Summary
holding that the enaction of similar notice provisions under CR 55-(b) did not abrogate the common law rule of Pedersen
Summary of this case from Richardson v. HullOpinion
No. 12855-8-I.
August 5, 1985.
[1] Judgment — Vacation — Review — In General. A trial court's denial of a motion to vacate a judgment under CR 60(b) is subject to review for an abuse of discretion.
[2] Courts — Rules of Court — Construction — Readoption Following Construction. When a court rule is judicially construed and its successor is silent as to the issue construed, the construction is presumed to remain valid absent a clear indication of the Supreme Court's intent to change the construction.
[3] Judgment — Default Judgment — Presentation — Notice to Defaulting Party — Necessity. A party who has had a default judgment entered against him is not entitled to notice of the presentation and signing of the judgment, findings, and conclusions.
[4] Judgment — Default Judgment — Vacation — Excusable Neglect — Failure To Answer Second Complaint. A defendant's belief that he need not answer a complaint in light of his having answered a previous, nearly identical, complaint constitutes "excusable neglect" under CR 60(b)(1) for his failure to answer the second complaint.
Judgment — Default Judgment — Vacation — Review — Factors.
Nature of Action: Action to collect on a debt and foreclose a mortgage. Three months earlier, the plaintiff had filed a nearly identical complaint which the defendant had answered.
Superior Court: The Superior Court for King County, No. 82-2-12365-0, Shannon Wetherall, J., entered a default judgment and on January 26, 1983, denied the defendant's motion to vacate the judgment.
Court of Appeals: Holding that the defendant was not entitled to notice of the presentation of the judgment but that the defendant's negligence in not answering the complaint was excusable, the court reverses the trial court and vacates the judgment.
W. Kirkland Taylor, for appellant.
Donald Osborne, for respondent.
Defendant Allen Swanson appeals the denial of his motion for relief from default judgment. Finding that the defendant's failure to answer was due to excusable neglect, we reverse.
On June 20, 1982, plaintiff, C. Rhyne and Associates, a Washington corporation, had defendant Allen B. Swanson served with a summons and complaint for unpaid debt and mortgage foreclosure. The bases of the complaint were a note and mortgage, both signed by the defendant in connection with an earlier lawsuit between the parties. The defendant served a timely answer on the plaintiff, but the plaintiff chose to abandon that complaint and neither party filed pleadings with the court. On September 10, 1982, the plaintiff, through new counsel, served a new complaint on the defendant. Although titled differently, the subject matter and request for relief were nearly the same as those of the June complaint. Believing this new complaint to be a continuation of the June lawsuit, the defendant did not serve a new answer. On October 1, having had no response from the defendant, the plaintiff brought a motion for default. A superior court commissioner entered an order of default that same day. On October 8, the defendant's attorney filed with the court a notice of appearance and answer and counterclaim. The defendant's attorney states that he had copies of the document served on the plaintiff as well. On October 14, another commissioner entered findings of fact and conclusions of law and a default judgment which ordered foreclosure and sale of the defendant's property. The defendant then filed a "Motion for Review of Order of Default or Relief From Default" on November 4. A superior court judge orally ordered that the judgment be vacated, but upon plaintiff's motion for reconsideration, entered a written order denying Swanson's motion. Swanson appeals this order.
[1] We first address the plaintiff's argument that this court may not review the defendant's contentions because the defendant did not appeal from the default judgment. Although Swanson did not appeal directly from the judgment, he did move within 20 days to set it aside. We find his motion timely, as such a motion may be brought within a reasonable time and not more than 1 year after the judgment. CR 60(b). The trial court's decision on the motion may be appealed, and this court will review the decision for an abuse of discretion. Although appeal from a denial of a CR 60(b) motion is not a substitute for appeal from the judgment, Swanson's appeal from the denial of his motion is properly before us. Bjurstrom v. Campbell, 27 Wn. App. 449, 452, 618 P.2d 533 (1980).
The second issue is whether, as Swanson argues, the defendant was entitled to notice of the presentation and signing of the judgment and findings of fact and conclusions of law.
[2, 3] CR 55 governs entry of default and entry of default judgment. Under the forerunner of CR 55, once a defendant has been properly adjudged to be in default, the defendant "cannot contest the subsequent proceedings and is not entitled to further notice thereof." Pedersen v. Klinkert, 56 Wn.2d 313, 320, 352 P.2d 1025 (1960). CR 55 itself is silent on the issue of notice of presentation of a default judgment, and in the absence of a clear indication of intent to change the Pedersen holding, we will not presume that CR 55 is such an innovation on the common law. See Green Mt. Sch. Dist. 103 v. Durkee, 56 Wn.2d 154, 161, 351 P.2d 525 (1960). Thus, once the court has properly made an entry of default, the defendant is not entitled to notice of the presentation of judgment or findings. Allison v. Boondock's, Sundecker's Greenthumb's, Inc., 36 Wn. App. 280, 283, 673 P.2d 634 (1983).
"(a) Entry of Default.
Motion.
Pleading After Default.
Notice.
"(b) Entry of Default Judgment.
When Amount Certain.
Nevertheless, we conclude that defendant's motion to set aside the default judgment should have been granted. [4] "Default judgments are not favored in the law." Griggs v. Averbeck Realty, Inc., 92 Wn.2d 576, 581, 599 P.2d 1289 (1979). "The fundamental guiding principle" in the area of defaults should be to do justice. Griggs, at 582. Here, the trial court was aware when it denied the defendant's motion that the defendant had already answered the previous complaint. The trial court abused its discretion in not finding that Swanson's failure to answer the September complaint was "excusable neglect" under CR 60(b)(1).
CR 3(a) provides that a civil action "is commenced" by service of a summons and complaint. Thus, the plaintiff commenced an action against Swanson by serving the June summons and complaint even though that complaint was never filed. Swanson served a timely answer. Despite the defendant's appearance, the plaintiff obtained a default judgment by serving a nearly identical complaint 3 months later, which the defendant failed to answer. Under the circumstances, defendant was negligent in not answering the new complaint, but such negligence was clearly excusable.
[5] In reviewing a denial of a CR 60(b) motion to vacate a default judgment, we consider not only whether the failure to answer was due to mistake, inadvertence, surprise or excusable neglect on the part of the defendant, but also whether the defendant has made out a prima facie defense to the plaintiff's claim. White v. Holm, 73 Wn.2d 348, 352, 438 P.2d 581 (1968). This latter factor presents a slight problem, as the defendant violated CR 60(e)(1) by failing to support his motion to vacate with a statement of the facts constituting his defense. Griggs, at 583. However, the answer, filed after entry of default, raises lack of consideration, res judicata, and setoff. The defendant's primary defense is that he received no consideration for the note he signed. The plaintiff claims that he had paid the defendant for certain precious metals which later turned out to be worthless, but the defendant asserts that plaintiff had paid a partial advance, and that the metals were actually worth much more. Swanson claims that he signed the note as evidence of the money he had received. Swanson has thus shown a prima facie, albeit tenuous, defense. Such a showing on the record is sufficient, however, to support a motion to vacate. Griggs, at 583. Furthermore, where the defendant moves promptly to vacate and has a strong case for excusable neglect, the strength of the defense is less important to the reviewing court. White v. Holm, supra at 353.
Because we hold for defendant Swanson, we deny plaintiff's request for attorney's fees. The order of the trial court is reversed, and we remand this case with instructions to vacate the default judgment.
RINGOLD and WEBSTER, JJ., concur.