Myers v. Pitney Bowes, Inc., 20160

• Decision Date: 30 January 1996
• Docket Number: No. 20160,20160
• Citation: Myers v. Pitney Bowes, Inc., 914 S.W.2d 835 (Mo. App. 1996)
• Parties: Lawrence Leroy MYERS, Plaintiff-Respondent, v. PITNEY BOWES, INC., Defendant-Appellant.
• Court: Missouri Court of Appeals

Page 835

914 S.W.2d 835

Lawrence Leroy MYERS, Plaintiff-Respondent, v. PITNEY BOWES, INC., Defendant-Appellant.

No. 20160.

Missouri Court of Appeals,

Southern District,

Division One.

Jan. 30, 1996.

Appeal from the Circuit Court of Greene County; Don Bonacker, Judge.

Clark H. Cole, Keith A. Rabenberg, Armstrong, Teasdale, Schlafly & Davis, St. Louis, for defendant-appellant.

Mark E. Gardner, Mary H. Neal, Carmichael, Gardner & Clark, Springfield, for plaintiff-respondent.

PER CURIAM.

Pitney Bowes, Inc. (Defendant) appeals the denial of its motion to set aside a default judgment entered in favor of Plaintiff, Lawrence Leroy Myers. We reverse and remand.

In his petition filed in December, 1994, Plaintiff sought a declaratory judgment concerning his entitlement to benefits, including disability benefits, under plans provided by Defendant. Included in the petition were allegations that he had been employed by Defendant since 1976, and as a result he was entitled to certain benefits, including disability benefits described in a "Pitney Bowes Benefit Plans" pamphlet, portions of which were attached; that he had requested a temporary leave of absence on April 20, 1990, and in that same month had applied for disability benefits under the plan, which were denied, as was his appeal from that decision; that he was told by Defendant's agents that in order to remain employed by Defendant he should give written notice that he was able to return to work on January 1, 1991, which he did (although he also alleged that the statement was not true); that he received medical benefits from Defendant through December, 1992; that he was told by Defendant's agents to apply for social security disability benefits, and that if those benefits were granted he would be entitled to receive benefits from Defendant; that on March 25, 1992 he was determined to be disabled as defined in the Social Security Act and was found to be entitled to social security disability benefits retroactive to October 1, 1990; "[t]hat plaintiff has been entitled to receive disability benefits from defendant pursuant to [the portions of the plan attached to the petition] since April 20, 1990 and continues to be entitled to receive such benefits until reaching age 65"; that in addition to disability benefits he is entitled to "other benefits including life insurance, supplementary life insurance, and health insurance" as set forth in other portions of the "Pitney Bowes Benefit Plans" pamphlet attached; that he had been "wrongfully denied all such benefits"; and that Defendant "is estopped from asserting a lack of timeliness in pursuing this claim for the reason that defendant mislead plaintiff as set forth above and caused him to believe that his employment was continuing and that the denial of benefits would be rectified." The prayer of the petition sought a declaratory judgment concerning the "respective status, rights, obligations and legal relationships of the parties herein and particularly to adjudge and declare that plaintiff is entitled to receipt of disability benefits, as well as life insurance, supplementary life insurance and health insurance, retroactive to April 20, 1990 and continuing until plaintiff reaches the age of 65...."

Defendant did not respond to Plaintiff's petition, although its registered agent was duly served, and the trial court entered an "Interlocutory Judgment on Default" on January 17, 1995. On February 23, 1995, the court entered a Judgment against Defendant in which it held that "plaintiff is awarded and defendant is ordered to provide to plaintiff, disability benefits, as well as life insurance, supplementary life insurance and health insurance benefits retroactive to April 20, 1990 and continuing until plaintiff reaches the age of 65...." ¹

Defendant filed a Motion to Set Aside Default Judgment (the motion) pursuant to Rule 74.05(d) ² on March 24, 1995, which was denied on March 30, 1995. Defendant now appeals the denial of that motion and presents four points of alleged error. Because we find that its first point is dispositive, we do not address the remaining points.

Defendant's first point is premised on the theory that the trial court abused its discretion in denying the motion to set aside the default judgment, filed pursuant to Rule 74.05(d). The current version of Rule 74.05(d) indicates a more liberal posture concerning setting aside default judgments. LaRose v. Letterman, 890 S.W.2d 347, 351 (Mo.App.S.D.1994); Gibson v. Elley, 778 S.W.2d 851, 853, n. 1 (Mo.App.W.D.1989). That rule provides that a default judgment may be set aside "[u]pon motion stating facts constituting a meritorious defense and for good cause shown...." It defines "good cause" as including a mistake or conduct that is not "intentionally or recklessly designed to impede the judicial process," and requires that the motion be made within a reasonable time not to exceed one year.

