## Facts

- The Lucases obtained a mortgage loan secured by a mortgage on their real property.
- After the Lucases defaulted, U.S. Bank, N.A. filed a mortgage foreclosure action in Indiana state court.
- The Lucases asserted legal defenses and counterclaims against U.S. Bank and the loan servicer seeking money damages and related relief tied to the loan’s origination and servicing.
- The Lucases demanded a jury trial on their defenses and counterclaims.
- The trial court granted U.S. Bank’s motion to strike the jury demand, treating the case as equitable and concluding the related legal claims were subsumed within equity.
- The Indiana Court of Appeals reversed, recognizing a jury-trial right on at least some legal claims.
- The Indiana Supreme Court granted transfer, vacated the Court of Appeals’ decision, and reviewed whether a jury trial was required.

## Issues

1. Whether borrowers are constitutionally entitled to a jury trial on legal defenses and counterclaims asserted in a mortgage foreclosure action.
2. Under Indiana’s law/equity framework, when legal claims joined with an equitable foreclosure are sufficiently intertwined with the foreclosure such that they may be tried to the court without a jury.

## Decision

- The Indiana Supreme Court affirmed the trial court and reversed the Court of Appeals.
- The Court held the Lucases were not entitled to a jury trial on their defenses or counterclaims.
- The Court concluded the borrowers’ defenses and claims were triable in equity because their core legal questions were significantly intertwined with the subject matter of the foreclosure action.

## Legal Principles

- Indiana’s constitutional jury-trial guarantee preserves the jury right as it existed historically; there is no jury-trial right for matters of exclusively equitable jurisdiction.
- Mortgage foreclosure is historically an equitable action and is tried to the court.
- When legal and equitable matters are joined, courts must evaluate each claim’s essential character and whether legal claims are independent of, or instead intertwined with, the equitable controversy.
- Under the Songer framework, legal claims that are significantly intertwined with an equitable claim may be resolved by the court as part of the equitable proceeding; only distinct, separable legal claims require a jury.
- Where borrowers’ defenses and counterclaims arise from the same loan transaction and bear directly on the mortgagee’s right to foreclose and the equitable relief available, the trial court may try the entire controversy in equity without a jury.

## Conclusion

The Indiana Supreme Court held that in a mortgage foreclosure action, borrowers are not entitled to a jury trial on related legal defenses and counterclaims when those claims are significantly intertwined with the foreclosure’s equitable subject matter and do not present distinct, separable legal issues requiring jury determination.


Lucas v. U.S. Bank, N.A., 953 N.E.2d 457 (Ind. 2011)