Adam Hayden and Above the Cut Restoration, LLC v. Genevieve Carmany (mem. dec.)

MEMORANDUM DECISION FILED
Pursuant to Ind. Appellate Rule 65(D), Jun 29 2018, 7:56 am
this Memorandum Decision shall not be CLERK
Indiana Supreme Court
regarded as precedent or cited before any Court of Appeals
and Tax Court
court except for the purpose of establishing
the defense of res judicata, collateral
estoppel, or the law of the case.
ATTORNEY FOR APPELLANTS ATTORNEY FOR APPELLEE
Scott A. Kreider Scott A. Norrick
Kreider McNevin Schiff LLP Anderson, Indiana
Indianapolis, Indiana
IN THE
COURT OF APPEALS OF INDIANA
Adam Hayden and Above the June 29, 2018
Cut Restoration, LLC, Court of Appeals Case No.
Appellants-Defendants, 48A02-1712-PL-2863
Appeal from the Madison Circuit
v. Court
The Honorable Thomas Newman,
Genevieve Carmany, Judge
Appellee-Plaintiff. Trial Court Cause No.
48C03-1707-PL-72
Bradford, Judge.
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Case Summary
[1] Appellee Genevieve Carmany (“Appellee”) filed a complaint against
Appellants Adam Hayden and Above the Cut Restoration LLC (“Appellants”)
on July 31, 2017. Appellants were served on August 14, 2017. On September
21, 2017, after no responsive pleading was filed, Appellee moved for default
judgment. The trial court granted the motion for default judgment on
September 25, 2017. On October 12, 2017, Appellants filed a motion for relief
from judgment. A hearing was held on November 1, 2017. The trial court
denied the motion on November 15, 2017.
[2] Appellants argue that the trial court abused its discretion when it found that
there was no excusable neglect and denied Appellants’ motion to set aside the
default judgment. Finding no abuse of discretion, we affirm the judgment of
the trial court.
Facts and Procedural History
[3] On July 31, 2017, Appellee filed a complaint against Appellants setting forth
claims of a breach of warranty, a breach of contract, and a violation of the
Indiana Home Improvement Contract Act (“HICA”) based on allegedly
deceptive business practices. Appellants were served with the complaint and
summons on August 14, 2017. Appellants’ answer was due by September 6,
2017. On September 21, 2017, after no responsive pleading was filed to the
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complaint and thirty-eight days after service, Appellee moved for default
judgment.
[4] The trial court granted the motion for default judgment on September 25, 2017.
Two days later, Appellants’ counsel submitted an answer and request for
enlargement of time. The trial court initially granted the request for additional
time, but later vacated the order as improvidently granted.
[5] On October 12, 2017, Appellants, with new counsel, filed a verified motion for
relief from judgment pursuant to Trial Rule 60(B). Attached to the motion
were excerpts of text messages regarding this case. On October 16, 2017,
Appellee filed an opposition to defendants’ request for relief from judgment and
motion to strike defendant’s exhibits. The trial court held a hearing on
November 1, 2017. On November 16, 2017, the trial court entered an order
denying the request to set aside the default judgment.
Discussion and Decision
[6] A trial court’s decision regarding whether to set aside a default judgment is
given substantial deference and our review is limited to whether the trial court
abused its discretion. Nwannunu v. Weichman & Assocs., P.C., 770 N.E.2d 871,
876 (Ind. Ct. App. 2002). In reviewing the trial court’s decision, we will not
reweigh the evidence or substitute our judgment for that of the trial court. Id.We will only reverse if the trial court’s decision is clearly against the logic and
effect of the facts and circumstances before the court. Id.Court of Appeals of Indiana | Memorandum Decision 48A02-1712-PL-2863| June 29, 2018 Page 3 of 7
[7] “A party seeking to set aside a default judgment under T.R. 60(B)(1) must
demonstrate that the judgment was entered as a result of mistake, surprise, or
excusable neglect.” Id. The trial court has broad discretion in this area because
any determination of mistake, surprise, or excusable neglect must turn upon the
particular facts and circumstances of each case. Id. While making its
determination, the trial court must balance the need for an efficient judicial
system with the judicial preference for deciding cases on the merits. Id.[8] In the present case, Appellants were served on August 14, 2017. That same
day, Appellants contacted an attorney about the Complaint. Appellants
followed up several times before the deadline to respond had passed. When
asked, the Appellants’ attorney said that she was “finishing up prep” and things
were “covered.” App. Vol. II p. 29. Those statements were not necessarily
untrue. The deadline to respond had not yet passed. Appellants were well
aware of when the deadline to respond was and were not told that a response
had been filed on or before the deadline passed.
