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Majority affirms default judgment against Sears

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The Indiana Court of Appeals split today as to whether a department store was entitled to have a default judgment set aside.

Judge James Kirsch believed Sears Roebuck and Co. did all it was required to do with Razor, the maker of an electric scooter, under the Universal Terms and Conditions contract the two companies had when it learned it was being sued. But the majority believed Sears’ third-party administrator was inattentive in monitoring the claim, which led to the default judgment being entered against Sears.

Vicky James sued Sears and Razor after her son fell and injured himself on a scooter she bought at Sears, alleging Razor defectively manufactured and designed the scooter and that Sears negligently sold and distributed it.

Sears forwarded the complaint to its third-party administrator and Nancy Hall was assigned to the case. She contacted James’ counsel, Richard Morgan, and general counsel for Razor, John Cochrane. Cochrane acknowledged Razor’s obligation under the UTC contract to defend Sears and that he had appointed John Obenchain as attorney.

The contract didn’t require Sears to send Cochrane written notice, but Cochrane waited to receive written notice from Hall confirming Razor’s duty to defend. She never sent it and Obenchain never appeared for Sears.

Seven months later, Hall tried following up, but sent e-mails to the wrong address. After reaching Obenchain, she learned of the default judgment entered against Sears and the $107,000 in damages award, and that he never appeared on the company’s behalf.

In Sears Roebuck and Co. v. Vicky James, et al., No. 71A03-1002-CT-104, Sears argued that the trial court erred in not setting aside the default judgment based on excusable neglect. The majority didn’t find any evidence of excusable neglect, but that Hall’s conduct in handling the litigation was “simple inattention.” She waited seven months to try to follow up with Cochrane; she could have contacted Obenchain directly. She also should have brought the case to the attention of her supervisor, which she did not.

The majority also concluded that James’ counsel’s conduct didn’t amount to misconduct that justified setting aside the judgment. They rejected Sears’ argument that James’ attorney should have contacted Hall prior to seeking default judgment. Hall is a claims adjuster, not an attorney, and under the Rules of Professional Conduct, James’ attorney wasn’t required to notify Hall of his intent to pursue default judgment, wrote Judge Patricia Riley.

But Judge Kirsch believed Sears acted with due diligence and did everything it was supposed to do when it learned it was being sued. Hall contacted James’ attorney and the general counsel for Razor. Cochrane told Hall that Razor was contractually obligated to defend Sears and that an attorney had been appointed.

“The subsequent default was the result of a breakdown of communications which we have held to constitute excusable neglect,” he wrote.

He also noted that setting aside default regarding Sears wouldn’t prejudice Razor in any way, and the only harm to the plaintiffs would be they couldn’t collect a judgment to which they may not be entitled on the merits of their claim. Judge Kirsch would vacate the default judgment and allow the case to go forward for a determination on its merits.
 

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  1. Should be beat this rap, I would not recommend lion hunting in Zimbabwe to celebrate.

  2. No second amendment, pro life, pro traditional marriage, reagan or trump tshirts will be sold either. And you cannot draw Mohammed even in your own notebook. And you must wear a helmet at all times while at the fair. And no lawyer jokes can be told except in the designated protest area. And next year no crucifixes, since they are uber offensive to all but Catholics. Have a nice bland day here in the Lego movie. Remember ... Everything is awesome comrades.

  3. Thank you for this post . I just bought a LG External DVD It came with Cyber pwr 2 go . It would not play on Lenovo Idea pad w/8.1 . Your recommended free VLC worked great .

  4. All these sites putting up all the crap they do making Brent Look like A Monster like he's not a good person . First off th fight actually started not because of Brent but because of one of his friends then when the fight popped off his friend ran like a coward which left Brent to fend for himself .It IS NOT a crime to defend yourself 3 of them and 1 of him . just so happened he was a better fighter. I'm Brent s wife so I know him personally and up close . He's a very caring kind loving man . He's not abusive in any way . He is a loving father and really shouldn't be where he is not for self defense . Now because of one of his stupid friends trying to show off and turning out to be nothing but a coward and leaving Brent to be jumped by 3 men not only is Brent suffering but Me his wife , his kids abd step kidshis mom and brother his family is left to live without him abd suffering in more ways then one . that man was and still is my smile ....he's the one real thing I've ever had in my life .....f@#@ You Lafayette court system . Learn to do your jobs right he maybe should have gotten that year for misdemeanor battery but that s it . not one person can stand to me and tell me if u we're in a fight facing 3 men and u just by yourself u wouldn't fight back that you wouldn't do everything u could to walk away to ur family ur kids That's what Brent is guilty of trying to defend himself against 3 men he wanted to go home tohisfamily worse then they did he just happened to be a better fighter and he got the best of th others . what would you do ? Stand there lay there and be stomped and beaten or would u give it everything u got and fight back ? I'd of done the same only I'm so smallid of probably shot or stabbed or picked up something to use as a weapon . if it was me or them I'd do everything I could to make sure I was going to live that I would make it hone to see my kids and husband . I Love You Brent Anthony Forever & Always .....Soul 1 baby

  5. Good points, although this man did have a dog in the legal fight as that it was his mother on trial ... and he a dependent. As for parking spaces, handicap spots for pregnant women sure makes sense to me ... er, I mean pregnant men or women. (Please, I meant to include pregnant men the first time, not Room 101 again, please not Room 101 again. I love BB)

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