Denial of motion to set aside default judgment was error, COA rules

A trial court erroneously denied a motion to set aside default judgment against a building company when it considered that motion just one day after it was filed without giving notice to the defendants, the Court of Appeals of Indiana has ruled.

In August 2020, Christopher Crocker and Beth Anne Robards-Crocker filed a complaint regarding Legacy Builders Inc.’s remodeling project at their residence in Poland, Indiana. The sheriff’s department filed a return, which provided that the complaint was served by “D/M Copy” at an address in Franklin. The record did not indicate that a summons was filed or served.

The Crockers filed a motion for default judgment in October 2020 “without notice” against the defendants.

Three days later, the Clay Circuit Court found that “[s]ervice was perfected on the Defendant’s [sic] by Sheriff, delivery on August 25, 2020.” The trial court thus granted default judgment against Legacy Builders and set the matter “for hearing on whether or not to enter judgement [sic] individually against Defendant, Jonathon D. Douglas.”

In February 2021, the trial court held a damages hearing, at which the defendants did not appear. The trial court issued its order on the damages in May and entered judgment against the defendants “jointly and severally” in the amount of $22,969.65.

The Crockers then filed a motion for proceedings supplemental, and the trial court set the matter for hearing on Sept. 1. On Aug. 31, the defendants filed a motion to continue the Sept. 1 hearing, which the trial court granted and rescheduled for Sept. 16.

On Sept. 15, the defendants filed a motion to set aside the default judgment. They alleged the Crockers did not file or serve a summons with the complaint, the defendants did not receive a copy of the motion for default judgment and the motion did not contain a certificate of service.

That same day, the defendants also filed a motion to continue the proceedings supplemental hearing, which was scheduled for the next day.

The next day, although the trial court did not give the defendants notice, it conducted a hearing on the motion to set aside the default judgment instead of on the proceedings supplemental. The defendants had not appeared for the scheduled proceedings supplemental hearing, so they were not present for the hearing on their motion.

The trial court then denied the motion to set aside the default judgment but reset the hearing on the proceedings supplemental for Oct. 4.

A motion to reconsider was filed but denied.

In reversing on Friday, the Court of Appeals found the trial court abused its discretion by conducting a hearing on the motion to set aside the default judgment without notice to the defendants.

“Defendants were aware that a hearing was scheduled, but the scheduled hearing was for the purpose of addressing the proceedings supplemental, not the motion to set aside,” Judge Elizabeth Tavitas wrote. “The record contains no indication that Defendants were provided with any notice that the trial court would be hearing their motion to set aside at the same time. “

Regarding the question of personal jurisdiction, the Court of Appeals also reversed, pointing to Overhauser v. Fowler, 549 N.E.2d 71 (Ind. Ct. App. 1990), and finding that because the Crockers failed to file a summons with their complaint, the trial court did not acquire personal jurisdiction of the defendants.

“In Overhauser, this court held that the service of a summons, not accompanied by the complaint, was insufficient to confer personal jurisdiction,” Tavitas wrote. “Likewise, here, the service of a complaint, not accompanied by a summons, was insufficient to confer personal jurisdiction. Under these circumstances, the trial court should have granted Defendants’ motion to set aside the default judgment.”

The case of Legacy Builders Indiana, Inc. and as amended Legacy Builders Indiana, LLC, et al. v. Christopher Crocker and Beth Anne Robards-Crocker, 21A-CT-2255, was remanded for further proceedings.