MATHIAS, Judge.
After concluding that Appellant Steven Weinreb ("Weinreb") defaulted on a loan guaranty, the Marion Superior Court granted summary judgment in favor of the predecessor in interest to Appellee TR Developers. Weinreb filed a Trial Rule 60(B) motion and argued that his signature on the loan guaranty was forged. The trial court denied Weinreb's first Rule 60(B) motion, and Weinreb later filed a second Rule 60(B) motion alleging the same grounds for relief, plus an allegation of negligence of his original attorney and fraud on the part of an adverse party. Weinreb now appeals the trial court's denial of his second motion to set aside judgment pursuant to Trial Rule 60(B)(1), (3), and (8). Concluding that the trial court did not abuse its discretion when it denied Weinreb's second Trial Rule 60(B) motion because all of his alleged grounds for relief were known or knowable at the time of his first Trial Rule 60(B) motion, we affirm. We also remand this case to the trial court for a determination of whether TR Developers is entitled to an award of appellate attorney fees.
In 2007, WK Timber Ridge owned an apartment complex in Indianapolis, Indiana. On or about May 31, 2007, National Consumer Cooperative Bank ("the Bank") loaned $4,000,000 to Timber Ridge for a debt refinancing. In consideration for the loan, Timber Ridge signed a promissory note and a mortgage, all of which were recorded on June 5, 2007. Two guaranties bearing Weinreb's signature were also executed on May 31, 2007. The first guaranty ensured Timber Ridge's performance of various obligations under the loan documents, and the second guaranty promised partial payment of the loan if Timber Ridge defaulted on its loan payments. Appellant's App. pp. 120-44. Specifically, the second guaranty provided that Weinreb would pay up to 50% of the loan's unpaid principal balance, plus all accrued, unpaid interest, late payment charges, and collection costs. Weinreb also executed an Environmental and Hazardous Substance Indemnification Agreement in connection with obtaining the loan.
The loan documents and guaranties were reviewed by Timber Ridge's attorney, who, in a May 31, 2007 letter to the Bank, stated:
Appellant's App. p. 282. Timber Ridge's attorney also opined that "[t]he Loan Documents are the legal, valid and binding obligations of Borrower and Guarantor, respectively,
The loan was also "conditioned upon receiving a guarantee [sic] from" Weinreb. Id. at 270, 274; see also Appellant's App. p. 176. The Bank "relied upon the Guaranties in entering into the Loan Documents with Timber Ridge." Id. at 176. Furthermore, "[i]n connection with the proposed financing by [the Bank], Weinreb provided [the Bank] with various personal financial information including a financial statement and tax returns." Id. at 270. Weinreb also executed a certification acknowledging his execution of the guaranties. Id. at 271, 278-79. The certification contains a provision stating:
Id. at 278.
On September 12, 2008, the Bank filed a complaint in Marion Superior Court alleging that Timber Ridge had defaulted on its loan payments. The Bank further alleged that its loan was secured by a promissory note, a mortgage, an assignment of leases and rents, and the two guaranties bearing Weinreb's signature. The Bank attached copies of all relevant, executed documents to its complaint. In their Answer, Timber Ridge and Weinreb asserted only a general denial to all of the allegations in the Bank's Complaint. Id. at 153.
On January 30, 2009, the Bank filed a motion for summary judgment. On motion of Timber Ridge and Weinreb, the trial court extended the deadline for their summary judgment response to April 6, 2009. However, Timber Ridge and Weinreb did not file a response or designation of evidence before the April 6, 2009 deadline. Two weeks later, they requested an additional enlargement of time to respond to the Bank's summary judgment motion. The Bank objected to the request for additional time to respond to its motion. A hearing was held on Weinreb's motion for extension of time and the Bank's summary judgment motion on May 13, 2009.
