G.H. Skala Const. Co. v. NPW, Inc.

• Decision Date: 29 December 1998
• Docket Number: No. 79A02-9803-CV-245,79A02-9803-CV-245
• Citation: 704 N.E.2d 1044
• Parties: G.H. SKALA CONSTRUCTION COMPANY, Appellant-Defendant, v. NPW, INC. and S.S. Restaurant Corporation, Appellees-Plaintiffs.
• Court: Indiana Appellate Court

Page 1044

704 N.E.2d 1044

G.H. SKALA CONSTRUCTION COMPANY, Appellant-Defendant, v. NPW, INC. and S.S. Restaurant Corporation, Appellees-Plaintiffs.

No. 79A02-9803-CV-245.

Court of Appeals of Indiana.

Dec. 29, 1998.

John S. Antalis, Lafayette, Steven A. Miller, Michael D. Richman, Sachnoff & Weaver, Ltd., Chicago, IL, for Appellant-Defendant.

Roger Wm. Bennett, Christine A. Desanctis, Bennett, Boehning & Clary, Lafayette, for Appellees-Plaintiffs.

OPINION

RUCKER, Judge.

When the G.H. Skala Construction Company failed to appear for trial, a bench trial was conducted in its absence and judgment was entered in favor of NPW, Inc. Skala Construction had not entered an appearance in the case. Alleging it received no notice of the trial, and that it did not appear on the advice of a person who was not a licensed attorney, Skala Construction filed a motion for relief from judgment. According to Skala Construction it should have been given notice of the trial, and the conduct of the purported attorney amounted to fraud on the court. After a hearing the trial court denied the motion. Skala Construction now appeals raising six issues for our review four of which concern purported procedural errors that occurred before and during the hearing on the motion for relief from judgment. We address the remaining two dispositive issues which we rephrase as follows: (1) was Skala Construction entitled to notice when no appearance was entered on its behalf, and (2) did the advice of an unlicensed attorney represent fraud on the court. The answer to both questions is no, and we therefore affirm.

Facts and Procedural History ¹

The G.H. Skala Construction Company is an Illinois corporation engaged in the construction business. George Houmpavlis is president and majority stockholder, and his wife Mary is an employee responsible for maintaining corporate books and records. She also orders materials, sometimes works with customers, obtains building permits, deals with banks, and does paperwork involving contractor statements. NPW, Inc. is an Indiana corporation doing business as the Nirvana Family Restaurant located in Lafayette. In May 1995 the restaurant was gutted by fire. Later that year NPW and Skala Construction entered a written agreement under which Skala Construction was required to furnish all labor and materials necessary to reconstruct the restaurant. Sometime thereafter a dispute arose between the parties over Skala Construction's alleged failure to pay various subcontractors and to perform the construction in a workmanlike manner. Communication between Mary Houmpavlis and lawyers for NPW did not resolve the dispute. Thereafter she hired David R. Geocaris to represent Skala Construction. A resident of Illinois with an office in that state, Geocaris held himself out as a lawyer. The record is not clear whether Geocaris was ever licensed to practice law in any state. However at all times relevant to this action he was not licensed to practice in either Illinois or Indiana.

On April 22, 1996, NPW sued Skala Construction seeking declaratory judgment, damages, and injunctive relief. A hearing on the injunction was conducted two days later on April 24, 1996. Geocaris did not attend the hearing nor enter an appearance on Skala Construction's behalf. Rather, George and Mary Houmpavlis appeared pro se. The Houmpavlises did not indicate to the court that they had retained counsel in this matter, nor did they seek a continuance. Instead, both George and Mary testified at the hearing, and cross-examined witnesses including unpaid subcontractors who were threatening to file mechanics liens against the Nirvana Family Restaurant. At the conclusion of the hearing, the trial court granted NPW injunctive relief prohibiting the Houmpavlises from filing or allowing to be filed any mechanics liens against the restaurant. The trial court also resolved issues related to the subcontractors, orally advised the parties that a trial on the merits of NPW's claim would be conducted on June 4, 1996, and orally advised the Houmpavlises "if you want a lawyer, get a lawyer. If you don't, it's okay.... [ ] I'll listen to the evidence, and I'll try to sort this out." R. at 432.

