Lucas v. U.S. Bank, N.A.

953 N.E.2d 457 (Ind. 2011)

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Nature of the Case

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Facts

Ds entered into a residential mortgage loan transaction. A few months after Ds closed on the loan, disagreements arose between Ds and AMC Mortgage Services (AMC), the original loan servicer. AMC and Ds disputed whether Ds provided sufficient evidence of homeowner's insurance and paid the correct amounts of property taxes. Litton Loan Servicing took over as the loan servicer. Litton charged Ds late fees for the months of February, March, and April 2006. Ds claimed these fees were erroneous. Ds filed for bankruptcy and indicated on their bankruptcy application that they wanted to reaffirm their mortgage loan. More disagreements arose, and Ds requested that Litton discontinue their escrow account. The bankruptcy was discharged. Ds continued to incur late fees, and in October 2007, Litton sent Ds a notice of default and intent to accelerate on the loan. P as Trustee filed a complaint seeking to foreclose on the mortgaged property. P alleged that Ds failed to pay monthly mortgage payments and fees according to the terms of the mortgage loan documents. Ds filed affirmative defenses, counterclaims, a third-party complaint, and a demand for a jury trial. P then filed a motion to strike the jury request.

The trial court granted P's motion. It reasoned foreclosure is an equitable cause of action. Accordingly, the trial court concluded that Ds' related legal claims and counterclaims were drawn into equity. The court of appeals reversed. D appealed.