Sherwood & Roberts, Inc. v. Riplinger

• Decision Date: 08 September 1982
• Docket Number: No. 13412,13412
• Citation: 650 P.2d 677,103 Idaho 535
• Parties: SHERWOOD & ROBERTS, INC., a Washington corporation, Plaintiff-Respondent, v. Robert A. RIPLINGER and Kathy Riplinger, husband and wife, Defendants-Appellants.
• Court: Idaho Supreme Court

Page 677

650 P.2d 677

103 Idaho 535

SHERWOOD & ROBERTS, INC., a Washington corporation, Plaintiff-Respondent, v. Robert A. RIPLINGER and Kathy Riplinger, husband and wife, Defendants-Appellants.

No. 13412.

Supreme Court of Idaho.

Sept. 8, 1982.

Richard P. Wallace, Coeur d'Alene, for defendants-appellants

Dale G. Higer and Thomas R. Linville, of Eberle, Berlin, Kading, Turnbow & Gillespie, Boise, for plaintiff-respondent.

BAKES, Chief Justice.

This is an appeal from the district court's denial of a motion to set aside a default judgment. The appellant, Robert Riplinger, ¹ was employed by respondent Sherwood & Roberts, Inc., from February, 1969, to February, 1970, as a loan officer. In February, 1970, the respondent accused Riplinger of misappropriating funds. Rather than face criminal prosecution, Riplinger and his wife, Kathy, signed a "Memorandum of Agreement" on April 1, 1970, admitting among other things that "funds of Sherwood & Roberts were diverted to the bank account of Robert and Kathy Riplinger for their personal use ...," and agreeing to repay the amount of the loss to Sherwood & Roberts. On May 1, 1970, the appellant and his wife signed a promissory note in favor of Sherwood & Roberts for $20,000 pursuant to the "Memorandum of Agreement."

The Riplingers made payments on the note through January, 1976, and then ceased making further payments. In September, 1976, Sherwood & Roberts filed a complaint against the Riplingers to collect on the balance of the note. On October 7, 1976, Robert Thompson filed a notice of appearance as counsel for Riplingers. Thereafter, an answer and counterclaim were filed. On October 20, 1978, Thompson filed a motion for leave to withdraw as attorney for the appellant. ² On October 27, 1978, in accordance with I.R.C.P. 11(b)(3) ³ "NOW THEREFORE, IT IS HEREBY ORDERED that ROBERT H. THOMPSON is granted leave to withdraw as attorney for the defendant(s) and shall send by certified mail a copy of this order directing the defendant(s) to appoint another attorney to appear, or to appear in person by filing a written notice with the court stating how they will represent themselves within twenty (20) days from the date of this order. Such failure to appear in the action within twenty (20) days shall be sufficient grounds for entry of default against the defendant(s) without further notice to the defendant(s)." ⁴

the court granted the motion to withdraw by entering the following order:

Two affidavits of personal service of the order permitting withdrawal of attorney appear in the record. Both were served on November 8 by the same process server at different addresses. The appellant admitted receiving a copy of the order, and he telephoned the court clerk on November 13, 1978. Riplinger maintains that he told the court clerk that he intended to defend the action, and if nothing else that he would represent himself. A note made by the clerk of that conversation was read by the trial court as follows:

"Mr. Bob Riplinger called this date advising that he has received notice from Robert Thompson that he has withdrawn from representing Mr. Riplinger. He advised that he did not receive this notice until the time for him to make an appearance or file written notice had expired. I advised Mr. Riplinger that he should decide as soon as possible how he intends to proceed and then notify the court of his intentions as soon as possible." ⁵

Riplinger took no further action, and pursuant to Sherwood & Robert's request, the court entered an order of default and a judgment against Riplinger on the basis that he had "failed to file notice stating how said defendant shall represent himself ...." Subsequently, respondent settled with Kathy Riplinger, and the action against her was dismissed by stipulation. Riplinger's first notice of the default judgment against him appears to have been when a writ of execution was served on his employer on April 20, 1979. He then contacted his present attorney who filed a motion to set aside the entry of the default and default judgment on May 16, 1979. After a hearing, the court denied that motion, and that denial is the subject of this appeal.

