Court Opinion

ID: 2727911
Source: CourtListenerOpinion
Date Created: 2014-09-08 21:25:32.842957+00
Date Added: 2024-06-11T13:26:56.827770
License: Public Domain

Feb 27 2013, 10:25 am

FOR PUBLICATION

ATTORNEY FOR APPELLANT:                        ATTORNEY FOR APPELLEE:

SHAUN T. OLSEN                                 DAVID W. HOLUB
Law Office of Weiss & Schmidgall, P.C.         Law Offices of David W. Holub, P.C.
Merrillville, Indiana                          Merrillville, Indiana

                             IN THE
                   COURT OF APPEALS OF INDIANA

STORM DAMAGE SPECIALISTS OF                    )
AMERICA D/B/A AMERICA’S SDS                    )
CONSTRUCTION, INC.,                            )
                                               )
      Appellant-Defendant,                     )
                                               )
             vs.                               )       No. 64A03-1209-CT-386
                                               )
MELISSA A. JOHNSON and                         )
MICHAEL B. JOHNSON,                            )
                                               )
      Appellees-Plaintiffs.                    )

                   APPEAL FROM THE PORTER SUPERIOR COURT
                         The Honorable Mary R. Harper, Judge
                   The Honorable Thomas W. Webber, Sr., Senior Judge
                           Cause No. 64D05-1111-CT-11530

                                   February 27, 2013

                              OPINION–FOR PUBLICATION

BAKER, Judge
       A representative of the appellant-defendant Storm Damage Specialists of America

d/b/a America’s SDS Construction, Inc., (Storm Damage Specialists) solicited the

appellees-plaintiffs Melissa A. Johnson and Michael B. Johnson (collectively, the

Johnsons) regarding the repair of their roof as a result of suspected hail damage.

       Storm Damage Specialists received a check from State Farm, the Johnsons’

insurance company, in the amount of $4,224.78.          Storm Damage Specialists never

performed the work and refused to refund the insurance proceeds.

       The issues in this case are whether the trial court erred in refusing to grant Storm

Damage Specialists’ motion to correct error in light of its refusal to set aside the default

judgment entered in the Johnsons’ favor because of alleged defective service of process,

whether the compensatory damages amount awarded to the Johnsons was improperly

quadrupled, and whether the attorney fees that were awarded to the Johnsons were

excessive.

       Although the trial court properly entered a judgment for the Johnsons, it erred

when it ordered Storm Damage Specialists to pay them four times the $4,224.78

compensatory damages amount. Therefore, we remand this cause with instructions that

the trial court award treble damages and reduce the total judgment award by $4,224.78.

Thus, we affirm in part, reverse in part, and remand.

                                          FACTS

                                             2
       In September 2011, Storm Damage Specialists’ construction agent, Andy Dessuit,

went to the Johnsons’ Porter County residence to solicit repairs for what Dessuit

represented was hail damage to their roof.        Dessuit claimed that Storm Damage

Specialists could repair the roof either at no cost or for no more than the Johnsons’

insurance deductible.

       On October 8, 2011, Michael Johnson signed a contract with Storm Damage

Specialists, turning over to Storm Damage Specialists the Johnsons’ right to negotiate for

any damage to the property on their own behalf with their insurance company. The

contract was the only paperwork left with the Johnsons, and Dessuit failed to supply the

Johnsons with any “right to cancel paperwork,” which is required under both federal and

Indiana law. Appellant’s App. p. 6, 35. Later that same day, Dessuit contacted State

Farm, the Johnsons’ insurance company, advising that he was making a claim on the

Johnsons’ behalf for hail damage to the roof. Storm Damage Specialists received a check

for $4,224.78 from State Farm on October 13, 2011.

       After depositing the check, representatives from Storm Damage Specialists

refused to meet the Johnsons to choose materials for the repairs or to set a start date, as

they had originally discussed and agreed upon. Neither Storm Damage Specialists nor

Dessuit ever applied for the required solicitor’s permit from the city of Portage to begin

the repairs.

       After the Johnsons made several verbal requests for a refund, the Johnsons

notified Storm Damage Specialists later in October that they wanted to terminate the

                                            3
contract. In accordance with Indiana and federal law, the Johnsons requested a full

refund of the insurance money that Storm Damage Specialists had collected from the

insurance policy. Storm Damage Specialists refused to refund the money and never

returned the $4,224.78 to the Johnsons. Storm Damage Specialists claimed that they had

performed the work, but the only work that had been completed were shingles having had

been torn off and a tarp had been placed over that portion of the roof.

