Josephina Augila on behalf of Pedro Aguila v. Anonymous Physicians 1 & 2 (mem. dec.) ( 2017 )

MEMORANDUM DECISION
FILED
Pursuant to Ind. Appellate Rule 65(D), this
Memorandum Decision shall not be regarded as May 24 2017, 9:30 am
precedent or cited before any court except for the CLERK
purpose of establishing the defense of res judicata, Indiana Supreme Court
Court of Appeals
collateral estoppel, or the law of the case. and Tax Court
ATTORNEYS FOR APPELLANTS ATTORNEYS FOR APPELLEES
David J. Cutshaw Edward W. Hearn
Gabriel A. Hawkins Alan M. Kus
Cohen & Malad, LLP Johnson & Bell P.C.
Indianapolis, Indiana Crown Point, Indiana
Barry D. Rooth
Holly S.C. Wojcik
William A. Theodoros
Theodoros & Rooth, P.C.
Merrillville, Indiana
IN THE
COURT OF APPEALS OF INDIANA
Josephina Aguila on behalf of May 24, 2017
Pedro Aguila, Frederick Ard, Court of Appeals Case No.
Darren Bala, Robert Besler, Cella 45A03-1609-CT-2069
King, and Larry Salinas as Appeal from the Lake Superior
Personal Representative of the Court.
The Honorable Calvin D. Hawkins,
Estate of Amelia Porras, Judge.
Appellants-Petitioners, Trial Court Cause No.
45D02-1604-CT-65
v.
Anonymous Physicians 1 & 2,
Anonymous Medical P.C.,
Anonymous Hospital, G.
Anthony Bertig, and Stephen
Robertson, as Commissioner of
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the Indiana Department of
Insurance,
Appellees-Respondents.
Shepard, Senior Judge
[1] The trial court determined Anonymous Hospital presented sufficient grounds to
set aside the entry of default judgment. The appellants, who are patients or
representatives of patients who were treated by the Hospital, challenge the
court’s decision. We conclude the court did not abuse its discretion in setting
aside the default.
[2] The appellants, whom we will refer to as the Patients, were treated by
Anonymous Physicians 1 and 2, Anonymous Medical P.C., and the Hospital.
The Patients claim the physicians performed unnecessary surgeries and, further,
that the Hospital negligently credentialed the physicians and were aware of the
unnecessary surgeries but allowed them to continue.
[3] Between July 31, 2014 and October 27, 2014, the Patients filed proposed
1
medical malpractice complaints with the Indiana Department of Insurance.
The Department of Insurance assembled medical malpractice review panels for
1
Approximately 300 other patients filed similar complaints against Anonymous Physicians 1 and 2,
Anonymous Medical P.C., and the Hospital.
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the Patients’ cases, and G. Anthony Bertig was selected as the chairperson of
each of the six panels.
[4] Bertig set deadlines for the parties to submit evidence to the panels, and the
Hospital failed to comply in all six cases. For example, in Salinas’ case, on
April 16, 2015, Bertig instructed the Hospital to submit its submission no later
than July 31, 2015. In Aguila’s case, on September 8, 2015, Bertig instructed
the Hospital to file by January 15, 2016. The Hospital did not meet any of the
deadlines. The physicians and the Medical P.C. failed to file submissions in
four of the six cases.
[5] On April 26, 2016, the Patients filed a Petition for Preliminary Determination
and Default Judgment, asking the court to enter default judgment against all
defendants for failure to timely submit documents to the panels. On May 2,
2016, the court granted the default and entered judgment.
[6] The court later set aside the May 2 order to allow the physicians, the Center,
and the Hospital to respond to the Patients’ petition. The Hospital moved to
dismiss, arguing the court lacked authority to rule on the Patients’ request. The
Hospital also filed its submissions with the review panels in all six cases on July
11, 2016, the day before a scheduled trial court hearing. Meanwhile, Physicians
1 and 2 also filed their submissions in all six cases. Patients and the physicians
later stipulated that Physicians 1 & 2 and the Center would be dismissed from
the preliminary determination. The Patients and the Hospital did not reach a
similar agreement.
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[7] On July 13, 2016, the court entered default against the Hospital for a second
time. The Hospital filed a motion to set aside the default pursuant to Indiana
Trial Rule 60(B)(1), and the Patients asked to schedule a hearing on damages.
After further briefing and oral argument, the court granted the Hospital’s
motion, concluding it presented “a viable basis for relief under Trial Rule
60(B).” Appellants’ App. Vol. II, p. 19.
