ATTORNEY FOR APPELLANT
: ATTORNEY FOR APPELLEE:
R. BROCK JORDAN J. DOUGLAS ANGEL
Rubin & Levin, P.C. J. Douglas Angel & Associates
Indianapolis, Indiana Munster, Indiana
COURT OF APPEALS OF INDIANA
DENISE NWANNUNU a/k/a )
DENISE WILLIAMS, )
vs. ) No. 45A03-0109-CV-308
WEICHMAN & ASSOCIATES, P.C., )
APPEAL FROM THE LAKE SUPERIOR COURT, ROOM TWO
The Honorable William E. Davis, Judge
Cause No. 45D02-9707-CP-0824
June 26, 2002
OPINION - FOR PUBLICATION
ppellant, Denise Nwannunu a/k/a Denise Williams (Ms. Williams), appeals the trial courts denial
of her Trial Rule 60 Motion for Relief from Judgment.
Dr. Nwannunu and Ms. Williams were married in the summer of 1987 and
lived together in Indiana until the summer of 1997, when Ms. Williams moved
to New Jersey.
See footnote During that time, Dr. Nwannunu purported to operate his
medical practice through a corporation known as Lakefront Medical and Ambulatory Care Center,
P.C. (Lakefront).See footnote
From July 1993 through January 1997, Weichman & Associates, P.C. (Weichman) performed accounting
and other financial services for Lakefront, including payroll, compiling and reconstructing transactions, and
preparation of corporate income tax returns. Invoices were submitted to Lakefront for
such services. Weichman also performed accounting services for Dr. Nwannunu and Ms.
Williams personally by preparing their personal income tax returns. Invoices were submitted
to Dr. Nwannunu and Ms. Williams personally for such services.
On July 29, 1997, Weichman filed its complaint against Dr. Nwannunu, Lakefront, and
Ms. Williams (collectively the defendants where appropriate) for indebtedness incurred as a result
of the accounting and financial services Weichman provided to the defendants. Counts
I and II of the complaint sought judgment on account against Dr. Nwannunu
and Lakefront in the principal amount of $59,270.00. Counts III and IV
sought judgment on account against Dr. Nwannunu and Ms. Williams personally in the
principal amount of $5,425.00. On July 31, 1997, the complaint and summons
for Ms. Williams were left at the Dyer, Indiana residence which she had
shared with Dr. Nwannunu. However, Ms. Williams had already relocated to New
On August 13, 1997, William Walden (Attorney Walden), at the request of Dr.
Nwannunu, entered his appearance on behalf of all defendants, and thereafter filed an
answer and counter-claim on their behalf. Weichman filed a reply to the
counter-claim and initiated discovery in October 1997. During the course of the
litigation, several discovery disputes arose concerning the defendants failure to comply with discovery
requests, including answering interrogatories, producing documents, and attending depositions. Weichman filed several
motions to compel, which the trial court granted. The defendants, however, did
not comply with the trial courts orders, resulting in sanctions being imposed against
On November 3, 1999, Weichman filed a Motion for Sanctions, Costs and Attorney
Fees, wherein Weichman requested that judgment be entered against the defendants as a
discovery sanction. Prior to the hearing on Weichmans motion for sanctions, Attorney
Walden filed a motion to withdraw his appearance, asserting that there had been
an irretrievable breakdown between him and the defendants.See footnote Weichman filed an objection
to Attorney Waldens withdrawal. On March 10, 2000, the trial court entered
an order granting Attorney Waldens motion to withdraw his appearance. The trial courts
order further stated:
As sanctions for the Defendants failure to comply with discovery and ADR Rules,
the Court now orders Defendants, and each of them, defaulted as of May
11, 2000, unless they appear prior to that date, in open Court, and
comply with the Courts prior Orders.
If [Defendants] fail to appear by May 11, 2000, the Court will enter
Judgment against them in the amount of Sixty-Four Thousand Six Hundred Ninety-Five ($64,695.00)
Dollars, plus pre-judgment interest, costs, and attorneys fees. Appellants Appendix at 51-52.