At the hearing, Weinreb's counsel argued that the parties had agreed to take the deposition of the Bank's chief financial officer, which he "thought operated as an agreement between the parties for an enlargement of time[.]" Id. at 202. The Bank's attorney stated that it had agreed to a date for the deposition but never had "any confirmation of that[.]" Id. at 203. The trial court observed that Weinreb and Timber Ridge were required to have filed a motion for further extension of time by April 6, 2009, and therefore, the court had no discretion to grant their motion, which was filed two weeks after that date. Id. at 201. At the hearing, Weinreb's counsel also asserted that Weinreb denied signing the guaranties. Id. at 200.
At the close of the hearing, the trial court concluded that Timber Ridge and Weinreb failed to make timely payments to the Bank and had breached the loan contract and guaranties. The trial court then granted the Bank's motion for summary judgment and entered judgment in favor of the Bank, together with a decree of foreclosure. Specifically, the trial court entered judgment in favor of the Bank and
Appellant's App. pp. 216-17. Importantly, neither Weinreb nor Timber Ridge appealed this judgment.
Instead, on June 12, 2009, Timber Ridge and Weinreb filed a Trial Rule 60(B) motion for relief from judgment. In that motion, Weinreb argued that he was entitled to relief from judgment because the Bank did not provide the court or their attorneys "with any original signatures on the documents attached to the Complaint for Foreclosure." Appellant's App. p. 221. Further affidavits were submitted in support of the motion from Julian Blumenthal, another Timber Ridge principal, and Weinreb, both averring that neither individual "executed the documents establishing the personal guaranty insuring the mortgage which is the subject of this case." Id. at 222. Despite claiming that he never executed the guaranties, Weinreb admitted, "[a]s a Member of the company, it was expected that I execute two guaranties, a Guaranty and a Limited Guaranty." Id. at 225.
On July 8, 2009, the trial court denied Timber Ridge's and Weinreb's first Trial Rule 60(B) motion. In its order, the court noted that Timber Ridge and Weinreb had failed to timely respond or designate any evidence in opposition to the Bank's motion for summary judgment. Furthermore, the court noted that Timber Ridge and Weinreb "never timely filed any responsive pleading or affidavit denying the execution of the documents [the Bank] attached to the complaint." Id. at 234. Finally, the court found:
Id. at 234-35 (footnote omitted). Thereafter, on October 1, 2009, the Bank assigned the May 13, 2009 judgment to TR Developers,
On January 6, 2010, nearly five months after the trial court denied his first 60(B) motion, Weinreb filed a second Trial Rule 60(B) motion for relief from judgment, after employing new counsel. In the motion, Weinreb argued that he was entitled to relief from judgment because Weinreb had told his prior counsel that his signatures on the guaranties were forged and counsel failed to "take the appropriate steps to defend him from liability in conjunction with such Guaranties." Id. at 242. Weinreb also alleged that his counsel failed to inform him of the summary judgment entered against him, and that the first motion for relief from judgment was filed without his knowledge. Finally, Weinreb argued that the Bank committed fraud because Weinreb notified the Bank that his signatures on the guaranties were forgeries prior to the commencement of this action. In support of his motion, Weinreb submitted an affidavit, in which he averred:
Appellant's App. p. 249. Weinreb also submitted the affidavit of a handwriting expert who, after reviewing documents purporting to contain Weinreb's authentic signatures, concluded that the signature on the guaranties was not Weinreb's signature. Id. at 256-57.
Weinreb also submitted his own, supplemental affidavit in support of his motion, which states in pertinent part:
Id. at 305-06.
In its response to Weinreb's second 60(B) motion, TR Developers submitted the affidavit of Mark Hiltz, the Chief Risk Officer of the Bank, who averred:
Id. at 271. On February 12, 2010, the trial court denied Weinreb's second motion for relief from judgment. On March 12, 2010, Weinreb filed this appeal.
