Sysco Intermountain Food Service v. City of Twin Falls

• Decision Date: 18 July 1985
• Docket Number: No. 15415,15415
• Citation: 705 P.2d 548,109 Idaho 88
• Parties: SYSCO INTERMOUNTAIN FOOD SERVICE, a corporation, Plaintiff/Appellant, v. The CITY OF TWIN FALLS, a municipal corporation, Defendant/Respondent.
• Court: Idaho Court of Appeals

Page 548

705 P.2d 548

109 Idaho 88

SYSCO INTERMOUNTAIN FOOD SERVICE, a corporation, Plaintiff/Appellant, v. The CITY OF TWIN FALLS, a municipal corporation, Defendant/Respondent.

No. 15415.

Court of Appeals of Idaho.

July 18, 1985.

Review Denied Sept. 30, 1985.

Charles D. Coulter, Boise, for plaintiff/appellant.

James D. Holman, Idaho Falls, for defendant/respondent.

HUNTLEY, Acting Chief Judge.

By this appeal we are asked to decide (1) whether a default judgment in favor of Sysco was properly set aside pursuant to I.R.C.P. 60(b)(1); and (2) whether the motion for summary judgment in favor of Sysco was properly granted.

On December 15, 1981, Sysco's vehicle, driven by employee Larry Smith, collided with a vehicle owned by the City of Twin Falls and driven by a city employee. After Sysco's vehicle was towed to a garage, Smith inquired of and was informed by a city police officer that the City's insurance agent was Anderson, Blake, Fay Insurance Agency ("ABF"). Smith went to ABF and filed a claim against the City. ABF accepted the claim and referred it to the City's carrier, CNA Insurance. CNA investigated the claim, and on January 20, 1982, denied the claim by means of a telephone call to Larry Smith. The caller stated that plaintiff's claim was denied because of a witness' statement.

On September 14, 1982, after retaining counsel, Sysco served a written tort claim notice upon the City pursuant to I.C. § 6-906. ¹ CNA again denied the claim. On January 17, 1983, Sysco filed suit against the City. The City was served on March 24, 1983.

The City's usual and customary practice was to forward summons and complaints to ABF, which in turn forwarded them to CNA. CNA would then obtain legal counsel to defend its insured. In the instant case, the City forwarded the complaint and summons from Sysco to ABF, but the day they were received at ABF's office, the experienced clerk who usually handled them was hospitalized and out of the office. An inexperienced clerk simply placed the complaint and summons in a file instead of forwarding them to CNA.

Sysco filed a motion for entry of default judgment on April 26, 1983, and the magistrate court granted it the same day. After the court entered judgment, Sysco's counsel mailed to the City notice of hearing for the taking of evidence. The City received the notice on May 10, 1983, one day before the hearing was scheduled. The City's request for a continuance was denied, and after the hearing the court entered judgment against the City.

The City's motion to set aside the default judgment pursuant to I.R.C.P. 60(b)(1) was denied by the magistrate court without findings of fact or conclusions of law. The City appealed to the district court, which vacated the default judgment.

The City then filed a motion for summary judgment, which the district court granted on the ground that Sysco had failed to timely file a written tort claims notice with the City within the 120 day limit. Sysco appealed, contending first, that the default judgment should not have been set aside; and second, that summary judgment against Sysco should not have been granted, because Sysco had filed a claim with the insurance agency within the required time limit.

I. THE DEFAULT JUDGMENT

I.R.C.P. 60(b)(1) provides that "on motion and upon such terms as are just, the court may relieve a party or his legal representative from a final judgment, order or proceeding for the following reasons: (1) mistake, inadvertence, surprise, or excusable neglect; ...." In setting aside the default judgment in the case at bar, the district court concluded that "mistakes creating the present confusion are excusable...."

Judgments by default are not favored, and the general rule is that in doubtful cases relief from default is granted in order to reach a judgment on the merits. Johnson v. Pioneer Title Company of Ada County, 104 Idaho 727, 662 P.2d 1171 (Ct.App.1983). The decision to grant a motion to set aside a default judgment is committed to the sound discretion of the trial court, and ordinarily such decision will not be disturbed on appeal in the absence of an abuse of discretion. Id. at 731, 662 P.2d 1171.

In Avondale on Hayden, Inc. v. Hall, 104 Idaho 321, 658 P.2d 992 (Ct.App.1983), the Court of Appeals concluded that where evidence submitted on a motion for relief from a default judgment is entirely documentary, the trial court's findings of fact will not be disturbed unless they are clearly erroneous. Because here the magistrate made no findings of fact and provided no reasons for its denial of the City's motion to set aside default judgment, the district court properly reviewed the record on appeal, made its own findings, and exercised its own discretion in setting aside the default judgment. We conclude that the factual record supports the ruling that the default judgment should be set aside on the grounds of inadvertence.

The facts in the instant case are similar to those in Johnson, supra, where plaintiffs' summons and complaint were served upon an employee of the title company who failed to either notify his superiors of the receipt of the documents or forward them to Pioneer's legal counsel. In fact, Pioneer's predecessor in interest was the proper defendant. The defendants attempted to communicate with the predecessor in interest, and to inform plaintiffs who the proper defendant should be. Plaintiffs meanwhile obtained a default judgment, which the trial court refused to vacate on Pioneer's motion. The Court of Appeals there held that while Pioneer's employees might have acted more prudently, in view of the confusion which existed among the parties, it could not be said that Pioneer was guilty...