Weichmans attorney sent a letter to Ms. Williams at her residence in New
Jersey, enclosing a copy of the trial courts order. Ms. Williams, however,
did not appear in open court by the May 11 deadline. Nevertheless,
the record does not indicate that a default judgment was entered. On
May 19, 2000, James Clement (Attorney Clement) entered his appearance on Ms. Williams
On May 24, 2000, Weichman filed a Motion to Enter Judgment requesting that
judgment be entered against the defendants as a result of their failure to
comply with the trial courts March 10 order. The trial court conducted
a hearing on Weichmans motion on August 28, 2000. Ms. Williams was
not present at this hearing, but was represented by Attorney Clement. Following
the hearing, the trial court entered an order stating:
That in light of the history of flagrant disregard for the Indiana Rules
of Trial Procedure regarding discovery and the Orders of this Court by the
Defendants, and each of them, it is clear that no sanction other than
entering judgment in favor of the Plaintiff is appropriate. Appellants App. at
The trial court then entered judgment against the defendants, jointly and severally, in
the amount of $99,956.75.See footnote
Standard of Review
On September 19, 2000, the trial court granted Attorney Clements motion to withdraw
as counsel for Ms. Williams. On February 27, 2001, Attorney Walden re-entered
his appearance on behalf of Ms. Williams and contemporaneously filed a motion for
relief from judgment and memorandum in support thereof. A hearing on Ms.
Williams motion was held on August 23, 2001.
Ms. Williams attended the hearing on her motion for relief from judgment and
informed the trial court that she was not aware that she had been
named as a defendant in the lawsuit until she received the letter and
a copy of the courts order from Weichmans attorney sometime in March 2000,
nearly three years after the lawsuit had been filed. Ms. Williams further
testified that she had not consented to Attorney Waldens representation of her interests,
as she did not even know that she was a party to the
action. Ms. Williams explained to the trial court that she had never
spoken or corresponded with Attorney Walden. She further asserted that she never
knew about scheduled depositions, requests for production of documents, or the need to
answer interrogatories, or of the various court orders compelling compliance with such discovery.
Ms. Williams maintained that she had not consciously ignored the courts previous
orders and asserted that she was willing to cooperate fully by appearing for
depositions and responding to interrogatories. Ms. Williams further acknowledged personal liability relating
to the preparation of her personal income tax returns and offered to pay
the indebtedness incurred thereby. Notwithstanding Ms. Williams testimony, the trial court denied
her motion for relief from judgment.
Upon appeal, Ms. Williams contends that the trial court abused its discretion in
denying her Indiana Trial Rule 60(B) motion for relief from judgment. Specifically,
Ms. Williams asserts that a breakdown in communication occurred, thereby constituting excusable neglect
in not complying with various discovery requests and court orders. Further, Ms.
Williams alleges that she has a meritorious defense to Weichmans cause of action.
Upon appeal, a trial courts decision regarding whether to set aside a default
judgment is given substantial deference. Kmart Corp. v. Englebright, 719 N.E.2d 1249,
1253 (Ind. Ct. App. 1999), trans. denied. Our standard of review is
limited to determining whether the trial court abused its discretion. Id.
We will find an abuse of discretion if the trial courts decision is
clearly against the logic and effect of the facts and circumstances before the
court. Id. In reviewing the trial courts determination, we will not
reweigh the evidence or substitute our judgment for that of the trial court.
Id. Any doubt as to the propriety of a default judgment
is resolved in favor of the defaulted party. Pitts v. Johnson County
Dept. of Public Welfare, 491 N.E.2d 1013, 1015 (Ind. Ct. App. 1986).
Generally, default judgments are not favored in Indiana, for it has long been
the preferred policy of this State that courts decide a controversy on its
merits. Pitts, 491 N.E.2d at 1015. However, when the discovery process
breaks down, Indiana Trial Rule 37 provides the court with tools to enforce
compliance. Hatfield v. Edward J. DeBartolo Corp., 676 N.E.2d 395, 399 (Ind.
