Sumrall v. Lesea, Inc

234 N.E.3d 230

Lester L. SUMRALL, Appellant-Defendant/Counterclaim Plaintiff

v.LESEA, INC., Appellee-Plaintiff/Counterclaim Defendant

Court of Appeals Case No. 23A-PL-2214

Court of Appeals of Indiana.

Filed April 30, 2024

Appeal from the St. Joseph Circuit Court, The Honorable John E. Broden, Judge, Trial Court Cause No. 71C01-1903-PL-84

Attorney for Appellant: Philip E. Hesch, Hesch Law Office, LLC, Elkhart, Indiana

Attorneys for Appellee: Louis T. Perry, Emily A. Kile-Maxwell, Faegre Drinker Biddle & Reath LLP, Indianapolis, Indiana

Crone, Judge.

Case Summary

[1] Lester L. Sumrall (Lester) appeals an order granting a motion for judgment lien on real estate in favor of LeSEA, Inc. (LeSEA). Lester also appeals the denial of his motion to continue a hearing. We affirm.

Facts and Procedural History

[2] In an unpublished decision, a different panel of our Court provided a detailed history of the events that ultimately led to the current appeal. See Sumrall v. LeSEA, Inc., No. 22A-PL-45, 2022 WL 17749955, at *1-5 (Ind. Ct. App. Dec. 19, 2022) (Sumrall Z). We recite pertinent highlights. In March 2016, almost forty years after certain "bonds became due and well after the [six-year] statute of limitations had expired," Lester filed a bond debt notice against LeSEA. Id. at *7. In the notice, which was filed with the St. Joseph County Recorder, Lester asserted that a $172,967.69 debt was "now due and owing." Id.

[3] In a warranty deed dated November 6, 2018, Ryan T. Marcott conveyed and warranted certain real property, 53646 Bridgewater Court, in Elkhart County (the Bridgewater Property) to Lester for ten dollars and other valuable consideration. Appellant’s App. Vol. 2 at 119, 122-24. The warranty deed originally identified Lester "and Sarah Sumrall, Husband and Wife," as grantee, but the quoted language was scratched out and initialed. Id. at 122. The identity of the person who initialed the change is unclear, as is the reason for the change. On November 15, 2018, "Lester Sumrall, A Married Man[,]" was identified as the sole borrower on a mortgage taken out on the Bridgewater Property. Id. at 109. On November 20, 2018, Lester executed and submitted to the Elkhart County Recorder a quitclaim deed. Lester was listed as the "Owner" who quitclaimed the Bridgewater Property to "Lester L. Sumrall and Sarah J. Sumrall, as Co-Trustees of The Lester and Sarah Sumrall Trust dated November 19, 2018 [hereafter, the Sumrall Trust], for no consideration[.]" Id. at 101.

[4] The Sumrall Trust, which is dated November 19, 2018, and was signed by Lester and Sarah, identifies Lester and Sarah as "both Settlors and Co-Trustees." Id. at 130. The Sumrall Trust provides in pertinent part as follows:

The Settlors reserve the right and power, jointly or individually, at any time and from time to time while living to revoke in whole or in part this Trust and to withdraw any … property … belonging to the trust estate or any part thereof; or to alter or amend any term or provision of the Trust, except that the Settlors shall have no power to change the duties of the Trustee without the Trustee’s written consent. During the lifetime of the Settlors, the Trustee shall distribute to the Settlors, or as either of the Settlors may otherwise direct inwriting, the net income of the Trust, and the Trustee shall pay any or all of the principal of the Trust as either of the Settlors may direct in writing.

Id. at 131. In addition, the document provides that upon the death of the surviving settlor, the Sumrall Trust "shall thereafter be irrevocable and not subject to alteration or amendment by any person." Id. at 132. The Sumrall Trust further provides that after the death of both Lester and Sarah, their children shall be the residual beneficiaries. Id. at 135-36.

[5] Circling back to the $172,967.69 bond debt notice, in 2019, LeSEA filed a complaint against Lester in St. Joseph County. LeSEA sought a declaratory judgment and argued that Lester had slandered title to LeSEA’s real property by recording an invalid bond notice. Lester lodged counterclaims, which requested declaratory relief and specific performance and alleged that LeSEA had breached a contract by failing to redeem the bonds.

[6] In 2020, the trial court granted summary judgment to LeSEA in its slander of title action. In October 2021, the trial court issued an "order granting [prevailing party] LeSEA $136,721.98 in attorney fees" (Original Attorney Fees). Sumrall 1, 2022 WL 17749955, at *1. As for Lester’s breach of contract counterclaim, the trial court granted summary judgment in favor of LeSEA in December 2021. Lester appealed.

