Johnson v. Pioneer Title Co. of Ada County

• Decision Date: 26 April 1983
• Docket Number: No. 13817,13817
• Citation: 104 Idaho 727,662 P.2d 1171
• Parties: Curtis D. JOHNSON and Joan Johnson, Husband and Wife, Plaintiffs-Respondents, v. PIONEER TITLE COMPANY OF ADA COUNTY, Defendant-Appellant, and Daniel A. Jones and Ruth E. Jones, Husband and Wife; Roger Schwartz; Joe Threadgill; Herbert Nagel; Elton Suko Realty; Hope Realty and First American Title Company of Northern Idaho, Defendants. PIONEER TITLE COMPANY OF ADA COUNTY, Defendant-Third Party Plaintiff, v. GEM VALLEY TITLE COMPANY, Third Party Defendant.
• Court: Idaho Court of Appeals

Page 1171

662 P.2d 1171

104 Idaho 727

Curtis D. JOHNSON and Joan Johnson, Husband and Wife, Plaintiffs-Respondents, v. PIONEER TITLE COMPANY OF ADA COUNTY, Defendant-Appellant and Daniel A. Jones and Ruth E. Jones, Husband and Wife; Roger Schwartz; Joe Threadgill; Herbert Nagel; Elton Suko Realty; Hope Realty and First American Title Company of Northern Idaho, Defendants PIONEER TITLE COMPANY OF ADA COUNTY, Defendant-Third Party Plaintiff, v. GEM VALLEY TITLE COMPANY, Third Party Defendant.

No. 13817.

Court of Appeals of Idaho.

April 26, 1983.

Rehearing Denied April 26, 1983.

Petition for Review Denied June 15, 1983.

Terry C. Copple of Davison, Copple, Copple & Copple, William C. Roden of Smith & Roden, Boise, for defendant-appellant.

Dan J. Rude, Coeur d'Alene, for plaintiffs-respondents.

THIS OPINION SUPERSEDES THE COURT'S PRIOR OPINION ISSUED FEBRUARY 1, 1983, WHICH IS WITHDRAWN.

SWANSTROM, Judge.

Pioneer Title Company has appealed the denial of its "renewed motion" to vacate a default judgment entered against "First American Title Co. of Northern Idaho," an assumed business name under which Pioneer has been operating in Coeur d'Alene, Idaho. The threshold issue in this case is whether this appeal must be dismissed as untimely. The remaining issue is whether the default judgment should have been set aside. We conclude that the appeal is timely, and that the default judgment should be set aside.

Curtis and Joan Johnson filed this suit on June 1, 1979, naming several parties, including "First American Title Company of Northern Idaho," as defendants. The sole appellant in this appeal, Pioneer Title Company of Ada County, was not named as a party or mentioned in the Johnsons' complaint. ¹ The complaint charged several of the defendants with misrepresentation in connection with the sale of a mobile home accessory business from Daniel and Ruth Jones to the Johnsons. The complaint also charged that First American, as the title insurance company involved in this transaction, gave unauthorized legal advice at the time of the closing and improperly rebated $1,206 in insurance premiums to the sellers.

The Jones-Johnson transaction occurred in August, 1978. At that time and up until December 1, 1978, Gem Valley Title Company, an Idaho corporation, was engaged in business at Coeur d'Alene, Idaho, as "First American Title Company of Northern Idaho"--an assumed business name. During that period, there was a certificate on file with the Kootenai County Recorder showing Gem Valley was doing business as "First American Title Company of Northern Idaho." I.C. § 53-501, et seq. On December 1, 1978, Gem Valley sold its title business to Pioneer Title Company of Ada County, another Idaho corporation. At the time of sale Gem Valley Title Company filed with the County Recorder, a certificate of withdrawal of its assumed business name. At the same time Pioneer filed a certificate to show it would be doing business under the name of "First American Title Company of Northern Idaho." Pioneer continued to operate the business of First American with the same local management that had run the business when it belonged to Gem Valley. Pioneer asserts that this sale merely involved a transfer of physical assets. The Johnsons, however, contend that Pioneer purchased both the assets and liabilities of an on-going business. In any event, it is uncontested that the conduct which gave rise to the Johnsons' claim against "First American" occurred when "First American" was owned by Gem Valley, not by Pioneer Title.

