H & W Transfer and Cartage Service, Inc. v. Griffin

• Decision Date: 08 July 1987
• Docket Number: No. 57742,57742
• Citation: 511 So.2d 895
• Court: Mississippi Supreme Court
• Parties: H & W TRANSFER AND CARTAGE SERVICE, INC. v. Millie GRIFFIN.

Page 895

511 So.2d 895

H & W TRANSFER AND CARTAGE SERVICE, INC. v. Millie GRIFFIN.

No. 57742.

Supreme Court of Mississippi.

July 8, 1987.

Joseph W. McDowell, McCoy, Wilkins, Noblin & Stephens, Jackson, for appellant.

Crymes G. Pittman, Robert G. Germany, Cothren & Pittman, Jackson, for appellee.

Before HAWKINS, P.J., and ROBERTSON and ANDERSON, JJ.

ROBERTSON, Justice, for the court:

I.

This is another of a seemingly increasing lot of cases where the plaintiff and her attorney dotted all of the "i's" and crossed all the "t's" only to find the defendant wholly asleep at the switch with the end result of a substantial default judgment for the plaintiff. Because the trial court committed no error of law nor abuse of discretion, we have no choice but to affirm.

Our oft stated admonition that judgment by default be regarded an extreme sanction and our great preference for disposition of cases via trial on the merits to the contrary notwithstanding, defendants simply must take seriously their duty to answer. When, as here, they fail without good reason, they may expect no relief.

II.

This civil action was commenced on November 18, 1985, when Millie Griffin, Plaintiff below and Appellee here, filed her complaint in the Circuit Court of the First Judicial District of Hinds County, Mississippi. Griffin named as Defendant H & W Transfer and Cartage Service, Inc. ("H & W"), a Georgia corporation, Appellant here. Griffin charged further that on May 20, 1985, she was operating her motor vehicle in a westerly direction on Interstate Highway 20 in Hinds County, Mississippi. At that time, she alleges that a vehicle driven by Douglas V. Weaver rearended her as a result of which she sustained serious personal injuries. Griffin charges that Weaver was negligent in the premises and that he was at all time acting within the course and scope of his employment with H & W Transfer and Cartage. Finally, Griffin claimed that, as a direct and proximate result of Weaver's negligence, she sustained damages including medical and hospital expenses, both past and future, pain and suffering, and permanent injuries. She demanded $120,000.00 in damages.

Griffin caused H & W to be served with process by substituted service upon the Secretary of State. A copy of the summons and complaint were mailed to H & W which acknowledged receipt thereof on November 23, 1985. Immediately thereafter, H & W delivered copies of the suit papers to its insurance agent who in turn delivered same to Midland Insurance Company, liability insurance carrier for H & W. H & W took no further action and heard nothing further regarding the suit until April 17, 1986, when Jackson counsel contacted H & W's president and advised that his law firm had been retained by Midland to file the necessary pleadings to attempt to set aside a default judgment.

In the meanwhile, a claims representative of Midland Insurance Company had been engaged in settlement discussions with Plaintiff Griffin's Jackson, Mississippi, counsel. During this time it is apparent that Griffin agreed that, at least for the time being, H & W need not file an answer. On February 4, 1986--some 78 days after the suit had been filed--Griffin's counsel addressed a letter to Midland advising that it should retain counsel to defend the suit and answer on or before February 14, 1986.

It appears without contradiction that Midland's claims representative received this advice letter within a day or two of its date. He consulted his company's book of approved attorneys and selected Joseph L. McCoy of Jackson, Mississippi, to defend the suit. On February 7, 1986, Midland mailed to McCoy a copy of the suit papers. The papers were incorrectly addressed, however, and McCoy never received them.

Meanwhile, on February 20, 1986, having heard nothing in response to his February 4, 1986, demand that Midland employ counsel to defend the suit, and the February 14, 1986, deadline having come and gone, Griffin's counsel applied to the clerk of the court for entry of default which was accomplished. See Rule 55(a), Miss.R.Civ.P. Griffin followed up on March 6, 1986, with a non-jury hearing on damages, see Guaranty National Insurance Co. v. Pittman, 501 So.2d 377, 387 (Miss.1987); Dungan v. Dick Moore, Inc., 463 So.2d 1094, 1097-98 n. 2 (Miss.1985) resulting in entry of a final judgment in favor of Griffin and against H & W in the sum of $85,000.00.

