Josephina Augila on behalf of Pedro Aguila v. Anonymous Physicians 1 & 2 (mem. dec.)

MEMORANDUM DECISION
FILED
Pursuant to Ind. Appellate Rule 65(D), this
Memorandum Decision shall not be regarded as May 24 2017, 9:30 am

precedent or cited before any court except for the CLERK
purpose of establishing the defense of res judicata, Indiana Supreme Court
Court of Appeals
collateral estoppel, or the law of the case. and Tax Court

ATTORNEYS FOR APPELLANTS ATTORNEYS FOR APPELLEES
David J. Cutshaw Edward W. Hearn
Gabriel A. Hawkins Alan M. Kus
Cohen & Malad, LLP Johnson & Bell P.C.
Indianapolis, Indiana Crown Point, Indiana

Barry D. Rooth
Holly S.C. Wojcik
William A. Theodoros
Theodoros & Rooth, P.C.
Merrillville, Indiana

IN THE
COURT OF APPEALS OF INDIANA

Josephina Aguila on behalf of May 24, 2017
Pedro Aguila, Frederick Ard, Court of Appeals Case No.
Darren Bala, Robert Besler, Cella 45A03-1609-CT-2069
King, and Larry Salinas as Appeal from the Lake Superior
Personal Representative of the Court.
The Honorable Calvin D. Hawkins,
Estate of Amelia Porras, Judge.
Appellants-Petitioners, Trial Court Cause No.
45D02-1604-CT-65
v.

Anonymous Physicians 1 & 2,
Anonymous Medical P.C.,
Anonymous Hospital, G.
Anthony Bertig, and Stephen
Robertson, as Commissioner of

Court of Appeals of Indiana | Memorandum Decision 45A03-1609-CT-2069 | May 24, 2017 Page 1 of 10
 the Indiana Department of
Insurance,
Appellees-Respondents.

Shepard, Senior Judge

[1] The trial court determined Anonymous Hospital presented sufficient grounds to

set aside the entry of default judgment. The appellants, who are patients or

representatives of patients who were treated by the Hospital, challenge the

court’s decision. We conclude the court did not abuse its discretion in setting

aside the default.

[2] The appellants, whom we will refer to as the Patients, were treated by

Anonymous Physicians 1 and 2, Anonymous Medical P.C., and the Hospital.

The Patients claim the physicians performed unnecessary surgeries and, further,

that the Hospital negligently credentialed the physicians and were aware of the

unnecessary surgeries but allowed them to continue.

[3] Between July 31, 2014 and October 27, 2014, the Patients filed proposed
1
medical malpractice complaints with the Indiana Department of Insurance.

The Department of Insurance assembled medical malpractice review panels for

1
Approximately 300 other patients filed similar complaints against Anonymous Physicians 1 and 2,
Anonymous Medical P.C., and the Hospital.

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 the Patients’ cases, and G. Anthony Bertig was selected as the chairperson of

each of the six panels.

[4] Bertig set deadlines for the parties to submit evidence to the panels, and the

Hospital failed to comply in all six cases. For example, in Salinas’ case, on

April 16, 2015, Bertig instructed the Hospital to submit its submission no later

than July 31, 2015. In Aguila’s case, on September 8, 2015, Bertig instructed

the Hospital to file by January 15, 2016. The Hospital did not meet any of the

deadlines. The physicians and the Medical P.C. failed to file submissions in

four of the six cases.

[5] On April 26, 2016, the Patients filed a Petition for Preliminary Determination

and Default Judgment, asking the court to enter default judgment against all

defendants for failure to timely submit documents to the panels. On May 2,

2016, the court granted the default and entered judgment.

[6] The court later set aside the May 2 order to allow the physicians, the Center,

and the Hospital to respond to the Patients’ petition. The Hospital moved to

dismiss, arguing the court lacked authority to rule on the Patients’ request. The

Hospital also filed its submissions with the review panels in all six cases on July

11, 2016, the day before a scheduled trial court hearing. Meanwhile, Physicians

1 and 2 also filed their submissions in all six cases. Patients and the physicians

later stipulated that Physicians 1 & 2 and the Center would be dismissed from

the preliminary determination. The Patients and the Hospital did not reach a

similar agreement.

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[7] On July 13, 2016, the court entered default against the Hospital for a second

time. The Hospital filed a motion to set aside the default pursuant to Indiana

Trial Rule 60(B)(1), and the Patients asked to schedule a hearing on damages.

