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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. CCHP's real accomplishment is the 2015 law signed by Gov Pence that basically outlaws any annexation that is forced where a 65% majority of landowners in the affected area disagree. Regardless of whether HP wins or loses, the citizens of Indiana will not have another fiasco like this. The law Gov Pence signed is a direct result of this malgovernance.

  2. I gave tempparry guardship to a friend of my granddaughter in 2012. I went to prison. I had custody. My daughter went to prison to. We are out. My daughter gave me custody but can get her back. She was not order to give me custody . but now we want granddaughter back from friend. She's 14 now. What rights do we have

  3. This sure is not what most who value good governance consider the Rule of Law to entail: "In a letter dated March 2, which Brizzi forwarded to IBJ, the commission dismissed the grievance “on grounds that there is not reasonable cause to believe that you are guilty of misconduct.”" Yet two month later reasonable cause does exist? (Or is the commission forging ahead, the need for reasonable belief be damned? -- A seeming violation of the Rules of Profession Ethics on the part of the commission) Could the rule of law theory cause one to believe that an explanation is in order? Could it be that Hoosier attorneys live under Imperial Law (which is also a t-word that rhymes with infamy) in which the Platonic guardians can do no wrong and never owe the plebeian class any explanation for their powerful actions. (Might makes it right?) Could this be a case of politics directing the commission, as celebrated IU Mauer Professor (the late) Patrick Baude warned was happening 20 years ago in his controversial (whisteblowing) ethics lecture on a quite similar topic: http://www.repository.law.indiana.edu/cgi/viewcontent.cgi?article=1498&context=ilj

  4. I have a case presently pending cert review before the SCOTUS that reveals just how Indiana regulates the bar. I have been denied licensure for life for holding the wrong views and questioning the grand inquisitors as to their duties as to state and federal constitutional due process. True story: https://www.scribd.com/doc/299040839/2016Petitionforcert-to-SCOTUS Shorter, Amici brief serving to frame issue as misuse of govt licensure: https://www.scribd.com/doc/312841269/Thomas-More-Society-Amicus-Brown-v-Ind-Bd-of-Law-Examiners

  5. Here's an idea...how about we MORE heavily regulate the law schools to reduce the surplus of graduates, driving starting salaries up for those new grads, so that we can all pay our insane amount of student loans off in a reasonable amount of time and then be able to afford to do pro bono & low-fee work? I've got friends in other industries, radiology for example, and their schools accept a very limited number of students so there will never be a glut of new grads and everyone's pay stays high. For example, my radiologist friend's school accepted just six new students per year.

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