Coulsen v. Owens

• Citation: 125 P.3d 1233,2005 OK CIV APP 93
• Decision Date: 21 November 2005
• Docket Number: No. 101,641.,101,641.
• Parties: Kimberly COULSEN, an individual; Mary Kirk and Donnell Richison, Mother and Father of Kimberly Coulsen, Plaintiffs/Appellants, v. Oscar Lee OWENS, an individual, Defendant/Appellee, and Progressive Northern Insurance Company and West American Insurance Company, Garnishees.
• Court: Supreme Court of Oklahoma

125 P.3d 1233

2005 OK CIV APP 93

Kimberly COULSEN, an individual; Mary Kirk and Donnell Richison, Mother and Father of Kimberly Coulsen, Plaintiffs/Appellants, v. Oscar Lee OWENS, an individual, Defendant/Appellee, and Progressive Northern Insurance Company and West American Insurance Company, Garnishees.

No. 101,641.

Court of Civil Appeals of Oklahoma, Division 4.

September 6, 2005.

Certiorari Denied November 21, 2005.

Released for Publication by Order of the Court of Civil Appeals of Oklahoma, Division No. 4.

Appeal from the District Court of Tulsa County, Oklahoma; Honorable Jefferson D. Sellers, Trial Judge.

REVERSED.

William R. McMahon, Jr., Tulsa, OK, for Appellants.

Bob L. Latham, Roni S. Rierson, Brian J. Goree, Latham, Stall, Wagner, Steele & Lehman, P.C., Tulsa, OK, for Appellee.

Opinion by JERRY L. GOODMAN, Presiding Judge.

¶ 1 Plaintiffs Kimberly Coulsen and her parents, Mary and Donnell Richison, appeal the trial court's December 13, 2004, order vacating its earlier judgment, filed March 11, 2004, which had been obtained by default against Defendant Oscar Lee Owens when Defendant's attorney failed to timely file an answer to Plaintiffs' petition. Plaintiffs sought to collect their judgment from Defendant's insurer, Garnishees Progressive Northern Insurance Company and West American Insurance Company. Garnishees filed a motion to vacate the default judgment. The trial court conducted an evidentiary hearing and granted the motion to vacate. Plaintiffs appeal. Based upon our review of the facts and applicable law, we reverse.

FACTS

¶ 2 Plaintiff Coulsen, an adult, was a passenger on a motorcycle operated by Defendant when the latter lost control and crashed, ejecting Plaintiff, who suffered extensive injuries, including a broken neck, broken right leg, and facial injuries. Plaintiffs Richison, Coulsen's parents, incurred medical expenses and loss of use of their daughter's services. Plaintiffs filed suit February 5, 2004. Their petition, set out three "causes of action."¹ Their petition did not generically request damages in excess of $10,000.00 as required by 12 O.S.2001, § 2008(A)(2), but rather specifically requested damages of $375,000.00, plus costs and interest. Service of process was served on February 10, 2004, by certified mail.²

¶ 3 According to the record, Defendant Owens timely sent the summons and petition to his insurance company which, in turn, forwarded it to its local counsel in Tulsa. Local counsel testified that he reviewed the petition and discerned flaws therein. He therefore directed an associate in his office to prepare a motion to dismiss to file in the matter instead of an answer. However, local counsel did not timely file either an answer or the motion to dismiss. Instead, local counsel believed the associate had filed the pleading, while the associate believed local counsel had filed the pleading. Local counsel did not review the file until April 22, 2004, when he discovered that no answer or other responsive pleading had been filed. Although local counsel stated that during this time he was in the process of expanding his office space, he admitted that this expansion was essentially completed before the summons and petition were found laying on his desk.

¶ 4 Thus, at the end of the twenty-day answer period set out in 12 O.S.2001, § 2012(A)(1)(a), Defendant had not filed any responsive pleading or answer. On March 11, 2004, either 30 or 31 days after service,³ Plaintiffs appeared before the trial court, gave testimony, and were awarded the sum of $375,000.00 against Defendant. There is nothing in this record to suggest Plaintiffs gave notice to Defendant that they intended to take a default judgment.

¶ 5 Following judgment, Plaintiffs attempted to collect the judgment by filing a garnishment action against Defendant's insurance carrier. The insurance carrier contacted local counsel, who then discovered the responsive pleading on his desk. Despite the fact that no answer had been timely filed and that a default judgment had been taken against Defendant, local counsel did not immediately file an answer. Instead, local counsel called Plaintiffs' counsel. Local counsel asked Plaintiffs to voluntarily vacate the judgment. Plaintiffs asked local counsel for copies of all insurance policies which might afford coverage. Plaintiffs were provided that information, but for reasons unclear from the record, did not voluntarily vacate the judgment.

