Sampson v. Cansler

• Decision Date: 04 December 1998
• Citation: 726 So.2d 632
• Parties: Jesse SAMPSON and Terence J. Sampson v. Maud CANSLER, as executrix of the estate of Neil Cansler, deceased. William Todd Atkinson et al. v. Maud Cansler, as executrix of the estate of Neil Cansler, deceased.
• Court: Alabama Supreme Court

726 So.2d 632

Jesse SAMPSON and Terence J. Sampson v. Maud CANSLER, as executrix of the estate of Neil Cansler, deceased.

William Todd Atkinson et al. v. Maud Cansler, as executrix of the estate of Neil Cansler, deceased.

1976.

Supreme Court of Alabama.

December 4, 1998.

Gerald D. Colvin, Jr., of Bishop, Colvin, Johnson & Kent, Birmingham, for appellants Jesse Sampson and Terence J. Sampson.

Bert S. Nettles, Mark D. Hess, and Peter D. LeJeune of London & Yancey, L.L.C., Birmingham, for intervenors/appellants William Todd Atkinson and Fite, Davis Atkinson, Guyton & Bentley, P.C.

Terry L. Dempsey and F. David Lowery of Lowery & Dempsey, Russellville, for appellee.

KENNEDY, Justice.

These appeals are from an order denying a Rule 60(b)(6), Ala.R.Civ.P., motion for relief from a default judgment. We reverse and remand.

On September 11, 1996, Neil Cansler was driving his farm tractor on Highway 5 in Franklin County when his tractor was struck from behind by a automobile driven by Terence Sampson. Mr. Cansler was thrown from the tractor, and he later died from injuries he suffered in the accident. Maud Cansler, administratrix of his estate, sued Terence Sampson and his father, Jesse Sampson, who had cosigned a note with Terence for Terence to finance the purchase of the car he was driving at the time of the accident. Ms. Cansler alleged negligence against Terence Sampson and negligent entrustment against his father. Ms. Cansler also sued Auto-Owners Insurance Company and Alfa Mutual Insurance Company for uninsured motorist benefits, based on Neil Cansler's policies. Ms. Cansler later settled with the two insurance companies.

Service of process was made on Jesse Sampson by certified mail on December 23, 1996, and Terence Sampson was personally served on January 22, 1997, after the plaintiff had tried to serve him by certified mail. According to Jesse and Terence Sampson, they contacted William Todd Atkinson of the law firm of Fite, Atkinson, Guyton, & Bentley, P.C., and asked him to represent them. Atkinson never made a formal appearance in the lawsuit. Atkinson states that he never filed a formal appearance because, he says, he had agreed only to telephone Terence Sampson's insurance company, Integon Insurance Company, and inform it of the lawsuit. Atkinson did contact Ms. Cansler's attorney and told him of his limited representation and asked that Ms. Cansler's attorney allow the Sampsons time to obtain a defense from Terence's insurer. In April 1997, Terence's insurance carrier, Integon, notified Atkinson by mail that shortly before the accident Terence Sampson's policy had been canceled for nonpayment of premiums and that Integon, therefore, would provide no coverage or defense.

The court entered a default judgment against Jesse and Terence Sampson, and it held a hearing to determine the damages. It entered a $5,000,000 judgment against Jesse and Terence Sampson on September 15, 1997. On December 2, 1997, a writ of garnishment was served on Jesse Sampson and on his employer, Alabama Power Company. According to Jesse Sampson, his wife contacted Atkinson after the garnishment and Atkinson told them that he had undertaken only a limited representation, a representation limited solely to informing Terence's insurance carrier of the accident, in an effort to obtain a defense, and that upon notifying the insurance carrier he had completed his limited representation. On February 9, 1998, Jesse Sampson contacted an attorney and asked the attorney to represent both him and Terence in regard to the default judgment and the garnishment. That attorney filed a Rule 60(b)(6), Ala. R. Civ. P., motion to set aside the default judgment and a motion to stay the enforcement of the writ of garnishment. The motion alleged that the Sampsons' failure to answer was attributable to legal malpractice on the part of Mr. Atkinson. Atkinson and his law firm asked for, and were granted, permission to intervene.

On April 3, 1998, the trial court denied the Rule 60(b)(6) motion. It granted the motion to stay the enforcement of the writ of garnishment pending appeal by the Sampsons and the intervenors, Atkinson and his law firm. The Sampsons and the intervenors appealed the denial of the Rule 60(b) motion.

In Kirtland v. Fort Morgan Auth. Sewer Serv., Inc., 524 So.2d 600 (Ala.1988), this Court held that the trial court has broad discretion in determining whether to grant or to deny a defendant's motion to set aside a default judgment, but that that discretion is not boundless. The trial court must balance two competing policy interests associated with default judgments—judicial economy and the defendant's right to defend on the merits. Kirtland, 524 So.2d at 604. These interests must be balanced under the two step process set out in Kirtland.

Under Kirtland, the trial court must first presume that cases should be decided on the merits whenever it is practicable to do so. This presumption exists because the right to have a trial on the merits ordinarily outweighs the need for judicial economy. Second, the trial court must apply a three-factor analysis in determining whether to set aside a default judgment: it must consider "1) whether the defendant has a meritorious defense; 2) whether the plaintiff will be unfairly prejudiced if the default judgment is set aside; and 3) whether the default judgment was a result of the defendant's own culpable conduct." Kirtland, 524 So.2d at 605.

Although Kirtland involved a Rule 55(c) motion to set aside a default judgment, we also apply the Kirtland analysis to Rule 60(b) motions to set aside default judgments. Rooney v. Southern Dependacare, Inc., 672 So.2d 1 (Ala.1995).

In its order denying the motion to set aside the judgment, the trial court found that the Sampsons had negligently failed to protect their own interest and to make inquiry as to the status of their case. The court also found that the Sampsons did not have a meritorious defense of legal malpractice because there was no proof that Atkinson undertook to represent them other than to the limited extent of telephoning Terence Sampson's insurance carrier and informing it of Ms. Cansler's claims. The court stated: "After learning that Jesse Sampson's coverage had been canceled, that no defense of indemnity would be provided and advising the Sampsons, accordingly, [Atkinson] was relieved of any further duty or obligation to them and committed no legal malpractice." (C.R.148.)

The trial court further held:

"Relief by the intervenors and the defendants Sampson is sought pursuant to the provisions of Rule 60(b)(6), Ala. R. Civ. P., thereby invoking the discretionary authority of the Court. In determining whether to exercise that discretionary authority in this case, the Court has considered the actions of the

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