From the record it further appears that on June 1, 1979, copies of the Johnsons' summons and complaint were served upon a Pioneer employee who worked at First American in Coeur d'Alene. The employee did not inform his superiors of the service or forward the documents to Pioneer's legal counsel. On June 25, 1979, the Johnsons' attorney (who is different from counsel on appeal) called First American, informing the manager that more than twenty days had elapsed since the service and demanding to know when he might expect an answer. The manager replied that he did not even know about the lawsuit. He then looked on the employee's desk and found the complaint and summons under some other papers. Upon discovering these documents, the manager--according to an affidavit later filed--returned to the phone and advised the Johnsons' attorney that Gem Valley Title Company, the owner of First American at the time of the transaction, was the proper defendant. The manager stated in his affidavit that he also gave the attorney the telephone number of Gem Valley's president, who resided in Minnesota. In a reply affidavit the attorney denied receiving notice of Gem Valley's interest in First American. He stated that the manager told him only that "certain other companies" were involved.

In another affidavit, Pioneer's president stated that after speaking with the Johnsons' attorney, the manager of First American contacted the president of Gem Valley, who requested that the summons and complaint be sent to him in Minnesota. The manager soon mailed the documents but, after the entry of default, they were returned unclaimed, because Gem Valley's president had moved from Minnesota without leaving a forwarding address.

On July 16, 1979, the Johnsons obtained a default judgment against First American for $51,206, plus costs of $3,345, after it failed to appear in the case. The Johnsons thereafter informed Pioneer that they considered it responsible for the judgment, and they threatened execution upon Pioneer's assets. On August 6, 1979, Pioneer filed a motion to "vacate" this judgment, and to stay execution, contending in part that if anyone were obligated under the judgment it would be Gem Valley and not Pioneer. The district court denied the motion in an order entered December 4, 1979. The court observed that no appearance had been made in the case in behalf of Gem Valley or First American. The court also noted that it had not authorized Pioneer to intervene in the suit. It concluded that Pioneer had no standing to make a motion to vacate. Pursuant to I.R.C.P. 24, Pioneer then filed a motion to intervene in the case, which the court orally granted at a hearing on January 31, 1980. A written order dated February 12, 1980, was later filed.

On March 7, Pioneer renewed its motion to vacate the default judgment. It also filed a third party complaint against Gem Valley seeking indemnification for any damages it might sustain as a result of the Johnsons' suit. The court denied Pioneer's renewed motion to vacate. The court also rejected any argument by Pioneer that the complaint should be dismissed because Pioneer was an incorrect party to the action. The court ruled, without elaboration, that "there is insufficient showing that a default entered against First American Title Company should be set aside under Idaho Rules of Civil Procedure." From this order filed June 26, 1980, Pioneer appealed. The Johnsons have moved this court to dismiss the appeal, asserting that it was not timely taken.

I

The first issue we address is whether this appeal should be dismissed because it was not filed within the forty-two day limit set by I.A.R. 14. The Johnsons contend that Pioneer's notice of appeal, filed on July 8, 1980, was too late because the time for filing an appeal began to run not on June 26, 1980, but on December 4, 1979, when the court denied the original motion to vacate. In otherwords, the Johnsons argue that Pioneer should have appealed the earlier order rather than intervening and filing a renewed motion to vacate the judgment.

The Johnsons further argue that, by filing a renewed motion to vacate, Pioneer was merely trying to circumvent the forty-two day time limit for the filing of appeals. They contend that a party should not be allowed to extend the time for filing an appeal by moving the court to reconsider an otherwise final order. The Johnsons assert that the December 4 order denying Pioneer's original motion was a final, appealable order and, because no appeal was taken within forty-two days, this Court lacks jurisdiction to consider the appeal.

A

In Idaho a timely notice of appeal is a jurisdictional requirement. I.A.R. 21; Neal v. Harris, 100 Idaho 348, 597 P.2d 234 (1979). If Pioneer's notice of appeal were determined to be untimely, we would have to dismiss this appeal.

However, at the time Pioneer made its first motion to vacate, it was not a named party to this suit. Because the suit had been brought against "First American Title Company of Northern Idaho," the district court did not rule on the merits of Pioneer's motion, but simply concluded that Pioneer lacked standing, as a nonparty, to seek any relief in the case.

Conceivably, Pioneer could have appealed from the judge's denial of its original motion to vacate. But, on the record then existing, Pioneer's standing to bring such an appeal would have been at least as uncertain as its standing to ask for direct relief from the judgment. It was not until Pioneer moved to intervene that the district court determined Pioneer to be affected by the judgment; and only when this determination had been made did the court consider the merits of Pioneer's request for relief from the judgment. We hold that the order denying relief on June 26, 1980, being the first order addressing the merits of Pioneer's motion to vacate the judgment, was an appealable order made after final judgment. I.A.R. 11. Accordingly, the appeal taken from that order was timely and appropriate.

B

After receiving our initial opinion in this case, the Johnsons filed a petition for rehearing. In the brief accompanying their petition the Johnsons note that Pioneer's renewed motion to vacate was filed more than six months after entry of the default judgment. They argue that because I.R.C.P. 60(b) and 6(b) do not allow such motions to be filed more than six months after the entry of the judgment, Pioneer's...