Sanders Kennels, Inc. v. Gary Lane ( 2020 )

FILED
Jul 28 2020, 9:22 am
CLERK
Indiana Supreme Court
Court of Appeals
and Tax Court
ATTORNEY FOR APPELLANT ATTORNEY FOR APPELLEE
Andrea L. Ciobanu Adam Lenkowsky
Ciobanu Law, P.C. Roberts Litigation Group
Indianapolis, Indiana Indianapolis, Indiana
IN THE
COURT OF APPEALS OF INDIANA
Sanders Kennels, Inc., July 28, 2020
Appellant/Defendant/ Court of Appeals Case No.
Counter-Plaintiff, 20A-CC-675
v. Appeal from the Marion
Superior Court
Gary Lane, The Hon. Gary L. Miller,
Judge
Appellee/Plaintiff/
Counter-Defendant. Trial Court Cause No.
49D03-1610-CC-37906
Bradford, Chief Judge.
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Case Summary
[1] Around 2013, Gary Lane contacted Sanders Kennels, Inc., a Georgia
corporation, about purchasing Presa Canario dogs for breeding. Lane and
Sanders Kennels eventually entered into a verbal contract, pursuant to which
Lane agreed that he would sell any dogs received from Sanders Kennels under
its name but that he could sell any puppies under his. Sanders Kennels agreed
that it would provide a measure of lifetime care for the dogs and their offspring
and would refer any potential customers from Indiana to Lane. From 2014 to
2016, Lane purchased, agreed to purchase, or received several Presa Canarios
from Sanders Kennels, none of which were suitable for professional breeding.
[2] In October of 2016, Lane sued Sanders Kennels for breach of contract, fraud,
theft, and conversion. In January of 2017, Sanders Kennels moved to dismiss
Lane’s complaint on the basis that the trial court lacked personal jurisdiction
over it, which motion the trial court denied. In June of 2017, Sanders Kennels
filed a counterclaim for defamation based on social media posts Lane had made
that were critical of Sanders Kennels. In January of 2018, Sanders Kennels’
counsel withdrew. In June of 2019, Lane issued his requests for admissions to
Sanders Kennels, which the trial court deemed admitted when Sanders Kennels
failed to respond. In November of 2019, Lane moved for summary judgment
on his claims and Sanders Kennels’ counterclaim, to which Sanders Kennels
also failed to respond. In February of 2020, the trial court entered summary
judgment in favor of Lane and awarded damages. In March of 2020, Sanders
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Kennels moved for relief from judgment and/or to correct error, which motions
the trial court denied.
[3] Sanders Kennels contends that the trial court abused its discretion in denying its
motion for relief from judgment because it was never served with several filings
and orders. Sanders Kennels also contends that the trial court abused its
discretion in denying its motion to correct error because it lacked personal
jurisdiction over Sanders Kennels and because it erroneously entered summary
judgment in favor of Lane. Finding no merit in Sanders Kennels’ arguments,
we affirm.
Facts and Procedural History
[4] Lane is a dog breeder in Indianapolis, and Sanders Kennels is a dog breeding
business operated by Noah Sanders in Dawsonville, Georgia. Around 2013,
after seeing a Sanders Kennels advertisement in Dog Fancy magazine in 2009,
Lane contacted Sanders Kennels about purchasing Presa Canario dames and
sires for breeding. Sanders Kennels represented to Lane that it would provide
him healthy, breed-quality, pure-bred Presa Canarios, as well as supporting
ancestry documentation. Lane and Sanders Kennels entered into an informal,
unwritten business arrangement, pursuant to which Lane would purchase Presa
Canarios and breed them, sell the dogs purchased from Sanders Kennels under
the Sanders Kennels name, and would sell any offspring under his name. In
return, Sanders Kennels agreed to provide lifetime support for the Presa
Canarios they provided to Lane and their offspring, which consisted of
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consultation regarding the sale, care, and treatment of the dogs. Finally,
Sanders Kennels agreed to refer potential Indiana customers to Lane.
