Court Opinion

ID: 9711657
Source: CourtListenerOpinion
Date Created: 2023-08-26 04:36:09.265444+00
Date Added: 2024-06-11T18:23:06.551717
License: Public Domain

BARTEAU, Judge,
dissenting.
Gallant was fully aware that a lawsuit had been filed by its insured against Rickelman, which judgment would be binding upon Gallant should Rickelman be uninsured: Gal*596lant’s “neglect” in failing to intervene was not “excusable” under the Condon and Carvey standards, and the trial court properly denied Gallant’s motion to set aside the default judgment. For that reason, I dissent from the majority decision setting aside the default judgment.
In the Condon and Carvey decisions upon which Gallant and the majority rely, the plaintiffs’ attorneys made affirmative misrepresentations which caused the defaulted parties to refrain from defending themselves in the action: In Carvey, for example, the plaintiffs attorney indicated he was filing suit only to pursue parties other than the defaulted party, who had already settled with the plaintiff. The defaulted party was told he did not need to defend. In Condon, the plaintiffs attorney represented in August that he was filing suit only to satisfy the statute of limitations, and that he would allow the defaulted party an indefinite extension of time for pleading. The defaulted party talked to, or left telephone messages with, the plaintiffs attorney periodically through November of the following year*. In a conversation that May, a secretary to the plaintiffs attorney represented that after another suit was resolved in about two weeks, “they will work on getting this suit resolved.” 459 N.E.2d at 1206. But on June 17, a motion for default judgment was filed.
No such affirmative representation which would lead a party to refrain from becoming involved in a lawsuit was made by Toliver. To the contrary, Toliver’s counsel notified Gallant at least twice that he believed Rickel-man was uninsured, thus implicating Gallant’s interests, and he indicated to Gallant why he believed Rickelman to be uninsured. He so informed Gallant about a month before he filed suit, and again about two weeks after he filed suit. Gallant’s response was that it would not act on the claim until it received proof that Rickelman was uninsured — proof which Toliver’s counsel had informed Gallant it had been unable to obtain, but hoped could be obtained in the course of the lawsuit.
So, Gallant, a presumably sophisticated litigant, had notice that a lawsuit was likely to be filed, and received notice, along with a copy of the complaint, soon after one was filed. Yet, it declined to intervene to protect its interests until after a judgment had been entered.
An insurer who chooses not to intervene in an action of this nature is bound by a judgment against the uninsured motorist if it has notice of the “filing and pendency” of the complaint. Stewart v. Walker, 597 N.E.2d 368, 372 (Ind.Ct.App.1992). Gallant had ample notice of the “filing and pendency” of Toliver’s complaint:
In this context, receiving a copy of the complaint filed by its insured against a purportedly uninsured motorist, early enough to allow intervention, suffices to inform the insurer that its interests may be in jeopardy, and therefore providing an instigation for it, as expressed by the court below, to “come out of the woodwork” and enter its appearance in the trial court.... Conversely, an insurer that does not intervene runs the risk that the plaintiff will obtain a judgment, that the defendant will prove to be judgment proof, and that the plaintiff will seek satisfaction from the insurer.

Id.

The decision whether to set aside a default judgment is within the sound discretion of the trial court, and we should reverse its decision only if the trial court has abused its discretion. Such an abuse of discretion should be found only when the trial court’s action is clearly against the logic and effect of the circumstances. Sears v. Blubaugh, 613 N.E.2d 468 (Ind.Ct.App.1993). The trial court was well within its discretion to deny Gallant’s motion to set aside the default judgment in this lawsuit; Gallant was notified in a timely manner that the lawsuit had been filed, it was aware of the pi’ogress of the lawsuit, and it was aware of its potential interest in the outcome of the lawsuit, but it declined to intervene until after judgment.
I would affirm the trial court.