Como, Inc. v. Carson Square, Inc.

Carson Partners owned the Carson Square Shopping Center in Indianapolis, Indiana. The shopping center was secured by a mortgage held by Bank One. In June 1990, Carson Partners entered into an agreement with Como Incorporated (defendant) to lease 20,000 square feet for a term of five years, with two five-year renewal options. In February 1991, Carson Partners defaulted on its mortgage payments, and Bank One sought foreclosure of the shopping center. Como was not named a party or otherwise notified of the foreclosure action. A judgment of foreclosure was entered in favor of Bank One. Bank One then assigned its interests in the mortgage and judgment to Carson Square Incorporated (plaintiff), which purchased the shopping center at a sheriff’s sale. Carson Square alleged that Como’s leasehold rights were extinguished by the foreclosure sale and demanded that Como deliver immediate possession of the leased premises to Carson Square. Como argued that it was not a party to the foreclosure proceedings and, therefore, was not afforded the due process required to relinquish its interests. The trial court granted summary judgment in favor of Carson Square. Como appealed, and the appellate court reversed the trial court’s judgment, holding that Como’s exclusion constituted a denial of due process and, therefore, the foreclosure did not abolish its leasehold interests. Carson Square appealed the judgment of the appellate court. The Indiana Supreme Court granted transfer to review the issue and was evenly split, with two justices believing that the judgment of the court of appeals was correct and two justices believing the court of appeals was incorrect.