[7] In its December 2022 decision, the Sumrall 1 panel reiterated evidence that Lester had recorded the false bond debt notice, that "a sale of certain property was unable to close until the Bond Debt Notice was released," and that, consequently, LeSEA incurred substantial legal expenses to secure the release. Id. at *7. Concluding that summary judgment was appropriate in both instances and finding no abuse of discretion in the award of Original Attorney Fees, the Sumrall 1 panel affirmed.

[8] On May 1, 2023, LeSEA filed with the trial court a motion for additional attorney fees (Appellate Attorney Fees) generated by the Sumrall 1 appeal. On or about June 12, 2023, Lester filed a motion arguing against Appellate Attorney Fees. On June 13, 2023, LeSEA filed its "Motion for Judgment Lien on Real Estate," which referenced the judgment of Original Attorney Fees, requested that the trial court enter a lien on the Bridgewater Property, and included exhibits. Appellant’s App. Vol. 2 at 99. On June 15, 2023, LeSEA filed a motion requesting leave to file a reply in support of its motion for Appellate Attorney Fees. On June 16, 2023, Lester filed a motion stating that he had no objection to LeSEA filing a reply. He also asked the trial court to set the matter for a hearing and require that all briefs be submitted "within ten (10) days of the hearing." Id. at 151.

[9] On June 20, 2023, the trial court granted leave to LeSEA to file a reply in support of its motion for Appellate Attorney Fees. Also on June 20, the trial court scheduled an August 1, 2023 hearing to be conducted via Zoom (Zoom hearing). On June 21, 2023, Lester filed both an objection to LeSEA’s motion for judgment lien against the Bridgewater Property and a motion requesting that the matter be set for hearing "no sooner than forty-five (45) days from the filing of this Motion, with briefs and arguments on the issues due ten (10) days before the hearing." Id. at 154.

[10] One week prior to the Zoom hearing, Lester filed a motion to continue it. In his motion, Lester asserted that time constraints prohibited him from presenting testimony at a July 2023 hearing¹ and that he would be unable to attend the Zoom hearing because he would be out of the country "on a speaking engagement[.]" Id. at 170. On July 26, 2023, Lester filed a brief addressing Appellate Attorney Fees and a separate brief concerning the judgment lien on the Bridgewater Property. Also filed that same day was LeSEA’s objection to Lester’s motion to continue the Zoom hearing. LeSEA contended, inter alia, that time was of the essence because at the July hearing, Lester had "testified that he may be filing bankruptcy[.]" Id. at 177.

[11] On July 28, 2023, the trial court entered an order denying Lester’s motion for continuance. Within its order, the trial court found that the hearing had been set more than a month ago and reiterated that it would be conducted via Zoom. The trial court further found that "no testamentary evidence will take place, but instead the Court will hear argument from counsel on the fully briefed Motions." Id. at 50.

[12] At the Zoom hearing, the trial court heard argument from counsel and took the matter under advisement. In an August 23, 2023 order, the trial court granted LeSEA’s motion for Appellate Attorney Fees, halved the requested amount, and explained its reasoning as follows:

The Court believes it is of critical importance that [Lester] is not assessed any attorney fees for professional services unrelated to the slander of title issue. Therefore, in an abundance of caution to insure [Lester] is not assessed any attorney fees for work performed by [LeSEA’s] counsel unrelated to the slander of title issue, the Court reduces the global fee for the professional services proved by [LeSEA’s] counsel by Fifty Per Cent (50%). Thus, [LeSEA’s] Motion for Appellate Attorney Fees is GRANTED but in the amount of $12,384.75.

Appealed Order at 5. The trial court also granted LeSEA’s motion for judgment lien on the Bridgewater Property. Without "questioning [Lester’s] motives for placing [the Bridgewater] property in a trust," the trial court concluded that "the legal impact of placing the real property in a revocable trust where the Trust instrument freely allows the property to be removed from the Trust at any time is much different than placing the real property in an irrevocable trust." Id. at 6-7.

[13] On September 20, 2023, Lester filed a notice of appeal that identified only the August 23 order. Lester filed his appellant’s brief, and LeSEA filed its appellee’s brief. Lester filed his reply brief. LeSEA filed a motion to strike the reply brief or, alternatively, for leave to file a surreply. Lester filed an answer to LeSEA’s motion. We denied the motion to strike and granted leave to file a surreply.

Discussion and Decision

Section 1 - Lester has not demonstrated that the entry of a judgment lien violated due process.

[1, 2] [14] Lester intertwines due process concerns with the denial of his motion to continue the Zoom hearing. The standard of review for due process is well settled. "Whether a party was denied due process is a question of law that we review de novo." Miller v. Ind. Dep’t of Workforce Dev., 878 N.E.2d 346, 351 (Ind. Ct. App. 2007). "The fundamental requirement of due process is the opportunity to be heard at a...