Court Opinion

ID: 4556426
Source: CourtListenerOpinion
Date Created: 2020-08-18 16:04:12.612904+00
Date Added: 2024-06-11T09:37:46.152691
License: Public Domain

MEMORANDUM DECISION
Pursuant to Ind. Appellate Rule 65(D),
this Memorandum Decision shall not be                                                 FILED
regarded as precedent or cited before any
                                                                                  Aug 18 2020, 8:36 am
court except for the purpose of establishing
the defense of res judicata, collateral                                               CLERK
                                                                                  Indiana Supreme Court
estoppel, or the law of the case.                                                    Court of Appeals
                                                                                       and Tax Court

ATTORNEYS FOR APPELLANT                                  ATTORNEY FOR APPELLEE
Robert D. King, Jr.                                      Jeremy M. Noel
David R. Thompson                                        Indianapolis, Indiana
The Law Office of Robert D. King, Jr.,
P.C.
Indianapolis, Indiana

                                           IN THE
    COURT OF APPEALS OF INDIANA

John M. Hauber, not                                      August 18, 2020
Individually but as Chapter 13                           Court of Appeals Case No.
Trustee for the Bankrupt Estate                          19A-CT-2890
of Abreena Townsend,                                     Appeal from the Marion Superior
Appellant-Plaintiff,                                     Court
                                                         The Honorable Timothy W.
        v.                                               Oakes, Judge

Michael Muncy and Lutherstock                            The Honorable Caryl F. Dill,
                                                         Magistrate
Properties, LLC,
                                                         Trial Court Cause No.
Appellees-Defendants
                                                         49D02-1704-CT-14744

Crone, Judge.

Court of Appeals of Indiana | Memorandum Decision 19A-CT-2890 | August 18, 2020          Page 1 of 9
                                              Case Summary
[1]   Postal carrier Abreena Townsend was bitten by a dog while delivering mail to

      an Indianapolis residence. John M. Hauber, acting as the Chapter 13 trustee

      for Townsend’s bankruptcy estate, filed a negligence action against Michael

      Muncy, whom Townsend believed to be the dog’s owner, and Lutherstock

      Properties, LLC (Lutherstock), as owner and landlord of the residence. 1

      Townsend sought and was granted a default judgment against both defendants.

      Lutherstock filed a motion to set aside default judgment, which the trial court

      granted. Townsend now appeals the trial court’s ruling. Finding that the trial

      court acted within its discretion in setting aside default judgment against

      Lutherstock, we affirm.

                                  Facts and Procedural History
[2]   In January 2017, Townsend was delivering mail to an Indianapolis residence

      when she was bitten by a dog that was running loose on the property. She filed

      a negligence action against Muncy, as the alleged owner of the dog. She filed

      an amended complaint against Muncy, as the dog’s alleged owner, and

      Lutherstock, as owner of the property, claiming that each knew or should have

      known that the dog had dangerous propensities and that each failed to secure or

      1
        Townsend filed her first complaint individually against only Muncy. She filed an amended complaint
      under the name of Hauber, as trustee for her pending bankruptcy proceedings, naming both Muncy and
      Lutherstock as defendants. On May 21, 2019, the United States Bankruptcy Court, Southern District of
      Indiana, dismissed Townsend’s bankruptcy case. Appellant’s App. Vol. 2 at 50. She appears individually in
      this appeal.

      Court of Appeals of Indiana | Memorandum Decision 19A-CT-2890 | August 18, 2020                Page 2 of 9
      supervise the dog and failed to warn her concerning the dog. She also alleged

      negligence per se, based on the defendants’ alleged violations of a local

      ordinance prohibiting domesticated animals from roaming at large.

[3]   On April 12, 2017, service of process was attempted by certified mail on

      Lutherstock at the address listed in its corporate documents and on Muncy at

      his last known address. Both were returned as undeliverable. On September

      11, 2018, Townsend filed a praecipe for summons service by publication on

      both defendants. On October 18, 2018, Townsend filed a proof of notice by

      publication, pursuant to which each defendant was given thirty days to respond.

      Neither of the defendants appeared or filed a responsive pleading. On January

      17, 2019, Townsend filed a motion for default judgment against both

      defendants pursuant to Indiana Trial Rule 55. On February 6, 2019, the trial

      court granted her motion for default judgment and scheduled a hearing on the

      issue of damages.

