Fitzpatrick v. Monster Dig. Mktg.

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Kevin Fitzpatrick d/b/a Wheel Pizza and/or Chop Shop, Appellant-Defendant, v. Monster Digital Marketing, Appellee-Plaintiff.

No. 23A-SC-777

Court of Appeals of Indiana

October 31, 2023

Pursuant to Ind. Appellate Rule 65(D), this Memorandum Decision is not binding precedent for any court and may be cited only for persuasive value or to establish res judicata, collateral estoppel, or law of the case.

Appeal from the Monroe Circuit Court The Honorable Catherine B Stafford, Judge Trial Court Cause No. 53C04-2202-SC-146

ATTORNEY FOR APPELLANT

Amanda Couture Paganelli Law Group Indianapolis, Indiana

ATTORNEY FOR APPELLEE

Benjamin Niehoff Slotegraaf Niehoff Bloomington, Indiana

MEMORANDUM DECISION

TAVITAS, JUDGE

Case Summary

[¶1] Cynthia Hogan, d/b/a Monster Digital Marketing ("Monster"), filed a small claims action against Kilroy's on Kirkwood, LLC ("Kilroy's Kirkwood"), Kilroy's on Dunkirk, LLC ("Kilroy's Dunkirk"), Kilroy's Sports, LLC ("Kilroy's Sports") (collectively, the "Kilroy's LLCs"), and Kevin Fitzpatrick and Kevin Duffy, d/b/a Wheel Pizza/Chop Shop. Fitzpatrick and Duffy were members of the Kilroy's LLCs. The Kilroy's LLCs appeared in the small claims action via their corporate manager and entered into an agreed settlement. Fitzpatrick, however, failed to appear, and the small claims court entered default judgment against him.^[1] Fitzpatrick later moved to set aside the default judgment, claiming that he was unaware that the manager, who represented the Kilroy's LLCs, did not also represent Fitzpatrick. The small claims court denied the motion to set aside, and Fitzpatrick appeals. We conclude that the small claims court did not abuse its discretion by denying Fitzpatrick's motion and affirm.

Issue

[¶2] Fitzpatrick presents one issue on appeal: whether the small claims court abused its discretion by denying Fitzpatrick's motion to set aside the default judgment entered against him.

Facts

[¶3] Monster is an Indiana-based business that provides web services to other businesses. Fitzpatrick is a managing member of the Kilroy's LLCs. Kilroy's Kirkwood and Kilroy's Sports operate a bar and restaurants in Bloomington, Indiana. Kilroy's Dunkirk leased a multi-level building in Bloomington. The upper level housed an entertainment venue; the lower level housed a restaurant. The restaurant, first named Chop Shop, was later replaced by Wheel Pizza. Neither of these restaurants was registered as a business entity. According to Fitzpatrick, these businesses were operated by Kilroy's Dunkirk, which is no longer in business.

[¶4] In 2021, the Kilroy's LLCs hired Monster to perform work on their websites. Monster performed the work as requested and billed the Kilroy's LLCs for these services by sending several invoices. When these invoices went unpaid, Monster filed a small claims action against the Kilroy's LLCs, Duffy, and Fitzpatrick on February 11, 2022. Monster claimed breach of contract and unjust enrichment against each of the defendants.

[¶5] On September 27, 2022, the small claims court held a Zoom hearing on the matter and referenced the hearing on the chronological case summary as a "Small Claims Collection Hearing." Appellant's App. Vol. II p. 5. Ian Schilling Makins, the regional manager for the Kilroy's LLCs, appeared at the hearing on behalf of the Kilroy's LLCs.^[2] Fitzpatrick did not appear by counsel, nor did he designate Makins as his employee representative. Monster's counsel and Makins reached an agreed settlement. Kilroy's Kirkwood agreed to settle Monster's claims for $1,203, and Kilroy's Sports agreed to settle Monster's claims for $1,630. Monster agreed to dismiss the claims against Kilroy's Dunkirk and against the now-deceased Duffy. The small claims court entered a default judgment against Fitzpatrick in the amount of $4,665 with prejudgment interest of $695.51.

[¶6] On October 27, 2022, Fitzpatrick moved to set aside the default judgment. In his motion, Fitzpatrick stated: "Fitzpatrick is an executive of the two active Kilroy's defendants, Kilroy's on Kirkwood and Kilroy's Sports. He was also an executive of Kilroy's on Dunkirk and Wheel Pizza/Chop Shop when those entities were active." Appellant's App. Vol. II p. 51. Fitzpatrick claimed that he intended to have Makins represent all of the Defendants in the small claims action, including Fitzpatrick individually and argued:

Fitzpatrick's failure to appear at the September 27, 2022 hearing was unintentional and was based on excusable confusion because of the 'd/b/a Wheel Pizza/Chop Shop' nature of the claim against him. Fitzpatrick thought Ian Schilling Makins would be permitted to represent him. Corporate entities are not required to be represented by counsel in Indiana Small Claims Courts if the claim is for less than $6,000. See Indiana Small Claims Court Rule 8(C)(2), (3). Monster Digital Marketing's claim against Fitzpatrick was for less than $6,000.

