Rush v. North American Van Lines, Inc.

• Decision Date: 12 August 1992
• Docket Number: No. 89-CA-0540,89-CA-0540
• Citation: 608 So.2d 1205
• Parties: James A. RUSH, Arthur Rush and Ruth Rush v. NORTH AMERICAN VAN LINES, INC.
• Court: Mississippi Supreme Court

Page 1205

608 So.2d 1205

James A. RUSH, Arthur Rush and Ruth Rush v. NORTH AMERICAN VAN LINES, INC.

No. 89-CA-0540.

Supreme Court of Mississippi.

Aug. 12, 1992.

Rehearing Denied Dec. 3, 1992.

Laurel G. Weir, Thomas L. Booker, Jr., Weir & Booker, Philadelphia, for appellants.

Helen J. McDade, DeKalb, for appellee.

En Banc.

ROBERTSON, Justice, for the Court:

I.

This appeal concerns the propriety of a default judgment in a replevin action. Because we find no hint the trial court applied an incorrect legal standard, much less abused its discretion, we affirm.

II.

A.

James A. Rush has heretofore been an over-the-road truck driver for North American Van Lines, Inc. On October 7, 1985, at a time when Rush was living in the Preston Community in Kemper County, Mississippi, he purchased from North American a 1986 International Harvester tractor for $60,195.00. Rush paid $2,000.00 down and gave North American his promissory note providing that the balance be paid in weekly installments.

Via a written security agreement, Rush granted to North American a purchase money security interest in the IHC tractor to secure performance of his obligations in the premises, principal of which, of course, was making the weekly time payments of $320.44 each. The security agreement provided that, in the event of Rush's default, North American "shall become entitled to possession and control" of the collateral. Rush granted to North American "a license to enter upon the premises of debtor [Rush] at any reasonable time ... for purposes of repossession or removal." In the event of default, the agreement provided that North American "shall have all of the rights and remedies permitted ... [by law] and as authorized under this agreement,...."

It appears Rush made his weekly payments until June of 1988 and thereafter fell into default. Acting under the acceleration clause in the note, North American declared the entire unpaid balance due and calculated this sum at $30,619.67. Rush does not contest the accuracy of this calculation. North American sought but failed at a private repossession of the tractor.

B.

On November 22, 1988, North American commenced the present civil action by filing its complaint in the Circuit Court of It appears Arthur Rush and Ruth Rush are husband and wife who live on the Kemper County premises. We assume they are among the kin of James A. Rush, but their exact relationship does not appear.

Kemper County, Mississippi, naming as defendants James A. Rush, Arthur Rush, and Ruth Rush. The complaint stated a garden-variety replevin action and alleged the Rushes held the property at a site known as Rush Circle 336A, also referred to as Route 2, Box 336, Preston, Mississippi, and that North American was entitled to the immediate possession of the property, only that the Rushes wrongfully detailed it.

The record reflects personal service of process on Arthur Rush and Ruth Rush on November 23, 1988. In the promissory note and security agreement James Rush executed on October 7, 1985, he designated Rush Circle 336A, Preston, Mississippi, as his residence, as well. By the time of North American's replevin action, James Rush had left Mississippi and was living in Benton Harbor, Michigan. The record reflects process upon James Rush as a non-resident and includes a return receipt signed personally by James Rush on December 13, 1988, acknowledging receipt of process. See Rule 4(c)(5), Miss.R.Civ.P.

In any event, on November 22, 1988, the Circuit Court entered an order directing that the sheriff seize the IHC tractor. North American posted a replevin bond on which Safeco Insurance Company of America served as surety, the principal amount of said bond being in some $72,000.00, double the value of the property. In due course, the sheriff executed the writ of replevin and seized the IHC tractor.

Process for James A. Rush, Arthur Rush and Ruth Rush was initially made returnable for December 22, 1988. That hearing was continued, and, on March 21, 1989, the Circuit Court ordered that the matter be set for April 25, 1989. Of consequence, the Court ordered that the Rushes plead or otherwise respond on or before April 5, 1989--a gratuitous enlargement of time of some 104 days. Up until this point, none of the three Defendants had appeared or pleaded, nor had any attorney appeared on their behalf. The order setting the cause for hearing provides, "The Clerk shall mail a copy of this order to all defendants." The docket of the Court, appearing as a part of the Record Excerpts here, contains the notation under date of "3/21/89," "Copy Mailed to Defendant."

