Selah Academy, Inc. Aquanatte Ruffin, and Lawrence Ruffin v. Jackqueline Jones (mem. dec.) ( 2016 )

MEMORANDUM DECISION
Pursuant to Ind. Appellate Rule 65(D),
this Memorandum Decision shall not be Mar 09 2016, 9:02 am
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 ATTORNEYS FOR APPELLEE
Adam J. Sedia Mark L. Phillips
Rubino, Ruman, Crosmer & Polen Anthony G. Novak
Dyer, Indiana LaPorte, Indiana
IN THE
COURT OF APPEALS OF INDIANA
Selah Academy, Inc., Aquanatte March 9, 2016
Ruffin, and Lawrence Ruffin, Court of Appeals Case No.
Appellants-Defendants, 46A04-1508-PL-1186
Appeal from the LaPorte Superior
v. Court
The Honorable Jeffrey L. Thorne,
Jackqueline Jones, Judge
Appellee-Plaintiff. The Honorable V. Michael
Drayton, Pro Tem
Trial Court Cause No.
46D03-1412-PL-2158
Altice, Judge.
Case Summary
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[1] Selah Academy, Inc. (Selah) and one of its two principal officers, Aquanatte
Ruffin (Aquanatte), (collectively, the Defendants) appeal from the trial court’s
denial of their motion to set aside a default judgment entered against them
pursuant to Ind. Trial Rule 60(B). The Defendants present one issue for our
review: Did the trial court abuse its discretion in denying their motion to set
aside the default judgment?
[2] We affirm.
Facts & Procedural History
[3] On March 14, 2006, Lawrence Ruffin (Lawrence) and Aquanatte organized
Selah, an Indiana non-profit corporation that provides rehabilitative services to
children with behavioral problems. At all times, Lawrence served as Selah’s
President and CEO and Aquanatte served as its Vice President. On November
1, 2012, Jackqueline Jones was hired as a program coordinator for Selah, and
she continued in that role until her resignation on January 21, 2014.
[4] On December 15, 2014, Jones filed a complaint against the Defendants and
Lawrence, seeking to recover for unpaid wages, overtime compensation, and
other related damages.1 After the Defendants and Lawrence were served with
the complaint, Lawrence asserts that he and Aquanatte agreed that Lawrence
would seek legal advice from Attorney Robert Lewis (Attorney Lewis).
1
Jones sought recovery under Indiana’s Wage Payment Statute and the federal Fair Labor Standards Act.
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Lawrence asserts that Attorney Lewis advised him to file a chronological case
summary (CCS) form denying the claims asserted by Jones.
[5] On January 9, 2015, Lawrence went to the La Porte County Clerk’s office and,
in accordance with Attorney Lewis’s advice, filed a handwritten CCS form
stating, “I want to dispute this case and set for hearing.” Appellants’ Appendix at
28. Lawrence signed the CCS form in his own name. It was Lawrence’s
understanding that such filing sufficed as a response to Jones’s complaint on
behalf of himself and the Defendants. The trial court set a hearing for February
27, 2015, and ordered all parties to appear.
[6] On February 19, 2015, Jones filed a motion for default judgment against the
Defendants. Jones did not request entry of default judgment against Lawrence,
indicating in her motion that “Lawrence is the only one to have appeared,
plead, or otherwise defend [sic] himself in this action.” Appellee’s Appendix at 2.
Two days before the scheduled hearing, Lawrence filed a request to reset the
hearing, claiming additional time was needed to prepare. 2 The trial court
denied Lawrence’s request and ordered all parties to appear in person or by
counsel at the February 27 hearing. Notice was sent to Lawrence and the
Defendants. The Defendants, however, failed to appear. After the hearing, the
2
Lawrence’s handwritten CCS form stated, “I want to reset the hearing due to needing more documentation
for the hearing.” Appellee’s Appendix at 7. The form was signed only by Lawrence.
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trial court entered an order granting default judgment against the Aquanatte
and Selah and in favor of Jones.
[7] On March 23, 2015, Jones moved for proceedings supplemental. The trial
court ordered the Defendants to appear before the court on April 15, 2015.
