Goglia v. Bodnar

• Court: Arizona Court of Appeals
• Writing for the Court: SHELLEY; Scott; Dr. Bodnar again moved to dismiss, reconsider, and vacate the previously entered default judgment, adding as grounds for relief the contention that the amended complaint had opened up the default. Goglia filed a response and the motio
• Citation: Goglia v. Bodnar, 156 Ariz. 12, 749 P.2d 921 (Ariz. App. 1987)
• Decision Date: 01 September 1987
• Docket Number: No. 1,CA-CIV,1
• Parties: John GOGLIA, Plaintiff-Appellee, v. Thomas BODNAR, M.D., Defendant-Appellant. 9170.

Page 921

749 P.2d 921

156 Ariz. 12

John GOGLIA, Plaintiff-Appellee, v. Thomas BODNAR, M.D., Defendant-Appellant.

No. 1 CA-CIV 9170.

Court of Appeals of Arizona Division 1, Department C.

Sept. 1, 1987.

Reconsideration Denied Oct. 23, 1987.

Review Denied Feb. 23, 1988.

[156 Ariz. 14] William J. Monahan, P.C. by William J. Monahan, Harris & Peacock by Donald W. Harris and Paul G. Ulrich, P.C. by Paul G. Ulrich, Phoenix, for plaintiff-appellee.

Teilborg, Sanders & Parks, P.C. by S. Paul Forrest, James W. Kaucher, Phoenix, for defendant-appellant.

OPINION

SHELLEY, Presiding Judge.

This is an appeal from several superior court orders denying a defendant doctor's motions to vacate a default judgment in a medical malpractice case. It is necessary to set forth the somewhat involved procedural history of this litigation in order to properly address the issues raised on appeal.

PROCEDURAL HISTORY

John Goglia incurred serious leg fractures and other related injuries as the result of a 1982 motorcycle accident. Goglia was taken to Boswell Memorial Hospital and treated for his injuries by an emergency room physician who consulted with Thomas Bodnar, M.D., an orthopedic surgeon.

Goglia filed a complaint against Sun Health Corporation, Walter O. Boswell Memorial Hospital, Inc., dba Boswell Memorial Hospital (Boswell), Dr. Bodnar and various fictitious corporations. The complaint alleged in part that Dr. Bodnar had failed to treat Goglia's 1982 injuries in a timely fashion and that as a result Goglia's leg became severely infected, resulting in permanent injuries.

Dr. Bodnar did not file a timely answer to Goglia's complaint. An affidavit on default and entry of default as to Bodnar were filed on January 10, 1985. A notice of default damages hearing was filed and an evidentiary hearing was held before a court commissioner. The commissioner entered a default judgment for $702,000.00 against Bodnar on March 11, 1985. Sun Health Corporation and Boswell were later dismissed from the litigation pursuant to stipulation.

Dr. Bodnar filed an answer to the complaint on March 5, 1985 and on March 8, 1985 he filed a motion to set aside default or default judgment. Attached to the motion was an affidavit of Dr. Bodnar explaining his actions as follows.

After receiving the summons and complaint on December 11, 1984, Dr. Bodnar sent them to Cigna Health Plan's legal department because he believed that Goglia was covered by Cigna and that Cigna would afford Bodnar coverage. Shortly after January 2, 1985, Cigna advised Bodnar that Goglia was not a Cigna patient and returned the complaint to Bodnar. Dr. Bodnar incorrectly believed that as a result of this delay he was in default and that nothing could be done to relieve him of the default. Therefore, on or about January 11, 1985, he "undertook to write a letter" to Goglia's attorney explaining his involvement in the case, advising that he had little to do with Goglia's care, and requesting relief. However, during an informal conversation with his corporate attorney, Bodnar was advised not to send such a letter and therefore did not do so.

Dr. Bodnar's affidavit states that between January 11, 1985 and March 1, 1985, he attempted to obtain medical records, determine his involvement in the case, and speak with the emergency room physician. On March 1, 1985, he took the summons and complaint along with other materials to Mutual Insurance Company of Arizona (MICA), his private medical malpractice liability insurance carrier.

The affidavit of Stephen Paul Forrest, Esq., one of Dr. Bodnar's litigation attorneys, was also attached to the motion to set aside the default. Mr. Forrest's affidavit states that MICA was first notified of any potential involvement of Dr. Bodnar in a lawsuit on March 1, 1985. Mr. Forrest asserted that he was advised to undertake the defense of Dr. Bodnar on March 4, 1985. The affidavit does not state by whom Mr. Forrest was advised to undertake the case.

