McElroy v. Eagle Star Group, Inc.

• Decision Date: 25 January 2005
• Docket Number: No. WD 63862.,WD 63862.
• Citation: 156 S.W.3d 392
• Parties: Robin McELROY, Respondent, v. EAGLE STAR GROUP, INC., Appellant.
• Court: Missouri Court of Appeals

156 S.W.3d 392

Robin McELROY, Respondent, v. EAGLE STAR GROUP, INC., Appellant.

No. WD 63862.

Missouri Court of Appeals, Western District.

January 25, 2005.

Motion for Rehearing and/or Transfer to Supreme Court Denied March 1, 2005.

William J. Gotfredson, Kansas City, MO, for appellant.

Steven C. Effertz, Independence, MO, for respondent.

Before RONALD R. HOLLIGER, Presiding Judge, PATRICIA BRECKENRIDGE, Judge and JOSEPH M. ELLIS, Judge.

JOSEPH M. ELLIS, Judge.

Appellant, Eagle Star Group, Inc. ("Eagle Star"), appeals the denial of its motion to set aside a default judgment entered by the Circuit Court of Jackson County in favor of respondent, Robin McElroy, in her personal injury action against Eagle Star. In its sole point on appeal, Eagle Star claims the motion should have been granted pursuant to Rule 74.05(d)¹ since it stated facts establishing a meritorious defense to McElroy's lawsuit and also showed good cause for setting aside the default judgment. Finding a lack of good cause shown, we affirm.

McElroy's attorney first notified Eagle Star of McElroy's personal injury claim in a letter dated March 17, 2003, which was sent to and received by Eagle Star's registered agent, Michael Jaax. In this letter, counsel for McElroy described the nature and cause of McElroy's injuries, requested that Jaax notify Stone Oak's liability insurer of McElroy's claim, and asked that either Jaax or Stone Oak's liability insurer acknowledge her claim within fifteen days. Counsel for McElroy never received a response of any kind from Jaax or a liability insurer for Stone Oak.

McElroy filed her petition against Eagle Star on September 19, 2003, and Jaax was served on October 8, 2003. The petition alleged that McElroy was a resident of Stone Oak Apartments ("Stone Oak"), an apartment complex located at 3151 Jennings Road in Independence, Jackson County, Missouri, and that Eagle Star was "the owner and operator" of Stone Oak. According to the petition, on or about November 15, 2002, McElroy was injured when a glass globe which was located on a light fixture in her apartment fell off the fixture, striking her on the left wrist. The petition further alleged that an Eagle Star "maintenance employee" had previously changed a light bulb in that fixture but had negligently failed to secure the glass globe covering the fixture, which fell out of the fixture and struck McElroy when she subsequently attempted to replace the light bulb that had been placed there by Eagle Star's employee. The petition alleged three separate acts of negligence on the part of Stone Oak, "one or more of" which caused or contributed to cause McElroy's injuries: (1) that Stone Oak "failed to properly maintain the light fixture, to ensure that plaintiff could safely remove and replace a light bulb"; (2) that Stone Oak, "by its employee, improperly installed the lens to the light fixture so as to allow the lens to be insecure and fall on plaintiff as she attempted to change a light bulb"; and (3) that Stone Oak "allowed the light fixture to be placed in a location so that the fixture was dangerous to persons who might change the light bulb in said fixture, including plaintiff." Finally, the petition alleged that as a direct and proximate cause of Eagle Star's negligence, McElroy sustained: physical injury to her left arm and hand, including a lacerated tendon which required surgical repair; pain and suffering; permanent and progressive disability; past and future medical expenses; and past and future wage losses.

Eagle Star failed to file an answer to McElroy's petition within thirty days of personal service of process on its registered agent, as required by Rule 55.25(a). As a result, on November 20, 2003 (which was a little less than two weeks after Eagle Star was required to have filed its answer), McElroy filed a motion requesting the entry of an interlocutory order of default under Rule 74.05(b), a copy of which was also served on Jaax by counsel for McElroy. The trial court entered an interlocutory order of default on November 25, 2003, and set an evidentiary hearing for December 18, 2003. The following day (November 26, 2003), McElroy's counsel sent to Jaax, via certified mail with return receipt requested,² a letter enclosing a copy of the interlocutory order of default, which stated that such an order had been entered against Eagle Star and that an evidentiary hearing had been scheduled for December 18, 2003. This letter, which noted that counsel had previously attempted to contact Jaax by phone to discuss the case, but had never heard back from him, also invited Jaax to call counsel should he wish to discuss the matter prior to the scheduled hearing.³ Counsel for McElroy received no written or telephonic response to the letter.