Ct. App. 1997), trans. denied. The court may impose various sanctions, including
an award of costs and attorneys fees, exclusion of evidence, dismissing the action,
or rendering a judgment by default. T.R. 37(B)(2). The appropriate sanction
for failure to comply with a trial courts order is a matter committed
to the sound discretion of the trial court. Hatfield, 676 N.E.2d at
399. The trial court is not required to impose lesser sanctions before
applying the ultimate sanction of dismissal or default judgment. Id.
A party seeking to set aside a default judgment under T.R. 60(B)(1) must
demonstrate that the judgment was entered as a result of mistake, surprise, or
excusable neglect. The trial courts discretion in this area is necessarily broad
because any determination of mistake, surprise, or excusable neglect must turn upon the
particular facts and circumstances of each case. Kmart, 719 N.E.2d at 1253.
Because the circumstances of each case will be different, there are no
fixed rules or standards for determining what constitutes mistake, surprise, or excusable neglect.
Id. In making its determination, the trial court must balance the
need for an efficient judicial system with the judicial preference for deciding disputes
on the merits. Id.
A well-established ground for relief from a default judgment is a breakdown in
communication sufficient to establish mistake, surprise, or excusable neglect under T.R. 60(B)(1).
Whittaker v. Dail, 584 N.E.2d 1084, 1087 (Ind. 1992) (finding an abuse of
discretion in not setting aside a default judgment where a breakdown in communication
between insurer and insured, which resulted in insureds failure to appear at trial,
constituted excusable neglect, and where there was no evidence of foot dragging by
defendant). Nevertheless, not all breakdowns in communication rise to the level of
excusable neglect. See Smith v. Johnston, 711 N.E.2d 1259, 1262 (Ind. 1999)
(holding breakdown in communication which resulted from defendants failure to open his mail
was neglect, but not excusable neglect).
Here, the trial court entered a default judgment against Ms. Williams in light
of the history of flagrant disregard for the Indiana Rules of Trial Procedure
regarding discovery and the Orders of this Court. Appellants App. at 56.
However, the undisputed evidence shows that at the time the complaint and
summons were served by being left at the home she had shared with
Dr. Nwannunu, Ms. Williams no longer lived at that location, as she had
already relocated to New Jersey. In a certification attached to her motion
for relief from judgment, Ms. Williams indicated that she was aware of Weichmans
lawsuit against Dr. Nwannunu and Lakefront, but that she did not know that
she had been named as a defendant in the cause of action.
At the hearing on her motion for relief from judgment, Ms. Williams testified
that she never saw a copy of the complaint. Ms. Williams further
testified that she was not aware of, nor had she received from Dr.
Nwannunu or Attorney Walden, any discovery requests or court orders compelling her compliance
with various discovery requests, including appearance for scheduled depositions. Ms. Williams stated
that she never willfully disobeyed any of the trial courts orders.
In addition, it is undisputed that Attorney Walden entered his appearance on behalf
of Ms. Williams at the request of Dr. Nwannunu, and that Ms. Williams
never consented to such representation. Ms. Williams testified that she had not
hired Attorney Walden to represent her, as she did not even know that
she was a party to the action. Further, there is nothing in
the record which indicates that Ms. Williams ever received notice that Attorney Walden
had entered an appearance on her behalf. In the three years that
the lawsuit was pending before the trial court, Attorney Walden defended the action
on behalf of all defendants, despite the fact that he had never spoken
or corresponded with Ms. Williams. Attorney Walden stated that he mailed documents
relating to the litigation directly to Dr. Nwannunu. Attorney Walden admitted that
he had assumed, albeit wrongly, that Dr. Nwannunu was sharing the information regarding
the lawsuit with Ms. Williams. Finally, it is undisputed that Dr. Nwannunu
never joined Ms. Williams in New Jersey, and that sometime in 1998, Dr.
Nwannunu abandoned Ms. Williams and moved to Nigeria.
From this evidence, we conclude that Ms. Williams alleged neglect in failing to
respond to discovery requests and comply with court orders was excusable. Here,
there was more than a breakdown in communicationthere was no communication at all.
