Full Opinion

FILED Sep 24 2026, 8:53 am CLERK Indiana Supreme Court IN THE Court of Appeals and Tax Court Court of Appeals of Indiana U.S. Bank National Association, Not in its Individual Capacity, but Soley as Trustee of the NRZ Inventory Trust, Appellant-Plaintiff v. Bradford W. Raths; Frank Spelman; Mortgage Electronic Registration Systems, Inc. as Nominee for Ruoff Mortgage Company, Inc.; Anna M. Spelman; Receivables Management Partners, LVNV Funding LLC; Ruoff Mortgage Company, Inc., Appellees-Defendants September 24, 2026 Court of Appeals Case No. 25A-MF-1692 Appeal from the Hendricks Superior Court The Honorable Rhett M. Stuard, Judge Trial Court Cause No. 32D02-2404-MF-69 Opinion by Judge May Judge Altice and Judge Foley concur. Court of Appeals of Indiana | Opinion 25A-MF-1692| September 24, 2026 Page 1 of 9 May, Judge. [1] In 2002, Frank and Anna Spelman borrowed money to buy a home in Danville and secured the debt with a mortgage. They defaulted in 2006. Their lender sued on the note, accelerated the debt, and obtained a judgment and decree of foreclosure, but never completed a sheriff’s sale and never enforced the judgment. Eighteen years later, after the house had burned, been abandoned, been sold twice, and been rebuilt from the ground up by a buyer who paid $240,000 for the new home, U.S. Bank National Association, as Trustee of the NRZ Inventory Trust (“U.S. Bank”) took an assignment of the old mortgage and filed this second foreclosure action against the current owner, Bradford W. Raths. The trial court granted summary judgment to Raths. Because the debt that the mortgage secured has been barred by the statute of limitations for well over a decade, and because in Indiana a mortgage cannot be foreclosed after the debt it secured is barred, we affirm. Facts and Procedural History [2] On April 26, 2002, the Spelmans purchased a home in Danville, Indiana, and executed an adjustable-rate promissory note and a mortgage in favor of Moore Financial Enterprises, Inc., d/b/a Lenders Diversified. The note carried a stated maturity date of April 26, 2032. The mortgage was recorded May 15, 2002. The note and mortgage were assigned to JPMorgan Chase Bank as Trustee (“Chase”) on April 26, 2002, and recorded May 7, 2003. Court of Appeals of Indiana | Opinion 25A-MF-1692| September 24, 2026 Page 2 of 9 [3] The Spelmans defaulted, and on September 25, 2006, Chase filed a complaint to recover on the note and to foreclose the mortgage in Hendricks Circuit Court under Cause No. 32C01-0609-MF-156. On October 30, 2006, the court entered a default judgment and decree of foreclosure for the accelerated balance then due, $94,944.67, which included the principal balance of $83,213.23 plus accrued interest and other fees, and ordered the property sold by the sheriff “as soon as said sale can be had under the laws of this jurisdiction.” (Appellant’s App. Vol. 3 at 36.) [4] At the end of November 2006, the Spelmans sought Chapter 13 bankruptcy protection, and an automatic stay of the foreclosure proceedings was in effect for approximately eleven months. The stay was lifted on October 26, 2007. Chase filed praecipes for a sheriff’s sale in November 2007, October 2008, April 2009, and February 2010, but no sale was ever held. The foreclosure docket fell silent for fourteen years, and the judgment was never vacated. [5] The Spelmans executed two loan-modification agreements with GMAC Mortgage, LLC in 2010 and 2011. GMAC held no recorded assignment of the mortgage, neither loan modification was recorded, and the record reflects no payment by the Spelmans under either loan. Each modification recited only that the parties agreed “to extend and carry forward the lien(s) on the Property” based on the promissory note from April 26, 2002. (Appellant’s App. Vol. 2 at 110.) Court of Appeals of Indiana | Opinion 25A-MF-1692| September 24, 2026 Page 3 of 9 [6] On February 23, 2018, the improvements were substantially damaged by fire, and the Spelmans abandoned the property. More than two years later, the Spelmans conveyed the fire-damaged parcel to Hebrews Holdings, LLC, for $20,000, and the deed was recorded November 23, 2020. Hebrews Holdings demolished the ruined structure and, in 2023, built a new single-family home on the property. Hebrews Holdings then conveyed the newly built home to Raths for $240,000, and Raths financed the purchase with a loan from Ruoff Mortgage Company, which secured the loan with a mortgage in