Kueper v. Murphy Distributing

Decision Date28 July 1992
Docket NumberNo. 60775,60775
Citation834 S.W.2d 875
PartiesGilbert KUEPER and James Frerker, d/b/a Carlyle Distributing, Plaintiffs-Respondents, v. MURPHY DISTRIBUTING, d/b/a Deb, Inc., Defendant, and Angie Hogan, Individually, Defendant-Appellant.
CourtMissouri Court of Appeals

W.W. Sleater, Kirkwood, for defendant-appellant.

Raymond A. Bruntrager Sr., Daniel J. Bruntrager, St. Louis, for plaintiffs-respondents.

STEPHAN, Judge.

Angie Hogan ("Hogan") appeals from a trial court order: (1) overruling her motion to set aside a default judgment and execution; (2) denying her motion to reconsider or amend the judgment denying her motion to set aside the default judgment and execution; and (3) denying her motion to strike surplusages and enter final judgment. We reverse and remand.

On October 15, 1990, Gilbert Kueper and James Frerker, d/b/a Carlyle Distributing ("Carlyle"), filed a petition on open account in St. Louis City against Murphy Distributing, d/b/a Deb, Inc. ("Murphy"), and Angie Hogan, individually, alleging that from May 23, 1988, through November 28, 1989, at "defendant's" request, Carlyle furnished to "defendant" soda at 1831 Sidney in St. Louis City, and although "defendant" received the same, it has failed and refused to pay $41,801.75, which is still due and owing.

On November 21, 1990, the St. Louis City Sheriff attempted to serve both Murphy and Hogan at the Sidney address. The Sheriff, however, returned service on both summonses stating that after a due and diligent search he was unable to locate either Murphy or Hogan in that the building at the referenced address was vacant. Carlyle then requested that alias summonses be issued to Murphy and Hogan at 7373 Elm Street, Maplewood, Missouri 63143. On November 8, 1990, the St. Louis County Sheriff served Murphy and Hogan at the Elm address. Although Hogan accepted service, neither Murphy nor Hogan filed an answer to Carlyle's petition nor appeared in court. As a result, the trial court entered an interlocutory default judgment against Hogan on March 12, 1991. On April 11, 1991, the trial court held a hearing as to damages. Hogan continued to remain in default. After the presentation of evidence, the court entered a default judgment in favor of Carlyle and against Hogan in the amount of $41,801.75 plus costs.

On June 4, 1991, Carlyle filed a request for execution and/or garnishment. On June 19, 1991, the St. Louis City Deputy Clerk issued a Writ of Execution to the St. Louis County Sheriff, ordering him to levy upon Hogan's individual property.

On June 29, 1991, Hogan filed a "Separate Special Appearance of Defendant Angie Hogan, and Her Separate Motion to Set Aside Judgment and Execution Heretofore Entered, as Being Entered Without Jurisdiction or Venue." The trial court denied this motion on August 7, 1991. On August 23, 1991, Hogan filed a "Special Appearance of Defendant Angie Hogan and Her Motion to Reconsider or Amend This Court's Order of August 7, 1991, or in the Alternative, For a New Trial." Four days later, Hogan filed a "Motion to Strike Surplussages [sic] and Enter Final Judgment." On August 30, 1991, the trial court denied both motions. On September 5, 1991, Hogan filed her Notice of Appeal, stating that she was appealing from the trial court's order: (1) overruling her motion to set aside judgment and execution; (2) denying her motion to reconsider or amend; and (3) denying her motion to strike surplusages and enter final judgment. On October 28, 1991, Carlyle filed a motion to dismiss Hogan's appeal alleging that it was untimely since Hogan failed to file the appeal within ten days of the August 7, 1991 judgment, pursuant to Rules 81.04(a) and 81.05(a). On October 31, 1991, Hogan filed a "Motion for Leave to File Appeal Out of Time" alleging that the trial court's August 7, 1991 judgment did not become final for purposes of appeal until thirty days had elapsed, to wit, September 6, 1991, and that she had ten days thereafter to file her appeal. On November 13, 1991, this court denied both Carlyle's motion to dismiss and Murphy's motion for leave to file appeal out of time.

At the outset, we address a threshold issue, our jurisdiction. Neither party cited, nor were we able to find, a case which addresses the issue of whether an order disposing of a motion to set aside a default judgment is immediately final for purposes of appeal. However, recently, our brethren from the Southern District, touched on this issue. Clark v. Brown, 794 S.W.2d 254 (Mo.App.1990).

