Court Opinion

ID: 2730706
Source: CourtListenerOpinion
Date Created: 2014-09-08 22:05:43.737577+00
Date Added: 2024-06-11T12:39:55.726136
License: Public Domain

FOR PUBLICATION
ATTORNEY FOR APPELLANTS:              ATTORNEY FOR APPELLEE

                                                                    FILED
                                      HEWLETT-PACKARD:
PAUL T. DEIGNAN
Taft Stettinius & Hollister LLP       HENRY EFROYMSON             Mar 08 2012, 8:54 am
Indianapolis, Indiana                 Ice Miller LLP
                                      Indianapolis, Indiana              CLERK
                                                                       of the supreme court,
                                                                       court of appeals and
                                                                              tax court
                                      ATTORNEYS FOR APPELLEE
                                      BANK OF AMERICA AS SUCCESSOR
                                      TO BARCLAYS BUSINESS CREDIT,
                                      INC.:

                                      ALAN K. MILLS
                                      HOWARD E. KOCHELL
                                      MARK J. CRANDLEY
                                      Barnes & Thornburg LLP
                                      Indianapolis, Indiana

                              IN THE
                    COURT OF APPEALS OF INDIANA

UNITED BROTHERHOOD OF                 )
CARPENTERS AND JOINERS OF             )
AMERICA, LOCAL UNION NO. 2371,        )
OFFICIAL BARGAINING AGENT, et. al.,   )
                                      )
       Appellants-Plaintiffs,         )
                                      )
              vs.                     )   No. 33A05-1107-CP-345
                                      )
MERCHANDISING EQUIPMENT GROUP,        )
DIVISION OF MEG MANUFACTURING         )
CORPORATION; BARCLAYS BUSINESS        )
CREDIT, INC., HEWLETT-PACKARD         )
COMPANY FINANCE AND                   )
REMARKETING DIVISION; FIRST NAT’L     )
LEASING CORP., BANK ONE,              )
RICHMOND, N.A.;                       )
INDIANA STATEWIDE CERTIFIED           )
DEVELOPMENT CORP.; XEROX              )
CORPORATION; and                      )
STEELWORKS, INC.,                     )
                                      )
       Appellees-Defendants.                         )
                                                     )

                      APPEAL FROM THE HENRY CIRCUIT COURT
                        The Honorable John L. Kellam, Special Judge
                              Cause No. 33C01-9611-CP-173

                                       March 8, 2012

                               OPINION - FOR PUBLICATION

VAIDIK, Judge

                                      Case Summary

       In 2011, the trial court granted the defendants’ Trial Rule 41(E) motion to dismiss

for failure to prosecute after the case had been pending for eighteen years, the court failed

to rule on the summary judgment motions for fourteen years, and the plaintiffs took no

action to push the case to resolution for a decade.         The plaintiffs now appeal the

dismissal. Given the extensive and unprecedented delay in this case and the plaintiffs’

lack of excuse for the delay, we conclude that the trial court did not abuse its discretion in

dismissing this case for failure to prosecute.

                               Facts and Procedural History

       This lawsuit dates back to the closing of a manufacturing facility in Cambridge

City, Indiana, nearly two decades ago. The plaintiffs are 220 former employees of

Merchandising Equipment Group, Division of MEG Manufacturing Corporation

(“MEG”), and the employees’ union representative, The United Brotherhood of

Carpenters and Joiners of America, Local Union No. 2371.

                                                 2
        In April 1992, MEG’s assets were sold to SteelWorks, and the employees learned

shortly thereafter that they did not have jobs with either MEG or SteelWorks. MEG also

filed for bankruptcy. According to the employees, at the time of their termination they

were owed compensation for, among other things, unused vacation and sick time, unpaid

medical expenses, unpaid wages, and back pay and benefits as a result of MEG’s failure

to provide advance notice of the closure as required by federal law. The employees claim

they are entitled to $3.3 million.

        In June 1992, the employees filed notices of intention to hold a mechanic’s lien,

Ind. Code § 32-28-3-1, and corporate employees’ lien, Ind. Code § 32-28-12-1, with the

Wayne County Recorder’s Office. The following June the employees and their union

(collectively referred to as “the Union”) filed a complaint against Hewlett-Packard

Company Financing and Remarketing Division (“HP”), Barclays Business Credit, Inc.

