Pounds v. Pharr

• Decision Date: 15 June 1978
• Docket Number: No. 1-177A7,1-177A7
• Citation: 376 N.E.2d 1193,176 Ind.App. 641
• Parties: Billy D. POUNDS, Plaintiff-Appellant, v. Jimmy Vaughn PHARR and Leon J. Keel, Defendants-Appellees.
• Court: Indiana Appellate Court

Page 1193

376 N.E.2d 1193

176 Ind.App. 641

Billy D. POUNDS, Plaintiff-Appellant, v. Jimmy Vaughn PHARR and Leon J. Keel, Defendants-Appellees.

No. 1-177A7.

Court of Appeals of Indiana,First District.

June 15, 1978.

Thomas J. Lantz, Montgomery, Elsner & Pardieck, Seymour, for plaintiff-appellant.

H. William Irwin, Richard E. Aikman, Jr., Stewart, Irwin, Gilliom, Fuller & Meyer, Indianapolis, Taylor T. Hoffar, Seymour, Robert J. Brown, North Vernon, for defendants-appellees.

LYBROOK, Presiding Judge.

Billy D. Pounds, plaintiff-appellant, brings this appeal following the granting by the trial court of defendants' motion to set aside an entry of default.

The facts most relevant to this appeal indicate that Pounds and defendant Jimmy Pharr were involved in an automobile collision on July 19, 1973. Pharr was operating a vehicle owned by codefendant Leon Keel. On June 20, 1974, Pounds filed suit against both Pharr and Keel. Service of complaint and summons was had by certified mail. Keel received his summons and complaint and forwarded them to his insurance broker in Illinois. No further action was taken by or on behalf of Keel until January 20, 1975. Pharr received service at his last known address when his father accepted the certified letter. Pharr's father returned the complaint and summons and enclosed a letter stating that he had no idea of his son's present location. Pharr has never appeared in person.

On August 5, 1974, Pounds filed a motion for default against Keel. Since neither defendant had appeared or pleaded, the trial court entered the default in the following manner:

"Comes now the plaintiff, by counsel. Defendants are audibly called three times and appear not. Defendants defaulted."

On January 20, 1975, Robert J. Brown, attorney, entered his appearance for defendant Keel. On March 28, 1976, H. William Irwin and Taylor Hoffar entered their appearances for both defendants. A motion to set aside the default was filed on May 13, 1976. Following argument to the trial court, the motion was granted and the default was set aside.

On the above facts the appellant presents for our review the following issue:

Did the trial court commit reversible error by setting aside its previous entry of default?

I.

A resolution of this above issue initially requires a determination of the appealability of the order setting aside the entry of default. While prior case law would indicate that no appeal could be taken (because the default was never reduced to judgment) ¹ it appears that the matter was settled in Indiana by the case of Henline, Inc. v. Martin (1976), Ind.App., 348 N.E.2d 416, in which Judge Sullivan explicitly stated that a default entry and a default judgment are to be treated alike for purposes of seeking relief therefrom. We therefore find that the order setting aside the default was an appealable order and this court has jurisdiction to hear the appeal.

Once it is established that the judgment is of such finality as to support an appeal, Ind. Rules of Procedure, Trial Rule 60 establishes the guidelines to be employed in seeking relief from a judgment. In the case at bar, the pertinent parts of TR. 60 read as follows:

"(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;

(6) the judgment is void;

(7) the judgment has been satisfied, released, or discharged, or a prior judgment upon which it is based has been reversed or otherwise vacated, or it is no longer equitable that the judgment should have prospective application; or

(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. * * * "

As was pointed out by the facts listed above, approximately twenty- one months expired between the entry of default and the filing of defendants' motion to set aside the default. The pivotal decision is therefore whether the motion to set aside was founded on one of the grounds specified in TR. 60(B)(1), (2), (3) or (4) and thus barred by the one year time limitation; or, was that motion, and its subsequent granting, based on TR. 60(B)(8) and thus committed to the trial court's discretion.

It must be initially noted that the burden of proof is upon the defaulted party to demonstrate why the default judgment should be set aside. Green v. Karol (1976), Ind.App., 344 N.E.2d 106. We must therefore review the grounds which were presented to the trial court in support of the motion to set aside the default and determine the basis which the trial court employed to grant the motion.

The only evidence presented to the trial court consisted of assertions that Keel had informed his independent insurance agent that his truck had been in an accident....