In Clark, the plaintiffs filed suit on various grounds, including malicious prosecution. Id. at 255. When the defendant failed to appear, the plaintiffs dismissed all counts of their petition except those pertaining to malicious prosecution. Id. On August 17, 1988, Judge McPherson entered a default judgment for plaintiffs for $24,000 in actual damages and $100,000 in punitive damages. Id. On November 10, 1988, the defendant filed a motion to amend proof of service of process or, in the alternative, to set aside the default judgment under Rule 74.05(c). Id. The trial court held a hearing on that motion on March 1, 1989. Id. On April 20, 1989, Judge McPherson wrote to the Commission on Retirement, Removal and Discipline requesting retirement for physical disability. Id. The Commission concluded that Judge McPherson was unable to discharge the duties of his office, and on June 13, 1989, it recommended to the Missouri Supreme Court that Judge McPherson be granted disability retirement. Id. However, on June 26, 1989, Judge McPherson entered an order overruling defendant's motion to amend proof of process or to set aside the default judgment. Id. On July 6, 1989, the defendant appealed from that order alleging that Judge McPherson had no jurisdiction to act in the case after June 13, 1989. Id.

The plaintiffs, on the other hand, argued that Judge McPherson's inability to act on June 26, 1989, was immaterial, because the motion became overruled automatically on February 8, 1989. Id. The plaintiffs reasoned that the motion to set aside the default was an after trial motion under Rule 81.05 and was subject to the same time limitations as a motion for a new trial; and therefore, the motion to set aside was subject to the provision of Rule 78.06 that if the trial court does not pass upon the motion within 90 days after it is filed, it is denied for all purposes. Id. The plaintiffs further argued that the appeal was untimely, because it was filed more than ten days after February 8, 1989. Id.

The court noted that the plaintiffs' argument was supported by some cases decided prior to the rules' revision which became effective January 1, 1988. Id. The court explained that these cases say that a motion to set aside a default judgment can properly be considered as an after trial motion in the nature of a motion for a new trial, and is, therefore, subject to the time limitations of old Rules 75.01, 78.04 and 78.06. Id. at 256. The court further explained, however, that those cases became inapplicable with the adoption of Rule 74.05(c), effective January 1, 1988. Id. The court stated:

[Rule 74.05(c) ] now provides for one year after entry of the default for the filing of a motion to set aside that default. This new time provision serves to sharply distinguish motions to set aside default judgments from motions for new trial and other motions in the nature thereof. The latter motions must be filed within 15 days after judgment and will be automatically denied if not otherwise ruled at the end of 90 days. These time limitations cannot logically apply to motions to set aside defaults, which now may be filed as long as one year after the rendition of the default.

Id. The court determined, relying on State ex rel. King v. Huesemann, 776 S.W.2d 488 (Mo.App.1989), that a motion to set aside a default judgment is an independent action and it cannot terminate automatically after 90 days any more than a new suit in equity would so terminate. Id. The court concluded that the motion to set aside the default judgment was not automatically disposed of on February 8, 1989, but was still pending in June 1989. Id. The court further concluded that because Judge McPherson had become disqualified to act on June 13, 1989, the purported order of June 26 was null and of no effect, and, therefore, there was no final appealable order upon which the appellate court could exercise its jurisdiction. Id.

We now hold that because a motion to set aside a default judgment is an independent action which does not automatically terminate after 90 days, the trial court's determination of whether to grant or deny such a motion is an independent judgment. As such, the trial court retains control over its judgment for thirty days after the entry of said judgment, and may, after giving the parties an opportunity to be heard and for good cause, vacate, reopen, correct, amend, or modify its judgment within that time. Rule 75.01. At the expiration of this thirty day period, the judgment becomes final. A party then has ten days to appeal from the judgment, pursuant to Rule 81.04(a).

Here, the trial court denied Hogan's motion to set aside the default judgment on August 7, 1991. Since the trial court retained jurisdiction of that judgment for thirty days, pursuant to Rule 75.01, that judgment did not become final until September 6, 1991. Although Hogan filed her Notice of Appeal on September 5, 1991, under Rule 81.05(b), such notice is considered as filed on September 6, 1991, and Hogan's appeal is, therefore, timely. Having determined the jurisdiction of this appeal, we proceed to its merits.

Trial courts have broad discretion to grant or deny motions to set aside default judgments, even though appellate courts favor a trial on the merits rather than default, particularly when a substantial defense exists. Plybon v. Benton, 806 S.W.2d 520, 524 (Mo.App.1991). Normally, if the trial court sets aside...

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