(“the Bank”),1 and other third parties that conducted business with MEG. The Union

specifically named HP and the Bank as defendants because of their security interests in

MEG’s property. That is, HP repossessed and sold its collateral previously held by MEG

pursuant to HP’s purchase money security interest in the collateral. In addition, the Bank

provided financing to MEG and took a security interest in equipment and other items of

property MEG purchased as well as a mortgage on the facility itself. The Union claimed

that pursuant to the mechanic’s lien and corporate employees’ lien statutes, the

employees’ liens were superior to HP’s and the Bank’s. This was a novel argument

under Indiana law.

        1
          Bank of America, N.A. is Barclays’ successor in interest and stands in its shoes for purposes of
this case. Bank of America and Barclays are collectively referred to as “the Bank.”
                                                    3
      The Bank filed its motion for summary judgment in late 1995, and HP filed its

motion for summary judgment in early 1996. A hearing was held on these motions in

May 1996. However, in July 1996 the trial court judge hearing the case disqualified

himself because of a conflict of interest with one of the parties, and a special judge

accepted jurisdiction in August 1996. Because there was no transcript of the earlier

summary-judgment hearing, the special judge reheard the summary-judgment arguments

in January 1997. The parties stipulated that the “time limitation for ruling upon a motion

set forth in T.R. 53.1 shall not apply to ruling upon pending summary judgment

motions.” Appellants’ App. p. 534; see also Ind. Trial Rule 53.1(A) (“In the event a

court fails for thirty (30) days to set a motion for hearing or fails to rule on a motion

within thirty (30) days after it was heard or thirty (30) days after it was filed, if no

hearing is required, upon application by an interested party, the submission of the cause

may be withdrawn from the trial judge and transferred to the Supreme Court for the

appointment of a special judge.”).

      Following the January 1997 summary-judgment hearing, the parties filed

supplemental memoranda. In April 1997, the Bank filed a second motion for summary

judgment which added a federal preemption defense. Then, in October 1997, the parties

submitted a thirty-page “Outline of Oral Argument” that meticulously explained their

various positions on the summary-judgment motions.

      From 1997 to 2011, the special judge did not rule on the summary-judgment

motions. During this time period, the CCS mainly shows follow-ups to the summary-

judgment motions and changes to the numerous attorneys involved in this litigation. But

                                            4
it shows some other activity, too. For example, in February 1998, the Bank asked the

special judge to rule on the summary-judgment motions or, in the alternative, to hold a

new hearing. Appellants’ App. p. 610. In this motion, the Bank acknowledged that the

issues were “complex.” Id. The special judge, however, never ruled on this motion.

Then, in August 1999, the Bank requested a status conference. All parties appeared at the

October 1999 status conference, following which they supplemented their previous

summary-judgment filings.

        In July 2001, which was approximately two years after the last status conference,

the Union requested a status conference. Id. at 24-25. This would be the first and only

action the Union took to move the litigation until HP filed a Trial Rule 41(E) motion to

dismiss for failure to prosecute in 2011. The special judge, however, did not set a

conference. After July 2001, nothing of substance occurred in the case until September

2008, when the special judge set a status conference for the following month.2 Id. at 26.

The Union blames its lack of action during these seven years on its assumption that the

special judge “was working on a ruling on the Motions for Summary Judgment.”

Appellants’ Br. p. 7. As an example of the lack of activity during this time period, the

CCS reflects a nearly four-year period where not a single CCS entry was made. See

Appellants’ App. at 25 (December 2003 to September 2007). Following the October

2008 status conference, the parties stipulated that the Union’s second amended complaint

had indeed been filed. Id. at 27.

        2
          The Union points out that in 2007, Bank of America was substituted as successor in interest to
Barclays, and the attorneys changed.
                                                   5
        Other than this stipulation, nothing happened after the October 2008 status

conference until March 18, 2011, when HP filed a Trial Rule 41(E) motion to dismiss for

failure to prosecute. HP argued that the case “has remained pending in this Court since

1996 [when the special judge was appointed], more than fourteen (14) years, without

resolution” and that the Union “has failed to prosecute this case in a manner in which it

may be resolved within a reasonable period of time.” Id. at 701. HP further argued that

“[j]ustice would be served by dismissal of this case inasmuch as [HP] has been required

to defend this action, and reflect the contingent claim in public disclosure documents, for

a period of time in excess of fourteen (14) years, and resolution of this case through

continued prosecution by [the Union] is unlikely.” Id. at 701-02. The Bank joined in

HP’s motion. Id. at 28. Approximately two weeks later, the Union filed its first motion

to move the litigation since 2001, specifically, a motion to set a pretrial conference. The

Union explains, without any citation to the record, that there was no activity for nearly

three years after the October 2008 status conference because “[t]he parties were of the

understanding . . . that the Court was working on its ruling on the Motions for Summary

Judgment.” Appellants’ Br. p. 8. After a hearing3 and over the Union’s objection, the

special judge granted the motion to dismiss for failure to prosecute. Appellants’ App. p.