The burden is on the movant to establish grounds for Trial Rule 60(B) relief. In re Paternity of P.S.S., 934 N.E.2d 737, 740 (Ind.2010). "A motion made under subdivision (B) of Trial Rule 60 is addressed to the `equitable discretion' of the trial court; the grant or denial of the Trial Rule 60(B) motion `will be disturbed only when that discretion has been abused.'" Id. at 740-41.
In re Marriage of Jones, 180 Ind.App. 496, 499, 389 N.E.2d 338, 341 (Ind.Ct.App. 1979).
While Weinreb is appealing from the denial of his second Trial Rule 60(B) motion, we believe that the background behind the trial court's denial of Weinreb's first Trial Rule 60(B) motion is informative and, in many ways dispositive, concerning the trial court's exercise of its discretion in denying Weinreb's second motion.
First, it is important to keep in mind that the Bank attached fully executed copies of all the loan documents, including the loan guaranties, to its complaint. Weinreb's counsel asserted only a general denial in response to the Bank's complaint. Appellant's App. pp. 120-44. Trial Rule 9.2(B) provides:
Entering an unverified general denial in response to a complaint is permissible practice under Trial Rule 8(B) and Trial Rule 11(A), the latter of which provides that pleadings need not be verified or accompanied by affidavit, except when specifically required by rule. The key for the purposes of the merits of Weinreb's challenges to the judgment is that Rule 9.2(B) requires that the validity of the execution of a document attached to the complaint be challenged by a verified responsive pleading or an affidavit attached to a responsive pleading. "Taken
Because Weinreb failed to deny, under oath, that he executed the loan guaranties, execution of the guaranties was deemed established by operation of Trial Rule 9.2(B). Moreover, although the Bank bore the ultimate burden of proving execution of the guaranties, the trial court properly presumed execution of the guaranties at summary judgment because Weinreb failed to introduce in a timely manner any evidence that would support a contrary finding. See Trial Rule 9.2(B) & (D); Master Copy & Reprod. Ctr., Inc. v. Copyrite, Inc., 750 N.E.2d 824, 830 (Ind.Ct.App. 2001).
Through his counsel, Weinreb was on notice of the Bank's specific loan and guaranty documentation at issue. However, despite the presumption that he executed the guaranties by operation of Rule 9.2, Weinreb still had the opportunity to present his forgery defense and supporting evidence thereof, and his resulting claim of fraud, to the trial court during the summary judgment proceedings by designating the affidavits later submitted with his first and second motions for relief from judgment. But Weinreb failed to respond to the Bank's motion for summary judgment within the time limits prescribed by Trial Rule 56(C). Despite notice and two distinct opportunities to challenge the Bank's documentation, Weinreb failed to raise his forgery defense at any stage of the proceedings before final judgment was entered against him.
So, when Weinreb argued in his first Trial Rule 60(B) motion that his signature on the loan guaranty was a forgery, the trial court was understandably less than sympathetic, finding that
Appellant's App. p. 235. It is with this background that the trial court received and heard Weinreb's second Trial Rule 60(B) motion, filed nearly five months after the denial of the first.
It is well established that a 60(B) motion may not serve as a substitute for direct appeal. See Magnuson v. Blickenstaff, 508 N.E.2d 814, 816 (Ind.Ct.App.1987). Allowing a party to file repetitive Trial Rule 60(B) motions encourages "defaulted defendants to drag their feet and be dilatory in discovering grounds for setting aside a default judgment." Keybank v. Davis, 785 N.E.2d 1146, 1151 (Ind.Ct.App.2003) (citing Siebert Oxidermo, Inc. v. Shields, 446 N.E.2d 332, 338 (Ind.1983)) ("the Siebert Oxidermo case"); see also Carvey v. Ind. Nat'l Bank, 176 Ind.App. 152, 159, 374 N.E.2d 1173, 1177 (1978) ("A party may not file repeated TR 60 motions until he either offers a meritorious ground for relief or exhausts himself and the trial court in an effort to do so."). Because Weinreb is appealing from the denial of his
In the Siebert Oxidermo case, Siebert Oxidermo's president forwarded Shields's complaint and summons to the company's insurance agent. However, on the date Shields was injured, Siebert Oxidermo was insured with another insurance company. There was conflicting testimony as to whether the current insurance agent agreed to handle the matter or whether he advised Siebert Oxidermo to send Shields's complaint to their former agent. However, Siebert Oxidermo's former insurance agent did not receive a copy of the complaint until after default judgment had been entered against it.