On March 18, 1985, MICA filed a "Motion to Intervene for Limited Purpose" through separate counsel. MICA's motion sought "leave to intervene not as a named party but for the limited purpose of providing additional information in support of the motion to set aside default or alternatively default judgment filed on behalf of its insured, Thomas Bodnar, M.D." The memorandum of points and authorities supporting MICA's motion asserted that Dr. Bodnar had admitted his failure to provide MICA with notice of the summons and complaint until approximately 2 1/2 months after he had been served. MICA alleges that his untimely notice violated a provision of his insurance policy. MICA's memorandum thereafter asserted,

If a default which has been entered against Dr. Bodnar is not set aside, Dr. Bodnar will be without insurance coverage from MICA because he failed to comply with the notice provision to the substantial prejudice of MICA. On the other hand, if this Court sets aside the default thus relieving MICA from the prejudice resulting from Dr. Bodnar's failure to provide notice, MICA intends to provide coverage pursuant to the terms and conditions of his policy. MICA joins in the motion to set aside default or alternatively default judgment, filed March 8, 1985, and asks the Court to grant the relief request by Dr. Bodnar so that this matter may proceed on its merits. (Emphasis added.)

MICA's motion to intervene was opposed by Goglia. During the hearing on that motion, MICA attempted to limit its involvement in the lawsuit and expressed concern that if it became a named party, and if the default were set aside, the issue of insurance would reach the jury. Judge Linda K. Scott ruled that the motion to intervene would be granted and that MICA would be named as an intervenor. Judge Scott held that because Dr. Bodnar was already represented, MICA would not be permitted to participate on his behalf. She stated that it would be premature to determine if MICA would remain as a party should the default be set aside and noted that MICA might later file a motion for dismissal or stipulation removing it as a party.

Dr. Bodnar's motion to set aside the default judgment was heard on April 22, 1985. The written motion was based on Rule 60(c)(1), Arizona Rules of Civil Procedure, and urged that Dr. Bodnar's actions constituted excusable neglect. During the hearing Dr. Bodnar also cited Rule 60(c)(6) as a basis for relief from the default judgment. In so doing he argued that the default must be set aside in order to protect MICA's interests. MICA's counsel did not participate in the argument.

Judge Scott found that Dr. Bodnar had presented evidence of a meritorious defense and had made a prompt application for relief, but that his failure to take any action with respect to the complaint between January 2, 1985 and March 1, 1985 was inexcusable. Accordingly, the trial court denied Dr. Bodnar's motion to set aside default judgment on May 14, 1985 by minute entry order. The order states that Dr. Bodnar's motion was based only on Rule 60(c)(1) and that the court considered only this portion of the rule.

Dr. Bodnar filed a notice of appeal from the formal written order which had been entered on June 4, 1985. This court dismissed the appeal on December 16, 1985 on grounds that the order was not appealable because parties remained in the litigation and the judgment did not contain Rule 54(b) findings.

During the pendency of the appeal, Goglia filed an amended complaint naming Dr. Bodnar, Maricopa Orthopedic Associates, P.C., (Maricopa), his professional corporation, and Cigna as defendants. The complaint does not purport to state a claim against Dr. Bodnar as such. Paragraph 11 alleges:

"That on or about March 8, 1985, this honorable Court granted plaintiff, after a damages hearing, a $702,000.00 default judgment as to defendant Bodnar on the original complaint filed herein. That said default is a judicial admission of medical malpractice alleged in the original complaint and realleged herein for all acts the defendant Maricopa Orthopaedics [sic] Associates, P.C."

The prayer of the complaint seeks judgment against all defendants except Thomas Bodnar, M.D. for the reasons stated in Paragraph 11.

Dr. Bodnar and Maricopa, both appearing through the same attorney, filed an answer to Goglia's amended complaint. On behalf of both Dr. Bodnar and Maricopa the attorney thereafter noticed and participated in several depositions.

Dr. Bodnar again moved to dismiss, reconsider, and vacate the previously entered default judgment, adding as grounds for relief the contention that the amended complaint had opened up the default. Goglia filed a response and the motion was argued to Judge Joseph D. Howe. However, Judge Howe did not rule on the motion because he concluded that the then pending appeal had ended the superior court's jurisdiction over these issues.

Following this court's dismissal of his appeal, Dr. Bodnar filed a "Motion to Vacate Default Judgment and Request for Setting of Oral Argument on Previous Motions." This motion asked the superior court to: (1) reconsider its decision refusing to set aside the default judgment entered against him in March 1985 (referring to the formal order entered by Judge Scott on June 4, 1985); (2) vacate the default judgment on the grounds set forth in his previous motion (which had not been ruled on by Judge Howe because of the pending appeal); (3) rule that Goglia had waived the default by allowing Dr. Bodnar to defend on the merits; (4) vacate the default judgment because it was interlineated; and (5) vacate the default judgment because, viewing the case in its entirety, allowing the default to stand would be unjust.

MICA filed a one-page "Joinder in Dr. Bodnar's Motion to Set Aside Default Judgment." The joinder did not assert any independent argument or interest on MICA's behalf. Rather, it adopted and incorporated by reference the memoranda and exhibits filed by Dr. Bodnar in support of his...