After further briefing and oral argument, the court granted the Hospital’s

motion, concluding it presented “a viable basis for relief under Trial Rule

60(B).” Appellants’ App. Vol. II, p. 19.

[8] Indiana Trial Rule 60(B)(1) states:

(B) Mistake-Excusable neglect-Newly discovered evidence-
Fraud, etc. On motion and upon such terms as are just the court
may relieve a party or his legal representative from a judgment,
including a judgment by default, for the following reasons:
(1) mistake, surprise, or excusable neglect; . . . .

A party who files a motion under Rule 60(B)(1) must demonstrate “a

meritorious claim or defense.” Id.

[9] A Rule 60(B) motion is addressed to the equitable discretion of the court, and

we reverse only upon an abuse. Brimhall v. Brewster, 864 N.E.2d 1148 (Ind. Ct.

App. 2007), trans. denied. An abuse of discretion occurs if the court’s decision is

clearly against the logic and effect of the facts and circumstances or if the court

has misinterpreted the law. Baxter v. State, 734 N.E.2d 642 (Ind. Ct. App.

2000).

[10] The trial court’s discretion is necessarily broad in this area because any

determination of excusable neglect, surprise, or mistake must turn upon the

unique factual background of each case. Kmart Corp. v. Englebright, 719 N.E.2d

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 1249 (Ind. Ct. App. 1999), trans. denied. Any doubt of the propriety of a default

judgment should be resolved in favor of the defaulted party. Coslett v. Weddle

Bros. Constr. Co., Inc., 798 N.E.2d 859 (Ind. 2003). Reinstatement of a case is

ultimately a matter of equity. Baker & Daniels, LLP v. Coachmen Indus., Inc., 924

N.E.2d 130 (Ind. Ct. App. 2010), trans. denied.

[11] The Patients raise several claims in support of their argument that the court

should not have set aside the default. They claim the Hospital is erroneously

attempting to litigate the merits of the case rather than present equitable

considerations. They also claim the Hospital erroneously submitted new

evidence in support of its motion for relief, and the evidence was inadmissible

because it could have been presented prior to default.

[12] The Patients also argue the Hospital’s failure to timely file its submissions was

sufficiently egregious that the entry of a default was appropriate and well within

the court’s discretion. They claim the Hospital’s noncompliance is “more

egregious than that found in every case disclosed by petitioners’ research.”

Appellants’ Br. p. 32. The Patients conclude vacating the default was an

inappropriate response to such misfeasance.

[13] They further contend the Hospital has failed to show good cause for setting

aside the default judgment, stating the Hospital erroneously chose to focus on

its late discovery responses rather than its late evidentiary submissions, and

must be held accountable for that choice. They say they warned the Hospital

about the late submissions several weeks before moving for preliminary

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 determination. They also argue that the January 24, 2016 death of the spouse

of the Hospital’s primary attorney does not amount to good cause because they

had agreed to extend case deadlines because of the death, but the Hospital was

unreasonably late months after the fact. Finally, the Patients say that the one-

year delay in each of their cases was severely prejudicial.

[14] In response, the Hospital states this case would be the first to hold that a court

abused its discretion by vacating a grant of default judgment. This is not quite

accurate. A panel of this Court reversed a court’s vacatur of a dismissal for

failure to prosecute, determining the court abused its discretion. Munster Cmty.

Hosp. v. Bernacke, 874 N.E.2d 611 (Ind. Ct. App. 2007).

[15] The Hospital states the evidence shows excusable neglect because Bertig’s

deadlines were flexible and the death of the spouse of the Hospital’s primary

attorney on these cases prevented the Hospital from completing the

submissions. The Hospital also claims Patients’ counsel gave it the impression

that Patients wanted the Hospital to prioritize responding to discovery requests

in all the malpractice cases instead of filing evidentiary submissions with the

review panels. The Hospital reasons that, at best, the choice to prioritize

discovery responses over panel submissions based on discussions with the

Patients was a mistake that does not warrant the sanction of default. The

Hospital further claims its submissions were delayed in part because the

Patients were slow to respond to the Hospital’s discovery requests.

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[16] In addition, the Hospital argues the Patients never took steps in the context of

the review panel process to resolve the issue of the Hospital’s overdue

submissions, such as asking the review panels to decide the cases without the

Hospital’s submissions. To the contrary, the Hospital notes that after the

spouse of Hospital’s attorney died, Patients agreed to work with the Hospital on

pending issues such as discovery and the submissions. Instead, the Hospital

argues, they surprised the Hospital by moving for preliminary determination. 2

[17] The Hospital disputes the Patients’ claim that it is inappropriate to cite evidence

in support of a motion for relief from judgment if the evidence could have been

submitted prior to the entry of default judgment. In any event, the Hospital

also argues that most of the evidence it submitted with its motion for relief from

judgment had already been submitted to the court in other parties’ documents.

