Robertson v. Rosner

Decision Date22 February 2022
Docket NumberWD 84647
Citation641 S.W.3d 436
Parties Patricia ROBERTSON, Respondent, v. Charles ROSNER, Appellant.
CourtMissouri Court of Appeals

David R. Schapker, Shawnee, KS, for appellant.

Lara M. Owens, Overland Park, KS, for respondent.

Before Division Two: Alok Ahuja, P.J., and Edward R. Ardini, Jr., and Janet L. Sutton, JJ.

Alok Ahuja, Judge

Charles Rosner appeals from a default judgment entered against him in the Circuit Court of Jackson County. Rosner claims that the default judgment is void, because the circuit court lacked subject matter jurisdiction based on deficiencies in the plaintiff's petition, and because the court lacked jurisdiction to enter a default judgment awarding greater relief than that prayed for in the petition. We conclude that Rosner's arguments do not raise "jurisdictional" issues which can be asserted in a direct appeal of a default judgment. We accordingly dismiss Rosner's appeal.

Factual Background

Prior to 2016, Patricia Robertson was employed by Ruiz & Associates, P.C., which provided accounting and other financial services in Kansas City. Robertson is a Kansas resident. She filed suit against Ruiz & Associates in the District Court of Johnson County, Kansas, alleging that her employment had been wrongfully terminated. On September 6, 2016, judgment was entered in favor of Robertson and against Ruiz & Associates in the Kansas action, for $285,172.76, plus post-judgment interest.

Robertson filed the present action in the Circuit Court of Jackson County on January 31, 2019. Robertson's petition named Rosner as a defendant, along with Ruiz & Associates, Ruiz & Company, Inc., and Eugene Ruiz and Genette Ruiz. Robertson's petition identified Rosner and Eugene Ruiz as the owners, officers and directors of Ruiz & Associates; the petition also identified Rosner and Genette Ruiz as the sole shareholders of Ruiz & Company. The petition alleged that Ruiz & Company was formed on February 8, 2016, "while the Kansas Lawsuit was pending" against Ruiz & Associates. The petition alleged that defendants Eugene Ruiz, Genette Ruiz, and Ruiz & Company "participated in or contributed to a scheme to avoid paying [Robertson] on the [Kansas] Judgment," including by "transferr[ing] assets from Defendant Ruiz & Associates to Defendant Ruiz [&] Company." Among other relief, the petition prayed for the avoidance of fraudulent transfers made by Ruiz & Associates to Eugene Ruiz, Genette Ruiz, and Ruiz & Company. The petition also prayed for entry of a money judgment against Eugene Ruiz, Genette Ruiz, and Ruiz & Company in the amount of the Kansas judgment, "with post-judgment interest [in] such amount that may be proved at trial," as well as "substantial punitive damages to serve as a deterrent for similarly situated defendants from engaging in similar fraudulent transfers."

Although the petition did not allege specific wrongful acts by Rosner, or specifically pray for relief against him, it alleged that, "[b]y virtue of participating in these fraudulent transfers and conspiring in furtherance of them, as described above, all of the Defendants are jointly and severally liable."

Rosner filed an affidavit in the circuit court in which he acknowledged that he was served with the petition and a summons on June 17, 2019. The summons advised Rosner that he was required to appear and file a response to Robertson's petition; the summons warned that, "[i]f you fail to file your pleading, judgment by default may be taken against you for the relief demanded in the petition."

In his affidavit, Rosner stated that he reviewed the petition and summons "and saw that, ... although I was named as a defendant in the Petition, the Plaintiff had not alleged that I did anything wrong and that the Plaintiff was not asking for any relief against me." Rosner stated that he "scanned the paperwork and forwarded the digital copy via email to Eugene Ruiz, who was handling this legal matter for the named company defendants." Rosner took no other action to defend the case, and did not file an answer to the petition.

On July 23, 2019, Robertson filed a motion for entry of default judgments against Rosner, Ruiz & Associates, and Ruiz & Company – none of whom had responded to the petition, although properly served. In his affidavit, Rosner acknowledged receiving a copy of Robertson's motion for entry of default judgment by mail "[o]n or shortly after July 23, 2019." Rosner's affidavit stated that he read the motion, and saw that it "asked for ‘Judgment by Default’ against three defendants, including me personally." Although Rosner recognized that the motion sought relief against him, his affidavit stated that he once again simply scanned the document and forwarded a digital copy to Eugene Ruiz, but took no other action.

On July 29, 2019, the circuit court entered judgment by default against Rosner, Ruiz & Associates, and Ruiz & Company.

Judgment was entered in the total amount of $457,806.24, consisting of the principal sum of the Kansas judgment ($285,172.76), interest on the Kansas judgment of $72,633.48, and punitive damages of $100,000.

