Opinion
No. 5760.
December 2, 1981.
Appeal from the Superior Court, Third Judicial District, Anchorage, J. Justin Ripley, J.
Sailor J. Kennedy, pro se.
Ronald G. Birch and Marc W. June, Birch, Horton, Bittner, Monroe, Pestinger Anderson, Anchorage, for appellee.
Before BURKE, C.J., and RABINOWITZ, CONNOR, MATTHEWS and COMPTON, JJ.
OPINION
The issue in this appeal is whether the superior court abused its discretion in refusing to set aside a default judgment.
Sailor Kennedy is the president of an Ohio brokerage corporation. The First National Bank of Fairbanks committed one million dollars to the corporation for investment purposes.
The bank actually loaned $334,958.83 to the corporation. The bank contends that Kennedy personally guaranteed the note; Kennedy has denied this. When the note was in default, the bank sued Kennedy individually, the investment firm, and two other corporations run by Kennedy.
The action was begun by a complaint mailed on August 12, 1980; the complaint was received by Kennedy, in Ohio, on August 21. On September 9, Kennedy, acting pro se, mailed to Alaska a motion for extension of time within which to file an answer. On September 11, the bank moved for entry of default and for a default judgment. The same day, Judge Victor D. Carlson entered a joint and several default judgment against all parties in the amount of $441,083.63. When Kennedy's motion for an extension of the time to answer was received, on September 16, it was denied.
On November 17, 1980, Kennedy moved to set aside the default judgment on the grounds that the court lacked personal jurisdiction over him and because the entry of judgment under the circumstances was fundamentally unfair. See Rules 55(e) and 60(b), Alaska Rule of Civil Procedure. Judge J. Justin Ripley denied the motion on December 29, and this appeal followed.
The adequacy of the bank's case against Kennedy as an individual is, on the facts in the record before us, quite debatable. Kennedy's response to the complaint, although technically inadequate to prevent entry of the default, was prompt. It appears that his default was due to his "lack of familiarity with the rules and . . . not due to gross neglect or lack of good faith." Sanuita v. Hedberg, 404 P.2d 647, 651 (Alaska 1965). Moreover, the record "negates any suggestion that setting aside the default would have prejudiced or harmed appellee in any way — except to require [it] to prove [its] case." Id.
We conclude that the superior court's refusal to set aside the default in the instant case, was an abuse of the court's discretion. "The purpose of the Rules of Civil Procedure is to secure not only the speedy, but also the just determination of every action or proceeding." Id. The default should have been set aside and Kennedy given a reasonable opportunity to answer the complaint.
REVERSED and REMANDED for further proceedings consistent with this opinion.