Scannell v. Ed. Ferreirinha & Irmao, LDA

• Decision Date: 16 November 1987
• Citation: 401 Mass. 155,514 N.E.2d 1325
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court
• Parties: John D. SCANNELL et al. 1 v. ED. FERREIRINHA & IRMAO, LDA.

Page 1325

514 N.E.2d 1325

401 Mass. 155

John D. SCANNELL et al. ¹ v. ED. FERREIRINHA & IRMAO, LDA.

Supreme Judicial Court of Massachusetts Plymouth.

Argued Sept. 9, 1987.

Decided Nov. 16, 1987.

Michael P. Duffy (Philip M. Cronin, Boston, with him), for defendant.

Cynthia J. Cohen (Leo V. Boyle & Michael B. Bogdanow, Boston, with her), for plaintiffs.

Before HENNESSEY, C.J., and WILKINS, LIACOS, ABRAMS and LYNCH, JJ.

LYNCH, Justice.

On November 7, 1976, the plaintiff, John D. Scannell, was injured while operating a drill press manufactured by Ed. Ferreirinha & Irmao, LDA (EFI), a Portuguese corporation. Scannell asserted claims for injuries arising from the accident against EFI, the retailer of the drill press, and his employer. His wife claimed loss of consortium.

On April 15, 1980, the plaintiffs' amended complaint was served on EFI in Portugal, pursuant to G.L. c. 223A (1986 ed.), by registered mail. EFI signed and returned the receipt and also sent the plaintiffs' counsel a letter acknowledging receipt of the summons, and stating that the matter had been turned over to EFI's insurance company, Northern Insurance Company (Northern). According to the affidavit of an employee, one Albano Rocha Teixeira, EFI believed at this point that Northern would defend its interests at trial. ²

Through September 11, 1980, neither EFI nor its insurer had filed any responsive pleading in the action and the defendant was defaulted. A copy of the default judgment was sent to EFI and receipt was acknowledged by letter to the plaintiffs' counsel. Beyond this letter, EFI took no action for over four years to cure the default.

During pretrial discovery an attorney ostensibly representing the Commercial Union Assurance Companies, an affiliate of Northern, attended depositions of three of Scannell's fellow employees. In May, 1984, an attorney for Northern and an attorney retained by EFI attended a deposition in Portugal. ³

In October, 1984, the plaintiffs again served process on EFI, this time in accordance with the Hague Convention on the Service Abroad of Judicial and Extrajudicial Documents in Civil or Commercial Matters, November 15, 1965, 20 U.S.T. 361, T.I.A.S. No. 6638. After an answer was filed by EFI's attorney, the plaintiffs moved to remove the default against EFI, and to schedule the case for trial on June 5, 1985, with "no further continuances." The motion was allowed.

The plaintiffs' counsel notified EFI and its attorney of the trial date. Both EFI and the attorney acknowledged the letter and stated that arrangements were being made for an attorney in the United States to defend the case.

When the case was called for trial on June 6, 1985, an attorney requested a continuance on behalf of EFI, but did not file an appearance. The request for continuance was denied and EFI was defaulted. The trial went forward and a settlement was reached with the other two defendants in the amount of $550,000, and was approved by the judge. A hearing was then held on the assessment of damages against EFI.

On June 28, 1985, damages were assessed against EFI in the amount of $1,750,000, in favor of John Scannell and $100,000 in favor of Mrs. Scannell, less a credit for the $550,000 settlement. Mr. Scannell had only requested damages of $800,000 in his demand for judgment. EFI did not appeal from this judgment. On August 22, 1985, EFI moved to vacate the judgment under Mass.R.Civ.P. 60(b)(1), 365 Mass. 828 (1974). The motion was denied. EFI appealed to the Appeals Court, which reversed. 23 Mass.App.Ct. 465, 503 N.E.2d 668 (1987). We granted the plaintiffs' application for further appellate review. We remand the case to the Superior Court with instructions.

1. Motion to vacate. A motion to vacate judgment under rule 60(b)(1), is properly addressed to the sound discretion of the trial judge. ⁴ Bird v. Ross, 393 Mass. 789, 791, 473 N.E.2d 1097 (1985). Trustees of the Stigmatine Fathers, Inc. v. Secretary of Admin. & Fin., 369 Mass. 562, 565, 341 N.E.2d 662 (1976). The trial judge is in the best position to balance the competing claims of fairness to the litigants and case-flow efficiency presented by such a motion. Berube v. McKesson Wine & Spirits Co., 7 Mass.App.Ct. 426, 434, 388 N.E.2d 309 (1979). Cf. Burger Chef Syss., Inc. v. Servfast of Brockton, Inc., 393 Mass. 287, 289, 471 N.E.2d 77 (1984). Therefore, while appellate courts have not hesitated to intercede when the circumstances so required, see, e.g., Wilkinson v. Guarino, 19 Mass.App.Ct. 1021, 1023, 476 N.E.2d 983 (1985); Mullen Lumber Co. v. F.P. Assocs., 11 Mass.App.Ct. 1018, 419 N.E.2d 861 (1981), a judge's decision will not be overturned, except upon a showing of a clear abuse of discretion. Bird v. Ross, supra. Murphy v. Administrator of the Div. of Personnel Admin., 377 Mass. 217, 227, 386 N.E.2d 211 (1979). See Cullen Enters., Inc. v. Massachusetts Property Ins. Underwriting Ass'n, 399 Mass. 886, 894, 507 N.E.2d 717 (1987); Chiu-Kun Woo v. Moy, 17 Mass.App.Ct. 949, 457 N.E.2d 663 (1983). In this case, the defendant fails to make such a showing.

