Joshua A. Hinman v. Members Choice Federal Credit Union (mem. dec.)

MEMORANDUM DECISION
FILED
Pursuant to Ind. Appellate Rule 65(D), Apr 19 2016, 5:53 am
this Memorandum Decision shall not be CLERK
regarded as precedent or cited before any Indiana Supreme Court
Court of Appeals
court except for the purpose of establishing and Tax Court
the defense of res judicata, collateral
estoppel, or the law of the case.
ATTORNEY FOR APPELLANT
Joshua A. Hinman
Olympia, Washington
Appellant Pro Se
IN THE
COURT OF APPEALS OF INDIANA
Joshua A. Hinman, April 19, 2016
Appellant-Defendant, Court of Appeals Case No.
53A01-1509-SC-1342
v. Appeal from the Monroe County
Circuit Court
Members Choice Federal Credit The Honorable Elizabeth Cure,
Union, Judge
Appellee-Plaintiff. Trial Court Cause No.
53C04-1303-SC-1211
Altice, Judge.
Case Summary
[1] Members Choice Federal Credit Union (the Bank) filed a consumer debt
collection action against Joshua A. Hinman in small claims court. The Bank
obtained a default judgment against Hinman, which was subsequently set aside
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due to insufficient service of process. The Bank then properly served Hinman,
and the small claims court scheduled a collection hearing. The hearing was
continued upon Hinman’s request and eventually set for a contested hearing.
Hinman failed to appear for the hearing, and a default judgment was entered
against him in the amount of $1889.86, plus attorney fees of $500.00 and court
costs. On appeal, Hinman proceeds pro se and raises a number of jurisdictional
claims. He also challenges the award of attorney fees.
[2] We affirm in part and reverse in part.
Facts & Procedural History
[3] On March 22, 2013, the Bank filed a notice of claim against Hinman in Monroe
County Small Claims Court. Service was mailed to an incorrect address in
Minnesota and signed by a David Larson, who is not otherwise connected to
this case. The small claims court held a collection hearing on May 14, 2013,
and entered a default judgment against Hinman.
[4] On June 20, 2013, the Bank initiated proceedings supplemental. Unable to
perfect service, the action was cancelled. The case was reopened by the Bank
on October 10, 2014, and Hinman was properly served at his current address in
Olympia, Washington.1 On January 16, 2015, the small claims court received
correspondence from Hinman, which the court treated as a motion to set aside
1
Hinman moved from Indiana to Minnesota in 2011 and then to Washington in 2014.
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default judgment. The small claims court set the motion for hearing and
directed Hinman that he could appear by telephone.
[5] After two continuances, on April 2, 2015, the court held a hearing on Hinman’s
motion. Hinman appeared telephonically, and the Bank did not dispute his
claim of insufficient service of process. Accordingly, the court set aside the
default judgment. The court verified Hinman’s current address and then
indicated that Hinman would be properly served and a new hearing set.
[6] Before the hearing concluded, the court ordered the Bank to make sure to
provide Hinman with proof of the debt. The Bank’s counsel asked permission
to “inquire a little bit” and proceeded to ask Hinman whether he had
voluntarily surrendered the vehicle back to the Bank. Transcript from April 2015
Hearing at 8. Hinman stated that he could not recall specifically but assumed he
had. The Bank’s counsel responded, “what I’m going to send out to you is
called a Validation of Debt under the Fair Debt Collection Practices Act and so
then I’ll have some documentation with respect to the debt, uh, you’ll have that
within about fifteen (15) days”. Id. at 8-9. Counsel then told Hinman to feel
free to call counsel to try to work something out before the hearing if he desired.
