McKinley, Inc a/k/a McKinley Associates, Inc. d/b/a Summer Wood Apartment Homes v. Michelle Skyllas , 77 N.E.3d 818 ( 2017 )

FILED
May 30 2017, 10:36 am
CLERK
Indiana Supreme Court
Court of Appeals
and Tax Court
ATTORNEYS FOR APPELLANTS ATTORNEY FOR APPELLEE
Larry L. Barnard Adam J. Sedia
Eric M. Blume Rubino, Ruman, Crosmer & Polen
Carson Boxberger LLP Dyer, Indiana
Fort Wayne, Indiana
IN THE
COURT OF APPEALS OF INDIANA
McKinley, Inc. a/k/a McKinley May 30, 2017
Associates, Inc. d/b/a Summer Court of Appeals Case No.
Wood Apartment Homes, 45A05-1612-CT-2853
Appellant-Defendant, Appeal from the Lake Superior
Court.
The Honorable Bruce D. Parent,
v. Judge.
Trial Court Cause No. 45D04-1101-
Michelle Skyllas, CT-12
Appellee-Plaintiff.
Sharpnack, Senior Judge
Statement of the Case
[1] McKinley, Inc., appeals the trial court’s grant of Michelle Skyllas’ motion to
correct error, which set aside the trial court’s prior grant of summary judgment
to McKinley. McKinley also appeals the trial court’s grant of Skyllas’ motion
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to withdraw and amend admissions. We reverse and remand with
1
instructions.
Issue
[2] McKinley raises three issues, which we consolidate and restate as: Whether the
trial court erred by granting Skyllas’ motions.
Facts and Procedural History
[3] Skyllas hired her second cousin, attorney Samuel Vazanellis, to sue McKinley.
Skyllas filed suit on January 12, 2011, claiming she was injured on January 25,
2009, in a slip and fall on McKinley’s property. She alleged McKinley
negligently failed to remove snow and ice. McKinley filed a third-party
complaint against Snow Pros, Inc., claiming Snow Pros was responsible for
removing snow and ice on its property.
[4] Skyllas concedes that Vazanellis was uncommunicative from the beginning of
their attorney-client relationship, and that she had to approach him at family
gatherings to obtain information about her case. Meanwhile, he failed to
litigate her case. In 2015, McKinley filed two motions to dismiss Skyllas’
complaint due to inactivity, pursuant to Trial Rule 41(E). The court denied the
motions.
1
We heard oral argument in Indianapolis, Indiana on May 4, 2017. We thank the parties for their written
and oral presentations.
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[5] On May 12, 2016, the court set discovery deadlines. On May 13, 2016,
McKinley served a request for admissions on Skyllas through Vazanellis. The
request for admissions included potentially dispositive admissions, such as
“Skyllas has no evidence that McKinley was negligent in any way” and
“Skyllas did not suffer any injuries or damages as a result of the incident.”
Appellants’ App. p. 47. Skyllas’ response to the request for admissions was due
within thirty days. Meanwhile, Snow Pros served interrogatories on Skyllas
through Vazanellis.
[6] Vazanellis continued to avoid communicating with Skyllas. From April
through August 2016, Skyllas called his office a total of fifteen to twenty times
and called his personal number weekly, and he never responded. Vazanellis
also ignored her biweekly texts. In late May or early June 2016, Skyllas met
with Vazanellis’ wife at his office to prepare answers to Snow Pros’
interrogatories. Vazanellis talked with Skyllas but did not mention the request
for admissions. He told her that “he had filed everything that needed to be
filed,” and everything was “under control.” Id. at 65.
[7] On June 27, 2016, the trial court set a deadline for dispositive motions.
McKinley timely filed a motion for summary judgment against Skyllas,
attaching Skyllas’ admissions. She did not respond within the thirty-day
deadline, and on August 22, 2016, McKinley filed a request for a summary
ruling.
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[8] On August 25, 2016, the Indiana Supreme Court indefinitely suspended
Vazanellis from the practice of law for failure to cooperate with an
investigation. On August 30, 2016, the court granted McKinley’s motion for
summary judgment. Meanwhile, Vazanellis had spent the month of August on
vacation in Greece. Skyllas learned of his vacation through her daughter, who
had also vacationed in Greece for part of August and had encountered him.
[9] At some point in late August or early September 2016, Skyllas learned through
her other daughter, a law student, that the Indiana Supreme Court had
suspended Vazanellis’ license and that McKinley had prevailed on summary
judgment. She hired a new attorney.
