Maynard v. Nguyen

• Court: Idaho Supreme Court
• Writing for the Court: BURDICK, Chief Justice.
• Citation: Maynard v. Nguyen, 152 Idaho 724, 274 P.3d 589 (Idaho 2011)
• Decision Date: 07 September 2011
• Docket Number: No. 37335.,37335.
• Parties: Janice MAYNARD, Plaintiff–Appellant, v. Do NGUYEN, an individual, Jana Nguyen and Kenny Nguyen, husband and wife, and John Doe, whose true name is unknown, Defendants–Respondents.

152 Idaho 724

274 P.3d 589

Janice MAYNARD, Plaintiff–Appellant,

v.Do NGUYEN, an individual, Jana Nguyen and Kenny Nguyen, husband and wife, and John Doe, whose true name is unknown, Defendants–Respondents.

No. 37335.

Supreme Court of Idaho, Boise, June 2011 Term.

Sept. 7, 2011.

Rehearing Denied Oct. 31, 2011.

Idaho Legal Aid Services, Inc., Boise, for appellant. Howard A. Belodoff argued.

Do Nguyen, Jana Nguyen and Kenny Nguyen, Boise, pro se respondents argued.

BURDICK, Chief Justice.

This case comes before this Court on appeal from the grant of Do Nguyen, Jana Nguyen, Kenny Nguyen and John Doe's (collectively "the Nguyens") motion to set aside a default judgment in favor of Janice Maynard. On appeal, Maynard contends that the district court abused its discretion in setting aside its previously entered default judgment. We affirm the district court's order setting aside the default judgment and remand for further proceedings.

I. FACTUAL AND PROCEDURAL BACKGROUND

On approximately July 7, 2006, Maynard filled out an application to rent a trailer home from the Nguyens and reached an agreement with the Nguyens under which Maynard would receive title to the home if she paid $500 in rent each month for a period of three years. On November 11, 2008, Maynard reported to the Ada County Jail to serve a sentence, and when she returned home on November 27, 2008, she discovered that the Nguyens had removed her belongings from the trailer home and rented the trailer to other tenants.

On May 7, 2009, Maynard filed an action against the Nguyens under the Idaho Consumer Protection Act (ICPA), seeking actual damages for her missing possessions and enhanced ICPA penalties. The Nguyens were served with process on May 27, 2009, but did not file a timely answer or make a timely appearance. On June 19, 2009, Maynard's counsel applied with the district court for a default judgment. The court signed an order of default on June 25, 2009, though it did not enter the same in the record until September 2nd.

On July 14, 2009, an evidentiary hearing was held on the issue of damages. At the beginning of that hearing Maynard's attorney told the court that he had received a two-page letter on June 29, 2009, which was addressed to "The Honorable Judge, Mr. Eppink [counsel for Maynard], Janice Maynard and To Whom it May Concern". Counsel asked whether the court had received that letter, and described various documents which were attached to it. When the court said that it had not received the letter, the attorney offered no further information concerning the letter's contents, but proceeded to present evidence concerning damages.¹

On September 9, 2009, the district court entered a default judgment against the Nguyens in the amount of $3,265 in actual damages and an enhanced penalty of $15,000 for the ICPA violation.

On September 16, 2006, the Nguyens filed a motion pursuant to I.R.C.P. 60 to set aside the default judgment. The Nguyens noted that they had sent Maynard's attorney a letter on June 25, 2009, explaining their version of events and why they believed that Maynard had abandoned the trailer home.

On December 7, 2009, the district court granted the Nguyens' motion to set aside the default judgment, finding that the Nguyens had demonstrated that there were unique and compelling circumstances justifying relief under I.R.C.P. 60(b)(6). Specifically, the court found that Maynard's attorney had failed to comply with Idaho Rule of Professional Conduct 3.3 and that this lapse had resulted in prejudice to the Nguyens. The Court found that the letter sent by the Nguyens had asserted and explained a meritorious defense of abandonment. On December 21, 2009, Maynard filed a motion for permissive appeal, which the district court granted on January 13, 2010. The notice of appeal was filed on March 25, 2010.

II. STANDARD OF REVIEW

As this Court wrote in Waller v. State, Department of Health and Welfare:

A trial court's decision whether to grant relief pursuant to I.R.C.P. 60(b) is reviewed for abuse of discretion. The decision will be upheld if it appears that the trial court (1) correctly perceived the issue as discretionary, (2) acted within the boundaries of its discretion and consistent with the applicable legal standards, and (3) reached its determination through an exercise of reason. A determination under Rule 60(b) turns largely on questions of fact to be determined by the trial court. Those factual findings will be upheld unless they are clearly erroneous. If the trial court applies the facts in a logical manner to the criteria set forth in Rule 60(b), while keeping in mind the policy favoring relief in doubtful cases, the court will be deemed to have acted within its discretion.