[9] Appellants point to several text messages as evidence that there was excusable
neglect in this case. Appellee, however, raises concerns regarding the
admissibility of these texts. Assuming, arguendo, that the text messages were
properly admitted, Appellants still failed to show that the trial court abused its
discretion. There is a large body of Indiana case law which does not relieve a
client from the consequences of an attorney’s action or inaction. See, e.g.,
Weinreb v. TR Developers, LLC, 943 N.E.2d 856, 867 (Ind. Ct. App. 2011)
(affirming the denial of two motions for relief from judgment and noting even
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gross negligence by the attorney was insufficient to establish grounds for relief);
Thompson v. Thompson, 811 N.E.2d 888, 904 (Ind. Ct. App. 2004) (affirming the
denial of a motion for relief from judgement on the grounds that the attorney’s
negligence was binding on the client); Int’l Vacuum, Inc. v. Owens, 439 N.E.2d
188, 190 (Ind. Ct. App. 1982) (affirming the denial of a motion to set aside
default judgment where appellant failed to demonstrate that it had exercised
due diligence in keeping informed about the case).
[10] Appellants, however, cite to several cases in support of their claim that the
breakdown in communication with their attorney was enough for purposes of
Rule 60(b). In many of those cases, the defaulted party produced evidence
establishing a breakdown in communication with a third party, like an
insurance company, that was obligated to arrange for counsel for the defaulted
party as that party’s agent. These cases are easily distinguishable from the
present case as there is no intervening third party here. The facts of the other
cases that Appellants cited were so extreme that the courts found that they were
exceptions to the general rule that attorney negligence is imputed on the client.
See, e.g., Rose v. Rose, 390 N.E.2d 1056, 1058 (Ind. Ct. App. 1979) (describing
the attorney’s conduct1 as “unexplainable and inexcusable misfeasance and
nonfeasance” while the client was “conscientious and diligent”); Kmart Corp. v.
Englebright, 719 N.E.2d 1249 (Ind. Ct. App. 1999) (finding that the defaulted
1
The attorney from Kentucky in Rose repeatedly lied to the client, stating that he had hired an attorney in
Indiana to represent the client. 390 N.E.2d at 1057.
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party’s failure to respond to the complaint constituted excusable neglect where
defaulted party reasonably relied on representations of opposing counsel which
granted defaulted party an indefinite extension of time in which to file
responsive pleadings and counsel’s appearance). These cases are
distinguishable from the present case because they involved gross misconduct or
actions by opposing counsel, neither of which is present here. Based on our
review of the governing caselaw as applied to the facts of this case, the trial
court did not abuse its discretion when it denied the Appellants’ motion for
relief from judgment and found that the attorney’s alleged misconduct was
attributable to the client for purposes of Trial Rule 60(B).
[11] The judgment of the trial court is affirmed.
Kirsch, J., concurs.
Baker, J., concurs in result with opinion.
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IN THE
COURT OF APPEALS OF INDIANA
Adam Hayden and Above the Court of Appeals Case No.
Cut Restoration, LLC, 48A02-1712-PL-2863
Appellants-Defendants,
v.
Genevieve Carmany,
Appellee-Plaintiff
Baker, Judge, concurring in result.
[12] Precedent compels me to concur, notwithstanding my abhorrence of default
judgments where the defaulted party’s counsel has dropped the ball.
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