[8] Indiana Trial Rule 60(B)(1) states:
(B) Mistake-Excusable neglect-Newly discovered evidence-
Fraud, etc. On motion and upon such terms as are just the court
may relieve a party or his legal representative from a judgment,
including a judgment by default, for the following reasons:
(1) mistake, surprise, or excusable neglect; . . . .
A party who files a motion under Rule 60(B)(1) must demonstrate “a
meritorious claim or defense.” Id.
[9] A Rule 60(B) motion is addressed to the equitable discretion of the court, and
we reverse only upon an abuse. Brimhall v. Brewster, 864 N.E.2d 1148 (Ind. Ct.
App. 2007), trans. denied. An abuse of discretion occurs if the court’s decision is
clearly against the logic and effect of the facts and circumstances or if the court
has misinterpreted the law. Baxter v. State, 734 N.E.2d 642 (Ind. Ct. App.
2000).
[10] 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. Kmart Corp. v. Englebright, 719 N.E.2d
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1249 (Ind. Ct. App. 1999), trans. denied. Any doubt of the propriety of a default
judgment should be resolved in favor of the defaulted party. Coslett v. Weddle
Bros. Constr. Co., Inc., 798 N.E.2d 859 (Ind. 2003). Reinstatement of a case is
ultimately a matter of equity. Baker & Daniels, LLP v. Coachmen Indus., Inc., 924
N.E.2d 130 (Ind. Ct. App. 2010), trans. denied.
[11] The Patients raise several claims in support of their argument that the court
should not have set aside the default. They claim the Hospital is erroneously
attempting to litigate the merits of the case rather than present equitable
considerations. They also claim the Hospital erroneously submitted new
evidence in support of its motion for relief, and the evidence was inadmissible
because it could have been presented prior to default.
[12] The Patients also argue the Hospital’s failure to timely file its submissions was
sufficiently egregious that the entry of a default was appropriate and well within
the court’s discretion. They claim the Hospital’s noncompliance is “more
egregious than that found in every case disclosed by petitioners’ research.”
Appellants’ Br. p. 32. The Patients conclude vacating the default was an
inappropriate response to such misfeasance.
[13] They further contend the Hospital has failed to show good cause for setting
aside the default judgment, stating the Hospital erroneously chose to focus on
its late discovery responses rather than its late evidentiary submissions, and
must be held accountable for that choice. They say they warned the Hospital
about the late submissions several weeks before moving for preliminary
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determination. They also argue that the January 24, 2016 death of the spouse
of the Hospital’s primary attorney does not amount to good cause because they
had agreed to extend case deadlines because of the death, but the Hospital was
unreasonably late months after the fact. Finally, the Patients say that the one-
year delay in each of their cases was severely prejudicial.
[14] In response, the Hospital states this case would be the first to hold that a court
abused its discretion by vacating a grant of default judgment. This is not quite
accurate. A panel of this Court reversed a court’s vacatur of a dismissal for
failure to prosecute, determining the court abused its discretion. Munster Cmty.
Hosp. v. Bernacke, 874 N.E.2d 611 (Ind. Ct. App. 2007).
[15] The Hospital states the evidence shows excusable neglect because Bertig’s
deadlines were flexible and the death of the spouse of the Hospital’s primary
attorney on these cases prevented the Hospital from completing the
submissions. The Hospital also claims Patients’ counsel gave it the impression
that Patients wanted the Hospital to prioritize responding to discovery requests
in all the malpractice cases instead of filing evidentiary submissions with the
review panels. The Hospital reasons that, at best, the choice to prioritize
discovery responses over panel submissions based on discussions with the
Patients was a mistake that does not warrant the sanction of default. The
Hospital further claims its submissions were delayed in part because the
Patients were slow to respond to the Hospital’s discovery requests.
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[16] In addition, the Hospital argues the Patients never took steps in the context of
the review panel process to resolve the issue of the Hospital’s overdue
submissions, such as asking the review panels to decide the cases without the
Hospital’s submissions. To the contrary, the Hospital notes that after the
spouse of Hospital’s attorney died, Patients agreed to work with the Hospital on
pending issues such as discovery and the submissions. Instead, the Hospital
argues, they surprised the Hospital by moving for preliminary determination. 2
[17] The Hospital disputes the Patients’ claim that it is inappropriate to cite evidence
in support of a motion for relief from judgment if the evidence could have been
submitted prior to the entry of default judgment. In any event, the Hospital
also argues that most of the evidence it submitted with its motion for relief from
judgment had already been submitted to the court in other parties’ documents.