28-29, 716. The Union then filed a motion to correct errors, which the the special judge

denied. Id. at 755-56.

        The Union now appeals.

                                     Discussion and Decision

        3
         There is no transcript for this hearing. The only transcript contained in the record on appeal is
the January 2007 summary judgment hearing. See Tr. p. 119 (Reporter’s Certificate).
                                                    6
       The Union contends that the trial court erred in dismissing this case for failure to

prosecute according to Trial Rule 41(E). We will reverse a Trial Rule 41(E) dismissal for

failure to prosecute only in the event of a clear abuse of discretion, which occurs if the

trial court’s decision is against the logic and effect of the facts and circumstances before

it. Belcaster v. Miller, 785 N.E.2d 1164, 1167 (Ind. Ct. App. 2003), trans. denied. We

will affirm if there is any evidence that supports the decision of the trial court. Id.

       Trial Rule 41(E) provides:

       [W]hen no action has been taken in a civil case for a period of sixty [60]
       days, the court, on motion of a party or on its own motion shall order a
       hearing for the purpose of dismissing such case. The court shall enter an
       order of dismissal at plaintiff’s costs if the plaintiff shall not show sufficient
       cause at or before such hearing. Dismissal may be withheld or
       reinstatement of dismissal may be made subject to the condition that the
       plaintiff comply with these rules and diligently prosecute the action and
       upon such terms that the court in its discretion determines to be necessary
       to assure such diligent prosecution.

The purpose of this rule is “‘to ensure that plaintiffs will diligently pursue their claims.

The rule provides an enforcement mechanism whereby a defendant, or the court, can

force a recalcitrant plaintiff to push his case to resolution.’” Belcaster, 785 N.E.2d at

1167 (quoting Benton v. Moore, 622 N.E.2d 1002, 1006 (Ind. Ct. App. 1993), reh’g

denied). “The burden of moving the litigation is upon the plaintiff, not the court. It is not

the duty of the trial court to contact counsel and urge or require him to go to trial, even

though it would be within the court’s power to do so.” Id. (quotation omitted). “Courts

cannot be asked to carry cases on their dockets indefinitely and the rights of the adverse

party should also be considered. [The defendant] should not be left with a lawsuit

hanging over his head indefinitely.” Id. (quotation omitted).

                                               7
       Courts of review generally balance several factors when determining whether a

trial court abused its discretion in dismissing a case for failure to prosecute. These

factors include: (1) the length of the delay; (2) the reason for the delay; (3) the degree of

personal responsibility on the part of the plaintiff; (4) the degree to which the plaintiff

will be charged for the acts of his attorney; (5) the amount of prejudice to the defendant

caused by the delay; (6) the presence or absence of a lengthy history of having

deliberately proceeded in a dilatory fashion; (7) the existence and effectiveness of

sanctions less drastic than dismissal which fulfill the purposes of the rules and the desire

to avoid court congestion; (8) the desirability of deciding the case on the merits; and (9)

the extent to which the plaintiff has been stirred into action by a threat of dismissal as

opposed to diligence on the plaintiff’s part. Id. The weight any particular factor has in a

particular case appears to depend upon the facts of that case. Id. However, a lengthy

period of inactivity may be enough to justify dismissal under the circumstances of a

particular case, especially if the plaintiff has no excuse for the delay. Id. Although

dismissals are generally viewed in disfavor and considered extreme remedies that should

be granted only under limited circumstances, the court need not impose a sanction less

severe than dismissal where the record of dilatory conduct is clear. Beemer v. Elskens,

677 N.E.2d 1117, 1119 (Ind. Ct. App. 1997), reh’g denied, trans. denied; Lee v.

Friedman, 637 N.E.2d 1318, 1321 (Ind. Ct. App. 1994).

       The lengthy period of inactivity in this case coupled with the Union’s excuse that

it took no action because it was waiting (for fourteen years) on the special judge’s

                                             8
summary judgment ruling justifies the judge’s dismissal of this case for failure to

prosecute.

