Edgar v. Armored Carrier Corp., No. 51241

• Court: United States State Supreme Court of Iowa
• Writing for the Court: THOMPSON; All Justices concur, except HAYS
• Citation: 256 Iowa 700,128 N.W.2d 922
• Decision Date: 09 June 1964
• Docket Number: No. 51241
• Parties: Wilma C. EDGAR, Appellant, v. ARMORED CARRIER CORPORATION, a Corporation, Appellee.

Page 922

128 N.W.2d 922 256 Iowa 700 Wilma C. EDGAR, Appellant,
v.
ARMORED CARRIER CORPORATION, a Corporation, Appellee. No. 51241. Supreme Court of Iowa. June 9, 1964.

[256 Iowa 701]

Page 923

J. W. Ritchie, Indianola, for appellant.

[256 Iowa 702] Bannister, Carpenter, Ahlers & Cooney, Des Moines, for appellee.

THOMPSON, Justice.

To err is human; to forgive, or at least to permit correction of mistakes, is sometimes the prerogative of the courts. The mistake, or oversight in the instant case is obvious; the question before us is whether the trial court should be upheld in its ruling which gives the defendant a second chance to appear and defend. On June 6, 1963, the plaintiff filed her action for damages claimed to have arisen through the negligence of the defendant's driver in the operation of a motor vehicle. The driver was also made a party, but he is not involved in the present appeal. Armored Carrier Corporation will hereafter be known as Armored; its insurance carrier, Hartford Accident & Indemnity Company, will be referred to as Hartford.

On June 7th, 1963, original notice of the suit was served on Clarence Cosson, Armored's process agent, in Des Moines. The notice was promptly forwarded to Armored in New York, and by it to Hartford at its New York offices. Affidavits of Hartford officials show the notice was received by that company on June 13, but was lost or mislaid and has never been found. So it received no attention and no appearance was filed for Armored prior to the entering of default on June 27, and a judgment for $135,000.00 on July 1 next. Hartford had the duty to represent and defend for Armored, and Armored relied upon the insurer to do so. These things, and other facts, are shown by affidavits attached to the motion to set aside default. There is no substantial dispute in the facts, although it is possible different inferences may be drawn from them. An affidavit states: '* * * had said notice not been lost, it would have been processed in the ordinary course of business, our Des Moines claim office timely notified and our Des Moines counsel instructed to enter a timely appearance and defend on behalf of Armored Carrier Corporation.'

An affidavit of Dean F. Hodges, a claim supervisor in the Des Moines office of Hartford, was also attached to the motion to set aside default. From it these things appear: On [256 Iowa 703] June 24 Hodges talked with plaintiff's attorney, said he knew the driver had been served, and was told Armored's process agent had also been served. No service date was mentioned other than June 18, and Hodges concluded that was the approximate date of service against which he should guard, and he 'figured our appearance was due by July 8, 1963.' At all times it was his intention to see that a timely appearance was made for both defendants. Ritchie did not tell him service had been made on Armored on June 7, and he thought if an earlier service than June 18 had been had, Ritchie would have told him. Mr. Ritchie's affidavit, filed in connection with plaintiff's resistance to the motion to set aside the judgment, is not materially different, except he said he told Hodges the petition and return of service on Armored was on file in the

Page 924

courthouse; and that when Hodges said they would have until sometime after July 1 to appear he made no reply. Mr. Ritchie, then, knew that Hodges was under a misapprehension as to the date for Armored's appearance. Whether he was under any duty to correct this mistake we do not decide; but it is apparent he knew that Armored intended to appear and defend on the merits.

The motion to set aside default, around which the storm centers in this case, was filed on July 5, 1963. At the same time answer of Armored to the petition of the plaintiff was filed. It denies generally in separate paragraphs the material allegations of the petition, and so asserts a meritorious defense. Resistance to the motion was filed on July 15, and on September 16 next the trial court by written ruling set aside the default and judgment. We granted leave to appeal, under R.C.P. 332, 58 I.C.A.

I. R.C.P. 236 provides: 'On motion and for good cause shown, and upon such terms as the court prescribes, but not ex parte, the court may set aside a default or the judgment thereon, for mistake, inadvertence, surprise, excusable neglect or unavoidable casualty. Such motion must be filed promptly after the discovery of the grounds thereof, but not more than sixty days after entry of the judgment. Its filing shall not affect the finality of the judgment or impair its operation.'

[256 Iowa 704] The problem raised by this appeal is whether the trial court abused its discretion in setting aside the default and judgment. The plaintiff first asserts that 'an insurance carrier, not a party to the action, has no right or authority to have a default judgment against a named defendant,...