       The Johnsons filed their complaint and summons against Storm Damage

Specialists on November 30, 2011. The summons was addressed to the registered agent

of Storm Damages Specialists of America, d/b/a America’s SDS Construction, Inc., who

was listed on the Indiana Secretary of State’s Website as the following:

James Kennedy
3400 W 15th Ave.
Gary, IN 46404

Appellant’s App. p. 12, 13, 53.

       Service was made via certified mail and marked “signed by addressee” on

December 19, 2011. Id. at 13, 55. Storm Damage Specialists’ insurance companies,

Atlantic Casualty Insurance Company and Crowell Insurance Company also received

courtesy copies of the complaint and summons on December 20, 2011, via facsimile.

       Storm Damage Specialists did not enter an appearance and failed to respond to the

complaint. On January 13, 2012, the Johnsons filed a motion for default judgment

pursuant to Indiana Trial Rule 55, which the trial court granted.          The Johnsons

subsequently requested a damages hearing, and copies of the notice and order were

                                             4
served on Storm Damage Specialists’ registered agent via certified mail, which was

returned as unclaimed.

       The Johnsons then mailed copies of the notice and order to the registered agent via

U.S. First Class mail on March 28, 2012. No one from Storm Damage Specialists

appeared at the May 30, 2012, damages hearing. The trial court entered a final judgment

in favor of the Johnsons for compensatory damages, treble damages, prejudgment

interest, costs, and reasonable attorney fees for a total of $23,936.94, plus statutory

interest at 8% per annum. The trial court entered findings of fact and conclusions of law

that included the following:

       On October 13, 2011, [Storm Damage Specialists] collected $4,224.78
       from the Plaintiffs’ insurance company, and deposited the money in its
       account.

       [Storm Damage Specialists] neither performed any services nor made any
       repairs to the Johnsons’ Home.

       [Storm Damage Specialists] has failed and refused, and still fails and
       refuses to return said money but has taken, appropriated, and converted the
       same to [Storm Damage Specialists’] own use, and knowingly and/or
       intentionally exerted unauthorized control over the funds belonging to [the
       Johnsons].

       [Storm Damage Specialists], with fraudulent purpose of cheating and
       defrauding the [Johnsons], falsely and fraudulently represented to the
       [Johnsons] that their home had hail damage on various surfaces, that their
       company would repair the damage with money obtained from the Johnsons’
       insurance company by cooperating with the Johnsons as to materials to be
       used and a time for services to begin/be completed, but said representations
       when made to the [Johnsons] were false, were then and there known by
       [Storm Damage Specialists] to be false, in that [Storm Damage Specialists]
       knew once the money was obtained from the [Johnsons’] insurance

                                            5
       company, any cooperation with the [Johnsons] for repairs would diminish
       greatly or ultimately cease.

       The [Johnsons] relied upon said representations and were thereby induced
       to contract for a consumer sale with their insurance proceeds which was in
       the amount of $4,224.78, and were damaged in said amount.

       Storm Damage Specialists is in violation of IC § 24-5-10-17, thereby
       enabling the [Johnsons] to be entitled to damages and attorney’s fees
       pursuant to IC 24-5-11-1 through IC § 24-5-11-14, and [Storm Damage
       Specialists] is subject to penalties of IC § 24-5-0.5-4 and IC § 24-5-0.5-5.
                                              ...

       STATEMENT OF RELIEF FOR PLAINTIFF

       The Court, being duly advised in the premises, hereby orders that
       Defendant . . . pay to Plaintiffs instanter:

              Compensatory damages of $4,224.78
              Treble damages pursuant to Indiana Code 34-24-3-1 of $12,674.34
              Prejudgment interest of $206.61
              Costs of $206.21
              Reasonable attorney fees of $6,625
              For a total judgment of $23,936.94
              The judgment will bear statutory interest at 8% per annum.

Appellant’s App. p. 64-65.

       On June 4, 2012, the Johnsons sent a copy of the judgment via facsimile to James

Kennedy at the business fax number listed on Storm Damage Specialists’ contract with

the Johnsons. On June 27, 2012, Storm Damage Specialists, by counsel, filed a motion to

correct error, citing lack of service and an error in the judgment amount as grounds to set

aside the award.

