Trial Rule 60(B) does not sway COA to overturn default judgment

A certified public accountant who abruptly booted a tenant from his property then failed to appear at the subsequent court proceedings discovered the limits of trying to get relief under Indiana Trial Rule 60(B) when the Court of Appeals of Indiana found the CPA miscalculated his ability to get a do-over.

Jeffrey Baker and his company, Lafayette Rentals, Inc., were sued after reneging on a deal to allow F.H. Paschen, S.N. Nielson & Associates, LLC, to continue renting the office space for a short period after their lease had expired. Paschen tried through his attorney to get access to the property in order to retrieve his office equipment, but was met with Baker’s allegation of breach of lease and demand for additional payment.

In response, Paschen filed a complaint in Tippecanoe Circuit Court with allegations that included breach of contract, theft and conversion. Baker did not file an answer nor did he appear at the subsequent hearing for preliminary injunction and default judgment.

Afterward, Baker tried to get the default judgment set aside, telling the court he could not appear for the hearing because as an accountant he was busy filing tax returns and he was fearful of contracting the COVID-19 virus.

The trial court denied his motion and Baker appealed, arguing he was entitled to relief under Indiana Trial Rule 60(B).

The Court of Appeals affirmed the default judgment in Jeffrey D. Baker and Lafayette Rentals, Inc., v. F.H. Paschen, S.N. Nielsen & Associates, LLC, 21A-PL-2018.

Specifically, the appellate panel found Baker was not entitled to relief under Trial Rule 60(B)(1) which allows for excusable neglect. Baker admitted he was aware the motion for default judgment had been filed and a hearing had been scheduled so, the COA ruled, he had not shown any evidence of excusable neglect.

Also, Baker cited Trial Rule 60(B)(3) which enables for relief because of fraud, misrepresentation or other misconduct by the opposing party. He claimed Paschen made false statements in the complaint but the Court of Appeals found the allegation had no bearing on the trial court’s ruling.

“In its order granting default judgment, the trial court found that Paschen had served its complaint on Defendants and that they had not filed an answer, appeared in the matter, or otherwise attempted to defend the complaint,” Judge Derek Molter wrote for the court. “Therefore, the alleged misrepresentations that Defendants reference were not made with respect to a material fact which would change the trial court’s judgment because the judgment was based on the fact that Defendants failed to answer the complaint or attempt to defend the complaint in any manner.”

Next, Baker pointed to trial Rule 60(B)(8) which allows a trial court to set aside a default judgment for “any reason justifying relief from the operation of the judgment” with certain exceptions. However, the Court of Appeals held because the issue was not raised to the trial court, it was waived for appellate review.

In a footnote, the appellate panel noted the defendants allege a meritorious defense. However, the court did not see a need to consider a meritorious defense because the defendants did not establish any grounds for relief under Trial Rule 60(B).