In re Fredericksen

• Citation: 867 N.W.2d 195 (Table)
• Decision Date: 06 May 2015
• Docket Number: No. 13–1781.,13–1781.
• Parties: In re the MARRIAGE OF Carol Ann FREDERICKSEN and Thomas Michael Fredericksen, Upon the Petition of Carol Ann Fredericksen, Petitioner–Appellee, And Concerning Thomas Michael Fredericksen, Respondent–Appellant.
• Court: Court of Appeals of Iowa

867 N.W.2d 195 (Table)

In re the MARRIAGE OF Carol Ann FREDERICKSEN and Thomas Michael Fredericksen

Upon the Petition of Carol Ann Fredericksen, Petitioner–Appellee

And Concerning Thomas Michael Fredericksen, Respondent–Appellant.

No. 13–1781.

Court of Appeals of Iowa.

May 6, 2015.

Alice S. Horneber of Horneber Law Firm, P.C., Sioux City, for appellant.

Elizabeth A. Row, Sioux City, for appellee.

Considered by VOGEL, P.J., and POTTERFIELD and MULLINS, JJ. SCOTT, S.J., takes no part.

Opinion

POTTERFIELD, J.

In these consolidated appeals, Thomas Fredericksen appeals from several rulings following the entry of a default dissolution decree. Finding no error of law or abuse of discretion, we affirm on both appeals.

I. First Appeal.

A. Background facts and proceedings. On July 31, 2012, Carol Ann Fredericksen filed a petition for dissolution of her marriage to Thomas Michael Fredericksen. The petition and original notice were personally served on Thomas on August 9 and the return of service was filed on August 14, 2012.

Notice of intent to file a written application for default judgment was filed on September 4, a copy of which was sent that same date by ordinary mail to the marital residence, Thomas's last known address.

On September 18, Carol filed an application for entry of default judgment and notice was again sent to Thomas.

On October 1, the clerk of court entered default judgment. Thomas had filed no answer or responsive pleading to the petition. No attorney had entered an appearance for Thomas.

Dissolution Decree. On March 22, 2013, the district court entered a decree dissolving the parties' marriage and dividing the marital property. The court awarded the marital residence to Carol, ordering Thomas to vacate the premises. The court ordered the assets and real estate of the parties' corporation (TFC Builders & Services, Inc.) sold and the net proceeds equally divided. Thomas was awarded the business, MAGS Aviation, L.L.C., and its assets. Other personal property was divided in accordance with a seven-page exhibit to the decree, which listed corresponding market values. Carol and Thomas were ordered to pay any indebtedness in their own names. The decree also provided:

All individual state and federal tax refunds received by the parties for tax years 2009, 2010, 2011, and 2012 shall be divided evenly between the parties. All taxes and penalties owed for the tax years 2009, 2010, 2011, and 2012 shall be divided evenly between the parties and paid within 12 months, unless other arrangements are made with the Internal Revenue Service or the State of Iowa. Each party shall be responsible for filing state and federal income tax returns for his or her 2013 income, and each party shall pay any taxes or penalties associated therewith.

A copy of the decree was mailed by the clerk of court to Thomas at the marital address.¹

Motion to Set Aside. On March 27, 2013, Thomas filed a motion to set aside the decree, which Carol resisted. A hearing was held on April 22, 2013, at which Thomas, Carol, Keith Robley (Thomas's mail carrier), and Cindy Scherer (Carol's attorney's secretary) testified. In addition, counsel for both Thomas and Carol offered professional statements.

On September 13, 2013, the district court concluded Thomas had not proved good cause to set aside the default under Iowa Rule of Civil Procedure 1.977.² The court found Thomas's claims that he had not received notice of intent to file for default was not credible. Moreover, the court rejected Thomas's claims of mistake, inadvertence, and surprise.

Motion to Modify and Petition to Vacate. On September 26, 2013, Thomas, now represented by new counsel, filed an Iowa Rule of Civil Procedure 1.904(2) motion to modify the ruling on the denial of his motion to set aside. Thomas also filed a petition to vacate judgment pursuant to rule 1.1012,³ asserting that entry of the decree “without filing mandatory documents and without having a mandatory hearing constitutes irregularity.”

On September 30, 2013, (fourteen months after the petition for dissolution was filed and six months after the dissolution decree was entered) Thomas filed an answer to the petition for dissolution and a financial affidavit.

Carol's Motion to Strike and Motion for Summary Judgment, and other filings. Carol filed a resistance to the rule 1.904(2) motion to modify, arguing the issues were res judicata. She also filed a motion to strike Thomas's answer and affidavit of financial status as not responsive to any pending matter. In addition, Carol also filed an answer to the petition to vacate. Finally, Carol filed a motion for summary judgment, asserting the petition to vacate was res judicata.

