Hobbs v. Martin Marietta Co.

• Decision Date: 15 December 1964
• Docket Number: No. 51544,51544
• Citation: 131 N.W.2d 772,257 Iowa 124
• Parties: George HOBBS, Appellee, v. MARTIN MARIETTA COMPANY, formerly American Marietta Company, and Concrete Materials and Construction Company, Appellants.
• Court: Iowa Supreme Court

Page 772

131 N.W.2d 772

257 Iowa 124

George HOBBS, Appellee, v. MARTIN MARIETTA COMPANY, formerly American Marietta Company, and Concrete Materials and Construction Company, Appellants.

No. 51544.

Supreme Court of Iowa.

Dec. 15, 1964.

Shuttleworth & Ingersoll, Cedar Rapids, for appellants.

McMahon & Cassel, Algona, and Barnes, Wadsworth, Elderkin, Locher & Pirnie, Cedar Rapids, for appellee.

LARSON, Justice.

The problem presented by this appeal is whether the trial court abused its judicial discretion in refusing to set aside a default and judgment rendered against defendants in an action for personal injuries brought in Linn County, Iowa.

The accident out of which this action arose occurred at a rock quarry in Chickasaw County, Iowa, November 26, 1960. As a result of a blasting operation, plaintiff alleged he was severely injured and claimed damages in the sum of $19,604.75. Action against defendants was commenced in the Linn County District Court on November 1, 1962. The original notices were served upon defendants by delivering a copy to Glenn H. Ulfers, vice-president and controller of Concrete Materials and Construction Company, at defendant's place of business in Cedar Rapids, Iowa.

Ulfers advised his superior of the service and on November 2, 1962, mailed the original notices by certified mail to Jay A. Misicka, assistant insurance manager of defendant company in Chicago, Illinois. Several days later Ulfers talked to Misicka by telephone and was assured the original notices had been promptly forwarded to Marsh & McLennan, their insurance agents.

It appears Misicka received the notices on November 5, 1962, and on the same day sent one copy thereof to Marsh & McLennan by special messenger. The notice was placed in an envelope addressed to Marsh & McLennan, attention of William J. Wilczynski, Jr., the individual who handled defendant's business in that agency.

The special messenger who delivered this envelope, John J. Russell, was employed as mail clerk and special messenger in defendant's Chicago office. It appears he made this delivery to the mail room of Marsh & McLennan in the early afternoon of November 5, 1962. While this was the usual procedure, somehow Mr. Wilczynski did not receive the notice of this action and does not know what happened to it.

When no appearance was filed on behalf of defendants, an unreported hearing was had before the court on November 27, 1962, and a default judgment was rendered for plaintiff in the sum of $19,604.75 together with interest and costs.

Defendants received a written notice of the entry of this judgment from the Linn County Clerk of Court, and on January 4, 1963, filed a motion to set it aside in accordance with the provisions of Rule 236, Rules of Civil Procedure, 58 I.C.A., alleging the default occurred because of mistake, inadvertence, surprise, excusable neglect or unavoidable casualty, and that it had a good and meritorious defense to the plaintiff's claim. By amendment, supplemental affidavits in support of the motion were filed. Resistance denying defendant's allegations was filed by plaintiff January 11, 1963.

Following a hearing on December 13, 1963, the court entered its order overruling defendants' motion to set aside the default and judgment, and defendants appeal.

Assigned errors relied upon for reversal are: (1) The trial court abused its discretion in refusing to set aside the default and judgment rendered against defendants. (2) The trial court erred in not sustaining defendants' motion filed under Rule 236, R.C.P., for good cause shown on the ground that it appears there was mistake, inadvertence, surprise, excusable neglect or unavoidable casualty. These assignments being closely related, we shall consider them together.

X. Rule 236, Rules of Civil Procedure, provides: '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 or the judgment thereon, for mistake, inadvertence, surprise, excusable neglect or unavoidable casualty. Such motion must be filed promptly after the discovery of the grounds thereof, but not more than sixty days after entry of the judgment. Its filing shall not affect the finality of the judgment or impair its operation.'

This difficult problem involves an interpretation and application of Rule 236, supra. Questions of this nature have long been considered by the courts of this state, as well as others. Section 11589 of the Code of 1939 made similar provisions for setting aside defaults, and used the words 'a reasonable excuse shown.' Corresponding sections in the Codes of 1897, 1873 1851, and the Revision of 1860, indicate the period such motions have been authorized. Those sections required affidavits of merit omitted in Rule 236, but the latter requires 'good cause shown.' We said in Svoboda v. Svoboda, 245 Iowa 111, 118, 60 N.W.2d 859, 863, 'A 'good cause' is a sound, effective, and truthful reason. It is something more than an excuse, a plea, apology, extenuation, or some justification, for the resulting effect.' It also requires 'at least a claimed defense asserted in good faith.'