After the trial court entered a default judgment against it in the amount of $760,000, Siebert Oxidermo filed three Trial Rule 60(B) motions to set aside default judgment. The only issue raised in the first 60(B) motion was failure to appear due to excusable neglect because Oxidermo's insurance agent failed to forward Shields' complaint to the proper insurance carrier on time. The trial court denied Oxidermo's first Trial Rule 60(B) motion after observing that Oxidermo was bound by the acts of its insurance agent.
Our supreme court affirmed the trial court's denial of the first 60(B) motion and observed:
Id. at 340 (citing Henline, Inc. v. Martin, 169 Ind.App. 260, 268, 348 N.E.2d 416, 420-21 (1976) (affirming the trial court's refusal to set aside default judgment where the defendant's insurance adjuster had failed to act promptly upon receipt of legal documents while noting that under the same facts "another trial court might not have abused its discretion by granting defendants relief[.]")).
Siebert Oxidermo also argued that the trial court abused its discretion when it denied its second and third 60(B) motions and alleged that those motions raised grounds that were unknown or unknowable on the date it filed its first 60(B) motion. Our supreme court disagreed and stated:
Id. at 338. The court then concluded that the Court of Appeals had erred in remanding the case to the trial court to hold a new hearing on damages because the issue could have been raised in the first motion to set aside judgment, but it was not.
Finally, the court considered the "appealability of an issue raised by Oxidermo" not in the first Trial Rule 60(B) motion, but in Siebert Oxidermo's subsequent Trial Rule 59 motion to correct error. In the motion to correct error, Siebert Oxidermo argued that it was entitled to relief pursuant to Rule 60(B)(3) and the claims for relief were "factually related to the conduct of the attorneys in the case," a ground which is similar to that alleged by Weinreb in this case. Id. at 341. Specifically, "Oxidermo claimed Shields' attorney misrepresented facts regarding the service of process on Oxidermo at the May 25 hearing on his Motion for Default." Id. Our supreme court concluded that Siebert Oxidermo could not raise the claim for the first time in a motion to correct error because it was not raised in the preceding Rule 60(B) motion and stated:
Id. at 342. For all of these reasons, the Supreme Court affirmed the trial court in all respects, including its award of damages in the amount of $760,000 as a part of the default judgment. Id.
Five years earlier, in Carvey v. Indiana National Bank, 176 Ind.App. 152, 374 N.E.2d 1173 (1978), our court reached the opposite result and reversed the denial of defendant Carvey's second motion for default judgment. In that case,
Fulton v. Van Slyke, 447 N.E.2d 628, 633-34 (Ind.Ct.App.1983) (discussing Carvey, 176 Ind.App. 152, 374 N.E.2d 1173). Specifically, the Carvey court reversed the denial of the defendant's second motion to set aside default judgment because Carvey had relied on the plaintiff's representations and he "did not become aware of the full implications of those representations until after his first TR 60(B) motion had been filed." 176 Ind.App. at 159, 374 N.E.2d at 1177.
