Court Opinion

ID: 4312901
Source: CourtListenerOpinion
Date Created: 2018-09-17 15:06:54.916065+00
Date Added: 2024-06-11T14:44:41.810398
License: Public Domain

FILED
                                                                              Sep 17 2018, 9:02 am

                                                                                  CLERK
                                                                              Indiana Supreme Court
                                                                                 Court of Appeals
                                                                                   and Tax Court

      ATTORNEY FOR APPELLANT                                     ATTORNEY FOR APPELLEE
      Kevin E. Steele                                            James R. Schrier
      Burke Costanza & Carberry LLP                              Reiling Teder & Schrier, LLC
      Valparaiso, Indiana                                        Lafayette, Indiana

                                                  IN THE
          COURT OF APPEALS OF INDIANA

      Timothy C. Troxel,                                         September 17, 2018
      Appellant-Defendant,                                       Court of Appeals Case No.
                                                                 18A-PL-597
              v.                                                 Appeal from the LaPorte Circuit
                                                                 Court
      Dale Ward, successor in interest                           The Honorable Thomas J.
      to original Plaintiff,                                     Alevizos, Judge
      Plan Administrators, Inc.,                                 Trial Court Cause No.
      Appellee-Plaintiff                                         46C01-1605-PL-796

      Vaidik, Chief Judge.

                                            Case Summary
[1]   A Wisconsin corporation obtained a default judgment against Timothy C.

      Troxel in Wisconsin state court and later sought to enforce that judgment in

      Indiana. The LaPorte Circuit Court ultimately ordered the sale of Troxel’s

      stock in an Indiana corporation to satisfy the Wisconsin judgment. Upon
      Court of Appeals of Indiana | Opinion 18A-PL-597 | September 17, 2018                           Page 1 of 11
      learning of the sale of his stock, Troxel filed a motion to set aside the sale

      pursuant to Indiana Trial Rule 60(B). Because Troxel was not properly served

      with notice of the Wisconsin lawsuit, the Wisconsin court did not have

      personal jurisdiction over him. Accordingly, the Wisconsin judgment and any

      Indiana orders based upon it are void. We therefore reverse the trial court’s

      denial of Troxel’s Trial Rule 60(B) motion.

                             Facts and Procedural History
[2]   In late 2013 or early 2014, Troxel moved from Indiana to Florida. See

      Appellant’s App. Vol. II pp. 77 (Troxel’s affidavit stating that he has been a

      Florida resident since December 2013), 11 (trial court’s order stating that Troxel

      became a Florida resident in 2014); Tr. p. 19 (Troxel testifying that in late 2013,

      he bought a condo in Florida and “intended to stay there”). In November

      2014, Plan Administrators, Inc., a Wisconsin corporation with its principal

      place of business in Wisconsin, filed a lawsuit against Troxel and WK Payroll,

      Inc. (Troxel’s company) in Wisconsin state court. The complaint alleged that

      in 2013 WK Payroll executed a promissory note agreeing to pay Plan

      Administrators $653,000, Troxel executed a guaranty for the $653,000

      promissory note, WK Payroll breached the promissory note by failing to make

      payments, and Plan Administrators was accelerating the amount due. The

      complaint also alleged:

              Timothy Troxel is an adult resident of the state of Indiana. His
              address is unknown but he utilizes P.O. Box 637, Franc[e]sville,

      Court of Appeals of Indiana | Opinion 18A-PL-597 | September 17, 2018      Page 2 of 11
               Indiana 47946 as his mail box for delivery of mail, notices and
               the like.

      Appellant’s App. Vol. II p. 83.1 On December 29, 2014, Plan Administrators

      left a copy of the summons and complaint for Troxel and WK Payroll at 106 E.

      Montgomery Street in Francesville, Indiana. According to Troxel, he owned a

      company called ASI Property Management and that company owned the brick

      building at 106 E. Montgomery Street from “2003 until roughly 2015,” when it

      was foreclosed. Tr. p. 14.

[3]   When neither WK Payroll nor Troxel responded to the Wisconsin lawsuit, Plan

      Administrators filed a motion for default judgment in April 2015 alleging that

      the complaint and summons “were properly served on [WK Payroll and

      Troxel] on December 29, 2014” and they have “failed to answer or otherwise

      respond.” Appellant’s App. Vol. II p. 153.2 In support, Plan Administrators

      filed, among other things, an Affidavit of Service explaining how service was

      attempted on Troxel in Indiana. The Affidavit of Service, executed by the

      1
        Notably, the guaranty that Plan Administrators attached to the complaint states that Troxel is a Florida
      resident. See Appellant’s App. Vol. II p. 90.
      2
        Plan Administrators’ attorney submitted an Affidavit of Default along with the motion for default
      judgment. The Affidavit of Default erroneously provides that the summons and complaint were “personally
      served” on WK Payroll and Troxel on December 29, 2014. Appellant’s App. Vol. II p. 160.

