Stevenson v. Manners

• Decision Date: 07 May 1985
• Docket Number: No. 585S184,585S184
• Citation: 477 N.E.2d 847
• Parties: Raymond STEVENSON, Appellant (Defendant and Third-Party Plaintiff), v. Dale MANNERS, Carl Manners, and Kenneth Minor, Appellees (Plaintiffs and Counterclaim Defendants), v. Myrtle HUFFMAN, Ray Mattingly, Appellees (Third-Party Defendants).
• Court: Indiana Supreme Court

Page 847

477 N.E.2d 847

Raymond STEVENSON, Appellant (Defendant and Third-Party Plaintiff), v. Dale MANNERS, Carl Manners, and Kenneth Minor, Appellees (Plaintiffs and Counterclaim Defendants), v. Myrtle HUFFMAN, Ray Mattingly, Appellees (Third-Party Defendants).

No. 585S184.

Supreme Court of Indiana.

May 7, 1985.

Frank E. Spencer, Indianapolis, for appellant.

G. Terry Cutter, Indianapolis, for appellees Dale Manners, Carl Manners and Kenneth Minor.

James Brand, Greenfield, for appellee Myrtle Huffman.

Seymour Bagal, Indianapolis, for appellee Ray Mattingly.

PIVARNIK, Justice.

Petition to Transfer is sought by Raymond Stevenson, Appellant, and Defendant and Third Party Plaintiff in the trial court. The Second District Court of Appeals reversed the trial court judgment granting default judgment against Stevenson but affirmed the trial court's dismissal of Appellant's counter-claim and third-party complaint. 460 N.E.2d 1030. It is the affirmance of the trial court's dismissal of Appellant's counter-claim and third-party complaint that is raised in the transfer petition.

The issues presented to the Court of Appeals by Appellant Stevenson were that Stevenson, Defendant and Third-Party Plaintiff, appealed from a dismissal and default judgment, claiming inter alia, the trial court abused its discretion in denying his Motion for Relief From Judgment pursuant to Ind.R.Tr.P. 60(B). The facts showed that on July 28, 1975, Plaintiffs, also designated as Appellees and counter-claim Defendants, filed their complaint against Stevenson seeking damages and other relief arising out of a business deal that had turned sour. On May 31, 1977, Stevenson filed his answer. After considerable delay and procedural maneuvering not relevant to the issues here, the trial court on February 5, 1981, sua sponte, set a hearing pursuant to Ind.R.Tr.P. 41(E) for March 9, 1981, to determine whether the case should be dismissed for failure to prosecute. Plaintiffs responded on February 11, 1981, by requesting the trial court to enter an order requiring Stevenson to answer certain deposition questions or suffer default judgment. Upon that Motion, the court, on February 17, 1981, entered an order directing Stevenson to supply the answers to the deposition questions by March 10, 1981, or suffer default. After Stephenson unsuccessfully sought to have this order set aside, he made a request for an extension of time to comply with the trial court's order. On March 6, 1981, the trial court granted Stevenson's request, giving him until March 17, 1981, to answer the deposition questions.

Three days later, March 9, 1981, the trial court made an entry in which it "agreed" with Stevenson's assumption that the extension of time to file answers resolved the issues raised by the trial court's Ind.R.Tr.P. 41(E) motion. Then, the next day, March 10, 1981, still within the period in which Stevenson had to comply with the court order to answer the deposition questions, the court entered default judgment against Stevenson, awarding Plaintiffs $3500.00, $1586.00 prejudgment interest, and a $225.00 attorney's fees sanction. The next entry in the record indicates that on that same day, March 10, 1981, Stevenson filed answers to the deposition questions. Still later, on March 16, 1981, the trial court dismissed Stevenson's third-party complaint and counter-claim. On March 27, 1981, Stevenson filed his Ind.R.Tr.P. 60(B) Motion for Relief from Judgment and Notice of Application of Ind.R.Tr.P. 59, Motion to Correct Errors, which the trial court denied. The Court of Appeals found that the unannounced judgment of default made by the trial court during the time within which it had given Stevenson to answer the deposition questions, and the court's subsequent refusal to relieve him from that default judgment on the grounds of surprise, constituted an abuse of its discretion. They further found the trial court's action to be clearly against the logic, facts, and inferences supporting the default judgment, citing Soft Water Utilities, Inc., v. LeFevre, (1973) 261 Ind. 260, 301 N.E.2d 745; Plough v. Farmers State Bank of Henry County, (1982) Ind.App., 437 N.E.2d 471; First National Bank & Trust Co., v. Coling, (1981) Ind.App., 419 N.E.2d 1326. The cause was remanded to the trial court on this issue with instructions to set the case for hearing on the application for default judgment.

The Court of Appeals properly disposed of the issue concerning the default judgment and we adopt that part of their opinion and judgment on that issue and make it part of this opinion. We agree with Petitioner Stevenson, however, that the Court of Appeals erred in affirming the trial court's dismissal of Appellant's counter-claim and third-party complaint. Accordingly, we grant transfer and vacate that part of the Court of Appeals' opinion relating to this issue.

The sole reason given by the Court of Appeals for its finding on this issue was:

"Stevenson, followed the proper procedure in attacking the default judgment pursuant to T.R. 55(C) and T.R. 60(B). Siebert Oxidermo, Inc., v. Shields, (1983) Ind., 446 N.E.2d 332. However, there is nothing in Stevenson's T.R. 60(B) Motion which attacks the dismissal of his counterclaim and third-party complaint; therefore, he has waived any error in that regard. Id. at 338."

In short, the Court of Appeals found that the Appellee failed to raise the dismissals as error in its combination Motion for Relief From Judgment Pursuant to Trial Rule 60 and Notice of Application of Trial Rule 59 Motion To Correct Errors and thereby waived the issue. Appellee claims that allegations of error are not deemed waived when such allegations can be gleaned from the Motion to Correct Errors and Memorandum in Support thereof. Appellant relied upon Hendrickson & Sons Motor Co., v. OSHA, (1975) 165 Ind.App. 185, 194, 331 N.E.2d 743, 749, reh. denied, which held as follows "With respect to the...