Scott Roberts for www.theindianalawyer.com

The Indiana Court of Appeals ruled an appraiser has no duty of care to a seller after he appraised a house for much less than the proposed purchase price. The COA upheld summary judgment for the appraiser in a case where the seller alleged negligence, fraud and slander of title.

BSA Construction LLC entered into an agreement to sell residential real estate to Lilia Lopez. Lopez received financing from Bank of America pending a final appraisal, which was done by Jimmie Johnson of LandSafe. The purchase price was agreed at $60,000 but Johnson only appraised the property for $50,000, and thus Bank of America denied financing. BSA appealed the bank’s decision but the bank upheld it.

BSA then filed suit against Johnson in Hendricks County, and the case was transferred to Marion County. Johnson filed for summary judgment and moved to strike numerous evidentiary items BSA had designated. The court granted the motion to strike and summary judgment, and BSA appealed.

BSA claimed Johnson owed them a duty of care on negligence principles, but the COA disagreed, saying Johnson’s duty of care was to the bank that hired him, not BSA. “In an arms-length transaction like the one here, we cannot conclude that Johnson had any duty to serve two masters with conflicting interests. Whether Johnson was bound by or aware of the code of ethics of a professional association, or knew that a poor appraisal might be associated with the real estate for some period of time, does not change the fundamental arrangement of the duties at issue here,” Judge L. Mark Bailey wrote for the panel. “Johnson’s duty was to the bank and as a matter of law cannot — because of the contradictory interests at issue — have extended to BSA.”

BSA also claimed Johnson’s appraisal amounted to fraud, but Bailey wrote that BSA never took any action after the appraisal after Johnson was appointed and the risk of an unfavorable appraisal was already known to BSA.

Finally, BSA claimed slander of title, but Johnson did not affect BSA’s ownership of the property, just the monetary value.

The case is BSA Construction LLC v. Jimmie E. Johnson, 49A02-1506-CT-749.

Indianapolis – Governor Mike Pence touted the state’s prudent fiscal management, following the publication of Moody’s annual Investor Service State Debt Medians report. According to the report, while states like Illinois and California are struggling with large amounts of public debt, Indiana’s tax-supported debt ranks among the lowest in the nation.

“Keeping a strong handle on our tax-supported debt is a mark of good day-to-day public service, and proves we’re managing our state budgets with prudent fiscal management and responsibility,” said Governor Pence. “Over the past decade, our state has established a history of being a good fiscal steward for the people of Indiana, and this report is just another indicator that we are consistently honoring that trust.”

While other states are struggling with increasing public debt per capita to grow their economies, Indiana is growing and diversifying its economy in a way that efficiently manages its existing tax base. Unlike other states, Indiana has not over committed the revenue it takes in from taxpayers.

“In keeping our tax-supported debt low, Indiana can be more flexible and nimble in reacting to market and economic changes, including weathering emergencies or capitalizing on opportunities in an economic expansion,” said Dan Huge, director of the Indiana Finance Authority.

Citizens in neighboring Illinois, for example, are burdened with $2,522 of tax-supported public debt per household. Whereas in Indiana, tax-supported debt ranks in at $463 per Hoosier household.

“In a nutshell, the data shows Indiana is growing its economy without financially strapping future generations,” said Mark Pascarella, director of debt management with the Indiana Finance Authority.

The Moody’s report was developed based on an analysis of calendar year 2015 debt issuance and fiscal year 2015 debt service. Indiana was also noted in the report for its AAA credit rating, another indicator of Indiana’s smart financial management.

The report in full can be found attached.