Gallegos v. Franklin

• Decision Date: 03 February 1976
• Docket Number: No. 1901,1901
• Citation: 547 P.2d 1160,89 N.M. 118,1976 NMCA 19
• Parties: E. S. GALLEGOS, as Administrator of the Estate of Robert A. Gallegos, Deceased, Plaintiff-Appellee, v. James E. FRANKLIN and Albuquerque General Hospital, Defendants-Appellants.
• Court: Court of Appeals of New Mexico

Page 1160

547 P.2d 1160

89 N.M. 118

E. S. GALLEGOS, as Administrator of the Estate of Robert A Gallegos, Deceased, Plaintiff-Appellee, v. James E. FRANKLIN and Albuquerque General Hospital Defendants-Appellants.

No. 1901.

Court of Appeals of New Mexico.

Feb. 3, 1976.

Rehearing Denied Feb. 17, 1976.

Richard E. Ransom P.A., Smith, Ransom & Gilstrap, Albuquerque, for defendants-appellants.

Kent Winchester, Toulouse, Krehbiel & Cheney, P.A., Albuquerque, for plaintiff-appellee.

OPINION

SUTIN, Judge.

Defendants, Dr. James E. Franklin and Albuquerque General Hospital, appeal from a default judgment in a medical and hospital malpractice claim which awarded plaintiff compensatory damages in the sum of $300,000 and punitive damages in the sum of $200,000. We remand for a hearing on the issue of compensatory and punitive damages.

A. Status of the Record

On January 24, 1974, plaintiff's complaint was filed.

On January 29, 1974, the complaint was served on Dr. Franklin, individually and as director of the defendant hospital.

On February 11, 1974, the law firm of Aldridge, Baron, Pearlman & Campbell, P.A., entered its appearance for defendants. No answer to the complaint was ever served on plaintiff or filed of record.

On April 19, 1974, plaintiff filed interrogatories submitted to the hospital pursuant to Rule 33 of the Rules of Civil Procedure. The certificate of service by mail is dated April 17, 1974. No answer to interrogatories was ever submitted by the hospital to plaintiff or filed of record.

On September 27, 1974, plaintiff filed a motion for an order directing the hospital to answer the interrogatories, and in the alternative for a default judgment. The certificate of service by mail was dated September 26, 1974. This motion was not set for hearing and no order was entered.

On September 30, 1974, plaintiff filed a notice to take the deposition of Dr. Franklin on October 24, 1974, at 1:30 p.m. at the office of plaintiff's attorneys. The certificate of service was dated September 27, 1974. Dr. Franklin was served with a subpoena on October 7, 1974.

On September 30, 1974, plaintiff filed interrogatories submitted to Dr. Franklin. The certificate of service by mail was September 27, 1974. No answer to interrogatories was ever submitted by Dr. Franklin to plaintiff, nor filed of record.

On November 4, 1974, defendants' law firm filed a motion for withdrawal as attorney of record for defendant hospital and attached a letter dated October 25, 1974, directed to Dr. Franklin, individually, and as administrator of the hospital, to immediately obtain the services of another attorney to represent them in this and other cases.

On November 4, 1974, plaintiff noticed defendants' attorney for hearing on November 18, 1974, on motion of withdrawal.

On November 12, 1974, plaintiff filed a motion for entry of default judgment for defendants' failure to answer interrogatories and the late arrival by one hour of Dr. Franklin for deposition, after all parties, including attorneys and court reporter, had left. The certificate of service by mail was dated November 11, 1974.

On November 12, 1974, plaintiff filed a notice to take default judgment on November 18, 1974. The certificate of service by mail was dated November 11, 1974.

On November 13, 1974, plaintiff certified mailing to Dr. Franklin a true copy of notice and motion for entry of default judgment.

On November 18, 1974, Dr. Franklin filed consent to withdrawal of defendants' law firm as attorneys of record subscribed and sworn to on October 18, 1974.

On November 18, 1974, after default judgment was entered, the trial court allowed defendants' law firm to withdraw as attorneys of record.

Defendants were represented by attorneys from the date of entry of appearance on February 11, 1974, to November 18, 1974, the date of the default judgment.

On November 22, 1974, the default judgment was filed based upon 'a hearing on the issues of the default judgment,' held on November 18, 1974, at 8:45 a.m. No record was made of this hearing. The trial court found among other things:

(1) Defendants are in default in their willful failure to make discovery as set by the Rules of Civil Procedure and that judgment should be entered against them for their default.

(2) Defendants breached the standard of care and that the breach showed a gross, wanton and willful negligent departure from the standard of care and plaintiff was entitled to punitive, as well as compensatory damages against each of them.

(3) Defendants willfully failed, refused and neglected to abide by the Rules of Civil Procedure as to discovery, 'and that such was done to present (sic) the full disclosure of the facts surrounding the care and treatment of the deceased by the defendants.'

