Court Opinion

ID: 4462110
Source: CourtListenerOpinion
Date Created: 2019-12-06 16:04:18.762556+00
Date Added: 2024-06-11T14:53:31.460264
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                               Dec 06 2019, 8:40 am

      court except for the purpose of establishing                                 CLERK
                                                                               Indiana Supreme Court
      the defense of res judicata, collateral                                     Court of Appeals
                                                                                    and Tax Court
      estoppel, or the law of the case.

      ATTORNEY FOR APPELLANTS                                 ATTORNEYS FOR APPELLEE
      Jonathan D. Harwell                                     David J. Jurkiewicz
      Indianapolis, Indiana                                   Nathan T. Danielson
                                                              Indianapolis, Indiana

                                                IN THE
          COURT OF APPEALS OF INDIANA

      Arthur David Siegle and Karen                           December 6, 2019
      Lynn Siegle,                                            Court of Appeals Case No.
      Appellants-Defendants,                                  19A-CC-1467
                                                              Appeal from the Hamilton Circuit
              v.                                              Court
                                                              The Honorable Paul A. Felix,
      NextGear Capital, Inc.,                                 Judge
      Appellee-Plaintiff                                      Trial Court Cause No.
                                                              29C01-1810-CC-9687

      Altice, Judge.

                                               Case Summary

[1]   Arthur David Siegle and his wife Karen Lynne Siegle appeal the trial court’s

      entry of default judgment against them and in favor of NextGear Capital, Inc.

      Court of Appeals of Indiana | Memorandum Decision 19A-CC-1467 | December 6, 2019                 Page 1 of 6
      (Nextgear). The Siegles contend that they had appeared in the action and were

      thus, pursuant to Ind. Trial Rule 55(B), entitled to be served with written notice

      of NextGear’s application for default judgment at least three days prior to a

      hearing on the application. The Siegles contend that the trial court improperly

      entered the default judgment without holding a hearing and without proper

      notice. This might be true, but because they did not follow the proper

      procedure for perfecting their appeal of this issue, we must dismiss the appeal.

[2]   We dismiss.

                                       Facts & Procedural History

[3]   On October 11, 2018, NextGear initiated this lawsuit by filing a complaint

      against International Auto Group of South Florida, Inc. d/b/a International

      Auto Group (Auto Group) and the Siegles. Pursuant to an amended contract,

      Auto Group had borrowed money on a credit line from NextGear, and the

      Siegles were personal guarantors. The first three counts of the complaint

      alleged breach of contract against each defendant and the fourth alleged a

      conversion claim against Auto Group and Arthur. Arthur and Karen were

      individually served with the complaint and a summons at their residence in

      Florida in November.

[4]   Thereafter, on March 29, 2019, Arthur, pro se, filed a motion for extension of

      time to retain local counsel. In the motion Arthur indicated that he was acting

      on behalf of himself, Karen, and Auto Group. NextGear objected to the

      motion as to Karen and Auto Group, arguing that Arthur could not file a

      Court of Appeals of Indiana | Memorandum Decision 19A-CC-1467 | December 6, 2019   Page 2 of 6
      responsive pleading for those parties because he was not licensed to practice law

      in Indiana. On April 15, 2019, the trial court sustained NextGear’s objection

      and granted the motion for extension of time with respect to Arthur only, giving

      him until May 1, 2019, to answer the complaint.

[5]   On May 23, 2019, NextGear filed a notice of dismissal without prejudice as to

      defendant Auto Group. This was because NextGear had been unable to locate

      or obtain service on this defendant. The trial court dismissed Auto Group that

      same day.

[6]   The next day, May 24, NextGear filed a motion for entry of default judgment

      as to Arthur and Karen for their failure to answer or otherwise respond to the

      complaint. NextGear filed supporting affidavits and sought judgment against

      Arthur and Karen, jointly and severally, for actual damages for breach of

      guaranty in the amount of more than $8.5 million. Additionally, NextGear

      sought damages for civil conversion against Arthur in the amount of more than

      $1.2 million. NextGear served a copy of the motion for default judgment on

      Arthur and Karen by first class mail.

