Case Title: Olsten Staffing Services, Inc. v. D.A. Stinger Services, Inc.,

Citation: 

Docket Number: 

State: wyoming

Court: Wyoming Supreme Court

Date: 1996-06-27T00:00:00Z

Document:
Olsten Staffing Services, Inc. v. D.A. Stinger Services, Inc.,1996 WY 91921 P.2d 596Case Number: 95-197, 95-198Decided: 06/27/1996Supreme Court of Wyoming
OLSTEN STAFFING SERVICES, INC.,

 Appellant 
(Defendant),

v.

D.A. STINGER SERVICES, 
INC., a Wyoming corporation, 

Appellee (Plaintiff). 

KEY BANK OF WYOMING, 

Appellant 
(Defendant),

 v. 

D.A. STINGER SERVICES, 
INC., a Wyoming corporation,

 Appellee (Plaintiff).

Appeal from The District 
Court of Natrona County, Dan Spangler, J.

Ann M. Rochelle 
of Williams, Porter, Day & Neville, P.C., Casper, for Appellant 
Olsten.

John B. "Jack" 
Speight and Rick A. Thompson of Hathaway, Speight & Kunz, Cheyenne, for 
Appellant Key Bank. 

Jerry A. Yaap of 
Bishop, Bishop & Yaap, Casper, for Appellee Stinger.

Before 
GOLDEN, C.J., and THOMAS, MACY, TAYLOR and LEHMAN, JJ.

THOMAS, Justice.

[¶1]      The sole issue 
upon which we resolve these cases is whether the trial judge was deprived of 
jurisdiction under WYO. R. CIV. P. 40.1(b)(1) by a motion for peremptory 
disqualification. Olsten Staffing Services, Inc. (Olsten) failed to answer the 
complaint of D.A. Stinger Services, Inc. (Stinger) within twenty days as 
required by WYO. R. CIV. P. 12(a). On the twenty-third day, counsel for Olsten 
entered an appearance and, on the twenty-seventh day, Olsten filed an answer and 
a motion to peremptorily disqualify the judge. In the meantime, counsel for 
Stinger obtained entry of default on the twenty-first day. Key Bank of Wyoming 
(Key Bank) also failed to answer within twenty days, suffered a default, and has 
joined in this consolidated appeal to assert error on the part of the trial 
judge in refusing to disqualify himself. We hold the fact that Olsten was in 
default at the time it filed its motion for peremptory disqualification does not 
foreclose its right to disqualify the judge. So long as that motion was filed 
with its pleading and within thirty days as required by WYO. R. CIV. P. 
40.1(b)(1), the presiding judge was deprived of jurisdiction in the case except 
for the sole purpose of assigning it to another district judge who was not 
disqualified. The deprivation of jurisdiction renders void all subsequent action 
by the court in this case. We reverse these cases and remand them for 
reassignment according to WYO. R. CIV. P. 40.1(b)(1). At that juncture, the 
assigned judge will have the authority to address all pleadings subsequent to 
the motion for peremptory disqualification.

[¶2]      In its Brief of 
Appellant, Olsten articulates four issues:

A.        Did Judge 
Spangler err in failing to remove himself as the presiding judge when 
Defendant-Appellant Olsten Staffing Services, Inc. (Olsten) filed its motion 
pursuant to Wyo.R.Civ.P. 40.1(b)(1) for a peremptory disqualification of Judge 
Spangler?

B.        Should 
Appellant Olsten have been allowed to pursue discovery before the trial judge 
ruled on Appellant Olsten's Motion to Set Aside Entry of Default or Appellee's 
Application for Default Judgment?

C.        Should the 
trial judge have allocated the fault between the actors at a hearing pursuant to 
Wyo.R.Civ.P. 55?

D.        Did good 
cause exist to set aside the entry of default against Appellant Olsten and the 
default judgment against Appellant?

In its Brief of 
Appellee addressed to Olsten's appeal, Stinger restates the issues in this 
way:

A.        Whether the 
district court abused its discretion when it denied Appellant's motion to set 
aside the default after Appellant failed to demonstrate mistake, inadvertence, 
surprise, excusable neglect or other reason justifying relief.

B.        Whether 
Appellant Olsten's appeal is barred by the doctrines of res judicata and 
collateral estoppel.

C.        Whether 
Appellant failed to comply with W.R.C.P. 40.1 and has standing to peremptorily 
disqualify a judge when in default.

D.        Whether 
Appellant, by reason of its default, is entitled to discovery in a non-personal 
injury case in which damages are liquidated.

E.        Whether 
W.S. 1977 § 1-1-109 on comparative negligence applies in a W.R.C.P. 55 hearing 
which is neither a(1) jury trial or (2) trial to the court without 
jury.

As appellant, 
Key Bank, sets forth the following issues:

A.        Did the 
trial court abuse its discretion by refusing to set aside the entry of default 
when Defendant Key Bank demonstrated good cause to set it aside under Rule 
55(c)?

B.        Is the 
entry of default and resulting default judgment against Defendant Key Bank void 
since the entry of default was prematurely entered?

C.        Did the 
trial court err when it prohibited the Defendants in default from participating 
in the discovery process and on issues relating to comparative fault and 
allocation of damages?

D.        Did the 
trial judge err by refusing to disqualify himself from the case when one of the 
Defendants timely filed a motion for peremptory disqualification under Rule 
40.1(b)(1)?

In its second 
Brief of Appellee, in response to Key Bank's appeal, Stinger then sets forth 
seven issues:

A.        Whether 
Appellant can appeal from a default judgment without first moving the trial 
court to set aside the judgment under W.R.C.P. 55(c) and 60(b).

B.        Whether the 
trial court abused its discretion when it denied Appellant Key Bank's Motion to 
Set Aside the Default after Appellant failed to demonstrate mistake, 
inadvertence, surprise, excusable neglect or other reason justifying 
relief.

