FERGUSON v. STEVENS
Court of Appeals of
2006 WL 2129788
August 1, 2006
case results from an appeal for relief from a default judgment against Sandra
and Donald Stevens.† The judgment stems
from the forgery of a veterinarianís health certificate for carriage horses
owned by the Stevens.† Sandra Stevens,
divorced from her husband, was not aware of the original suit and was not
served nor was she present to defend herself.† She swore that she neither forged the signatures nor knew about the
lawsuit until an irregularity showed up on her credit rating.† This court affirms the judgment granting the
motion to set aside the verdict.
Text of Opinion
Rob Ferguson, D.V.M., appeals
the trial court's decision to set aside a default judgment in his favor. We
find that when service is by publication and the defendant has no actual notice of the default judgment, under Trial Rule 60(B)(4) a
showing of a meritorious defense is required before the trial court can set
aside the judgment. Because the trial court properly set aside the judgment, we
and Procedural History
, has an ordinance
requiring that a veterinarian inspect horses that pull carriages. After
inspections, the horses' owners are required to file Veterinary Certificates of
Examination for Carriage License with the city. Sandra and Donald Stevens
operated a carriage ride business, East Fork Livery, in
. However, city officials received
word that some of the Stevens' horses looked ill.
†Jack Dorsett from the Nashville Police
Department pulled three Veterinary Certificates for horses belonging to the Stevenses to see if the horses had been inspected. The
certificates, which described the horses as fit to work a daily schedule as a carriage animal on the
public streets, bore the signature and address of Rob Ferguson, D.V.M., and
were dated April 19, 2001. Dorsett brought these certificates to
's attention as
possible forgeries on April 23, 2001.
filed a complaint against the Stevenses on March 31,
2003, alleging that the Stevenses, who were in
business together, forged his signature and asking for the following damages:
the income he would have derived from inspecting the horses, damages for the
misuse of his identity, punitive damages, and all other proper relief. That
day, a copy of the complaint and a summons were issued separately to each of
the Stevenses by Certified Mail, Return Receipt
Requested. Both summonses were returned to the clerk as "unclaimed."
A separate Alias Summons was then issued to each of the Stevenses for personal service by the Brown County Sheriff's Department. The sheriff
could not serve the alias summons because the Stevenses had moved. Thereafter,
filed an Affidavit of Non-Residence of Defendants.
published a Non-Resident Summons in
the Brown County Democrat once a week for three consecutive weeks.
filed a Motion for Default Judgment with an Affidavit in Support of Motion for
Default Judgment. In the Affidavit,
alleged that Donald Stevens had publicly stated in a town meeting that Donald
and Sandra were in business together. Ferguson also swore that he had not
inspected or been paid to inspect the three
horses in question, that he had not been in Nashville on the day the
certificates were signed, that the address on the certificates was his
previous, incorrect address, and that his signature on the certificates was
forged. Appellant's App. p. 18-19. On February 11, the court entered a Default
Judgment & Order Setting Hearing on Damages.
†On June 1, 2004, the court held a hearing on
damages and entered a Judgment Decree. The court found the following damages
against the Stevenses: $1000 in compensatory damages;
$20,000 in punitive damages; $107 in court costs, and $115 in publication
costs. Ten days later the court entered an Amended Judgment Decree in order to
correct some clerical errors and to amend the compensatory damages to $125.
Less than one year after the
court entered its Judgment Decree, Sandra Stevens, now divorced from Donald, appeared by counsel to file a Motion for Relief of Judgment.
The court held a hearing on the motion. During the hearing, Sandra testified
that she has lived in
since early 2002 and had no notice of the claim against her. She did not leave
a forwarding address because she did not want to receive Donald's mail. She
swore she did not forge the signature and had no knowledge of the forgery until
the spring of 2001. Appellant's App. p. 68-72. The court granted Sandra's motion
to set aside the default "primarily ... because this was a case with a
substantial award of punitive damages" and noted that her amount of
involvement with the forgery could make a
significant difference in her case and the punitive damages award.
Id. at 77.
Ferguson contends that the lower court abused its discretion in
setting aside the default judgment. A default judgment is disfavored, and any
doubt of its propriety must be resolved in favor of the defaulted party. Comer-Marquardt v. A-1 Glassworks, LLC, 806 N.E.2d 883, 886
law strongly prefers disposition of cases on their merits. Coslett v. Weddle Bros. Constr. Co., 798 N.E.2d 859, 861
(Ind.2003), reh'g denied. Generally, a
trial court's decision to set aside default is entitled to deference and will
be reviewed for an abuse of discretion.
that Sandra lacks the necessary meritorious defense to set aside a default
judgment. He also argues that the punitive damages are reasonable and cannot
serve as a valid reason to set aside, instead of alter, the default judgment.
