Radioear Corp. v. Crouse
| Decision Date | 16 March 1976 |
| Docket Number | No. 11743,11743 |
| Citation | 97 Idaho 501,547 P.2d 546 |
| Parties | RADIOEAR CORPORATION, a corporation, Plaintiff-Respondent, v. David F. CROUSE, dba Boise Hearing Aid Center, Defendant-Appellant. |
| Court | Idaho Supreme Court |
Peter E. Heiser, Jr., of Kidwell & Heiser, Boise, for defendant-appellant.
Frank E. Chalfant, Jr., Boise, for plaintiff-respondent.
Radioear Corporation instituted this action in magistrate's court against David F. Crouse, doing business as Boise Hearing Aid Center, seeking judgment on a debt allegedly owed by Crouse. After Crouse answered, Radioear Corporation moved for a default judgment and this motion was granted. Crouse moved to set aside the default judgment and this motion was granted. Crouse also moved to be allowed to file a counterclaim against Radioear Corporation, which was also granted. Radioear Corporation appealed to the district court from the orders setting aside the default judgment and permitting Crouse to file a counterclaim. The district court reversed both orders and Crouse appealed to this court. We reverse the district court's order and reinstate both magistrate's orders.
This case presents a tangled web of procedural steps which must be unraveled. Radioear Corporation instituted this action in amgistrate's court alleging that Crouse owed Radioear a debt in the amount of $976.40. Crouse answered by his attorney denying that he owed Radioear Corporation the sum prayed for in the complaint. Radioear Corporation served upon Crouse a set of interrogatories and a request for admissions which were answered.
Crouse's former attorney moved to withdraw as counsel of record and this motion was heard April 5, 1973. On May 9, 1973, the magistrate signed an order nunc pro tunc allowing the attorney of record to withdraw as of April 5, 1973. On April 6, 1973, Radioear Corporation served a notice by mail upon Crouse requesting him 'to appear in person or to appoint another attorney to act for you'. The notice informed Crouse that '(i)f you fail to appoint another attorney, or appear in person to defend and give the undersigned Notice of so doing within twenty (20) days from receipt of this Notice, the Plaintiff will take judgment, as prayed for in its Complaint, against you by default' pursuant to I.C. § 3-206. 1 Crouse did not appoint a new attorney, nor did he appear within the twenty day period.
Radioear Corporation moved for a default judgment on April 26, 1973; the attorney for Radioear Corporation submitted a sworn affidavit asserting that Crouse had not appeared or answered the summons and complaint served upon him. Citing Crouse's failure to appear, the magistrate entered default judgment against him on May 9, 1973. Crouse was not served with a three day notice of the application for a default judgment (I.R.C.P. 55(b)(2)), nor was Crouse later served with notice of the entry of judgment (I.R.C.P. 77(d)). 2
Crouse became aware of the default judgment during a preliminary title search on his real property. Crouse retained his present attorney to represent him in this action and by his attorney petitioned the magistrate to set aside the default judgment August 10, 1973. Pursuant to I.C. § 10-1115, he deposited funds with the clerk of the court to satisfy the judgment and obtained a release and satisfaction of judgment. Crouse thus was able to remove the cloud on the title to his real property created by the judgment lien and he sold the property.
Following a hearing on the motion, the magistrate ordered the default judgment set aside. In his memorandum opinion, the magistrate cited the following procedural irregularities:
'(1) Notice to Appoint Attorney, Pursuant to I.C. 3-206, was mailed to defendant April 6, 1973, while the actual Order Allowing Withdrawal was not signed until May 9, 1973 (the date default judgment was also entered), and never served on defendant.
'(2) Defendant was never served with a 3-day Notice of Intent to Take Default pursuant to I.R.C.P. 55(b)(2).
'(3) The Affidavit, Order and Judgment of Default were erroneously based upon defendant's alleged failure to appear and answer, rather than upon his failure to appoint another attorney or appear in person, pursuant to I.C. § 3-206; nor was he served with notice pursuant to Rule 77(d). * * *.'
Subsequent to the entry of the order setting aside the default judgment, Crouse moved to be allowed to amend his pleadings by adding a counterclaim against Radioear Corporation. The magistrate granted this motion.
Radioear Corporation appealed to the district court from the magistrate's memorandum opinion and order setting aside the default judgment and from the order granting Crouse's motion to allow a counterclaim. The district court reversed both the orders and Crouse appealed to this court.
Setting aside a default judgment is a matter committed to sound legal discretion of the trial court and such a decision will not be disturbed on appeal in the absence of an abuse of discretion. Fisher v. Bunker Hill Co., 96 Idaho 341, 528 P.2d 903 (1971); Western Loan and Savings Co. v. Smith, 12 Idaho 94, 85 P. 1084 (1906).