[4]   On October 7, 2019, Lutherstock filed a motion to set aside default judgment

      pursuant to Indiana Trial Rule 60(B)(4), claiming a meritorious defense. The

      motion was accompanied by an affidavit from Lutherstock’s owner and sole

      member, Alfred Warren, averring that he had no actual knowledge of

      Townsend’s action until after default judgment was entered, that the address to

      which the summons and complaint were sent was not current for Lutherstock

      or for himself individually, that Lutherstock owned the property and had leased

      it to three tenants on the date of the dog bite, that Muncy was not one of those

      Court of Appeals of Indiana | Memorandum Decision 19A-CT-2890 | August 18, 2020   Page 3 of 9
      tenants and had never been a tenant of Lutherstock, and that Warren had never

      heard of Muncy and had never given consent for a pet on the leased premises.

[5]   Following a hearing, the trial court issued an order granting Lutherstock’s

      motion to set aside default judgment. Townsend now appeals. Additional facts

      will be provided as necessary.

                                     Discussion and Decision
[6]   Townsend asserts that the trial court erred in granting Lutherstock’s Trial Rule

      60(B) motion to set aside default judgment. “Default judgment is an extreme

      remedy and …. whenever possible, courts should decide cases on their merits.”

      Citimortgage, Inc. v. Barabas, 975 N.E.2d 805, 812 (Ind. 2012) (citations omitted).

      Any doubt concerning the propriety of the default judgment must be resolved in

      favor of the defaulted party. Kretschmer v. Bank of America, N.A., 15 N.E.3d 595,

      601 (Ind. Ct. App. 2014), trans. denied (2015). When reviewing a trial court’s

      ruling on a motion to set aside default judgment, we apply an abuse of

      discretion standard. Speedway SuperAmerica, LLC v. Holmes, 885 N.E.2d 1265,

      1270 (Ind. 2008). An abuse of discretion occurs where the trial court’s decision

      is clearly against the logic and effect of the facts and circumstances before it or if

      the trial court has misinterpreted the law. Fields v. Safway Grp. Holdings, LLC,

      118 N.E.3d 804, 809 (Ind. Ct. App. 2019), trans. denied. When a Trial Rule

      60(B) motion involves a request to set aside a default judgment, the trial court’s

      discretion should be exercised in light of the disfavor in which default

      Court of Appeals of Indiana | Memorandum Decision 19A-CT-2890 | August 18, 2020   Page 4 of 9
      judgments are generally held. Seleme v. JP Morgan Chase Bank, 982 N.E.2d 299,

      303 (Ind. Ct. App. 2012), trans. denied (2013).

[7]   Trial Rule 60(B) provides a mechanism for obtaining relief from default

      judgment under certain limited circumstances, and the burden is on the movant

      to establish grounds for such relief. Seleme, 982 N.E.2d at 303. Trial Rule 60(B)

      states in pertinent part,

              On motion and upon such terms as are just the court may relieve
              a party or his legal representative from a judgment, including a
              judgment by default, for the following reasons:

              ….

              (4) entry of default judgment or judgment by default was entered
              against such party who was served only by publication and who
              was without actual knowledge of the action and judgment, order
              or proceedings;

              …. or

              (8) any reason justifying relief from the operation of the
              judgment, other than those reasons set forth in sub-paragraphs
              (1), (2), (3), and (4).

              The motion shall be filed within a reasonable time for reasons
              (5), (6), (7), and (8), and not more than one year after the
              judgment, order or proceeding was entered or taken for reasons
              (1), (2), (3), and (4). A movant filing a motion for reasons (1),
              (2), (3), (4), and (8) must allege a meritorious claim or defense.

      Court of Appeals of Indiana | Memorandum Decision 19A-CT-2890 | August 18, 2020   Page 5 of 9
      Lutherstock based its motion on sub-paragraph (4) and therefore was required

      to file the motion within the required time limit, to make a prima facie showing

      of a meritorious defense, and to demonstrate a lack of actual knowledge of the

      action until after default judgment was entered. First Chicago Ins. Co. v. Collins,

      141 N.E.3d 54, 62 (Ind. Ct. App. 2020).

[8]   At the hearing on Lutherstock’s motion to set aside default judgment,

      Townsend focused her argument on the timing of Lutherstock’s motion,

      claiming that it was untimely filed because it was filed more than a year after

      she served notice by publication. Her argument is misplaced. Trial Rule 60(B)

      specifies that the party seeking relief from judgment under sub-paragraph (4)

      shall file its motion “not more than one year after the judgment, order or

      proceeding was entered.” (Emphases added.) The trial court entered default

      judgment on February 6, 2019, and Lutherstock timely filed its Trial Rule

      60(B) motion on October 7, 2019.

[9]   Lutherstock also was required to make a prima facie showing of a meritorious

      defense to the underlying action. A meritorious defense refers to “evidence

      that, if credited, demonstrates that a different result would be reached if the case

      were retried on the merits and that it is unjust to allow the default to stand.”

