Ozark Capital Corp. v. Lynn K. Kurzendorfer (mem. dec.)

Citation: Not availableDocket: 82A04-1706-CC-1233

Court: Indiana Court of Appeals; November 20, 2017; Indiana; State Appellate Court

Original Court Document: View Document

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On November 21, 2017, the Indiana Court of Appeals issued a Memorandum Decision, which stated that the decision is not to be cited as precedent except for specific legal doctrines such as res judicata. The case involved Ozark Capital Corp. (Appellant) appealing the Vanderburgh Superior Court's denial of its verified motion for proceedings supplemental against Lynn K. Kurzendorfer (Appellee). The Court reversed the trial court's decision and remanded the case with instructions. 

The central issue was whether the trial court could vacate a prior summary judgment during a proceedings supplemental hearing. The background included a 2003 arbitration award in favor of CACV of Colorado against Kurzendorfer, which led to a confirmation complaint and subsequent summary judgment granted in 2004. Despite Kurzendorfer's requests for information about the arbitration amount, CACV failed to supply it. 

After multiple proceedings supplemental initiated by CACV and later by Ozark, the trial court dismissed the proceedings due to CACV's non-compliance with discovery requests. In 2012, Ozark purchased the judgment from CACV and continued to seek enforcement through various motions, the latest of which led to a hearing in March 2017 where Kurzendorfer reiterated his request for documentation regarding the credit card charges. The court's decision ultimately focused on the procedural validity of the trial court's actions in relation to the summary judgment.

The trial court acknowledged repeated failures by CACV to provide requested information over a 12-year period, leading to the dismissal of a proceeding supplemental (P/S) in July 2008. The court indicated that the summary judgment granted on October 27, 2004, was likely inappropriate due to the outstanding information. Consequently, the court initiated a reconsideration of its previous judgment, stating that it lacked sufficient information at the time of the ruling and thus would set aside the judgment.

In the appeal context, the absence of an appellee’s brief from Kurzendorfer allows Ozark to establish a prima facie case of error, a standard less stringent than usual. Proceedings supplemental are initiated to assist judgment-creditors in enforcing their rights based on previously established judgments, without the full due process protections typically afforded in civil cases. The trial court has broad discretion in these proceedings, which are viewed as a continuation of the original claim and not a new action.

Importantly, Indiana Trial Rule 60 restricts a trial court from sua sponte setting aside a judgment, except to correct clerical errors. A party must file a motion to set aside a judgment, followed by a hearing. The trial court had previously entered summary judgment in favor of CACV, finding no just reason for delay.

CACV's petitions for proceedings supplemental led the trial court to repeatedly continue hearings and request information from Kurzendorfer about an arbitrated credit card amount. On March 23, 2017, the trial court vacated a 2004 summary judgment on its own initiative, citing insufficient information to justify the original ruling. However, since there was no clerical mistake or motion from Kurzendorfer to set aside the judgment under T.R. 60(B), the trial court lacked the authority to vacate it sua sponte. Kurzendorfer was aware of the proceedings and present at the hearing, negating claims of mistake, surprise, or excusable neglect. No evidence supported claims of fraud or misconduct by CACV or Ozark, nor was the judgment void or satisfied. Kurzendorfer's ongoing requests for information were viewed as an improper collateral attack on the summary judgment, which is prohibited in supplemental proceedings. Consequently, the appellate court reversed the trial court’s decision to vacate the summary judgment and remanded the case for supplemental proceedings. Additionally, Ozark's request to reverse the trial court’s denial of a final garnishment order was noted, but the trial court appeared to focus on Kurzendorfer's missing evidence claims rather than the legal requirements for garnishment. The court's decision emphasized that relief under T.R. 60(B)(8) requires a party's motion, which Kurzendorfer did not file. The appellate court concluded by reversing and remanding the trial court’s order.