Although the court's written order reflected a trial date of June 3, 1996 which the court later rescheduled to June 6, 1996, the record shows that neither the Houmpavlises nor anyone acting on behalf of Skala Construction was present in court on either June 3, 4, or 6. The record also shows that no one entered an appearance on behalf of Skala Construction prior to the June 6 trial date. On the date of trial, in the absence of the Houmpavlises and Skala Construction, the trial court heard evidence and thereafter entered judgment in favor of NPW and against Skala Construction in the amount of $120,965.46. About a month later Geocaris, the purported Illinois attorney, filed with the trial court a pleading entitled "Motion To Vacate Ex-Parte Order and Default Judgment Pursuant to Ind. Trial Rule 60(B)." R. at 71. A hearing on the motion was originally scheduled for July 16, 1996. However, as a result of numerous continuances along with a congested trial docket the hearing was ultimately rescheduled to January 27, 1997. When Skala Construction failed to appear on that date NPW moved to dismiss the pleading which the trial court took under advisement. Ultimately the trial court denied the motion. In May 1997 present counsel entered an appearance on behalf of Skala Construction. Represented by counsel, Skala Construction then filed a motion for relief from judgment which it later amended. Skala Construction also filed a motion for discovery which included interrogatories directed to NPW, and a request for production of documents. The discovery motion was denied. A hearing on the motion for relief from judgment was finally held on November 6, 1997, after which the trial court denied the motion. This appeal followed in due course. Additional facts are set forth below where relevant.

Discussion and Decision

The grant or denial of a T.R. 60(B) motion for relief from judgment is left to the equitable discretion of the trial court. On review we will reverse only if the trial court abused its discretion. Lake County Trust No. 3190 v. Highland Plan Comm'n, 674 N.E.2d 626, 628 (Ind.Ct.App.1996), reh'g. denied. An abuse of discretion occurs when the trial court's judgment is clearly against the logic and effect of the facts and inferences supporting the judgment for relief. Id.

In its motion before the trial court Skala Construction did not indicate the exact subsection under T.R. 60(B) which would allow it relief from judgment. Similarly before this court Skala Construction has not indicated the specific subsection on which it relies. Indeed nowhere in its fifty-eight page Brief or its thirty-eight page Reply Brief does Skala Construction even cite the text of the rule which provides in pertinent part:

On motion and upon such terms as are just the court may relieve a party or his legal representatives from an entry of default, final order, or final judgment, including a judgment by default, for the following reasons:

(1) mistake, surprise, or excusable neglect;

(2) any grounds for a motion to correct error, including without limitation newly discovered evidence, which by due diligence could not have been discovered in time to move for a motion to correct errors under Rule 59.

(3) fraud (whether heretofore denominated intrinsic or extrinsic), misrepresentation, or other misconduct of an adverse party;

(4) entry of default or judgment by default was entered against such party who was served only by publication and who was without actual knowledge of the action and judgment, order or proceedings;

....

(8) any reason justifying relief from the operation of the judgment, other than those reasons set forth in sub-paragraphs (1), (2), (3), and (4).

We acknowledge that a party's failure to specify the exact paragraph under which the party seeks relief will not defeat a request for relief if the party can make an adequate showing that there are sufficient grounds to support the motion. Greengard v. Indiana Lawrence Bank, 556 N.E.2d 1373, 1375 (Ind.Ct.App.1990). In this case Skala Construction's argument can be summed-up as follows: (1) the Houmpavlises did not attend the June 6, 1996, trial date because Geocaris advised them that he was settling the case with NPW and therefore it was unnecessary for them to appear in court on that date because there would be no hearing; (2) the Houmpavlises thought Geocaris was a licensed attorney; (3) Geocaris was in fact not licensed to practice law in either Illinois or Indiana; and (4) the trial court did not give the Houmpavlises advance notice of the June 6 hearing date. According to Skala Construction, Geocaris' conduct represented fraud on the court, and the Houmpavlises were entitled to notice. Skala Construction contends that for both reasons it is entitled to relief.

Given Skala Construction's averments T.R. 60(B)(8) appears to be the more applicable provision for its notice argument, and T.R. 60(B)(1) appears to be the more applicable provision for its "fraud on the court" argument. ² A party seeking relief from judgment under subsection (8) must affirmatively demonstrate extraordinary circumstances. Summit Account & Computer v. Hogge, 608 N.E.2d 1003, 1005 (Ind.Ct.App.1993). Id. For all subsections of T.R. 60(B), the burden is on the movant to establish the grounds for relief. Id. at 1006.

On the question of notice, Skala Construction specifically contends that the Houmpavlises were unaware of the June 6 trial date until sometime around June 21, 1996. At that time Geocaris purportedly advised Mary Houmpavlis that a hearing had been conducted and a default judgment entered. Skala Construction also complains that it was not until August 10, 1996, that the Houmpavlises received notice from the court that the trial date had been rescheduled from...