Neither showed. On April 24, 2015, Jones filed a Motion for Rule to Show
Cause. The trial court ordered the Defendants to appear for a hearing on
Jones’s motion on June 22, 2015, and service on the Defendants was perfected
by the Lake County Sheriff’s Department on April 30. On May 19, 2015, an
attorney entered an appearance on behalf of the Defendants and filed a motion
to set aside the default judgment and to stay the proceedings supplemental.3
Over Jones’s objection, the trial court stayed the proceedings supplemental,
vacated the hearing on rule to show cause, and set a hearing on the Defendants’
motion to set aside judgment for July 13, 2015. The Defendants were present
before the court for that hearing. On July 28, 2015, the trial court entered its
order denying the Defendants’ motion to set aside judgment. The Defendants
then filed a motion to correct error, which the trial court denied. This appeal
ensued.
Discussion & Decision
3
The motion to set aside default judgment was also made on behalf of Lawrence. However, as noted by the
trial court, default judgment was never entered against Lawrence.
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[8] The Defendants argue that the trial court abused its discretion in denying their
motion to set aside judgment pursuant to Ind. Trial Rule 60(B)(1) and (8). The
Defendants maintain that they “acted with reasonable promptness and
diligence” in contesting Jones’s claim. Appellants’ Appendix at 10. They further
argue that they reasonably relied upon “defective legal advice,” which they
assert constitutes a mistake justifying an order setting aside the default
judgment entered against them. Id. at 1.
[9] In Huntington Nat’l Bank v. Car-X Ass’n Corp., our Supreme Court set forth the
standard governing a trial court’s decision to set aside a default judgment.
The decision whether to set aside a default judgment is given
substantial deference on appeal. Our standard of review is
limited to determining whether the trial court abused its
discretion. An abuse of discretion may occur if the trial court’s
decision is clearly against the logic and effect of the facts and
circumstances before the court, or if the court has misinterpreted
the law. . . . The trial court’s discretion is necessarily broad in
this area because any determination of excusable neglect,
surprise, or mistake must turn upon the unique factual
background of each case . . . . A cautious approach to the grant
of motions for default judgment is warranted in “cases involving
material issues of fact, substantial amounts of money, or weighty
policy determinations.” In addition, the trial court must balance
the need for an efficient judicial system with the judicial
preference for deciding disputes on the merits. Furthermore,
reviewing the decision of the trial court, we will not reweigh the
evidence or substitute our judgment for that of the trial court.
Upon a motion for relief from a default judgment, the burden is
on the movant to show sufficient grounds for relief under Indiana
Trial Rule 60(B).
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39 N.E.3d 652, 655 (Ind. 2015) (quoting Kmart Corp. v. Englebright, 719 N.E.2d
1249, 1253 (Ind. Ct. App. 1999)) (internal citations omitted).
[10] We first consider application of T.R. 60(B)(1). A motion to set aside a
judgment pursuant to T.R. 60(B)(1) does not attack the substantive, legal merits
of a judgment, but rather addresses the procedural, equitable grounds justifying
relief from the finality of a judgment. Blichert v. Brososky, 436 N.E.2d 1165,
1167 (Ind. Ct. App. 1982). To prevail on a motion to set aside a default
judgment based on mistake, surprise, or excusable neglect, a party is not only
required to show mistake, surprise, or excusable neglect, but also must show
that he has a good and meritorious defense to the cause of action. Burke v.
DeLarosa, 661 N.E.2d 43, 45 (Ind. Ct. App. 1996), trans. denied.
[11] After the Defendants and Lawrence were served with Jones’s complaint,
Lawrence apparently took the complaint and summons for each named
defendant to Attorney Lewis, who Lawrence asserted was an attorney who
represented him in another matter. According to Lawrence, Attorney Lewis
advised him that he needed to file a CCS form with the court denying all of
Jones’s claims. Lawrence did just that, believing that he was undertaking such
action on behalf of all named defendants, i.e., himself, Aquanatte, and Selah.
The Defendants now characterize Attorney Lewis’s advice to Lawrence as
“defective legal advice” and argue that their reliance on that advice constitutes
a mistake on their part. Appellants’ Appendix at 1.
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[12] In rejecting the Defendants’ asserted grounds for setting aside the default
judgment, the trial court noted that the Defendants were inconsistent in
identifying Attorney Lewis’s relationship to them in terms of establishing
whether the purported legal advice he gave was directed to them. The court
noted that in their initial pleadings, Attorney Lewis is identified as Lawrence’s
attorney in another matter. During the hearing on Defendants’ motion, counsel
for the Defendants identified Attorney Lewis as Lawrence’s divorce attorney.
