Bailey v. Algonquin Gas Transmission Co.

• Decision Date: 30 January 2002
• Docket Number: No. 2000-315-Appeal.,2000-315-Appeal.
• Citation: 788 A.2d 478
• Parties: Robert BAILEY et al. v. ALGONQUIN GAS TRANSMISSION COMPANY et al.
• Court: Rhode Island Supreme Court

788 A.2d 478

Robert BAILEY et al. v. ALGONQUIN GAS TRANSMISSION COMPANY et al.

No. 2000-315-Appeal.

Supreme Court of Rhode Island.

January 30, 2002.

Present WILLIAMS, C.J., LEDERBERG, BOURCIER, FLANDERS, and GOLDBERG, JJ.

Max Wistow, Robert D. Parrillo/Anthony F. Cottone, Providence, for plaintiff.

Joseph V. Cavanagh, Jr., Karen A. Pelczarski/Dorothy S. Davison, Providence, for defendant.

OPINION

FLANDERS, Justice.

This is another inglorious chapter in a long-running series of civil cases in which, regrettably, the sins of the lawyer as agent are visited upon the client as principal.

The defendant-client, Maguire Group, Architects, Engineers, Planners, Ltd. (Maguire), appeals from a Superior Court order denying its motion to vacate a default judgment that entered against it on August 6, 1999, in the amount of $458,533.69, including interest and costs. The court entered the default judgment because Maguire's lawyer, John Coffey, Jr. (Coffey), inexcusably had failed to respond to a request for production of documents and then inexcusably failed to respond to a series of follow-up motions and conditional court orders compelling Maguire to produce the requested documents. Despite proper service of these documents on Coffey, both his and Maguire's stony silence eventually culminated in the entry of a default judgment against Maguire for the amount of the plaintiffs' damages and prejudgment interest.

The plaintiffs alleged that they suffered personal injuries while they were excavating a trench and laying a gas line in East Providence, and that defendants' negligence caused these injuries. Although Maguire filed an answer denying these allegations, its later default mooted whatever defenses it may have possessed to its asserted liability on these claims. But when plaintiffs attempted to execute on the default judgment, Maguire learned for the first time of its lawyer's malfeasance and sought to vacate the judgment. The motion justice refused to do so, however, finding no manifest injustice in holding Maguire's feet to the fire lit by its own lawyer's inexcusable neglect. Because we are unable to conclude that the motion justice abused his discretion in denying the motion to vacate the default judgment, we affirm for the reasons amplified below.

Facts and Travel

The defendant, Algonquin Gas Transmission Company (Algonquin), employed plaintiffs to excavate a trench and lay a gas line in East Providence. The plaintiffs alleged that they suffered personal injuries as a result of working there because of Algonquin's and the other defendants' negligence. Although the complaint did not assert specific allegations against Maguire, plaintiffs alleged that defendants knew or should have known that the soil and ground water that plaintiffs excavated had been contaminated with various toxic chemicals. They further averred that defendants were negligent in failing to warn plaintiffs about the presence of toxic chemicals at this site and in misrepresenting the dangers of working in that area.

In March 1997, during pretrial discovery, plaintiffs propounded a request to Maguire for the production of relevant documents, to which Maguire failed to respond. There followed, in due course, a motion and an order compelling Maguire to produce the requested documents, a conditional default order, the entry of a default, a hearing on damages, and, finally, a default judgment, in August 1999.Despite proper service of these court papers on Maguire's lawyer and his receipt of several commendable letters from plaintiffs' lawyer entreating him to comply, Coffey failed to respond to any of them. Ultimately, an execution on the judgment issued on September 7, 1999, and plaintiffs caused it to be duly served on Maguire soon thereafter. Finally waking up to the fact that its own lawyer had been asleep at the switch while this train wreck of a default was occurring, Maguire engaged new counsel who, in October 1999, filed a motion to vacate the judgment. The court denied the motion and Maguire then appealed to this Court.

