Lowe v. Institutional Investors Trust

• Decision Date: 19 December 1974
• Citation: 529 P.2d 920,270 Or. 814
• Parties: Charles L. LOWE, doing business as Valley Fence Co., Respondent, v. INSTITUTIONAL INVESTORS TRUST, a Massachusetts business trust, et al., Appellant. Pacific Western Mobile Estates, Inc., Defendants.
• Court: Oregon Supreme Court

Page 920

529 P.2d 920

270 Or. 814

Charles L. LOWE, doing business as Valley Fence Co., Respondent, v. INSTITUTIONAL INVESTORS TRUST, a Massachusetts business trust, et al., Appellant Pacific Western Mobile Estates, Inc., Defendants.

Supreme Court of Oregon.

Argued and Submitted Dec. 3, 1974.

Decided Dec. 19, 1974.

Robert L. Nash, Portland, argued the cause for appellant. With him on the brief were William M. McAllister and Davies, Biggs, Strayer, Stoel & Boley, Portland.

Jack L. Mattison, Eugene, argued the cause for respondent. With him on the brief were Donald A. Gallagher and Jaqua & Wheatley, Eugene.

Before O'CONNELL, C.J., and HOLMAN, TONGUE, HOWELL, BRYSON and SLOPER, JJ.

SLOPER, Justice Pro Tem.

This is an appeal from an order denying defendant Institutional Investors Trust's motion to set aside a default judgment entered against it and a motion in the alternative for a reduction in the amount of attorney fees awarded to plaintiff.

The record establishes that plaintiff filed a suit in equity on November 27, 1973, to foreclose a mechanic's lien claim for labor and materials furnished in the construction of a mobile home park in Lane County, Oregon. Institutional Investors Trust (hereinafter referred to as IIT) was named a defendant because it held a mortgage on the real property and improvements upon which plaintiff claims a lien. Service was effected upon IIT by personal service on a Mr. J. Bulfamante, in New York City, on December 26, 1973. Mr. Bulfamante was employed by IIT as Assistant to the Executive Vice President of the corporation and was authorized to accept on their behalf process of personal service of legal proceedings. On February 12, 1974, an order of default was entered against IIT and other defendants, and on February 22, 1974, the trial court entered a Judgment and Decree of Foreclosure providing that plaintiff have judgment by default for $15,378.05, together with interest thereon, and for $5,181.79, costs and disbursements, including $5,000 attorney fees, and declaring that plaintiff's lien was a first lien against the real property and improvements. Thereafter and on the fourth day of April, 1974, IIT filed its motion seeking to set aside the decree and its alternative motion for a reduction in plaintiff's award of attorney fees. The motion was accompanied by an answer and an affidavit of J. Bulfamante. On April 5, 1974, the issues raised by defendant's motions were heard, testimony was taken and oral arguments of counsel were submitted to the court and the court on the eighth day of April, 1974, entered an order denying both of said motions. It is from this order that defendant IIT appeals.

The statute under which IIT seeks to have the default set aside, ORS 18.160, provides as follows:

'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.'

Under our previous decisions a default decree will be set aside only if the moving party establishes that the decree was entered against him through mistake, inadvertence, surprise, or excusable neglect; that he acted with reasonable diligence after knowledge of the default decree; and that he has a meritorious defense to the suit. The latter two legs of this legal tripod are important elements to be considered by the trial judge in the exercise of his discretion in granting or denying a motion to vacate a default decree. The proof of these two requirements does not, however, in and of itself, establish the first requirement of 'mistake, inadvertence, suprise or excusable neglect' as required in ORS 18.160, supra. See Burke v. Rachau,262 Or. 323, 338, 497 P.2d 1154 (1972); Stirling v. Dari-Delite, Inc., 262 Or. 359, 363, 491 P.2d 1168, 494 P.2d 252, 498 P.2d 753 (1972).

IIT contends that the trial court, in denying its motion to set aside the default decree, abused its discretion and committed prejudicial error because a mistake was made, either due to inadvertence or excusable neglect within the meaning of ORS 18.160.

The only explanation offered by IIT for its failure to appear and the only basis for tis motion to vacate the default under ORS 18.160 is contained in the affidavit of Mr. Bulfamante attached to the motion. The relevant parts of that affidavit after acknowledging that he is the proper person to accept service of legal process are:

3) That upon receipt of such process, it is customary and in the normal course of business that I forward said instrument(s) of process to the Legal Department of the Advisor, together with a forwarding memorandum concerning same, and filing a copy of said memorandum in the corporate records of the subject matter, and in my personal records;

'4) That I have been advised by Oregon counsel that the records in the matter of charles L. Lowe (d/b/a Valley Fence Co.) v. Springfield 256 Oreg. Ltd.; Pacific Western Mobile Estates, Inc.; IIT; et al show that service of process therein was accepted by me personally on December 26, 1973;

'5) That I have no recollection of such service; and

'6) That after a search of the files of IIT and of the Advisor, and...