Keybank v. Davis

OPINION BAKER, Judge. Appellant-plaintiff Keybank, f/k/a Society National Bank, Indiana (Keybank) ap [1148] peals the trial court's decision to grant relief to appellee-defendant Candice Davis. Specifically, Keybank argues that Candice waived any claim of deficient service of process by failing to assert such a defense in her first motion to set aside the default judgment filed pursuant to Indiana Trial Rule 60(B). Concluding that the trial court effectively granted Candice's amended motion to set aside a default judgment and that any error committed by the trial court in entertaining a "second" Trial Rule 60(B) motion was harmless, we affirm. FACTS The facts most favorable to the judgment, which have spawned satellite criminal and civil litigation in our state and federal courts, show that on December 14, 1990, Candice's husband, Paul Davis, together with two business partners, applied for a $2,000,000 loan from Keybank as officers of U.S.A. Diversified Products (Diversified). The loan officer who reviewed Diversified's application had originally wanted Paul, his partners, and Candice to act as guarantors on the loan, but Paul assured the officer that Candice only worked part-time and owned no property individually. Thus, only Paul and his associates were required to guarantee the loan. As company assets, Paul and his partners listed twelve acres of land on Lake Wawa-see in Kosciusko County, Indiana, which they agreed not to subsequently pledge. In reality, Diversified never owned the real estate. In the meantime, Paul was indicted in August 1991 for mail fraud in the United States District Court for the Northern District of Indiana. On June 26, 1992, Paul pled guilty to those charges. Candice, in the interim, moved to Michigan in June 1992 and filed an action for divorcee against Paul. Upon learning of Paul's plea, Keybank conducted title searches on the real estate supposedly owned by Diversified, which showed that Diversified owned no such property. On November 30, 1992, bank officers went to Diversified's offices and asked for an opportunity to review Diversified's financial records. The request was denied, and on December 8, 1992, Keybank obtained a writ of attachment against Diversified, Paul, and his partners in the Elkhart Superior Court. After having obtained access to Diversified's financial records through court order, Keybank discovered that some of Diversified's funds had been diverted to accounts in the names of Paul and Candice Davis. Because we are presented with quite the procedural knot to untangle, we set forth the remainder of the facts in chart form and in chronological order for the sake of clarity: [[Image here]] [1149] [[Image here]] [1150] [[Image here]] Keybank now appeals, asserting that the trial court abused its discretion in vacating its previously entered default judgment. DISCUSSION AND DECISION Keybank argues that Candice waived any argument as to lack of service of process. Specifically, Keybank notes that Candice did not contend that service of process was deficient in her first Trial Rule 60(B) motion. Thus, Keybank alleges that Candice was barred from arguing that service was lacking in a second motion to set aside a default judgment and that no relief should have been granted. We first note that a motion made under Indiana Trial Rule 60(B) to vacate a default judgment is addressed to the "equitable discretion" of the trial court. Ind. Ins. Co. v. Ins. Co. of N. Am., 734 N.E.2d 276, 278 (Ind.Ct.App.2000). We review the grant of such a motion only for an abuse of discretion. Goldsmith v. Jones, 761 N.E.2d 471, 473 (Ind.Ct.App.2002). An abuse of discretion exists when "the trial court's decision is against the logic and effect of the facts and cireumstances before it." Lee v. Friedman, 637 N.E.2d 1318, 1320 (Ind.Ct.App.1994). We also note that when a defendant disclaims all interests in the property that is the subject of the litigation, no controversy exists for a court to settle. In essence, the plaintiff has won and cannot [1151] ask for more. King v. Twin City State Bank, 139 Ind.App. 317, 319, 216 N.E.2d 853, 854 (1966) (holding that when defendant disclaimed any interest in the property subject to litigation, the bank had sole right to the property). Here, Keybank alleged in its complaint that bank accounts and real estate were procured through fraud. Appellee's App. p. 16. Keybank asked for relief "in an amount necessary to compensate it for the losses it has suffered" from Candice's and Paul's alleged fraud. Appellee's App. p. 16. However, during Candice's testimony at the hearing on the "second" Trial Rule 60(B) motion, when Candice was presented with documentation of a joint checking account with Lake City Bank, Candice stated, "I don't know what this is." Appellant's App. p. 146. When asked whether she had a bank account with Merrill Lynch, Candice responded, "Not that I know of." Appellant's App. p. 146. When Keybank asked Candice if she had a $43,000 certificate of deposit with Summit Bank, Candice replied, "No. No, I don't." Appellant's App. p. 147. Finally, Candice was asked if she ever owned "two parcels of real estate in Kosciusko County," to which Candice answered, "No. No I did not." Appellant's App. p. 151. In sum, Candice denied any rights to the property sought to be attached by Keybank and effectively disclaimed any interest she may have had in that property. After Candice disclaimed any rights to the property Key-bank sought to attach, no further controversy remained. To be sure, the trial court should not have entertained a "second" Trial Rule 60(B) motion for the reason that allowing a party to file repetitive Trial Rule 60(B) motions will "encourage defaulted defendants to drag their feet and be dilatory in discovering grounds for setting aside a default judgment." Siebert Oxidermo, Inc. v. Shields, 446 N.E.2d 332, 338 (Ind.1983). Notwithstanding the trial court's actions, however, we find that the error the trial court committed in hearing the "second" Trial Rule 60(B) motion was harmless because had we heard Candice's appeal of her motion to correct error-which alleged that the trial court abused its discretion in denying her motion to amend-we would have reversed the trial court. It is apparent that the trial court abused its discretion in denying Candice's motion to amend her Trial Rule 60(B) motion inasmuch as the motion to amend presented uncontroverted evidence that Candice was no longer a party in interest to the litigation. Appellant's App. p. 115. Thus, the trial court's decision on Candice's motion to amend was "against the logic and effect of the facts before it" because it had evidence that the litigation had come to a close. Friedman, 637 N.E.2d at 1320. In short, because the trial court heard the very same evidence Candice sought to present in her September 21, 2001 motion to amend-which was erroneously denied-any error in hearing the so-called "second" Trial Rule 60(B) motion was harmless. Thus, we affirm the trial court's ruling. Affirmed. RILEY, J., and MATHIAS, J., concur.