MASTER TECH LLC v. MITCHELL JELLISON ASSOCIATES INC (2025)

MEMORANDUM DECISION

[1] Master Tech, LLC appeals the trial court's denial of its motion to set aside a default judgment that the court had entered against it and in favor of Mitchell Jellison Associates, Inc.¹ Master Tech raises four issues for our review, which we consolidate and restate as whether the trial court abused its discretion when it denied Master Tech's motion to set aside the default judgment.

[2] We affirm.

Facts and Procedural History

[3] In June 2021, Mitchell Jellison and Master Tech entered into a two-year lease agreement, which they later extended into a third year. In early 2024, Master Tech failed to make its payments owed to Mitchell Jellison under the lease. Accordingly, on February 2, Mitchell Jellison informed Master Tech in writing that Master Tech was in breach of the lease. Mitchell Jellison instructed Master Tech to vacate the premises unless Master Tech paid the amount due within ten days of the letter. Master Tech did not respond to Mitchell Jellison in writing.

[4] On February 23, 2024, Mitchell Jellison filed its complaint against Master Tech for breach of lease. Mitchell Jellison sought Master Tech's eviction and a damage award for the unpaid rent. Master Tech did not appear or respond to Mitchell Jellison's complaint, and the trial court entered a default judgment against Master Tech that included permission for Mitchell Jellison to take possession of the leased premises.

[5] Shortly thereafter, Master Tech moved to set aside the default judgment and for an emergency stay of Mitchell Jellison's repossession of the premises. The trial court granted the request for the emergency stay and set a hearing date on Master Tech's motion to set aside the default judgment. In support of its motion to set aside the default judgment, Master Tech did not dispute that it had originally failed to pay the amounts due to Mitchell Jellison under the lease. But Master Tech alleged that, after receiving the February 2 letter, it had entered into an oral agreement with Mitchell Jellison to “cure” Master Tech's default in exchange for making certain payments to Mitchell Jellison, which payments Master Tech had made and Mitchell Jellison had accepted. Appellant's App. Vol. 2, pp. 143, 145-46. Thus, Master Tech asserted that “it is current” under the lease and not in default. Id. at 142. In response, Mitchell Jellison argued that Master Tech “did not make those payments under any agreement as an agreed cure” and that Master Tech still owed unpaid sums to Mitchell Jellison, although Mitchell Jellison conceded that Master Tech was entitled to be credited against the default judgment total for the amounts it had paid. Id. at 163.

[6] Following the hearing, the trial court denied Master Tech's motion to set aside the default judgment and reinstated its permission for Mitchell Jellison to take possession of the premises. In its order, the court asked the parties to file a stipulation to account for Master Tech's payments toward the total default judgment or, if the parties were unable to so stipulate, to request an evidentiary hearing for the court to determine Mitchell Jellison's outstanding damages. To date, neither party has filed either a stipulation or a request for an evidentiary hearing on damages.

Standard of Review

[7] Master Tech appeals the trial court's denial of its motion to set aside the default judgment under Indiana Trial Rules 60(B)(1), 60(B)(3), and 60(B)(8).² We review the trial court's judgment under those Rules for an abuse of the trial court's discretion. See, e.g., State v. Collier, 61 N.E.3d 265, 268 (Ind. 2016). An abuse of discretion occurs if the trial court's decision is clearly against the logic and effect of the facts and circumstances before the court or the reasonable, probable, and actual deductions to be drawn therefrom. Id. We do not reweigh the evidence on appeal. Id. And it is well established that we may affirm a default judgment on any theory supported by the record. See Prime Ins. Co. v. Wright, 133 N.E.3d 749, 753 (Ind. Ct. App. 2019) (quoting Kmart Corp. v. Englebright, 719 N.E.2d 1249, 1253 (Ind. Ct. App. 1999)), trans. denied.

