COA: Man entitled to have attorney present at small claim hearing

Finding that a businessman who was confused as to whether he needed his attorney to appear in a small claims case was denied the basic right of representation, the Indiana Court of Appeals reversed the denial of his motion for a continuance.

Jim R. Fine originally sued Sheldon Graber as president of Destination Yachts, claiming warranty work was not completed. After a hearing date was set, Fine amended the complaint to add Destination Yachts as a defendant. Fine flew in from Las Vegas and Graber appeared in person without counsel, on behalf of himself and the company.

Small Claims Trial Rule 8(C)(3) requires businesses be defended or presented by counsel when the claims exceed more than $1,500. Fine sought $6,000 plus materials. Graber said he spoke to his attorney, who thought he didn’t need to be present for the hearing. He testified that his attorney misunderstood what they needed to do because the complaint was originally against Graber, not the business.

He asked the special judge to reschedule the matter so his attorney could be present, but the judge instead entered a judgment of $6,000 against Destination Yachts, plus interest.

In Destination Yachts, Inc., and Sheldon Graber v. Jim R. Fine, 14A01-1404-SC-188, the judges turned to caselaw as to how to deal with a matter where a corporation appears without counsel since Small Claims Rule 8(C)(3) is silent on that issue.

They found this case to be similar to Sears v. Blubaugh, 613 N.E.2d 468, 469 (Ind. Ct. App. 1993), in which the COA reversed default judgment in favor of the plaintiff after the defense asked for a continuance upon learning his counsel should have appeared. The appeals court held that Sears should have been given a chance to rectify its error.

In the instant case, the statement of claim told Graber he didn’t need an attorney, unless he was a corporation. But Fine initially just sued Graber, not the company. And at the hearing, Graber was confused about whether he needed an attorney.

“We believe under these facts, and under our standard of review in this case of prima facie error, the denial of a motion to continue was an abuse of discretion. We are aware that Fine travelled from Las Vegas for the hearing and that returning at a later date may have inconvenienced him. However, inconvenience is not a reason to justify the denial of a continuance where the basic rights of representation and defense against a claim are at issue,” Judge Melissa May wrote, ordering the case back to the trial court for more proceedings.