King v. Montz

• Decision Date: 28 June 1974
• Docket Number: No. 8961,8961
• Citation: 219 N.W.2d 836
• Parties: Joanne KING, Plaintiff/Appellee, v. Fredrick MONTZ and C. R. Montz, Defendants/Appellants. Civ.
• Court: North Dakota Supreme Court

Page 836

219 N.W.2d 836

Joanne KING, Plaintiff/Appellee, v. Fredrick MONTZ and C. R. Montz, Defendants/Appellants.

Civ. No. 8961.

Supreme Court of North Dakota.

June 28, 1974.

Syllabus by the Court

1. On motion and upon such terms as are just, the court may relieve a party or his legal representative from a final judgment or order in any action or proceeding for the following reasons: mistake, inadvertence, surprise, or excusable neglect. Rule 60(b)(1), N.D.R.Civ.P.

2. Rule 60(b), N.D.R.Civ.P., providing for relief from default judgments has superseded Section 28--29--01, N.D.R.C. 1943. This rule, like the statute which it superseded, is remedial in nature and should be liberally construed and applied.

3. Where a default has been regularly entered it is largely within the discretion of the trial court to say whether the defendant shall be permitted to come in afterwards and make his defense and, unless an abuse of discretion be made to appear, this court will not interfere.

4. Ordinarily, where a judgment has been entered by default and a prompt application made at a reasonable time to set it aside, with a tender of an answer disclosing a meritorious defense, the court should, on reasonable terms, sustain the motion and permit the cause to be heard upon the merits.

5. In situations such as those disclosed in this case, where the defendant personally has not been negligent in the protection of his interests, the courts have been reluctant to attribute to him the errors of his legal representatives.

6. 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 defend is not to be imputed to the 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 the plaintiff.

7. For reasons stated in the opinion, the order of the district court denying defendant's motion to vacate the default judgment is reversed, the default judgment is ordered vacated, and the case is remanded to the district court for trial.

Fleck, Mather, Strutz & Mayer, Bismarck, for defendants/appellants.

Mackoff, Kellogg, Kirby & Kloster, Dickinson, for plaintiff/appellee.

KNUDSON, Judge.

This is an appeal from an order dated August 8, 1973, that denied a motion to vacate a default judgment entered by the Burleigh County District Court on April 27, 1973, in favor of the plaintiff Joanne King (hereinafter King), and against the defendants Fredrick Montz and C. R. Montz (hereinafter Montzes), and from the judgment.

On February 4, 1971, King and Fredrick Montz were involved in an automobile accident wherein the Montz vehicle ran into the rear of the King vehicle. The testimony indicates that the King vehicle slid on some ice while stopping and that the Montz vehicle slid on the same patch of ice before hitting the rear of the King vehicle. At the moment of impact King felt two sharp snaps or pains in the back of the neck at the base of the spine, though she did not feel injured or disabled at the time. The next morning King awakened with a stiff neck which persisted for three days, and two weeks later she began to experience occasional sharp pains in her left hip and down the left leg. Pain pills and muscle relaxers were prescribed for King for a while, until she experienced a sudden painful twist in the calf of her right leg which paralyzed it, and she required hospitaliation. While in the hospital she was examined by a specialist and was discovered to have a herniated disc. Surgery was performed on April 9, 1971, to remove fragments from each side of the disc between the fourth and fifth lumbar vertebrae.

Since the time of the surgery, and up to the time of trial, King experienced a constant numbness in the calf of her right leg and down into the toes of the right foot. She has also experienced cramps in the calf of the right leg.

King had no history of back trouble prior to the accident, but since her surgery, and up to the time of trial, she was unable to carry on her normal sports activities, although she had returned to her job and worked the same amount of time she did prior to the accident. King was the only person who testified at trial, and, in reply to a question from the judge, she testified that she could then do eighty percent of the things she could do prior to the accident.

During this period, King's attorney was negotiating with Montz' insurance company for a settlement for King's injuries. Finally, on March 16, 1973, King's attorney telephoned the claims supervisor of Montz' insurance company in Edina, Minnesota, that a summons and complaint had been prepared and that they would be mailed to the sheriff that day for service on the Montzes. Those pleadings were mailed to the sheriff and were served on the Montzes on March 19, 1973. Fredrick Montz took the pleadings to the local office of his insurance company, where the agent forwarded them to the claims office in Edina, Minnesota. No responsive pleading was submitted by the insurance company on behalf of the Montzes, and on April 27, 1973, a default was proven and a default judgment entered in favor of King for $27,644.45. Copies of findings of fact, conclusions of law, order for judgment and judgment were mailed on May 3, 1973, to Montz' insurance company, and the claims supervisor asserts that the receipt of these documents was the first notice the insurance company had that pleadings had been filed and a lawsuit initiated.

On May 10, 1973, the Montzes moved the trial court to open and vacate the default judgment under Rule 60, North Dakota Rules of Civil Procedure. On August 8, 1973, the trial court ordered that said motion be denied. It is from this order that the Montzes appeal, and they claim that the evidence is not sufficient to justify the judgment, that the award of damages was excessive, and that the trial court abused its discretion in denying Montz' motion to vacate the default judgment.

The view we take of his makes it necessary that we consider only the third issue raised by the defendant, that the trial court abused its discretion in denying Montzes' motion to vacate the default judgment.

Rule 60(b)(1), North Dakota Rules of Civil Procedure, provides, in part:

'On motion and upon such terms as are just, the court may relieve a party or his legal representative from a final judgment or order in any action or proceeding for the following reasons: (1) mistake, inadvertence, surprise, or excusable neglect; . . .'

With regard to this rule, we held in Sioux Falls Construction Co. v. Dakota Flooring, 109 N.W.2d 244 (N.D.1961), Syllabus 1, 3 and 5, that:

'1. Rule 60(b), N.D.R.Civ.P., providing for relief from default judgment has superseded Section 28--2901, NDRC 1943. This rule, like the statute which it superseded, is remedial in nature and should be liberally construed and applied.

'3. Where a default has been regularly entered it is largely within the discretion of the trial court to say whether the defendant shall be permitted to come in afterwards and make his defense and, unless an abuse of discretion be made to appear, this court will not interfere.

'5. Ordinarily, where a judgment has been entered by default and a prompt application made at a reasonable time to set it aside, with a tender of an answer disclosing a meritorious defense, the court should, on reasonable terms, sustain the motion and permit the cause to be heard upon the merits.'

Federal Civil Rule 60(b), from which our Civil Rule 60(b) is derived, has been interpreted to mean, 'Where timely relief is sought from a default judgment and the movant has a meritorious defense, doubt, if any, should be resolved in favor of the motion to set aside the judgment so that cases may be decided on their merits.' 7 Moore's Federal Practice (2d ed.) 60.19, pages 232, 233. One of the cases annotated under the quoted comment from Moore's is Barber v. Turberville, 94 U.S.App.D.C. 335, 218 F.2d 34 (1954). In the Barber case the defendant delivered the summons and complaint that had been served upon her to her attorney. Through inadvertence and confusion over negotiations, the attorney failed to enter responsive...