Pease Bros., Inc. v. American Pipe & Supply Co., 4294

• Decision Date: 28 May 1974
• Docket Number: No. 4294,4294
• Citation: 522 P.2d 996
• Parties: PEASE BROTHERS, INC., Appellant (Defendant below), v. AMERICAN PIPE & SUPPLY CO. (Defendant below), P. A. Coleman et al., Appellees (Plaintiffs below).
• Court: Wyoming Supreme Court

Page 996

522 P.2d 996

PEASE BROTHERS, INC., Appellant (Defendant below), v. AMERICAN PIPE & SUPPLY CO. (Defendant below) P. A. Coleman et al., Appellees (Plaintiffs below).

No. 4294.

Supreme Court of Wyoming.

May 28, 1974.

Donald P. White, of White & Hansen, Riverton, for appellant.

Donald E. Chapin, Casper, for appellee Coleman.

George M. Apostolos, of Brown, Drew, Apostolos, Barton & Massey, Casper, for appellee American Pipe & Supply Co.

Before PARKER, C. J., and McEWAN, GUTHRIE, McINTYRE and McCLINTOCK, JJ.

Mr. Justice McCLINTOCK delivered the opinion of the Court.

Pease Brothers, Inc. ¹ appeals from the order of the district court of Natrona County, Wyoming denying its motion to vacate default judgment theretofore entered after this defendant had failed to appear and plead in the action.

By judgment entered in the district court of Campbell County, Wyoming on May 6, 1972 the three plaintiffs herein were awarded separate judgments and accrued interest against Pease totaling $58,898.71. As part of execution proceedings out of that court they thereafter caused garnishment notice to be served upon American. Its answer acknowledged an indebtedness to Pease after payment of existing indebtedness of $34,457.94, which sum it claimed could be reduced by setoffs which could amount to $16,000.00. It was also stated that American had in its possession certain damaged pipe belonging to Pease, the future storage and cost of removal of this damaged pipe being the basis of the contingent setoff of $16,000.00.

No further proceedings appear to have transpired in that execution and on April 12, 1973 the present action was commenced in the district court of Natrona County by these same plaintiffs against American and Pease as defendants. The first claim of the complaint alleges the entry of the judgment, the issuance of garnishee notice, answer by American, a copy thereof being attached to and incorporated in the complaint, and that the disclosures therein are unsatisfactory. It is then alleged that the present action is commenced against American pursuant to the provisions of §§ 1-430 and 1-256, W.S.1957 for determination of the amount of property and credits of every kind of Pease in the possession of American. The second claim, directed against Pease, alleges that the amount due from American to Pease arises from a contract between the two defendants whereby Pease undertook to do certain work in the excavation and removal of a pipe line which had been purchased by American and the right to relief by plaintiffs against American cannot be adequately determined without the designation of Pease as a party defendant. The complaint prays for determination of the amount due from American to Pease; judgment against American Pipe for all property, credits, money, and every other asset in the possession of American owned by or owed to Pease, to an amount sufficient to satisfy its existing judgment against Pease; and

'3. Such other and proper relief as to afford complete adjudication of the rights and obligations between plaintiffs and the defendants or either of them and between the defendants.'

Signed summons bearing the seal of the court addressed to American was issued April 12 and bears a notation of acceptance of service by the attorney who later appeared in behalf of American.

Unsigned summons ² bearing no official seal, addressed to Pease, likewise was issued on April 12 and the return thereon shows that it was served by the deputy sheriff of Campbell County on April 14, by delivery 'to Pease Brothers, Inc. (by leaving with Roy Lind, agent) in person and personally, in Campbell County, Wyoming'.

On April 17, 1973 plaintiffs filed a request to the clerk to mail a copy of the complaint and summons to 'said defendant corporation, ³ registered mail with return receipt requested, at its last known address, 120 East Main, Vernal, Utah, 84078', which request was made pursuant to provisions of Rule 4(d)(4), W.R.C.P. for personal service upon a corporation. Attached to the clerk's certificate of mailing is a postal receipt for certified mail dated April 17, 1973, No. 130851. The record also contains an unopened envelope addressed by the clerk to Pease Brothers, Inc., at the above Utah address, postmarked in the Casper cost office April 17, 1973 with stamped notation thereon that first notice was given April 20, 1973 and '2nd Notice Return' May 5, 1973. It also is stamped 'Returned to Writer, Reason Checked, Unclaimed X'. This envelope apparently was returned to the Casper post office on May 9, 1973 and thereupon returned to the clerk of the court.