It is quite apparent that Dr. Nwannunu never shared any information concerning
the lawsuit with Ms. Williams. Moreover, Attorney Walden never made any effort
to correspond with Ms. Williams regarding the litigation, a party he purported to
represent. From the facts before the trial court, there is nothing which
indicates to us that Ms. Williams was even aware that she had been
named as a defendant in this cause or that she was apprised of
the status of the litigation prior to receiving the letter and a copy
of the courts order nearly three years after the lawsuit commenced. We
cannot see how the failure to comply with the discovery requests and court
orders can be attributed to a party who was not even aware of
them. Further, there is no evidence that there was foot dragging on
Ms. Williams part as to the events which led to the entry of
Weichman attempts to avoid this conclusion by asserting that Dr. Nwannunu, as Ms.
Williams husband, acted as her agent, and thus, his knowledge of the lawsuit
could be imputed to her. Weichmans assertion, however, is a legal conclusion
which is unsupported by the facts.
It has long been recognized that husbands may, under certain circumstances, act as
the agent for their wives. Runyon v. Snell, 116 Ind. 164, 18
N.E. 522 (1888). However, the relationship of husband and wife does not
itself create agency. Idlewine v. Madison County Bank and Trust Co., 439
N.E.2d 1198, 1202 (Ind. Ct. App. 1982); Uland v. Natl City Bank of
Evansville, 447 N.E.2d 1124, 1128 (Ind. Ct. App. 1983). Nonetheless, marriage is
a factor to be considered to determine if an agency relationship exists.
Idlewine, 439 N.E.2d at 1202. To establish the agency relationship,
the evidence must be clear and satisfactory and sufficiently strong to explain and
remove the equivocal character of the marital relationship. Id. (quoting Bayes v.
Isenberg, 429 N.E.2d 654, 659 (Ind. Ct. App. 1981)). Implied authority for
a husband to act as the agent for his wife must be discerned
from acts and conduct, and not merely from the marriage relationship. Moehlenkamp
v. Shatz, 396 N.E.2d 433, 436 (Ind. Ct. App. 1979).
While Weichmans argument seems plausible, there is no evidence in the record to
support the contention. Weichmans assertion that Dr. Nwannunu acted as Ms. Williams
agent seems to be based only upon the fact that they were married,
which, by itself, is not sufficient. Weichman does not direct us to,
and our review of the record does not reveal, any evidence to support
a finding that Ms. Williams authorized, expressly or impliedly, Dr. Nwannunu to act
as her agent with regard to the lawsuit in question. Indeed, from
the undisputed facts before the trial court, it appears that Dr. Nwannunu concealed
the litigation from Ms. Williams by failing to inform her that she had
been named as a defendant to the lawsuit and by failing to communicate
with her about the status of the litigation. Ms. Williams discovered that
she was a party to the lawsuit only after Weichmans attorney mailed her
a copy of the trial courts order directing her to appear or risk
being defaulted, nearly three years after the complaint was filed. Thus, we
cannot say that Dr. Nwannunus knowledge about the lawsuit and his subsequent failure
to comply with discovery requests and court orders should be imputed to Ms.
Weichman further asserts that because Attorney Walden entered his appearance on Ms. Williams
behalf, he too was acting as her agent, and thus his knowledge could
be imputed to her. We begin by noting that where an attorney
appears there is a rebuttable presumption that he has authority to enter an
appearance for a party until his authority is challenged and evidence introduced to
the contrary. State ex rel. Durham v. Marion Circuit Court, 240 Ind.
132, 137, 162 N.E.2d 505, 507 (1959).
Here, Ms. Williams testified that she never consented to Attorney Waldens initial representation
of her in this lawsuit. See Douglas v. Monroe, 743 N.E.2d
1181, 1184 (Ind. Ct. App. 2001) (recognizing that the attorney client relationship is
only created when the attorney and the client both consent to its formation).
