J.K. Harris, a tax resolution company with several offices in Indiana, lost its ability to argue against a class action suit brought against it by an Indiana resident whose tax issues were not resolved by the company, the Court of Appeals of Indiana held today in J.K. Harris & Co. v. Sandlin, No. 49A05-1003-CT-184.
The rationale behind the forfeiture of argument stems from Harris’s five and a half month absence from the litigation. Harris failed to appear before the court several times before the trial court ordered locks to be placed on the doors of the Indiana locations of the business.
In an appeal of the court’s denial to set aside default judgment against it, Harris argued that it did not receive adequate notice of the proceedings, even though it was served with the plaintiff’s complaint. The Court of Appeals concluded that because Harris did not raise the argument during trial, it waived any ability to make the argument on appeal. The court similarly dismissed Harris’s claim that the contract signed by the plaintiff stated that any disputes between the parties would be resolved in arbitration. The court held that by ignoring the pending litigation, Harris, in effect, acted as if it was not interested in pursuing the arbitration claim and, therefore, could not stand by the arbitration clause in the contract. The court remanded the case for further class determination, but sided with the plaintiff on all other accounts.