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COA: Court properly denied motion to set aside default judgment

January 3, 2017

A company being sued for negligence failed to convince the Indiana Court of Appeals that the default judgment entered against it in the matter should be overturned.

Larry and Loa Myers filed a lawsuit April 20, 2014, against numerous product manufacturers and landowners, including Dalton Corp., alleging negligence following Larry Meyers’ diagnosis of malignant pleural mesothelioma. Dalton’s registered agent in Indiana is Corporation Service Co. The Myerses served CSC, which forwarded notice of the lawsuit to John Laskey, the corporate controller of Dalton’s parent company Neenah Enterprises Inc. But Laskey was not told by his predecessor that CSC only sent notice of service by email and that he would be the only one receiving emails from CSC.

Laskey never forwarded the notice of the lawsuit to NEI’s general counsel and Dalton never appeared or filed any responsive pleadings. In October 2014, the trial court granted the Myerses’ September 2014 motion for default judgment.

NEI realized Dalton was a defendant 14 months later after receiving a paper copy of the service list from another defendant’s pleading in the cause. It then filed a motion for relief pursuant to Ind. Trial Rule 60(B)(8) in December 2015, claiming a meritorious defense and listing equitable considerations.

The trial court denied the motion, leading to the appeal in Dalton Corporation v. Larry Myers and Loa Myers, 49A02-1604-MI-836.

To prevail, Dalton must allege sufficient grounds showing exceptional circumstances justifying relief, allege a meritorious defense and file the motion within a reasonable time.

“[W]e note the circumstances leading to Dalton’s default judgment were due entirely to a breakdown of communication between only those who work for Dalton and NEI; CSC properly forwarded service and no other parties outside of Dalton and NEI are responsible for Dalton’s failure to appear and timely file any responsive pleadings. The circumstances are not exceptional, and consistent with the trial court, we are not persuaded the remaining equitable considerations noted by Dalton justify setting aside the default judgment,” Judge Margret Robb wrote.

Robb also noted how it does not appear there was any contact between the Myerses’ attorney and Dalton’s counsel prior to filing the complaint, so it is unlikely that the Myerses’ attorney knew the identity of Dalton’s counsel. It’s also likely that the Myerses only knew to contact Dalton through its registered agent and thus sent CSC copies of the complaint, motion for default judgment and the order granting default judgment.
 

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