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Recent Court Decisions in Ohio and Indiana Regarding Default Litigation

April 18, 2022

Did the Emergency Orders issued by the Indiana Supreme Court during the outbreak of the COVID-19 pandemic toll or suspend pre- or post-judgment interest?  The Court of Appeals of Indiana says no.

In PNC Bank, NA v. Page, 2022 Ind. App. LEXIS 92, Court of Appeals Case No. 21A-MF-1974, following Indiana Statutes Ind. Code §§24-4.6-1-101, 102, & 103 as well as Ind. Code § 26-1-3.1-412; confirmed that a party’s right to prejudgment interest according to a contract is not discretionary.  In addition, the Court further confirmed that Post-Judgment interest on a money judgment is automatic pursuant to Indiana statute.  The Court reasoned that the aforementioned statutes are substantive rather than procedural, as they create, define, and regulate rights rather than prescribing the method of enforcing a right. Therefore, the Court determined that the Emergency Orders did not toll or suspend interest. 

Common risks to lien holders are when a third party initiates a foreclosure or an action that impacts the secured real estate.

Recently, in Cuyahoga Cty. Treasurer v. Unknown Heirs of Russell, 8th Dist. Cuyahoga No. 110540, 2022-Ohio-309, a lienholder was barred from asserting an interest in excess sale proceeds due to the failure of the predecessor lienholder to answer and assert its interest in the tax foreclosure case.   The Court reasoned that a defaulting junior lienholder is not entitled to share in any proceeds realized from a foreclosure sale because, in the absence of other indications in the complaint, its default can be construed as a disclaimer of interest in the property.  The lienholder, in this case, was subordinate to the tax lien and failed to answer and assert its interest in the tax foreclosure.  Therefore, the Court stated that the lienholder, including its successor in interest, has no interest and is barred from asserting a right to the excess sale proceeds.  As such, when a lienholder is named in an action that impacts the security, in this case, the real estate, it is imperative that the lien holder file an answer to avoid having its lien eliminated. 

If you have any questions or would like to discuss this or other default-related matters in Ohio, Indiana, Kentucky, or Michigan, you can contact Daniel Cox at dacox@woodlamping.com.

About the Author

Daniel A. Cox

Daniel A. Cox

Daniel Cox is a partner and manages the Default Litigation Practice Area which handles accounts in Ohio, Indiana, Michigan, and Kentucky.

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