Borer v. Lewis
| Decision Date | 24 May 2004 |
| Docket Number | No. 02SC808.,02SC808. |
| Citation | 91 P.3d 375 |
| Parties | Deborah J. BORER and Ted Borer, Petitioners v. Chris LEWIS and Carolyn Lewis, Respondents. |
| Court | Colorado Supreme Court |
Rehearing Denied June 21, 2004.1
The Law Firm of Stephen H. Cook, P.C., Stephen H. Cook, Derek Regensburger, Boulder, Colorado, Walter H. Sargent, Colorado Springs, Colorado, Attorneys for Petitioners.
John R. Rodman & Associates, John R. Rodman, Denver, Colorado, Attorney for Respondents.
The plaintiffs, Deborah and Ted Borer (hereinafter the "Plaintiffs"), appeal from a court of appeals decision affirming a trial court order setting aside a default judgment against the defendant, Carolyn Lewis (hereinafter the "Defendant"). The trial court found that the Defendant proved by a preponderance of the evidence that process had never been served to her, and the court of appeals affirmed. The Plaintiffs argue that the lower courts erred in requiring the Defendant to prove that the default judgment should be set aside only by a preponderance of the evidence. Instead, the Plaintiffs claim that the Defendant was required to present "clear, strong and satisfactory proof" that the judgment should be set aside. We agree with the Plaintiffs that the lower courts erred in applying the preponderance of the evidence standard. However, because we find that, viewing the record as a whole, the Defendant did present "clear, strong and satisfactory proof" that she was never served, we uphold the order setting aside the default judgment.
This case stems from an automobile accident which took place on September 21, 1984, wherein a car driven by Otway Shans crashed into a vehicle in which Deborah Borer was a passenger. At the time of the accident, Shans, who had not yet received his driver's license, was driving a car owned by his friend, Chris Lewis, and insured by Chris' mother, Carolyn Lewis. Mrs. Borer and her husband initially filed suit only against Shans but, in June 1986, filed an amended complaint adding Chris and Carolyn Lewis as defendants and asserting claims of negligent entrustment against both Chris and Carolyn Lewis as well as civil conspiracy and outrageous conduct against Chris Lewis.
The Plaintiffs claim that they achieved service of process against the Defendant on October 3, 1986, relying on a Return of Service signed by Denver Deputy Sheriff Sherri Chase which stated that a summons and a copy of the First Amended Complaint were served on the Defendant on that date. Based on the Defendant's failure to file a timely response to that complaint, the trial judge, upon the Plaintiffs' motion, entered a default judgment against the Defendant on March 11, 1987. The Defendant and her son then filed their answer to the First Amended Complaint on March 16, 1987.
Subsequently, the Defendant discovered the default judgment which had been entered against her, and, on July 21, 1987, filed a Motion to Set Aside Default Judgment Against Carolyn Lewis and to Permit Filing of Answer and Supporting Memorandum pursuant to C.R.C.P. 55(c). In support of her motion, the Defendant provided an affidavit stating that she had never been served with a summons and complaint; that she was insured at the time of the accident and was aware of the need to give prompt notice of service to her insurer; that she did not own the car driven by Shans and did not entrust the car to Shans on the night of the accident; and that she believed she had a meritorious defense.2 The trial judge, after considering the Defendant's affidavit as well as the Return of Service signed by Deputy Chase, ruled that the Defendant was properly served on October 3, 1986, that the Defendant had failed to establish the existence of a meritorious defense, and that the balance of equities weighed in the Plaintiffs' favor. The trial judge therefore denied the Defendant's motion to set aside the default judgment.
After a jury trial wherein damages were assessed against the Defendant and liability and damages were determined as against both Chris Lewis and Otway Shans, the Defendant again moved to set aside the judgment, this time citing evidence that she had been heavily sedated in October 1986 and therefore would have been unable to recognize the summons and complaint if they were in fact served upon her. The trial court denied that motion and the Defendant appealed. In April 1990, the court of appeals reversed the trial court's orders denying the Defendant's motions to set aside the default judgment. The court of appeals ruled that the trial court erred in failing to conduct an evidentiary hearing prior to ruling on the matter. Thus, the court of appeals remanded the matter to the trial court with directions to conduct an evidentiary hearing both as to whether the Defendant was actually served and, if so, whether the default judgment might nevertheless be set aside based on grounds of excusable neglect.