[5] Between November of 2014 and March of 2016, Lane purchased, agreed to
purchase, or received several Presa Canarios from Sanders Kennels, all of
which were unsuitable for professional breeding due to health problems,
undocumented ancestry, overbreeding, or some combination of the above.
Beginning in or around March of 2016, Lane made several postings on various
social media that were critical of Sanders Kennels.
[6] On October 24, 2016, Lane sued Sanders Kennels, alleging breach of contract,
fraud, theft, and conversion. The summons issued to the Indiana Secretary of
State identified Sanders Kennels’ address as 1301 Elliot Family Parkway,
Dawsonville, Georgia, 30534 (“the Mailing Address”). On January 5, 2017,
Sanders Kennels moved to dismiss Lane’s complaint on the basis that the trial
court lacked personal jurisdiction over it. On January 25, 2017, Lane
responded to Sanders Kennels’ motion to dismiss and attached a sworn
affidavit from Lane detailing the informal business relationship he had with
Sanders Kennels. On May 19, 2017, the trial court denied Sanders Kennels’
motion to dismiss. On June 16, 2017, Sanders Kennels filed a counterclaim
alleging defamation. On January 22, 2018, counsel for Sanders Kennels moved
for leave to withdraw, which leave the trial court granted the next day. Counsel
did not appear for Sanders Kennels again until March of 2020.
[7] Meanwhile, on June 7, 2019, Lane served his requests for admissions on
Sanders Kennels, and the certificate of service indicated that requests were
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mailed to Sanders Kennels at the Mailing Address. Sanders Kennels did not
respond to the requests for admissions. On July 17, 2019, Lane moved to deem
his requests for admissions from Sanders Kennels admitted, which motion
indicated that it was mailed to Sanders Kennels at the Mailing Address. The
trial court’s August 7, 2019, order deeming the requests for admissions admitted
listed Sanders Kennels’ address as the Mailing Address, and the chronological
case summary (“CCS”) indicates that “Automated Paper Notice” was issued to
the parties. Appellee’s App. Vol. II p. 8.
[8] On November 14, 2019, Lane moved for summary judgment, and the certificate
of service indicated that the motion was mailed to Sanders Kennels at the
Mailing Address. On December 17, 2019, the trial court entered summary
judgment in favor of Lane. The trial court’s order indicates that a copy was
sent to the Mailing Address, and the CCS shows an “Automated Paper Notice”
being sent to Sanders Kennels. Appellee’s App. Vol. II p. 8. On January 14,
2020, Lane moved to continue the damages hearing, which motion indicated
that it was mailed to the Mailing Address, and when the trial court granted
Lane’s motion the next day, its order included Sanders Kennels’ address, and
the CCS shows that “Automated Paper Notice” was given. Appellee’s App.
Vol. II pp. 8–9. On February 12, 2020, the trial court entered final judgment in
favor of Lane in the amount of $277,312.60. The trial court’s order on final
judgment included Sanders Kennels’ address as the Mailing Address, and the
CCS shows an “Automated Paper Notice” being sent to Sanders Kennels.
Appellee’s App. Vol. II p. 8.
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[9] On March 10, 2020, Sanders Kennels, represented by counsel again, moved to
correct error and/or for relief from judgment pursuant to Indiana Trial Rules 59
and 60. On March 11, 2020, the trial court denied Sanders Kennels’ motion to
correct error and for relief from judgment.
Discussion and Decision
I. Motion for Relief from Judgment
[10] Sanders Kennels contends that the trial court abused its discretion in denying its
motion for relief from judgment. Trial Rule 60(B) provides, in part, that “[o]n
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[.]”
Our scope of review for the grant or denial of a T.R. 60(B)
motion is limited to whether the trial court abused its discretion.
An abuse of discretion occurs where the trial court’s judgment is
clearly against the logic and effect of the facts and inferences
supporting the judgment for relief.
McIntyre v. Baker, 703 N.E.2d 172, 174 (Ind. Ct. App. 1998) (citations omitted).