146 Idaho 234, 237–38, 192 P.3d 1058, 1061–62 (2008) (citations omitted) (internal quotation marks omitted). An I.R.C.P. 60(b) motion may be used to obtain relief from a final judgment; however, it should not be used as a substitute for a timely appeal. Miller v. Haller, 129 Idaho 345, 348, 924 P.2d 607, 610 (1996). Although courts have broad discretion in granting or denying such motions, that discretion is bounded by the requirement that the party seeking relief demonstrate "unique and compelling circumstances" which justify relief. Id. at 349, 924 P.2d at 611.

It is incumbent upon a party seeking relief from a judgment not only to meet the requirements of I.R.C.P. 60(b), but also to show, plead or present evidence of facts which, if established, would constitute a meritorious defense to the action. This policy recognizes that it would be an idle exercise and a waste of judicial resources for a court to set aside a judgment if, in fact, there is no genuine justiciable controversy.

Ponderosa Paint Mfg., Inc. v. Yack, 125 Idaho 310, 317, 870 P.2d 663, 670 (Ct.App.1994).

III. ANALYSIS

Maynard argues that the district court abused its discretion in granting the Nguyens' I.R.C.P. 60(b) motion, based on the court's finding that Maynard's attorney had breached the rules of professional conduct, and that this constituted unique and compelling circumstances justifying relief. Maynard contends that the Nguyens never raised the issue of attorney misconduct in their I.R.C.P. 60(b) motion, and that the district court exceeded its discretion in considering that ground. Maynard contends that it is inappropriate to grant relief under I.R.C.P. 60(b)(6) for attorney misconduct where the Nguyens never cited I.R.C.P. 60(b)(3) (allowing for relief from judgment in cases of misconduct) and neither party briefed the issue or argued it before the court. Moreover, Maynard contends that her attorney did not violate the rules of professional conduct. Finally, Maynard contends that the Nguyens failed to plead or present evidence of facts which, if established, would constitute a meritorious defense. The Nguyens argue that the district court did not abuse its discretion.

The Nguyens brought their motion to set aside the default judgment under I.R.C.P. 60(b)(1) & (6). Idaho Rule of Civil Procedure 60(b) provides:

(b) Mistakes, Inadvertence, Excusable Neglect, Newly Discovered Evidence, Fraud, Grounds for Relief From Judgment on Order. On motion and upon such terms as are just, the court may relieve a party or his legal representative from a final judgment, order, or proceeding for the following reasons: (1) mistake, inadvertence, surprise, or excusable neglect; (2) newly discovered evidence which by due diligence could not have been discovered in time to move for a new trial under Rule 59(b); (3) fraud (whether heretofore denominated intrinsic or extrinsic), misrepresentation, or other misconduct of an adverse party; (4) the judgment is void; (5) the judgment has been satisfied, released, or discharged, or a prior judgment upon which it is based has been reversed or otherwise vacated, or it is no longer equitable that the judgment should have prospective application; or (6) any other reason justifying relief from the operation of the judgment. The motion shall be made within a reasonable time, and for reasons (1), (2), and (3) not more than six (6) months after the judgment, order, or proceeding was entered or taken. A motion under this subdivision (b) does not affect the finality of a judgment or suspend its operation. Such motion does not require leave from the Supreme Court, or the district court, as the case may be, as though the judgment has been affirmed or settled upon appeal to that court. This rule does not limit the power of a court to: (i) entertain an independent action to relieve a party from a judgment, order or proceeding, or (ii) to set aside, as provided by law, within one (1) year after judgment was entered, a judgment obtained against a party who was not personally served with summons and complaint either in the state of Idaho or in any other jurisdiction, and who has failed to appear in said action, or (iii) to set aside a judgment for fraud upon the court.

The district court recognized its decision to grant or deny the Nguyens' I.R.C.P. 60(b) motion was one of discretion, and that I.R.C.P. 60(b)(6) required that the Nguyens demonstrate unique and compelling circumstances justifying relief. The district court also recognized that in order to qualify for I.R.C.P. 60(b) relief an appellant must allege facts which, if proven true, would constitute a meritorious defense. The only remaining inquiry is whether the district court acted within the boundaries of its discretion and consistent with the applicable legal standards in reaching its decision.

There are two bases on which this Court may find that the district court abused its discretion: (1) finding that the Nguyens alleged facts which, if established, would have constituted a meritorious defense, and (2) finding that the Nguyens demonstrated unique and compelling circumstances justifying relief. We find that the district court acted within its discretion in both regards.

A. Meritorious Defense

The Nguyens did not specifically allege a...