Arthur David Siegle and Karen Lynn Siegle v. NextGear Capital, Inc. (mem. dec.) ( 2019 )


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  •       MEMORANDUM DECISION
    Pursuant to Ind. Appellate Rule 65(D),
    this Memorandum Decision shall not be
    FILED
    regarded as precedent or cited before any                               Dec 06 2019, 8:40 am
    court except for the purpose of establishing                                 CLERK
    Indiana Supreme Court
    the defense of res judicata, collateral                                     Court of Appeals
    and Tax Court
    estoppel, or the law of the case.
    ATTORNEY FOR APPELLANTS                                 ATTORNEYS FOR APPELLEE
    Jonathan D. Harwell                                     David J. Jurkiewicz
    Indianapolis, Indiana                                   Nathan T. Danielson
    Indianapolis, Indiana
    IN THE
    COURT OF APPEALS OF INDIANA
    Arthur David Siegle and Karen                           December 6, 2019
    Lynn Siegle,                                            Court of Appeals Case No.
    Appellants-Defendants,                                  19A-CC-1467
    Appeal from the Hamilton Circuit
    v.                                              Court
    The Honorable Paul A. Felix,
    NextGear Capital, Inc.,                                 Judge
    Appellee-Plaintiff                                      Trial Court Cause No.
    29C01-1810-CC-9687
    Altice, Judge.
    Case Summary
    [1]   Arthur David Siegle and his wife Karen Lynne Siegle appeal the trial court’s
    entry of default judgment against them and in favor of NextGear Capital, Inc.
    Court of Appeals of Indiana | Memorandum Decision 19A-CC-1467 | December 6, 2019                 Page 1 of 6
    (Nextgear). The Siegles contend that they had appeared in the action and were
    thus, pursuant to Ind. Trial Rule 55(B), entitled to be served with written notice
    of NextGear’s application for default judgment at least three days prior to a
    hearing on the application. The Siegles contend that the trial court improperly
    entered the default judgment without holding a hearing and without proper
    notice. This might be true, but because they did not follow the proper
    procedure for perfecting their appeal of this issue, we must dismiss the appeal.
    [2]   We dismiss.
    Facts & Procedural History
    [3]   On October 11, 2018, NextGear initiated this lawsuit by filing a complaint
    against International Auto Group of South Florida, Inc. d/b/a International
    Auto Group (Auto Group) and the Siegles. Pursuant to an amended contract,
    Auto Group had borrowed money on a credit line from NextGear, and the
    Siegles were personal guarantors. The first three counts of the complaint
    alleged breach of contract against each defendant and the fourth alleged a
    conversion claim against Auto Group and Arthur. Arthur and Karen were
    individually served with the complaint and a summons at their residence in
    Florida in November.
    [4]   Thereafter, on March 29, 2019, Arthur, pro se, filed a motion for extension of
    time to retain local counsel. In the motion Arthur indicated that he was acting
    on behalf of himself, Karen, and Auto Group. NextGear objected to the
    motion as to Karen and Auto Group, arguing that Arthur could not file a
    Court of Appeals of Indiana | Memorandum Decision 19A-CC-1467 | December 6, 2019   Page 2 of 6
    responsive pleading for those parties because he was not licensed to practice law
    in Indiana. On April 15, 2019, the trial court sustained NextGear’s objection
    and granted the motion for extension of time with respect to Arthur only, giving
    him until May 1, 2019, to answer the complaint.
    [5]   On May 23, 2019, NextGear filed a notice of dismissal without prejudice as to
    defendant Auto Group. This was because NextGear had been unable to locate
    or obtain service on this defendant. The trial court dismissed Auto Group that
    same day.
    [6]   The next day, May 24, NextGear filed a motion for entry of default judgment
    as to Arthur and Karen for their failure to answer or otherwise respond to the
    complaint. NextGear filed supporting affidavits and sought judgment against
    Arthur and Karen, jointly and severally, for actual damages for breach of
    guaranty in the amount of more than $8.5 million. Additionally, NextGear
    sought damages for civil conversion against Arthur in the amount of more than
    $1.2 million. NextGear served a copy of the motion for default judgment on
    Arthur and Karen by first class mail.
    [7]   On May 28, 2019, without holding a hearing, the trial court granted the motion
    for default judgment as to the Siegles. The court awarded actual damages from
    Court of Appeals of Indiana | Memorandum Decision 19A-CC-1467 | December 6, 2019   Page 3 of 6
    Arthur and Karen, jointly and severally, in the amount of $8,523,571.52. 1 The
    Siegles now appeal directly from the entry of the default judgment.
    Discussion & Decision
    [8]   The Siegles argue on appeal that the default judgment was invalid because no
    hearing was held and they did not receive the three-day notice required by T.R.
    55(B), which provides in relevant part: “If the party against whom judgment by
    default is sought has appeared in the action, he (or, if appearing by a
    representative, his representative) shall be served with written notice of the
    application for judgment at least three [3] days prior to the hearing on such
    application.” Further, relying on Nehring v. Raikos, 
    413 N.E.2d 328
    (Ind. Ct.
    App. 1980), the Siegles contend that they had appeared in the action by
    Arthur’s filing the motion for extension of time before NextGear’s application
    for default judgment. 
    Id. at 330
    (reversing the denial of defendant’s Ind. Trial
    Rule 60(B) motion and holding that defendant had “appeared in the action” by
    filing an untimely pro-se motion for enlargement of time and, therefore, was
    “entitled to be served with written notice of the application for judgment at least
    three days prior to the hearing on the application”).
    [9]   We are not unsympathetic to the Siegles’ argument. T.R. 55(B) requires a
    hearing before a default judgment may be issued. See Snyder v. Tell City Clinic,
    