[11] Pursuant to Trial Rule 60(B)(1), a party may obtain relief from judgment for
“mistake, surprise, or excusable neglect”:
Under subsection (B)(1), a trial court may relieve a party from a
default judgment for “mistake, surprise, or excusable neglect” if
the party files a motion within one year of the judgment and
alleges a meritorious claim or defense. Addressed to the trial
court’s equitable discretion, “[a] Trial Rule 60(B)(1) motion does
not attack the substantive, legal merits of a judgment, but rather
addresses the procedural, equitable grounds justifying the relief
from the finality of a judgment.” [Kmart Corp. v. Englebright, 719
N.E.2d 1249, 1254 (Ind. Ct. App. 1999) (citation omitted), trans.
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denied]. Because “[t]here is no general rule as to what constitutes
excusable neglect under Trial Rule 60(B)(1),” “[e]ach case must
be determined on its particular facts.” Id. (citations omitted).
Huntington Nat. Bank v. Car-X Assoc. Corp., 39 N.E.3d 652, 655 (Ind. 2015). A
movant filing pursuant to subsection 60(B)(1) must also allege a meritorious
claim or defense. T.R. 60(B).
[12] Sanders Kennels contends that its neglect to respond to Lane’s requests for
admissions, summary judgment motion, the trial court’s order setting a
damages hearing, and the trial court’s order continuing the damages hearing
was excusable because it did not have notice of any of those documents.
Sanders Kennels claims the record indicates that only electronic service of these
documents was attempted, service that would have failed because Sanders
Kennels had no email address registered with the Indiana Case Management
System at the time.
[13] While Sanders Kennels’ claim would likely be compelling if true, the notion
that Lane only attempted electronic service is fatally undercut by the record.
Sanders Kennels does not dispute that the Mailing Address is correct, and it
was to this address that Lane’s complaint was first sent, which Sanders Kennels
obviously received, because it retained counsel and responded to it. Regarding
the orders at issue, the record clearly indicates that “Automated Paper Notice”
was issued of the trial court’s orders deeming the requests for admissions
admitted, entering summary judgment in favor of Lane, and continuing the
damages hearing. Appellee’s App. Vol. II pp. 8–9. Moreover, all three of the
orders contained the Mailing Address, and the order entering summary
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judgment in favor of Lane specifically indicated that a copy was sent to that
address.
[14] As for Lane’s filings, namely his requests for admissions, motion to deem the
requests admitted, and summary-judgment motion, and the summary-judgment
motion’s accompanying memorandum, all contained certificates of service
indicating that they were mailed to the Mailing Address. The requests for
admissions provided that “a true and accurate copy of the foregoing was served
on June 7, 2019 by U.S. Mail, Postage Prepaid, addressed to: Noah Sanders[,]
SANDERS KENNELLS [sic] LLC[,] 1301 Elliot Family Parkway[,]
Dawsonville, GA 30534[.]” Appellant’s App. Vol. II p. 87. The motion to
deem the requests admitted, the summary judgment motion, and the summary-
judgment motion’s accompanying memorandum all provided that “a true and
accurate copy of the foregoing was mailed, postage prepaid, […] addressed to:
Noah Sanders[,] SANDERS KENNELS [,] 1301 Elliot Family Parkway[,]
Dawsonville, GA 30534[.]” Appellant’s App. Vol. II pp. 74, 90; Vol. III p. 11.
[15] Indiana Trial Rule 5(B)(2) provides that
[i]f service is made by mail, the papers shall be deposited in the
United States mail addressed to the person on whom they are
being served, with postage prepaid. Service shall be deemed complete
upon mailing. Proof of service of all papers permitted to be mailed
may be made by […] certificate of an attorney. […] Service by
delivery or by mail at such address shall be deemed sufficient and
complete.
(Emphases added). Because the record clearly indicates that the filings in
question were mailed, postage paid, to Sanders Kennels, the requirements of
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Trial Rule 5(B)(2) were thereby satisfied. To summarize, because the record
clearly indicates that Sanders Kennels was properly served with the documents
in question, it has failed to establish that the trial court abused its discretion by
failing to determine that its neglect was excused by a lack of notice.