[7]   On May 28, 2019, without holding a hearing, the trial court granted the motion

      for default judgment as to the Siegles. The court awarded actual damages from

      Court of Appeals of Indiana | Memorandum Decision 19A-CC-1467 | December 6, 2019   Page 3 of 6
      Arthur and Karen, jointly and severally, in the amount of $8,523,571.52. 1 The

      Siegles now appeal directly from the entry of the default judgment.

                                              Discussion & Decision

[8]   The Siegles argue on appeal that the default judgment was invalid because no

      hearing was held and they did not receive the three-day notice required by T.R.

      55(B), which provides in relevant part: “If the party against whom judgment by

      default is sought has appeared in the action, he (or, if appearing by a

      representative, his representative) shall be served with written notice of the

      application for judgment at least three [3] days prior to the hearing on such

      application.” Further, relying on Nehring v. Raikos, 413 N.E.2d 328 (Ind. Ct.

      App. 1980), the Siegles contend that they had appeared in the action by

      Arthur’s filing the motion for extension of time before NextGear’s application

      for default judgment. Id. at 330 (reversing the denial of defendant’s Ind. Trial

      Rule 60(B) motion and holding that defendant had “appeared in the action” by

      filing an untimely pro-se motion for enlargement of time and, therefore, was

      “entitled to be served with written notice of the application for judgment at least

      three days prior to the hearing on the application”).

[9]   We are not unsympathetic to the Siegles’ argument. T.R. 55(B) requires a

      hearing before a default judgment may be issued. See Snyder v. Tell City Clinic,

      391 N.E.2d 623, 627 (1979); see also Standard Lumber Co. of St. John v. Josevski,

      1
          $1,225,507.98 of this amount also represented damages against Arthur on the civil conversion claim.

      Court of Appeals of Indiana | Memorandum Decision 19A-CC-1467 | December 6, 2019                   Page 4 of 6
       706 N.E.2d 1092, 1096 (Ind. Ct. App. 1999) (“[T]he default judgment was

       invalid because a hearing was never held.”). And the Siegles – or, at a

       minimum, Arthur – appeared in the action before the application for default by

       filing the motion for extension of time.

[10]   “The language of T.R. 55(B) is not superfluous and strict adherence to the

       notice provision is required.” Evansville Garage Builders v. Shrode, 720 N.E.2d
1273, 1277 (Ind. Ct. App. 1999), trans. denied. It is well established, however,

       that the proper procedure for setting aside a default judgment is to first file a

       T.R. 60(B) motion seeking to have the judgment set aside. 2 See T.R. 55(C); see

       also Siebert Oxidermo, Inc. v. Shields, 446 N.E.2d 332, 337 (Ind. 1983); Greer v.

       Discover Bank, 49 N.E.3d 1110, 1111 (Ind. Ct. App. 2016), trans. denied.

       “Thereafter, an appeal may be taken for the trial court’s ruling on the Rule

       60(B) motion.” Greer, 49 N.E.3d at 1111.

[11]   Because the Siegles did not file a T.R. 60(B) motion for relief from the trial

       court’s entry of default judgment against them, their appeal is not properly

       before us and must be dismissed. See Greer, 49 N.E.3d at 1111 (citing to several

       cases holding that a direct appeal from the entry of a default judgment is

       improper). Of course, our holding does not preclude the Siegles from seeking

       relief by filing a proper T.R. 60(B) motion with the trial court.

       2
        Default judgments entered without following the requirements of T.R. 55(B) are voidable and generally
       qualify for relief under T.R. 60(B)(8) (the “catch-all provision”). See Evansville Garage Builders, 720 N.E.2d at
       1277-78; Standard Lumber, 706 N.E.2d at 1096.

       Court of Appeals of Indiana | Memorandum Decision 19A-CC-1467 | December 6, 2019                      Page 5 of 6
[12]   Dismissed.

       Brown, J. and Tavitas, J., concur.

       Court of Appeals of Indiana | Memorandum Decision 19A-CC-1467 | December 6, 2019   Page 6 of 6