Further, Attorney Walden explained to the trial court that he entered his
appearance for Ms. Williams only at the request of Dr. Nwannunu. Attorney
Walden defended the action on behalf of Ms. Williams even though he had
never spoken with her. Attorney Walden communicated directly with Dr. Nwannunu and
made no attempt to contact or correspond with Ms. Williams in any way.
From these facts, it is clear that Ms. Williams has rebutted the
presumption that Attorney Walden had authority to enter his appearance on her behalf
and represent her in the action. Thus, we cannot say that Attorney
Walden acted as Ms. Williams agent or that his conduct and knowledge about
the lawsuit can be imputed to her.
Given the undisputed facts before the trial court, it is clear that Ms.
Williams did not contumaciously disregard Weichmans discovery requests or the subsequent court orders
compelling her compliance. Weichmans bare legal assertions do not permit us to
impute the knowledge and conduct of Dr. Nwannunu or Attorney Walden to Ms.
Williams. There was clearly a lack of communication which gave rise to
the events which led to the entry of default judgment as a discovery
sanction against Ms. Williams.
To prevail on a motion to set aside a default judgment upon grounds
of mistake, surprise, or excusable neglect, a party is also required to demonstrate
that she has a good and meritorious defense to the action. T.R.
60(B); Kmart, 719 N.E.2d at 1258. A meritorious defense is one showing
that, if the case was tried on the merits, a different result would
be reached. Id. The movant need not prove the meritorious defense,
but only show enough admissible evidence to make a prima facie showing of
a meritorious defense indicating to the trial court the judgment would change and
the defaulted party would suffer an injustice if the judgment was allowed to
Upon appeal, Ms. Williams maintains that she has a meritorious defense. Specifically,
Ms. Williams asserts that she cannot be liable for the corporate debt incurred
by Lakefront and Dr. Nwannunu. Ms. Williams testified that she was not
an officer, director, or incorporator of Lakefront, nor was she in any way
involved or affiliated with Lakefront. Ms. Williams further asserted that she is
not a medical doctor. We conclude that Ms. Williams has presented sufficient
evidence to make a prima facie showing of a meritorious defense.
Because we have concluded that Ms. Williams has established excusable neglect and that
she has made a prima facie showing of a meritorious defense, we hold
that the trial court abused its discretion in denying Ms. Williams motion to
set aside default judgment.
The judgment of the trial court is reversed and the cause remanded for
further proceedings not inconsistent with this opinion.
KIRSCH, J., and ROBB, J., concur.
Dr. Nwannunu initially intended to relocate to New Jersey after he
tied up business and personal affairs in Indiana. Ms. Williams asserted that
instead of moving to New Jersey, she believed that in October of 1998,
Dr. Nwannunu moved to Nigeria to pursue political interests. In April 2001,
Ms. Williams obtained a divorce from Dr. Nwannunu on the basis of abandonment.
Footnote: During discovery, it was determined that Dr. Nwannunus corporation, i.e. Lakefront,
was administratively dissolved on December 31, 1987 for failing to file annual reports.
Footnote: Ms. Williams testified that she was not living in Indiana when
Weichman filed its complaint in July 1997. Ms. Williams explained that she
had a temporary address in New Jersey prior to moving to her current
address in August 1997.
Footnote: Apparently, the trial court conditioned Attorney Waldens withdrawal upon his providing
the court with Ms. Williams address in New Jersey. Attorney Walden complied
with the courts request.
Footnote: The judgment is broken down as follows: principal sum of
$64,695.00 ($59,270.00 prayed for in Counts I and II, plus $5,425.00 prayed for
in Counts III and IV), plus pre-judgment interest in the sum of $27,413.83,
plus reasonable attorney fees, costs, and expenses in the sum of $7,847.92.
Footnote: We recognize that in March 2000, after receiving a copy of the
trial courts order warning of default if she did not comply, Ms. Williams
had actual knowledge of the lawsuit and yet she still failed to appear
by May 11. However, we note that the risk of being defaulted
arose out of the failure of the parties to comply with discovery and
court orders. As we have concluded that such failure should not be
attributed to Ms. Williams, it can hardly be said that default judgment as
a discovery sanction was appropriate.