Opinion
No. 06A01-1102-SC-73
08-24-2011
PETER JOHNSON, Appellant-Defendant, v. KEITH SOVE, Appellee-Plaintiff.
ATTORNEY FOR APPELLANT : CHRISTOPHER C. ZOELLER Indianapolis, Indiana ATTORNEY FOR APPELLEE : ROGER L. BURRUS Burrus & Burrus Zionsville, Indiana
Pursuant to Ind.Appellate Rule 65(D),
this Memorandum Decision shall not be
regarded as precedent or cited before
any court except for the purpose of
establishing the defense of res judicata,
collateral estoppel, or the law of the case.
ATTORNEY FOR APPELLANT:
CHRISTOPHER C. ZOELLER
Indianapolis, Indiana
ATTORNEY FOR APPELLEE:
ROGER L. BURRUS
Burrus & Burrus
Zionsville, Indiana
APPEAL FROM THE BOONE SUPERIOR COURT
The Honorable Mark X. Sullivan, Judge Pro Tempore
Cause No. 06D02-1007-SC-820
BAILEY , Judge
Case Summary
Appellant-defendant Peter Johnson ("Johnson") appeals the trial court's denial of his motion to correct error following its denial of his motion to set aside a default judgment in favor of appellee-plaintiff Keith Sove ("Sove"). He raises a single issue for our review: whether the trial court abused its discretion when it denied his motion to correct error. We affirm.
Facts and Procedural History
On July 2, 2010, Sove initiated a small claims action against Johnson seeking $6,000 for the balance of payment due from the sale of an antique map. In his notice of claim, Sove alleged that Johnson had tendered four checks, each in the amount of $1,500, and that all were returned unpaid because the account was closed. The cause was set for a bench trial on August 27, 2010, and service was made on Johnson by the county sheriff.
Neither Johnson nor his attorney appeared to defend the action on August 27, and the trial court entered default judgment in favor of Sove for $6,000 plus $89.00 in court costs. On September 2, 2010, Johnson's attorney entered his appearance and requested a continuance. Having already entered default judgment in favor of Sove, the trial court denied Johnson's request.
Johnson alleges that his attorney mailed and faxed his appearance and request for continuance on August 26, 2010, but the copies of these documents in his appendix are not filemarked and he has not produced a copy of the fax. Sove states that he never received these documents and disputes whether they were mailed on August 26, 2010.
On September 10, 2010, Johnson filed a motion to set aside the default judgment which also included an answer to Sove's complaint and a counterclaim. After receiving an enlargement of time, Sove filed a response to Johnson's motion to set aside the default judgment and a motion to strike Johnson's counterclaim on November 1, 2010. On November 12, 2010, the trial court denied Johnson's motion to set aside default judgment and struck his answer and counterclaim.
Johnson then filed a motion to correct error on December 14, 2010. The trial court did not rule on Johnson's motion, and after forty-five days it was deemed denied pursuant to Indiana Trial Rule 53.3. Johnson now appeals.
Discussion and Decision
Sove requests that we strike the "non-factual allegations" contained in Johnson's brief, referring to Johnson's recitation of various pleadings and the allegations made therein within his Statement of Facts. While we agree with Sove that allegations contained in pleadings are not facts, we deny his request to strike because Johnson has not misstated the record insofar as Johnson did submit various pleadings that contained certain allegations. See Ind. App. R. 42.
Standard of Review
A trial court has broad discretion when granting or denying a motion to correct error, and we will reverse its decision only when it abuses that discretion. White v. White, 796 N.E.2d 377, 379 (Ind. Ct. App. 2003). An abuse of discretion occurs when the court's decision is against the logic and effect of the facts and circumstances before the court or the reasonable inferences that may be drawn therefrom, or if the trial court has misinterpreted the law. Hawkins v. Cannon, 826 N.E.2d 658, 662 (Ind. Ct. App. 2005), trans. denied.
We also consider the standard of review for the underlying ruling. Principal Life Ins. Co. v. Needler, 816 N.E.2d 499, 502 (Ind. Ct. App. 2004). Here, Johnson seeks to set aside the default judgment against him. In general, default judgments are not favored in Indiana, Bedree v. DeGroote, 799 N.E.2d 1167, 1172 (Ind. Ct. App. 2003), trans. denied, but the decision to set aside a default judgment is within the sound discretion of the trial court. Sears v. Blubaugh, 613 N.E.2d 468, 469 (Ind. Ct. App. 1993), trans. denied. It is therefore also reviewed for an abuse of discretion. Id. The burden is on the movant to establish grounds for relief. Id.