favor of MERS. The deed was recorded December 27, 2023. [7] On February 13, 2024, Chase assigned the 2002 mortgage to U.S. Bank, and the assignment was recorded February 16, 2024. On April 22, 2024 – more than seventeen years after the 2006 judgment foreclosing the 2002 mortgage – U.S. Bank filed this action to foreclose the same mortgage and alleged the Spelmans had defaulted on April 1, 2013. On May 29, 2024, U.S. Bank amended its complaint to add Raths. [8] Raths answered and counterclaimed for declaratory relief and then subsequently moved for partial summary judgment. In his summary judgment motion, Raths argued the applicable statutes of limitations and the 2006 judgment barred enforcement of the Spelmans’ note and mortgage against him and his real estate. After a hearing on April 9, 2025, the trial court granted summary judgment for Raths after determining that the lien created by the 2006 judgment had expired under Indiana Code section 34-55-9-2 and that “[n]either Hebrew Holdings, nor Raths, would have been, or could have been, aware of Court of Appeals of Indiana | Opinion 25A-MF-1692| September 24, 2026 Page 4 of 9 the lien when the Property was purchased, because it no longer existed.” (Appellant’s App. Vol. 2 at 19.) The court further found, independently, that “it would be patently unjust” to permit foreclosure against Raths and Ruoff when U.S. Bank had done nothing to enforce the judgment while Hebrews Holdings and Raths had invested large sums in the property. (Id. at 20.) Discussion and Decision [9] We review de novo a trial court’s decision about summary judgment. Cave Quarries, Inc. v. Warex LLC, 240 N.E.3d 681, 684 (Ind. 2024). Summary judgment is warranted only where the designated materials show no genuine issue of material fact and establish the moving party’s entitlement to judgment as a matter of law. Id. at 684-85. As we conduct our review, we “view the evidence in the light most favorable to the nonmovant and draw all reasonable inferences for the nonmovant.” Id. at 685. As the appealing party, U.S. Bank must establish that the trial court’s ruling was error. Kramer v. Cath. Charities of the Diocese of Fort Wayne-South Bend, Inc., 32 N.E.3d 227, 231 (Ind. 2015). Because our review is de novo, we may sustain the judgment on any ground the record supports. Id. [10] Raths argues U.S. Bank cannot recover on the mortgage because the 2002 promissory note is no longer enforceable. The Spelmans’ note contained an optional acceleration clause, and Chase exercised that clause in September 2006 when it declared the entire balance due, sued on the note, and took judgment for the full accelerated balance in October 2006. Our Supreme Court has held Court of Appeals of Indiana | Opinion 25A-MF-1692| September 24, 2026 Page 5 of 9 that a lender’s exercise of an optional acceleration clause starts a six-year limitations period on the note under Indiana Code section 34-11-2-9.1 Blair v. EMC Mortg., LLC, 139 N.E.3d 705, 711 (Ind. 2020). Six years from the acceleration in 2006 was October 2012. Even if we include the eleven-month bankruptcy stay in the time calculation, any action on the accelerated note was time-barred by October 2013, at the latest, which would make U.S. Bank’s 2024 lawsuit untimely. [11] U.S. Bank responds by asserting it is trying to recover on the mortgage, not the note. However, Indiana adheres to the lien theory of mortgages, which makes the mortgage a “mere security” for a debt. E. Point Bus. Park, LLC v. Priv. Real Estate Holdings, LLC, 49 N.E.3d 589, 606 (Ind. Ct. App. 2015). Because a mortgage is not a freestanding obligation, “when the debt has been barred, by statute of limitations or otherwise, the mortgage also is barred.” Tennant v. Hulet, 116 N.E. 748, 750 (Ind. Ct. App. 1917). As Chase’s recovery of the Spelman debt was barred no later than October 2013, so too was the mortgage.2 It therefore could not be foreclosed in 2024. [12] That Raths is not the original borrower does not change the analysis. For example, in Willette v. Gifford, 92 N.E. 186 (Ind. Ct. App. 1910), our court noted 1 Indiana Code section 34-11-2-9 provides in relevant part that “an action upon promissory notes . . . must be commenced within six (6) years after the cause of action accrues.” 