6 Id. at ¶21.7 Id. at ¶23.

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