First Nat. Ins. Co. of America v. Thain, 39801

• Decision Date: 05 December 1962
• Docket Number: No. 3,No. 39801,39801,3
• Parties: FIRST NATIONAL INSURANCE COMPANY OF AMERICA v. W. J. THAIN
• Court: Georgia Court of Appeals

Page 381

129 S.E.2d 381

107 Ga.App. 100

FIRST NATIONAL INSURANCE COMPANY OF AMERICA v. W. J. THAIN.

No. 39801.

Court of Appeals of Georgia, Division No. 3.

Dec. 5, 1962.

Syllabus by the Court

Excusable neglect authorizing the opening of a default, as contemplated by Code § 110-404, as amended, is that neglect which might have been the act of a reasonably prudent person under the same circumstances, particularly when the neglect results from reliance upon the promised action of the opposite party in obtaining what was supposed or thought to be a valid extension of time for the filing of defensive pleadings.

Plaintiff (defendant in error) filed suit against defendant insurance company (plaintiff in error) on August 4, 1961 in Columbia Superior Court seeking to recover on a fire insurance policy as follows: $3,919.29 damage to his house, $352.58 increased living expenses occasioned by the fire loss, $1,066 penalty, and $4,650 attorney's fees because of alleged bad faith in refusing to pay the amount of his loss, a total of $9,987.87. Service was perfected on the defendant August 11, 1961, with a resulting appearance day of September 10, 1961. ¹ On August 31, 1961 plaintiff's attorney procured from the court an order extending the time for filing defensive pleadings 'an additional fifteen days,' and on September 13, 1961 he procured an order further extending the time an additional 45 days.

It appears that there was another insurance policy with another company covering the same loss and that plaintiff was negotiating with both companies for a settlement. A settlement agreement was reached with defendant, pursuant to which drafts were issued and sent to plaintiff's attorney, but there were returned because no settlement had been reached with the other company.

On November 9, 1961, defendant filed a motion to open a default. To that motion plaintiff demurred generally. After the motion was twice amended, the demurrer was renewed, and on December 19, 1961, it was sustained.

The case was tried and resulted in a jury verdict for plaintiff in the amount sued for on the fire damage and increased living expenses and $500 on the penalty. By agreement the court tried the attorney's fees issue and awarded $4,000. Defendant's motion for new trial as amended was overruled.

Exception is to the sustaining of the demurrer to the motion to open the default and to the overruling of the motion for new trial.

Isaac S. Jolles, Augusta, for plaintiff in error.

Randall Evans, Jr., Thomson, for defendant in error.

EBERHARDT, Judge.

1. Both parties agree that the case was in default at the time the motion to reopen was filed, although different reasons are advanced. Defendant's motion to reopen, as amended, alleged 'excusable neglect' on its part, one of the grounds for opening a default under Code Ann. § 110-404. The plaintiff's general demurrer to the motion was sustained, the effect of which was to rule that the motion did not set out any excusable neglect on the defendant's part. Thus, the discretion which the trial judge is said to have by virtue of Code § 110-404, as amended, does not come into play.

What facts will be sufficient to constitute excusable neglect? 'We would that we might deduce from the numerous cases some fixed rule by which to determine questions of this character, but the task is legally impossible * * * [and] 'cannot be determined by any fixed rule, but depends upon the circumstances of the cases.' * * * The wide divergence apparently existing in the authorities is not the result or the evidence of a confusion of the law, but indicates merely the breadth of the field of the discretionary power which is vested in the judges in matters of this kind.' Sherman v. Stephens, 30 Ga.App. 509, 519, 118 S.E. 567, 571. See Deen v. Baxley State Bank, 192 Ga. 300, 303, 15 S.E.2d 194 and citations.

'Punctuality is a virtue of high order, but truth and justice are even more exalted. Hence the demand for punctuality in pleading should not be so strict as to prevent inquiry into truth and to deny justice where the delinquency is reasonably excusable. Therefore, while the law makes requirements of punctuality in pleadings, it also usually makes provision for relieving against the penalties imposed for a lack of this virtue when the interests of truth and justice require it. This may be said to be the general policy of the law.' Bass v. Doughty, 5 Ga.App. 458, 460, 63 S.E. 516, 517.

The general rule seems to be that "Excusable neglect' does not mean gross negligence. It does not mean a willful disregard of the process of the court, but refers to cases where there is a reasonable excuse for failing to answer.' Brucker v. O'Connor, 115 Ga. 95, 96, 41 S.E. 245, 246; Haynes v. Smith, 99 Ga.App. 433, 435, 108 S.E.2d 772 and citations. It has been defined as 'that neglect which might have been the act of a reasonably prudent person under the same circumstances.' Tradesmans Nat. Bank, etc., Co. v. Cummings, 38 N.J.Super. 1, 118 A.2d 80, 82. It 'implies not simply any, but reasonable * * * or excusable neglect as to, or * * * occasioned by, some fact, or something that has or has not been done, of which the complaining party ought to have knowledge, and which, if he had had such knowledge, might have prevented' the default. Skinner v. Terry, 107 N.C. 103, 12 S.E. 118, 119.

This is particularly applicable to a situation in which the neglect results from a reliance upon the action of the opposite party in obtaining what was supposed or thought to be a valid extension of the time within which to file defensive pleadings. Cf. Graves v. Hines, 106 N.C. 323, 11 S.E. 362, 363; Stafford v. McMillan, 25 Wis. 566, 568; Landau Bros v. Towery, 51 Ga.App. 113(3), 179 S.E. 647.

Applying these principles, was there excusable neglect by the defendant here? Two orders were obtained providing for an extension of time to file defensive pleadings; one for 'an additional fifteen days' and another for forty-five days. The first order obviously extended the time for filing the defensive pleadings for fifteen days from the appearance day (September 10), although plaintiff makes a contrary contention. ² The language of the order determines its effect. The second order, if valid, would have granted forty-five more days, making a total of sixty days extension granted by the court orders and placing the last day for filing defensive pleadings on November 9.

While a private agreement between counsel to extend the time to file pleadings is not binding, ³ a valid court order would be. See ...