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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. All the lawyers involved in this don't add up to a hill of beans; mostly yes-men punching their tickets for future advancement. REMF types. Window dressing. Who in this mess was a real hero? the whistleblower that let the public know about the torture, whom the US sent to Jail. John Kyriakou. http://www.nytimes.com/2013/01/26/us/ex-officer-for-cia-is-sentenced-in-leak-case.html?_r=0 Now, considering that Torture is Illegal, considering that during Vietnam a soldier was court-martialed and imprisoned for waterboarding, why has the whistleblower gone to jail but none of the torturers have been held to account? It's amazing that Uncle Sam's sunk lower than Vietnam. But that's where we're at. An even more unjust and pointless war conducted in an even more bogus manner. this from npr: "On Jan. 21, 1968, The Washington Post ran a front-page photo of a U.S. soldier supervising the waterboarding of a captured North Vietnamese soldier. The caption said the technique induced "a flooding sense of suffocation and drowning, meant to make him talk." The picture led to an Army investigation and, two months later, the court martial of the soldier." Today, the US itself has become lawless.

  2. "Brain Damage" alright.... The lunatic is on the grass/ The lunatic is on the grass/ Remembering games and daisy chains and laughs/ Got to keep the loonies on the path.... The lunatic is in the hall/ The lunatics are in my hall/ The paper holds their folded faces to the floor/ And every day the paper boy brings more/ And if the dam breaks open many years too soon/ And if there is no room upon the hill/ And if your head explodes with dark forbodings too/ I'll see you on the dark side of the moon!!!

  3. It is amazing how selectively courts can read cases and how two very similar factpatterns can result in quite different renderings. I cited this very same argument in Brown v. Bowman, lost. I guess it is panel, panel, panel when one is on appeal. Sad thing is, I had Sykes. Same argument, she went the opposite. Her Rooker-Feldman jurisprudence is now decidedly unintelligible.

  4. November, 2014, I was charged with OWI/Endangering a person. I was not given a Breathalyzer test and the arresting officer did not believe that alcohol was in any way involved. I was self-overmedicated with prescription medications. I was taken to local hospital for blood draw to be sent to State Tox Lab. My attorney gave me a cookie-cutter plea which amounts to an ALCOHOL-related charge. Totally unacceptable!! HOW can I get my TOX report from the state lab???

  5. My mother got temporary guardianship of my children in 2012. my husband and I got divorced 2015 the judge ordered me to have full custody of all my children. Does this mean the temporary guardianship is over? I'm confused because my divorce papers say I have custody and he gets visits and i get to claim the kids every year on my taxes. So just wondered since I have in black and white that I have custody if I can go get my kids from my moms and not go to jail?

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