[10] On October 3, 2016, Skyllas, through her new counsel, filed a motion to correct
error pursuant to Trial Rule 59 and a motion to withdraw and amend
admissions. McKinley filed responses in opposition to the motions, and Skyllas
filed replies in support of her motions. On November 22, 2016, the court
granted both of Skyllas’ motions, concluding that Vazanellis was “extremely
negligent” and effectively obliterated the attorney-client relationship. Id. at 24.
The court further concluded withdrawal of the admissions was appropriate.
Thus, the court vacated the grant of summary judgment and granted Skyllas
additional time to amend her admissions. This appeal followed.
Discussion and Decision
[11] McKinley argues the trial court should not have granted Skyllas’ motion to
correct error and motion to withdraw admissions because she was not entitled
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to relief through those procedures. Skyllas responds that the trial court did not
err because Vazanellis’ conduct effectively obliterated the attorney-client
relationship and she was not responsible for his actions or inactions.
[12] In general, we review a trial court’s ruling on a motion to correct error for an
abuse of discretion. Santelli v. Rahmatullah, 993 N.E.2d 167, 173 (Ind. 2013).
Similarly, the grant or denial of a motion to withdraw admissions is generally
reviewable for an abuse of discretion. Gen. Motors Corp. v. Aetna Cas. & Sur. Co.,
573 N.E.2d 885, 889 (Ind. 1991). In this case, McKinley did not challenge any
statements of fact in Skyllas’ motions and does not dispute any facts on appeal.
We are thus asked to decide a question of law, and we review such questions de
novo with no deference to the trial court’s determination. Zoeller v. Sweeney, 19
N.E.3d 749, 751 (Ind. 2014).
[13] In her motion to correct error, Skyllas raised no error in the process that
resulted in summary judgment against her, but rather claimed that the court had
erred in attributing “Vazanellis’s conduct . . . to Plaintiff.” Appellant’s App. p.
63. We cannot conclude that the trial court’s grant of summary judgment to
McKinley was erroneous for purposes of Indiana Trial Rule 59. McKinley’s
motion for summary judgment included dispositive admissions from Skyllas
due to her failure to respond. In addition, Skyllas did not respond to the
motion for summary judgment. It is plain to see that the court had no choice
but to grant the motion. Skyllas did not argue to the trial court or in this appeal
that her discovery of Vazanellis’ inaction was based on newly-discovered
evidence.
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[14] Similarly, Skyllas’ motion to withdraw admissions was procedurally
inappropriate. It was filed after judgment had been entered, and the trial court
lacked authority to rule on it. See Hubbard v. Hubbard, 690 N.E.2d 1219, 1221
(Ind. Ct. App. 1998) (“After a final judgment has been entered, the issuing
court retains such continuing jurisdiction as is permitted by the judgment itself,
or as is given the court by statute or rule.”) The motion was essentially
combined with the motion to correct error, and a party may not raise an issue
for the first time in a motion to correct error. Troxel v. Troxel, 737 N.E.2d 745,
752 (Ind. 2000).
[15] We prefer to address issues on their merits where possible. Kelly v. Levandoski,
825 N.E.2d 850, 856 (Ind. Ct. App. 2005), trans. denied. In this case, the trial
court essentially granted relief from judgment by determining that the failure to
respond to the request for admissions, which provided the basis for the grant of
summary judgment, was the fault of Vazanellis and not attributable to Skyllas.
Therefore, the admissions would be withdrawn and the summary judgment
vacated. In effect, the court granted the type of relief that is available under
Indiana Trial Rule 60(B)(1), and we will review the trial court’s decision in that
light.
[16] According to Indiana Trial Rule 60(B)(1), a court may relieve a party from a
judgment, including judgment by default, for “mistake, surprise, or excusable
neglect.” The movant must allege a meritorious claim or defense. Id. Our
standard of review remains de novo because we are presented with questions of
law.
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[17] Skyllas relies on Rose v. Rose, 181 Ind. App. 98, 390 N.E.2d 1056 (Ind. Ct. App.
1979), to support the result reached by the trial court. In that case, Donald
Rose was named as a respondent in a petition for dissolution of marriage filed
in Indiana. Rose moved to Kentucky and hired a Kentucky-based attorney.
