Outback Steakhouse of Florida v. Markley

Decision Date08 November 2006
Docket NumberNo. 18S04-0602-CV-66.,18S04-0602-CV-66.
Citation856 N.E.2d 65
PartiesOUTBACK STEAKHOUSE OF FLORIDA, INC., Toncredi, Inc., and John Broz, d/b/a Outback Steakhouse of Muncie, Appellants (Defendants below), v. David D. MARKLEY and Lisa K. Markley, Appellees (Plaintiffs below).
CourtIndiana Supreme Court

P. Gregory Cross, Michael J. Alexander, Donald K. McClellan, Muncie, IN, Attorneys for Appellees.

On Petition To Transfer from the Indiana Court of Appeals, No. 18A04-0401-CV-13.

BOEHM, Justice.

The plaintiffs' response to the defendants' discovery request failed to identify a critical witness whose identity was known to plaintiffs' counsel. Under the circumstances of this case we conclude that this omission, in concert with other acts and omissions attributable to plaintiffs' counsel, constituted misconduct requiring a new trial.

Facts and Procedural History

On the evening of July 21, 1997, William Whitaker attended the "grand opening" of Outback Steakhouse in Muncie. There was conflicting testimony as to Whitaker's level of intoxication when he left Outback between 9:00 and 9:30 p.m. After leaving Outback, Whitaker went to Van's, a bar in Muncie, where he was served one or more drinks. Testimony conflicted as to whether the drinks at Van's contained alcohol.1 At approximately 11:00 p.m., David and Lisa Markley were severely injured when the motorcycle they were riding was struck by Whitaker's car.

The Markleys retained attorneys Michael J. Alexander and Donald McClellan, who shared an office in Muncie. Patrice Roysdon had been a waitress at the grand opening but left Outback's employ soon thereafter. One or two months after the opening, Roysdon went to Alexander's office at Alexander's request and told Alexander and his investigator that Whitaker was visibly intoxicated when she served him on the evening of the collision.2

In July 1999 the Markleys sued Outback Steakhouse of Florida, Inc. and John Broz, d/b/a Outback Steakhouse of Muncie (collectively "Outback")3 alleging a common law claim that Outback had negligently served alcohol to an intoxicated person and statutory violations that Outback had knowingly served alcohol to a habitual drunkard in violation of Indiana Code section 7.1-5-10-14 (2004) and had knowingly served alcohol to a visibly intoxicated person in violation of Indiana Code section 7.1-5-10-15.5 (2004).

In 1999 Outback served interrogatories on the Markleys. Interrogatory 12 read:

State specifically each and every fact upon which you rely to support your allegation under I.C. § 7.1-5-10-15.5 that these Defendants, and each of them, provided alcoholic beverages to William J. Whitaker with actual knowledge that he was visibly intoxicated, and the names and addresses of those persons possessing knowledge of such facts.

The Markleys' response identified several individuals who attended the grand opening but did not mention Roysdon. It did not allege that Whitaker displayed any symptoms of intoxication or allege any other facts specific to Whitaker. Rather, it described lack of control over the amount of alcohol consumed by all attendees and made several other factual claims that any server at the opening would presumably have been in a position to confirm or deny. It concluded: "this Interrogatory will be supplemented as discovery proceeds."4

In 2001, Outback deposed Roysdon. Roysdon testified in the deposition that Whitaker was not visibly intoxicated at Outback. She was not asked whether she had communicated with the plaintiffs' attorneys. Alexander was not present at the deposition, and the Markleys were represented by McClellan alone. McClellan did not challenge Roysdon's testimony that Whitaker seemed "fine."

The trial first started in 2002, but circumstances unrelated to Roysdon produced a mistrial. A person who had not been identified as a witness testified for the plaintiff, and a juror passed a note to the judge stating that the juror knew the witness and the witness was a "pathological liar." Roysdon had been identified as a witness by Outback but not by the plaintiffs. As a result of the mistrial, she did not testify at the first trial.

A second trial began in June 2003. Shortly before the second trial began, the court granted summary judgment to Outback on the habitual drunkard claim, leaving for trial only the visible intoxication claims. Outback subpoenaed Roysdon to testify as a defense witness. In its opening statement, Outback told the jury Roysdon would testify that Whitaker was not visibly intoxicated and that no witness would be produced who would testify to the contrary. On the Friday of the first week of the trial, still in the presentation of the Markleys' case-in-chief, Roysdon called Alexander's office and arranged an appointment for that Sunday. On Sunday, Roysdon came to Alexander's office and told him she had lied in her 2001 deposition and that she planned to testify at trial that Whitaker was visibly intoxicated when she served him. Roysdon had not communicated her change of story to Outback or its attorneys, and Alexander did not inform the trial court or Outback of this meeting or seek to supplement the plaintiffs' answer to Interrogatory 12.

When trial resumed on Monday, Alexander called Roysdon as a witness. Although the plaintiffs had not listed Roysdon as one of their witnesses, Outback did not object to Roysdon's testifying in the plaintiffs' case-in-chief. Roysdon testified that Whitaker was visibly intoxicated at Outback, that she continued to serve him after she realized he was intoxicated, and that she felt guilty and responsible for the collision. On cross-examination Outback impeached her with statements from her 2001 deposition. Roysdon responded that she lied when she gave her 2001 deposition, that she was afraid when she gave her 2001 statements, and that she wanted to tell the truth at trial regardless of the consequences to her. Outback did not ask that Roysdon's testimony be stricken or that a continuance be granted in response to her decision to recant her deposition testimony. The jury returned a verdict valuing the Markleys' damages at $60 million. It allocated 65% of the fault to Outback, 35% to Whitaker, and 0% to Van's. The trial court accordingly entered judgment against Outback in the amount of $39 million.

