Catching a Judgment Over Fear of Catching Covid?

By: Courtney M. Gaber, Associate

We have all learned over the past three years that the fear of catching Covid can have a profound effect on a person’s choices, whether it be avoiding public spaces or shunning social situations. Although the virus has shown few signs of going away, Covid anxieties will not excuse litigants from a judgment when deadlines are neglected or ignored in a lawsuit.

In Baker v. F.H. Paschen, S.N. Nielsen & Assocs., LLC, [1] the Indiana Court of Appeals held that where service to a complaint had been perfected, no answer had been filed and the defendants had failed to attend the pre-judgment hearings, the “fear of catching Covid” did not constitute excusable neglect to set aside a default judgment under Trial Rule 60 (B)(1).

Indiana Trial Rule 60(B) is an equitable rule which provides eight different avenues for parties to seek relief from judgments or orders. The most common route utilized by litigants falls under Indiana Trial Rule 60(B)(1), which allows relief from judgments in cases of “mistake, surprise or excusable neglect.” In addition to the motion being timely filed within one year after the judgment was entered, Indiana Trial Rule 60(B)(1) requires the moving party to allege a meritorious claim or defense. Thus, defendants must satisfy both prongs for the judgment to be set aside.

Baker involved a dispute between a commercial tenant and its landlord under Trial Rule 60(B)(1). Upon the lease expiration, the parties entered discussions regarding a holdover period as the tenant’s lease at different location did not commence for a couple of weeks. Although tenant paid landlord the full amount of rent for the following month, landlord informed tenant it was ceasing holdover discussions and that tenant must immediately vacate. Unable to remove its property, the tenant filed a complaint alleging breach of contract, theft, conversion, and requesting injunctive relief against landlord and its owner.

Default judgment was granted in favor of tenant. Landlord and its owner moved to set aside the default judgment under several provisions of Indiana Trial Rule 60(B), which the trial court denied. The Court of Appeals affirmed, holding landlord’s arguments of “being busy with work” and “wanting to avoid COVID” were inadequate to find excusable neglect under Indiana Trial Rule 60(B)(1). The court emphasized the landlord did not respond to the complaint or attend any hearings despite perfected service and admitted awareness of the complaint and preliminary injunction motion. Since landlord failed to establish the first prong of Indiana Trial Rule 60(B)(1), the court did not address the second prong of meritorious claim or defense.

The moral of the story? While the fear of catching covid may excuse you from certain obligations, it will not protect you from catching a judgment.

[1] Baker v. F.H. Paschen, S.N. Nielsen & Assocs., LLC, 188 N.E.3d 486 (Ind. Ct. app. 2022)