On August 9, 2019, Rosner filed a Motion to Set Aside Default Judgment. Rosner's motion did not seek to set aside the default judgment based on the assertion of "facts constituting a meritorious defense and for good cause shown," as contemplated by Rule 74.05(d). Instead, his motion invoked Rule 74.06(b), and argued that the judgment was void, irregular, and the result of Robertson's fraud, misrepresentation and misconduct, because the petition did not assert a claim or seek relief against Rosner, and therefore failed to give him adequate notice.

The circuit court denied Rosner's motion to set aside the default judgment in an order entered on October 10, 2019.

Because the circuit court's default judgment did not resolve the claims against Eugene or Genette Ruiz, the litigation continued. On June 29, 2021, the circuit court dismissed Robertson's claims against the Ruizes, and Rosner then filed the present appeal.

Discussion

Rosner argues that the default judgment entered against him should be reversed, because the circuit court awarded relief beyond that prayed for in Robertson's petition, and because the petition failed to state a claim for relief against him.

"Generally, a party may not appeal a default judgment until it has proceeded with a motion to set aside the judgment as provided under Rule 74.05(d)." AMG Franchises, Inc. v. Crack Team USA, Inc. , 289 S.W.3d 655, 657 (Mo. App. E.D. 2009). Under Rule 74.05(d), a party may seek to set aside a default judgment by demonstrating "facts constituting a meritorious defense and for good cause shown." Rule 74.05(d) requires that the motion be "made within a reasonable time not to exceed one year after entry of the default judgment." Thus, "[i]n order to set aside a default judgment under Rule 74.05(d), the moving party must establish: (1) a meritorious defense to the suit; (2) good cause for failing to respond to the petition; and (3) that the motion was filed within a reasonable time not to exceed one year." Irvin v. Palmer , 580 S.W.3d 15, 23 (Mo. App. E.D. 2019) (citing Bryant v. Wahl , 502 S.W.3d 9, 13 (Mo. App. W.D. 2016) ). " ‘Failure to establish either the "meritorious defense" element or the "good cause" element of a motion pursuant to Rule 74.05(d) is fatal to the motion.’ " Saturn of Tiffany Springs v. McDaris , 331 S.W.3d 704, 709 (Mo. App. W.D. 2011) (quoting Agnello v. Walker , 306 S.W.3d 666, 673 (Mo. App. W.D. 2010) ).

Although Rosner filed a motion to set aside the default judgment entered against him, that motion did not seek to satisfy Rule 74.05(d)’s requirements that Rosner show a "meritorious defense" and "good cause" for his failure to timely answer Robertson's petition. And on appeal, Rosner does not argue that he has satisfied Rule 74.05(d)’s standards.

Rosner would not have the present right to appeal from the circuit court's refusal to set aside the default judgment, even if he had properly invoked Rule 74.05(d). Rule 74.05(d) specifies that "[a] motion filed under this Rule 74.05(d) ... is an independent action." Because it terminates "an independent action," "the judgment granting or denying a motion to set aside a default judgment[ ] must meet the requirements of a judgment under Rule 74.01(a) before it may be appealed" – including the requirement that the judgment be in writing, and "denominated a ‘judgment’ or ‘decree.’ " Cook v. Griffitts , 498 S.W.3d 855, 858 (Mo. App. W.D. 2016) (dismissing an appeal from the denial of a motion to set aside a default judgment, where the ruling was not properly denominated as a "judgment"); see also , e.g. , Kelly-Patel v. Wensel , 588 S.W.3d 604, 608 (Mo. App. E.D. 2019).1

The circuit court denied Rosner's motion to set aside the default judgment in an order which it entered on October 10, 2019. Because that order was not denominated as a "judgment" or "decree," it did not finally resolve any "independent action" which was commenced by the filing of Rosner's motion to set aside the default judgment. The circuit court's October 10, 2019 order was not a final and appealable judgment.

Rather than following the typical path of filing a motion to set aside the default judgment under Rule 74.05(d), and then appealing from a judgment denying that motion, Rosner has instead taken "the road less traveled," and appealed directly from the default judgment.

Rosner's appeal is timely. Although the default judgment against Rosner, Ruiz & Associates, and Ruiz & Company was denominated as a "judgment" when it was entered on July 29, 2019, the default judgment was not final and appealable at that time, because it did not resolve Robertson's claims against the Ruizes, and was not certified by the court as a partial final judgment. See Rule 74.01(b); Wilson v. City of St. Louis , 600 S.W.3d 763, 768 (Mo. 2020). Once the circuit court dismissed Robertson's remaining claims against the Ruizes in the judgment...

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