On May 2, 1986, H & W appeared through counsel and moved, pursuant to Rule 60(b), Miss.R.Civ.P., to vacate the March 6 judgment and to allow H & W to file an answer and proceed to trial on the merits. H & W also moved the court to stay all proceedings to enforce the judgment pending disposition of its Rule 60(b) motion. Attached to the motion to vacate were two affidavits, one of Frank Coffey, formerly claims representative for Midland Insurance Company, and the other from Ray Lewis, president of H & W. In addition to the facts set forth above, these affidavits tell us little. Lewis' affidavit simply says that he received the suit papers on November 23, 1985, and referred them to his insurance agent and did nor heard nothing until April 17, 1986, when he was notified of the default judgment. Coffey's affidavit explains the reason for the error in transmission of the suit papers to Jackson counsel, to-wit: that Midland's book of approved attorneys had an erroneous address for McCoy in Jackson, Mississippi. There is no question but that McCoy never heard of the matter until April 15, 1986, some forty days after the final judgment had been entered.

The motion to vacate asserts that H & W "has a meritorious defense to the claim of the plaintiff." No details of that defense are given. The affidavit on behalf of Coffey and Midland merely reflects that

In my conversations with the Plaintiff's attorney, I made it clear that we would contest this claim on behalf of the defendant, especially on the amount of damages being claimed by the plaintiff.

No details are given wherein Plaintiff's damages are said to have been excessive or exaggerated.

There is another wrinkle. On April 3, 1986--some twenty-eight days after entry of final judgment--the Supreme Court of the State of New York, County of New York, entered an order of liquidation directing that James P. Corcoran, Superintendent of Insurance of the State of New York, take possession of and liquidate the business and affairs of Midland Insurance Company. That order enjoined all parties to lawsuits "in this state [New York] and all other states ... which Midland is obligated to defend a party insured or any other persons it is legally obligated to defend by virtue of its insurance contract" from taking any further proceedings for a period of 180 days from the date of the order. The injunction expired of its own terms on September 30, 1986. Nothing is presented to us regarding any subsequent proceedings regarding the liquidation of Midland, except that Coffey states he is now acting on behalf of the New York Superintendent of Insurance in connection with the liquidation. Furthermore, Lewis on behalf of H & W charges in his affidavit that, because of the liquidation, "there may be no funds to pay the judgment under the coverage of my insurance policy."

In any event, on August 6, 1986, H & W's Rule 60(b) motion was called for hearing in the Circuit Court which recited in the end that it had "considered the claim, heard the arguments of counsel, read and considered the memorandum briefs submitted by counsel." The Circuit Court then found that Griffin had complied with Rule 55 in obtaining the February 20, 1986, entry of default. Further, the Circuit Court held that H & W's failure to file an answer within the time allowed by law was not as a result of "accident or mistake as provided by Rule 60 of the Mississippi Rules of Civil Procedure." The court found additionally that H & W had "failed to show any other grounds which would permit the court to set aside the judgment in question." H & W's motion was thereupon overruled.

H & W has now timely perfected its appeal from the aforesaid August 6, 1986, order. Supersedeas, however, was not granted incident to the appeal, in part no doubt because of the financial situation of Midland.

In any event, as this appeal has been pending, Griffin moved the Circuit Court for examination of judgment debtor H & W and for production of documents. On February 25, 1987, the Circuit Court ordered H & W to appear in Hinds County "through its designated agent ... to be examined concerning its ability to pay the judgment ... and to bring with it certain records, books, papers or documents, reflecting its income and ability to satisfy the judgment,...." See Miss.Code Ann. Sec. 13-1-261 through -271 (Miss.1972). After considerable wranglings in the Circuit Court, H & W applied to this Court for a stay of the judgment debtor examination pending outcome of this appeal on the merits. On March 25, 1987, a single Justice of this Court entered an order for stay pending further consideration of the matter. Accordingly, before us at this time and ripe for review together are H & W's appeal on the merits and, if necessary, the question of whether H & W is subject to judgment debtor examination in Hinds County, Mississippi.

III.

We begin with Rule 60(b), Miss.R.Civ.P., which reads, in pertinent part, as follows:

On motion and upon such terms as are just, the court may relieve a party of his legal representative from a final judgment, order, or proceeding for the following reasons: ... (2) accident or mistake; ... (6) any other reasons justifying relief from the judgment.

Rule 60(b) as our touchstone, there is no reason to repeat the numerous platitudes uttered by this Court pre-Rules and post-Rules regarding default judgments. We have considered the law of the matter at considerable length in Pointer v. Huffman, 509 So.2d 870, 874-75 (Miss.1987); Guaranty National Insurance Co. v. Pittman, 501 So.2d 377, 386-89 (...