Camacho v. Gardner

• Decision Date: 29 December 1967
• Docket Number: CA-CIV,No. 2,2
• Citation: 6 Ariz.App. 590,435 P.2d 719
• Parties: Jerry CAMACHO, a minor by his mother and best friend Helen Camacho, Appellant, v. Henry M. GARDNER and Jane Doe Gardner, husband and wife, and Ralph T. Badilla, Apellees. 403.
• Court: Arizona Court of Appeals

Page 719

435 P.2d 719

6 Ariz.App. 590

Jerry CAMACHO, a minor by his mother and best friend Helen Camacho, Appellant, v.Henry M. GARDNER and Jane Doe Gardner, husband and wife, and Ralph T. Badilla, Apellees.

No. 2 CA-CIV 403.

Court of Appeals of Arizona.

Dec. 29, 1967.

William Messing, Tucson, for appellant.

Chandler, Tullar, Udall & Richmond, by D. B. Udall, Tucson, for appellees.

MOLLOY, Judge.

This appeal questions the propriety of the trial court's setting aside an entry of the defendants' default and the $50,000 judgment for the plaintiff which had been entered on the default.

Since the trial court granted the defendants' motion, our function on appeal is to examine the affidavits submitted in support of and in opposition to the motion to set aside default and default judgment in the strongest light possible in favor of the defendants, prevailing parties below.Thomas v. Goettl Bros. Metal Products, 76 Ariz. 54, 57, 258 P.2d 816(1953).Accordingly, the facts as stated here are those undisputed in the record and those supplied by the affidavits of the defendants and defendants' counsel.

On December 21, 1966, an action to recover for personal injuries to the minor-plaintiff was instituted on his behalf.The Gardners, husband and wife, were served with a copy of the summons and complaint on December 22, 1966.Previous to this date, the Gardners had been represented by counsel, a Mr. David Pakula, in connection with their claim for injuries sustained in the same accident which gives rise to the minor-plaintiff's action.

The Gardners had received a letter from the plaintiff's counsel informing them that a civil action was contemplated against them and suggesting they forward the letter to their insurance company.The Gardners had contacted their attorney, Mr. Pakula, about this letter and he advised them that as soon as the suit papers were received by them, they should be forwarded 'immediately' to their insurance company.Additionally, Mr. Pakula advised the Gardners that he would notify the appropriate insurance adjuster of the letter threatening suit, and Mr. Pakula forthwith did this.

At the time the complaint and summons were served upon the defendants, the process server informed the defendantsthey should turn the papers over to their insurance company.After service on December 22, 1966, the Gardners 'forgot' about the service and did nothing about notifying either the insurance company or their attorney until they were informed of the default judgment on January 13, 1967.At this time, they found the suit papers in a cupboard in their home.

The grounds advanced below for the setting aside of the default and the default judgment were: * * * on the grounds of 'mistake, inadvertence, surprise, and excusable neglect.'These are the words of subparagraph (1) of Rule 60(c), R.Civ.P., 16 A.R.S.By its terms, this rule applies only to the setting aside of the default judgment.The test as to whether a default should be set aside is as stated in Rule 55(c), (c), R.Civ.P., 16 A.R.S.--'* * * for good cause shown.'6 Moore's Federal Practice§ 55.10(1), at 1827 (2d ed. 1953), see also§ 55.10(2), at 1830.

Though these two rules use different language as to the test for granting relief, in the many decisions in this state pertaining to the setting aside of a default and default judgment, no distinction has ever been made which would suggest that the trial court has any discretion in separating the default from the default judgment on such a motion, i.e., Marquez v. Rapid Harvest Co., 99 Ariz. 363, 409 P.2d 285(1965);Bateman v. McDonald, 94 Ariz. 327, 385 P.2d 208(1963);Hendrie Buick Co. v. Mack, 88 Ariz. 248, 253, 355 P.2d 892(1960);Marsh v. Riskas, 73 Ariz. 7, 9, 236 P.2d 746(1951);Rogers v. Tapo, 72 Ariz. 53, 57, 230 P.2d 522(1951);Burbage v. Jedlicka, 27 Ariz. 426, 431--432, 234 P. 32(1925);Mann v. Hennessey, 2 Ariz.App. 438, 440, 409 P.2d 597(1966).

The decisions in this jurisdiction indicate that the granting of relief from default and/or default judgment is a matter lying within the 'discretion' of the trial court, i.e., see citations supra.However, this discretion is not unlimited and can be abused by the granting of a motion to set aside, Overson v. Martin, 90 Ariz. 9, 363 P.2d 604(1961), as well as by the denial of a motion to set aside.Coconino Pulp & Paper Co. v. Marvin, 83 Ariz. 117, 317 P.2d 550(1957).

