H & A, Inc. v. Gilmore

• Citation: 359 N.E.2d 259,172 Ind.App. 10
• Decision Date: 27 January 1977
• Docket Number: No. 3--476A81,3--476A81
• Parties: H & A, INC., Plaintiff-Appellant, v. Homer GILMORE, Defendant-Appellee.
• Court: Court of Appeals of Indiana

Page 259

359 N.E.2d 259

172 Ind.App. 10

H & A, INC., Plaintiff-Appellant, v. Homer GILMORE, Defendant-Appellee.

No. 3--476A81.

Court of Appeals of Indiana, Third District.

Jan. 27, 1977.

Steven W. Handlon, Hobart, for plaintiff-appellant.

Lund & Wieser, P.C., Gary, for defendant-appellee.

HOFFMAN, Judge.

Plaintiff-appellant H & A, Inc. appeals from a trial court decision which set aside a previous default judgment entered against defendant-appellee Homer Gilmore for failing to file a responsive pleading. The issue raised on appeal concerns whether the trial court pursuant to Indiana Rules of Procedure, Trial Rule 60(B)(8), abused its discretion in setting aside the prior judgment and allowing Gilmore's counterclaim.

On November 25, 1969, H & A, Inc. commenced this action against Gilmore for his failure to move a house in accordance with the terms of a contract between the parties. After entering his appearance Gilmore's attorney began negotiations for a settlement but failed to respond to H & A's original complaint. On November 4, 1970, after almost one year, H & A moved for a default judgment. On November 25, 1970, the trial court entered a default against Gilmore and set for hearing on November 30, 1970, the question of damages. During such hearing, an award of $5,170 was entered for H & A and against the absent Gilmore. At intervals subsequent thereto, H & A filed several petitions with the trial court in an attempt to collect on the judgment, but to no avail.

Within six months, the parties began new negotiations for a settlement which resulted in an agreement requiring Gilmore's payment of $1,500 to H & A prior to September 10, 1971. Although Gilmore paid $700 toward the settlement, the balance remained owing. Thus on April 8, 1974, H & A filed a 'Petition in Proceedings Supplemental to Execution' and Gilmore was ordered to appear and 'testify as to his non-exempt property.' After retaining new counsel, Gilmore finally responded by filing on June 12, 1974, a motion to set aside the default judgment. In accord therewith, on September 9, 1975, the trial court sustained its previous entry of default but set aside the judgment as to damages and allowed Gilmore to interpose his counterclaim contesting the amount.

Drawing into consideration Trial Rule 60(B), supra, we note that its provisions are addressed to circumstances requiring specific relief from final judgments in order to render overall fairness and justice for extenuating circumstances. The rule provides in pertinent part:

'(B) Mistake--Excusable neglect--Newly discovered evidence--Fraud, etc. On motion and upon such terms as are just the court may relieve a party or his legal representative from a final judgment, order, default or proceeding for the following reasons:

(1) mistake, surprise, or excusable neglect;

(2) any ground 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) 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 other reason justifying relief from the operation of the judgment.

'The motion shall be made within a reasonable time, and for reasons (1), (2), (3) and (4) not more than one (1) year after the judgment, order or proceeding was entered or taken.'

From the foregoing it is apparent that Trial Rule 60(B)(8), supra, is the ommibus provision which gives broad equitable powers to the trial court in the exercise of its discretion and imposes a time limit based only on reasonableness. School City of Gary v. Continental Electric Co. Inc. (1973), Ind.App., 301 N.E.2d 803 (transfer denied). Nevertheless under Trial Rule 60(B)(8), supra, the defaulted party must show that its failure to act was not merely due to an omission involving mistake, surprise or excusable neglect. Rather some extraordinary circumstance must be affirmatively demonstrated. Public Service Commission v. Schaller (1973), Ind.App., 299 N.E.2d 625. See also, 4 Harvey, Ind.Pract.--Rules of Civ.Proc., 215, § 6.17.

H & A asserts that such special circumstances are not disclosed by the evidence in the case at bar, nor do the circumstances alleged disclose a need for the extraordinary relief of Trial Rule 60(B)(8), supra. Gilmore's on-going negotiation for a settlement and his claimed failure to receive actual notice are said to show only negligence. See Moe v. Koe (1975), Ind.App., 330 N.E.2d 761 (transfer denied).

In the past, great deference has been paid to the discretion vested in a trial court when it is called upon to weigh the competing legal problems involved in whether to enter a judgment upon procedural default or render a decision on the merits. Fitzgerald v. Brown (1976), Ind.App., 344 N.E.2d 309; Kreczmer v. Allied Constr. Co. (1972), 152 Ind.App. 665, 284 N.E.2d 869 (transfer denied). However we fail to find the circumstances herein sufficient to allow such discretion to go unbridled.

Gilmore's motion filed pursuant to Trial Rule 60(B)(8), supra, presents a near classic allegation for relief under Trial Rule 60(B)(1), supra, although conceivably Trial Rule 60(B)(3), supra, is also urged. His assertion that on-going negotiation after the entry of a default judgment constitutes another 'reason justifying relief' within the ambit of Trial Rule 60(B)(8), supra, appears...