Pinkham v. Plate
| Docket Number | Docket No. 48954-2021 |
| Decision Date | 28 June 2024 |
| Citation | 552 P.3d 605 |
| Parties | Scott PINKHAM, an individual; and Natalie Pinkham, an individual, Plaintiff-Counterdefendants-Respondents, v. David PLATE an individual; Three Peaks Homes, LLC, an Idaho limited liability company; Rebeccah Jensen, an individual, Defendants-Counterclaimants-Appellants, and Legacy Management Enterprises, LLC, a Wyoming limited liability company, Defendants-Counterclaimants, and Doug Hall, an individual; Rebel Crew Construction, LLC, a Wyoming limited liability company, Defendants. |
| Court | Idaho Supreme Court |
Appeal from the District Court of the Seventh Judicial District of the State of Idaho, Bonneville County. Bruce L. Pickett, District Judge.
The district court’s default judgment is affirmed.
Hawley, Troxell, Ennis & Hawley, LLP, Pocatello, for Appellants. John A. Bailey argued.
Parsons, Behle & Latimer, Idaho Falls, for Respondents. John E. Cutler argued.
SUBSTITUTE OPINION
THE OPINION DATED NOVEMBER 28, 2023, IS WITHDRAWN
This case concerns the entry of a default judgment in favor of Scott and Natalie Pink- ham for $647,311.95 against Three Peaks Homes, LLC, David Plate, and Rebeccah Jensen (collectively "Appellants") jointly and severally. Appellants moved to set aside both the entry of default and default judgment, but the district court denied both motions.
On appeal, Appellants contend that the district court abused its discretion by not setting aside the default because the default should not have been entered in the first place or because there was good cause to set aside the default. Appellants also argue that they are entitled to relief from the default judgment because the district court entered it without proper authority or evidentiary support. On November 28, 2023, this Court released its original decision in this appeal. We thereafter granted the Pinkhams’ petition for rehearing. For the reasons discussed below, we affirm the district court’s decision denying the motion to set aside the default and default judgment.
The Pinkhams signed a contract with Three Peaks Homes, LLC, for the construction of a custom home at a fixed price of $1,000,000. Construction did not go as planned and the contract was terminated before the home was completed. Three Peaks subsequently filed two $600,000 mechanics’ liens against the Pinkhams’ home. The Pinkhams then filed a complaint against David Plate, Rebeccah Jensen, Three Peaks, Rebel Crew Construction, LLC, and Legacy Management Enterprises, LLC, asserting several causes of action: (1) breach of contract; (2) breach of implied warranty of workmanship; (3) fraud; (4) replevin; (5); trespass; (6) slander of title; (7) quiet title; and (8) unjust enrichment. The Pinkhams later filed an amended complaint that added claims for injunctive relief and piercing the corporate veil. Neither the complaint nor the amended complaint specified the amount of monetary damages sought, but instead prayed for "an award of damages to Plaintiffs in [sic] amount to be determined at trial[.]" Additionally, the Pinkhams filed notices of lis pendens against two other properties owned by Legacy on the basis that Three Peaks used materials and labor that the Pinkhams paid for in projects on those properties.
Plate and Jensen appear to own both Three Peaks and Legacy, although the record is unclear as to their exact ownership interests or the management structure of those businesses. Plate, Jensen, Three Peaks, and Legacy were represented by the same attorney, Lance Schuster. Plate, Jensen, and Three Peaks filed a combined answer and counterclaim, while Legacy filed a separate answer and counterclaim. Three Peaks asserted that the Pinkhams breached the construction contract and sought to foreclose on its liens on the Pinkhams’ home. Legacy’s counterclaim asserted causes of action for abuse of process and slander of title and sought to have the lis pendens removed from the public record.
Legacy and the Pinkhams filed cross motions for partial summary judgment. The Pinkhams’ motion sought a judgment ordering the removal of Three Peaks’ mechanics’ lien's filed against the Pinkhams’ home. The Pinkhams’ motion was supported by a declaration from Scott Pinkham, which included an attachment showing all the cheeks and bank draws used to pay for Three Peaks’ work, totaling $648,296.02. The summary judgment decision is not included in the record on appeal, but based on other parts of the record, it appears the district court denied the Pinkhams’ motion.
On November 13, 2020, Schuster filed a motion for leave to withdraw as counsel for Plate, Jensen, Three Peaks, and Legacy under Idaho Rule of Civil Procedure 11.3(b). He asserted his clients had failed to communicate or provide requested information and that neither Three Peaks nor Legacy had met their financial obligations to him. In his motion, Schuster provided Appellants’ last known addresses. Schuster provided the same address for all four parties.
That same day, the court clerk served a copy of the withdrawal order on Appellants via first class mail to the last known address provided by Schuster. On December 11, Schuster served two copies of the order on Appellants, one via certified mail and the other via first class mail, to the same last known address.
The return address on the letter was the same last known address provided by Schuster, and the same address to which the clerk and Schuster mailed copies of the order granting the motion to withdraw. The district court did not take any action in response to Appellants’ letter.
On January 6, 2021, the Pinkhams moved for the entry of default and default judgment against Appellants and for dismissal of Appellants’ counterclaims with prejudice. The Pinkhams asserted default judgment was proper under Rule 11.3 because Appellants failed to file "a notice of appearance of a new attorney or a notice of self-representation … within 21 days" of service of the district court’s December 10 order. The Pinkhams acknowledged Appellants’ December 23 letter but argued the letter did not constitute a written appearance as required by Rule 11.3. Neither the Pinkhams’ motion nor their memorandum in support of the motion identified the amount of damages sought or included any documentation supporting an award of damages. The motion stated it was supported by Schuster’s declaration confirming he served two copies of the order on Appellants, and "the pleadings and records on file herein." The Pinkhams’ counsel served the motion on Appellants on January 6 via first class mail to the last known address identified by Schuster.
From the record, it appears that the Pinkhams also submitted a proposed order granting their motion and a proposed default judgment to the district court. The record does not indicate whether the Pinkhams served copies of the proposed order and judgment on Appellants. The proposed default judgment included an award of damages in the amount of $647,331.95. However, the Pinkhams submitted no memorandum, declarations, evidence, or argument to support the damage award included in the proposed default judgment.
Five days later, on January 11, 2021, the district court granted the Pinkhams’ motion without a hearing. The district court found that Appellants had not filed a notice of appearance or self-representation as required by Rule 11.3 and the district court’s December 10 order. The district court entered default against Appellants and ordered that judgment be entered by default against Appellants "in accordance with the relief sought in Plaintiffs’ Amended Complaint, as set forth in the Judgment." The district court signed the proposed order and default judgment submitted by the Pinkhams without making any changes to either document. The default judgment stated:
Defendants Three Peaks Homes LLC, David Plate, Rebecca [sic] Jensen, Legacy Management Enterprises, LLC[,] and Rebel Crew Construction, LLC[,] are jointly and severally liable to the Plaintiffs Scott Pinkham and Natalie Pinkham, husband and wife, in the amount of $647,331.95.
The district court did not issue a separate decision explaining the basis for its damage award. The deputy court clerk served copies of the default order and default judgment on Appellants at their last known address.
Appellants later secured new counsel and on April 5, 2021, filed a motion to set aside the default and default judgment under Idaho Rule of Civil Procedure 60(b)(1), (4), and (6). They argued that the default and default judgment should be set aside based on excusable neglect or mistake as they requested an extension of time, did not have notice of the twenty-one-day deadline to inform the district court how they were...
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