Terra Builders, Inc. v. International Paper Co.

• Decision Date: 16 January 1984
• Docket Number: No. 15903-CA,15903-CA
• Citation: 445 So.2d 79
• Parties: TERRA BUILDERS, INC., Plaintiff-Appellee, v. INTERNATIONAL PAPER COMPANY, Defendant-Appellant.
• Court: Court of Appeal of Louisiana — District of US

Page 79

445 So.2d 79

TERRA BUILDERS, INC., Plaintiff-Appellee, v. INTERNATIONAL PAPER COMPANY, Defendant-Appellant.

No. 15903-CA.

Court of Appeal of Louisiana, Second Circuit.

Jan. 16, 1984.

Writ Denied March 16, 1984.

Madison, Garrett, Brandon, Hamaker & Tugwell by Merwin M. Brandon, Jr., Bastrop, for defendant-appellant.

Herman L. Lawson and Steven R. Thomas, Mansfield, for plaintiff-appellee.

Before HALL, MARVIN and SEXTON, JJ.

HALL, Judge.

The defendant, International Paper Company, appeals from a $245,000 default judgment rendered in a suit for breach of contract, contending that the trial court abused its discretion in refusing to grant defendant a new trial and that the evidence offered by the plaintiff upon confirmation of the default was insufficient to support the judgment rendered. Under the circumstances of this case, we hold the trial court abused its discretion in failing to grant a new trial and remand the action for a new trial.

Plaintiff filed this breach of contract suit on October 15, 1982. In its petition, the plaintiff alleged that it contracted with the defendant to build housing for the defendant's employees in the Mansfield area. The plaintiff further alleged that the defendant refused to honor its verbal commitment to allow the plaintiff to build additional housing at a higher price to offset plaintiff's losses under the construction contract at issue, and refused to pay the plaintiff for certain "extras" included at defendant's request in the houses built by the plaintiff for the defendant under the disputed contract. Plaintiff sought recovery of $118,000 for its losses incurred in constructing and selling houses to defendant's employees at prices below market value and $127,000 in compensation for the "extras" included in the houses.

On November 9, 1982, counsel for the defendant filed a motion for an extension of time in which to answer which was granted and the defendant was given until December 7, 1982, to file an answer. By letter dated November 30, 1982, counsel for the defendant informed counsel for the plaintiff that an answer would follow shortly and served upon the plaintiff a detailed set of interrogatories. The defendant's counsel granted the plaintiff's counsel several informal extensions of time in which to answer these interrogatories. Answers to the interrogatories were filed on January 14, 1983. By letter dated January 28, 1983, counsel for the defendant acknowledged receipt of these answers and stated that an answer would be filed within 10 days. No answer having been filed as of May 3, 1983, counsel for the plaintiff, without notice to opposing counsel, entered a preliminary default on that date which was confirmed on May 6, 1983.

On May 16, 1983, the defendant timely filed a motion for new trial alleging the neglect of defense counsel, the insufficiency of the evidence presented by the plaintiff, and the existence of valid defenses to plaintiff's suit. After a hearing, the district court overruled the motion and the defendant appealed.

Initially, we note that counsel for the appellant makes no contention that the taking of the default judgment in this case violated any agreement or understanding between counsel for the respective parties, or that there was any ill practice in any respect on the part of plaintiff's counsel. Instead, the issue presented for our consideration is whether the trial court committed an abuse of discretion in refusing to set aside the properly entered default judgment and to grant the appellant a new trial. Under the facts of this case, we find an abuse of discretion occurred.

Our determination is guided by the principles authoritatively enunciated in the recent case of Lamb v. Lamb, 430 So.2d 51 (La.1983), in which the Supreme Court held that the district court abused its discretion in refusing to grant a new trial to the defendant-wife against whom a separation judgment was rendered by default because of her attorney's neglect in failing to file an answer. The court held:

"La.C.C.P. art. 1973 provides that the trial court may grant a new trial if there exists good grounds therefor. A proper application of this article necessitates an examination of the facts and circumstances of the individual case. When the trial judge is convinced by his examination of the facts that the judgment would result in a miscarriage of justice, a new trial should be ordered. Deliberto v. Deliberto, 400 So.2d 1096 (La.App. 1st Cir.1981); Jones v. Ledet, 383 So.2d 1308 (La.App. 3rd Cir.1980); Shows v. Williamson, 256 So.2d 688 (La.App. 2nd Cir.1972); See Hardy v. Kidder, 292 So.2d 575 (La.1973); Succession of Robinson, 186 La. 389, 172 So. 429 (1936). We have recognized that the court has much discretion regarding this determination. However, this court will not hesitate to set aside the ruling of the trial judge in a case of manifest abuse. La.C.C.P. art. 1971 comment (d); Hardy v. Kidder, 292 So.2d 575 (La.1973); DeFrances v. Gauthier, 220 La. 145, 55 So.2d 896 (La.1951).

"With respect to cases, such as the one at bar, wherein a timely motion for new trial is denied after the proper confirmation of a default judgment, this court has been particularly cautious in examining the circumstances underlying the judgment due to the general policy consideration, weighing in the defendant favor, that every litigant should be allowed his day in court. In Hardy v. Kidder, 292 So.2d 575 (La.1973), for example, we reversed the trial court's denial of a new trial application which had been timely filed after a preliminary default was confirmed. We found that the defendant should not have been denied the opportunity to assert his absolute defense to the plaintiff's suit where the failure to plead the defense was the result of his attorney's neglect rather than the client's fault.

"However, not every motion...