Dealers Warehouse Co. v. Wahl and Associates, 2--56163

• Court: United States State Supreme Court of Iowa
• Writing for the Court: Heard by MOORE; McCORMICK
• Citation: 216 N.W.2d 391
• Parties: DEALERS WAREHOUSE CO., Appellee, v. WAHL & ASSOCIATES et al., Appellees, and Frank Moothart, Appellant.
• Docket Number: No. 2--56163,2--56163
• Decision Date: 27 March 1974

Page 391

216 N.W.2d 391 DEALERS WAREHOUSE CO., Appellee,
v.
WAHL & ASSOCIATES et al., Appellees,
and Frank Moothart, Appellant. No. 2--56163. Supreme Court of Iowa. March 27, 1974.
Rehearing Denied April 18, 1974.

Page 392

Thoma, Schoenthal, Davis, Hockenberg & Wine, Des Moines, for appellant.

Korf, Diehl, Clayton & Cleverley, Newton, for appellee, Dealers Warehouse Co.

Heard by MOORE, C.J., and RAWLINGS, REES, HARRIS and McCORMICK, JJ.

McCORMICK, Justice.

Defendant Frank Moothart appeals trial court's order overruling his motion to set aside a default and judgment thereon. We affirm.

On March 6, 1968, plaintiff Dealers Warehouse Co. filed its petition against defendants alleging they owed plaintiff $51,416.54 with interest at seven percent from February 29, 1968, on a promissory note executed to plaintiff in their behalf by defendant H. H. Bud Wahl. Moothart is a California resident. Plaintiff attempted to serve him with original notice by serving Wahl as his agent and by serving him through the procedure permitted under the long-arm statute, § 617.3, The Code.

Moothart appeared specially to attack service. He was first represented by the Iowa City law firm of Meardon, Sueppel & Chapman and later by the Des Moines firm of Duncan, Jones, Riley & Davis. Through various discovery skirmishes relating to the special appearance counsel for Moothart entered stipulations removing the case from the dismissal provisions of rule 215.1, Rules of Civil Procedure. After hearing, trial court on August 3, 1972, overruled the special appearance on two grounds, one on the merits and the other on a finding counsel's agreement to continuances and filing of a motion for protective order relating to discovery constituted a general appearance. Moothart does not challenge that ruling in this appeal.

No answer was filed by Moothart subsequent to the order overruling his special appearance. On October 17, 1972, his counsel wrote plaintiff's counsel in response to a request that an answer be filed. Moothart's counsel attributed the delay to difficulty in communicating with Moothart and Moothart's failure to pay fees, reporting

Page 393

that a certified letter had been sent Moothart on October 11 notifying him failure to communicate and pay the statement for services by October 31 would cause counsel to withdraw.

On October 27, 1972, Moothart's attorneys filed application to withdraw, listing communication difficulty as a reason. Attached was a copy of a notice sent by certified mail to Moothart informing him of hearing on the application at 9:00 a.m. November 6, 1972.

An order was entered November 7, 1972, authorizing withdrawal of the Duncan Firm. Moothart's default in the action was entered the same date (Holliday, J.). On November 15, 1972, judgment was entered by the court on the default for plaintiff against Moothart for $71,413.45 with interest at seven percent from November 10, 1972, costs and statutory attorney fees.

On November 29, 1972, Moothart filed his motion to set aside the default and judgment entry, through the Duncan law firm, alleging he sought to communicate with counsel prior to entry of default but did not make contact until later. He also asserted he had a good defense based on his denial H. H. Bud Wahl signed the note as his agent.

Moothart later filed an affidavit in support of the motion in which he asserted he learned September 29, 1972, his special appearance had been overruled; he was away from his office on business from October 30 through November 2, 1972; he picked up the notice of his attorneys' withdrawal application at the post office on the latter date but was so occupied with business matters in and out of his city of residence from then until November 16 he did nothing about it; he picked up a certified letter on that date from Iowa counsel enclosing a copy of the withdrawal order and mailed it the next day to his California counsel requesting they handle the matter for him; he was notified on November 21, 1972, a default judgment had been entered against him; on November 27, 1972, he rehired his Iowa counsel. Moothart also asserted it would be unjust to permit his default to stand in view of trial set for January 5, 1973, against his codefendants, against whom no default was taken despite their failure to answer until after November 15, 1972.

Moothart's California lawyer also gave an affidavit, confirming his firm's role in the events of November 20 through November 27, 1972. That firm received Moothart's November 17 letter and enclosure on November 20, called Glenn Smith of the Duncan firm, learned of the default and judgment, and on November 21 obtained Moothart's permission to negotiate with the Duncan firm. By November 27 the Duncan firm was rehired to represent Moothart in Iowa.

Trial court (Perkins, J.) held Moothart failed to show good cause for setting aside the default...