Despite rebuke, Court of Appeals tosses default judgment

A defendant who consistently failed to appear for scheduled hearings in small claims court gained a reprieve, but with an admonishment, from the Indiana Court of Appeals.

Linda Rosenberg appealed the entry of default judgment against her on two causes brought in small claims court in Lake County. Her former office manager, Kenneth Robinson, alleged she failed to repay a loan he made to her in August 2011 and that she skipped paying him for about four weeks of work during his six-months of employment.

At the Oct. 30, 2013, trial, Rosenberg’s counsel requested a stay because of a federal investigation into Rosenberg.

The court rescheduled for Jan. 14, 2014, but both Rosenberg and her counsel did not appear. Consequently, the court took testimony from Robinson and entered judgment by default on both claims for $6,000 each.

Three days later Rosenberg filed a motion to set aside the default judgment. She stated her attorney had “inadvertently omitted” the hearing from his calendar. On Jan. 22, the court granted her motion to stay and scheduled a hearing for March 20, 2014.

At the March hearing, counsel for Rosenberg requested a continuance because she had been unable to contact Rosenberg for more than two weeks only to discover Rosenberg had been in the hospital. The court grantee the continuance and set the hearing for June 3, 2014.

However, on that day, Rosenberg failed to appear and her counsel was nearly 20 minutes late. The court subsequently denied Rosenberg’s motion to reconsider and to set aside the default judgment.

After her motion to correct error was denied, Rosenberg filed an appeal, claiming the trial court erred in denying her motion to set aside default judgment.

She argued small claims court erred in entering the default judgment because the judgments were not supported by evidence in the record. Robinson did not produce any agreement or documentation supporting his contention that he loaned her money. Also, he did not provide any evidence of his pay rate or employment with Rosenberg that showed he was not compensated for all his work.

Rosenberg asserted that according to Small Claims Rule 10 (B), the court must examine that the plaintiff has a prima facie case before default judgment is entered. But based on the scant evidence in the record, the court could not have found Robinson satisfied all the necessary elements of his claims.

The Court of Appeals agreed that Robinson had not established a prima facie case for his recovery of either claim. The unanimous panel reversed and remanded with instructions in Linda Rosenberg v. Kenneth Robinson, 45A03-1407-SC-262.

The Court of Appeals did admonish Rosenberg and her counsel. In a footnote, the panel noted that although it remanded for further proceedings, it did not approve of Rosenberg’s and her counsel’s failure to appear and tardiness at scheduled hearings.