Continental Assurance Co. v. Sickels

252 N.E.2d 439, 145 Ind. App. 671, 1969 Ind. App. LEXIS 429
CourtIndiana Court of Appeals
DecidedNovember 19, 1969
Docket1268A207
StatusPublished
Cited by23 cases

This text of 252 N.E.2d 439 (Continental Assurance Co. v. Sickels) is published on Counsel Stack Legal Research, covering Indiana Court of Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Continental Assurance Co. v. Sickels, 252 N.E.2d 439, 145 Ind. App. 671, 1969 Ind. App. LEXIS 429 (Ind. Ct. App. 1969).

Opinions

Pfaff, C.J.

Plaintiffs-appellees filed suit against defendant-appellant to recover benefits allegedly due under a contract of insurance. Upon appellant’s failure to appear and defend this cause of action, a default judgment was entered against the defendant-appellant. Upon learning of the entry of the default judgment in plaintiff-appellees’ favor, appellant filed a complaint to set aside said default judgment, alleging therein excusable neglect in addition to a .proper defense to the cause of action, i.e., termination of the appellant’s obligation to pay under the .contract provisions prior to the date of injury. Appellees demurred to the appellant’s amended complaint to set aside said default judgment and said demurrer was sustained for the reason that the trial court concluded that the appellant’s complaint did not state facts sufficient to constitute a cause of action to set aside the default judgment.

The correctness of the court’s ruling on appellees’ demurrer is the issue on appeal. It is our opinion that the judgment of the Municipal Court of Marion County, Room No. 2, in sustaining appellees’ demurrer constitutes reversible error.

The setting aside of a default judgment is provided for by [673]*673Acts 1881 (Spec. Sess.), ch. 38, § 135, p. 240, as last amended by Acts 1941, ch. 72, § 1, p. 185, being Burns’ Ind. Stat. Anno. §2-1068 (1967 Repl.).1

Section 2-1068, supra, states in pertinent part as follows:

“The court shall relieve a party from a judgment taken against him through his mistake, inadvertence, surprise, or excusable neglect, on complaint filed and notice issued, as in original actions within two (2) years from and after the date of the judgment, * *

Appellees’ demurrer and memorandum in support thereof maintains that appellant’s amended complaint to set aside default judgment did not state facts sufficient to constitute a cause of action to set aside the default judgment because appellant did not establish “excusable neglect”. The applicable statute, § 2-1068, supra, speaks of four separate grounds available when a party seeks to set aside a default judgment: mistake, inadvertence, surprise, or excusable neglect. We believe, and appellant so maintains, that a technical interpretation of the statute would compel a conclusion that appellees have conceded that appellant’s amended complaint to set aside said default judgment is sufficient to constitute a cause of action to set aside the default judgment because of alleged facts sufficient to show “mistake, inadvertence, or surprise”, that is, the demurrer speaks of only “excusable neglect”. Further, the demurrer does not question the sufficiency of the defense raised by appellant in its complaint. Here, however, we need not resort to a conclusion supported by a technical construction of the appropriate statute, nor is it necessary to speak of appellees’ waiver of issues that might have been interposed by their demurrer. We prefer to consider the essential question of whether or not appellant provided the trial court with facts sufficient to show “excusable neglect”, this being the exact basis of appellees’ demurrer.

[674]*674We have heretofore stated that it was error to sustain the demurrer, the reason being that appellant’s excusable neglect was reason to set aside the prior default judgment. Defendant-appellant did not appear and defend the original action filed against it because of the following facts which we here hold to be facts establishing appellant’s excusable neglect.

The record establishes that appellant, Continental Assurance Company, received a copy of appellees’ complaint and a summons on November 17, 1967. Appellant has an established procedure whereby complaints and summonses, when received at the appellant’s Chicago office, are “docketed” and sent to appellant’s counsel. Appellant’s “docketing” of legal proceedings against appellant refers to an intra-office procedure whereby upon receipt of a complaint and summons the secretary of appellant’s counsel records the same in a ledger which gives the date of receipt and the date upon which an appropriate response is due. When appellant received the complaint and summons in question, the aforesaid intra-office procedure was not effected and appellant’s counsel first received notice of appellees’ claim when notice of default judgment was received on December 5, 1967. At this time appellant company, after a thorough search of all records, discovered the original complaint and summons in a complaint file drawer and said documents were attached, by paper clip, to legal proceedings | emanating- from another jurisdiction. Appellant averred that in filing, a clerk allowed appellees’ complaint and summons to become attached to a legal matter from another jurisdiction. Thus, appellant’s counsel was not notified of the pending claim and a default judgment resulted from what we hold to be appellant’s “excusable neglect”. Thereafter, appellant immediately instituted this action to set aside the default judgment.

In reviewing Indiana decisions and authorities defining the statutory language “excusable neglect” we find the following statement in 2 Wiltrout Ind. Civ. Proc. § 1230, p. 243:

[675]*675“(4) What Constitutes Excusable Neglect, etc. No fixed rule can be stated as to what facts and circumstances will constitute excusable neglect, mistake, or inadvertance for not appearing and defending against the default judgment. What constitutes excusable neglect, mistake, or inadvertence within the meaning of the statute must be determined from the facts in each particular case, and any doubt should be resolved in favor of the application to set aside the default judgment in order to permit the merits of the case to be heard and determined. The term ‘excusable neglect’ or ‘inadvertence’ is a general term, and each case must necessarily depend upon its own facts and circumstances, and any doubt resolved in favor of the applicant in order that the merits of the cause may be heard and determined. There are innumerable decisions construing what is sufficient to constitute ‘excusable neglect’ and it is impossible to review all of them in this work. All that can be done is to refer to a few of the many decisions.
“The following facts have been held to constitute excusable neglect, mistake, and inadvertance: (a) absence of party’s attorney through no fault of party; (b) an agreement made with opposite party, or his attorney; (c) conduct of other persons causing party to be misled or deceived; (d) unavoidable delay in traveling; (e) faulty process, whereby party fails to receive actual notice; (f) fraud, whereby party is prevented from appearing and making a defense; (g) ignorance of defendant; (h) insanity or infancy; (i) married women deceived or misled by conduct of husbands; (j) sickness of party, or illness of member of family.”

We refer to the opinion of this court in the case of Himelstein Bros., Inc. v. The Texas Co. (1955), 125 Ind. App. 448, 125 N. E. 2d 820. This decision and an earlier Appellate Court decision in Masten v. Indiana Car, etc., Co. (1900), 25 Ind. App. 175, 57 N. E. 148, provide ample authority for our judgment that it was reversible error to sustain appellees’ demurrer.

In Himelstein, supra, this court stated at page 453 of 125 Ind. App. as follows:

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Continental Assurance Co. v. Sickels
252 N.E.2d 439 (Indiana Court of Appeals, 1969)

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Bluebook (online)
252 N.E.2d 439, 145 Ind. App. 671, 1969 Ind. App. LEXIS 429, Counsel Stack Legal Research, https://law.counselstack.com/opinion/continental-assurance-co-v-sickels-indctapp-1969.