      Court of Appeals of Indiana | Opinion 18A-PL-597 | September 17, 2018                             Page 3 of 11
      process server, provides:

      Id. at 159.3 A second affidavit from the process server similarly provides:

                 4 attempts made [at 106 E. Montgomery Street] with no evidence
                 of occupancy—neighbors, businesses & city offices were
                 canvassed and opinion of those persons is that defendant moved
                 when his business closed. Business is now vacant.

      Id. at 161.

[4]   Before the Wisconsin court entered default judgment, the clerk asked Plan

      Administrators’ attorney for the “citation for the Indiana Stat. that permits

      posting a summons & Complaint as a substitute for personal service.” Id. at

      143. This is because the Wisconsin service rules provide that if a defendant is

      not personally served “within or without” Wisconsin, the defendant may be

      served in another state according to that state’s service rules. See Wis. Stat. §

      801.11(1)(b)(2); Judicial Council Notes, 1986, Wis. Stat. § 801.11. Plan

      3
          The Affidavit of Service for WK Payroll is identically worded. See Appellant’s App. Vol. II p. 158.

      Court of Appeals of Indiana | Opinion 18A-PL-597 | September 17, 2018                               Page 4 of 11
      Administrators gave the Wisconsin court a copy of Indiana Trial Rule 4.1,

      which provides that service may be made on an individual by “leaving a copy of

      the summons and complaint at his dwelling house or usual place of abode.”

      Ind. Trial Rule 4.1(A)(3). Plan Administrators argued that it satisfied Indiana

      Trial Rule 4.1(A)(3) because its process server “left a copy of the Summons and

      Complaint at the dwelling.” Appellant’s App. Vol. II p. 150.

[5]   On April 16, 2015, the Wisconsin court entered default judgment in favor of

      Plan Administrators and against WK Payroll and Troxel in the amount of

      $490,010.13 plus costs. Id. at 16.

[6]   Over a year later, in May 2016, Plan Administrators filed in LaPorte Circuit

      Court a Notice of Filing of Foreign Judgment and a Complaint to Enforce

      Foreign Judgment against Troxel pursuant to Indiana Code chapter 34-54-11,

      Indiana’s Uniform Enforcement of Foreign Judgments Act (UEFJA). Pursuant

      to the UEFJA, Plan Administrators also filed an affidavit setting forth that

      Troxel was an Indiana resident “living in LaPorte County, with a last-known

      address of 412 South Washington Street, La Crosse, Indiana 46348.” Id. at 21;

      see also Ind. Code § 34-54-11-2(a). A summons and complaint were sent via

      certified mail to Troxel at the La Crosse, Indiana address; however, they were

      marked “return[ed] to sender” and “unable to forward.” Appellant’s App. Vol.

      II p. 24; see also I.C. § 34-54-11-2(d) (providing that the judgment creditor shall

      “(1) mail a notice of the filing of the [foreign] judgment to the judgment debtor;

      and (2) file proof of mailing with the clerk.”).

      Court of Appeals of Indiana | Opinion 18A-PL-597 | September 17, 2018      Page 5 of 11
[7]    Nevertheless, Plan Administrators moved forward. The next month, June

       2016, Plan Administrators filed a motion for proceedings supplemental against

       Troxel and Adaptasoft, Inc., as garnishee defendant (based on Troxel’s

       ownership of stock in Adaptasoft). A hearing was scheduled for July 18.

       Notice of the hearing was published in the Herald Argus, a daily newspaper in

       LaPorte, on June 22, June 29, and July 6. Appellant’s App. Vol. II pp. 29-32.

       Troxel did not appear at the hearing.

[8]    In February 2017, Plan Administrators filed a notice that it had assigned its

       right, title, and interest in the Wisconsin judgment to Dale Ward, and Ward

       was substituted as a party in this case. Id. at 34. Ward then asked the LaPorte

       Circuit Court for an order authorizing the sale of 8578 shares of Adaptasoft

       stock (which was valued at approximately $300,000) owned by Troxel. Id. at

       36, 42. In May, the LaPorte Circuit Court entered an order authorizing the sale

       of Troxel’s stock, which was to take place on June 29 at the courthouse in

       LaPorte. Id. at 44, 48. Notice of the sale was published in The News Dispatch,

       a daily newspaper in Michigan City, on June 1 and 8. Id. at 54. Ward

       purchased Troxel’s stock at the sale. Id. at 50.