Consequently, we need not address Sanders Kennels’ claim that it had a
meritorious claim or defense to Lane’s summary-judgment motion.
II. Motion to Correct Error
[16] In the alternative, Sanders Kennels contends that the trial court abused its
discretion in denying his motion to correct error.
In general, we review a trial court’s ruling on a motion to correct
error for an abuse of discretion. Hawkins v. Cannon, 826 N.E.2d
658, 661 (Ind. Ct. App. 2005), trans. denied. However, to the
extent the issues raised […] are purely questions of law, our
review is de novo. See Ind. BMV v. Charles, 919 N.E.2d 114, 116
(Ind. Ct. App. 2009) (“Although rulings on motions to correct
error are usually reviewable under an abuse of discretion
standard, we review a case de novo when the issue ... is purely a
question of law.”); Christenson v. Struss, 855 N.E.2d 1029, 1032
(Ind. Ct. App. 2006) (challenge to magistrate’s authority to
conduct hearing on motion to correct error presented question of
law reviewed de novo).
City of Indpls. v. Hicks, 932 N.E.2d 227, 230 (Ind. Ct. App. 2010), trans. denied.
A. Motion to Withdraw Admissions
[17] Sanders Kennels argues that the trial court abused its discretion in not allowing
it to withdraw its admissions. Trial Rule 36(B) provides, in part, that “the court
may permit withdrawal or amendment when the presentation of the merits of
the action will be subserved thereby and the party who obtained the admission
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fails to satisfy the court that withdrawal or amendment will prejudice him in
maintaining his action or defense on the merits.” Sanders Kennels, however,
did not raise this claim until its motion to correct error, and it is well-settled that
“[a] party may not raise an issue for the first time in a motion to correct
error[.]” Van Winkle v. Nash, 761 N.E.2d 856, 859 (Ind. Ct. App. 2002).1
B. Personal Jurisdiction
[18] Sanders Kennels contends that the trial court erred in denying its motion to
dismiss, which was based on its claim that the trial court did not have personal
jurisdiction over it. Because personal jurisdiction is a question of law, the
determination of the existence of personal jurisdiction is subject to de novo
review. LinkAmerica Corp. v. Cox, 857 N.E.2d 961, 965 (Ind. 2006). To the
extent that personal jurisdiction turns on facts such as contacts of the defendant
with the forum state, however, the findings of fact by the trial court are
reviewed for clear error. Id.
The Due Process Clause of the Fourteenth Amendment requires
that before a state may exercise jurisdiction over a defendant, the
defendant must have “certain minimum contacts with [the state]
such that the maintenance of the suit does not offend ‘traditional
notions of fair play and substantial justice.’” Int’l Shoe Co. v.
Wash., 326 U.S. 310, 316, 66 S. Ct. 154, 90 L. Ed. 95 (1945)
(quoting Milliken v. Meyer, 311 U.S. 457, 463, 61 S. Ct. 339, 85 L.
Ed. 278 (1940)).
1
This argument, like Sanders Kennels’ Trial Rule 60(B) argument, is premised on Lane’s alleged failure to
serve Sanders Kennels with his requests for admissions. We have already determined, however, that the
record does not support this allegation.
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[….]
If the defendant’s contacts with the forum state are not
“continuous and systematic,” specific jurisdiction may be
asserted if the controversy is related to or arises out of the
defendant’s contacts with the forum state. [Helicopteros Nacionales
de Colombia, S.A. v. Hall, 466 U.S. 408, 414 n.8, 104 S. Ct. 1868,
80 L. Ed. 2d 404 (1984).] Specific jurisdiction requires that the
defendant purposefully availed itself of the privilege of
conducting activities within the forum state so that the defendant
reasonably anticipates being haled into court there. Burger King
Corp. v. Rudzewicz, 471 U.S. 462, 474–75, 105 S. Ct. 2174, 85 L.
