Heartland Resources, Inc. v. Bedel

903 N.E.2d 1004, 2009 Ind. App. LEXIS 591, 2009 WL 866859
CourtIndiana Court of Appeals
DecidedMarch 31, 2009
Docket24A01-0808-CV-399
StatusPublished
Cited by10 cases

This text of 903 N.E.2d 1004 (Heartland Resources, Inc. v. Bedel) 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
Heartland Resources, Inc. v. Bedel, 903 N.E.2d 1004, 2009 Ind. App. LEXIS 591, 2009 WL 866859 (Ind. Ct. App. 2009).

Opinion

OPINION

NAJAM, Judge.

STATEMENT OF THE CASE

Heartland Resources, Inc.; Heartland Red River Prospect, LP.; David A. Stewart; Richard Stewart; and Mark Haynes (collectively "Heartland") appeal from the trial court's entry of default judgment against Heartland and award of damages to Ambrose Bedel and Catherine Bedel (collectively "the Bedels"). Heartland presents the following restated issues for our review:

*1006 1. Whether the trial court had personal jurisdiction over Heartland.
2. Whether the trial court erred when it awarded the Bedels treble damages.

The Bedels cross-appeal and contend that the trial court erred when it did not award them attorney's fees.

We affirm and remand with instructions.

FACTS AND PROCEDURAL HISTORY

On December 10, 2002, the Bedels entered into a contract ("the contract") with Heartland whereby the Bedels invested $10,750 in Heartland's "gas well ventures" in Louisiana. Appellants' App. at 17. The contract included a forum-selection clause stating that "all matters in dispute" under the contract would be resolved in Warren County, Kentucky. Id. at 38. Thereafter, the Bedels invested more money with Heartland over the course of 2003.

On February 12, 2007, the Bedels filed a complaint against Heartland alleging violations of the Indiana Uniform Securities Act, fraud, constructive fraud, deception, breach of fiduciary duty, and identity theft. Heartland did not timely file an answer or other pleading, and, on March 29, 2007, the trial court entered default judgment against Heartland. Thereafter, the trial court granted Heartland an "extension of time" in which to "answer or otherwise plead to Plaintiffs' Complaint." Id. at 38. And on May 25, Heartland filed an answer and a motion to dismiss the Bedels' complaint. In the motion to dismiss, Heartland alleged that the trial court did not have personal jurisdiction over Heartland based upon the forum-selection clause in the contract. On February 14, 2008, the trial court denied the motion to dismiss.

On February 29, 2008, Heartland filed a motion to set aside the default judgment. Heartland did not allege lack of personal jurisdiction in the motion to set aside. The trial court also denied that motion. Following a hearing on the Bedels' damages, the trial court entered judgment against Heartland in the amount of $180,510.10. This appeal ensued.

DISCUSSION AND DECISION

Issue One: Personal Jurisdiction

Heartland contends that the trial court abused its discretion when it did not dismiss the Bedels' complaint based upon the forum-selection elause in the contract. Indeed, the majority of Heartland's brief on appeal is devoted to arguments that the forum-selection clause was freely negotiated and just and reasonable. However, those issues are not properly before this court on appeal, and we do not address the validity of the forum-selection clause.

Once default judgment is entered against a party, the only means of challenging that judgment is by a motion to set aside the default judgment "in accordance with the provisions of Rule 60(B)." See Ind. Trial Rule 55(C); Siebert Oxidermo, Inc. v. Shields, 446 N.E.2d 332, 336-37 (Ind.1983); see also 3A William F. Harvey, Indiana Practice, § 55.11 at 223 @d ed.2002). Here, at first, Heartland did not move to set aside the default judgment, but instead moved to dismiss the complaint under Trial Rule 12(B)(2), alleging lack of personal jurisdiction, and under Trial Rule 12(B)(6), alleging failure to state a claim upon which relief can be granted. But because the default judgment had not been set aside, there was no pending cause of action to dismiss. Because judgment on the complaint had been entered, Heartland's subsequent motion to dismiss the complaint was a nullity.

Later, when Heartland finally moved to set aside the default judgment *1007 under Trial Rule 60(B)(1), Heartland did not allege lack of personal jurisdiction. Heartland's sole allegation was that mistake, surprise, or excusable neglect had caused it to not properly respond to the complaint. Specifically, Heartland argued that "when the Court granted Defendants' Motion for Extension of Time and permitted Defendants to file a responsive pleading to Plaintiffs' complaint, Defendants believed that the Court had, in effect, set aside the Entry of Default." Appellants' App. at 63-64. A party can waive lack of personal jurisdiction and submit himself to the jurisdiction of the court if he responds or appears and does not contest the lack of jurisdiction. See Maust v. Estate of Bair ex rel. Bair, 859 N.E.2d 779, 783 (Ind.Ct.App.2007). Here, when Heartland failed to allege lack of personal jurisdiction in its Trial Rule 60(B)(1) motion to set aside, it waived that issue for review on appeal.

Heartland also has not shown that the trial court abused its discretion when it denied its motion to set aside default judgment. In addition to showing excusable neglect, a movant for relief from judgment under Trial Rule 60(B)(1) must show a meritorious defense. See Bunch v. Himm, 879 N.E.2d 632, 637 (Ind.Ct.App.2008). A meritorious defense is one that would lead to a different result if the case were tried on the merits. Id. The movant need not prove absolutely the existence of a meritorious defense. Id. The movant must show, however, enough admissible evidence to make a prima facie showing of a meritorious defense indicating to the trial court the judgment would change and that the defaulted party would suffer an injustice if the judgment were allowed to stand. Id.

Here, Heartland did not plead the forum-selection clause or any meritorious defense, but merely alleged that the Be-delg' allegations were "not ... based in fact." Appellants' App. at 64. Heartland did not present any evidence in support of that bare assertion. Indeed, Heartland was not even present at the hearing on its motion to set aside default judgment. Heartland has not demonstrated that the trial court abused its discretion when it denied its motion to set aside default judgment.

Issue Two: Treble Damages

Heartland next contends that the trial court erred when it awarded treble damages to the Bedels. Heartland maintains that the Bedels' claims "fall squarely under" the Indiana Uniform Securities Act ("the Act"), which does not provide for treble damages. 1 In essence, Heartland contends that because the award is based on damages arising from the Bedelg' investment in securities, the Act is the exclusive remedy. But there is nothing in the Act making it the exclusive remedy for the Bedels. See, e.g., Call v. Scott Brass, Inc., 553 N.E.2d 1225, 1229 (Ind.Ct.App.1990) (observing that statutes that provide exclusive remedies specify their exclusivity in the statute, e.g., Worker's Compensation Act and Medical Malpractice Act), trams. denied.

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903 N.E.2d 1004, 2009 Ind. App. LEXIS 591, 2009 WL 866859, Counsel Stack Legal Research, https://law.counselstack.com/opinion/heartland-resources-inc-v-bedel-indctapp-2009.