Catledge v. Transport Tire Co., Inc.

• Decision Date: 05 December 1984
• Docket Number: No. 15230,15230
• Citation: 107 Idaho 602,691 P.2d 1217
• Parties: Gary CATLEDGE and Patricia Catledge, husband and wife, Plaintiffs-Respondents, v. TRANSPORT TIRE COMPANY, INC., an Idaho corporation, Defendant-Appellant, and William Harold Crowley and Jane Roe Crowley, husband and wife, Defendants.
• Court: Idaho Supreme Court

Page 1217

691 P.2d 1217

107 Idaho 602

Gary CATLEDGE and Patricia Catledge, husband and wife, Plaintiffs-Respondents, v. TRANSPORT TIRE COMPANY, INC., an Idaho corporation, Defendant-Appellant and William Harold Crowley and Jane Roe Crowley, husband and wife, Defendants.

No. 15230.

Supreme Court of Idaho.

Dec. 5, 1984.

Rehearing Denied Dec. 31, 1984.

R.B. Kading, Jr., Scott D. Hess, and Mark S. Geston, of Eberle, Berlin, Kading, Turnbow & Gillespie, Chartered, Boise, for defendant-appellant.

Larry Clyel Berry, of Pike & Berry, Chartered, Twin Falls, for plaintiffs-respondents.

SHEPARD, Justice.

Plaintiffs-respondents Catledges received a default judgment in the amount of $107,347 against Transport Tire Company, Inc., in a claim arising out of a motor vehicle accident. The sole issue in this appeal is the district court's denial of Transport Tire's motion to set aside the default judgment. We affirm.

On April 1, 1980, Patricia Catledge sustained injuries and damage as a result of a collision between the car she was driving and a truck owned by Transport Tire Company and driven by William Crowley, an employee of Transport Tire. The Catledges retained counsel, who ascertained from the accident report that Prescott & Craig, Inc. was the insurance agency for Transport Tire. During July 1981, counsel for Catledge confirmed through Leroy Craig that Prescott & Craig was the agent who sold Transport Tire the vehicular liability insurance policy in force on the date of the accident. That same day counsel wrote Craig attempting to initiate settlement negotiations. That letter was not answered and counsel for Catledge was unable to obtain any information during an August 1981 call to Craig regarding the settlement proposal. Craig refused to reveal the address of the insurance carrier, but indicated he was channeling the correspondence to the carrier.

Since counsel had received no response to settlement attempts, the Catledges filed suit against Transport Tire and Crowley on September 2, 1981. Harry Smookler was president, general manager and sole shareholder of Transport Tire, and he was personally served with summons and complaint on September 10, 1981. Crowley could not be located and the process directed to him was returned "Not Found" in November 1981. Smookler sent the summons and complaint, together with a letter to Thelma Thompson, office manager at Prescott & Craig, stating, "Kindly advise as this has to be answered within twenty days." According to Smookler, he never received an answer to that letter from Prescott & Craig, and believed the agency was handling the matter. Transport Tire did not retain an attorney nor did it answer the complaint.

On November 5, 1981, counsel for Catledge sent Craig a letter and a photocopy of the complaint, advising that Transport Tire had been served approximately 20 days earlier and stating:

"[Y]ou are hereby formally put on notice that I fully intend to make application to the court for default judgment pursuant to the statute. My sole purpose in affording you this notice is to avoid any claims upon the insurance company's, or your, behalf to the effect that you had no notice of the pending litigation or the consequences of your inaction with respect to [sic] thereto."

Counsel for Catledges received no response to that letter.

Shortly thereafter, counsel for Catledges ascertained that Transport Tire was no longer carrying on business, was insolvent, and had between $600,000 and $800,000 worth of judgments pending against it. On December 4, 1981, more than 80 days after service of process, counsel for Catledge had not been able to reach Smookler and had received no communication from the insurance carrier, and he again telephoned Craig.

