Koukal v. Coy

• Decision Date: 16 December 1959
• Parties: Joseph J. KOUKAL, Respondent, v. Frank E. COY and Beth Coy, Appellants.
• Court: Oregon Supreme Court

Page 602

347 P.2d 602

219 Or. 414

Joseph J. KOUKAL, Respondent, v. Frank E. COY and Beth Coy, Appellants.

Supreme Court of Oregon, Department 2.

Argued and Submitted Nov. 18, 1959.

Decided Dec. 16, 1959.

Charles S. Crookham, Portland, argued the cause for appellants. With him on the brief was Vergeer & Samuels, Portland.

F. Leo Smith, Portland, argued the cause for respondent. Patrick E. Dooley, Portland, submitted the brief.

Before McALLISTER, C. J., and ROSSMAN, SLOAN and KING, JJ.

ROSSMAN, Justice.

This is an appeal by the defendants Frank E. Coy and Beth Coy, husband and wife, from a judgment which the circuit court entered March 7, 1956, against them in favor of the plaintiff, after it had entered an order which found them in default and had later overruled a motion of the defendants to vacate that order.

The basis of the action was an injury which the plaintiff suffered January 4, 1955, in this state while riding in an automobile owned by the defendants and which was driven on that occasion by the defendant Beth Coy. The defendants reside in the city of Moses Lake, Washington. Service upon them was obtained in the manner authorized by ORS 15.190. The defendants concede that there was no defect in the manner in which process was served upon them and in which the circuit court of this state obtained jurisdiction over the cause of action. They contend, however, that they were unaware until April 18, 1956, that the plaintiff had instituted the action and had secured the judgment. Upon that day the Washington Farm Mutual Insurance Company, which had issued the defendants' policy of automobile insurance, received a letter from plaintiff's counsel, Mr. F. Leo Smith, stating that on March 7, 1956, the plaintiff obtained a default judgment in the sum of $14,519.56 against the defendants. The letter inquired when payment would be made. August 3, 1956, each defendant availed himself of the procedure afforded by ORS 18.060 by moving the circuit court to vacate the order of default. The motions were accompanied by affidavits which avowed that the defendants were unaware until April 18, 1956, that the plaintiff had filed his action and had secured judgment. November 23, 1956, the defendants filed further motions which also attacked the default. The motions of November 23--one for each defendant--claimed that the motion made by the plaintiff for the entry of defendants' default was not in writing and that, therefore, the judgment was void. All motions were overruled.

The motions to vacate the order of default which were based upon ORS 18.160 were accompanied by answers which each defendant tendered for filing. The answers were alike. The defendants condense in the following words a part of the tendered answers:

'Admitted paragraph I, admits the relationship between husband and wife, the ownership of the vehicle, the fact that it was driven by Beth Coy, and the road conditions were adverse, that Beth Coy knew the plaintiff was a Greyhound Bus driver, and the plaintiff rode in said vehicle westerly from Umatilla, Oregon, and that while on Columbia River Highway the same skidded on the pavement and came into collision with another vehicle, and admits that plaintiff may have suffered some injury.'

Those parts of the answer were followed by two affirmative defenses, the first of which averred that if the evidence should show that defendant Beth Coy was negligent in the operation of her automobile it would also show that the plaintiff was guilty of contributory negligence. The second affirmative defense averred that 'the plaintiff was being transported by defendant Beth Coy without payment and as a guest.'

The reference in the tendered answers to the Greyhound uniform which the plaintiff wore during the unfortunate journey apparently was induced by the following part of the complaint which, after stating that the weather and road were treacherous, added:

'* * * the defendant and her passenger observed that the plaintiff was wearing a Greyhound bus uniform and knew that he was a driver for said bus line and that he was familiar with the road conditions and also that he would be able to advise them as to how to handle their car on snow and ice and what to do on this particular road and what to do if they encountered unusual travelling conditions, and because of this, the defendant proposed that the plaintiff travel with her and her passenger on their trip * * * and the plaintiff * * * agreed to travel with the defendant and her passenger * * *.'

The defendants present these two assignments of error:

'The Court erred in refusing to set aside the default based upon defendants' mistake, inadvertence, surprise and/or excusable neglect.'

