On January 23, 2025, the Indiana Supreme Court published its decision in Automotive Finance Corporation v. Meng Liu, Case no. 24S-CC-223, reversing the Marion Superior Court’s decision granting relief from a summary judgment entry in favor of Rubin & Levin client Automotive Finance Corporation (“AFC”). Oral argument was held on September 12, 2024 and Rubin & Levin partner Josh Casselman successfully argued that the trial court abused its discretion in granting a motion to set aside the judgment previously entered in favor of AFC under Ind. T.R. 60(B)(3).
Indiana’s Court of Appeals had affirmed the trial court’s decision in Auto. Fin. Corp. v. Liu, 228 N.E.3d 1125 (Ind. Ct. App. 2024), however another panel of the Court of Appeals reversed the trial court’s decision with respect to another of the judgment defendants in the same underlying case in Auto. Fin. Corp. v. Yang, 238 N.E.3d 649 (Ind. Ct. App. 2024). Noting “a split in precedent on an important issue implicating [Indiana’s] trial rules,” the Indiana Supreme Court “granted AFC’s petition for transfer” and … “vacated the Court of Appeals’ opinion in Liu’s case.” Slip Op. p. 4.
Writing for the majority of the Justices, Chief Justice Loretta Rush began her opinion by noting:
Across Indiana, judges, clerks, court reporters, bailiffs, and others are working to resolve over 1.5 million pending cases. In 2023, our trial courts disposed of over 1 million cases. Respect for the finality of judgments is thus crucial to the efficient functioning of our legal system. Finality conserves limited resources, provides certainty and stability, and protects the interests of parties by enabling closure and reducing prolonged litigation. While our trial rules recognize the importance of finality, they also provide litigants with tools to set aside a final judgment in limited circumstances. But courts must enforce the procedural and substantive requirements that cabin those tools.
Slip Op. p. 2. (emphasis added).
In both Liu and Yang, summary judgment had been entered in favor of AFC based on a default under a commercial financing contract that contained the signatures of the judgment defendants as guarantors. The guarantors did not designate any evidence in opposition to summary judgment, filing only unsworn letters with the Court suggesting they were not connected with the borrower business and/or had no knowledge of the loan transaction. Approximately six (6) months after judgment was entered and only after proceedings supplemental were pending to enforce the judgment, the guarantors for the first time submitted evidence that another guarantor of the loan had caused their signatures on the contract to be forged.
The Supreme Court summarized the issues and result as follows:
AFC argues that the trial court, by granting Liu relief under Trial Rule 60(B)(3), abused its discretion in three ways: (1) by considering grounds that “could have been raised by a timely motion to correct errors and a timely direct appeal”; (2) by applying the Trial Rule 56 summary judgment standard instead of the Trial Rule 60(B)(3) standard; and (3) by granting relief without Liu showing that fraud prevented her from designating evidence in opposition to summary judgment. Though the first basis for reversal is sufficient to resolve this appeal, we agree with AFC on all three points.
Slip Op. p. 9. (emphasis added).
As was conceded by Liu, the alleged forgery was known at the time the summary judgment was pending but she failed to present and designate evidence in opposition to such motion. Moreover, Ind. T.R. 60(B)(3)’s limited remedy for setting aside judgments obtained based on fraud only applies to the fraud of an adverse party, and then only if such fraud prevented the judgment defendant from fairly and fully litigating their case. Neither existed here as there was no allegation of fraud by AFC or its counsel and nothing about the alleged fraud by a co-defendant prevented Liu from defending the matter at summary judgment or in a timely motion to correct error.
Congratulations to Josh Casselman for a victory on behalf of our client at Indiana’s highest court!