Indiana Court Clarifies Notice Requirements for Default Judgments in Milestone vs. ReEnergize Case

The Indiana appellate court’s decision in Milestone Contractors North, Inc. v. ReEnergize USA, LLC serves as a pivotal clarification on the necessity of proper notice and the grounds for granting relief from default judgments. This case emerged from a dispute over an alleged failure of payment for re-grading work, leading Milestone to obtain a default judgment against ReEnergize in December 2022 after ReEnergize did not respond to the complaint. The crux of the appeal was the application of Indiana Trial Rule 60(B)(3), which permits the court to relieve a party from a final judgment due to "fraud, misrepresentation, or misconduct of an adverse party."

ReEnergize’s motion for relief, filed in April 2023, argued that Milestone had not fulfilled its obligation to provide notice to ReEnergize’s counsel, suggesting misconduct. However, Milestone countered by distinguishing their case from the precedent set by Smith v. Johnson, which mandated reasonable efforts to contact known opposing counsel before pursuing default judgment. The appellate court ultimately sided with Milestone, underscoring that without clear evidence of ReEnergize being represented by an attorney at the time of the lawsuit, Milestone was not required to notify ReEnergize’s counsel before moving for default judgment.

This ruling underscores the significance of clear procedural misconduct for relief under T.R. 60(B)(3) and delineates the boundaries of the obligation to communicate with the opposing party’s counsel. It clarifies that absent explicit knowledge of legal representation, plaintiffs are not compelled to provide notice to the defendant’s attorney prior to seeking default judgments. This decision reiterates the principle that due process in the context of default judgments hinges on the clarity of the defendant’s legal representation.