'The trial court erred in refusing to set aside the defaults entered against the defendants although plaintiff failed to file written motion for default.'

We will now consider the assignments of error. ORS 18.160 provides:

'The court may, in its discretion, and upon such terms as may be just, at any time within one year after notice thereof, relieve a party from a judgment, decree, order or other proceeding taken against him through his mistake, inadvertence, surprise or excusable neglect.'

Few sections of our laws have received more attention from the courts of this state than the one just quoted. Courts are reluctant to deny a party opportunity to present a defense, if he has one, to an action which has been brought against him. Accordingly, if the barrier to his presentation of a defense is an order of default which was entered 'through his mistake, inadvertence, suprise or excusable neglect,' and the court is satisfied that justice demands the vacation of the order ORS 18.160 empowers it to exercise sound discretion and vacate the default.

The language of ORS 18.160, including the word 'discretion,' is broad in its implications and it must be kept so, for often nothing less than sagacity is required to determine whether a defendant who seeks to be relieved of a default comes in good faith with a bona fide defense, or whether he had actual knowledge of the institution of the case against him and is an impostor. It is a serious matter to deprive a defendant of opportunity to present a defense, but it is equally serious to strip a plaintiff of a just judgment upon the motion of a pretender. As time has gone on and the courts have been enlightened through their administration of statutes such as ORS 18.160, they have come to take special note of incidents which they must look for when a defaulted defendant seeks an order reliving him from his default. Whether he acted promptly or took a dilatory course after becoming apprised of the order of the default judgment is often significant.

When any one is injured he lets out immediately an outcry of pain; when an innocent person is erroneously accused of a wrong he promptly protests; when a person is defamed his wounded pride gives him no rest until atonement has been made; in fact, when any one is made the victim of a serious injustice he does not wait silently for a while before seeking amends. Wrong gives its victim a strong compulsion to speak up and seek redress. If the victim of the injustice sees that a court has been victimized into lending its aid to the wrong-doer his urgency to set the matter aright is doubled. Accordingly, if any one claims that a wrong was done to him upon a prior occasion, and, yet it develops that he remained silent day after day and month after month until he entered the court room and sought damages or other relief he may find that there lurks in the word 'discretion,' found in ORS 18.160, doubts and suspicions of his story which he will have to remove before relief is awarded to him.

In Steeves v. Steeves, 139 Or. 261, 9 P.2d 815, 816, this court said:

'* * * The party seeking to vacate and set aside a decree must act with reasonable diligence and show good cause. Courts are usually liberal in opening up a default or setting aside a decree or judgment during the term in which it was entered. However, a different rule obtains after the term is closed. The action of the court in refusing to set aside a decree or judgment will not be reviewed except for an abuse of discretion * * *.'

The defendants--appellants cite five decisions of this court as authority for a contention that ORS 18.160 'is a remedial statute and is to be given a remedial and liberal interpretation to the end that every litigant shall have his day in court.' But in each of the five cases which they cite the motion to vacate the order of default was made within the term of court in which plaintiff won the judgment.

In the case at bar the defendants' insurance company concedes that it received on April 18, 1956, a letter from plaintiff's attorney which stated that a judgment against these defendants (the Coys) had been obtained by the plaintiff (Koukal). We explain that before the plaintiff had instituted his action his attorney and the claims supervisor, Mr. Dullanty, of the insurance company had exchanged several letters concerning the plaintiff's claim. The last of Mr. Dullanty's letters declined payment of the claim. It stated that the insurance company had carefully investigated the claim and had even consulted an Oregon attorney concerning its merits. From the facts just stated it will be noticed that when the insurance company on April 18, 1956, was notified that judgment had been obtained and was asked to make payment the letter concerned a matter with which it was well acquainted.

When the defendants on April 18, were informed that the plaintiff held a default judgment against them twelve days remained in the April term of the circuit court for Multnomah County. It was that court which had rendered the judgment. In those twelve days the defendants did nothing; that is, they filed no motion to vacate the order of default. Likewise, nothing was done in the May term of 31 days. The June term extends through June, July...