The Kentucky attorney promised to hire local counsel in Indiana. Rose met
with the Kentucky attorney “four or five times” and was promised each time
that local counsel had been hired. 390 N.E.2d at 1057. The Kentucky attorney
had contacted an Indiana attorney, who ultimately declined to file an
appearance on behalf of Rose after the Kentucky attorney “continually failed to
respond” to letters and phone calls. Id. Despite choosing not to enter an
appearance, the Indiana attorney succeeded in obtaining a continuance of the
evidentiary hearing, and notice of the continuance was sent to the Kentucky
attorney. The Kentucky attorney did not inform Rose, and neither Rose nor
the attorney appeared at the rescheduled evidentiary hearing. As a result, the
trial court entered judgment against Rose and awarded a “substantial share of
the marital estate” to his wife. Id.[18] A month later, Rose met with the Kentucky attorney, who told him that the
trial court had not yet ruled on the case. The attorney then gave the case file to
Rose and sent him to a different Indiana attorney. Rose eventually learned of
the judgment and, through new counsel, filed a motion for relief from
judgment. The trial court denied the motion.
[19] On appeal, a panel of this Court reversed. The Court acknowledged that Rose
bore a heavy burden in seeking relief because “the negligence of the attorney is
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generally imputed to the client.” Id. at 1058. In reversing, the Court
characterized the Kentucky attorney’s conduct as “unexplainable and
inexcusable misfeasance and nonfeasance” while, in contrast, Rose was
“conscientious and diligent.” Id. The Court, citing a California case,
determined that where the attorney’s neglect amounts to positive misconduct,
the attorney-client relationship is obliterated and negligence should not be
attributed to the client. Finally, the Court stated Rose had alleged a valid
defense by alleging his wife had squandered marital assets for personal use.
[20] The facts of Rose are quite different from the facts of this case. The Kentucky
attorney repeatedly lied to Rose, stating that an Indiana attorney had been hired
to represent him. Rose had no reason to believe the attorney was neglecting his
case. By contrast, in this case Vazanellis failed to communicate with Skyllas
from the beginning, and he repeatedly ignored her phone calls and emails
during the summer of 2016. She was forced to approach him at family
gatherings to get information about her case.
[21] Skyllas points out that Vazanellis told her in late May or early June 2016 “he
had filed everything that needed to be filed,” and everything was “under
control.” Appellants’ App. at 65. Those statements were not necessarily
untrue. The deadline to respond to the request for admissions was set to expire
on June 13, 2016, so Skyllas’ response was not yet late when she and Vazanellis
met.
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[22] In addition, the result in Rose stands in contrast to the many Indiana cases
which do not relieve the client from the consequences of the attorney’s action or
inaction. In Ferrara v. Genduso, 214 Ind. 99, 14 N.E.2d 580 (Ind. 1938), the
Indiana Supreme Court affirmed the denial of a motion to vacate judgment. In
that case, the defendants hired attorneys to represent them in a foreclosure
action. The attorneys filed a general answer but did not appear in court on the
day of trial and agreed with opposing counsel that judgment should be entered
against the defendants. The defendants later hired new counsel, who
unsuccessfully sought to vacate the judgment. On appeal, the Indiana Supreme
Court concluded the actions and omissions of the attorney were attributable to
the client, and the defendants were not entitled to have the judgment vacated
regardless of counsel’s inaction.
[23] The principle discussed in Ferrara has been applied in numerous Indiana cases.
See Weinreb v. TR Developers, LLC, 943 N.E.2d 856, 867 (Ind. Ct. App. 2011)
(affirming denial of two motions for relief from judgment and noting even gross
negligence by attorney was insufficient to establish grounds for relief), trans.
denied; Thompson v. Thompson, 811 N.E.2d 888, 904 (Ind. Ct. App. 2004)
(affirming denial of motion for relief from judgment; Court concluded
attorney’s negligence was binding on client), trans. denied; Kmart Corp. v.
Englebright, 719 N.E.2d 1249, 1256 (Ind. Ct. App. 1999) (reversing denial of
Rule 60(B) motion where opposing counsel had informed defendant there was
no need to file answer while settlement discussions were ongoing and later
obtained default judgment for failure to file answer), trans. denied; Int’l Vacuum,
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Inc. v. Owens, 439 N.E.2d 188, 190 (Ind. Ct. App. 1982) (affirming denial of
motion to set aside default judgment; appellant failed to demonstrate it had
exercised due diligence in keeping informed about the case). We conclude that
Rose is factually unique and does not support a departure from the weight of
Indiana authority in this case.
[24] Based upon our review of governing caselaw as applied to the undisputed facts
of this case, Vazanellis’ misconduct, while deplorable, was attributable to his
client for purposes of Trial Rule 60(B). We cannot conclude that Skyllas
established she was entitled to relief from judgment with respect to the grant of
summary judgment or the admissions.
Conclusion
[25] For the reasons stated above, we reverse the judgment of the trial court and
remand with instructions to reinstate the judgment in favor of McKinley and
against Skyllas.
[26] Reversed and remanded with instructions.
May, J., and Brown, J., concur.
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