In discussing Rule 236 the author in 2 Iowa Rules of Civil Procedure, Revised Edition, by Cook, page 666, said, 'It is doubtful how far changes from the statutory language have changed the practice on these points.' (8 requirements set out.) The advisory committee in its comment states, 'The setting aside of defaults and judgments entered thereon has been liberalized.' That intent and purpose should be borne in mind as we interpret and apply this rule. It appears we have done so in recent cases. See Edgar v. Armored Carrier Corp., Iowa, 128 N.W.2d 922; Handy v. Handy, 250 Iowa 879, 96 N.W.2d 922; Newell v. Tweed, 241 Iowa 90, 40 N.W.2d 20; Svoboda v. Svoboda, supra. This court has seized upon the words 'good cause shown' when affirming the trial court's order setting aside a default and judgment, and has added that in passing upon the merits of a showing of 'good cause' the trial court exercises a broad or wide sound judicial discretion, which, unless clearly and manifestly abused, will not be disturbed on appeal. Usually that was because there was a fact question under conflicting evidence. Svoboda v. Svoboda, supra, loc. cit. 245 Iowa 120, 60 N.W.2d 864. We have also emphasized that courts prefer a trial on the merits. Newell v. Tweed, supra. Even before the adoption of Rule 236, this court recognized these well established principles and gave a liberal interpretation of the grounds deemed sufficient for setting aside a default. Barto v. Sioux City Electric Co., 119 Iowa 179, 93 N.W. 268.

In addition, it appears that when appellate courts have thought the trial court too severe in denying a motion to set aside a default and judgment thereon, they have pointed out that while it is the movant's burden to show 'good cause' or 'reasonable excuse,' if the undisputed evidence produced showed that his failure to appear and defend was not due to his negligence or want of ordinary care or attention, or to his carelessness or inattention, but affirmatively showed that defendant did intend to appear and defend, and took reasonable steps to do so, and because of some misunderstanding, accident, mistake, or excusable neglect he failed to appear, the trial court would abuse its sound judicial discretion by denying such a timely motion. Barto v. Sioux City Electric Co., supra.

Apparently this is a case of first impression, for we have had no previous occasion to pass on the effect of Rule 236 upon the trial court's broad discretionary power to deny such a motion, at least where there was no factual controversy.

The nub of this case, then, seems to be whether, keeping in mind the purpose behind the adoption of Rule 236, the facts shown permit a finding of such carelessness, inattention or neglect as would justify a denial of defendant's motion. Although not applicable here, it is of course true that if the facts are such that different inferences may be drawn from them, then the findings of the trial court, in the position of a trier of the facts, are binding upon the appellate court. Edgar v. Armored Carrier Corp., supra, Iowa, 128 N.W.2d 922, 926; Handy v. Handy, supra, loc. cit. 250 Iowa 884, 96 N.W.2d 926. This authority of the trial court no doubt is one of the reasons why it has been said appellate courts more readily affirm the action of the trial court when it grants a motion to set aside a default than when it denies it. Edgar v. Armored Carrier Corp., supra; Barto v. Sioux City Electric Co., supra.

It was, of course, movant's burden here to produce facts showing 'good cause,' a cause which would not only permit but require a finding of 'mistake, inadvertence, surprise, excusable neglect or unavoidable casualty.' Rule 236, supra; Handy v. Handy, supra.

Defendants maintain the facts relied upon are not in dispute, that it is only the effect they have under the circumstances that is controverted. We are inclined to agree.

An examination of the factual situation, then, is often necessary to determine why in somewhat similar situations one trial court's decision granting such a motion is upheld while another's decision denying the motion is reversed. If there is no factual issue, the question is one of law and the appellate court is not bound by the determination of the trial court. In the case at bar there is no real factual controversy. The defendants showed the notice was placed in an envelope addressed to the insurance agent in the same office building, that it was delivered to that office under the regular and general practice followed in these matters, and that it was simply lost in the insurance company mail room. Courts have taken cognizance of the intricacies and expansion of business enterprises, and the cases reveal a liberal tendency with reference to adequate proof of proper handling of mail in such matters. State Bank of...