Daniels v. Chaffee

• Decision Date: 17 July 1981
• Docket Number: No. 51019,51019
• Citation: 630 P.2d 1090,230 Kan. 32
• Parties: Daisy DANIELS and Patricia L. Filancia, Plaintiffs-Appellants, v. Jerry CHAFFEE d/b/a Circle "C" Training Center, Defendant-Appellee.
• Court: Kansas Supreme Court

Page 1090

630 P.2d 1090

230 Kan. 32

Daisy DANIELS and Patricia L. Filancia, Plaintiffs-Appellants, v. Jerry CHAFFEE d/b/a Circle "C" Training Center, Defendant-Appellee.

No. 51019.

Supreme Court of Kansas.

July 17, 1981.

Syllabus by the Court

1. Where a district court enters a judgment without giving notice to the parties or counsel as required by K.S.A. 60-258 and Rule No. 134, a valid judgment is entered which is subject, however, to being set aside when attacked by post-judgment motions and proceedings. The time for filing post-judgment motions or taking an appeal from a final judgment entered without the required notice commences to run when there has been a compliance with K.S.A. 60-258 and Rule No. 134.

2. Under the provisions of K.S.A. 60-206(c ) and K.S.A. 60-260(b ), a district court retains a broad discretionary power to relieve a party from a final judgment for any reason justifying relief from the operation of the judgment, if such power is exercised prior to the time for docketing an appeal from the judgment in the appellate court.

3. Under the circumstances fully set forth in the opinion, the district court had jurisdiction to set aside an order overruling a motion to set aside a default judgment filed pursuant to K.S.A. 60-260(b ) and to grant a new trial on its own initiative four days after its original order was entered.

Robert D. Hecht, of Scott, Quinlan & Hecht, Topeka, argued the cause and was on the brief for plaintiffs-appellants.

Donald R. Hoffman, of Humpage, Berger & Hoffman, Topeka, argued the cause and was on the brief for defendant-appellee.

PRAGER, Justice:

This is an appeal from an order of the district court setting aside a default judgment. The plaintiffs-appellants are Daisy Daniels and Patricia L. Filancia. The defendant-appellee is Jerry Chaffee d/b/a Circle "C" Training Center. The factual circumstances are fully set out in the opinion of the Court of Appeals in Daniels v. Chaffee, 5 Kan.App.2d 552, 620 P.2d 348 (1980). The issues raised are procedural in nature. Hence, a chronological statement of the proceedings in the case is necessary.

This action was filed in Shawnee County District Court on August 4, 1976. Plaintiffs alleged, in substance, that they were entitled to actual and punitive damages because of the unlawful conversion by defendant of four horses belonging to the plaintiffs which had been boarded at the defendant's place of business. At the time the petition was served on defendant, there was also served a notice to take the deposition of the defendant with a subpoena for defendant to appear at the office of plaintiffs' attorney on September 11, 1976. Apparently assuming that no action on his part was necessary until his deposition had been taken, defendant failed to file a response to the petition within the statutory period. On August 30, 1976, on motion of plaintiffs and after a brief evidentiary hearing, the district court awarded plaintiffs a default judgment in the amount of $7,500 compensatory damages for the value of four horses and $7,500 punitive damages.

On September 11, 1976, the day of the scheduled deposition, defendant Chaffee appeared at the office of plaintiffs' attorney to have his deposition taken. The attorney told defendant that the deposition was not necessary because defendant had not responded to the petition. Defendant was advised to obtain counsel. The defendant was not advised by plaintiffs' counsel that default judgment had been obtained. Defendant then obtained counsel who, on September 22, 1976, filed a motion to set aside the default judgment pursuant to K.S.A. 60-255(b ) and 60-260(b ). A hearing was held on the motion on December 10, 1976. Counsel for the defendant argued that defendant had been misled because he had been served with the subpoena duces tecum along with the notice to take his deposition. He claimed the failure to file a response to the petition was due to mistake and inadvertence. The trial court took the motion under advisement. Four months later on April 4, 1977, the court denied the motion to vacate the default judgment. In its journal entry, the court stated that it gave consideration to the evidence presented but noted that the defendant had failed to show that he had a meritorious defense to the action. This journal entry was filed without notice to counsel and copies of the order were never mailed to counsel for plaintiffs or defendant. Defendant's counsel assumed that the matter was still under advisement and took no action for nearly six months.