At the hearing on remand, the Defendant testified that she had never been served and also testified regarding the nature of various medical problems she had been experiencing during October 1986 which required her to take medications that interfered with her memory as well as her ability to appreciate the full implication of legal documents. Additionally, the Defendant presented the testimony of her insurance representative, who stated that he was in contact with the Defendant during the relevant time period and that she had consistently stated to him that she was not served with any summons in October 1986.
The Plaintiffs offered the testimony of Deputy Chase, who could not specifically remember serving papers to the Defendant but instead described her habit and routine practice regarding service of process generally. Deputy Chase testified that she was serving approximately fifty to eighty people per day during October 1986 and would routinely note on each service envelope whether service was successful. In addition to Deputy Chase's testimony, the Plaintiffs relied on the service envelope and Return of Service documentation created by the Deputy in October 1986, as well as earlier affidavits in which Deputy Chase described her service of process to the Defendant, as evidence that the Defendant was in fact served.
At the close of the hearings, the trial court ruled in favor of the Defendant because it found that she had established by a preponderance of the evidence that she had not been served. The trial court's ruling was based on a determination that Deputy Chase's testimony regarding the amount of summonses served daily was "not plausible" and that inconsistencies in her testimony regarding the security details of the Defendant's building "detract[ed] from her believability." The court further noted that while the Defendant was not "particularly credible," her "active participation in other court proceedings [made] it unlikely that she would attempt to evade the instant case by claiming non-service of process." Finally, the trial court observed that because the Defendant was represented by counsel and her legal expenses were covered by insurance, she had little incentive to falsely deny process. Thus, finding that process had not been served, the trial court never ruled on the Defendant's arguments regarding excusable neglect.
After several years of proceedings regarding the outstanding claims, the trial court granted summary judgment in favor of the Defendant and Chris Lewis on all claims against them. The Plaintiffs appealed both the entry of summary judgment and the order setting aside the default judgment against the Defendant based on the preponderance of the evidence standard. The court of appeals reversed the trial court's entry of summary judgment. However, the court of appeals upheld the trial court's order setting aside the default judgment against the Defendant, ruling that the trial court properly applied the preponderance of the evidence standard to the issue before it. This appeal followed.
At issue before us today is what burden should be applied to a party seeking to overturn a default judgment entered against them. In particular, we are called upon to address whether section 13-25-127, 5 C.R.S. (2003), which sets forth the burden of proof for civil actions, has effectively overridden the standard previously established through our common law. In order to answer these questions, we look first to our common law establishing the burden of proof in setting aside default judgments, and then to section 13-25-127 to determine what impact, if any, that statutory enactment has had on the common law rule.
The process by which a default judgment may be set aside under C.R.C.P. 55(c) or C.R.C.P. 60(b)3 has been well-established through our case law. "The underlying goal in ruling on motions to set aside default judgments is to promote substantial justice." Craig, 651 P.2d at 401. The determination of whether a default judgment should be set aside in order to promote substantial justice is generally left to the sound discretion of the trial court. Id. at 402; see also, e.g., Browning v. Potter, 129 Colo. 448, 457, 271 P.2d 418, 423 (1954)
(); Gumaer v. Bell, 51 Colo. 473, 482, 119 P. 681, 684 (1911) (). However, such discretion is not without bounds:
When there does exist a controlling legal standard, however, a court may not disregard that standard in favor of some other legal rule. The fact that the legal standard requires the consideration and application of...
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State v. Tucker
...526 A.2d 1283, 1289 (1987) ("General Assembly lacks the power to enact rules governing [court] procedure ...."); Borer v. Lewis , 91 P.3d 375, 380–81 (Colo. 2004) (en banc) (holding that if a legislative act were read to override a court procedural rule, it would be an unconstitutional "inf......
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...postconviction relief under Crim. P. 35(c), is substantive and therefore not a violation of separation of powers); accord Borer v. Lewis , 91 P.3d 375, 380 (Colo. 2004) ( section 13-25-127, C.R.S. 2021, which sets forth the burden of proof in civil cases, is substantive and therefore not a ......
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