Denial of Motion to Modify Order. On October 22, 2013, Thomas's motion to modify the order denying the motion to set aside default judgment was rejected. The court refused to consider additional factual allegations contained in Thomas's motion to modify, noting the hearing “was limited to the issues of ‘mistake, inadvertence, surprise, excusable neglect, or unavoidable casualty’ under Rule 1.977.” The order provided further,

The Court also denies the Motion in regard to the claim that [Carol] did not file an Affidavit of Financial Status or present evidence prior to the entry of the Default Decree. First, said claim was not raised at the time of the hearing on the Motion to Set Aside Default. Second, [Thomas's] claim of “irregularity” and “fraud” are not bases for setting aside a default under Rule 1.977.

Finally, the Court denies [Thomas's] request to modify its prior Findings that [Thomas] never formally retained representation until after the Decree was filed. Although the evidence clearly established that [Thomas] contacted and spoke with Attorney Kayl in August and September 2012, [Thomas] and Attorney Kayl had not finalized an agreement concerning payment, specifically payment of a retainer fee. [Thomas] therefore had not formally retained representation until after the Decree was filed. Again, the Court makes no determination as to factual allegations made by [Thomas] in regard to his communications with Attorney Kayl that were not presented at the time of the hearing on the Motion to Set Aside Default.

The court further noted the issues raised by Thomas's petition to vacate were “different than the issues addressed by the court in its ruling on the motion to set aside a default under rule 1.977 ” and were to be tried as a different matter.

Order Granting Motion to Strike. On October 25, the court granted the motion to strike the answer and affidavit: “There is no pending dissolution of marriage action, therefore, for which an Answer and Affidavit can be filed. To the extent Respondent's pending petition to vacate that decree is successful, Respondent will then have an opportunity to Answer the dissolution petition.”

First Notice of Appeal. On November 7, Thomas filed a notice of appeal concerning the district court's September 13 (denial of motion to set aside), October 22 (denial of motion to modify the September 13 ruling), and October 25, 2013 (order striking answer and affidavit). We will address these issues first in order to avoid further confusion arising from this procedural morass.⁴

B. Standard of review. Thomas contends our review is de novo,⁵ however, a proceeding to set aside a default judgment is at law. Cent. Nat'l Ins. Co. v. Ins. Co. of N. Am., 513 N.W .2d 750, 753 (Iowa 1994). Thus, we review for errors of law. Id.

We vest district courts with broad discretion in ruling on a motion to set aside a default. We reverse such a ruling only if this discretion is abused. Generally, we find such an abuse only when there is a lack of substantial evidence to support the district court's ruling. Paige v. City of Chariton, 252 N.W.2d 433, 437 (Iowa 1977). We are bound by the district court's findings of fact if supported by substantial evidence, and we view the evidence in the light most favorable to the district court's ruling.

Id.; see also Wilson v. Liberty Mut. Grp., 666 N.W.2d 163, 165 (Iowa 2003) (“Reversal on appeal is warranted only when the court's discretion has been abused.”).

Our review of the district court's grant of a motion to strike is for abuse of discretion. Theis v. James, 184 N.W.2d 708, 710 (Iowa 1971). “The district court abuses its discretion when it exercises its discretion on grounds or for reasons clearly untenable or to an extent clearly unreasonable.” State v. Brown, 856 N.W .2d 685, 688 (Iowa 2014). “A ground or reason is untenable when it is not supported by substantial evidence or when it is based on an erroneous application of the law.” Graber v. City of Ankeny, 616 N.W.2d 633, 638 (Iowa 2000).

C. Denial of motion to set aside default. Thomas first contends the district court erred in failing to grant his motion to set aside the default judgment.

Iowa Rule of Civil Procedure 1.977 provides “[o]n motion and for good cause ... the court may set aside a default or the judgment thereon, for mistake, inadvertence, surprise, excusable neglect or unavoidable casualty.” The burden is on the movant to plead and prove good cause. Cent. Nat'l Ins., 513 N.W.2d at 754. 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.” Id. (emphasis added). The reason for default must rise to one of the grounds enumerated in the rule, that is, mistake, inadvertence, surprise, excusable neglect, or unavoidable casualty. Id. Additionally, good cause requires at least a claimed defense asserted in good faith. Id.

The underlying purpose of rule 1.977 is “to allow a determination of controversies on their merits rather than on the basis of nonprejudicial inadvertence or mistake.” Brandenburg v. Feterl Mfg. Co., 603 N.W.2d 580, 584 (Iowa 1999). However, “this objective must be qualified and cannot be extended to the point where a default judgment will be vacated when the [movant] has ignored [the rules...