Kretschmer v. Bank of America (IN)

Summary: In order to set aside a default judgment, the movant must provide evidence of a meritorious defense and that the relief sought is necessary and just.

 

Kretschmer v. Bank of America, N.A., 15 NE 3d 595 (Ind. App. 2014).

 

Go to full opinion.

 

Facts: Bank of America, North America (BANA) filed a mortgage foreclosure suit against Michael Kretschmer on March 1, 2012. On June 7, 2012, the trial court entered default judgment in favor of BANA. On June 26, 2012, Kretschmer filed a motion to set aside the default judgment alleging that BANA had agreed to a short sale of the real estate. He claimed that after he received notice of the foreclosure, he spoke with an attorney at BANA who told him not to worry and to continue with the short sale. Therefore, he continued with the short sale and did not appear in the foreclosure case or hire an attorney. He also claimed that BANA offered him a chance to refinance and failed to provide him with any notice of the default judgment.

On September 11, 2013, Kretschmer filed a motion to submit additional evidence alleging that he had a short sale with BANA, but they never responded to the offer. As a result the buyer withdrew. He also alleged that during the settlement conference earlier in the year, he gave BANA another short sale offer, but they never responded to it.

The trial court heard Kretschmer’s motion to set aside default judgment and denied it on November 5, 2013. Kretschmer appealed.

 

Holding: Reversed and Remanded. The Court addressed whether the trial court had abused its discretion by denying Kretschmer’s motion to set aside default judgment under Ind. Trial Rule 60(B). Under the statute, a court may relieve a party of a default judgment for various reasons including (1) mistake, surprise, or excusable neglect and (3) fraud…, misrepresentation, or other misconduct of an adverse party. The movant, Kretschmer, must allege a meritorious defense, which is "one that would lead to a different result if the case were tried on the merits." Wagler v. West Boggs Sewer Dist., Inc., 980 N.E.2d 363, 372.  

Kretschmer's failure to timely file an answer to BANA's complaint was excusable neglect and based on misconduct of the adverse party, because he relied on what BANA’s counsel had told him to not worry and continue with the short sale. Even though he continued with the short sale, BANA nevertheless filed an application for default judgment.

Furthermore, Kretschmer presented a meritorious defense because he provided evidence that, if true, may support defenses of estoppel and contractual sabotage. Therefore, the motion for default judgment was set aside.

 

Opinion Year: 
2014
Jurisdiction: 
Indiana
By: ATG Underwriting Department | Posted on: Fri, 11/13/2015 - 12:20pm