       We begin by observing that the delay in this case is unprecedented. The motions

for summary judgment were filed in 1995 and 1996, and the hearing was held before the

special judge in 1997. In 2001, the Union requested a status conference. After this point,

however, the Union took no action to move the litigation. The trial court requested a

status conference in 2008, but again the Union took no action to push the case to

resolution until HP filed the motion to dismiss for failure to prosecute in 2011. Only at

this point did the Union file a motion to set a pretrial conference. According to this

timeline, the Union took no action for a period of ten years. While most failure-to-

prosecute cases are judged by inaction in months or sometimes days, this case is judged

by inaction in decades. See 22A Stephen E. Arthur & Jerome L. Withered, Indiana

Practice: Civil Trial Practice § 34.10 (2nd ed. 2007) (noting that dismissals have been

affirmed where cases had been pending without action for sixty-five, forty-five, and

nineteen months); see also Olson v. Alick’s Drugs, Inc., 863 N.E.2d 314, 320 (Ind. Ct.

App. 2007) (“While we agree that a six-month delay is not among the most egregious

periods of inactivity that this court has seen, we have upheld dismissals under

circumstances of a shorter delay.”), reh’g denied, trans. denied; Lee v. Pugh, 811 N.E.2d

881, 885-86 (Ind. Ct. App. 2004) (affirming dismissal where case had been pending for

one year and the plaintiffs failed to take action for ninety days); Belcaster, 785 N.E.2d at

1167-68 (affirming dismissal where inaction for ten months).

                                             9
       Nevertheless, the Union argues that because of the complexity of this case, the

parties agreed early on that the case would be tried in a certain manner. See, e.g.,

Appellants’ Br. p. 3-4 (“Because such efforts [depositions of all 220 employees and

retaining experts to analyze their claims] would be time consuming, expensive and

disruptive, the proposal to which all parties agreed was that the Defendants would file a

Motion for Summary Judgment raising several legal issues, both statutory interpretation

issues as well as federal preemption issues, along with others, with the purpose of

obtaining legal rulings on matters of first impression . . . . All agreed, including the

Plaintiffs, that such a procedure for managing the case was the appropriate approach.”),

20-21. However, the Union provides no citation to the record for this alleged agreement.

But even if the parties had an agreement to seek summary judgment on certain issues

before proceeding to costly depositions and other issues in the case, HP and the Bank

never agreed to an indefinite delay of the case or that the Union was relieved of its duty

to diligently prosecute the case.   See Appellants’ App. p. 748 (affidavit from HP’s

attorney: “Many years ago, [HP] agreed that it made sense for Plaintiffs to submit certain

legal issues present in the case through a motion for summary judgment . . . and agreed to

waive the initial ‘lazy judge’ rule . . . . [HP] never agreed that the Plaintiffs should be

relieved of their obligation to prosecute their case even if it became apparent that the

Court would not rule on the motion for summary judgment, or that the case should pend

in an inactive status for years and years due to the lack of a ruling on the motion.”). At

most, HP and the Bank agreed that the thirty-day time limit for ruling on the summary-

                                            10
judgment motion did not apply. This, however, is not equivalent to HP and the Bank

agreeing to an indefinite delay.

       This decade-long delay is compounded by the Union’s failure to put forth a good

reason for it. The Union explains that it did not take any action because it was waiting on

the special judge’s summary-judgment ruling. In light of the fact that the judge did not

rule on the motion for fourteen years, this explanation defies logic. Even though the

Union took action in 2001 to move the litigation by requesting a status conference, the

Union took no further action to move the litigation for the next ten years. Despite the fact

that the parties surrendered their right to a change of judge, the Union still had other

options available to it. For example, the Union could have requested (1) a ruling on the

summary-judgment motions, (2) additional status conferences, (3) another summary-

judgment hearing, (4) a pretrial conference (which it did after HP filed the motion to

dismiss for failure to prosecute), or (5) a trial date. The Union did not request any of

these measures for a decade. Although the Union asserts that it was “ready, able and

willing to proceed to trial,” Appellants’ Br. p. 21, its inaction belies this assertion. The

pending summary-judgment motions did not relieve the Union of its duty to move the

litigation.

       We recognize that dismissals are generally disfavored and do not condone the

special judge’s failure to rule on the summary-judgment motions for fourteen years.

Nevertheless, the burden of moving the litigation is upon the plaintiff, not the court.

Given the Union’s decade-long delay and lack of excuse for the delay, we conclude that

                                            11
this case is one of those limited circumstances where dismissal is warranted.   We

therefore affirm the trial court.

       Affirmed.

FRIEDLANDER, J., and DARDEN, J., concur.

                                        12