    391 N.E.2d 623
    , 627 (1979); see also Standard Lumber Co. of St. John v. Josevski,
    1
    $1,225,507.98 of this amount also represented damages against Arthur on the civil conversion claim.
    Court of Appeals of Indiana | Memorandum Decision 19A-CC-1467 | December 6, 2019                   Page 4 of 6
    
    706 N.E.2d 1092
    , 1096 (Ind. Ct. App. 1999) (“[T]he default judgment was
    invalid because a hearing was never held.”). And the Siegles – or, at a
    minimum, Arthur – appeared in the action before the application for default by
    filing the motion for extension of time.
    [10]   “The language of T.R. 55(B) is not superfluous and strict adherence to the
    notice provision is required.” Evansville Garage Builders v. Shrode, 
    720 N.E.2d 1273
    , 1277 (Ind. Ct. App. 1999), trans. denied. It is well established, however,
    that the proper procedure for setting aside a default judgment is to first file a
    T.R. 60(B) motion seeking to have the judgment set aside. 2 See T.R. 55(C); see
    also Siebert Oxidermo, Inc. v. Shields, 
    446 N.E.2d 332
    , 337 (Ind. 1983); Greer v.
    Discover Bank, 
    49 N.E.3d 1110
    , 1111 (Ind. Ct. App. 2016), trans. denied.
    “Thereafter, an appeal may be taken for the trial court’s ruling on the Rule
    60(B) motion.” 
    Greer, 49 N.E.3d at 1111
    .
    [11]   Because the Siegles did not file a T.R. 60(B) motion for relief from the trial
    court’s entry of default judgment against them, their appeal is not properly
    before us and must be dismissed. See 
    Greer, 49 N.E.3d at 1111
    (citing to several
    cases holding that a direct appeal from the entry of a default judgment is
    improper). Of course, our holding does not preclude the Siegles from seeking
    relief by filing a proper T.R. 60(B) motion with the trial court.
    2
    Default judgments entered without following the requirements of T.R. 55(B) are voidable and generally
    qualify for relief under T.R. 60(B)(8) (the “catch-all provision”). See Evansville Garage 
    Builders, 720 N.E.2d at 1277-78
    ; Standard 
    Lumber, 706 N.E.2d at 1096
    .
    Court of Appeals of Indiana | Memorandum Decision 19A-CC-1467 | December 6, 2019                      Page 5 of 6
    [12]   Dismissed.
    Brown, J. and Tavitas, J., concur.
    Court of Appeals of Indiana | Memorandum Decision 19A-CC-1467 | December 6, 2019   Page 6 of 6
    

Document Info

Docket Number: 19A-CC-1467

Filed Date: 12/6/2019

Precedential Status: Precedential

Modified Date: 12/6/2019