M.S. Conway Const. Co., Inc. v. Prudential Ins. Co. of America

• Decision Date: 16 October 1984
• Docket Number: No. WD,WD
• Citation: 682 S.W.2d 56
• Parties: M.S. CONWAY CONSTRUCTION CO., INC., Plaintiff-Respondent, v. The PRUDENTIAL INSURANCE COMPANY OF AMERICA, Defendant-Appellant. 34894.
• Court: Missouri Court of Appeals

Page 56

682 S.W.2d 56

M.S. CONWAY CONSTRUCTION CO., INC., Plaintiff-Respondent, v. The PRUDENTIAL INSURANCE COMPANY OF AMERICA, Defendant-Appellant.

No. WD 34894.

Missouri Court of Appeals,

Western District.

Oct. 16, 1984.

Motion for Rehearing and/or Transfer to

Supreme Court Overruled and Denied

Nov. 27, 1984.

Application to Transfer Denied

Jan. 15, 1985.

William E. Simmons, Kent T. Perry, Wagner, Leek & Mullins, Kansas City, for defendant-appellant.

Dennis J.C. Owens, Gary McMillan, Raymond, Raymond & Owens, Kansas City, for plaintiff-respondent.

Before TURNAGE, C.J., and SOMERVILLE and MANFORD, JJ.

TURNAGE, Chief Judge.

Prudential Insurance Company appeals from the refusal of the trial court to set aside a default judgment entered against it. M.S. Conway Construction Company appeals from the judgment entered in its favor on the ground that the court erroneously awarded only the statutory nine per cent rate of interest from the date of judgment, rather than the parties' contractual rate of interest. Affirmed.

Conway filed suit against Prudential in January of 1983 in which it sought to recover the contract price plus interest for repair work it performed on a shopping center parking lot owned by Prudential. On January 7, 1983, Conway obtained service pursuant to law on the Superintendent of Insurance for the State of Missouri. The summons and petition were mailed to Prudential's home office in New Jersey, and by that office forwarded to its Chicago regional office. Prudential did not file responsive pleadings and was thus in default on February 7, 1983.

On February 11, 1983, Conway moved for a default judgment and hearing, and on February 23, the court conducted a hearing and entered judgment awarding Conway $41,226.84, together with interest on the judgment at nine per cent per annum.

On March 2, 1983, Prudential moved to set aside the default judgment, ¹ pleading that its default was a result of excusable neglect, that it had a meritorious defense to the suit, and that Conway would not be injured if the court sustained the motion. On April 1, 1983, the court held a hearing on the motion to set aside and Prudential presented only the testimony of its associate regional counsel for real estate. Counsel testified he received the summons and petition at his Chicago office and then placed the papers in his briefcase because he was leaving that day to discuss other business in Kansas City. Counsel stated that he met with local counsel in Kansas City and discussed various legal matters with him. He thought he had delivered the Conway suit papers to local counsel, but he was called on February 24, 1983, and advised that a default judgment had been entered in favor of Conway on February 23. Investigation revealed that Prudential's counsel had failed to leave the papers with local counsel in Kansas City, but had inadvertently taken them back to Chicago, where they were placed in a file in the Prudential offices and forgotten. On May 16, 1983, the court overruled Prudential's motion to set aside the default judgment.

Prudential contends on appeal that its failure to file a responsive pleading was the result of excusable neglect or mistake, and that it had a meritorious defense to the lawsuit, thus, the trial court erred in refusing to set aside the default judgment. The action of a trial court in sustaining or overruling a motion to set aside a default judgment is generally within its discretion. Whitledge v. Anderson Air Activities, 276 S.W.2d 114, 116 (Mo.1955). The general rule is that, in order to justify a trial court in setting aside a default judgment, a defendant must have shown he has a meritorious defense, and he has good reason or excuse for the default. Id. The defendant must show both his meritorious defense and the excuse for his default in order to warrant setting aside the default judgment. J.G. Jackson Associates v. Mosley, 308 S.W.2d 774, 778[4-6] (Mo.App.1958). Further, when a trial court has overruled a motion to set aside a default judgment, the judgment will not be disturbed on appeal unless the elements of reasonable excuse and meritorious defense are so clearly apparent that it is manifest the refusal to set aside was arbitrary. Whitledge, 276 S.W.2d at 116.

Prudential contends that it was excusable human error for its regional counsel to become engrossed in other matters and forget to transfer the suit papers to local counsel in Kansas City. While each case involving the existence of good cause or excusable neglect is to be considered on its own facts, cases exist where papers have been filed and forgotten or misrouted. In Distefano v....