2 Given that recovery on the mortgage is barred because the underlying debt is barred, we need not address U.S. Bank’s arguments regarding whether the mortgage “merged” with the 2006 foreclosure judgment. Court of Appeals of Indiana | Opinion 25A-MF-1692| September 24, 2026 Page 6 of 9 a subsequent purchaser of land could defeat foreclosure on a mortgage entered by a prior owner of the land if the subsequent purchaser “could show the debt no longer existed, or that it had been barred by the statute of limitations[.]” Id. at 188. Herein, Raths has made that showing – the debt between the Spelmans and Chase was barred six years after Chase’s 2006 foreclosure on the accelerated debt, and the subsequent sale of neither the land to Raths nor the mortgage paperwork to U.S. Bank alters that result. The debt is barred. [13] U.S. Bank resists this conclusion based upon Indiana Code section 32-28-4-1, which indicates a mortgage lien survives until ten years after the recorded maturity date. U.S. Bank argues it therefore has a lien on the property until 2042 because the Spelmans’ 30-year note was not mature until 2032. However, in Blair, our Indiana Supreme Court explained that suing for the entire amount owed after a note’s date of maturity remains an option only if the lender “opt[s] not to accelerate” the full balance due. Blair, 139 N.E.3d at 711. When, as here, the lender opts to accelerate the debt, “rendering the full balance immediately due[,] [t]he lender must then bring a cause of action within six years of that acceleration date.” Id. [14] U.S. Bank also argues the 2006 acceleration of the note and foreclosure of the mortgage is not the last of the material facts because the Spelmans signed loan modification documents in 2010 and 2011. However, those loan modifications were executed with GMAC, and U.S. Bank provided no evidence to demonstrate an assignment of Chase’s 2002 note or mortgage to GMAC or the authority of GMAC to act on behalf of Chase. U.S. Bank has not designated Court of Appeals of Indiana | Opinion 25A-MF-1692| September 24, 2026 Page 7 of 9 evidence that the 2006 judgment was set aside, that either alleged modification of the mortgage was recorded, or that the Spelmans made any payment to Chase after those modifications. While the GMAC loan modification documents indicated the parties agreed “to extend and carry forward the lien(s) on the Property[,]” (Appellant’s App. Vol. 2 at 110), nothing demonstrates the “lien(s)” referenced was the Chase mortgage. Moreover, at the time the GMAC documents were signed, there was no existing mortgage lien to “extend and carry forward” because the debt had been accelerated and mortgage foreclosed by the 2006 judgment. [15] Finally, the equities confirm what the limitations statutes require. Mortgage foreclosure is an equitable remedy that invokes the equitable jurisdiction of the trial court. Lucas v. U.S. Bank, N.A., 953 N.E.2d 457, 466 (Ind. 2011), reh’g denied. The statutes of limitation exist to prevent precisely what U.S. Bank attempts here – a lender that waits years to re-assert its interest in a property after obtaining foreclosure.3 Chase and its successors took a judgment in 2006 and then did nothing to enforce it for eighteen years while the property burned, sat abandoned, was salvaged for $20,000, and was rebuilt into a new home for which Raths paid $240,000. The limitations statutes place the risk of that delay on the lender who slept on its rights, not on the good-faith purchaser who built 3 Raths’s counsel described the interest as a “zombie” mortgage – a long-dormant secured debt revived for foreclosure years after it appeared spent. See generally Andrea Boyack & Robert Berger, Bankruptcy Weapons to Terminate a Zombie Mortgage, 54 Washburn L.J. 451 (2015). Whatever the label, our decision rests on the applicable statutes of limitation. Court of Appeals of Indiana | Opinion 25A-MF-1692| September 24, 2026 Page 8 of 9 and paid for a new home. Enforcing the statutes here is not only compelled by law, but also produces the just result. Conclusion [16] The debt secured by the Spelman mortgage was barred by the statute of limitations more than a decade before U.S. Bank filed this action, and under settled Indiana law a mortgage cannot be foreclosed once the debt it secures is barred. The trial court correctly granted summary judgment to Raths. [17] Affirmed. Altice, J., and Foley, J., concur. ATTORNEY FOR APPELLANT Jason E. Duhn Diaz Anselmo & Associates, LLC Fort Lauderdale, FL ATTORNEY FOR APPELLEE Tammy L. Ortman Ortman Law, LLC Greenfield, Indiana Court of Appeals of Indiana | Opinion 25A-MF-1692| September 24, 2026 Page 9 of 9