Before representing Maguire on this particular case, for many years Coffey had handled various types of legal work for this same client, mostly of the corporate variety. During 1999, when this lawsuit was pending in the Superior Court, Maguire was providing Coffey with an office, absorbing certain of his administrative expenses, and paying him a retainer of $15,500 per month. At quarterly meetings he attended with officers of the company, Coffey would report to Maguire on the status of this case and on the various other legal matters for which Maguire had engaged him to represent the company. Although Coffey recalled receiving in the mail a request for document production in this case, he testified he did not inform anyone at Maguire about it.¹ He admitted that he did not respond to the request for production or to the motion to compel that followed soon thereafter. He also acknowledged that, during the 1997-1998 period, he had received several items of mail in connection with this case; and that he had opened and looked at some but not all of these court documents that were mailed to him. Instead of responding to the requests and to the orders of the court, however, he would "just stack it [the mail] someplace and ultimately I would throw it away." When Maguire asked him about this caseat its quarterly meetings, Coffey testified, he would tell his client that nothing was happening. He conceded that he had done nothing in the case from the time he first had received the request for production in March 1997, up to the time he received the notice of execution on the default judgment in September 1999. Apparently, Coffey considered the case to be one of relative low priority compared with the other legal matters he was handling for Maguire.

Neither Coffey nor Maguire offered any explanation to the motion justice for his total inaction in the case, other than referring to the fact that Coffey was imbibing heavily during this time by consuming eight to ten glasses of wine per day, beginning at lunch (after leaving Maguire's premises for the day) and ending when he went to bed at night. Ultimately, Coffey had himself checked into Butler Hospital in September 1999, where he was treated for alcoholism. Coffey believed that his consumption of alcohol had affected his handling of this case by impairing his judgment. He stated:

"I think it was a pattern that had developed of making bad judgments that sort of steam roll you, and this just happened to be there. And I have no — I can't explain it myself."

Maguire based its motion to vacate the default judgment on Rule 60(b)(1) and (6) of the Superior Court Rules of Civil Procedure. Rule 60(b)(1) provides that a party may be relieved from a final judgment for "mistake, inadvertence, surprise, or excusable neglect." Rule 60(b)(6) allows relief for "any other reason justifying relief from the operation of the judgment." (Emphasis added.) The motion justice denied the motion on both grounds. He determined, first, that there was no causal connection between Coffey's tippling and his failure to handle this case properly, noting that Coffey had competently managed various other legal matters for Maguire during the same period he was ignoring the discovery requirements in this case. Indeed, Maguire's attempt to show a causal connection between Coffey's crapulence and his inexcusable neglect in handling this case foundered when its expertwitness recanted his medical opinion to that effect after he became aware of the other legal services that Coffey had ably performed for Maguire during this same period.

The motion justice next concluded that Coffey's failure to respond to plaintiffs' document requests did not constitute excusable neglect, but rather it was the result of either unexplained or willful conduct. On appeal, Maguire does not challenge the motion justice's findings with respect to Rule 60(b)(1), but it contends that its motion to vacate should have been granted under Rule 60(b)(6).

The motion justice reasoned that the grounds for relief under Rule 60(b)(6) must be "mutually exclusive" from the grounds that are available for relief under Rule 60(b)(1) through (5).² He concluded that because of its attorney's inexcusable neglect, Maguire was not entitled to relief under Rule 60(b)(1); therefore, he decided, this same inexcusable neglect that disqualified Maguire from obtaining relief under Rule 60(b)(1) could not offer it relief under Rule 60(b)(6). The motion justice found that defendant "failed to establish any circumstance leading to the default judgment herein which would serve * * * to work a manifest injustice to defendant." Consequently, applying black-letter agency principles,he concluded that Maguire should be held liable for the actions and inactions of the attorney it had selected to represent it in this case, and he therefore refused to vacate the default judgment.

Analysis

We will not disturb a trial court's ruling on a motion to vacate a judgment absent a showing of abuse of discretion or error of law. Webster v. Perrotta, 774 A.2d 68, 75 (R.I.2001); Iddings v. McBurney, 657 A.2d 550, 553 (R.I.1995). Maguire argues that it should not be held liable for the actions of its attorney because the evidence showed that Coffey was grossly negligent in his handling of this case. Even though the motion justice found that Coffey's negligence was inexcusable, Maguire argues, he should have granted Maguire relief from the judgment under Rule 60(b)(6) because its attorney was not merely negligent, but grossly so and his malfeasance included misrepresentations that led Maguire to believe nothing was happening in the case. The plaintiffs respond that this interpretation of Rule 60(b)(6) would eviscerate the excusable-neglect standard of Rule 60(b)(1) and result in the granting of nearly all motions to vacate based upon the attorney's negligent conduct. Indeed, the more...