Opinion
No. 6-105 / 05-1079
Filed March 15, 2006
Appeal from the Iowa District Court for O'Brien County, David A. Lester, Judge.
Aaron Windschitl appeals the district court's ruling on his motion to set aside default judgment. AFFIRMED IN PART; REVERSED IN PART AND REMANDED.
Craig Lane, Sioux City, for appellant.
Micah Schreurs, of Wolff, Whorley, De Hoogh Schreurs, Sheldon, for appellee.
Considered by Sackett, C.J., and Vogel and Mahan, JJ.
Aaron Windschitl appeals the district court's ruling on his motion to set aside default judgment. He argues the district court erred when it (1) overruled his motion to set aside the default decree and (2) granted the default decree without notice being served pursuant to Iowa Rules of Civil Procedure 1.972(2) and 1.972(3). We affirm in part, reverse in part, and remand.
I. Background Facts and Proceedings
Aaron Windschitl and Kristin Windschitl married in May 2000. They have two children, born November 3, 2001, and February 17, 2003. Kristin filed a petition for dissolution in March 2004. Aaron filed an answer to the petition in June 2004. In October, the court entered a temporary order granting both parties legal custody and Kristin physical care subject to Aaron's reasonable right of visitation. The court later modified its temporary order on December 6, 2004, finding the parties agreed that Aaron should not be awarded any temporary visitation rights pending entry of a final decree.
In December, Kristin served Aaron with various discovery requests. He did not respond. On January 18, 2005, Aaron's attorney withdrew, and was replaced on the same day. Also on January 18, 2005, Kristin filed a motion to compel the production of discovery documents. On January 31, 2005, the court ordered Aaron to respond to the discovery requests by February 7, 2005. On February 3, 2005, however, the attorneys for both parties agreed the trial should be continued from February 16, 2005, until March 23, 2005. Aaron's attorney then filed a motion for continuance, signed by both counsel and Kristin, stating that discovery would be completed by February 28, 2005, and that failure to comply could result in sanctions.
On February 24, 2005, Kristin's attorney served Aaron's attorney with his intent to depose Aaron on March 4, 2005. Though Aaron was aware of the time and place of the deposition, he failed to appear. He also did not complete discovery by February 28, 2005. Aaron's attorney filed an application for leave to withdraw on March 4, 2005. Aaron immediately obtained new counsel.
On March 8, 2005, Kristin filed an application for sanctions based on Aaron's failure to comply with discovery. The court set a hearing for sanctions six days later on March 14, 2005. During that hearing, the court granted Kristin's request for sanctions, entering default judgment against Aaron. It also instructed Kristin to prepare a dissolution decree.
It is clear the trial date was still set for March 23, 2005.
On March 17, 2005, Aaron's new attorney called Kristin's attorney to discuss a continuance of the March 23, 2005 trial. Kristin's attorney advised him that a default decree had instead been entered and the trial date had been cancelled.
The court filed Kristin's default decree on March 21, 2005. In response, Aaron filed a motion to set aside the decree on March 29, 2005. The hearing on that motion was held on April 25, 2005. On the same day, Aaron's attorney delivered his answers to the interrogatories and document requests Kristin filed in December 2004. At the hearing, Aaron requested the court allow him a final hearing and decide the dissolution on its merits. The court filed its order denying Aaron's motion on June 23, 2005.
Aaron appeals the district court's ruling, arguing the district court erred in (1) failing to grant his motion to set aside the default decree and (2) granting the default when no notice was served on him. Because we resolve the case on Aaron's first ground for reversal, we do not review the second.
II. Standard of Review
We generally review dissolution proceedings de novo. Iowa R. App. P. 6.4; In re Marriage of Thompson, 666 N.W.2d 617, 617 (Iowa Ct.App. 2003). However, the issue presented here is whether the district court erred in overruling Aaron's motion to set aside default pursuant to Iowa Rule of Appellate Procedure 1.977. Thus, we review for abuse of discretion. Troendle v. Hanson, 570 N.W.2d 753, 755 (Iowa 1997); Central Nat'l Ins. Co. of Omaha v. Insurance Co. of N. Amer., 513 N.W.2d 750, 753 (Iowa 1994).
We vest district courts with broad discretion in ruling on a motion to set aside a default. Brandenberg v. Feterl Mfg. Co., 603 N.W.2d 580, 584 (Iowa 1999). We reverse such a ruling only if discretion is abused. Id. Generally, we find such an abuse only when there is a lack of substantial evidence to support the district court's ruling. Id. We are bound by the district court's findings of fact if supported by substantial evidence, and we view the evidence in the light most favorable to the district court's ruling. Id. We are more reluctant to interfere with a grant of such a motion than with its denial. Id. In that sense, we look with disfavor on a denial of such a motion and conclude all doubt should be resolved in favor of setting aside a default. Id. "Because the sanctions of dismissal and default preclude a trial on the merits, the range of the trial court's discretion to impose such sanctions is narrow." Troendle, 570 N.W.2d at 755. In order to justify the sanction of default, the noncompliance with discovery orders must be the result of willfulness, fault, or bad faith. In re Marriage of Williams, 595 N.W.2d 126, 129 (Iowa 1999).
III. Merits
Kristin filed her application for sanctions pursuant to Iowa Rule of Civil Procedure 1.517(4), alleging willfulness and bad faith on the part of Aaron. Specifically, she requested the following possible sanctions:
(a)Entry of a default decree against the Respondent. See In re Marriage of Williams, 595 N.W.2d 126, 129 (Iowa 1999).