The trial concluded on June 25, 2003. On July 30 Outback filed a motion to correct errors alleging a number of grounds, one of which was a claim that Roysdon's testimony either at trial or in deposition was perjured, and this alone was a ground for a new trial. Outback also moved on July 30 for a new trial under Trial Rule 60(B) without specifying whether it was proceeding under 60(B)(2) or 60(B)(3). Outback sought and received leave to conduct post-trial discovery under Rule 60(D) to explore the shift in Roysdon's testimony from her 2001 deposition to her appearance at trial. The plaintiffs responded, characterizing Outback's motion as seeking a new trial under Trial Rule 60(B)(3) for "fraud, misrepresentation, or misconduct." Next, on August 14, after the matters described in Part IV of this opinion came to light through a July 31, 2003 newspaper article, Outback filed a second motion for a new trial based on newly discovered evidence discussed in Part III, which is unrelated to Roysdon's testimony. On September 2, 2003, Outback took a post-trial deposition of Roysdon in which she for the first time revealed her 1997 visit to Alexander's office. Outback filed on October 6, 2003 a "supplementation" to its earlier motions based on Roysdon's disclosure of her 1997 visit with Alexander.

The trial court denied all post-trial relief. Outback appealed on several grounds seeking a new trial and an order compelling the Markleys and/or Alexander and McClellan to pay Outback's trial and posttrial attorney fees. The Court of Appeals affirmed. Outback Steakhouse v. Markley, 831 N.E.2d 228, 241 (Ind.Ct.App.2005). We granted transfer. Outback Steakhouse v. Markley, No. 18S04-0602-CV-66, 856 N.E.2d 65, 2006 WL 3218531, 2006 Ind. LEXIS 144 (Ind. Feb. 21, 2006).

I. Relief from a Judgment for Misconduct

A grant of equitable relief under Indiana Trial Rule 60 is within the discretion of the trial court. Stonger v. Sorrell, 776 N.E.2d 353, 358 (Ind.2002) (citing Wolvos v. Meyer, 668 N.E.2d 671, 678 (Ind. 1996)). Accordingly, we review a trial court's ruling on Rule 60 motions for abuse of discretion. Id.

A. The Prerequisites of Indiana Trial Rule 60(B)(3)

Indiana Trial Rule 60(B)(3) enables a court to grant relief from an otherwise final judgment for "fraud, misrepresentation, or misconduct" of an adverse party. It is worded identically to Federal Rule of Civil Procedure ("FRCP") 60(b)(3). For this reason Indiana courts routinely look to both Indiana and federal authority to interpret Indiana Rule 60(B)(3). Stonger, 776 N.E.2d at 356-57. Neither the federal nor the Indiana rule defines "fraud, misrepresentation, or misconduct." The federal advisory committee explained in 1946 that these grounds for relief from a judgment were available at common law, and the rule was intended to simplify and regularize the procedures for seeking relief but not to change the grounds for relief. See FRCP 60(b) advisory committee's note (1946).

We recently held that "misconduct" under Indiana's Rule 60(B)(3) can be based on a violation of the Code of Professional Responsibility, even if the conduct at issue does not violate the rules of civil procedure. See Allstate Ins. Co. v. Watson, 747 N.E.2d 545, 548 (Ind.2001); Smith v. Johnston, 711 N.E.2d 1259, 1264 (Ind.1999). Federal authority interpreting FRCP 60(b)(3) clearly establishes that relief under subsection (b)(3) is available for both unintentional and intentional conduct. 12 Moore's Federal Practice, § 60.43[1][a] (3d ed.1997) (citing cases). Specifically, "misconduct" can cover accidental...

To continue reading

Request your trial
113 cases
  • McGrath v. Everest Nat. Ins. Co.
    • United States
    • U.S. District Court — Northern District of Indiana
    • September 23, 2009
    ...this straightforward correction of a misnomer based on the name on the sign hanging over the pub's door, by citing and quoting Outback Steakhouse, 856 N.E.2d at 77, is questionable. Outback Steakhouse criticized the "gaming view" of an attorney who committed discovery violations by failing ......
  • Phillips v. Stear
    • United States
    • West Virginia Supreme Court
    • March 2, 2016
    ...in failing to disclose or produce may be careless, accidental, or even innocent under Rule 60(b)(3)."); Outback Steakhouse of Florida, Inc. v. Markley, 856 N.E.2d 65, 73 (Ind.2006) ("[W]e readily conclude that ‘misconduct’ under Indiana's Rule 60(b)(3) can include both negligent and intenti......
  • Ind. State Police v. Damore
    • United States
    • Indiana Appellate Court
    • August 26, 2022
    ...circumstances make sanctions unjust. Id. (citing Wiseheart v. State , 491 N.E.2d 985, 990 (Ind. 1986) ; Outback Steakhouse of Fla., Inc. v. Markley , 856 N.E.2d 65, 77 (Ind. 2006) ).[37] In Wright , the plaintiffs filed a medical malpractice claim against certain medical providers. The medi......
  • K.R. Calvert Co. v. Sandys
    • United States
    • Indiana Appellate Court
    • January 14, 2020
    ...an abuse of discretion standard. Speedway SuperAmerica, LLC v. Holmes, 885 N.E.2d 1265, 1270 (Ind. 2008) ; Outback Steakhouse of Florida v. Markley , 856 N.E.2d 65, 72 (Ind. 2006). On appeal, we will not find an abuse of discretion unless the trial court's decision is clearly against the lo......
  • Request a trial to view additional results

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT