Altice, J.
Case Summary
PNC Bank, N.A. (PNC) filed a complaint against Michael R. Couch, among others, to foreclose on a promissory note and mortgage. On PNC’s motion, the trial court issued a judgment and decree of foreclosure that granted all requested relief to PNC with the exception that the trial court excluded “[i]nterest accruing 3/16/20 – 8/14/20” from the judgment against Couch. Appendix at 54. This exclusion of interest was based on a series of Ind. Administrative Rule 17 Emergency Orders (the Emergency Orders) that the Indiana Supreme Court issued in 2020 during the outbreak of the COVID-19 pandemic. Following the denial of its Motion to Correct Error, PNC appeals and raises the following restated issue:
Did the trial court err when it determined that certain terms in the Emergency Orders, which provided for the tolling of interest, were applicable to PNC’s mortgage loan agreement and operated to suspend the accrual of prejudgment interest for a period of time?
We reverse and remand.
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… Here, the issue is whether the trial court erred in finding that the interest provision in the Emergency Orders applied to PNC’s note and mortgage with Couch such that prejudgment interest was tolled for approximately five months. As this presents a question of law, we review the trial court’s ruling de novo.
PNC argues that, for the various reasons presented in its motion to correct error, our Supreme Court “could not have intended [the] sentence regarding interest in [the Emergency Orders] to apply to cases involving private mortgage contracts.” Appellant’s Brief at 11. On the basis discussed below, we agree.
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At the onset of the COVID-19 pandemic, the Court – using its authority “to provide by rule for the procedure employed in all courts of this state” – issued the Emergency Orders to address concerns that the pandemic was inhibiting the ability of litigants and courts “to comply with statutory deadlines and rules of procedure.” Admin. R. 17(A) (emphasis added). PNC argues that the Court “could not have intended the rule regarding interest in [the Emergency Orders] to apply to cases involving the enforcement of either negotiable or nonnegotiable instruments, given that its application [] would directly conflict with several Indiana statutes[.]” Appellant’s Brief at 14. PNC refers us to several such relevant statutes.
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The aforementioned statutes are substantive rather than procedural, as they “create[], define[], and regulate[] rights” rather than “prescribe[] the method of enforcing a right or obtaining redress for invasion of that right.” Morrison v. Vasquez, 124 N.E.3d 1217, 1222 (Ind. 2019); see also Denman, 176 N.E.3d at 504 (finding that post-judgment interest statute is substantive rather than procedural). Further, our courts have confirmed that a party’s right to prejudgment interest according to a contract is not discretionary. See Fackler, 923 N.E.2d at 979 (“[A]n award of prejudgment interest is generally not considered a matter of discretion.”).
This court’s recent decision in Denman is instructive to our analysis. There, we determined that the Emergency Orders did not toll or suspend post-judgment interest provided by I.C. § 24-4.6-1-101. [Footnote omitted.] The Denman court acknowledged “the potential breadth of the term ‘interest’” in the Emergency Orders’ directive that “no interest shall be due or charged during the tolled period” but explained that our Supreme Court could not have intended to include statutory post-judgment interest within that provision. 176 N.E.3d at 502. Among other reasons, we observed that post-judgment interest was “a creature of statute, born of legislative authority,” which was substantive rather than procedural. Id. at 503. Further, post-judgment interest under the statute was non-discretionary, as prevailing plaintiffs were automatically entitled to it. See id. at 504 (noting that “post-judgment interest – being automatic and continuous – cannot be tolled”). Thus, we observed that to find that the Emergency Orders applied to post-judgment interest would give them “effect beyond the power constitutionally and statutorily allocated to the courts.” Id.
Lastly, the Denman court noted that excluding post-judgment interest from the Emergency Orders did not affect the emergency purpose of the Orders – that being to address the fact that COVID-19 was impeding litigants’ and courts’ ability to comply with statutory deadlines and rules of procedure – because “[p]ost-judgment interest . . . arises just as automatically during a pandemic as it does any other time [] and will continue to do so until the legislature decides otherwise.” Id. at 505.
We find the same reasoning applies here. That is, because our Supreme Court could not, by rule, change substantive law, the Emergency Orders’ instruction – that interest would not “be charged or due during the tolled period” – cannot be construed to suspend the automatic accrual of non-discretionary interest provided by the terms of a private loan instrument and as permitted by statute. [Footnote omitted.] Our conclusion is consistent “with our practice of presuming that each branch of our government acts within their constitutionally prescribed boundaries.” Denman, 176 N.E.3d at 504.
We therefore reverse the trial court’s order denying PNC’s Motion to Correct Error and instruct the trial court on remand to award PNC interest from November 24, 2017 to the date of the judgment at the rate specified in the Note, including the period of March 16, 2020 through August 14, 2020.
Judgment reversed and remanded.
Bailey, J. and Mathias, J., concur.