At the outset, we note that
Sandra has failed to file an appellee's brief. In
such a case, we need not undertake the burden of developing arguments for the appellee. Painter v. Painter, 773
N.E.2d 281, 282 (Ind.Ct.App.2002). Applying a less stringent standard of
review, we may reverse the trial court if the appellant establishes prima facie
Id. Prima facie is defined as at first sight, on first appearance, or on the face
†In the Order Granting Motion for
Relief from Judgment, the trial court made no specific findings of fact. As to
issues on which the trial court has not made findings, we treat the judgment as
a general one, and we examine the record, affirming if the judgment can be
sustained upon any legal theory the evidence supports. Harrison v. Thomas, 761 N.E.2d 816, 819 (Ind.2002), trans. denied. In the review, we neither
weigh the evidence nor judge witness credibility.
Id. Therefore, we must examine the
record and affirm if the evidence supports any legal theory.
†Indiana Trial Rule 60(B)(4)
allows a trial court to set aside a default judgment within one year when a
party was served only by publication and had no actual notice of the
proceedings against him or her. Furthermore, Trial Rule 60(B) requires that a movant filing a motion under 60(B)(4)
allege a meritorious claim or defense.
The meritorious defense
requirement was added to Trial Rule 60 on January 1, 1999. This court has
addressed the requirements for relief under Trial Rule 60(B)(4)
once since the rule was amended in 1999. See Breneman v. Slusher, 768 N.E.2d 451, 462
(Ind.Ct.App.2002), reh'g denied, trans.
denied. The court listed three requirements for relief: a showing that the
default was entered; that the party was served only by publication; and that
the party was without actual knowledge of the action and judgment, order, or
Id. However, the court did not mention the meritorious defense requirement. Nonetheless, the text of the final paragraph
of Trial Rule 60(B) establishes that a meritorious defense is required even
when service is by publication and there is no actual notice.
In her Motion for Relief of
Judgment, Sandra acknowledged that a default judgment was entered against her.
At the hearing on Sandra's motion for relief of judgment, Sandra testified that
she had no actual notice of the action against her. Sandra eventually found out
about the action because of an irregularity on her credit report.
does not contest
any of these showings.
As to the meritorious defense
requirement, the defendant must make a prima facie showing to the trial court
that she has a meritorious defense to the action. A prima facie showing of a
meritorious defense is evidence that, if credited, demonstrates that a
different result would be reached if the case were retried on the merits and
that it is unjust to allow the default to stand. See Smith v.
, 711 N.E.2d 1259, 1265 (Ind.1999). It is one that will
prevail until contradicted and overcome by other evidence. Smith, 711 N.E.2d at 1265. Sandra has made such a showing through
her testimony at the hearing on her motion for relief from the default.
†Sandra testified that she did not commit or conspire
to commit the forgery. She suspected that Donald, who was her husband at that
time, forged the signatures on the certificates. This testimony, if credited,
will prevail unless it is contradicted and
overcome by evidence that proves that she had some individual responsibility
for the forged signature.
Id. Alternatively, if the court finds that Sandra's actual misconduct is not as
serious as the court had originally found, then the court could reach a
different result with regard to the punitive damages, and it would be unjust to
hold her liable for the full amount of the default judgment. See Bright v. Kuehl, 650 N.E.2d 311, 317 (Ind.Ct.App.1995) (noting
that punitive damages are awarded upon a showing of intentional conduct which
focuses on the defendant's state of mind), reh'g denied. At the hearing on Sandra's motion, the judge noted that her level
of involvement could make a significant difference on the amount of punitive
damages. In sum, Sandra has provided a prima facie showing of a meritorious defense
to the trial court through her testimony. [FN1] We cannot say the trial court abused its discretion when setting aside
the default judgment.
†DARDEN and RILEY, JJ., concur.
FN1. We note that
's brief includes
two other issues. First, he argues that his summonses were reasonably
calculated to inform. This argument is irrelevant because Trial Rule 60(B)(4) allows the court to set aside a default judgment even
if the summons was reasonably calculated to
appears to contend that the trial court abused its discretion in setting aside
the default judgment rather than amending the punitive damages award. However,
we have already found that the trial court acted within its discretion in
setting aside the default judgment.