I

The appellant argues initially that having once appeared in the action, judgment should not have been rendered against him without first providing him with "written notice of the application for judgment at least three days prior to the hearing on such application," as required under I.R.C.P. 55(b)(2). In Radioear Corp. v. Crouse, 97 Idaho 501, 547 P.2d 546 (1976), this Court was faced with a similar question with regard to the application of I.C. § 3-206, since repealed and replaced with I.R.C.P. 11(b)(3), both of which address the provision of notice concerning counsel's withdrawal. "3-205. NOTICE TO APPOINT ANOTHER ATTORNEY.--When one party's attorney dies, is removed, suspended, or ceases to act as such, the adverse party must, before any further proceedings can be had by written notice, require such party to appoint another attorney or to appear in person. Notice of compliance must thereafter and within twenty days be given to the party requesting appointment. Failure to give such notice within the time specified shall be sufficient to justify default entry or dismissal of action." (Emphasis added.)

As then applicable to the Radioear decision, I.C. § 3-206 stated the following:

In that case the defendant Crouse was served with a notice to appear or appoint new counsel, and was then defaulted without further notice when he failed to appear or appoint new counsel. In that case, we held that the three day notice under I.R.C.P. 55(b)(2) was required, and that the default judgment entered without that notice was voidable. 97 Idaho at 503-4, 547 P.2d 548-9.

However, I.R.C.P. 11(b)(3), which is applicable to the case at bar, is different in several respects from its predecessor, I.C. § 3-206. Of particular importance here is that I.R.C.P. 11(b)(3) provides that following service of the prescribed notice, failure of a party "to appear in the action either in person or through a newly appointed attorney within [the required] 20 day period, ... shall be sufficient ground for entry of default against such party or dismissal of the action of such party, with prejudice, without further notice, which shall be stated in the order." (Emphasis added.) Thus, I.R.C.P. 11(b)(3), unlike I.C. § 3-206, clearly permits the entry of default ⁶ without further notice, as long as the notice so states. Cf. Omega Alpha House Corp. v. Molander Assoc., 102 Idaho 361, 630 P.2d 153 (1981) (where answer had been filed by withdrawing counsel, but where notice did not state that default could be entered without further notice). Any conflict between I.R.C.P. 11(b)(3) and 55(b)(2) in this matter must be resolved in favor of Rule 11(b)(3), since it is both the more specific and the more recent ⁷ rule. Mickelsen v. City of Rexburg, 101 Idaho 305, 612 P.2d 542 (1980).

Additionally, in regard to the question of notice, it is urged that I.R.C.P. 11(b)(3) violates the appellant's right to due process under the fourteenth amendment in that it permits the entry of a default judgment without prior notice to him. However, I.R.C.P. 11(b)(3) itself clearly requires that notice be sent to the client of the withdrawing attorney, stating that failure to appear within twenty days will "be sufficient ground for entry of default against such party ... with prejudice ... without further notice." Such notice unambiguously apprises the party of the consequences of failing to appear, and thus satisfies his right to prior notice. If the notice were not received or were materially defective, then appellant would have good cause to have the default judgment set aside. Cf. Omega Alpha House Corp. v. Molander Assoc., supra. However, in this case the notice fully conformed with the requirements of I.R.C.P. 11(b)(3), and the defendant admitted that he timely received that notice.

II

The appellant also argues that his verbal contact with the clerk of the court was sufficient to constitute an appearance. However, the order unambiguously required a written notice of how the appellant intended to represent himself. In Cuoio v. Koseris, 68 Idaho 483, 200 P.2d 359 (1948), a judge, by telephone, orally extended the time limit for filing an answer for "a few days." Nevertheless, three days before the answer was filed, a default was entered. The district court later set the default aside on the basis of the oral extension. However, on appeal, this Court reversed the setting aside of the default, holding that the oral communication by the judge "was not a recognizable order effective to grant further time." 68 Idaho at 485, 200 P.2d at 360. If a specific oral extension of time by a judge was insufficient in Cuoio to alter the procedural requirements imposed by law upon the defendant in that case, then certainly in this case the defendant's telephonic communication with a clerk of the court, in which the clerk did nothing more than advise the defendant that "he should decide as soon as possible how he intend[ed] to proceed and then notify the court," is insufficient to relieve the defendant of the requirement of filing a written notice as set forth in both I.R.C.P. 11(b)(3) and the order of the court. Thus, we hold that the defendant's oral communication with the clerk of the court did not constitute an appearance.

III

It is next contended that the due process clause of the fourteenth amendment prohibits the entry of a default judgment against a party who has timely appeared and filed responsive pleadings. The appellant relies in particular upon Hovey v. Elliott, 167 U.S. 409, 17 S.Ct. 841, 42 L.Ed. 215 (1897). In Hovey, the defendants who had already appeared and answered in the action were ordered by the court to deposit into the court registry certain sums which were the subject of the suit. The defendants failed to obey the order and the plaintiffs moved the court to...