Court Opinion

ID: 9528295
Source: CourtListenerOpinion
Date Created: 2023-08-07 03:39:30.55022+00
Date Added: 2024-06-11T13:25:39.014325
License: Public Domain

Concurring Opinion.
Sharp, J.
I concur in the result reached by the majority opinion but do not agree with all of the reasoning and the authorities supporting the majority’s conclusion.
I believe that the Appellant’s Complaint was sufficiently broad within the meaning of Burns’ Indiana Statutes Annotated, § 2-1068, to withstand a demurrer. I further believe that the Appellant is entitled to a hearing on the merits of its unverified complaint to set aside the default judgment. The proceedings with reference to the hearing on the merits should be governed by the principles set forth in Schepp v. Pogue, 142 Ind. App. 341, 234 N. E. 2d 874 (1968). When proof is tendered within the rules of the Schepp case it still may be possible for the trial court to find under all of the circumstances before it that the conduct of the Appellant’s employees was not in fact excusable neglect. Inasmuch as we are overruling the demurrer sustained against Appellant, its remaining burden is to prove the allegations of its complaint by a fair preponderance of the evidence.
I do not believe that this case involves the negligence of a party’s legal counsel in failing to make a timely appearance for the party. I believe that this is a case involving the acts of the defendant itself in misplacing the relevant papers. This distinction is necessary to divorce the instant situation from *679that where the policy of the law would be to not hold a party liable to a default for the acts of another person over which it had no control and could reasonably rely upon.
What I believe is before this court is actually a policy question of first impression surrounding the definition of the term “excusable neglect” as it applies to defendants themselves. It is well settled that the statute in question should be interpreted liberally to allow parties to defend the original claim for damages on the merits rather than have a default judgment be enforced. Beatty v. McClellan, 119 Ind. App. 385, 88 N. E. 2d 56 (1949) ; Falmouth State Bank v. Hayes, 97 Ind. App. 68, 185 N. E. 662 (1932) ; Ayrshire Coal Co. v. Thurman, 73 Ind. App. 578, 127 N. E. 810 (1920). However, there is another side to the coin, as aptly stated in Himelstein Bros., Inc. v. The Texas Co., 125 Ind. App. 448, 457, 125 N. E. 2d 820, 823 (1955), quoted in the majority opinion. There this court stated:
“Appellant urges upon this court to reverse the judgment of the trial court in order to permit them to try the case upon the merits. What might be equitable in this case might prove inequitable to other litigants in the future. If Appellant’s theory be adopted, then similar arrangements made with a Clerk’s Office or the misplacing of papers on one’s desk would become a precedent and courts would be placed under the imperative duty of giving relief, thus preventing parties from knowing whether they had a valid judgment until after a lapse of time.”
It is this policy question that is before us, and I believe that the facts alleged in the complaint do constitute a cause of action under the statute. However, this is not a free rein in the area, and I believe it may be excusable neglect only because there are several indices of mistake involved; the present complaint was filed as soon as default notice was sent and the error discovered, and the wayward paperclip is not an unsual problem. This seems to me to override Appellee’s claim that we will never be sure when a judgment is final, for if the complaint of a defendant shows excusable neglect in another con*680text, the default judgment will be set aside. In other words, no default judgment is truly valid until the defaulted party has had a reasonable time to come forward to show his mistake, inadvertance, surprise, or excusable neglect. The cases are consistent in holding that a defaulted party must come forward within a reasonable time, i.e., as soon as they diligently discover their mistake, and they may not attempt to have a default set aside after waiting for the statutory period of limitation to nearly run. Birch et al. v. Frantz et al., 77 Ind. 199, 203 (1881) ; Moore v. Horner, 146 Ind. 287, 292, 45 N. E. 341 (1896) ; Ammerman v. State, 98 Ind. 165 (1884) ; City of Indianapolis v. State ex rel. Kennedy, 224 Ind. 600, 607, 70 N. E. 2d 635 (1946); Irwin v. State, 220 Ind. 228, 245, 41 N. E. 2d 809 (1942). Also, in the present case, I do not feel there would be a hardship upon the Appellee to try his original complaint on the merits.
However, it must be emphasized here that this case should not be construed to always relieve an insurance corporation of the acts of its authorized employees and agents in mislaying or mishandling suit papers. Insurance corporations are in the business of handling claims and must necessarily handle suit papers and other legal process in the ordinary course of their business. They certainly should not be encouraged by the result in this case to lower their standards of care and caution in the handling of such papers. The burden must always be on such corporate party to show that the facts of each particular case constitute excusable neglect.
As the trial court must now determine whether under all of the circumstances of this case the conduct of the Appellant’s agents and employees, in fact, constitutes excusable neglect, the reasonableness of Appellant’s intra-office procedure for handling such papers is put in issue. It is for the trier of fact to decide whether the mistake could have been prevented by another intra-office procedure, or, to use another example, whether the facts surrounding the wayward paperclip were negligence on the part of the secretary or not, or whether it *681was defendant’s negligence in hiring this employee. The trial court could find such acts were not excusable neglect, but mere carelessness.
For the above stated reasons, I concur that the demurrer to Appellant’s complaint should be overruled.
Note. — Reported in 252 N. E. 2d 439.