Ed. 2d 528 (1985). A single contact with the forum state may be
sufficient to establish specific jurisdiction over a defendant, if it
creates a “substantial connection” with the forum state and the
suit is related to that connection. McGee v. Int’l Life Ins. Co., 355
U.S. 220, 223, 78 S. Ct. 199, 2 L. Ed. 2d 223 (1957). But a
defendant cannot be haled into a jurisdiction “solely as a result of
random, fortuitous, or attenuated contacts or of the unilateral
activity of another party or a third person.” Burger King, 471 U.S.
at 475, 105 S. Ct. 2174 (internal quotation marks omitted) (citing
Helicopteros, 466 U.S. at 417, 104 S. Ct. 1868; Keeton v. Hustler
Magazine, Inc., 465 U.S. 770, 774, 104 S. Ct. 1473, 79 L. Ed. 2d
790 (1984); World-Wide Volkswagen Corp. v. Woodson, 444 U.S.
286, 299, 100 S. Ct. 559, 62 L. Ed. 2d 490 (1980)).
LinkAmerica Corp., 857 N.E.2d at 967.
[19] As an initial matter, to the extent that Sanders Kennels disputes the nature of its
business agreement with Lane, Lane submitted a sworn affidavit with his
response to Sanders Kennels’ motion to dismiss describing the nature of his
business agreement with Sanders Kennels. The affidavit indicates that Lane
and Sanders Kennels had an informal business arrangement, pursuant to which
Lane would purchase Presa Canarios and breed them, sell the dogs purchased
from Sanders Kennels under the Sanders Kennels name, and would sell any
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offspring under his name. The affidavit also indicates that Sanders Kennels
agreed to provide lifetime support for any Presa Canarios it sold to Lane, as
well as any puppies, which included consultation regarding the sale, care, and
treatment of the dogs. Finally, the affidavit indicates that Sanders Kennels
agreed to forward inquiries from potential Indiana customers to Lane. The trial
court was entitled to credit Lane’s affidavit regarding the nature of the business
relationship between Lane and Sanders Kennels and apparently did so.
LinkAmerica Corp., 857 N.E.2d at 965.
[20] That said, Sanders Kennels argues that it did not purposefully avail itself of the
privilege of conducting business in Indiana because it did not attempt or intend
to serve the Indiana market, it did not transport dogs to Indiana, it is not
registered to do business in Indiana, no employee ever travelled to Indiana for
business purposes, contracts were agreed upon over the telephone, and payment
was made using a credit card processing system in Georgia. Sanders Kennels
also argues that its 2009 advertisement in Dog Fancy did not create a substantial
connection to Indiana. While this is all well and good, Lane does not argue
that any of it is the reason Indiana can exercise personal jurisdiction over
Sanders Kennels—he argues that the anticipated ongoing nature of their
business agreement is. Sanders Kennels responds to this contention by arguing,
essentially, that any business relationship it may have had with Lane is
irrelevant because Lane’s claims arose from the sales of individual dogs, not the
business relationship. We do not believe that it is possible to separate the sale
of the dogs from the business agreement. Indeed, the sale of dogs was the entire
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point of the business relationship, from which all of the other obligations
flowed. Sanders Kennels would not be able to provide lifetime support for dogs
that were never delivered, and there would be no point in referring potential
customers to Lane if he had no Presa Canarios to sell.
[21] With this in mind, we turn to the question of whether Lane and Sanders
Kennels’ business agreement was sufficient to subject Sanders Kennels to the
jurisdiction of Indiana courts. The United States Supreme Court has noted that
“[w]ith respect to interstate contractual obligations, we have emphasized that
parties who ‘reach out beyond one state and create continuing relationships and
obligations with citizens of another state’ are subject to regulation and sanctions
in the other State for the consequences of their activities.” Burger King Corp.,
471 U.S. at 473 (citation omitted). Moreover, when considering contracts,
“prior negotiations and contemplated future consequences, along with the terms of
the contract and the parties’ actual course of dealing […] must be evaluated in
determining whether the defendant purposefully established minimum contacts
within the forum.” Id. at 479 (emphasis added).