(4) Plaintiff is entitled to judgment for compensatory damages against the defendants, jointly and severally, in the sum of $300,000, and punitive damages against Dr. Franklin and the hospital in the sum of $200,000 each.

Judgment was entered accordingly.

On November 27, 1974, with present counsel, Dr. Franklin moved to set aside the default judgment to permit defendant to enter a defense because there was good excuse for default and a meritorious defense existed. On the same day, plaintiff responded with affidavits attached thereto.

On December 13, 1974, the hospital moved to set aside the default judgment.

On December 18, 1974, Dr. Franklin moved to set aside the default judgment in part, limited to the question of compensatory and punitive damages, because there was 'no reasonable ex parte showing by plaintiff of the large sum of money determined by the default judgment * * *.'

On December 23, 1974, these three motions were denied.

On December 23, 1974, defendants appealed from the default judgment entered on November 22, 1974, and thereafter proceeded with the perfection of this appeal.

B. Denial of motions to vacate will not be reviewed.

Defendants did not appeal from the order entered on December 23, 1974, denying defendant's motions to set aside the default judgment.

The default judgment entered was a final judgment. The order denying defendants' motion to vacate the default judgment was a final order which affected substantial rights. Both the default judgment and the final order were appealable. Section 21--12--3(a)(1), (3), N.M.S.A.1953 (Repl. Vol. 4, Supp.1973); Starnes v. Starnes, 72 N.M. 142, 381 P.2d 423 (1963); Hoover v. City of Albuquerque, 56 N.M. 525, 245 P.2d 1038 (1952); Singleton v. Sanabrea, 35 N.M. 205, 292 P. 6 (1930); Kerr v. Southwest Flourite Co., et al., 35 N.M. 232, 294 P. 324 (1930); Jordan v. Jordan, 29 N.M. 95, 218 P. 1035 (1923).

Defendants attack both the entry of the default judgment and the order which denied their motions to vacate the default judgment. To support the latter attack, defendants included in the transcript on appeal records of two extensive hearings, one held on November 20, 1974, in a different case, and another which began on December 5, 1974, in the instant case. The evidence taken at these hearings has no bearing on the validity of the default judgment.

The only issue before this Court is whether the default judgment was properly entered.

C. Plaintiff was entitled to default judgment.

(1) Discretion of Court

Rule 55(b) of the Rules of Civil Procedure (§ 21--1--1(55)(b), N.M.S.A.1953 (Repl. Vol. 4)) reads:

Judgment by default may be entered as follows: In all cases the party entitled to a judgment by default shall apply to the court therefor; * * *. If, in order to enable the court to enter judgment or to carry it into effect, it is necessary to take an account or to determine the amount of damages or to establish the truth of any averment by evidence or to make an investigation of any other matter, the court may conduct such hearings or order such references as it deems necessary and proper and shall accord a right of trial by jury to the parties entitled thereto. (Emphasis added)

The rule provides (1) that judgment by default 'may' be entered, and (2) the trial court 'may' conduct such hearings as it deems necessary to determine damages, or the averments of plaintiff's complaint, by evidence.

Whether a default judgment should be granted rests within the sound discretion of the trial court. Diaz v. Southern Drilling Corp., 427 F.2d 1118 (5th Cir. 1970); Weiss Noodle Company v. Aprile, 272 F.2d 923 (6th Cir. 1959); Gomes v. Williams, 420 F.2d 1364 (10th Cir. 1970); 6 Moore's Federal Practice, §§ 55.05 at 55--52 (1975). The same is true on the motion of a defendant to set aside the default judgment. Otis Engineering Corporation v. Grace, 86 N.M. 727, 527 P.2d 322 (1974); Springer Corporation v. Herrera, 85 N.M. 201, 510 P.2d 1072 (1973). However, if the trial court desires to determine compensatory or punitive damages, a hearing on this matter is necessary.

(2) The Philosophy Which Surrounds Default Judgments

H. F. Livermore Corp. v. Aktiengesellschaft Gebruder L., 139 U.S.App.D.C. 256, 432 F.2d 689 (1970) said:

Given this approach, the default judgment must normally be viewed as available only when the adversary process has been halted because of an essentially unresponsive party. In that instance, the diligent party must be protected lest he be faced with interminable delay and continued uncertainty as to his rights. The default judgment remedy serves as such a protection. Furthermore, the possibility of a default is a deterrent to those parties who choose delay as part of their litigative strategy. * * * (432 F.2d at 691).

From January 29, 1974, to November 18, 1974, a period of ten months, the defendants failed to comply with the Rules of Civil Procedure. A default judgment may be entered. See Rules 55(a) and 37(d) of the Rules of Civil Procedure.

In addition, defendants filed a consent to the withdrawal of attorneys after the default judgment was entered. Defendants, having notice of the motion for withdrawal, failed to obtain other...