Spino v. Bhakta

Decision Date01 November 2005
Docket NumberNo. WD 64245.,No. WD 64260.,WD 64245.,WD 64260.
Citation174 S.W.3d 702
PartiesISIDORE SPINO, Appellant, v. ATITBHAI BHAKTA, Respondent.
CourtMissouri Supreme Court

James H. Thompson, Jr., Gladstone, for Appellant.

Timothy Joseph Mudd, Kansas City, for Respondent.

RONALD R. HOLLIGER, Judge.

Both parties appeal from a $25,000 reinstated default judgment in favor of Isidore Spino. Spino filed suit against Atitbhai Bhakta under Chapter 517 seeking damages for injuries sustained in a car accident. Bhakta failed to appear on the return date specified in the summons and default judgment was taken against him. After his first motion to set aside the judgment was denied by rule, Bhakta filed a post-final judgment motion seeking to have the default judgment vacated asserting the same basis as in his motion to set aside. The court granted that motion and a jury returned a verdict for Bhakta. The trial court then set aside the verdict and reinstated the default judgment but reduced it to $25,000. Because the trial court was barred from setting aside the default judgment by the doctrine of res judicata, and the limit a party can collect in a Chapter 517 action is $25,000, we find that the trial court reached the correct result and affirm the decision.

Facts and Procedural History

Spino's personal injury lawsuit was filed in the associate division pursuant to Chapter 517 and did not request a specific amount of monetary damages. Spino eventually obtained service of summons on Bhakta, but neither Bhakta nor his attorney appeared on the return date of June 5, 2002. After Spino presented evidence, a default judgment was entered against Bhakta for $112,750. Within thirty days Bhakta moved under Rule 74.05 to have the default judgment set aside. On September 4, 2002, the trial court conditionally set aside the default judgment while expressing reservations about doing so, however, because Bhakta's factual assertions in his motion were not sufficiently verified. The order was conditioned on Bhakta paying $900 in attorney's fees to Spino within five days. On September 9, 2002, Bhakta attempted to mail a $900 insurance draft to Spino's attorney, but it was misaddressed. On September 13, 2002, Bhakta filed a "Request for Hearing on Plaintiff's Refusal to Accept Attorney's Fees and Suggestions in Support." On the 91st day after the initial motion to set aside was filed, the trial court held a hearing and entered an order denying Bhakta's motion that same day.

On October 18, 2002, Bhakta filed a new Motion to Vacate the default judgment and to grant him additional time in which to comply with the September 4th, 2002, order to pay attorney's fees. That motion was filed pursuant to Rules 74.05 and 74.06 and was accompanied by an affidavit and numerous exhibits. On October 30, 2002, the trial court granted that motion and vacated the default judgment.

Subsequently, a jury trial was held and the jury returned a verdict in favor of Bhakta. Spino filed a motion for judgment notwithstanding the verdict and the trial court then set aside the verdict and the October 30, 2002, order and reinstated the default judgment reducing the award to $25,000. Both parties appeal. Because of the procedural complexity of this case, a timeline is useful. The relevant dates are as follows:

09-27-01 Petition filed by Spino

05-09-02 Alias summons served on Bhakta

06-05-02 Default Judgment entered

06-27-02 Bhakta's Motion to Set Aside default judgment under Rule 74.05

09-04-02 Judgment conditionally set aside upon paying of attorney's fees

09-15-02 Bhakta requests hearing on plaintiff's refusal to accept check

09-25-05 90th day after filing of Motion to Set Aside

09-26-02 Hearing on refusal to accept attorney's fees and Order denying Motion to Set Aside

10-18-02.1 Bhakta's Motion to Vacate default judgment pursuant to Rules 74.05 and 74.06

10-30-02 Default Judgment Set Aside

02-20-04 Judgment entered on jury verdict

05-25-04 Order setting aside the jury verdict and reinstating default judgment

I

Bhakta first argues that the trial court erred in sustaining Spino's motion for JNOV and entering an order setting aside the jury verdict and reinstating default judgment. Bhakta argues that the trial court was without jurisdiction to reinstate the default judgment because the trial court's October 30, 2002, order became a final and appealable judgment thirty days later and Spino waived any right to relief from that order by failing to file a timely notice of appeal.

Spino doesn't respond to Bhakta's argument directly, but instead attacks the October 30, 2002, order as entered without jurisdiction. He argues that the October 30 order granted a motion (Bhakta's October 18, 2002, Motion to Vacate Default Judgment) filed more that 90 days after Bhakta's initial Motion to Set Aside the default judgment. Spino asserts that the trial court did not have continuing jurisdiction to enter the October 30 order setting aside the default judgment because it was entered over 90 days after Bhakta's first motion to set the judgment aside was filed and thereby automatically denied. Rule 78.06. He contends that once Bhakta's initial Motion became final at the expiration of 90 days (September 25, 2002) Bhakta's only option was to appeal within 10 days, which he did not. Therefore, Spino claims, the trial court properly reinstated the original default judgment as it had lost jurisdiction to set it aside.