On October 4, 1977, shortly after receiving notice of the court's journal entry, the defendant filed a motion for rehearing. On October 28, 1977, an amended motion was filed giving additional reasons for the motion. Attached to the motion was an affidavit setting forth facts which would constitute a bona fide defense to plaintiffs' action. Five months later, on March 31, 1978, the district court entered a memorandum decision overruling the amended motion of defendant for rehearing. The motion was denied but, in order to avoid an injustice from the lack of notice to counsel at the time the April 4, 1977, order was entered, the court vacated the original order as of March 31, 1978, in order to allow the defendant a timely appeal. Four days later on April 4, 1978, the district judge had a change of heart. The court on its own motion set aside the order filed March 31, 1978, which had overruled the motion of defendant for rehearing, and vacated the default judgment of August 30, 1976. In setting aside the default judgment and its order overruling the motion of defendant for rehearing, the court gave the following reasons for its decisions:

(1) Defendant was reasonably prompt when he filed his original motion to vacate after the default judgment;

(2) It was not fair to penalize the defendant for the failure of his attorney to allege a meritorious defense in connection with his original motion to vacate;

(3) The six-month delay between the time of the decision to overrule the original motion to vacate and the filing of the amended motion for reconsideration was not due to the fault of the defendant;

(4) The defendant was not guilty of inexcusable neglect or reckless indifference; and

(5) In the amended motion for reconsideration a meritorious defense was alleged.

On April 17, 1978, the plaintiffs filed a motion for reconsideration of the court's order of April 4, 1978. Seven months later on November 29, 1978, the plaintiffs' motion for reconsideration was overruled. On December 26, 1978, the plaintiffs filed a motion to determine a point of law in advance of trial, contending that the trial court was without jurisdiction to set aside or vacate the default judgment because no timely appeal was taken from the order of April 4, 1977, and no statutory procedure existed for a motion for rehearing. This motion was overruled. On March 12, 1979, after further unexplained delays, the case was finally brought to trial. A six-member jury entered a special verdict finding that the defendant sold three of the plaintiffs' four horses and that the sale was unauthorized. The jury found the total value of the horses sold to be $2,450 and that punitive damages should be assessed against the defendant in the amount of $2,000. This award of damages was $10,550 less than the damages previously awarded by the trial court in the default judgment. The journal entry was filed on April 3, 1979. The plaintiffs then appealed to the Court of Appeals, raising as the sole issue on appeal that the district court erred in setting aside and vacating the default judgment of August 30, 1976.

At the hearing before the Court of Appeals, the plaintiffs argued, in substance, that after the entry of the order of April 4, 1977, denying the defendant's motion to vacate and set aside the default judgment entered on August 30, 1976, the defendant should have filed a timely notice of appeal within 30 days from that date even though his counsel had not been notified of the filing of the journal entry. It was contended that the trial court's failure to notify counsel of its April 4, 1977, order until six months later did not invalidate the ruling of the court or extend the appeal time. In response, the defendant contended that the trial court's failure to notify counsel promptly of the order of April 4, 1977, effectively eliminated his opportunity to take an appeal within the statutory 30 days. The Court of Appeals reversed with directions to the trial court to reinstate the default judgment as originally entered on August 30, 1976. In reaching that conclusion, the Court of Appeals reasoned as follows:

"We find that the order denying defendant's motion to set aside the default judgment was a final order. The validity of this judgment is not affected by failure to serve plaintiffs and defendant with a copy thereof as required by K.S.A. 60-258 and Supreme Court Rule No. 134, 225 Kan. lxiv. See Neagle v. Brooks, 203 Kan. 323, 454 P.2d 544 (1969). Although we are cognizant that present Supreme Court Rule No. 134, 225 Kan. lxiv, the successor to Supreme Court Rule No. 115, 214 Kan. xxxvii, discussed in Neagle v. Brooks, deleted any reference to the consequences of failure to mail notice to the parties, this revision does not affect our decision on this issue.

"Therefore, we hold that the trial court was without jurisdiction to entertain defendant's motion for rehearing on the order refusing to set aside the default judgment. All subsequent acts of the trial court are accordingly a nullity. Defendant's proper remedy upon the court's refusal to set aside the judgment was to appeal which he failed to do within the statutory thirty days from the date the journal entry was filed. K.S.A. 60-2103. In view of our decision on this point, we need not consider plaintiffs' remaining issue." 5 Kan.App.2d at 556-57, 620 P.2d 348.

The Supreme Court granted defendant's petition for review. The issue...