[7] On April 7, 2015, the Bank reopened the case by filing a notice of claim against
Hinman. This time, Hinman received proper notice and filed for a
continuance, which was granted. The small claims court rescheduled the
hearing for August 4, 2015. Upon the Bank’s motion, the matter was reset for a
contested hearing on August 6, 2015. When Hinman failed to appear for the
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hearing, the Bank presented brief testimony from Stephanie Lake, the collection
officer for the Bank, regarding the debt. The small claims court entered a
default judgment against Hinman in the amount of $1889.86, plus attorney fees
of $500.00 and court costs. Hinman now appeals.
Discussion & Decision
[8] We initially observe that the Bank has not filed an appellate brief. Accordingly,
we will not undertake the burden of developing arguments for the Bank. See
Maser v. Hicks, 809 N.E.2d 429, 432 (Ind. Ct. App. 2004). When an appellee
does not file a brief, we apply a less stringent standard of review and may
reverse when the appellant establishes prima facie error. Id. “‘Prima facie’ is
defined as ‘at first sight, on first appearance, or on the face of it.’” Id. (quoting
Parkhurst v. Van Winkle, 786 N.E.2d 1159, 1160 (Ind. Ct. App. 2003)).
Jurisdiction
[9] The main thrust of Hinman’s appellate argument is that the small claims court
erred by not immediately dismissing the case for lack of personal jurisdiction
once insufficient service of process was found. He contends the Bank should
not have been allowed to cure its insufficient service, and there should have
been no further inquiries during the April 15 hearing.
[10] Hinman correctly observes that insufficient service of process deprives a trial
court from having personal jurisdiction over a defendant. See Cotton v. Cotton,
942 N.E.2d 161, 164 (Ind. Ct. App. 2011). “A judgment rendered without
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personal jurisdiction over a defendant violates due process and is void.” Id.Recognizing this well-established rule of law, the trial court set aside the default
judgment entered against Hinman in May 2013. The propriety of this ruling is
not in dispute.
[11] Citing no relevant authority, Hinman asserts that after setting aside the default
judgment, the small claims court had “no jurisdictional or judicial authority to
delve into the merits of the case, and certainly no basis to begin preparation for
re-service and re-trial.” Appellant’s Brief at 12. Hinman continues in part:
It was reversible error to allow the [Bank] to merely cure the
insufficient service and maintain an eye on what the Court had
already determined as an eventual future hearing. The Court
swept this procedural violation under the rug and thereby treated
service of process as a minor speed bump, not a constitutional
barricade.
It was also wholly improper for the Court to conduct a
background check on [Hinman] at the erred party’s benefit. The
Court treated improper service as equivalent to a clerical or
administrative mistake that should have little or no bearing, and
appeared to have an interest in ensuring the [Bank] had all the
information necessary to now properly serve [Hinman].
Id.[12] We observe initially that the small claims court did not treat the lack of service
as a minor speed bump. Rather, as required, it set aside the default judgment
because the judgment was void for lack of service. Hinman provides no
authority for his proposition that the court – a small claims court – was required
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to dismiss the entire action at that point and refrain from helping to ensure that
Hinman receive proper service.
[13] Pro se appellants are bound by the Ind. Rules of Appellate Procedure, and
alleged errors are waived where noncompliance with the rules is so substantial
it impedes our appellate consideration of the errors. Perry v. Anonymous
Physician 1, 25 N.E.3d 103, 105 n.1 (Ind. Ct. App 2014), trans. denied. “We will
not consider an assertion on appeal when there is not cogent argument
supported by authority and references to the record as required by the rules.”
Id. See also Ind. Appellate Rule 46(A)(8)(a). Nor will we become an advocate
for an appellant or address arguments that are too poorly developed or
expressed to be understood. Perry, 25 N.E.3d at 105 n.1. Because Hinman
does not support his ultimate argument with any relevant authority, we find it
waived.2
[14] Moreover, we observe that Hinman did not object at the April 2015 hearing
when the court inquired about his current address and employment or when the
2
In addition to his personal jurisdiction argument, Hinman claims that the small claims court lacked subject
matter jurisdiction “the moment a consumer debt collection action was filed against an out-of-state
defendant.” Appellant’s Brief at 14. He also asserts that “telephonic appearances should be outside the
[subject matter jurisdiction] of Small Claims for the fairness of all parties”. Id. at 15. Clearly, Hinman does
not understand the concept of subject matter jurisdiction, and we do not endeavor to enlighten him here. His
argument is not supported by relevant authority or cogent argument and is, therefore, waived.
