Housing Authority v. Newbigging

• Decision Date: 08 March 2001
• Docket Number: No. 19175-3-III.,19175-3-III.
• Citation: 19 P.3d 1081,105 Wash.App. 178
• Parties: HOUSING AUTHORITY OF GRANT COUNTY, Appellant, v. Lynn NEWBIGGING, Respondent.
• Court: Washington Court of Appeals

19 P.3d 1081

105 Wash.App. 178

HOUSING AUTHORITY OF GRANT COUNTY, Appellant, v. Lynn NEWBIGGING, Respondent.

No. 19175-3-III.

Court of Appeals of Washington, Division 3, Panel One.

March 8, 2001.

Harold J. Moberg and William A. White, Moses Lake, for Appellant.

Jerry L. Sorlien, Moses Lake, for Respondent.

BROWN, A.C.J.

The Housing Authority of Grant County (Housing) obtained an unlawful detainer default judgment against Lynn Newbigging and subsequently evicted her. The trial court vacated the judgment and awarded Ms. Newbigging terms of $1,650. Housing appeals, alleging the trial court abused its discretion in vacating the default judgment and in awarding terms. We affirm, and in so doing adopt a rule that in an appropriate case, terms may be awarded to the party moving to set aside a default under CR 60(b).

FACTS

Ms. Newbigging rented a residence from Housing on a month-to-month lease from January 1986. Rent payments were due the first of each month. Rent in 1999 was $465. On July 20, 1999, Housing served Ms. Newbigging with a three-day notice to pay July's rent or vacate. Alleging she did not pay the rent as demanded, on July 30, Housing served her with an eviction summons and complaint for unlawful detainer, a motion for hearing on damages, and a note for motion docket. The record does not reflect that Housing sought and obtained a show cause order pursuant to RCW 59.18.370. The eviction summons demanded a written response by 5:00 p.m. on August 6. The complaint for unlawful detainer alleged nonpayment of July's rent.

On August 2, 1999, Ms. Newbigging responded by having her father pay (evidenced by receipt) her July rent of $465 plus a $20 late charge and a $250 attorney fee to Moberg Law Firm, counsel for Housing. On August 3, Moberg law firm sent Ms. Newbigging a letter with a note for motion docket notifying her that the unlawful detainer had been set for the August 13, motion docket. The letter stated the matter would be stricken from the docket if Ms. Newbigging paid her August rent by August 5.

Ms. Newbigging paid $250 directly to Housing on August 11, $40 on August 25, and another $180 on August 26. The total of $470 constituted a $5 overpayment of August rent. Housing did not issue any pay or vacate notices, nor did it initiate another unlawful detainer action with regard to the August rent. Ms. Newbigging did not appear in court on August 13. The trial court continued the matter to September 3. Counsel for Housing filed a note for motion docket. Again, the record does not contain a show cause order.

On August 13, 1999, counsel for Housing sent Ms. Newbigging a letter acknowledging receipt of the July rent and attorney fees. The letter went on to state that counsel had decided to continue the unlawful detainer matter until September 3, to "allow" Ms. Newbigging "to get current" on her rent for August and September. Clerk's Papers (CP) at 38. The letter (which referenced a note for motion docket) stated that failure to bring the rent current by September 3, would result in a default judgment and writ of restitution. On September 3, Housing obtained a default judgment of $760, consisting of $460 for September 1999 rent, $50 in costs, and $250 in attorney fees. The trial court issued an order and writ of restitution on September 3. That evening, the writ was served upon Ms. Newbigging. Ms. Newbigging attempted to pay her September rent on September 7. Counsel for Housing returned her money order and informed her that Housing would soon remove her from the premises. Pursuant to the writ, Housing evicted Ms. Newbigging from the premises on September 13.

The day after her eviction, Ms. Newbigging filed a CR 60(b) motion to vacate the default judgment. She retained counsel shortly thereafter. At a hearing on September 24, Ms. Newbigging, supported by affidavits, argued Housing's counsel told her she could cure the default by paying the July rent and that such payment was accepted. She also insisted her rental agreement had been amended to allow for later payment of rent. The trial court said resolution of the matter turned on the proper due date of rent and thus allowed Ms. Newbigging access to Housing's file to produce more evidence.

That access produced four documents. First, was a July 19, 1996 agreement signed by both Housing and Ms. Newbigging allowing for payment of rent in equal parts on the 15th and 28th of each month. Second, was an unsigned September 30, 1997 "permanent agreement" for payment of rent on the 15th and 27th. CP at 77. Third, was a July 9, 1999 "permanent agreement," signed solely by Housing, setting the rent payment dates on the 15th and the 27th. CP at 76. Fourth, was a July 19, 1999 letter rescinding the 15th and 27th payment agreement and setting the rental due date on the 5th of each month effective August 1999. Ms. Newbigging alleged that she did not receive the July 19 letter.