       More particularly, Storm Damage Specialists conceded and agreed that “the

address that the certified mailing was sent to was the address listed on the Indiana

                                            6
Secretary of State’s website.”     Appellant’s App. p. 21.      However, Storm Damage

Specialists claimed “that address was listed, as a scrivener’s error, by the corporate

accountant” and that the business address was actually P.O. Box 204, located in Dyer,

Indiana. Id. at 2.

       The Johnsons filed their response in opposition to Storm Damage Specialists’

motion to correct error on July 12, 2012, wherein the Johnsons cited evidence that they

had conformed with the Indiana Trial Rules for effective service. Specifically, the

Johnsons cited to Indiana Trial Rule 4.6(A)(1), stating that service may be made “[i]n the

case of a domestic or foreign organization upon an executive officer thereof, or if there is

an agent appointed or deemed by law to been appointed to receive service then upon such

agent.” Id. at 49. The Johnsons also pointed to Indiana Trial Rule 4.15(F), which

provides that “[n]o summons or the service thereof shall be set aside or be adjudged

insufficient when either is reasonably calculated to inform the person to be served that an

action has been instituted against him, the name of the court, and the time within which

he is requited to respond.” Appellant’s App. p. 50. The Johnsons maintained that they

had no reason to suspect improper service, as the return receipt was signed by a party at

the listed address.

       In response, Storm Damage Specialists claimed that the amount of attorney fees

that they were ordered to pay was excessive. The Johnsons agreed to Storm Damage

Specialists’ interpretation of the imposition of treble damages for the final judgment

amount.    More specifically, the Johnsons agreed to a reduction of $4224.78, thus

                                             7
rendering the proposed agreed final judgment to be $19,712.16.       The trial court denied

the motion to correct error, and Storm Damage Specialists now appeals.

                             DISCUSSION AND DECISION

                                   I. Default Judgment

       Storm Damage Specialists first contends that the trial court should have set aside

the default judgment. Specifically, Storm Damage Specialists claims that a scrivener’s

error resulted in an invalid address for it.     As a result, Storm Damage Specialists

maintains that the default judgment should be set aside as a result of surprise, mistake, or

excusable neglect.

       A default judgment may be set aside “because of mistake, surprise, or excusable

neglect so long as the motion to set aside the default is entered not more than one year

after the judgment and the moving party also alleges a meritorious claim or defense.”

Coslett v. Weddle Bros. Constr. Co., 798 N.E.2d 859, 860 (Ind. 2003). A panel of this

court has observed that:

       The decision whether to set aside a default judgment is given substantial
       deference on appeal. Our standard of review is limited to determining
       whether the trial court abused its discretion. An abuse of discretion may
       occur if the trial court’s decision is clearly against the logic and effect of
       the facts and circumstances before the court, or if the court has
       misinterpreted the law. A general default judgment may be affirmed by any
       theory supported by the record.

Anderson v. State Auto Ins. Co., 851 N.E.2d 368, 370 (Ind. Ct. App. 2006).

       In this case, the Johnsons addressed service to the registered agent of Storm

Damage Specialists, James Kennedy. Moreover, the Johnsons served Storm Damage

                                             8
Specialists’ registered agent at the address that was currently registered with the Indiana

Secretary of State in conformity with the Indiana Trial Rules requirements for service and

summons.1

       Storm Damage Specialists admits to registering an incorrect address with the

Secretary of State and states that it was because of a scrivener’s error that its accountant

committed at the time of the company’s organization on October 5, 2009. Nevertheless,

it contends that service was improper because it was not a business address, residence, or

other address of the company.             However, for more than two years, Storm Damage

Specialists did not correct the error or make any attempt to correct the information that

was provided to the Secretary of State. And the Johnsons had no reason to suspect that

       1
           Service of process on a corporation is controlled by Indiana Trial Rule 4.6 which provides that

       (A) Persons to be served. Service upon an organization may be made as follows:

              (1) In the case of a domestic or foreign organization upon an executive officer
                  thereof, or if there is an agent appointed or deemed by law to have been
                  appointed to receive service, then upon such agent.

       (B) Manner of service. Service under subdivision (A) of this rule shall be made on the
           proper person in the manner provided by these rules for service upon individuals.

              Indiana Trial Rule 4.1 outlines the proper methods for service upon an individual:

       (A) In General. Service may be made upon an individual, or an individual acting in a
           representative capacity, by:

                 (1) sending a copy of the summons and complaint by registered or certified mail
                     or other public means by which a written acknowledgment of receipt may be
                     requested and obtained to his residence, place of business or employment
                     with return receipt requested and returned showing receipt of the letter.

                                                      9
service was improper because the return receipt was signed by someone at that listed

address.