(b)In the alternative, entry of an order prohibiting the Respondent from presenting any testimony (by himself or through other witnesses) or other evidence at trial regarding any matter that should have been reasonably disclosed in the Respondent's discovery responses and/or deposition.
(c) Entry of an order finding the Respondent in contempt.
(d) Entry of an order requiring the Respondent to pay all expenses and attorney fees associated with the Petitioner's Motion to Compel, this Application, and the deposition scheduled for March 5, 2005.
(e) An order granting such other relief as the Court deems just and equitable in the premises.
The district court granted the application and entered the most severe sanction, default, on March 21, 2005. This was two days prior to the scheduled trial date. Aaron subsequently filed a motion to set aside this default eight days later on March 29, 2005. His motion was filed pursuant to Iowa Rule of Civil Procedure 1.977 and alleged inadvertence, surprise, and excusable neglect. The motion was ultimately denied on June 23, 2005.
Previously, Iowa Rule of Civil Procedure 236.
Aaron had the burden to show good cause under the rule. Central Nat'l Ins. Co., 513 at 754. He must therefore prove one of the grounds under the rule. Id. The determination of whether a movant has established good cause is a legal conclusion and not a finding of fact. Brandenburg, 603 N.W.2d at 584. Thus, the district court's findings are not binding upon us. Id.
Our supreme court has liberalized its approach to the excusable neglect ground. Id. at 585. A four factor approach has been established. Id. We now turn our focus to a discussion of these four factors.
First, we must determine if Aaron actually intended to defend. Our supreme court has concluded that promptness in filing a motion to set aside default is significant to this issue. Id. We note that Aaron filed his motion within eight days of the district court's ruling granting the sanction. We also note that he was represented by counsel throughout this proceeding. It is certainly true that his relationship with his first two counsel was strained. But, he nonetheless took the steps to insure he secured new counsel promptly. We conclude Aaron intended to defend.
Secondly, we must determine if Aaron asserts a claim in good faith. Of note in this discussion is the fact that this is a dissolution action and the district court's default decree awarded Kristin sole custody of the children and, more importantly, ordered that Aaron would not receive any rights of visitation. We conclude Aaron attempted to assert a claim in good faith.
Third, we must determine if Aaron's actions were the result of willfulness, fault, or bad faith. In Brandenburg, our supreme court quotes with approval the language of a dissent in First National Bank v. Claiser, 308 N.W.2d 1, 3 (Iowa 1981) (Uhlenhopp, J., dissenting):
I think we should reexamine the rationale of our decisions under rule [1.977]. When the party against whom a default is entered actually desires to prosecute his claim (if a plaintiff) or to present his defense (if a defendant), the default frequently constitutes a windfall for the other party; the latter party might not be able to prevail if the case were heard on the merits. Moreover, with the default set aside, often the latter part is no worse off, on the merits of the case, than if the default had not been entered. The loser, however, is deprived of his claim or defense without trial, irrespective of its merits.
I do not refer to the case in which a party willfully ignores the rules of procedure or defies them. I refer to the cases involving bungles. Rule [1.977] does not contemplate a blameless party; it contemplates that some fault actually exists; it allows relief for "neglect," if the neglect is "excusable." If the party is so culpable as to be inexcusable, the guilty party can have no relief.
The federal courts grant relief quite readily in order to get to the merits and avoid harsh results. I would adopt the rationale of decisions of this kind and grant relief in the present case.
Brandenburg, 603 N.W.2d at 584-85. This language makes clear that some fault is contemplated. To be sure, Aaron did not complete discovery timely and failed to appear for a deposition. Aaron claims, however, that he was not aware of the hearing on sanctions held on March 14, 2005. His conduct must show a deliberate intention to ignore and resist any adherence to the rules of procedure. Brandenburg, 603 N.W.2d at 585. We are unable to conclude Aaron's actions were willful and in bad faith. This is especially so considering the dissolution trial date was set for March 23, 2005, only nine days after the sanctions hearing. It is clear that Aaron was aware of the trial date. Therefore, if the district court had set the matter for sanctions at the time of trial, we would have had conclusive evidence as to his motives.
Lastly, with regard to factor four, it is clear Aaron and not his counsel was responsible for the mistakes.
Having considered the factors set out in Brandenburg, we conclude the district court abused its discretion by failing to grant Aaron's motion to set aside default judgment. The important issue of child visitation, in addition to other less serious matters, was at stake in this case. Our supreme court has stated the issue of prejudice to the other party can be given some consideration. It is hard to conceive prejudice to Kristin in having to wait an additional nine days for these matters to be resolved at trial. We conclude there were less severe sanctions that could have been imposed against Aaron, and this default judgment should be set aside. This ruling will uphold the underlying purpose of rule 1.977 "to allow a determination of controversies on their merits rather than on the basis of nonprejudicial" inadvertence, mistake, or excusable neglect. Whitcharm v. Lovik, 398 N.W.2d 851, 853 (Iowa 1987).
IV. Summary
We conclude the district court abused its discretion in failing to grant Aaron's motion to set aside default judgment. We recognize that a portion of the default judgment granted Kristin a dissolution of marriage. We affirm that part of the default judgment, but reverse all remaining provisions. Said default judgment is remanded for trial on the remaining provisions of the dissolution petition.