Baker Machinery, Inc. v. Superior Canopy Corp.

• Decision Date: 13 March 2008
• Docket Number: No. 02A03-0707-CV-322.,02A03-0707-CV-322.
• Citation: 883 N.E.2d 818
• Parties: BAKER MACHINERY, INC., Appellant, v. SUPERIOR CANOPY CORP., et al., Appellees.
• Court: Indiana Appellate Court

883 N.E.2d 818

BAKER MACHINERY, INC., Appellant, v. SUPERIOR CANOPY CORP., et al., Appellees.

No. 02A03-0707-CV-322.

Court of Appeals of Indiana.

March 13, 2008.

Benjamin K. McComas, Thompson Hine, LLP, Cincinnati, OH, Attorney for Appellant.

Martin E. Seifert, Haller & Colvin, PC, Fort Wayne, IN, Attorney for Appellee Superior Canopy Corp.

Daniel K. Leininger, Miner Lemon & Walston, LLP, Warsaw, IN, Attorney for Appellee Mega Manufacturing Corp.

OPINION

FRIEDLANDER, Judge.

Baker Machinery, Inc., filed a complaint under Cause No. 02-C01-0103-CP-403 (CP-403) against Superior Canopy Corporation alleging Superior owed part of the purchase price for a piece of equipment Baker had sold to Superior. Superior later filed a separate lawsuit under Cause No. 02C01-0308-PL-99 (PL-99) against Mega Manufacturing Corp. (Mega), the distributor of the machinery at issue, and Allsteel Corporation a/k/a Produits Ferro Cie Ltee a/k/a Ferro Products Co., LTD (Ferro), the equipment's manufacturer. Both complaints were dismissed with prejudice pursuant to Indiana Trial Rule 41(E). Baker appeals the dismissals, presenting the following restated issues for review:

1. Did the trial court err in dismissing Baker's complaint after Baker had asked the trial court to issue a scheduling order?

2. Did the trial court properly consider and apply the factors relevant to dismissal under T.R. 41(E)?

We affirm.

The facts of the underlying action are that Baker is a small company that serves as a manufacturer's representative in selling industrial equipment. On April 30, 1999, Baker sold to Superior a press brake system and a combination cut-to-length line for a total of $313,181.00. Superior made an initial payment of $198,191.75. The equipment was installed in September 1999 and Superior immediately began experiencing problems with it. As a result, Superior refused to pay the balance of the purchase price. On March 26, 2001, in CP-403, Baker filed a complaint for damages against Superior, alleging breach of contract. On May 23, 2001, Superior answered in denial, asserting affirmative defenses and counterclaims under several theories. Baker and Superior began discovery and conducted settlement discussions. Settlement was not forthcoming, however, and discovery continued into 2002. During this period of time, Baker changed counsel. The parties attempted settlement discussion again in July 2002, again without success. Baker changed counsel again in 2003 and new counsel conducted discovery, repeating the discovery actions undertaken by prior counsel.

On August 29, 2003, in PL-99, Superior filed a lawsuit against Mega, the distributor of the machinery at issue, and Ferro, the machinery's manufacturer. Superior sought damages against Mega and Ferro in PL-99 under the same theories asserted against Baker in Superior's counterclaim in CP-403. Mega later asserted third-party indemnity claims against Baker and Ferro in PL-99. On March 23, 2004, CP-403 and PL-99 were consolidated for purposes of discovery and pretrial proceedings, but otherwise remained separate actions under separate cause numbers. On December 29, 2004, for case CP-403, the trial court scheduled a pretrial conference for June 24, 2005 and set trial for August 22, 2005. On February 25, 2005, Ferro filed a motion to stay the proceedings in PL-99 because it had filed a bankruptcy action in Canada. The trial court entered a stay only with respect to PL-99. No one appeared at the scheduled June 24, 2005 pretrial conference. In an order entered that day, the trial court cancelled the August 22 trial date and directed Baker's counsel to "contact the Court to schedule a Case Management Conference when the parties have determined that this cause of action can again proceed." Appellant's Appendix at 85. Nothing happened until March 2006, when Superior was contacted by Baker's counsel. The parties exchanged letters and attended another settlement conference, but by the end of March 2006, action in the case again ceased.

On February 8, 2007, the trial courted entered an order entitled, as best we can tell, "Trial Rule 41(E) Notice and to Dismiss for Want of Prosecution", directing Baker to show cause why CP-403 and PL-99 should not be dismissed.¹ Appellant's Appendix at 98. After Baker's counsel received the show-cause order, she spoke with Baker about it. Counsel was informed that Baker did not have sufficient financial resources to proceed with litigation. Because of the show-cause order, however, Baker assured counsel it would obtain the resources to diligently do so. On March 30, 2007, Baker filed a memorandum with the court stating,

In response to this Court's Order to Show Cause, Plaintiff Baker Machinery, Inc. ("Baker") hereby seeks permission to continue this case in the court system. Due to financial constraints, Baker had been hopeful of and attempting to achieve an informal resolution of the case. However, it now appears that that endeavor is stalled.

