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Appeals court warns parties against no-response strategy

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A Marion Superior judge didn’t err in holding a big tax resolution company in contempt for failing to appear by closing six of its state offices and then issuing a default judgment against the firm, the Indiana Court of Appeals has ruled.

The unanimous three-judge panel ruled today in the class-action case of JK Harris & Company LLC v. Ronald Sandlin, No. 49A05-1003-CT-184, affirming the judgments by Marion Superior Judge Thomas Carroll.

South Carolina-based JK Harris, which has hundreds of offices in 43 states, advertises that it can help individuals settle their IRS tax debts for pennies on the dollar. But that didn’t happen in this Indianapolis case of Ronald Sandlin, who sued in August 2009 on claims that he was misled and the company didn’t perform the actions it had promised.

Sandlin learned from the IRS in 2006 that he’d been delinquent in his federal income tax payments, and so he hired JK Harris and paid $4,350 for tax relief help. Two settlement offers from the firm were rejected by the federal tax agency, and ultimately JK Harris wasn’t able to achieve any reduction in that tax debt and the company refused to refund Sandlin’s initial fee. He sued, alleging negligence, breach of contract, deceptive advertisement, and unjust enrichment. The case ultimately received class certification in late 2009. But while his counsel certified the notices and the Marion Superior Court later did the same, JK Harris didn’t enter an appearance and failed to appear at two proceedings.

In January 2010, Judge Carroll found JK Harris in contempt of court, fined the company $10,000, and also issued writs of attachment ordering the closure of offices in Bloomington, Evansville, Fort Wayne, Indianapolis, Lafayette and South Bend.

After learning its Indiana offices had been closed, JK Harris hired counsel and got involved in the litigation in February 2010, filing a motion to stay the proceedings, set aside the default judgment and class certification, and compel arbitration that it claimed was required in Sandlin’s contract. Judge Carroll denied those motions and set up this appeal.

The Indiana Court of Appeals criticized the company for ignoring the suit and court proceedings, warning that regardless of the merits its arguments may have had it doesn’t allow for parties to simply not participate once an issue goes to court.

Despite the proper service of Sandlin’s complaint and filings, JK Harris “apparently concluded that it was not worth its time and effort to respond in any manner until its Indiana offices had been padlocked by the Marion Superior Court,” the court wrote. “JK Harris’s arguments in this regard show only that it consciously ignored the Marion Superior Court for approximately five and one-half months and then hired able counsel to attempt to remove it from the deep procedural and substantive hole of its own making. Any ‘extraordinary circumstances’ it might and does allege to satisfy the requirements of Trial Rule 60(B)(8) are circumstances that would have been avoided with a timely responsive pleading after initial service of the complaint.”

The six offices that Judge Carroll ordered shut down remain closed, according to defense attorney Gary Miller with Miller Meyer in Indianapolis. This appellate ruling remands the case for the trial judge to further define the class of litigants. Miller says that his firm is reviewing the ruling to determine whether a transfer petition may be filed with the Indiana Supreme Court.

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  1. YES I WENT THROUGH THIS BEFORE IN A DIFFERENT SITUATION WITH MY YOUNGEST SON PEOPLE NEED TO LEAVE US ALONE WITH DCS IF WE ARE NOT HURTING OR NEGLECT OUR CHILDREN WHY ARE THEY EVEN CALLED OUT AND THE PEOPLE MAKING FALSE REPORTS NEED TO GO TO JAIL AND HAVE A CLASS D FELONY ON THERE RECORD TO SEE HOW IT FEELS. I WENT THREW ALOT WHEN HE WAS TAKEN WHAT ELSE DOES THESE SCHOOL WANT ME TO SERVE 25 YEARS TO LIFE ON LIES THERE TELLING OR EVEN LE SAME THING LIED TO THE COUNTY PROSECUTOR JUST SO I WOULD GET ARRESTED AND GET TIME HE THOUGHT AND IT TURNED OUT I DID WHAT I HAD TO DO NOT PROUD OF WHAT HAPPEN AND SHOULD KNOW ABOUT SEEKING MEDICAL ATTENTION FOR MY CHILD I AM DISABLED AND SICK OF GETTING TREATED BADLY HOW WOULD THEY LIKE IT IF I CALLED APS ON THEM FOR A CHANGE THEN THEY CAN COME AND ARREST THEM RIGHT OUT OF THE SCHOOL. NOW WE ARE HOMELESS AND THE CHILDREN ARE STAYING WITH A RELATIVE AND GUARDIAN AND THE SCHOOL WON'T LET THEM GO TO SCHOOL THERE BUT WANT THEM TO GO TO SCHOOL WHERE BULLYING IS ALLOWED REAL SMART THINKING ON A SCHOOL STAFF.

  2. Family court judges never fail to surprise me with their irrational thinking. First of all any man who abuses his wife is not fit to be a parent. A man who can't control his anger should not be allowed around his child unsupervised period. Just because he's never been convicted of abusing his child doesn't mean he won't and maybe he hasn't but a man that has such poor judgement and control is not fit to parent without oversight - only a moron would think otherwise. Secondly, why should the mother have to pay? He's the one who made the poor decisions to abuse and he should be the one to pay the price - monetarily and otherwise. Yes it's sad that the little girl may be deprived of her father, but really what kind of father is he - the one that abuses her mother the one that can't even step up and do what's necessary on his own instead the abused mother is to pay for him???? What is this Judge thinking? Another example of how this world rewards bad behavior and punishes those who do right. Way to go Judge - NOT.

  3. Right on. Legalize it. We can take billions away from the drug cartels and help reduce violence in central America and more unwanted illegal immigration all in one fell swoop. cut taxes on the savings from needless incarcerations. On and stop eroding our fourth amendment freedom or whatever's left of it.

  4. "...a switch from crop production to hog production "does not constitute a significant change."??? REALLY?!?! Any judge that cannot see a significant difference between a plant and an animal needs to find another line of work.

  5. Why do so many lawyers get away with lying in court, Jamie Yoak?

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