The decision of Overson v. Martin, supra, is the closest of our Supreme Court decisions to being in point.That case reversed a trial court's setting aside of a default, when the excuses presented were that the wife had been ill for two weeks of the one-month period during which the defendants failed to answer after becoming aware of service, and the husband had been busy 'with the gathering of data' during this time.For all that appeared in Overson, the defendants were completely unlearned in the law.On the basis of Overson, this court said in Prell v. Amado, 2 Ariz.App. 35 at 36, 406 P.2d 237, at 238(1965):

'Carelessness is not synonymous with 'excusable neglect' as a basis for setting aside a default judgment.'

The only arguments made as to why this setting aside could be affirmed on appeal are that the Gardners were 'inexperienced' in being served with process and that all doubts should be resolved in favor of securing a trial on the merits.Reliance is taken upon decisions such as Marquez v. Rapid Harvest Co., 99 Ariz. 363, 409 P.2d 285(1965);andGray v. Dillon, 97 Ariz. 16, 396 P.2d 251(1964).

That 'doubt' should be resolved in favor of a trial on the merits is unquestionably the law of this jurisdiction, Marquez v. Rapid Harvest Co., supra, but it is our view that before a 'doubt' arises, there must be a showing of unusual circumstance excusing in some degree the failure to answer so as to invoke a power of 'discretion' in the trial judge.There is no suggestion in this record that the Gardners were illiterate, or mentally or physically ill, or disturbed, or incapacitated or affected by any unusual circumstance at any time involved in this case.

The decision of Gray v. Dillon, supra, is perhaps the farthest our Supreme Court has gone in upholding the setting aside of a default for excusable neglect.The defendant, Dillon, in that case, at the time of service, was no active duty with the Arizona Air National Guard.He discovered his regular counsel was out of town and that it was necessary for him to secure new counsel.New counsel employed by the defendant filed a motion to set the judgment aside, two days after the taking of default.¹

There are circumstances in Gray that are absent here.These defendants, rather than being deprived of their regular counsel, were advised by their regular counsel as to the appropriate action to be taken after the service of process.There is no showing of any temporary special activity such as military service or otherwise in the picture here.Most defendants are not experienced in receiving service of process.If this default can be set aside, then Any default when the defendant'forgot' to answer can be so set aside, depending only upon drawing a trial judge whose 'discretion' so inclines him.We cannot affirm the setting aside of this default under what we consider to be the well-established law in this jurisdiction.

However, we do not regard the default and the default judgment to be inextricably attached one to the other.Under our practice, these two concepts are not only separate procedures, governed by separate rules, but they perform different functions.A default is a judicial admission of the plaintiff's right to recover, Postal Ben. Ins. Co. v. Johnson, 64 Ariz. 25, 165 P.2d 173(1946), but in an unliquidated damage case Not of the Amount of recovery.3 Barron & Holtzoff Federal Practice and Procedure§ 1216, at 86(1958);6 Moore's Federal Practice§ 55.07, at 1822 (2d ed. 1953);49 C.J.S.Judgments§ 201c, at p. 358.A default judgment is the judicial pronouncement which puts an end to controversy, makes available to the prevailing party the coercive processes of the court, and is as efficacious as any other judgment.Wheeling v. Financial Indem. Co., 201 Cal.App.2d 36, 19 Cal.Rptr. 879(1962);King v. Musch, 26 Ill.App.2d 290, 167 N.E.2d 698(1960);30A Am.Jur.Judgments§ 222, at 295--96;49 C.J.S.Judgments§ 200, at pp. 355--356.

In separately regarding the default judgment, we see there is cause to set aside, arising out of the amount of this judgment, which does not pertain to the default itself.Though this matter has not been specifically advanced by the defendant as a legal cause to set aside the judgment, it is appropriate to uphold an action taken by a lower court on appeal for any reason disclosed by the record, even though the grounds for affirmance have not been advanced by the litigant either below or on appeal, 5 Am.Jur.2d Appeal and Error § 931, at 359--60;5B C.J.S. Appeal and Error § 1849, at pp. 287--288;cf.Odom v. First Nat. Bank of Arizona, 85 Ariz. 238, 336 P.2d 141(1959).In this case, the size of this judgment was an implied argument for relief advanced by the defendants² and we conceive that this may very well have been the deciding favor in causing the trial court to set aside both default and default judgment.

After the entry of any default, pertinent rule provides as to the determination of the amount of damage as follows:

'2.If, in order to enable the court to enter judgment or to carry in into effect, it is necessary to take an account or to determine the amount of damages or to establish the truth of any averment by evidence or to make an investigation of any other matter, the court may conduct such hearings or order such references as it deems necessary and proper and shall accord a right of trial by jury to the parties when required by law.'Rule 55(b)(2), R.Civ.P., 16 A.R.S.

This is a rule adopted from the Federal Rules of Civil Procedure, Rule 55(b)(2)...