The trial court took additional argument on November 12, 1999. On December 31, 1999, the trial court granted the motion to vacate by memorandum opinion. The trial court partly stated:

If, as [Housing] alleges, the rent due-date modification agreement was vacated by letter of July 19, then when [Housing] obtained the Judgment and Writ on September 3, July and August rent were fully paid, along with a late fee for July and $250 in attorney fees, and September rent was not due. If, as [Ms. Newbigging] contends, the rent due-date modification agreement was still in effect, the same conclusion pertains.

[Housing] takes the position that the August 2 payment of July rent, late charges and attorney fees was a "partial payment," and that, as stated in the summons, further rent which became due during the pendency of the cause would have to be paid. The flaw in this position is that, even under [Housing's] view, the August 2 payment could not have been a partial payment because August rent was not yet due.

The court's conclusion is that when [Housing] received all rent then owing on August 2, together with an agreed sum of attorney fees for commencing the action, the action was defeated. If August rent was thereafter not paid when due, [Housing] would be required to provide a new 3-day notice and commence a new action if payment was not made as directed in the notice. Furthermore, as of September 3, September rent, for which the judgment was taken, was not yet due. Both of these irregularities render the judgment voidable.

In addition, [Ms. Newbigging's] failure to appear or answer, under the circumstances of contacts with, and payments to, [Counsel's] office, constitutes excusable neglect and inadvertence in a classic form. This is especially so under a conclusion that, as a matter of law, the August 2 payment resolved all matters pending in this action.

CP at 108-09.

On February 8, 2000, Ms. Newbigging filed a motion for award of terms, claiming approximately $3,300 in attorney fees. The trial court decided Ms. Newbigging was entitled to terms, however, reasoning that because she bore some of the blame, it awarded her $1,650. The trial court then reduced the award to judgment. Housing appealed the decisions to vacate and award terms.

ISSUES

The issues presented are whether the trial court erred by abusing its discretion when (A) vacating the default judgment against Ms. Newbigging, and (B) ordering Housing to pay terms. We note in response to Ms. Newbigging's RAP 10.7 motion to strike portions of Housing's brief pursuant to RAP 10.3 and 10.4, that it is apparent certain self-serving statements in Housing's brief are unsupported in the record. They will not be considered. See State v. Falling, 50 Wash.App. 47, 52 n. 3, 747 P.2d 1119 (1987) (appellate court will disregard matters not made part of record).

ANALYSIS

A. Vacating the Default Judgment

The trial court vacated the default judgment pursuant to CR 60(b). "Vacation of a judgment under CR 60(b) is within the trial court's discretion." State v. Santos, 104 Wash.2d 142, 145, 702 P.2d 1179, 70 A.L.R.4th 1021 (1985). The reviewing court "will overturn the trial court only if it plainly appears that its discretion has been abused." Id. (citing Haller v. Wallis, 89 Wash.2d 539, 573 P.2d 1302 (1978)). A trial court abuses its discretion when it exercises it on untenable grounds or for manifestly unreasonable reasons. State ex rel. Carroll v. Junker, 79 Wash.2d 12, 26, 482 P.2d 775 (1971). The abuse of discretion standard applies throughout this opinion.

From a policy standpoint, default judgments are not favored as they prevent controversies from being determined on the merits. Griggs v. Averbeck Realty, Inc., 92 Wash.2d 576, 581, 599 P.2d 1289 (1979); accord Norton v. Brown, 99 Wash.App. 118, 123, 992 P.2d 1019, 3 P.3d 207, review denied, 142 Wash.2d 1004, 11 P.3d 826 (2000). "On the other hand, an orderly system of justice mandates that parties comply with a judicial summons." Norton, 99 Wash.App. at 123, 992 P.2d 1019 (citing Griggs, 92 Wash.2d at 581, 599 P.2d 1289). Equitable principles guide the court considering a motion to vacate. Norton, 99 Wash.App. at 123, 992 P.2d 1019. As the Griggs court observed:

"[T]he overriding reason should be whether or not justice is being done. Justice will not be done if hurried defaults are allowed any more than if continuing delays are permitted.... What is just and proper must be determined by the facts of each case, not by a hard and fast rule applicable to all situations regardless of the outcome."

Griggs, 92 Wash.2d at 582, 599 P.2d 1289 (quoting Widucus v. Southwestern Elec. Coop., Inc., 26 Ill.App.2d 102, 109, 167 N.E.2d 799 (1960)).

"When deciding a motion to vacate a default judgment, the court must consider two primary and two secondary factors that must be shown by the moving party." Norton, 99 Wash.App. at 123, 992 P.2d 1019 (citing White v. Holm, 73 Wash.2d 348, 352, 438 P.2d 581 (1968)). The two primary factors are (1) "the existence of substantial evidence to support at least...