Weinreb argues that, like the defendant in Carvey, his "first opportunity to adequately address the forged Guaranties issue came in his second Rule 60(B) motion" because his prior counsel failed to timely respond to the Bank's motion for summary judgment. Appellant's Br. at 6. Weinreb claims that "[i]t was only in the second Rule 60(B) motion, prepared by new counsel for and on behalf of Weinreb, that relief was sought on the grounds of excusable neglect, fraud, and the Trial Court's broad equitable powers given the earlier attorney's malfeasance." Reply Br. at 2. Finally, Weinreb observes that his former counsel "defrauded him into believing that his former counsel was properly presenting his forgery defense" to the trial court, and the court erred in "imputing Weinreb's former counsel's action to him." Id. at 3.
Carvey is quite distinguishable from the facts before us. Carvey was granted relief because he relied on the direct misrepresentations of an adverse party and of its attorney to Carvey, personally at several procedural junctures in the case. Those are not the circumstances presented in this appeal. The facts of this case are analogous to those in the Siebert Oxidermo case. As with Siebert Oxidermo's insurance agent's failure to forward the complaint to the proper insurance carrier, here, Weinreb's prior counsel failed to present his forgery defense.
Also contained in his second Trial Rule 60(B) motion are more general, equitable claims made under subsection (8) of the rule. Most of these claims concern the conduct of Weinreb's first attorney. Weinreb also argues that equity demands that he be relieved of a judgment of over $2,000,000 entered against him based on loan guaranties that he alleges he never signed.
With regard to his first attorney's conduct, Weinreb has never argued
Koval v. Simon Telelect, Inc., 693 N.E.2d 1299, 1302 n. 2 (Ind.1998) (emphasis added).
In arguing that he was defrauded by his prior counsel's failure to respond to the motion for summary judgment and to keep him informed of the trial court's rulings, Weinreb ignores the fact that "[r]efusal to relieve a party from a judgment based upon the action of the party's attorney has a long history in Indiana common law." Morequity, Inc. v. Keybank, N.A., 773 N.E.2d 308, 314 (Ind.Ct.App.2002), trans. denied (citing Kreite v. Kreite, 93 Ind. 583, 585 (1884)) ("The attorney's act was appellant's act, and if as between them the attorney had no such authority, and appellant was injured, his remedy is against the attorney, and not to be relieved from the judgment."). Siebert Oxidermo was bound by its insurance agent's negligence, and Weinreb is similarly bound by his prior counsel's negligence in failing to present his forgery defense. See Mirka, 627 N.E.2d at 450 n. 1; Houchins v. Kittle's Home Furnishings, 589 N.E.2d 1190, 1195 (Ind.Ct.App.1992) (quoting Wise v. Curdes, 219 Ind. 606, 613, 40 N.E.2d 122, 125 (1942)) ("Ordinarily, the knowledge of an attorney gained while acting for a client and within the scope of his employment is deemed to be the knowledge of the client to whom it is presumed to have been imparted.").
As to Weinreb's final, general, equitable argument, a trial court may act within its discretion under Trial Rule 60(B)(8) to set aside a judgment upon a showing of exceptional circumstances justifying extraordinary relief. See Brimhall v. Brewster, 864 N.E.2d 1148, 1153 (Ind.Ct. App.2007), trans. denied.
Id. (quoting Ind. Ins. Co. v. Ins. Co. of N. Am., 734 N.E.2d 276, 279-80 (Ind.Ct.App. 2000), trans. denied (internal quotation omitted)).
Although a claim of newly discovered forgery might justify relief from judgment
Appellant's App. p. 235.
Moreover, the Bank (and substituted plaintiff TR Developers) presented evidence to the trial court in its response to Weinreb's second Rule 60(B) motion that casts serious doubt on Weinreb's claim that his signature was forged. Specifically, TR Developers submitted:
Appellant's App. pp. 270-79.
Finally, TR Developers submitted the letter of Stephen Backer indicating that counsel for WK Timber Ridge had reviewed all loan documents, including the guaranties, and further stating:
Appellant's App. p. 282. Attorney Backer further opined that "[t]he Loan Documents are the legal, valid and binding obligations of Borrower and Guarantor, respectively, enforceable against Borrower and Guarantor, respectively, in accordance with their respective terms[.]" Id.