Baker now seeks to engage in active discovery, in order to move the case forward within the court system. Accordingly, it respectfully requests that this Court not dismiss the case but, rather, set a scheduling order for it to proceed.

Id. at 86. After reviewing Baker's memorandum in response to its show-cause order, the trial court scheduled a telephonic case management conference for May 3, 2007. On April 25, 2007, Mega and Superior filed a motion apparently entitled "Joint Motion of Mega Manufacturing Corporation and Superior Canopy Corporation for Reconsideration of the Sufficiency of Baker Machinery Inc.'s Response to Court's Trial Rule 41(E) Notice and to Dismiss for Want of Prosecution." Appellant's Appendix at 92. For brevity's sake, we will refer to this as Superior's motion to reconsider, although it includes Mega's motion as well. On May 10, 2007, the trial court granted Mega and Superior's motion, citing the following reasons:

(1) [T]he length of the delay on the part of Baker Machinery Inc. to take any action to prosecute this cause;

(5) the amount of prejudice to Superior Canopy Corporation and Mega Manufacturing Corporation caused by the delay i.e., evidence has become stale and in some instances unobtainable;

(6) the presence of a lengthy history of Baker Machinery, Inc.'s having deliberately proceeded in a dilatory fashion; and

(9) the fact that Baker Machinery Inc. has been stirred into action only by a threat of dismissal and not by any diligence on the part of Baker Machinery Inc.'s to prosecute this action[.]

Id. at 11.² Baker appeals the order of dismissal.

1.

Baker contends the trial court erred in dismissing CP-403 and PL-99 because the motion requesting dismissal was untimely.

We review dismissal of a cause of action under T.R. 41(E) for an abuse of discretion. Beard v. Dominguez, 847 N.E.2d 1054 (Ind.Ct.App.2006), trans. denied. In so doing, we consider whether the trial court's decision was against the logic and effect of the facts and circumstances; "`we will affirm the trial court if any evidence supports the trial court's decision.'" Id. at 1059 (quoting Gray v. Westinghouse Elec. Corp., 624 N.E.2d 49, 55 (Ind.Ct.App.1993), trans. denied).

Baker's first challenge to the dismissal is largely procedural in nature. It frames this issue in terms of the timeliness of Superior's motion to reconsider. Baker explains, "[a]t no time during the pendency of this matter did Superior or Mega ever move the Circuit Court for dismissal until after Baker had already requested a scheduling conference, and the Court had granted that request." Appellant's Brief at 7 (emphasis in original). Baker contends a motion to dismiss under T.R. 41(E) may not be granted if the motion was submitted within sixty days after the allegedly dilatory party "resumed prosecution" of its case, id., which in this case occurred, according to Baker, when it requested that the trial court set a scheduling order. Baker cites State v. McClaine, 261 Ind. 60, 300 N.E.2d 342 (1973) in support of this contention.

In McClaine, the State filed an eminent domain action on January 9, 1958. The case was dismissed pursuant to a T.R. 41(E) motion filed by the defendant-landowners on February 26, 1971. We need not recount in detail the course of the proceedings. It is enough for our purposes to note that there were two lengthy periods of inactivity on the State's part: from May 15, 1958 to April 4, 1967, and again from April 29, 1968 to February 17, 1971. On the latter date—February 17, 1971—the State resumed prosecution of the case by filing a motion requesting a trial date. The landowners' motion to dismiss was filed approximately nine days later. Our Supreme Court reversed the order of dismissal upon the following rationale:

A motion to dismiss for want of prosecution should not be granted if the plaintiff resumes diligent prosecution of his claim, even though, at some prior period of time, he has been guilty of gross negligence.

The burden is clearly on the defendant to timely file a motion to dismiss pursuant to TR. 41(E). That is to say, the defendant must file his motion after the sixty-day period has expired and before the plaintiff resumes prosecution. The defendants in this case moved to dismiss after the plaintiff filed its request for trial and thereby failed to meet the requirements of TR. 41(E).

Id. at 344. Baker contends that its request for a scheduling order, like the request for a trial date in McClaine, constituted a resumption of diligent prosecution of its case, thereby rendering Superior's subsequent request for reconsideration untimely.

Superior responds that Baker has misidentified what we will call the triggering event, i.e., the T.R. 41(E) prompt that raises the specter of dismissal for lack of action. Baker's argument identifies Superior's motion to reconsider as the triggering event. That is, Baker contends that its resumption of prosecution, i.e., the request to set a scheduling order, came before the...