The Trial Court had the authority to entertain, but not to grant, Bhakta's October 18, 2002, Motion to Vacate the Default Judgment

We first take up Spino's argument that the trial court had no jurisdiction to enter the October 30, 2002, order because it granted a motion filed after the default judgment became final and thereby untimely. Spino asserts that the trial court has no jurisdiction to grant motions after a final judgment.

A defaulting party's Rule 74.05(d) motion to set aside a default judgment filed before the underlying default judgment has become final is treated for purposes of appeal as an authorized after-trial motion and is deemed the equivalent of a motion for new trial, thereby extending the trial court's control over the default judgment to 90 days from the day the motion is filed. McElroy v. Eagle Star Group, Inc., 156 S.W.3d 392, 399 (Mo.App.2005). If not ruled upon within 90 days of filing the motion, the motion is deemed denied and the judgment becomes final. Klaus v. Shelby, 4 S.W.3d 635, 637 (Mo.App.1999); Rule 78.06. After the judgment becomes final on the 90th day, notice of appeal must be filed within ten days or it is untimely. Budd v. Budd, 157 S.W.3d 229, 230 (Mo.App.2004); Rule 81.04. Additional motions filed after the judgment becomes final do not extend the jurisdiction of the trial court. Dangerfield v. City of Kansas City, 108 S.W.3d 769, 773 (Mo.App.2003) (overruled on other grounds).

In this case the 90th day after Bhakta filed his Motion to Set Aside the default judgment was September 25, 2002, and, thus, the judgment became final on that day. With the above rules in mind, Spino argues that the trial court no longer had jurisdiction to entertain any other motions. Spino asserts that Bhakta's October 18, 2002, Motion to Vacate Default Judgment was, in essence, a motion to reconsider his original motion to set aside and could not serve to extend the jurisdiction of the trial court.

We agree that the default judgment became final on the 90th day after Bhakta filed his original motion to set aside the default judgment. The trial court was without jurisdiction to grant that motion after the 90th day. Bhakta's October 18, 2002, Motion to Vacate, however, was an entirely different motion (one permitted to be filed after a final judgment) that the trial court, generally, would not need a jurisdictional extension to grant. Bhakta's October 18, 2002, Motion to Vacate was filed under both Rule 74.05 and 74.06. A Rule 74.05(d) "motion to set aside default filed after the default judgment has become final is an independent action, and the circuit court's judgment to grant or to deny that motion is independent of the underlying judgment." Hutchison v. Vandenburg, 90 S.W.3d 229, 231 (Mo.App.2002) (emphasis added).1 Similarly, the trial court is free to treat a motion filed pursuant to Rule 74.06 as an independent action in equity if its substance is "sufficient to invoke the equitable powers of the court." State ex rel. Div. of Child Support Enforcement v. Hill, 53 S.W.3d 137, 144 (Mo.App.2001).

As such, for the purposes of the trial court's decision on Bhakta's October 18 motion, it matters little whether trial court retained jurisdiction over the default judgment because the court could treat the motion as an independent action in equity. See Barney v. Suggs, 688 S.W.2d 356, 358 (Mo. banc 1985). Although the trial court lost jurisdiction over the default judgment when it became final on the 90th day after the original motion was filed, the default judgment remained susceptible to collateral attack under Rule 74.06. Thus, the trial court had the authority to entertain Bhakta's October 18, 2002, Motion to Vacate because it could properly be treated as an independent action in equity.

Although the trial court had the authority to entertain Bhakta's October 18, 2002, motion as an independent action in equity, the trial court erred in granting it because the issues raised were barred by the doctrine of res judicata. Spino argued in her response to Bhakta's second motion requesting relief from the default judgment, and here on appeal, that the second motion raised no new issues not previously decided by the court in Bhakta's initial motion to set aside. Res judicata prevents a party from re-litigating issues judicially determined in a previous action, even when the judgment was entered by default. State ex rel. Family Support Div. v. Stovall-Reid, 163 S.W.3d 519, 521-22 (Mo.App.2005). Res judicata only...

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    ...in McElroy v. Eagle Star Group, Inc., 156 S.W.3d 392, 399 (Mo.App.2005), adopted the holding in Klaus I. See also Spino v. Bhakta, 174 S.W.3d 702, 706 (Mo.App. 2005). In McElroy, defendant filed a motion to set aside a default judgment twenty-seven days after its entry. Defendant's motion w......
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