According to EFI, the motion to vacate should have been granted because the company's ill-fated reliance on its insurer to defend the case constituted "excusable neglect" within the meaning of rule 60(b). However, in order to prevail, EFI bears the burden of proving that the mistake or neglect "was not due to [its] own carelessness." Murphy v. Administrator of the Div. of Personnel Admin., supra, 377 Mass. at 228, 386 N.E.2d 211, quoting Reporters' Notes, J.W. Smith & H.B. Zobel, Rules Practice 462 (1977). We conclude that it was not error for the judge to find that EFI had not carried this burden.

In making this determination, we accept as true the uncontroverted portions of EFI's affidavit. Farley v. Sprague, 374 Mass. 419, 424-425, 372 N.E.2d 1298 (1978). Nonetheless, there was ample evidence from which the judge could have found that EFI was careless. EFI was defaulted twice in this case. It is from the second default that EFI seeks to escape by this appeal. The first default was entered in September, 1980, and idled on the docket for over four years. Prior to the default, EFI claims that it had informed its insurer, Northern, of the lawsuit and that it communicated with Northern's attorneys on "numerous occasions" prior to the default. Yet there is no evidence that EFI did anything during those four years to cure the default either by its own actions or by persuading Northern to act expeditiously on its behalf.

Furthermore, while EFI's affidavit declares that the presence of a Northern attorney at a deposition of the company "confirmed our belief that Northern Assurance would defend EFI at trial," nowhere does EFI state that it actually received such confirmation from Northern or from Northern's attorney. Although EFI states in its affidavit that it was not informed of Northern's unwillingness to defend until May 22, 1985, one week earlier, on May 14, 1985, EFI's attorney wrote to the plaintiffs' counsel and acknowledged that he had "already made arrangement for getting a lawyer who will be present in Court and defend my Client." While the letter was not without ambiguity, the judge may have inferred from it that EFI was not in fact relying on its insurer to defend it, and therefore that it was the company's own carelessness in this regard that led to the default. Alternatively, the judge may have simply believed that EFI's reliance on the insurer, to whatever extent, was unreasonable in light of all the facts. In either case, there was ample evidence from which the judge could conclude that the neglect in this case was indeed inexcusable and, therefore, the denial of the motion to vacate was within the judge's discretion.

The defendant asserts that this case satisfies all of the factors established in Berube v. McKesson Wine & Spirits Co., supra, 7 Mass.App.Ct. at 430-431, 388 N.E.2d 309, governing the granting of relief from judgment, and the Appeals Court agreed. This argument misapprehends the discretionary nature of the rule 60(b) decision. As we have said, "Facts similar to those which the Appeals Court found justified the action of the motion judge in Berube do not compel a ruling that the judge abused his discretion in this case" (emphasis in original). Bird v. Ross, 393 Mass. 789, 791, 473 N.E.2d 1097 (1985). "There is no error of law amounting to an abuse of discretion simply because a reviewing court might have reached a different result; the standard of review is not substituted judgment." Bucchiere v. New England Tel. & Tel. Co., 396 Mass. 639, 641, 488 N.E.2d 1 (1986). For purposes of this appeal, it is sufficient that the judge could have found for the plaintiffs within the bounds of her discretion; beyond that appellate inquiry is at an end.

Nonetheless, EFI argues that, even if it was guilty of some neglect, the judge abused her discretion by imposing on EFI an excessively severe sanction, citing Henshaw v. Travelers Ins. Co., 377 Mass. 910, 911, 386 N.E.2d 1029 (1979); Wilkinson v. Guarino, supra, 19 Mass.App.Ct. at 1023, 476 N.E.2d 983; Ticchi v. Ambassador Cab, Inc., 11 Mass.App.Ct. 912, 415 N.E.2d 227 (1981); Mullen Lumber Co. v. F.P. Assocs., supra, 11 Mass.App.Ct. at 1019, 419 N.E.2d 861. However, these cases are inapposite to the present situation.

Here, the judge was dealing not with an easily remedied failure to comply with a discovery request as in Henshaw or a failure to answer interrogatories as in Ticchi, but rather with a failure to provide an adequate defense in a case that had already dragged on for over six years. In the circumstances, entry of a default judgment against the defendant was not so much a punitive sanction as it was the logical and fair resolution of a case where a party had failed properly to protect its interests.

The defendant's claim of support from Wilkinson and Mullen Lumber Co. is equally unfounded. In those cases, the aggrieved parties were...