In response, Weinreb submitted a supplemental affidavit again denying execution of the certification and guaranties, and also stating that he was "unaware" of the Bank's financing proposal until after a default was declared on the loan. Id. at 305. Weinreb stated that he had no knowledge of Backer's letter, did not provide any personal financial information to the Bank, and that the forged guaranties were never mentioned during the 2008 negotiations concerning a loan modification. Id. at 306. Although Weinreb also submitted the affidavit of a handwriting expert in support of his second Rule 60(B) motion, the handwriting expert compared only the signatures on the guaranties "with documents purported to contain authentic signatures
With this equivocal evidence before it, distilling essentially to a swearing contest that should have been raised long before, the trial court was well within its discretion to reject Weinreb's equitable demands that the trial court set aside the judgment entered against him under Trial Rule 60(B)(8). Weinreb's second Trial Rule 60(B) motion did not present any grounds that would entitle him to relief from judgment that were unknown or unknowable at the time he filed his first such motion.
Carvey, as quoted in the Siebert Oxidermo case said it best: "A party may not file repeated TR 60 motions until he either offers a meritorious ground for relief or exhausts himself and the trial court in an effort to do so." Siebert Oxidermo, 446 N.E.2d at 338 (quoting Carvey, 176 Ind.App. at 159, 374 N.E.2d at 1177). Furthermore, our review of a trial court's decision on a 60(B) motion to set aside judgment is limited and will only "be overturned if it is clearly against the logic and effect of the facts or the reasonable deductions to be drawn therefrom." International Vacuum, Inc. v. Owens, 449 N.E.2d 599, 600 (Ind.1983). See also Principal Life Ins. Co. v. Needler, 816 N.E.2d 499, 502 (Ind.Ct.App.2004) ("Judicial discretion is a judge's privilege to decide and act in accordance with what is fair and equitable within the confines of justice, in light of and confined to the facts and circumstances of a particular case."). Under the facts and circumstances before us, we conclude that the trial court properly denied both of Weinreb's Trial Rule 60(B) motions at issue.
Finally, TR Developers argues that it is entitled to appellate attorney fees because Weinreb is obligated to pay all costs of collection including attorney fees under the guaranty. Weinreb did not respond to TR Developers claim for attorney fees in his Reply Brief.
The guaranty provides that "the Guaranteed Obligations, and liability of the Guarantor hereunder, shall in no event exceed the sum of (A) Fifty (50%) percent of the outstanding principal balance of the Loan plus (B) all accrued interest ..., late payment charges and all costs of collection (including, without limitation, attorney's fees). Appellant's App. p. 134. The trial court's May 13, 2009 order granting summary judgment in favor of the Bank provides: "To the extent additional fees and expense are incurred [the Bank] may petition the Court for additional judgment amounts." Id. at 217.
As TR Developers notes in its brief, the Bank assigned all of its rights in the judgment to TR Developers. See Appellee's Supp. App. p. 3. Accordingly, we remand this case to the trial court for a determination of whether TR Developers is entitled to appellate attorney fees. See Kruse v. Nat'l Bank of Indianapolis, 815 N.E.2d 137, 151 (Ind.Ct.App.2004) (stating that "appellate attorneys' fees may be appropriately awarded if a contractual provision calls for them and the party requesting the fees prevails").
In contravention of well-established precedent disfavoring the repetitive filing of Trial Rule 60(B) motions, Weinreb filed two such motions in this case, and did not appeal the trial court's denial of the first. The trial court did not abuse its discretion when it denied Weinreb's second Trial Rule 60(B) motion, because that motion did not present any grounds that might entitle him to relief from judgment that were unknown or unknowable at the time he filed his first 60(B) motion. We remand
Affirmed and remanded for proceedings consistent with this opinion.
BAKER, J., and NAJAM, J., concur.