¶ 6 It was not until July 1, 2004, more than three months after the default judgment was granted, that local counsel filed a petition to vacate the March 11 judgment. The petition set out the following grounds for vacation, pursuant to 12 O.S.2001, § 1031:

The district court shall have power to vacate or modify its own judgments or orders within the times prescribed hereafter:

. . .

3. For mistake, neglect, or omission of the clerk or irregularity in obtaining a judgment or order;

. . .

4. For fraud, practiced by the successful party, in obtaining a judgment or order;

. . .

7. For unavoidable casualty or misfortune, preventing the party from prosecuting or defending;

¶ 7 Following an evidentiary hearing on September 23, 2004, the trial court, after reviewing American Bank of Commerce v. Chavis, 1982 OK 66, 651 P.2d 1321, found that an unavoidable casualty occurred; that the matter should be resolved on its merits; and that it would be unfair not to vacate the judgment.⁴ The trial court then vacated the default judgment, a decision which was memorialized in an order filed December 13, 2004. Plaintiffs appeals.

STANDARD OF REVIEW

¶ 8 The standard of review of a trial court's ruling either vacating or refusing to vacate a judgment is whether the trial court abused its discretion. In Hassell v. Texaco, Inc., 1962 OK 136, ¶ 14, 372 P.2d 233, 235, this court held:

An application to vacate a judgment is addressed to the sound legal discretion of the trial court, and the order made thereon will not be disturbed on appeal unless it clearly appears that the trial court abused its discretion.

¶ 9 Considerations involved in review of the exercise of discretion on motions to vacate default judgments include: 1) default judgments are not favored; 2) default judgments are distinguishable from cases where parties have had the opportunity to be heard on the merits; 3) judicial discretion should be exercised so as to promote the ends of justice; 4) a stronger showing of abuse of discretion is required where a default judgment has been vacated than in cases where vacation was denied; 5) the potential for substantial hardship resulting from the decision whether to vacate. Ferguson Enterprises, Inc. v. H. Webb Enterprises, Inc., 2000 OK 78, ¶ 5, 13 P.3d 480, 481, citing Midkiff v. Luckey, 1966 OK 49, 412 P.2d 175; Burroughs v. Bob Martin Corp., 1975 OK 80, 536 P.2d 339; Hamburger v. Fry, 1958 OK 287, 338 P.2d 1088; Latson v. Eaton, 1957 OK 105, 311 P.2d 231.

ANALYSIS

¶ 10 The issue before this court on appeal is whether the trial court abused its discretion when it vacated its earlier default judgment pursuant to its finding that an unavoidable casualty occurred pursuant to 12 O.S.2001, § 1031(7). In support of their respective positions, the parties raise several issues in their appellate briefs, which we address in turn.

Violation of 12 O.S.2001, § 2008(A)(2)

¶ 11 We find no merit to the argument advanced by Defendant that service of process upon Defendant was defective because Plaintiffs' petition did not generically request damages "in excess of $10,000," but instead chose to plead for specific damages in the amount of $375,000.00. This violation of § 2008(A)(2) is irrelevant to the issue of whether or not proper service of process was obtained. While it may be relevant to the issue of whether the petition itself is defective, it is not relevant to the issue of whether service of that petition is defective. We further note that § 2008(F) requires all pleadings be construed "as to do substantial justice." While Plaintiffs' counsel should abide by the pleading code, a violation of this section is not sufficient grounds to warrant vacation of an otherwise properly served petition.

¶ 12 Closely related to this issue is Defendant's argument that a default judgment is void on its face if it purports to grant judgment for unverified, unliquidated future damages, such as future pain and suffering. Reed v. Scott, 1991 OK 113, 820 P.2d 445. We reject this argument, however, because the trial court made a specific finding of fact during the hearing that Plaintiff did not seek future, unliquidated damages when she obtained her judgment, but rather sought actual damages arising from her injuries.

¶ 13 Likewise, we find no merit to the Defendant's argument that Plaintiff Coulsen was an adult, and therefore her parents had no theory of recovery upon which they could pursue a claim against Defendant. Again, this issue goes to the merits of one of Plaintiffs' theories of recovery, but has no relevance to the sufficiency of service of that petition.⁵

¶ 14 We further find no merit to the argument that, because the certified mail delivery was not designated "restricted," service is somehow invalid. Under these facts, because there is no dispute that Defendant received the summons and petition, forwarded it to his insurance company which, in turn, gave it to local counsel, we hold service is valid. Defendant and his counsel were on notice of the pending lawsuit.

¶ 15 Both parties and the trial court rely on American Bank of Commerce v. Chavis, 1982 OK 66, 651 P.2d 1321 as authority for their respective positions. The trial court recessed the evidentiary hearing in order to review the holding in Chavis, and specifically cited Chavis in support of its decision to vacate the default judgment. We hold, under these facts, such reliance was an abuse of discretion.

¶ 16 In Chavis,

Summons was served on Chavis on June 20, 1978, specifying an answer...