Indymac Bank, F.S.B. v. Young


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Docket Number: 2006-CA-01175-COA

Court of Appeals: Opinion Link
Opinion Date: 10-23-2007
Opinion Author: KING, C.J.
Holding: Affirmed in part; Remanded in part

Additional Case Information: Topic: Contract - Jurisdiction - Default judgment - M.R.C.P. 60(b)(4) - Award of damages
Judge(s) Concurring: LEE AND MYERS, P.JJ., IRVING, CHANDLER, GRIFFIS, BARNES, ISHEE, ROBERTS AND CARLTON, JJ.
Procedural History: Default Judgment
Nature of the Case: CIVIL - CONTRACT

Trial Court: Date of Trial Judgment: 06-15-2006
Appealed from: TISHOMINGO COUNTY CIRCUIT COURT
Judge: Sharion R. Aycock
Disposition: DEFAULT JUDGMENT WAS ENTERED AGAINST INDYMAC. THE MOTION TO SET ASIDE THAT JUDGMENT WAS DENIED.
Case Number: CV02-0073(B)T

  Party Name: Attorney Name:  
Appellant: INDYMAC BANK, F.S.B.




CHARLES R. WILBANKS JEFFREY P. HUBBARD SUSAN LOUISE DURHAM



 

Appellee: JAMES C. YOUNG GREG E. BEARD  

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Topic: Contract - Jurisdiction - Default judgment - M.R.C.P. 60(b)(4) - Award of damages

Summary of the Facts: James Young borrowed $127,000 from Indymac Bank, F.S.B., and executed a deed of trust in favor of Indymac as security. The deed contained an incorrect legal description of property. The deed actually described another property that Young owned and resulted in the bank placing a lien on the wrong property. Young filed suit against Indymac and, once Indymac changed the legal description of the property, Young dismissed the suit. Young filed another suit against Indymac, alleging intentional breach of contract based on Indymac’s failure to correct the deed description in a timely manner. He requested $60,000, plus interests, and statutory and punitive damages. Indymac failed to answer the complaint, and Young obtained a final default judgment against Indymac in the amount of $60,000, plus $15,000 in attorney’s fees, for a total of $75,000. Indymac filed a motion to set aside the default judgment which the court denied. Indymac appeals.

Summary of Opinion Analysis: Issue 1: Jurisdiction Young filed his complaint in the circuit court, as an action for damages due to an intentional breach of contract. Indymac argues that the circuit court lacked subject matter jurisdiction to hear the case because Young’s cause of action involved a cloud of title upon real estate. Young filed his suit as a intentional breach of contract claim. The Supreme Court has held that the circuit court is in a better position to retain jurisdiction over breach of contract issues than the chancery court. Therefore, the circuit court maintained the proper subject matter jurisdiction to hear Young’s intentional breach of contract claims. Issue 2: Default judgment Indymac filed its motion to set aside judgment under M.R.C.P. 60(b)(4), alleging the judgment was void. Indymac filed the motion two years and four months after the entry of the default judgment. The trial court denied Indymac’s request, finding Indymac’s motion was not filed within a reasonable time period as required by M.R.C.P. 60(b). In deciding what constitutes a reasonable time period, the court must take into account whether the opposing party has been prejudiced by the delay in seeking relief and whether there is good reason for the defaulting party’s failure to take appropriate actions sooner. A judgement is void only if the court that rendered it lacked jurisdiction of the subject matter, or of the parties, or if acted in a manner inconsistent with due process of law. The final default judgment against Indymac is not void. The circuit court had jurisdiction over the subject matter and the parties to this action and did not act in any manner inconsistent with due process. Thus, the court did not abuse its discretion in finding Indymac failed to file its motion within a reasonable time period. Issue 3: Award of damages Indymac argues that the court’s judgment is void because the court did not hold an evidentiary hearing regarding the award of damages and the award is unsupported by any evidence in the record. The court found that since the default judgment was valid, the issues regarding damages were precluded from the court’s consideration. The trial court was incorrect in finding it was precluded from addressing Indymac’s arguments regarding the award of damages. Damages awards must be supported by evidence. The record is completely void of any evidence to support the damages awards or attorney’s fees. In the absence of supporting evidence, the actual award of damages is void. Therefore, the trial court’s award of damages and attorney’s fees is vacated and remanded for an evidentiary hearing to determine the appropriate amount of damages and attorney’s fees, if any, that should be awarded.


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