Discussion and Decision

[8] Master Tech moved to set aside the default judgment under Indiana Trial Rule 60(B)(1) (for excusable neglect), 60(B)(3) (for alleged fraud or misrepresentation by Mitchell Jellison), and 60(B)(8) (for “any other reason justifying relief”). Each of those Rules required Master Tech to demonstrate that it had a “meritorious ․ defense” to Mitchell Jellison's complaint. Ind. Trial Rule 60(B). The “meritorious defense” requirement, in turn, requires the moving party to present evidence that, if credited, demonstrates that a different result would be reached if the case were retried on the merits. Outback Steakhouse of Fla., Inc. v. Markley, 856 N.E.2d 65, 73-74 (Ind. 2006).

[9] Master Tech contends that it has a meritorious defense because, according to Master Tech, it had entered into an oral agreement with Mitchell Jellison to cure the default, which brought Master Tech current on its obligations under the lease. In support of that argument, Master Tech submitted the affidavit of its CEO, Timothy Klenk, in which he stated that Master Tech and Mitchell Jellison had reached that oral agreement.

[10] But we agree with Mitchell Jellison that Klenk's affidavit is not sufficient to demonstrate a meritorious defense. Paragraph 13.1(b) of the lease between Mitchell Jellison and Master Tech makes clear that a failure to pay an amount due is a breach of the lease. Appellant's App. Vol. 2, p. 32. And Paragraph 13.2 describes Mitchell Jellison's remedies in the event of a breach in relevant part as follows:

In the event of a breach of this Lease by [Master Tech], as defined in Paragraph 13.1, with or without further notice or demand and without limiting [Mitchell Jellison] in the exercise of any right or remedy which [it] may have by reason of such breach, [Mitchell Jellison] may: (a) Terminate [Master Tech's] right to possession of the premises ․ and [make] all amounts due under this Lease for the remainder of the term ․ immediately due and payable without notice․ Efforts by [Mitchell Jellison] to mitigate damages caused by [Master Tech's] ․ breach of this Lease shall not waive [Mitchell Jellison's] right to recover damages under this Paragraph․

Id. at 33 (emphases added). The lease also requires any amendments to be in writing. Id. at 40.

[11] The terms of the lease are clear and govern the parties’ conduct. Under the lease, Mitchell Jellison's February 2 offering of a ten-day window for Master Tech to cure the breach did not waive Mitchell Jellison's right to pursue recourse in the courts. There is no dispute that Master Tech did not comply with Mitchell Jellison's demands in the February 2 letter. There is also no dispute that Master Tech did make, and Mitchell Jellison did accept, some payments toward Master Tech's liability to Mitchell Jellison. But the lease is equally clear that Mitchell Jellison's acceptance of some payments toward the total amount owed may have mitigated Master Tech's total liability but expressly did not result in a waiver of Mitchell Jellison's right to seek full recovery in the courts.

[12] Master Tech's argument that it had an oral agreement to the contrary is, in effect, an argument that the parties agreed to amend the terms of Paragraphs 13.1 and 13.2 of the lease by having Mitchell Jellison waive rights that the plain language of the contract says Mitchell Jellison did not waive. But the lease also makes clear that any amendment must be in writing. Accordingly, Klenk's affidavit is not sufficient to show that the parties had a meeting of the minds that is contrary to the terms of the lease.

[13] Still, Master Tech also relies on Paragraphs 13.1(d) and 13.3 to support its argument on appeal. Paragraph 13.1(d) expressly excludes from its language a breach for failure to pay an amount due under Paragraph 13.1(b), and so Master Tech's reliance on this paragraph is a nonstarter. And Paragraph 13.3 speaks to inducements made by Mitchell Jellison to have Master Tech execute the lease, which also is not relevant here.

[14] For all of these reasons, Master Tech failed to show that it has a meritorious defense, as required to support its motion to set aside the default judgment. We therefore affirm the trial court's denial of Master Tech's motion.

[15] Affirmed.

FOOTNOTES

1.   Timothy Klenk, also a defaulted defendant, does not participate in this appeal.

2.   Master Tech also argued for relief under Trial Rule 60(B)(6) in the trial court, but it has abandoned that theory on appeal.

Mathias, Judge.

Brown, J., and Kenworthy, J., concur.