At the December 18, 2003 evidentiary hearing, which was not attended by counsel for or a corporate representative of Eagle Star, McElroy presented evidence that her medical expenses from the accident totaled $33,931.33, that she would incur over $65,000.00 in future medical expenses, including additional surgery on her left hand, and that she was permanently and progressively disabled due to her injuries. McElroy also presented evidence that she had already lost some $27,040.00 in wages due to the time she missed due to her injury, and would experience additional wage losses in the future. Finally, McElroy presented substantial evidence that Eagle Star was the owner and/or operator of Stone Oak. This evidence included a publicly recorded easement, dated March 23, 2001, reciting that "Eagle Star Group, dba Stone Oak Apts .... owns or has control over certain real estate and improvements thereon located at 3151 Jennings Road, Independence, Missouri 64055 ... consisting of 96 residential units known as Stone Oak Apartments" and granting a cable television company an easement to install, operate, and maintain a cable communications system on the property. The easement was executed by and bore the signature of Michael Jaax, who listed himself as the "owner" of "Eagle Star Group dba Stone Oak Apartments." It also included a May 30, 2001 letter from Jaax to McElroy's mother informing her of a rent increase for Stone Oak residents effective July 1, 2001. This letter, which was signed by "Mike Jaax," bore a prominent "EAGLE STAR GROUP" letterhead.

On December 31, 2003, the trial court entered a default judgment against Eagle Star, finding that Eagle Star "is doing business as Stone Oak Apartments and is therefore responsible for the damages claimed by Plaintiff in this action." The court further found, upon consideration of the evidence before it, that McElroy sustained "severe personal injury" resulting in permanent disability, which caused her to incur past medical expenses in excess of $33,000; future medical expenses in excess of $65,000; lost wages in excess of $25,000; and future wage losses. The court ultimately assessed total actual damages against Eagle Star in the amount of $369,000.00.

Nearly a month later (January 27, 2004), Eagle Star filed a verified motion to set aside the default judgment pursuant to Rule 74.05(d), which allows a default judgment to be set aside if the movant states facts constituting a meritorious defense and shows good cause. The verified motion alleged that: (1) Eagle Star had a meritorious defense because it did not own the Stone Oak apartment complex (rather, a different corporate entity known as Day Star Properties did), and because "McElroy's injuries were likely caused by her own negligent conduct"; and (2) Eagle Star had good cause for failure to file a timely answer "because it reasonably believed its insurance carrier was doing so." McElroy filed a response on February 9, 2004, and on February 17, 2004, the trial court entered an order denying Eagle Star's January 27, 2004 motion to set aside the default judgment.

Two days later (February 19, 2004), Eagle Star filed an "emergency" motion for reconsideration. On February 24, 2004 (five days after Eagle Star filed the motion for reconsideration but before the trial court had ruled on it), Eagle Star filed a notice of appeal. Meanwhile, on March 1, 2004, McElroy filed her response to Eagle Star's motion for reconsideration, which included, among other things, evidence that Jaax was particularly knowledgeable about the legal system in general and default judgments in particular, having been a party to 189 lawsuits in Jackson County alone, 87 of which resulted in a default judgment and in most of which he acted pro se.

Although Eagle Star did not request an evidentiary hearing and counsel for McElroy did not believe it was entitled to one, in a March 11, 2004 letter to the trial court, a copy of which was also faxed to counsel for Eagle Star, McElroy's lawyer suggested, out of an abundance of caution, that the trial court conduct one anyway in order to allow Eagle Star "an opportunity to be heard." The trial court accepted counsel's suggestion, and on March 24, 2004, conducted such a hearing. At the commencement of the hearing, counsel for Eagle Star advised the trial court that Eagle Star did not wish to present any evidence in support of its motions and also claimed that its motion for reconsideration was moot because of the notice of appeal it had filed on February 24, 2004. The trial court denied Eagle Star's motion for reconsideration by order dated March 24, 2004. Thereafter, counsel for both parties advised the court that its "order" denying the motion to set aside the default judgment dated February 17, 2004, needed to be designated a "judgment" for purposes of appeal, and on April 16, 2004, the trial court entered a "judgment" denying Eagle Star's motion to set aside the default judgment. This appeal followed.⁴

I.

At the outset, though neither party's brief questions this court's jurisdiction over the instant appeal, we have a duty to determine our appellate jurisdiction sua sponte. Chromalloy Am. Corp. v. Elyria...