Hansman v. Gute, 2--56181

Decision Date20 February 1974
Docket NumberNo. 2--56181,2--56181
Citation215 N.W.2d 339
PartiesDeborah A. HANSMAN, Individually, and as wife of Rick H. Hansman, and as parent and natural guardian of Jamie C. Hansman, et al., Appellees, v. Donlad GUTE, Individually, et al., Appellants.
CourtIowa Supreme Court

Gerry M. Rinden, for Klockau, McCarthy, Lousberg, Ellison & Rinden, Rock Island, Ill., and Marvin F. Heidman, for Gleysteen, Nelson, Harper, Kunze & Eidsmoe, Sioux City, for appellants.

Thomas L. McCullough, Sac City, and David E. Green, Carroll, for appellees.

Heard before MOORE, C.J., and RAWLINGS, REYNOLDSON, HARRIS and McCORMICK, JJ.

RAWLINGS, Justice.

Dram shop damage action by plaintiffs resulted in judgment on default against defendants from which they appeal. We affirm.

In May of 1972, Deborah A. Hansman, as administrator of her deceased husband's estate, commenced a dram shop action in Sac County. Donald Gute and Louis L. Nagl were among the named defendants.

July 19, 1972, that case was dismissed on an improper party plaintiff based motion by defense attorneys Gerry Rinden and Marvin F. Heidman.

Prior to such dismissal arrangements had been made to take the depositions of Deborah Hansman, Gute and Nagl on July 24, 1972, in the Sac City office of attorney Thomas L. McCullough.

Heidman appeared at McCullough's office July 19, 1972, and the latter then suggested they proceed with the planned depositions despite the aforesaid dismissal because an appropriate similar action would be commenced in Carroll County. Heidman refused to proceed in accord with McCullough's suggestion.

July 25, 1972, the instant Carroll County action was commenced by plaintiffs Deborah A. Hansman, Individually, and as wife of Rick H. Hansman, and as parent and natural guardian of Jamie C. Hansman, Amy Jo Hansman and Nichole L. Hansman, the children of Rick H. Hansman, Deceased, against defendants Donald Gute, Individually; Donald Gute, d/b/a Don's Place, Carroll, Iowa; Louis L. Nagl, d/b/a Louie's Lounge, Carroll, Iowa; and Louis L. Nagl, Individually.

July 26, 1972, original notice as to said Carroll County case was served on defendant Gute.

July 27, 1972, like service was had on defendant Nagl.

August 24, 1972, plaintiffs made application to Carroll District Court for order of default and judgment thereon since none of the above named defendants had appeared as required. On the same day these defendants were adjudged to be in default. Pursuant to court order by Judge Hill, then presiding, a separate hearing was thereafter had and evidence introduced regarding damages.

August 30, 1972, defendants Gute and Nagl moved the aforesaid default be set aside. This motion was premised upon claimed mistake, excusable neglect and unavoidable casualty.

October 16, 1972, hearing was had thereon. Gute, Nagl, Heidman and Rinden testified in support of the motion.

In essence Gute testimonially stated, upon receipt of the Sac County notice he delivered it to his liability insurance representative located nearby in Carroll. Rinden's secretary had, by phone, advised him regarding dismissal of the Sac County case and that he need not appear for the deposition proceeding until otherwise notified. The Carroll County notice was thought by him to be part of the original case. It was his intention to defend against the second action but the related notice received was not delivered to his insurance agent until August 25th, even though he had been told that if served with any litigation papers they were to be turned over to his insurer. He was aware of the fact the last original notice served on him required an appearance within 20 days, and knew the Carroll County case had been instituted because the local paper so stated and tavern patrons had talked to him about it.

Nagl testified substantially to the same effect but additionally stated it would not have made any difference had Rinden's secretary told him a second action would be commenced in Carroll County.

Heidman's testimony discloses he was co-counsel in the Sac County case; no notification was given him regarding the subsequent Carroll County action; but he knew McCullough intended to commence such a proceeding and Rinden had been so advised.

Rinden opined defendants had a meritorious defense due to absence of essential causal relationship between plaintiffs' decedent's intoxication and the death causing motor vehicle accident, and insufficiency of evidence disclosing either defendant had sold plaintiffs' decedent liquor to the point he became intoxicated.

Looking now to the other side of the coin McCullough's testimony discloses that after dismissal of the Sac County case he suggested the planned depositions be tkaen because a second action would be started against these defendants in Carroll County. Heidman refused the suggestion electing rather, on Rinden's advice, to have the cases proceed in a normal manner. McCullough did not feel called upon to advise opposing counsel regarding commencement of the second action. Upon the filing of plaintiffs' default application Judge Hill was advised as to the prior Sac County case; that appearance had there been made; of the ultimate disposition of that proceeding; and of the statement made to Heidman by McCullough regarding proposed commencement of the Carroll County action.

January 8, 1973, defendants' motion to set aside default was overruled by Judge Hellwege, then presiding.

January 15, 1973, plaintiffs were granted judgment for $138,875 against defendants Gute and Nagl.

A subsequent bill of exceptions by defendants, as supplemented by trial court, was allowed. It is thereby additionally disclosed (1) Judge Hill heard evidence presented on the damage issue but withheld filing of judgment until there had been a ruling on defendants' motion to set aside default; (2) after entry of order overruling said motion no further pleadings were filed; and (3) judgment was thereafter granted without prior official notification to defendants.

In support of a reversal defendants contend the overruling of their motion to set aside the default constituted an abuse of discretion, and they were entitled to be heard regarding the matter of damages following entry of default.

I. Iowa R.Civ.P. 236 states in relevant part:

'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 of the judgment thereon, for mistake, inadvertence, surprise, excusable neglect or unavoidable casualty.'

The purpose of this rule is to allow a determination of litigation on the merits, where appropriate, as opposed to an ex parte adjudication when the absence of opposing litigant is due to his nonprejudicial inadvertence or excusable mistake. See Gordon v. Gordon, 200 N.W.2d 527, 528 (Iowa 1972), and citations.

On the other hand, In re Estate of Staab, 192 N.W.2d 804, 807 (Iowa 1971), holds the burden is upon defendant-movant to plead and prove such good cause as will not only permit but require a finding of mistake, inadvertence, suprise, excusable neglect or unavoidable casualty. And requisite 'good cause' is a sound, effective and truthful reason--something more than an excuse, plea, apology, extenuation or some justification for the resulting effect.

Furthermore, in granting or denying a motion to set aside a default the trial court is vested with wide discretion and its findings on disputed facts are entitled to the same weight as a jury verdict. See Garrison v. Garrison, 179 N.W.2d 466, 471 (Iowa 1970).

In other words, this proceeding is at law and we are bound by trial court's findings of fact if supported by substantial evidence. See Walters v. Williams, 203 N.W.2d 383, 385 (Iowa 1973).

Factually analogous to the case not before us is Haynes v. Ruhoff, 261 Iowa 1279, 157 N.W.2d 914 (1968). There a nonresident defendant, after involvement in an Iowa highway accident, first received from the local sheriff an information for defendant's signature relative to a proposed traffic violation charge. Thereafter, by registered mail, return receipt requested, defendant received notice as to a...

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    ...matter. In this respect the present case is factually different from Haynes v. Ruhoff, 261 Iowa 1279, 157 N.W.2d 914 and Hansman v. Gute, 215 N.W.2d 339 (Iowa 1974). Any failure to timely appear and defend was not the corporation's but due to a mistake of defendant's liability insurance car......
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