On May 7, 1973 American filed its answer addressed to the first claim, ⁴ denying for want of information the allegations concerning the Campbell County judgment and payment thereon, admitting that it had received the garnishee notice and filed its answer, copy of which had been attached to plaintiffs' complaint and by reference thereto incorporated the same in this answer. All other allegations of the complaint were denied.

Without affirmative allegations or cross-claim against Pease, American demanded judgment against the plaintiffs and Pease jointly and severally: declaring and determining the amount of money due from American to Pease; declaring what property, if any, belongs to or is the property of Pease; determining the disposition of any money found to be owed by it to Pease and the disposition of any property that may be owned by Pease; discharging American as garnishee upon the court's making the foregoing determinations and dispositions; for such other and proper relief 'as to afford a complete adjudication of the rights and obligations among plaintiffs and defendants or either of them, and as between the defendants'; and for costs of action and any other relief that might be proper.

Pease filed no answer or other pleading and on May 8, 1973 attorney for the plaintiffs filed an affidavit for entry of default, reciting the foregoing facts concerning the service and mailing, and also claiming that time for answer had expired and Pease had neglected and failed to answer or otherwise plead. Pursuant thereto, and on May 8, 1973, entry of default was entered by the clerk, reciting the facts of service, mailing, and failure to plead.

The judgment entered May 21, 1973 ⁵ shows appearances by attorneys for plaintiffs and American. It recites the facts concerning service upon and mailing to Pease as above set forth, and the entry of default by the clerk. It is then recited that after hearing the court found that personal service had been made on Pease within the state of Wyoming as required by law and applicable rules, 'and that the court now has jurisdiction over all of the parties to and the subject matter of this action; that defendant Pease Brothers, Inc. is in default and its default is hereby entered'.

It is further found that Pease is indebted to plaintiffs for a total amount of $54,651.11; that American, in obedience to the garnishee notice, has retained funds owed by it to Pease in the amount of $37,845.44; and that in addition American is holding 36,421 feet of 12 3/4 O.D. pipe owned by defendant located at three separate places in the state of North Dakota, which it is holding subject to the further order of the court.

Judgment was then entered that American was indebted to Pease.

'in the total amount of $37,845.44, which amount is in full satisfaction of any and all rights and claims which defendant Pease Brothers, Inc. may now have or could hereafter assert against American Pipe & Supply Co. arising out of or accruing in connection with or on account of the performance of that certain agreement between said defendants dated July 17, 1971, which agreement provided for the removal by Pease Brothers, Inc. of a pipeline of 12 3/4 O.D. pipe extending 36 miles from Golva, North Dakota and about 27 miles of 12 3/4 O.D. pipeline commencing south of Dickinson, North Dakota, and other services relating to the removed pipe.'

It was then ordered that American pay plaintiffs the sum which it owed Pease for application upon plaintiffs' judgment.

'and forthwith deliver to the plaintiffs all of said pipe owned by defendant Pease Brothers, Inc. in its present condition in the yards in which it is now situate as aforesaid, and that upon such delivery, made to the satisfaction of the Court, defendant American Pipe & Supply Co. shall be released from any further obligation to the plaintiffs under the garnishment proceedings or to Pease Brothers, Inc. under said July 17, 1971 agreement or otherwise.' ⁶

On May 25, 1973 Pease, acting through present Wyoming counsel, filed motion to vacate and set aside the judgment and to grant leave to defendant to file an answer or otherwise plead in said cause, on the ground that through mistake and inadvertence answer or other pleadings were not filed in its behalf within the time required by law, as shown by the affidavit of attorney attached. The gist of this affidavit is that on May 9 (one day after default had been entered by the clerk) Wyoming counsel had received a call from Salt Lake City counsel about the matter, had discussed the case briefly, and it was agreed that the complaint and other pertinent documents would be forwarded to Wyoming counsel who would then contact opposing counsel. It further appears that while a letter of transmittal was written in Salt Lake City on May 10, the envelope bearing the enclosures was not postmarked in the Salt Lake City post office until May 22, and was received on May 23 by Wyoming counsel who immediately called the attorney for the plaintiffs and was informed by his secretary that judgment had been entered on May 21. It is further alleged in the affidavit that fairness and equity demand that the judgment should be vacated and set aside and the respective rights of the defendants and the claims and demands between them be adjudicated and determined by the court after due notice and...