Finally, the Hospital disagrees with the Patients that it was barred from

discussing the merits of the litigation in its motion for relief from judgment.

[18] In reply, the Patients argue the Hospital failed to demonstrate it was worthy of

the equitable remedy provided by Rule 60(B)(1) because it inappropriately

argued substantive law instead of equitable considerations. They say the

Hospital could not have reasonably understood there was indefinite flexibility

in the panels’ deadlines because the Hospital requested extensions of the

2
The Hospital also argues it had meritorious defenses to the Patients’ claims, a requisite showing to support
relief from judgment. Whelchel v. Cmty. Hosps. of Ind., Inc., 629 N.E.2d 900 (Ind. Ct. App. 1994), trans. denied.
At the hearing on the Hospital’s motion for relief from judgment, the Patients declined to contest that issue,
stating, “It’s correct we’re not challenging that they had a meritorious defense.” Tr. Vol. 2, p. 65.

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 deadlines in June 2016, which was after the Patients filed their petition for

preliminary determination. In addition, the Patients reiterate they told the

Hospital its submissions were late several weeks before they filed the petition.

[19] Regarding discovery, the Patients note that the Hospital filed the submissions

the day before a court hearing even though discovery was not complete. They

conclude from these circumstances that the Patients’ delayed discovery

responses could not have been a significant impediment to the Hospital’s filing

of evidentiary submissions with the review panels.

[20] On the question of prejudice, Patients claim that the Hospital’s filing of its

submissions with the review panels one day before a court hearing was

inadequate to cure the delay. They say the Hospital should not be allowed to

attack the underlying sanctions determination and is barred from presenting

evidence in support of its motion for relief from judgment if the evidence could

have been raised prior to default.

[21] We must consider the parties’ arguments in accordance with our standard of

review by determining whether the court’s decision to set aside the default was

clearly against the logic and effect of the facts and circumstances before the

court. Our answer is no. We cannot agree with the Patients that the Hospital

was barred from presenting evidence that could have been presented prior to

default. Per the plain language of Trial Rule 60(B), only motions filed under

60(B)(2) are subject to such a limitation.

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[22] In addition, we cannot agree that the Hospital should not have discussed the

merits of the parties’ claims while seeking relief from default. It is true that a

Trial Rule 60(B)(1) motion does not attack the substantive, legal merits of the

judgment but rather addresses the procedural, equitable grounds justifying the

relief from the finality of a judgment. Kmart Corp., 719 N.E.2d 1249. Some

discussion of the merits is unavoidable because a movant must demonstrate a

meritorious claim or defense in relation to the parties’ allegations. Ind. Tr. Rule

60(B). In this case, the Hospital also presented to the court equitable arguments

in favor of setting aside the default.

[23] Ultimately, the trial court’s decision was well within its discretion. The court

balanced the prejudice to the Patients against the Hospital’s right to present a

defense. See Tr. Vol. 2, pp. 79-80. The Hospital, which was defending against

300 malpractice cases, demonstrated that the death of its attorney’s spouse

delayed its responses. The Patients expressed a willingness to work with the

Hospital due to this tragedy. When the Hospital’s new attorney contacted the

Patients’ attorney in April 2016, he asked the Patients to state their priorities for

the various cases. The Patients’ attorney mentioned that the evidentiary

submissions were overdue but stated that receiving discovery responses from

the Hospital was the highest priority.

[24] Although the Patients were not required to seek lesser sanctions before

requesting default, it is relevant to the facts and circumstances that the Patients

did not first seek lesser sanctions, such as asking the panel chairperson to

consider the cases without the late submissions. Cf. Ross v. Bachkurinskiy, 770

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 N.E.2d 389 (Ind. Ct. App. 2002) (no abuse in denying motion for relief from

default; court warned plaintiff that failure to comply with discovery deadlines

could result in default).

[25] Finally, it is curious that both the Anonymous Physicians and the Hospital

were tardy in filing submissions, but when the physicians and the Hospital filed

their submissions after the court proceedings began, the Patients were willing to

dismiss only the Anonymous Physicians from the trial court proceedings.

Considering these facts and circumstances, we find no abuse of discretion.

[26] Affirmed.

Vaidik, C.J., and Mathias, J., concur.

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