The trial court has the discretion to set aside a default judgment, and its decision will not be interfered with unless an abuse of discretion is found. Bell v. Bell, 849 S.W.2d 194, 197 (Mo.App.W.D.1993); Moore v. Dahlberg, 810 S.W.2d 730, 732 (Mo.App.W.D.1991). The discretion not to set aside a default judgment, however, is a good deal narrower than the discretion to set one aside. LaRose v. Letterman, 890 S.W.2d at 350. Thus, appellate courts are more likely to reverse a judgment which fails to set aside a default judgment than one which grants that relief. Moore v. Dahlberg, 810 S.W.2d at 732. This is because of the law's distaste for default judgments and its preference for trials on the merits. See LaRose v. Letterman, 890 S.W.2d at 350; Gibson v. Elley, 778 S.W.2d at 854.

Defendant's motion alleged that its failure to answer or otherwise appear was the result of mistake or conduct that was not intentionally or recklessly designed to impede the judicial process. The motion explained that after being served, the lawsuit was transmitted to Defendant's Connecticut headquarters. During this period, Defendant was "undergoing reorganization of its Human Resources Department and Disability Department. In addition, the Manager of the Disability Department, the person who would normally respond to the allegations in the lawsuit, retired ... causing a realignment in responsibilities." Accordingly, the motion alleged, "this lawsuit did not come to the attention of someone able [to] respond to the allegations in time to answer timely under the Missouri Rules of Civil Procedure." The motion also alleged that "[e]ventually, the lawsuit came to the attention of Marcy Macdonald, Counsel, Employee Benefits & Statutory Compensation Plans, but the default judgment had already been entered. She immediately thereafter, on March 22, 1995, contacted ... defendant's local counsel in Missouri," which resulted in the filing of the motion on March 24. As support for the foregoing assertions, Defendant also submitted the affidavit of Ms. Macdonald which acknowledged that she had reviewed the Motion To Set Aside Default Judgment; that she had personal knowledge of the facts stated in the motion; and that such facts were true and correct to her best knowledge and belief. ³

It appears from the record before us that, in denying the motion, the trial judge found that Defendant had not shown good cause for its failure to appear. The good cause requirement of Rule 74.05(d) is satisfied by proving that the party in default did not recklessly or intentionally impede the judicial process. Great S. Sav. & Loan Ass'n v. Wilburn, 887 S.W.2d 581, 584 (Mo. banc 1994); LaRose v. Letterman, 890 S.W.2d at 351; Plybon v. Benton, 806 S.W.2d 520, 524 (Mo.App.W.D.1991). While the prior version of Rule 74.05 was interpreted to mean that a defendant who negligently failed to file a timely answer should be denied relief, the amended rule clarifies that " 'good faith mistakes do constitute good cause, and a default judgment can now be vacated even if the movant has negligently failed to file a timely answer.' " Newton v. Manley, 824 S.W.2d 522, 524 (Mo.App.S.D.1992) (quoting Laughrey, Judgments--The New Missouri Rule, J.Mo.Bar 11, 15 (Jan.-Feb. 1988)).

There is no evidence that Defendant engaged in conduct designed to impede the judicial process. See Garner-Roe v. Anderson, 894 S.W.2d 223, 227 (Mo.App.E.D.1995); Clark v. Brown, 814 S.W.2d 634, 638 (Mo.App.S.D.1991). Upon discovery of the default judgment, Marcy Macdonald verified that she immediately contacted Defendant's local counsel in Missouri, and the motion to set aside was filed two days later.

It is clear that the trial court's discretion to forgive the mishandling of legal documents has been considerably broadened by the provisions of current Rule 74.05(d). McClelland v. Progressive Casualty Ins. Co., 790 S.W.2d 490, 493 (Mo.App.S.D.1990). Where a reasonable doubt exists as to whether the conduct was intentionally designed or irresponsibly calculated to impede the work of courts, it should be resolved in favor of good faith. Gibson v. Elley, 778 S.W.2d at 855. In the instant case, the mistakes and internal mishaps have not been shown to constitute intentional or reckless behavior designed to impede the judicial process. See Clark v. Brown, 814 S.W.2d at 639; Gibson v. Elley, 778 S.W.2d at 854. We hold, therefore, that Defendant presented facts sufficient to constitute good cause for its failure to appear and defend as required by Rule 74.05(d).

Plaintiff relies upon Robson v. Willers, 784 S.W.2d 893 (Mo.App.W.D.1990), and Hellwege v. Lamb, 739 S.W.2d 594 (Mo.App.E.D.1987). These cases are distinguishable because those courts relied on case law decided prior to the adoption of the new Rule 74.05. Bell v. Bell, 849 S.W.2d at 198. Additionally, in Robson, the conduct of appellants amounted to a conscious choice to ignore the summons which amounted to recklessness. Id.

Rule 74.05(d) also requires that the motion be filed within a reasonable time....