      Smith v. Johnston, 711 N.E.2d 1259, 1265 (Ind. 1999). The underlying action

      against Lutherstock is a negligence claim based on the acts of a presumed

      tenant’s dog. To prevail against a landowner/landlord for the acts of a tenant’s

      dog, the plaintiff must prove that the landowner retained control over the leased

      property and that the landowner had actual knowledge of the tenant’s dog’s

      Court of Appeals of Indiana | Memorandum Decision 19A-CT-2890 | August 18, 2020   Page 6 of 9
       dangerous propensities. Morehead v. Deitrich, 932 N.E.2d 1272, 1276 (Ind. Ct. App.

       2010), trans. denied (2011).

[10]   In analyzing whether Lutherstock articulated a meritorious defense and

       whether it had actual knowledge of the action, we refer to the attached affidavit

       of Warren, Lutherstock’s sole member and registered agent. In his affidavit,

       Warren averred as follows: that he had no actual knowledge of the pending

       action until after the court issued the default judgment; that the address to

       which the summons and complaint were sent was neither the current business

       address of Lutherstock nor his personal address; that Lutherstock owned the

       property where the dog bite allegedly occurred but did not retain any possession

       or control over the property; that Warren never entered the leased property

       without notice; that the property had no common areas; that Muncy was never

       Lutherstock’s tenant; that Warren had never heard of Muncy; that the tenants

       on the date of the incident were John Edwards, Sean Miller, and Hubert Cox II;

       that Warren had never given consent for a pet on the premises; and that he was

       never put on notice of any pet there. Appellant’s App. Vol. 2 at 36-38. As

       reflected in Warren’s affidavit, Lutherstock neither retained control over the

       leased property nor had actual knowledge of the presence of any dog there, let

       alone one with dangerous propensities. Moreover, Warren expressly averred

       that as Lutherstock’s sole member and registered agent, he did not have actual

       knowledge of the underlying action until after default judgment was entered.

       Thus, Lutherstock made a prima facie showing of a meritorious defense and

       established a lack of actual knowledge of the action.

       Court of Appeals of Indiana | Memorandum Decision 19A-CT-2890 | August 18, 2020   Page 7 of 9
[11]   Townsend claims that Lutherstock is not entitled to relief from judgment

       because it failed to update its registered agent’s address with the secretary of

       state’s office as required by statute. See Ind. Code § 23-0.5-4-7(a) (if registered

       agent changes name, address, or email, agent shall deliver to secretary of state a

       statement of such change, specifying name of entity and both old information

       and changes to that information). Lutherstock acknowledges that it did not

       update its registered agent’s address but maintains that relief from default

       judgment nevertheless was appropriate because it was without actual

       knowledge of the action, articulated a meritorious defense, and was actually

       “served only by publication” under Trial Rule 60(B)(4), the last of which

       Townsend does not dispute.

[12]   With the foregoing in mind, we address Townsend’s claim that granting

       Lutherstock relief from her default judgment will result in an injustice because

       she now knows the true identity of the tenants (as listed in Warren’s affidavit)

       and is time-barred from pursuing them. However, Townsend is the one who

       named Muncy as a defendant based on her assumptions that he was the dog’s

       owner and that he was a tenant of Lutherstock. These mistaken assumptions

       were not attributable to Lutherstock. Unfortunately for Townsend, she now

       owns a default judgment against a defendant whose whereabouts are unknown.

       But she is not without a remedy against Lutherstock, should she be able to

       prove her case against it on the merits.

[13]   In short, Lutherstock lacked actual knowledge of the action at the time default

       judgment was entered, timely filed its motion to set aside default judgment, and

       Court of Appeals of Indiana | Memorandum Decision 19A-CT-2890 | August 18, 2020   Page 8 of 9
       made a prima facie showing of a meritorious defense to the underlying

       negligence action. We therefore conclude that the trial court acted within its

       discretion in setting aside default judgment against Lutherstock. In affirming

       the trial court, we by no means condone an entity’s failure to update its contact

       information with the secretary of state’s office. However, we are mindful of the

       strong disfavor in which default judgments are held and the trial court’s ensuing

       duty to exercise its discretion in accordance with Indiana’s well-settled

       preference for hearing cases on the merits. Seleme, 982 N.E.2d at 303.

       Consequently, we affirm.

[14]   Affirmed.

       Bailey, J., and Altice, J., concur.

       Court of Appeals of Indiana | Memorandum Decision 19A-CT-2890 | August 18, 2020   Page 9 of 9