The day following the hearing, Lawrence and Aquanatte submitted
supplemental affidavits to the court in which they “now” identified Attorney
Lewis as corporate counsel for Selah who often provided legal advice to
Aquanatte with respect to matters relating to Selah. Id. at 10. The trial court
found it “disconcerting” that the evidence seemed to change “to go with what
direction the wind is blowing.” Id. The trial court found that even if Attorney
Lewis had given poor legal advice, the Defendants had not established that that
he was representing their interests4 and thus, reliance on his legal advice could
not constitute a mistake or excusable neglect on their part.
[13] The trial court set forth additional reasons for rejecting the Defendants’
arguments that the default judgment should be set aside on the basis of mistake,
surprise, or excusable neglect, noting that the Defendants failed to appear for
the hearing on Jones’s motion for default judgment, even after having been
4
The trial court also noted that Attorney Lewis never entered his appearance on behalf of the Defendants in
this matter.
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ordered twice to do so. The Defendants also failed to appear a third time for a
proceeding supplemental hearing. It was not until five months after Jones’s
complaint was filed and after the trial court ordered the Defendants to appear
for a rule to show cause hearing that an attorney entered an appearance on
behalf of the Defendants. The trial court noted that the Defendants never
attempted to explain why they failed to comply with the court’s orders to
appear for the various hearings, nor did they allege that their failure to appear at
those hearings was based upon “poor legal advice.” Id. at 11. The trial court
also considered the fact that Lawrence’s CCS entry purported to be only on his
behalf. Specifically, the court noted that Lawrence’s entry stated, “I want to
dispute this case,” not “we” want to dispute this case. Id. at 11. Based on the
foregoing, the court concluded that the Defendants simply “ignored the default
judgment and did nothing.” Id. at 12.
[14] The trial court further concluded that to the extent the Defendants could rely on
any legal advice given by Attorney Lewis, such did not warrant setting aside the
default judgment. To be sure, “[t]he general rule has been long and firmly
established that the negligence of the attorney is the negligence of the client and
relief from a judgment taken by default will not be granted unless the negligence
of the attorney is shown to be excusable.” Moe v. Koe, 330 N.E.2d 761, 765
(Ind. Ct. App. 1975). The trial court stated that it was “not persuaded that a
‘mistake’ nor ‘surprise’ not even ‘excusable neglect’ as required by T.R. 60(B)
occurred in this case.” Id. at 15. Upon review, we find that the record supports
the trial court’s findings and conclusions. We therefore cannot say the trial
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court abused its discretion in refusing to set aside the default judgment under
T.R. 60(B)(1).
[15] The Defendants also argue that the trial court should have exercised its
equitable power and granted their request to set aside the default judgment
pursuant to T.R. 60(B)(8). Under that provision, a trial court may act within its
discretion to set aside a judgment upon a showing of exceptional circumstances
justifying extraordinary relief. See Brimhall v. Brewster, 864 N.E.2d 1148, 1153
(Ind. Ct. App. 2007), trans. denied.
[Trial Rule] 60(B)(8) is an omnibus provision which gives broad
equitable power to the trial court in the exercise of its discretion
and imposes a time limit based only on reasonableness.
Nevertheless, under T.R. 60(B)(8), the party seeking relief from
the judgment must show that its failure to act was not merely due
to an omission involving . . . mistake, surprise or excusable
neglect. Rather some extraordinary circumstances must be
demonstrated affirmatively. This circumstance must be other
than those circumstances enumerated in the preceding
subsections of T.R. 60(B).
Id. (quoting Ind. Ins. Co. v. Ins. Co. of N. Am., 734 N.E.2d 276, 279-80 (Ind. Ct.
App. 2000), trans. denied (internal quotation omitted)). The Defendants’
arguments under this provision are the same as their arguments under T.R.
60(B)(1), i.e., that their reliance on poor legal advice justifies setting aside the
default judgment entered against them. The trial court found that these are not
extraordinary circumstances falling within the parameters of T.R. 60(B)(8) so as
to justify relief from operation of the judgment herein. We conclude that the
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facts contained in the record before us support the trial court’s conclusion in
this regard.
[16] Having concluded that the Defendants have not established mistake, surprise,
or excusable neglect or other extraordinary circumstances justifying relief, we
need not consider whether they have a meritorious defense. See Moe, at 764
(noting that a party seeking to set aside a judgment must show both that the
judgment entered was a result of mistake, surprise, or excusable neglect and
that there is a meritorious defense to the claim).
Judgment affirmed.
Robb, J. and Barnes, J., concur.
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