Crouse had answered the complaint; thus, for a default judgment to be properly taken in this case, it must be pursuant to I.R.C.P. 55(b)(2). Under this rule, '(i)f the party against whom judgment by default is sought has appeared in this action, he * * * shall be served with written notice of the application for judgment at least three (3) days prior to the hearing on such application'. I.R.C.P. 55(b)(2). No notice of application for default judgment was served. Crouse should also have been served with notice of the entry of the default judgment by the clerk of the court, which was not done. I.R.C.P. 77(d). 3 The failure to give either notice may be due to the affidavit submitted by the attorney for Radioear Corporation, in which he alleged that Crouse had failed to appear and answer. If Crouse had actually failed to appear, neither notice would have been required. I.R.C.P. 55, 77(d). 4
A default judgment entered without the requisite three day notice is voidable as it has been irregularly obtained. Acker v. Mader, 94 Idaho 94, 481 P.2d 605 (1971). See, Wright and Miller, Federal Practice and Procedure; Civil § 2686 (1973). In most cases, the appropriate method to obtain relief from a voidable judgmenrt would be a motion to vacate the judgment pursuant to I.R.C.P. 55(c) 5 and 60(b)(1), (3), (6). 6 However, Crouse did not have notice of the application for the default judgment nor did he have notice of the entry of the default judgment so he was unable to comply with the 10 day limit of I.R.C.P. 60(b)(1), (2), (3) and (6) for filing a motion to vacate the default judgment in magistrate's court. We are presented with a situation where Crouse was not given the two required notices. As soon as Crouse became aware of the default judgment, he sought relief from that judgment. Upon this record, the magistrate did not abuse his discretion by setting aside a voidable default judgment. 7 I.C. § 5-905. 8 See, Acker v. Mader, supra; State ex rel. Symms v. V-1 Oil Company, 94 Idaho 456, 490 P.2d 323 (1971); Mountain States Implement Co. v. Sharp, 93 Idaho 231, 459 P.2d 1013 (1969) (); Lowe v. Lowe, 92 Idaho 208, 440 P.2d 141 (1968); Rich v. Wylie, 84 Idaho 58, 367 P.2d 763 (1962). But see, Wright & Miller, Federal Practice and Procedure, §§ 2864, 2866, 3084 (1973).
Radioear Corporation submits that Crouse, by satisfying the judgment by depositing funds with the clerk of the court pursuant to I.C. § 10-1115, 9 made an election of remedies and so is precluded from attacking the judgment. Radioear Corporation asserts that, if Crouse desired to attack the judgment, he should have obtained a stay of execution I.C. § 11-101. 10
This argument is without merit. 11 We have a serious question as to whether the doctrine of election of remedies is applicable to the case at bar; Crouse was seeking relief from a judgment and not seeking to enforce a remedial right or to redress a wrong (except inasmuch as he was seeking to enforce his right to a trial on the merits of the claim). Black's Law Dictionary 4th ed., p. 1457 (1968); Dobbs, The Law of Remedies, § 1.1 (1973). See Dahlquist v. Mattson, 40 Idaho 378, 233 P. 883 (1925). However, for the purposes of this discussion we will assume without deciding that the doctrine of the election of remedies is applicable to the case at bar.
This court has defined the doctrine:
'Election of remedies is the right of a party in an action to choose one of two or more co-existing remedial rights, where such rights arise out of the same facts; but the term is generally limited to a choice by a party between inconsistent remedial rights, the assertioin of one being necessarily repugnant to or a repudiation of the other.' Largilliere Co., Bankers v. Kunz, 41 Idaho 767, 772, 244 P. 404, 405 (1925).
One of the elements which is a prerequisite to application of the doctrine is that the remedies available be inconsistent. Boise Development Co. v. Boise City, 30 Idaho 675, 167 P. 1032 (1917); Eliott v. Collins, 6 Idaho 266, 55 P. 301 (1898). Prior to the enactment of I.C. § 10-1115 in 1955, two 'remedies' were available to a defendant confronted with a dilemma such as Crouse's; he could have satisfied the judgment (I.C. §§ 10-1113, 1114, repealed S.L.1975, ch. 242, § 1) or he could have sought a stay of execution (I.C. § 11-101). Those 'remedies' may be inconsistent, but, certainly, they would not have assisted this appellant, who was seeking to remove the cloud from his title caused by the judgment lien. However, by enacting I.C. § 10-1115, the legislature created a procedure which is essentially a hybrid between the two alternative procedures. In our opinion the legislature, by enacting this statute, had in mind guaranteeing a...
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