On May 26, 1982, counsel for Catledges filed an application for default judgment. That application did not contain an address for Transport Tire. On May 28, 1982, a default judgment was entered against Transport Tire in the amount of $107,347, for medical costs, car damages, lost wages, pain and suffering, and loss of consortium. On June 1, 1982, the clerk of the court mailed a notice of entry of default judgment to Transport Tire, addressing the documents to Mr. Smookler at Route 4, Box 162, Jerome, Idaho. That address had been obtained by counsel for Catledge from the Idaho Secretary of State's office, which listed that address for Smookler as the designated agent for the receipt of service of process. The same address was listed in the complaint of Catledge.

The notice of entry of default judgment was returned to the clerk of the court marked "not deliverable as addressed--unable to forward."

The actual location of Smookler's residence had not changed, but apparently the post office, in April of 1980, had instituted a change in the Jerome delivery addresses, and after June 1, 1981, the post office made no deliveries under the old addresses except as to certified mail or in cases where an address correction was requested. Neither the Catledges nor their counsel were aware of the post office's change of delivery addresses, nor were they aware that the notice of default judgment had been returned to the clerk of the court as non-deliverable. As of that time, no change had been made as to the address for Smookler in the office of the Secretary of State.

On December 3, 1982, counsel for Catledge wrote Craig requesting that Craig's principals correspond with counsel relative to the matter of the default judgment. A copy of the default judgment was enclosed. Counsel for Catledge received no response. Counsel for Catledge was concerned as to whether there was a defect in insurance coverage and whether Transport Tire was judgment proof and therefore subpoenaed Craig and Smookler in January 1983, to take their depositions. Both Craig and Smookler canceled their appearance at those depositions. On February 22, 1983, counsel for Catledges called Craig, who advised counsel for the first time that inquiries should be addressed to a representative of National Indemnity. Approximately a week later, counsel for Catledges was contacted by counsel for National Indemnity who advised that there was a potential insurance coverage problem in the case and also requested copies of the files of counsel for Catledges, because the Craig file had been lost. Counsel for Catledges complied by forwarding a copy of his file, but again there was no response. In April 1983, counsel for Catledges sent defense counsel a request that some action be taken. On May 12, 1983, nearly a year after the entry of default, and approximately 20 months after the initiation of suit and service of process, counsel for Catledges received a copy of Transport Tire's motion to set aside the default judgment pursuant to I.R.C.P. 60(b). On September 2, 1983, the court denied the motion to set aside the default judgment.

A party seeking relief from a final judgment under the provisions of I.R.C.P. 60(b) must bring a motion therefor within the applicable time period and assert facts which bring the case within the purview of the rule. See Compton v. Compton, 101 Idaho 328, 612 P.2d 1175, (1980); Hearst Corp. v. Keller, 100 Idaho 10, 592 P.2d 66 (1979). In the instant case Transport Tire brought its motion for relief asserting mistake, inadvertence, surprise, or excusable neglect under the provisions of I.R.C.P. 60(b)(1); upon allegations of fraud, misrepresentation, or other misconduct of an adverse party under I.R.C.P. 60(b)(3); upon assertion that the judgment was void under I.R.C.P. 60(b)(4); upon "any other reason justifying relief from the operation of the judgment," under the provisions of I.R.C.P. 60(b)(6); and also upon allegations that the judgment was the result of a fraud upon the court.

I.R.C.P. 60(b)(1)(3) and (6) are unavailable to Transport Tire. The rule itself specifically limits the time within which a motion based on those grounds must be made to six months. Here Transport Tire's motion was brought well beyond the six month time limitation. The district court is only vested with discretion to set aside a default judgment if the moving party has complied with the guidelines and the time for taking any such action pursuant to I.R.C.P. 60(b) may not be extended by either the parties or the court. I.R.C.P. 6(b).

Transport Tire urges that the above time limitation should be waived as a result of the failure of counsel for Catledge to comply with the I.R.C.P. 55(b)(2) requirement...