Arthur David Siegle and Karen Lynn Siegle v. NextGear Capital, Inc. (mem. dec.)

• Court: Indiana Court of Appeals
• Decided: December 6, 2019
• Docket: 19A-CC-1467
• Status: Published

Opinion

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