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A debt purchasing company was not substituted as the party of record or determined to be the plaintiff that owned a default judgment of $1,010 against an Ohio resident, the Court of Appeals of Indiana ruled Thursday in dismissing the appeal.
More than 20 years ago in February 2003, C1 Professional Trucking Center obtained a default judgment against Donald Parnell, then identified as an Ohio resident, in the amount of $1,010.16, with C1 initiating proceedings supplemental six days later.
According to court records, in May 2022, counsel for H & S Financial Inc. filed an appearance and also filed an unverified motion to change plaintiffs. H & S attached two pages, each labeled “Bill of Sale and Assignment,” to the motion.
The documents indicated that pursuant to California law, C1 Professional Training Center assigned its judgment against Parnell to Absolute Resolutions Corporation on March 1, 2004, and the latter assigned its judgment to H & S one week later.
On July 13, 2022, the Warren Township Small Claims Court of Marion County conducted a hearing at which Parnell did not appear, but counsel for H & S appeared. Neither counsel nor the trial court directly addressed the motion to change plaintiffs.
H & S did not request that its motion be treated as a motion for substitution of a party. It also didn’t proffer testimony, affidavits or an evidentiary exhibit.
On the same day, the small claims court issued an order captioned to reflect C1 Center as the plaintiff. The order stated that the statute of limitations to execute on the judgment would have expired on Feb. 13, 2013.
The order also stated — in error — that the motion before the court was one for leave to renew the judgment.
Although the order did not directly address party substitution, it effectively precluded H & S from initiating proceedings supplemental against Parnell.
H & S filed a motion to correct error, and a hearing was conducted on Nov. 2, 2022.
On Dec. 23, the small claims court issued an order which characterized its July 13, 2022, ruling as an “order denying Plaintiff’s request to substitute party, denying the Plaintiff’s request for renewal of judgment, and denying the Plaintiff’s request to file of [sic] a proceeding supplemental.”
H & S appealed, captioning its brief to identify itself as the plaintiff-appellant, a successive assignee of C1 Center.
The Court of Appeals dismissed the appeal, ruling H & S was not a party of record and did not show entitlement under Indiana Trial Rule 69(E) to conduct proceedings supplemental to enforce a judgment against Parnell.
Judge L. Mark Bailey wrote the opinion for the appellate court.
Bailey noted that, after a hearing at which H & S presented no evidence showing that it owned the judgment at issue, the trial court effectively denied H & S’s motion by entering an order that still listed C1 Center as the named plaintiff.
According to Bailey, the trial court erred in stating that a statute of limitations expired 10 years after the judgment was obtained and that the statute of limitations to execute on the judgment had expired and no party had renewed the judgment.
Judgment liens expire after 10 years, but the judgment itself, however, is still valid, Bailey wrote, and proceedings supplemental are available to enforce the judgment for another 10 years.
H & S contended that the relevant issue was not whether a judgment lien on real property or chattels real expired pursuant to Indiana Code § 34-55-9-2, but whether the holder of an equitable lien may conduct proceedings supplemental unrestricted by a statute of limitations.
Even if proceedings supplemental are chronologically available, they must be initiated by a judgment owner entitled to enforcement, Bailey wrote.
The appellate court said H & S did not specifically argue that the small claims court erroneously denied a motion for substitution, but instead suggested that the small claims court acquiesced to an informal substitution by stating that it “understood” there had been assignment or “changing hands.”
“But there is no order for party substitution. H & S is not a plaintiff. There has been no determination that H & S met the requirements of Trial Rule 69(E), and, on this record, such a determination could not be made. We can afford to H & S — a non-party — no relief,” Bailey concluded.
Judges Elizabeth Tavitas and Dana Kenworthy concurred.
The case is H & S Financial, Inc., as assignee of Absolute Resolutions Corp. as assignee of C1 Professional Training Center v. Donald Parnell, 23A-SC-154.
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