White Cap Construction Supply, Inc. v. Star Mountain Construction, Inc.
White Cap Construction Supply, Inc. v. Star Mountain Construction, Inc.
Opinion of the Court
MEMORANDUM DECISION
{ 1 Silver Baron Partners, LC and Daedalus USA, Inc. (collectively, Defendants) appeal the trial court's judgment in its contract dispute with Shamrock Plumbing, LLC (Shamrock). Shamrock eross-appeals, claiming that the trial court erred in setting aside a default judgment against Defendants on grounds of excusable neglect. Because we agree with Shamrock that the trial court should not have set aside the default judgment, we need not address Defendants' arguments regarding the trial court's later judgment.
T2 Shamrock argues that the trial court erred in setting aside the default judgment because its finding of excusable neglect was not supported by a finding of due diligence. See generally Jones v. Layton/Okland, 2009 UT 39, ¶ 20, 214 P.3d 859 ("[Elxeusable neglect requires some evidence of diligence in order to justify relief."). In support of their rule 60(b) motion to set aside the judgment on grounds of excusable neglect, see generalty Utah R. Civ. P. 60(b), Defendants argued (1) that their general practice of ignoring legal pleadings they received via regular mail was excusable because they believed they were represented by counsel and expected that counsel would handle the legal pleadings, and (2) that their neglect of their counsel's notice of withdrawal and the notice to appoint counsel sent by Shamrock was excusable because their counsel, with whom they had a long-term relationship, did not notify them of the withdrawal in person.
3 Defendants' counsel mailed a Notice of Withdrawal of Counsel to Defendants on January 9, 2009. Shamrock's counsel then mailed a Notice to Appear or Appoint Counsel on January 12, 2009. When Defendants failed to appoint new counsel, Shamrock's counsel mailed proposed default certificates to Defendants and the court on February 6, 2009. A Motion for Entry of Default Judgment, a Memorandum in Support of Motion for Entry of Default Judgment, and supporting affidavits were then filed with the court and mailed to Defendants on February 12, 2009. On March 2, 2009, Shamrock sent Defendants a copy of its Request to Submit for Decision. The trial court signed an Order and a Judgment entering default judgment against Defendants on March 5, 2009. Subsequently, Shamrock filed a Motion to Correct Judgment, a Memorandum in Support of Motion to Correct Judgment, and a supporting affidavit, and sent copies to Defendants on March 16, 2009. The trial court signed a Corrected Judgment on March 18, 2009. Finally, on March 19, 2009, Defendants' current counsel mailed an Entry of Appearance and a Motion to Set Aside Judgment and Motion for New Trial to Shamrock and the court.
T 4 In ruling on Defendants' motion to set aside, the trial court found that Defendants had been "less than concerned at times about this case" and stated that it was "hard-pressed to really understand how so many pleadings could be overlooked." Although these comments suggest that the trial court did not consider Defendants to have acted diligently, the trial court did not make any explicit finding regarding due diligence. Nevertheless, the trial court set aside the default judgment, explaining, "[Gliven the situation with counsel and the lack of personal contact and a long-term relationship, the court will again[
15 "A district court has broad discretion to rule on a motion to set aside a default judgment under rule 60(b) of the Utah Rules of Civil Procedure." Menzies v.
T6 The "attendant cireumstances" in this case do not "justify excusing [Defendants] from the full consequences of [their] neglect." See id. Even in light of the preference we tend to give to judgments on the merits, see Davis v. Goldsworthy, 2008 UT App 145, ¶ 10, 184 P.3d 626 (mem.) ("[Thhe law disfavors default judgments[.]" (alterations in original)), and the significant discretion granted to trial courts in assessing excusable neglect, see Jones, 2009 UT 39, ¶ 17, 214 P.3d 859, we conclude that the cireumstances presented here are simply insufficient to demonstrate due diligence and therefore cannot support the trial court's ruling that excusable neglect existed in this case. Defendants did not simply neglect to read the notice of withdrawal; it was Defendants' regular practice not to read mail relating to legal matters unless it came through personal service or registered mail. Defendants persisted in this practice despite having had defaults entered against them in the same case three years earlier when they ignored their mail and thus failed to respond to Shamrock's counterclaims.
T7 Because we conclude that the trial court exceeded its permitted discretion in granting Defendants' motion to set aside the default judgment, we reverse the trial court's July 13, 2010 judgment. The default judgment of March 18, 2009, is therefore reinstated.
18 WE CONCUR: WILLIAM A. THORNE JR. and STEPHEN L. ROTH, Judges.
. This was the second time the trial court had entered a default against Defendants in this case. See infra 1 6 & note 2.
. These defaults also were set aside based on Defendants' excuse that they had not read the pleadings they received via regular mail and that they were unrepresented by counsel. See generally Utah R. Civ. P. 55(c) ("For good cause shown the court may set aside an entry of default. ...").
. Defendants attribute this failure to the ignorance of their staff, asserting that mailings regarding a legal matter that their "staff was under the impression was being handled by the attorney ... would be filed as a matter of course" and that, given that the relevant pleadings "came in via regular mail{,] the staff member responsible for opening the mail did not realize that the practical effect of the pleadings was that [Defendants] no longer had legal representation on this matter." But if Defendants were going to file "client copies" "as a matter of course," then it was their responsibility to ensure that "the staff member responsible for opening the mail" was able to distinguish between client copies that
Reference
- Full Case Name
- White Cap Construction Supply, Inc. v. Star Mountain Construction, Inc. Ed Zite Thomas Strebel Idaho Pacific Lumber Co. Bingglei Rock Products, Inc. and Western States Equipment Co., Defendants SHAMROCK PLUMBING, LLC, Cross and v. SILVER BARON PARTNERS, LC Daedalus USA, Inc. Fred W. Fairclough Jr. and Christine Fairclough, Cross and
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- 4 cases
- Status
- Published