Sioux Falls Const. Co. v. Dakota Flooring

• Decision Date: 15 March 1961
• Docket Number: No. 7895,7895
• Citation: 109 N.W.2d 244
• Parties: SIOUX FALLS CONSTRUCTION COMPANY, Plaintiff and Respondent, v. DAKOTA FLOORING, a corporation, Defendant and Appellant.
• Court: North Dakota Supreme Court

Page 244

109 N.W.2d 244

SIOUX FALLS CONSTRUCTION COMPANY, Plaintiff and Respondent, v. DAKOTA FLOORING, a corporation, Defendant and Appellant.

No. 7895.

Supreme Court of North Dakota.

March 15, 1961.

Rehearing Denied May 27, 1961.

Syllabus by the Court.

1. Rule 60(b), N.D.R.Civ.P., providing for relief from default judgments has superseded Section 28-2901, NDRC 1943. This rule, like the statute which it superseded, is remedial in nature and should be liberally construed and applied.

2. This court views with favor the trial of cases upon their merits.

3. Where a default has been regularly entered it is largely within the discretion of the trial court to say whether the defendant shall be permitted to come in afterwards and make his defense and, unless an abuse of discretion be made to appear, this court will not interfere.

4. It is the spirit and policy of the law to give every party an opportunity to prosecute or defend his case in court and courts will never deny such right except for the fault or gross laches of such party or his authorized attorneys.

5. Ordinarily, where a judgment has been entered by default and a prompt application made at a reasonable time to set it aside, with a tender of an answer disclosing a meritorious defense, the court should, on reasonable terms, sustain the motion and permit the cause to be heard upon the merits.

Alfred A. Thompson, Bismarck, for defendant and appellant.

Jansonius, Fleck, Smith, Mather & Strutz, Bismarck, for plaintiff and respondent.

SAD, District Judge.

The complaint in this action alleges a cause of action upon a contract whereby the defendant agreed to furnish material and work necessary to the acoustical work provided for in said contract. The complaint further alleges that defendant breached the contract and did not complete the same within the time specified, whereby plaintiff was forced to proceed in accordance with the plans and specifications, perform the work and furnish material in accordance with the contract through another subcontractor, to plaintiff's damage in the sum of $217, the amount being in excess of that required to be paid over and above the contract price in order to complete the contract. In addition, the complaint alleges that plaintiff suffered damages because of the delay caused by defendant's refusal to perform said contract, and that by reason of the breach of said contract plaintiff incurred liquidated damages in the sum of $750, and claimed total damages in the sum of $967, with interest at the rate of four per cent per annum from the date of the breach of said contract, April 14, 1958, and for costs and disbursements incurred.

The summons and complaint were served on D. B. Harney, president of defendant corporation, on August 11, 1959, at Bismarck, North Dakota. Affidavit of default was entered on September 10, 1959, and on September 15, 1959, an order for judgment was entered.

On September 22, 1959, defendant appeared by its attorney, Alfred A. Thompson, made a motion to reopen the default judgment entered on September 15, 1959, and requested that the court stay execution. A stay was thereafter granted on October 5, 1959, providing that the defendant furnish bond in the sum of $1,000. On the date of the stay the defendant executed and filed a proposed answer. That answer contains a general denial and raises a defense to the complaint. The defendant admits paragraph one of the complaint and alleges that notice to commence work under the contract set forth in the complaint was given by a letter dated March 28, 1958, which was received by defendant on or about March 31, 1958. The answer sets forth that shortly after the contract was entered into, the defendant ordered materials to be installed thereunder, but that the same had not been received at the time of receiving notice; that the plaintiff was duly notified thereof by the defendant; that the defendant also advised the plaintiff that the contract might be completed within the time specified for completion therein; that despite this, the plaintiff, on April 15, 1958, informed the defendant that it had violated the contract, and that the plaintiff then intended to take over the contract and complete it; that by reason of the plaintiff's refusal to permit the defendant to complete the contract within the time specified the defendant has been damaged in the sum of $800. Defendant prayed judgment that the plaintiff's complaint be in all things dismissed, that the plaintiff take nothing thereby, and that the defendant be awarded damages in the sum of $800.

Donald B. Harney, president of defendant corporation, presented to the court an affidavit stating that service of summons and complaint was made upon him on August 11, 1959, at the Hughes Junior High School Building, located at the corner of Avenue D and Washington Street in the City of Bismarck, Burleight County, North Dakota, as appears by the sheriff's return. He states that he was busily employed at said building at the time and that he placed the said pleadings in a tile carton, pending later examination of the same; that on or about August 11, 1959, he was advised by medical authorities that his wife had fallen ill to a serious physical disorder and was in danger of losing her life; that by reason of the mental shock which he suffered by reason thereof, he was removed from his work at said location for a considerable length of time; that because of the shock of the aforesaid information, defendant became almost oblivious to all matters except the preservation of the life of his wife. Such affidavit shows that for a period of several weeks the defendant did nothing other than attend to his wife's physical condition, transporting her long distances for medical attention; that because of the mental shock impressed upon defendant, as therein set forth, the defendant lost awareness of the passage of time and was not aware of the fact that time for service of answer herein had slipped by so rapidly, and that he was not completely aware of the fact that he had been subjected to this lawsuit until execution was served upon him on or about September 15, 1959. The affidavit shows that the months of August and September are abnormally heavy in the business of the corporation, and that at the time of service of summons and complaint herein the corporation had 17 school buildings to complete prior to the commencement of the fall school terms. It states that the defendant is a closed corporation, and that the business affairs of the corporation are handled almost exclusively by Donald B. Harney, the affiant, and that the responsibility for answering herein rests solely upon him. It further sets forth that the defendant is making such affidavit in support of a motion made to the district court for the purpose of opening a default judgment, pursuant to Section 28-2901, NDRC 1943, as superseded by Rule 60(b), N.D.R.Civ.P.

The motion to reopen the judgment was denied by Judge C. L. Foster, and an order was made dismissing the motion to set aside default judgment.

The issue in this case is whether or not the court erred in denying the defendant's motion to reopen and vacate the judgment entered against him by default. He contends that he is entitled to be relieved from his default upon the ground of excusable neglect. He presented a motion supported by affidavits and a proposed verified answer setting forth a valid defense.

The defendant, in making his application and motion to set aside the judgment and permit him to defend the action, set out...