[22] We have little trouble concluding that Sanders Kennels created sufficient
contacts with Indiana to establish specific jurisdiction; its contacts with Indiana
are hardly “random, fortuitous, or attenuated[,]” nor are we determining that it
is subject to the jurisdiction of Indiana’s courts by virtue “of the unilateral
activity of another party or a third person.” LinkAmerica Corp., 857 N.E.2d at
967 (citing Burger King, 471 U.S. at 475). Sanders Kennels reached out beyond
Georgia into Indiana and created what was anticipated to be a continuing
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relationship with Lane, with all of its expected benefits and obligations. In light
of Sanders Kennels’ continuing obligations to Lane, it was reasonable to expect
that it might be haled into an Indiana court at some point. See LinkAmerica
Corp., 857 N.E.2d at 967. Because we conclude that the trial court had specific
personal jurisdiction over Sanders Kennels as matter of law, Sanders Kennels
has failed to establish that the trial court erred in denying its motion to dismiss.2
C. Summary Judgment
[23] Finally, Sanders Kennels contends that the trial court abused its discretion in
denying its motion to correct error, in which it sought the withdrawal of its
entry of summary judgment in favor of Lane on his claims and Sanders
Kennels’ counterclaim. When reviewing the grant or denial of a summary
judgment motion, we apply the same standard as the trial court. Merchs. Nat’l
Bank v. Simrell’s Sports Bar & Grill, Inc., 741 N.E.2d 383, 386 (Ind. Ct. App.
2000). Summary judgment is appropriate only where the evidence shows there
is no genuine issue of material fact and the moving party is entitled to a
judgment as a matter of law. Id.; Ind. Trial Rule 56(C). To prevail on a motion
2
If it is determined that a defendant has contacts with the forum state sufficient for general or specific
jurisdiction, due process also requires that the assertion of personal jurisdiction over the defendant be
reasonable. LinkAmerica Corp., 857 N.E.2d at 967 We need not address the question of whether assertion of
personal jurisdiction over Sanders Kennels is reasonable, however, because Sanders Kennels argues only that
minimum contacts did not exist. It is worth noting that the assertion of personal jurisdiction will rarely be
found unreasonable if minimum contacts exist. Id.
Sanders Kennels also claims that the trial court does not have jurisdiction pursuant to Trial Rule 4.4,
commonly referred to as Indiana’s long-arm provision. The Indiana Supreme Court has stated that “[t]he
2003 amendment to Indiana Trial Rule 4.4(A) was intended to, and does, reduce analysis of personal
jurisdiction to the issue of whether the exercise of personal jurisdiction is consistent with the Federal Due
Process Clause.” LinkAmerica Corp., 857 N.E.2d at 967 Consequently, we do not separately address Sanders
Kennels’ arguments pursuant to Trial Rule 4.4(A).
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for summary judgment, a party must demonstrate that the undisputed material
facts negate at least one element of the other party’s claim. Merchs. Nat’l Bank,
741 N.E.2d at 386.
[24] Sanders Kennels makes several arguments regarding Lane’s motion for
summary judgment and designated evidence, including that some of his
designated evidence was improperly included, he failed to designate evidence
tending to show the existence of a verbal contract, and that several claims were
insufficiently pled. We need not address any of these claims on the merits,
however, because “[i]t is well settled that arguments not presented to the trial
court on summary judgment are waived on appeal.” King v. Ebrens, 804 N.E.2d
821, 826 (Ind. Ct. App. 2004). It also does not help Sanders Kennels that it
raised some or all of these arguments in its motion to correct error, for it is
equally well-settled that, as mentioned, “[a] party may not raise an issue for the
first time in a motion to correct error[.]” Van Winkle, 761 N.E.2d at 859.
Sanders Kennels has failed to establish that the trial court abused its discretion
in denying his motion to correct error.
[25] The judgment of the trial court is affirmed.
Baker., J., and Pyle, J., concur.
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