Estate of Borgwald v. Old National Bank (IN)

Summary: A mortgage does not need to be notarized in order to be enforceable in Indiana.


Estate of Borgwald v. Old National Bank, 12 N.E.3d 252 (Ind. App. 2014).


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Facts: On March 21, 2001, Mildred Borgwald executed her Last Will and Testament, leaving $1,000 to each of her five grandchildren, with the remainder of her estate to her daughter, Lana McGee. On the same day, Mildred executed a power of attorney, designating Lana as attorney-in-fact upon a written declaration by Mildred’s doctor that she was unable to manage her own affairs. In July of 2001, Mildred’s doctor declared her "unable to manage her own affairs due to the onset of blindness," which activated the power of attorney.

In June of 2007, Mildred fell in her home and as a result she ended up needing nurse assistance in her home. She asked Raelynn, Lana’s daughter, to take care of her and offered $650 per week in exchange for Raelynn’s assistance.

In October of 2007, Raelynn accompanied Mildred to Old National Bank ("ONB") to obtain an equity line of credit against her home. Denis Keegan, an ONB representative, assisted Mildred in the application process. Keegan was assured that Mildred was cognizant of her surroundings and her actions, and at no time did Keegan believe Raelynn was directing or influencing the transaction. Once Mildred closed on the equity line of credit for the sum of $36,000, $12,600 was transferred into Mildred and Raelynn’s joint checking account. On November 7, 2007, the entire $12,600 was paid out to Raelynn. Following that transaction a series of checks from November 2007 to June 2008 were written to further deplete the equity line of credit. The money was used to pay for Raelynn’s assistance.

In June of 2008, Mildred was hospitalized and in August of that same year she died. In April of 2010, Lana opened the Mildred Estate. In July of 2010, ONB filed a claim against the Estate for the $36,274.54 outstanding on the equity line of credit. The Estate filed a petition seeking to recover assets from Raelynn and asserting fraud and undue influence. Moreover, the Estate asserted that the ONB mortgage was invalid because the notary did not read the mortgage instrument to Mildred, who was blind. At trial, the Estate produced a report by a gynecologist, but not Mildred’s gynecologist. The trial court eventually excluded the testimony because, among other things, the doctor’s opinion about Mildred was based solely off of medical records because he had never treated her.


Holding: Affirmed. On appeal, the court first addressed whether the trial court abused its discretion when excluding the gynecologist’s testimony. The court held that based on Evidence Rule 702 the trial court did not error by excluding the doctor’s testimony because it was only a regurgitation of the report that was filed in the court record. Furthermore, the doctor did not profess an independent competency of the neurological diseases with respect to Mildred therefore his testimony would be of no assistance to the trier of fact.

Then the court addressed whether the mortgage was invalid because ONB failed to follow the directives set forth in Indiana Code section 33-42-2-2(a)(4). More specifically, ONB’s notary did not read the mortgage instrument to Mildred, who was blind. The notary section was defective because of this fact. However, the court held that a mortgage does not need to be notarized in order to be enforceable in Indiana. Therefore, the court declined to invalidate ONB's mortgage.


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By: ATG Underwriting Department | Posted on: Mon, 09/21/2015 - 3:24pm