Hinz v. Northland Milk & Ice Cream Co.

• Decision Date: 16 May 1952
• Docket Number: No. 35768,35768
• Citation: 53 N.W.2d 454,237 Minn. 28
• Parties: HINZ v. NORTHLAND MILK & ICE CREAM CO.
• Court: Minnesota Supreme Court

Page 454

53 N.W.2d 454

237 Minn. 28

HINZ v. NORTHLAND MILK & ICE CREAM CO.

No. 35768.

Supreme Court of Minnesota.

May 16, 1952.

Syllabus by the Court.

1. In the exercise of a sound judicial discretion, under M.S.A. § 544.32, it is the duty of the trial court, In furthering justice through he adoption of a liberal policy conducive to the trial of causes on their merits, to grant a motion to open a default judgment and permit a party to answer, if the party in default shows that he (a) is possessed of a reasonable defense on the merits, (b) has a reasonable excuse for his failure or neglect to answer, (c) has acted with due diligence after notice of the entry of judgment, and (d) that no substantial prejudice will result to the other party.

2. Where a defendant with reasonable promptness delivers the summons and complaint to its insurer which by contract is obligated to defend the suit, the negligence of the insurer in failing to forward the papers to the attorney for answering until shortly after the time for answering has expired is not to be imputed to defendant so as to bar the opening of a default judgment where, in the exercise of a sound judicial discretion, it appears that defendant after receiving notice acted with diligence, has a defense on the merits, and where, as here, no substantial prejudice will result to plaintiff.

3. Likewise, a defendant possessed of a good defense on the merits will, as a matter of sound judicial discretion, be relieved from a default judgment entered because of the mistake or negligence of his lawyer, if he acts with diligence, and no substantial prejudice will result to the other party.

Robb, Robb & Van Eps, by William M. Robb, Minneapolis, for appellant.

Gordon E. Simons, Minneapolis, for respondent.

MATSON, Justice.

Appeal from an order denying defendant's motion to open a default judgment.

Plaintiff brought an action in the Minneapolis municipal court to recover damages for the negligent killing of his Chesapeake dog by one of defendant's trucks. The summons and complaint, which were served on December 17, 1951, were forwarded by defendant to its insurer on December 20, 1951. The insurer mislaid the papers, with the result that they were not forwarded to the attorneys for answering until December 29, 1951, when defendant was already in default.

On December 29, plaintiff filed an affidavit of 'No Answer,' and the matter was set for hearing on January 2, 1952. On the morning of January 2, defendant's attorney requested plaintiff's attorney for an extension of time to answer, but this request was refused and default judgment was entered on that date. On January 2, defendant served an unverified answer on plaintiff but did not appear at the default hearing.

On January 3, defendant obtained and served an order to show cause--accompanied by a notice of motion--why the judgment should not be opened and why the answer served the day before should not be permitted to stand. Upon the denial of this motion and the discharge of the order to show cause, defendant appeals.

1. Did the trial court abuse its judicial discretion in denying defendant's motion? M.S.A. § 544.32 provides:

'The court, In its discretion, may likewise permit an answer or reply to be made, or other act to be done, after the time limited therefor by this chapter, or by its order may enlarge such time; or at any time within one year after notice thereof, in its discretion, may relieve a party from any judgment, order, or other proceeding taken against him through his mistake, inadvertence, surprise, or excusable neglect; * * *.' (Italics supplied.)

In the exercise of a sound judicial discretion, under § 544.32, it is the duty of the trial court, In furthering justice by adopting a liberal policy ¹ Conducive to the trial of causes on their merits, to grant a motion to open a default judgment and permit a party to answer, if the party in default shows that he (a) is possessed of a reasonable defense on the merits, (b) has a reasonable excuse for his failure or neglect to answer, (c) has acted with due diligence after notice of the entry of judgment, and (d) that no substantial prejudice will result to the other party. ²

Although, in support of a motion to open a default judgment, an adequate showing of a bona fide defense, justification for not answering, reasonable diligence, and of the absence of prejudice to the other side, may in certain instances be made upon a verified answer alone as supplemented by the entire file, it may also be fortified by, or made solely of an affidavit executed by defendant or by some other person, such as defendant's attorney, ³ who is possessed of a personal knowledge of the facts. ⁴

Here, we have the affidavit of defendant's attorney, which adequately sets forth that through investigation he has acquired the requisite personal knowledge of the facts. By this affidavit it appears, as already stated, that defendant, with reasonable promptness, delivered the summons and complaint to its insurer, which inadvertently mislaid the papers so that they were not forwarded to the attorney for the preparation of an answer until two days after the time for answering had expired, or on December 29, the Saturday preceding New Year's Day. By reason of the holidays, defendant's attorney...