Analysis
As a small claims action, this case is governed by the Indiana Small Claims Rules. Ind. Small Claims Rule 1(A). The procedure concerning default in small claims actions is outlined in Indiana Small Claims Rule 10, which states:
If the defendant fails to appear at the time and place specified in the notice of claim, or for any continuance thereof, the court may enter a default judgment against him. Before default judgment is entered, the court shall examine the notice of claim and return thereof and make inquiry, under oath, of those present so as to assure the court that:Indiana Small Claims Rule 10(B).
(1) Service of notice of claim was had under such circumstances as to establish a reasonable probability that the defendant received such notice;
(2) Within the knowledge of those present, the defendant is not under legal disability and has sufficient understanding to realize the nature and effect of the notice of claim;
(3) Either (a) the defendant is not entitled to the protections against default judgments provided by the Servicemembers Civil Relief Act, as amended (the "Act"), 50 U.S.C. § 521, or (b) the plaintiff has filed with the court, subscribed and certified or declared to be true under penalty of perjury, the affidavit required by the Act (i) stating whether or not the defendant is in military service and showing necessary facts to support the affidavit; or (ii) if the plaintiff is unable to determine whether or not the defendant is in military service, stating that the plaintiff is unable to determine whether or not the defendant is in military service; and
(4) The plaintiff has a prima facie case.
After such assurance, the court may render default judgment and, upon entering such judgment, shall assess court costs against the defendant.
We are left to speculate as to the adequacy of Sove's assurances on these factors at trial. There is no transcript of the proceedings, and the parties did not provide us with any affidavits or exhibits presented at the hearing. Thus, we have no way of knowing the extent to which the trial court "made inquiry, under oath, of those present" regarding the four listed items in the rule, as it is required to do before entering a default judgment. See also Smith v. Patel, 560 N.E.2d 1260, 1261 (Ind. Ct. App. 1990) (holding that it was an error of law for a trial court to grant a small claims default judgment when plaintiff merely attached a returned check to the claim, and failed to make a prima facie case by not introducing evidence that the debt was due and unpaid). Notwithstanding these gaps in the record, the trial court's judgment order indicates that it was "duly advised in the premises" before finding for Sove, and Johnson does not claim error on this basis. He has therefore waived the issue for our review, because "[i]t is well settled that we will not consider an appellant's assertion on appeal when he has failed to present cogent argument supported by authority and references to the record as required by the rules." Shepherd v. Truex, 819 N.E.2d 457, 463 (Ind. Ct. App. 2004). "If we were to address such arguments, we would be forced to abdicate our role as an impartial tribunal and would instead become an advocate for one of the parties." Id
Small Claims Rule 10(C) provides guidance on setting aside default judgments and states that "[u]pon good cause shown the court may, within one year after entering a default judgment, vacate such judgment and reschedule the hearing of the original claim." The requirement of "good cause shown" is "a broad concept subject to the trial judge's sound discretion." Potts v. Castillo, 460 N.E.2d 996, 1000 (Ind. Ct. App. 1984). It is a concept we liberally apply to reviewing default judgments. Id. at 999.
Although couched in terms of our standard for setting aside a default judgment under Indiana Trial Rule 60(B), Johnson essentially argues that he has shown good cause for setting aside the default judgment because his attorney's mistakes were excusable, and, even if not excusable, not imputable to him. He also argues that he showed good cause by alleging a meritorious defense. We cannot agree.
It is only after one year that a party seeking to set aside a small claims default judgment must seek recourse through an independent action under Trial Rule 60(B). S.R.C. 10(C).