Finally, the Hospital disagrees with the Patients that it was barred from
discussing the merits of the litigation in its motion for relief from judgment.
[18] In reply, the Patients argue the Hospital failed to demonstrate it was worthy of
the equitable remedy provided by Rule 60(B)(1) because it inappropriately
argued substantive law instead of equitable considerations. They say the
Hospital could not have reasonably understood there was indefinite flexibility
in the panels’ deadlines because the Hospital requested extensions of the
2
The Hospital also argues it had meritorious defenses to the Patients’ claims, a requisite showing to support
relief from judgment. Whelchel v. Cmty. Hosps. of Ind., Inc., 629 N.E.2d 900 (Ind. Ct. App. 1994), trans. denied.
At the hearing on the Hospital’s motion for relief from judgment, the Patients declined to contest that issue,
stating, “It’s correct we’re not challenging that they had a meritorious defense.” Tr. Vol. 2, p. 65.
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deadlines in June 2016, which was after the Patients filed their petition for
preliminary determination. In addition, the Patients reiterate they told the
Hospital its submissions were late several weeks before they filed the petition.
[19] Regarding discovery, the Patients note that the Hospital filed the submissions
the day before a court hearing even though discovery was not complete. They
conclude from these circumstances that the Patients’ delayed discovery
responses could not have been a significant impediment to the Hospital’s filing
of evidentiary submissions with the review panels.
[20] On the question of prejudice, Patients claim that the Hospital’s filing of its
submissions with the review panels one day before a court hearing was
inadequate to cure the delay. They say the Hospital should not be allowed to
attack the underlying sanctions determination and is barred from presenting
evidence in support of its motion for relief from judgment if the evidence could
have been raised prior to default.
[21] We must consider the parties’ arguments in accordance with our standard of
review by determining whether the court’s decision to set aside the default was
clearly against the logic and effect of the facts and circumstances before the
court. Our answer is no. We cannot agree with the Patients that the Hospital
was barred from presenting evidence that could have been presented prior to
default. Per the plain language of Trial Rule 60(B), only motions filed under
60(B)(2) are subject to such a limitation.
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[22] In addition, we cannot agree that the Hospital should not have discussed the
merits of the parties’ claims while seeking relief from default. It is true that a
Trial Rule 60(B)(1) motion does not attack the substantive, legal merits of the
judgment but rather addresses the procedural, equitable grounds justifying the
relief from the finality of a judgment. Kmart Corp., 719 N.E.2d 1249. Some
discussion of the merits is unavoidable because a movant must demonstrate a
meritorious claim or defense in relation to the parties’ allegations. Ind. Tr. Rule
60(B). In this case, the Hospital also presented to the court equitable arguments
in favor of setting aside the default.
[23] Ultimately, the trial court’s decision was well within its discretion. The court
balanced the prejudice to the Patients against the Hospital’s right to present a
defense. See Tr. Vol. 2, pp. 79-80. The Hospital, which was defending against
300 malpractice cases, demonstrated that the death of its attorney’s spouse
delayed its responses. The Patients expressed a willingness to work with the
Hospital due to this tragedy. When the Hospital’s new attorney contacted the
Patients’ attorney in April 2016, he asked the Patients to state their priorities for
the various cases. The Patients’ attorney mentioned that the evidentiary
submissions were overdue but stated that receiving discovery responses from
the Hospital was the highest priority.
[24] Although the Patients were not required to seek lesser sanctions before
requesting default, it is relevant to the facts and circumstances that the Patients
did not first seek lesser sanctions, such as asking the panel chairperson to
consider the cases without the late submissions. Cf. Ross v. Bachkurinskiy, 770
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N.E.2d 389 (Ind. Ct. App. 2002) (no abuse in denying motion for relief from
default; court warned plaintiff that failure to comply with discovery deadlines
could result in default).
[25] Finally, it is curious that both the Anonymous Physicians and the Hospital
were tardy in filing submissions, but when the physicians and the Hospital filed
their submissions after the court proceedings began, the Patients were willing to
dismiss only the Anonymous Physicians from the trial court proceedings.
Considering these facts and circumstances, we find no abuse of discretion.
[26] Affirmed.
Vaidik, C.J., and Mathias, J., concur.
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