[9]    After learning of the sale of his Adaptasoft stock, Troxel filed a motion to set

       aside the sale pursuant to Indiana Trial Rule 60(B) in August 2017. Id. at 55.

       Following a hearing, the LaPorte Circuit Court issued an order denying the

       motion to set aside. Id. at 11.

[10]   Troxel now appeals.

       Court of Appeals of Indiana | Opinion 18A-PL-597 | September 17, 2018     Page 6 of 11
                                   Discussion and Decision
[11]   Troxel contends, among other things, that the LaPorte Circuit Court’s order

       authorizing the sale of his Adaptasoft stock is void pursuant to Trial Rule

       60(B)(6) because he “was not properly served with either the institution of the

       underlying [Indiana] action or the attempt to sell his Adaptasoft stock.”

       Appellant’s Reply Br. p. 8. Indiana Trial Rule 60(B)(6) provides that a court

       may relieve a party from a judgment, including a default judgment, because the

       judgment is void. Rather than addressing whether Troxel was properly notified

       of the Indiana proceedings, we find that the LaPorte Circuit Court’s order

       authorizing the sale of Troxel’s stock is void for purposes of Trial Rule 60(B)(6)

       for a more fundamental reason. That is, “[a] judgment which is void in the

       state where it is entered is also void in Indiana” and cannot be the basis for a

       subsequent judgment in Indiana. Jenkins v. Futch, 640 N.E.2d 379, 381 (Ind. Ct.

       App. 1994) (concluding that because a Texas order was void for lack of

       personal jurisdiction, the Indiana trial court “erred in enforcing this void

       order”); P.M.S., Inc. v. Jakubowski, 585 N.E.2d 1380, 1382-83 (Ind. Ct. App.

       1992) (concluding that because a New York default judgment was void for lack

       of personal jurisdiction, the Indiana trial court’s order enforcing it was also

       void); see also GIW Indus., Inc., v. Patriot Materials, Inc., 926 N.E.2d 491, 495

       (Ind. Ct. App. 2010); Commercial Coin Laundry Sys. v. Enneking, 766 N.E.2d 433,

       439 (Ind. Ct. App. 2002).

[12]   The United States Constitution requires state courts to give full faith and credit

       to the judgments of the courts of all states. U.S. Const. art. IV, § 1. However,

       Court of Appeals of Indiana | Opinion 18A-PL-597 | September 17, 2018       Page 7 of 11
       an out-of-state judgment is always open to collateral attack for lack of personal

       or subject-matter jurisdiction. GIW Indus., 926 N.E.2d at 494. Thus, before an

       Indiana court is bound by a foreign judgment, it may inquire into the

       jurisdictional basis for that judgment; if the first court did not have jurisdiction

       over the parties or the subject matter, then full faith and credit need not be

       given. Id. The party attacking the judgment of a sister state bears the burden of

       rebutting the presumption that a foreign judgment, which is regular and

       complete on its face, is valid. Id. In assessing a collateral attack on a foreign

       judgment, we apply the law of the state where the judgment was rendered. Id.

[13]   We recognize that Troxel does not argue that the Wisconsin judgment is void

       for lack of personal jurisdiction in the context of Trial Rule 60(B)(6); however,

       he does challenge the Wisconsin judgment in his brief. See Appellant’s Br. pp.

       21-22. And on appeal, Ward recognizes that Troxel has challenged the

       Wisconsin judgment. See Appellee’s Br. p. 23 (“Troxel appears to suggest that

       the Wisconsin judgment is void because that court lacked personal

       jurisdiction . . . .”); see also Tr. p. 23 (trial court acknowledging at the hearing

       that Troxel had attacked the validity of the Wisconsin judgment “back

       handedly”). Ward argues, however, that the scope of jurisdictional review is

       limited. See V.L. v. E.L., 136 S. Ct. 1017, 1020 (2016) (explaining that

       jurisdictional inquiry into a foreign court’s judgment is limited: “[I]f the

       judgment on its face appears to be a record of a court of general jurisdiction,

       such jurisdiction over the cause and the parties is to be presumed unless

       disproved by extrinsic evidence, or by the record itself.” (quotations omitted)).

       Court of Appeals of Indiana | Opinion 18A-PL-597 | September 17, 2018        Page 8 of 11
       Ward claims that personal jurisdiction should be presumed in this case because

       “[t]here is nothing in the record itself or in the evidence submitted to suggest

       that jurisdiction was not proper in the Wisconsin lawsuit.” Appellee’s Br. p. 23.