"Small claims courts and the small claims divisions of general jurisdiction courts are intended to be places where justice may be dispensed inexpensively and promptly." Flint v. Hopkins, 720 N.E.2d 1230, 1231-32 (Ind. Ct. App. 1999). The trials are to be "informal, with the sole objective of dispensing speedy justice between the parties according to the rules of substantive law" without application of procedural rules. S.C.R. 8(A); Multivest Properties v. Hughes, 671, N.E.2d 199, 201 (Ind. Ct. App. 1996). Although informality is an express goal of the Small Claims Rules, this informality was not intended to encompass blatant disregard for all the rules of procedure. Potts, 460 N.E.2d at 998. While we have found good cause shown when a non-attorney layperson failed to appear at a small claims trial due to a misunderstanding of procedural rules, we have not been inclined to do so for an attorney. Id. at 999-1000; also Baldwin v. Clodfelter, 180 Ind. App. 152, 156, 387 N.E.2d 101, 103 (1979) (no good cause shown when attorney did not appear at trial because he did not receive notice of trial date). Indeed, we stated in Potts that "[a] procedural error made by a layperson, for example, may be good cause for procedural leniency by a trial judge while an attorney making the same error representing a small claims litigant might not be similarly indulged. . . We would demand that an attorney be sure a trial date had been rescheduled before failing to appear at the date set for trial." Id. If an attorney does not know a hearing date, "it is the attorney's responsibility to inquire either of the court or of his client as to the date and time set for hearing." Baldwin, 180 Ind. App. at 156.
Here, Johnson's attorney did not enter an appearance and request a continuance until September 2, 2010, well after the trial had occurred. Even if Johnson's attorney mailed and faxed his appearance and continuance request on August 26, 2010, as he alleges, he still violated a Boone County local rule which requires that parties in small claims actions request a continuance at least three days before trial. LR06-TR53.5-BLR Rule 4. He has provided no other justification for violating the rules, other than his attorney's misunderstanding. Johnson therefore has not shown good cause based on his attorney's failure to follow procedural rules.
Specifically, the rule states that "Continuances of small claims will be granted only at the discretion of the Court and, in no event, less than 3 days prior to trial, unless all parties and the court concur to the continuance or unless shown by affidavit filed with the Court at least 1 day prior to trial that it is physically impossible to attend trial due to illness or injury. A physician's statement must accompany the affidavit."
We next turn to Johnson's argument that he should not be punished for his attorney's negligence. For the purpose of reviewing a decision to set aside a default judgment under the Trial Rules, negligence of an attorney is negligence of the client. Moe v. Koe, 165 Ind. App. 98, 105, 330 N.E.2d 761, 765 (1975). However, this general rule is "tempered" because "the facts and circumstances of the particular case are controlling." Rose v. Rose, 181 Ind. App. 98, 100, 390 N.E.2d 1056, 1058 (1979). Consequently, in Rose, we held that "where the uncontradicted evidence discloses that the client exercised diligence but whose rights were forfeited by attorney misconduct, the latter's negligence should not be imputed to the client." Id. at 101. Our supreme court has also held that "where the unchallenged credible testimony establishes a breakdown in communication which results in a party's failure to appear for trial, the grounds for setting aside a default judgment, as specified in Indiana Trial Rule 60, have been satisfied[.]" Whittaker v. Dail, 584 N.E.2d 1084, 1087 (Ind. 1992).
Generally, these principles apply equally to small claims cases. Indeed, the Trial Rules govern small claims proceedings to the extent that they are not inconsistent with the Small Claims Rules. Muenich v. Gulden, 579 N.E.2d 665, 666 (Ind. Ct. App. 1991). Consequently, we have applied the Trial Rules where the Small Claims rules are silent. Frank H. Monroe Heating & Cooling, Inc. v. Rider, 450 N.E.2d 1056, 1057 (Ind. Ct. App. 1983).
That said, there is no evidence here from which the trial court could have concluded that Johnson acted diligently such that he may be absolved of his attorney's negligence. The record does not indicate when Johnson hired his attorney, or whether or when he notified his attorney of the trial date. Furthermore, there is no evidence—let alone unchallenged credible testimony—from which the trial court could have concluded that there was a breakdown in communication between Johnson and his attorney. Absent such evidence, we apply the general rule that the negligence of Johnson's attorney is his negligence, and consequently conclude that he has not shown good cause for setting aside the default judgment based on alleged diligence.
Johnson's final argument is that he has shown good cause for setting aside the default judgment because the map Sove sold him was not of the quality he expected. However, Johnson did not submit any evidence to support his position. Instead, he mischaracterizes Sove's claim as one over bad checks (even though Sove's claim form makes clear that he seeks the balance of payments for the map) and asks that we reverse the trial court based simply on his allegations. We decline Johnson's invitation, and find no abuse of the trial court's discretion in denying Johnson's motion to correct error.
Conclusion
Johnson has not shown good cause to set aside the default judgment against him. The trial court therefore did not abuse its discretion in denying his motion to correct error.
Affirmed. MATHIAS, J., and CRONE, J., concur.