Id. at 52-53.

[¶7] The small claims court held a hearing on Fitzpatrick's motion on December 1, 2022. Fitzpatrick testified that he had spoken with Makins before the September 27 hearing; Fitzpatrick thought that each of the LLCs had a claim filed against them and that Makins would represent each of the LLCs at the hearing. Fitzpatrick also testified that, if he had known he was required to attend the initial hearing in person, he would have been there. The small claims court noted that Fitzpatrick had been properly served individually and that Fitzpatrick failed to designate Makins as his employee representative as required by the Small Claims Rules. The small claims court took the matter under advisement and, on March 9, 2023, issued an order denying Fitzpatrick's motion to set aside the default judgment. Fitzpatrick now appeals.

Discussion and Decision

A. Prima Facie Error

[¶8] We first note that Monster has not filed an appellee's brief. In such cases, we will not develop an argument for the appellees. Atkins v. Crawford Cnty. Clerk's Office, 171 N.E.3d 131, 138 (Ind.Ct.App. 2021) (citing Salyer v. Washington Regul. Baptist Church Cemetery, 141 N.E.3d 384, 386 (Ind. 2020)). Instead, we will reverse the lower court's judgment if the appellant's brief presents a case of prima facie error. Id. (citing Sayler, 141 N.E.3d at 386). In this context, prima facie means at first sight, on first appearance, or on the face of it. Id. (citing Sayler, 141 N.E.3d at 386). "This less stringent standard of review 'relieves [us] of the burden of controverting arguments advanced in favor of reversal where that burden properly rests with the appellee.'" Id. (quoting Jenkins v. Jenkins, 17 N.E.3d 350, 352 (Ind.Ct.App. 2014)). We are still obligated to correctly apply the law to the facts in the record to determine whether reversal is required. Id. (citing Jenkins, 17 N.E.3d at 352).

B. Motion to Set Aside Default Judgment

[¶9] Fitzpatrick claims that the small claims court erred by denying Fitzpatrick's motion to set aside the default judgment entered against him. Indiana Small Claims Rule 10(C) provides, in part: "Upon good cause shown the court may, within one year after entering a default judgment, vacate such judgment and reschedule the hearing of the original claim...." See also KOA Properties LLC v. Matheison, 984 N.E.2d 1255, 1258 (Ind.Ct.App. 2013) (quoting S.C. R. 10(C)), trans. denied.^[3] The party seeking to have the default judgment set aside bears the burden of showing grounds for relief from default-"good cause." KOA Properties, 984 N.E.2d at 1258 (citing All Season Exteriors, Inc. v. Randle, 624 N.E.2d 484, 485 (Ind.Ct.App. 1993)). "In order to obtain relief, the movant must ordinarily establish, by affidavit or introduction of evidence at a hearing, a factual basis for relief and a meritorious defense." Id. (citing Sears v. Blubaugh, 613 N.E.2d 468, 469 (Ind.Ct.App. 1993)). "Ultimately, the court's decision whether to set aside the default judgment is reviewed for an abuse of discretion, which will be found only where the court's action was clearly against the logic and effect of the circumstances or the court misinterpreted the law. Id. (citing King v. United Leasing, Inc., 765 N.E.2d 1287, 1289-90 (Ind.Ct.App. 2002)).

C. Propriety of Default Judgment

[¶10] The party moving to set aside a small claims default judgment may meet his or her burden by showing that the default judgment should not have been granted in the first place. KOA Properties, 984 N.E.2d at 1258 (citing Sears, 613 N.E.2d at 469). Fitzpatrick argues that the small claims court should have set aside the default judgment because the default judgment should not have been entered against him in the first place.

[¶11] Small Claims Rule 10(B) governs default judgments in small claims cases and provides:

Default. If the defendant fails to appear at the time and place specified in the notice of claim, or for any continuance thereof, the court may enter a default judgment against him. Before default judgment is entered, the court shall examine the notice of claim and return thereof and make inquiry, under oath, of those present so as to assure the court that:

(1) Service of notice of claim was had under such circumstances as to establish a reasonable probability that the defendant received such notice (2) Within the knowledge of those present, the defendant is not under legal disability and has sufficient understanding to realize the nature and effect of the notice of claim;

(3) Either (a) the defendant is not entitled to the protections against default judgments provided by the Servicemembers Civil Relief Act, as amended (the "Act"), 50 U.S.C. appx. § 521, or (b) the plaintiff has filed with the court, subscribed and certified or declared to be true under penalty of perjury, the affidavit required by

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