Singleton v. Fifth Third Bank (IN)

Summary: Borrower’s action of issuing an order to wire funds on the date payment was due constituted “making payment” under a forbearance agreement with the lender, and was not considered untimely.


Singleton v. Fifth Third Bank, 977 N.E.2d 958 (Ind. Ct. App. 2012).


Facts: From 2004 through 2008, Fifth Third Bank made loans to Rick Singleton. In 2010, Fifth Third filed a complaint for foreclosure. In April 2011, Singleton and Fifth Third entered into a Forbearance Agreement regarding the foreclosure action. As part of the agreement, Singleton was to make 5 payments to Fifth Third with the final payment to be made on June 30, 2011. For all payments except the final payment, the parties agreed on a grace period of 5 business days. For the May 30 payment, Singleton initiated a wire transfer from his bank to Fifth Third on June 6, 2011 (which was the 5th business day of the grace period). This payment was received by Fifth Third on June 7 (the 6th business day). The parties sought a declaratory judgment from the court on the timeliness of the payment. The court ruled that the transfer was initiated in a timely manner. The court determined that regardless of the receipt of the payment, which was outside of Singleton’s control, the payment was made pursuant to the terms of the agreement. The court then admonished Singleton not to let this dispute arise again for the June 30 payment.

On June 30, Singleton’s attorney corresponded by phone and email multiple times with the attorney for Fifth Third. The conversations were related to the method of final payment. In these communications, counsel for Singleton reportedly asked which form of payment was necessary so that the bank would not make a late payment claim. He also asked if counsel for the bank would like them to “bring a check to your office…, bring it to a Fifth Third branch, wire-transfer the funds; or was there another method preferred by Watkins or the bank.” Counsel for the bank requested the wire transfer. Singleton then requested that his counsel get written confirmation from Fifth Third’s counsel because of the way they handled the previous transfer. Counsel for the bank sent an email indicating that funds should be transferred, “by wire transfer, as always.” Singleton’s counsel made the transfer of the funds for payment at 3:39 p.m. The funds were received by Fifth Third on July 1. Fifth Third then moved for the entry of the agreed final judgment based on untimely payment.

After hearing arguments, the court granted the motion, determining that Singleton “had unfettered control of when and where to make the final payment,” that he “chose to replicate the problem that was created by the [previous] wire transfer,” and that “[i]t is axiomatic that the party who is best able to avoid a loss should bear it.” Since the court determined that Singleton was “in the best position to prevent a late payment,” it found that the equities were on the side of Fifth Third and ruled in their favor. Singleton filed a timely appeal.


Holding: Reversed and Remanded. Based on the Forbearance Agreement and the directive from Fifth Third’s counsel on the method of payment, the appellate court found that the payment was not untimely. The appellate court observed that the contract did not expressly provide for, or exclude, any particular method of payment. It was also silent as to the date a payment would be deemed made, if it was made using a funds-transfer system or other method of payment. Finally, there was no information indicating which statute or regulation would govern the interpretation of the agreement’s payment provisions. The court refused to expand upon the general contract language which, only directed Singleton to “make payments,” indicating that it was not at liberty to “supply omitted terms while professing to construe a contract.” Therefore, the court found that the language of the agreement did not support a finding that the payment was untimely.

The appellate court also disagreed with the trial court’s assertion that Singleton “chose to replicate the problem created by the previous wire transfer,” or that, “he was the party best able to avoid the loss,” and therefore should bear it. The court pointed to the fact that Singleton’s attorney made multiple communications to the attorney for Fifth Third regarding the appropriate method of payment for the final payment. The court found that: (1) Singleton’s actions were not inconsistent with the trial court’s previous ruling; (2) at a minimum, counsel for Fifth Third also believed that payment by wire transfer was required; and (3) counsel made this belief known in direct response to the question posed by Singleton’s attorney. 

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By: ATG Underwriting Department | Posted on: Fri, 03/15/2013 - 3:22pm