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Alexander v. PSB Lending Corp.12/31/2003
FOR PUBLICATION
Between October 10, 2001 and February 4, 2002, nine putative class action complaints were filed in Vanderburgh County by plaintiffs-appellants (Named Plaintiffs) on behalf of individuals and/or married couples, as well as those similarly situated, who had obtained loans secured by second mortgages on their Indiana homes. All nine complaints alleged similar violations of the Indiana Uniform Consumer Credit Code (IUCCC), namely, that excessive (greater than 2%) origination fees were charged on their second mortgage loans in violation of Ind. Code Ann. § 24-4.5-3-201(8) (West, PREMISE through 2003 1st Regular Sess.). Each complaint identified the respective lender (the Originator) that initially made the second mortgage loans to Named Plaintiffs, but only some of the complaints named the Originator as a defendant. Additionally, the complaints named over eighty entities as defendants (Non-Holder Defendants) who were not alleged to have originated or held Named Plaintiffs' loans, but rather were alleged to have purchased loans issued by the Originators to borrowers other than Named Plaintiffs. No complaint identified the current holder of Named Plaintiffs' loans.
In May 2002, the trial court consolidated the nine putative actions for pretrial purposes. All appearing defendants filed motions to dismiss alleging a variety of defects in Named Plaintiffs' complaints. The trial court heard oral argument in September 2002, and on November 11, 2002, entered a Dismissal Entry dismissing all nine putative actions for various reasons:
The defendants having filed their motions to dismiss, and the plaintiffs having filed their responses thereto, and the Court having heard the argument of counsel and being duly advised in the premises, now finds that all motions to dismiss of all defendants should be granted, based where applicable upon lack of personal jurisdiction, lack of standing, lack of standing based on bankruptcy of the particular plaintiff, arbitration agreement, and/or the "safe harbor provision" of I..C. 24-4.4-6-104 (2) .
Appellants' Appendix at 41. The Dismissal Entry did not identify which Defendants were dismissed for which reason.
On appeal, Named Plaintiffs contend that the trial court improperly granted the Defendants' motions to dismiss. The following issues are dispositive of our review:
1) Did the trial court correctly determine that Named Plaintiffs lacked standing against the Non-Holder Defendants?
2) Did the trial court correctly determine that Named Plaintiffs failed to state a claim based on the "safe harbor" provision of the IUCCC?
Affirmed in part, reversed in part, and remanded for further proceedings consistent with this opinion.
The facts are undisputed that Named Plaintiffs obtained loans secured by second mortgages on their Indiana homes between April 1997 and August 2000. The loans originated from six different lenders and ranged in amount from $17,000 to $35,000. Only two Originators remain in this appeal, Bann-Cor Mortgage Corporation (Bann-Cor) and Independent Realty Capital Corporation d/b/a Independent Mortgage Company (Independent Realty), Defendants in the Drake and Simms actions, respectively. No direct connection was alleged between the remaining sixty-four Non-Holder Defendants and Named Plaintiffs, rather, the Non-Holder Defendants are alleged holders of promissory notes relating to loans made to Named Plaintiffs and the putative class members. None of the complaints identifies the actual holders of Named Plaintiffs' loans.
In their complaints, Named Plaintiffs assert that the Defendants had violated the IUCCC, specifically, I.C. § 24
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