Similarly, Hinman asserts in passing that the court lacked personal jurisdiction over him because “an out-of-
state defendant with no current ties to the forum state cannot reasonably be expected to be hailed into a
foreign state’s small claims court.” Id. at 17. He did not raise this argument at the April 2015 hearing or
present any evidence in support. See LinkAmerica Corp. v. Cox, 857 N.E.2d 961, 965 (Ind. 2006) (“personal
jurisdiction turns on facts, typically the contacts of the defendant with the forum”). Nor does he present any
significant argument on appeal or even cite Indiana’s long-arm provision, Ind. Trial Rule 4.4(A).
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Bank was permitted to briefly question him. Nor did Hinman object when the
court indicated that the matter would “get straightened out” with Hinman
being properly served and a new hearing set. Transcript from April 2015 Hearing
at 9. Accordingly, Hinman cannot now be heard to complain.
[15] Other than setting aside the default judgment, the small claims court entered no
other judgment and held no additional hearings until after Hinman was
properly served, at which point the court acquired personal jurisdiction over
him. Hinman has failed to establish reversible error in this regard.
Attorney Fees
[16] Hinman also contends that the small claims court erred by awarding the Bank
attorney fees. Noting the American rule, he observes that the Bank offered no
legal justification at the August 2015 hearing for the award of attorney fees.
[17] Indiana has consistently followed the American rule. That is, “in the absence
of statutory authority or an agreement between the parties to the contrary – or
an equitable exception – a prevailing party has no right to recover attorney fees
from the opposition.” Loparex, LLC v. MPI Release Techs., LLC, 964 N.E.2d 806,
816 (Ind. 2012) (footnote omitted).
[18] In this case, the Bank requested attorney fees at the conclusion of the August
2015 hearing. When the court asked the basis for the request, the Bank
responded, “[b]ecause this is the third hearing.” Transcript from August 2015
Hearing at 6. The court then indicated, “[t]hat’s right he has made it a long
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involved process and he had a right to question things.” Id. Despite observing
Hinman’s right to challenge the first default judgment, the court granted the
Bank’s request for attorney fees.
[19] The Bank asserted no contractual right to attorney fees at the hearing. Rather,
it appears to have based its request on the obdurate behavior exception codified
in Ind. Code § 34-52-1-1(b). See also Loparex, 964 N.E.2d at 816 n.5. This
statutory exception provides, in relevant part, that the court may award
attorney fees to the prevailing party in a civil action if the court finds that the
losing party “litigated the action in bad faith.” I.C. § 34-52-1-1(b)(3). To
constitute bad faith in this regard, the conduct must be vexatious and oppressive
in the extreme. Techna-Fit, Inc. v. Fluid Transfer Prods., Inc., 45 N.E.3d 399, 417
(Ind. Ct. App. 2015).
[20] The record does not support a finding of bad faith. The original default
judgment was void for lack of personal jurisdiction due to insufficient service of
process. Hinman had every right to challenge that void judgment at the second
hearing, which resulted in the judgment being set aside. Consequently, a third
hearing – or first hearing after proper service – was necessary.
[21] We reiterate that because the Bank did not file an appellee’s brief, Hinman is
required to present only a prima facie case that the small claims court erred. See
Norris v. Pers. Fin., 957 N.E.2d 1002, 1009 (Ind. Ct. App. 2011). He has done so
with respect to the award of attorney fees, and therefore we reverse that portion
of the judgment.
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[22] Judgment affirmed in part and reversed in part.
[23] Robb, J. and Barnes, J., concur.
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