       In Precision Erecting v. Wokurka, 638 N.E.2d 472, 474 (Ind. Ct. App. 1994), this

court determined that “nothing in the trial rules require[ed] that the individual to whom

service of process is mailed be the one who signs the return receipts in order for service

to be effective. Rather, the rule requires only that service be sent by certified mail to the

proper person.” Also, as noted above, Indiana Trial Rule 4.15(F) provides that “[n]o

summons or the service thereof shall be set aside or be adjudged insufficient when either

is reasonably calculated to inform the person to be served that an action has been

instituted against him, the name of the court, and the time within which he is required to

respond.”

       In this case, the Johnsons complied with our rules of trial procedure when they

sent the complaint and summons to Storm Damage Specialists’s acknowledged registered

agent at the address it provided to the Indiana Secretary of State. In our view, the fact

that the registering of that particular address is claimed to be a scrivener’s error on the

part of Storm Damage Specialists’ accountant is a burden that should be borne by the

company.

       Precision had appealed the trial court’s denial to set aside a partial default

judgment, claiming lack of personal jurisdiction based on insufficient service of process.

Id. at 473. Precision had named Todd Anson as its registered agent listed with the

Secretary of State’s Office. Anson received service of the summons and complaint via

                                             10
certified mail, telephoned Precision’s office, and advised them of the pending lawsuit.

He failed to provide further specific information or forward the papers to Precision as

requested. Id. After Precision failed to appear or file a responsive pleading, the plaintiff

filed for a default judgment that the trial court granted. Id.

       Similar to the circumstances in this case, Precision raised the issue that Anson had

not consented to, nor was he aware, that he was a registered agent. The basis of the

argument was that Anson had failed to forward the summons and complaint. However,

we determined that “the risk of a breakdown in communication between Precision and

Anson is one that should be borne by Precision, not a third-party complainant.” Id. at

474.

       The Precision Erecting court also referenced Buck v. P.J.T., 394 N.E.2d 935 (Ind.

Ct. App. 1979), an insurance case that affirmed a default judgment where the defendant

was served via certified mail and the return receipt was signed by someone else.

Precision Erecting, 638 N.E.2d at 474. More particularly, it was observed that

       Service delivered by United States mail, postage prepaid, as certified mail
       with a return receipt satisfies the methods of due process. No contention is
       made that the information contained was inadequate or that inadequate time
       to respond was provided. Since actual delivery to the party is not
       jurisdictionally necessary, Buck’s argument that the court failed to acquire
       personal jurisdiction fails.

Id.

       Here, the evidence shows that the effective date of the Storm Damage Specialists’

organization with the Secretary of State was October 5, 2009. The Johnsons located this

                                              11
same information over two years later when filing their complaint by locating it on the

internet. Indeed, it appears that Storm Damage Specialists had two years to correct any

scrivener’s error that might have occurred.          Additionally, while Storm Damage

Specialists claimed through the affidavit of James Kennedy, “At this time, neither

[Kennedy] nor Storm Damage Specialists . . . has any idea as to who might own, lease,

use, or otherwise occupy the property at 3400 W. 15th Ave., Gary, Indiana 46404,”

Storm Damage Specialists has not clarified whether it had any form of presence at that

address previously or why or how that address was “mistakenly” registered through a

formal process with the Secretary of State. Appellant’s App. p. 28.

       Also, there is no requirement under the trial rules that the Johnsons are required to

serve a business at an address other than the one registered with the Secretary of State.

Accordingly, we believe that service upon the address located at 3400 W 15th Ave.,

Gary, Indiana, 46404, was proper under the trial rules. The notice was reasonably

calculated to inform Storm Damage Specialists that an action has been instituted against

it, the name of the court, and the time in which it was required to respond in accordance

with Indiana Trial Rule 4.15(F).      Moreover, any scrivener’s error that might have

occurred when Storm Damage Specialists filed with the Secretary of State should not be

borne by the Johnsons.

       In sum, we cannot say that the trial court abused its discretion in refusing to set

aside the default judgment on the basis of lack of personal jurisdiction.

                                             12
                                               II. Damages

          Storm Damage Specialists next claims that the trial court erred in awarding the

Johnsons damages in an amount exceeding that which is permissible under the Crime

Victim’s Relief Act.2 Storm Damage Specialists maintains—and the Johnsons concede—

that the trial court erred in quadrupling, rather than trebling, the compensatory damages

that were awarded. Thus, both parties agree that this cause should be remanded for the

trial court to correct the judgment in this regard.

