United States of America v. Johnson

Filing 31

OPINION AND ORDER granting 25 Motion for Summary Judgment. Judgment is entered against the defendant in the amount of $206,313.58. The court ORDERS the Marshal to conduct a foreclosure sale of the mortgaged property. The proceeds of the foreclosure sale after payment of costs is to be applied to the government's judgment. Signed by Magistrate Judge Andrew P Rodovich on 12/17/13. (cc: USMS) (ksp)

UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF INDIANA
LAFAYETTE DIVISION
UNITED STATES OF AMERICA,
Plaintiff,
v.
KRISTENA JOHNSON,
Defendant.

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4:11-cv-4

OPINION AND ORDER
This matter is before the court on the Motion for Summary Judgment [DE 25] filed by the
plaintiff, the United States of America, on July 30, 2013. For the following reasons, the motion
is GRANTED.

Background
On January 27, 2009, the parties signed a promissory note in the principal amount of
$159,600. The note was secured by a mortgage for real estate commonly known as 4289 Nauset
Court, Lafayette, IN 47909. The mortgage was recorded in the records of the Recorder of
Tippecanoe County, Indiana on January 30, 2009. The United States of America remains the
holder of the note.
The defendant, Kristena Johnson, defaulted on her obligations under the note by failing
to repay the amount due in a timely manner. To date, Johnson owes as follows:
Principal
Interest
Subsidy recapture
Advances on taxes and insurance

$157,479.94
$29,591.27
$3,421.55
$14,007.17

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Advances for title search
Interest on advances
Late fee permitted under note
Advances for appraisal
Total

$325.00
$1,016.34
$122.31
$350.00
$206,313.58

The government has filed this action to collect the amounts due under the note to enforce
its mortgage interest by causing the mortgage real estate to be sold by the Marshal at foreclosure
sale and to have the sale proceeds remaining after payment of costs applied to the payment of its
judgment.
Johnson filed her answer on May 11, 2011, stating that the U.S. Department of
Agriculture would not reduce her payment when her income went down although it bases its
payments upon income level. She further asserted that it was the intent of the government for
her to remain in her home. The government now moves for summary judgment. Johnson
responded that she has been unsuccessful in finding a way to keep her house.

Discussion
Pursuant to Federal Rule of Civil Procedure 56(c), summary judgment is proper only if it
is demonstrated that “there is no genuine issue as to any material fact and the moving party is
entitled to a judgment as a matter of law.” Celotex Corp. v. Catrett, 477 U.S. 317, 322-23, 106
S. Ct. 2548 , 91 L. Ed. 2d 265 (1986); Kidwell v. Eisenhauer, 679 F.3d 957, 964 (7th Cir. 2012);
Stephens v. Erickson, 569 F.3d 779, 786 (7th Cir. 2009). The burden is upon the moving party
to establish that no material facts are in genuine dispute, and any doubt as to the existence of a
genuine issue must be resolved against the moving party. Adickes v. S.H. Kress & Company,
398 U.S. 144, 160, 90 S. Ct. 1598, 1610, 26 L. Ed.2d 142, 155 (1970); Stephens, 569 F.3d at
786. A fact is material if it is outcome determinative under applicable law. There must be
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evidence on which the jury could reasonably find for the nonmoving party. Anderson v. Liberty
Lobby, Inc., 477 U.S. 242, 248, 106 S. Ct. 2505, 2510, 91 L.Ed.2d 202, 212 (1986); Stephens,
569 F.3d at 786; Wheeler v. Lawson, 539 F.3d 629, 634 (7th Cir. 2008). However, summary
judgment may be entered against the non-moving party if it is unable to “establish the existence
of an essential element to [the party’s] case, and on which [that party] will bear the burden of
proof at trial . . .”. Kidwell, 679 F.3d at 964 (citing Benuzzi v. Bd. of Educ., 647 F.3d 652, 662
(7th Cir. 2011) (quoting Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 91 L.Ed.2d
265 (1986)).
The government has demonstrated that Johnson has defaulted on a promissory note.
Johnson did not deny that she has defaulted, nor has she presented any evidence to show that the
money is not due. Rather, she argues that the USDA, the agency through which she financed her
home, refused to reduce her payment based on her income level. The promissory note in this
case was made under section 502 of the Housing Act of 1949, 42 U.S.C. § 1471, et seq. This
section provides authority for direct, single family housing loans to be serviced by the Rural
Housing Service of the USDA. The regulations include instructions to the agency on how to
service loans that are in default. See 7 C.F.R. § 3550.201 et seq. These sections of the
regulations provide that eligible borrowers “may be offered payment assistance” and “may be
offered the opportunity to avoid liquidation by entering into a delinquency workout agreement”
7 C.F.R. §§ 3550.204, 3550.205. Therefore, a borrower in default does not have a right to
receive any accommodation upon default.
Johnson has not submitted any evidence to show that a genuine issue of material fact
remains. She does not dispute that she entered into and defaulted on a promissory note that the

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government holds. She has failed to show any reason that would warrant her failure to pay and
entitle her to judgment in her favor. Rather, the regulations show that a borrower does not have
a right to an accommodation in the event of a default. Because the government has demonstrated
that it is the holder of a note on which Johnson defaulted, the court GRANTS the government’s
motion for summary judgment and enters judgment against the defendant in the amount of
$206,313.58. The court ORDERS the Marshal to conduct a foreclosure sale of the mortgaged
property. The proceeds of the foreclosure sale after payment of costs is to be applied to the
government’s judgment.
ENTERED this 17th day of December, 2013
/s/ Andrew P. Rodovich
United States Magistrate Judge

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