[14]   But there is such evidence. In accordance with the Wisconsin service rules,

       Plan Administrators attempted to serve Troxel pursuant to Indiana Trial Rule

       4.1(A)(3), which provides that service may be made on an individual by

       “leaving a copy of the summons and complaint at his dwelling house or usual

       place of abode.” (Emphasis added). Plan Administrators argued that leaving a

       copy of the summons and complaint at 106 E. Montgomery Street in

       Francesville, Indiana, satisfied Indiana Trial Rule 4.1(A)(3) because the

       documents were left “at the dwelling.” Appellant’s App. Vol. II p. 150.

[15]   However, service upon a defendant’s former residence is not sufficient to confer

       personal jurisdiction. Mills v. Coil, 647 N.E.2d 679, 681 (Ind. Ct. App. 1995),

       reh’g denied, trans. denied; see also Poteet v. Bethke, 507 N.E.2d 652, 654 (Ind. Ct.

       App. 1987) (concluding that service was defective because the complaint and

       summons were left at an address that the defendant had permanently moved

       from ten months earlier). Here, the Affidavit of Service, submitted by Plan

       Administrators, establishes that 106 E. Montgomery Street was not Troxel’s

       dwelling house or usual place of abode when the process server left the

       summons and complaint there on December 29, 2014. The Affidavit of Service

       provides that on four separate occasions the process server went to the property

       but there was “no response.” Appellant’s App. Vol. II p. 159. Moreover, the

       process server stated that the property was “vacant” with “no one . . . living

       Court of Appeals of Indiana | Opinion 18A-PL-597 | September 17, 2018        Page 9 of 11
       there now.” Id.; see also id. at 161 (“4 attempts made with no evidence of

       occupancy . . . .”). The process server also spoke with several people in the

       area, and it was believed that Troxel had moved from the vacant address two to

       three weeks earlier. Even if we assume that Troxel had previously lived at 106

       E. Montgomery Street, it was not his dwelling house or usual place of abode

       when service was attempted there on December 29, 2014. Accordingly, Troxel

       was not properly served with notice of the Wisconsin lawsuit pursuant to

       Indiana Trial Rule 4.1(A)(3).

[16]   According to Wisconsin law, a court gains personal jurisdiction over a party

       only by valid personal or substituted service. PHH Mortg. Corp. v. Mattfeld, 799
N.W.2d 455, 458 (Wis. Ct. App. 2011); see also Wis. Stat. § 801.04 (providing

       that a court who has subject-matter jurisdiction may render a judgment against

       a party personally only if a summons is served upon the person pursuant to

       Section 801.11 or the person appears and waives the defense of lack of personal

       jurisdiction). Wisconsin compels strict compliance with its service rules even

       though the consequences may appear to be harsh. PHH Mortg., 799 N.W.2d at

       458. Because Troxel was not properly served with notice of the Wisconsin

       lawsuit, the Wisconsin court did not have personal jurisdiction over Troxel

       when it entered default judgment against him and therefore that judgment is

       void.4 Accordingly, any Indiana orders based on the void Wisconsin judgment

       4
        Ward nevertheless argues that the Wisconsin court had personal jurisdiction over Troxel because Plan
       Administrators’ attorney informed Troxel’s attorney about the Wisconsin lawsuit in a telephone call. See
       Appellee’s App. Vol. II p. 2. Even if Troxel knew about the Wisconsin lawsuit from his attorney, which he

       Court of Appeals of Indiana | Opinion 18A-PL-597 | September 17, 2018                         Page 10 of 11
       are also void. See, e.g., Jenkins, 640 N.E.2d at 381. We therefore reverse the

       LaPorte Circuit Court’s denial of Troxel’s Trial Rule 60(B) motion and remand

       with instructions for the court to vacate its order authorizing the sale of Troxel’s

       stock.

[17]   Reversed and remanded.

       Riley, J., and Kirsch, J., concur.

       denied at the hearing, see Tr. p. 18, it is the law in both Wisconsin and Indiana that the mere fact that a
       defendant has knowledge of the action does not grant a court personal jurisdiction, Goodson v. Carlson, 888
N.E.2d 217, 220 (Ind. Ct. App. 2008); Hill v. Ramey, 744 N.E.2d 509, 512 (Ind. Ct. App. 2001); Span v. Span,
       191 N.W.2d 209, 211 (Wis. 1971).

       Court of Appeals of Indiana | Opinion 18A-PL-597 | September 17, 2018                          Page 11 of 11