April 5, 1989 came and passed and no Rush had appeared or made any filing, nor was any appearance or filing made over the next nineteen days. But, when the Court called the matter at 9:00 o'clock on April 25, 1989, Laurel G. Weir, an attorney of Philadelphia, Mississippi, appeared personally and announced to the Court that the Rushes had been represented by a lawyer in Meridian but that lawyer could not be present that day because he had a case set in Laurel, Mississippi. Weir stated, "I had a Court set at Tupelo but I decided I would come by here. I would have time to at least state our position to the Court." Weir then presented a hastily drawn motion to dismiss or, in the alternative, for a continuance. The motion to dismiss relied on Wyatt v. Cole, 710 F.Supp. 180 (S.D.Miss.1989), in which the United States District Court for the Southern District of Mississippi had, on April 13, 1989--twelve days prior to the hearing--held unconstitutional the pre-hearing seizure feature of the Mississippi replevin statute.

North American was present through counsel and objected to the two motions as being untimely. April 5 had been the (quite reasonable) deadline for filing such motions. North American represented that it had just that morning (it could have acted as early as April 6) presented the Circuit Clerk a request for entry of default, supported by the requisite affidavit for default dated April 25, 1989. North American further advised that on the same day, April 25, 1989, the Circuit Clerk had entered the default of James A. Rush, et al, see Rule 55(a), Miss.R.Civ.P., and asked the Court for judgment by default. Counsel for North American reminded one and all that April 5 had been set as the final deadline for the Rushes to answer or otherwise plead and that the Rushes had wholly made default.

Notwithstanding, new counsel for the Rushes claimed James Rush had suffered an on-the-job injury, said to have been covered by North American-provided credit disability insurance and that this afforded a defense on the merits. Nothing but the bald, unverified, conclusory, hearsay assertions of counsel supports the claim.

Presented with these matters, the Circuit Court held

that the motion to dismiss and defenses as well as the motion for a continuance comes too late.

The Court then entered judgment by default in favor of plaintiff, North American Van Lines, Inc., and against each of the three Defendants Rush, adjudging that:

Permanent possession of the 1986 model International Harvester Tractor, Model No. COF9670, Manufacturer's Identification No. IHSRDJSROGHB12011, NAVL Unit No. 233158, be and the same is hereby granted and awarded to Plaintiff, North American Van Lines, Inc.,....

James A. Rush, Arthur Rush and Ruth Rush now appeal to this Court.

III.

A.

No one questions that the pre-hearing seizure features of our replevin statutes as they existed in November of 1988 were constitutionally infirm. Wyatt v. Cole, supra, so held. We accepted that view in Odom v. Raypress Corporation, 601 So.2d 856 (Miss.1992); and Underwood v. Foremost Financial Services Corp., 563 So.2d 1387 (Miss.1990). The Mississippi Legislature acquiesced as well, enacting S.B. 2187, amending Section 11-37-101, effective July 1, 1990. See Miss.Laws ch. 344, § 1 (1990), and our question today is how all of this affects today's case. General propositions seldom decide specific cases.

We begin with the undisputed premise that James A. Rush, as debtor, and North American Van Lines, Inc., as secured party, had entered into a security agreement which provided that, upon James Rush's default, North American could repossess the IHC tractor. The agreement further gave North American the right to enter upon James Rush's premises without benefit of legal process and take the tractor. By contract, it is undisputed that in November of 1988, North American enjoyed the right to the tractor, a right to the immediate possession of the tractor, and the right to enter the Rush premises and take possession. It took no statute to render these rights valid and enforceable.

Out of respect for orderly process and the rights of the Rushes, North American did not exercise its contractual rights and pursue self-help, but instead went to court. Process was served on Arthur Rush and Ruth Rush on November 23, 1988, and, indisputably, James Rush received legally effective process on December 13, 1988, in Michigan. ¹ Rule 4(c)(5), Miss.R.Civ.P. Insofar as the record reflects, the Rushes did nothing for over three months. On March 21, 1989--at a time when the Rushes were long since in de facto default--the Court ordered them to answer or otherwise plead by April 5, 1989, and again, the Rushes did nothing, a default we find outcome-determinative. Thereafter, on April 25, 1989, noting that the Rushes had through counsel made an eleventh hour, fifty-ninth minute motion to dismiss or for a continuance, the Court entered judgment by default.

No court favors defaults. See Official Comment to Rule 55, Miss.R.Civ.P. We have carefully crafted procedural rules ² how defaults are taken, and we insist that those rules be observed. Rule 55(a), Miss.R.Civ.P., empowers the clerk to enter default The second stage is the application to the court for judgment on the default. Normally the plaintiff must serve upon the defendant written notice of the...