Michael H. Kretschmer v. Bank of America, N.A.
15 N.E.3d 595
Ind. Ct. App.2014Background
- BANA filed a foreclosure complaint against Kretschmer alleging he defaulted on a promissory note and mortgage; BANA attached the note, mortgage, and assignment.
- BANA moved for and obtained a default judgment on June 7, 2012, after Kretschmer did not answer.
- Kretschmer filed a T.R. 60(B) motion to set aside the default judgment, claiming he was told by BANA’s counsel’s office to continue pursuing a short sale and therefore did not respond.
- Kretschmer asserted he submitted at least two short-sale offers; he contends BANA never responded and the offers fell through, prejudicing him.
- The trial court denied the T.R. 60(B) motion; on appeal the court reviewed whether the trial court abused its discretion in denying relief.
- The Court of Appeals reversed, concluding Kretschmer showed excusable neglect/misrepresentation and a prima facie meritorious defense (estoppel/contractual sabotage/Hamlin-type claim), so the default judgment should be set aside.
Issues
| Issue | Plaintiff's Argument (BANA) | Defendant's Argument (Kretschmer) | Held |
|---|---|---|---|
| Whether the trial court abused discretion denying T.R. 60(B) motion to set aside default judgment | Advice to pursue a short sale is not excusable neglect; short sale/refinance are only possibilities and BANA was not required to accept offers; result would be same on merits | He reasonably relied on counsel’s office representations to continue short sale, constituting excusable neglect/misrepresentation; he presented a meritorious defense because a short sale would eliminate deficiency and BANA’s failure to respond harmed him | Reversed — court abused its discretion; relief warranted under T.R. 60(B)(1) and (3) because of excusable neglect/misrepresentation and a prima facie meritorious defense |
Key Cases Cited
- Allstate Ins. Co. v. Watson, 747 N.E.2d 545 (Ind. 2001) (setting aside default where opposing counsel’s assurances caused party not to defend)
- Wagler v. West Boggs Sewer Dist., Inc., 980 N.E.2d 363 (Ind. Ct. App. 2012) (standard of review for T.R. 60(B) and factors for relief)
- Kmart v. Englebright, 719 N.E.2d 1249 (Ind. Ct. App. 1999) (examples of excusable neglect and requirement that movant show relief is necessary and just)
- Ind. State Highway Comm’n v. Curtis, 704 N.E.2d 1015 (Ind. 1998) (Hamlin doctrine: prohibition on contractual sabotage and duty to consider approvals in good faith)
- Brown v. Branch, 758 N.E.2d 48 (Ind. 2001) (elements and doctrine of equitable estoppel)