          Indiana Code section 34-24-3-1, the Crime Victim’s Relief Act, states in relevant

part:

          If a person has an unpaid claim on a liability that is covered by IC 24-4.6-5
          or suffers a pecuniary loss as a result of a violation of IC 35-43, IC 35-42-
          3-3, IC 35-42-3-4, or IC 35-45-9, the person may bring a civil action
          against the person who caused the loss for the following:

                             (1) An amount not to exceed three (3) times:

                  (A) the actual damages of the person suffering the loss, in the case of
                  a liability that is not covered by IC 24-4.6-5; or
                                                  ...

                             (2) The costs of the action.

                             (3) A reasonable attorney’s fee.

          In this case, the trial court ordered Storm Damage Specialists to pay compensatory

damages totaling $4,224.78 plus treble damages in the amount of $12,674.34.

Appellant’s App. p. 50, 64-65. This was improper because it appears that the trial court

2
    Ind. Code § 34-24-3-1.
                                                     13
violated the provisions of Indiana Code section 34-24-3-1 when it quadrupled the amount

of compensatory damages. As a result, the amount of the damage award must be reduced

by $4,224.78.

                                     III. Attorney Fees

       Storm Damage Specialists next argues that the trial court erred in ordering it to

pay $6,625 to the Johnsons in attorney fees. Specifically, Storm Damage Specialists

argues that the amount awarded was “extraordinary” and should be reduced to the “bare

minimum.” Appellant’s Br. p. 23-24.

       When reviewing an award of attorney fees, we apply the clearly erroneous

standard to factual determinations, review legal conclusions de novo, and determine

whether the decision to award fees and the amount of the award constituted an abuse of

the trial court’s discretion. H & G Ortho, Inc. v. Neodontics Int’l., 823 N.E.2d 734, 737

(Ind. Ct. App. 2005). An abuse of discretion occurs when the trial court’s decision is

clearly against the logic and effect of the facts and circumstances before it. Id.

       In deciding to award attorney fees, a trial court may look to the responsibility of

the parties in incurring the attorney fees, and the trial judge may also rely on personal

expertise that he or she may use when determining the reasonableness of the fees. Id. In

determining whether a fee is reasonable, the trial court may consider such factors as the

hourly rate that is charged, the result achieved, and the difficulty of the issues involved in

the litigation. Id.

                                             14
       In Weiss v. Harper, 803 N.E.2d 201, 208 (Ind. Ct. App. 2003), this court outlined

the factors that should be considered in determining the reasonableness of attorney fees,

based on Indiana Rule of Professional Conduct 1.5(a), including:

       (1) the time and labor required, the novelty and difficulty of the questions
           involved, and the skill requisite to perform the legal service properly;
                                          ...

       (3) the fee customarily charged in the locality for similar services;

       (4) the amount involved and the results obtained; [and]

                                             ...

        (7) the experience, reputation, and ability of the lawyer or lawyers
       performing the services. . . .

       In this case, the Johnsons submitted at the damages hearing an affidavit itemizing

the attorney fees for time spent on this case, including the time spent in court. Ex. 14,

14A. The trial court specifically determined that the twenty-five hours and forty-four

minutes set forth in the affidavit were reasonable for an attorney representing a client and

were not excessive. Id.; Tr., p. 12. The trial court also found that the $250 hourly rate

was reasonable in this case.

       The Johnsons sought treble damages and undertook to prove wrongful conduct on

the part of Storm Damage Specialists to justify such an award. Counsel prepared for an

evidentiary hearing on damages and presented evidence as to the amount of money over

which Storm Damage Specialists wrongfully exercised control.

                                             15
       In light of these circumstances, our review of the record establishes that the

delineation of time and the amount charged by the Johnsons’ counsel as set forth in the

affidavit supports the amount of attorney fees that the trial court awarded. As a result, we

decline to set aside that award or reduce the amount.

       The judgment of the trial court is affirmed in part, reversed in part, and remanded

for a correction of the judgment and for further proceedings consistent with this opinion. 3

RILEY, J., and BARNES, J., concur.

3
 Because we are remanding this cause for a correction of the judgment, the trial court may hear
evidence as to the amount of appellate attorney fees that the Johnsons might be entitled. See
Wagner v. Wagner, 491 N.E.2d 549, 555 (Ind. Ct. App. 1986) (observing that a trial court is not
deprived of jurisdiction to award appellate attorney fees).

                                                  16