C.        Whether 
Appellant Key Bank has standing to appeal the Order Denying Discovery to 
Appellant Olsten.

1. If so, whether 
Appellant Key Bank by reason of its default is entitled to discovery in a 
non-personal injury case in which damages are liquidated.

D.        Whether 
W.S. 1977 § 1-1-109 on comparative negligence applies at a W.R.C.P. 55 hearing 
which is neither (1) a jury trial or (2) trial to the court without 
jury.

E.        Whether the 
trial court abused its discretion in denying Appellant Key Bank's Motion to Set 
Aside the Entry of Default when Appellant Key Bank failed to answer the 
complaint within 20 days after service.

F.         
Whether Appellant Key Bank has standing to peremptorily disqualify a 
judge when in default or to appeal from the order denying Appellant Olsten's 
Motion to Peremptorily Disqualify the Judge.

[¶3]      On March 14, 
1995, Stinger filed its complaint naming five defendants and asserting various 
claims for recovery revolving around charges of embezzlement by a Stinger 
employee. The causes of action against Olsten were attributed to the fact that 
the employee first was referred to Stinger by Olsten as a temporary 
bookkeeper-secretary and Olsten is responsible for losses due to embezzlement by 
that individual. With respect to Key Bank, the allegations relate to negligence 
on the part of Key Bank in honoring checks forged by the employee referred by 
Olsten. Olsten was served with the summons and complaint on March 21, 1995, but 
it did not respond until April 13, 1995. That was more than the twenty-day 
period provided for it to answer the complaint pursuant to WYO. R. CIV. P. 
12(a). On the twenty-first day, Stinger filed an appropriate affidavit and 
obtained an entry of default against Olsten. Two days later, counsel for Olsten 
entered an appearance, and Olsten filed its answer and a Motion to Peremptorily 
Disqualify Judge on April 17, 1995.

[¶4]      Service of the 
summons and complaint was made on Key Bank on March 15, 1995. Key Bank also 
failed to answer within the twenty-day period. Stinger filed an affidavit and 
obtained an entry of default against Key Bank on April 4, 1995, which was the 
twentieth day after service. A plethora of motions were filed by the parties 
and, on May 11, 1995, the court held a hearing at which Olsten's Motion to 
Peremptorily Disqualify Judge was denied. The court also ruled on the other 
pending motions. Additional motions were ruled upon by the trial judge at a 
second hearing on May 30, 1995.

[¶5]      Olsten then 
sought relief in this court by a Petition for Writ of Prohibition, Mandamus, 
Review and/or Certiorari. That petition was denied, and the trial court then 
entered its Order Making Judgment Final and Order for Supersedeas Bond. Stinger 
appealed from the final order and the other orders entered by the trial court. 
Key Bank simultaneously filed a separate notice of appeal. The two appeals were 
argued together in this court.

[¶6]      Olsten contends 
it satisfied the requirements of WYO. R. CIV. P. 40.1(b)(1), and 
disqualification of the judge was automatic under the rule. Stinger's counter 
argument is that Olsten's Motion to Peremptorily Disqualify Judge was not filed 
until April 17, 1995, but was due on or before April 10, 1995, the end of the 
twenty-day time period for filing its answer to Stinger's complaint. Stinger 
contends that, since Olsten missed the answer date, Olsten was not in compliance 
with WYO. R. CIV. P. 40.1(b)(1) and lost its standing to rely upon the rule. 
Stinger buttresses the argument by asserting that, if Olsten did enjoy standing, 
this court should have granted Olsten's writ of prohibition because the trial 
court exceeded its jurisdiction.

[¶7]      Stinger's 
assertion that neither Olsten nor Key Bank have "standing" and must be excluded 
from further participation in this case is erroneous. Standing is a shortened 
version of "standing to sue" and has been defined as follows:

Standing is a concept 
utilized to determine if a party is sufficiently affected so as to insure that a 
justiciable controversy is presented to the court * * *. The requirement of 
"standing" is satisfied if it can be said that the plaintiff has a 
legally protectible and tangible interest at stake in the 
litigation.

BLACK'S LAW 
DICTIONARY 1405 (6th ed. 1990) (citation omitted, emphasis added).

[¶8]      When a party 
lacks standing to sue, it cannot continue in the proceedings and is eliminated 
from the litigation. The concept of standing does not pertain to either of these 
defendants, Olsten or Key Bank. They continue as parties in the action, even 
though in default.

[¶9]      Stinger's 
contention that the rejection by this court of Olsten's writ of prohibition 
supports its conclusion Olsten did not have standing is fallacious. In State ex 
rel. Pearson v. Hansen, 409 P.2d 769, 770 (Wyo. 1966), we said: "It is 
elementary that a writ of prohibition is not favored and is issued with caution 
* * *. Further, it is a discretionary writ and not one of right." Olsten did not 
enjoy an absolute right to have its petition for writ of prohibition granted, 
and the rejection of that petition by this court cannot be understood as 
resolving the issue of standing.

[¶10]   The case is controlled by the 
provisions of WYO. R. CIV. P. 40.1(b)(1), which provides, in pertinent 
part:

Peremptory 
Disqualification. - A district judge may be peremptorily disqualified from 
acting in a case by the filing of a motion requesting that the judge be so 
disqualified. * * * The motion shall be filed by a defendant at or before the 
time the first responsive pleading is filed by the defendant or within 30 days 
after service of the complaint on the defendant, whichever first occurs. 
(Emphasis added.)

Rule 40.1(b)(1) 
does not allude to a timely filing of a responsive pleading, but simply refers 
to a responsive pleading that must be filed prior to the thirty days after 
service. Its application is independent of WYO. R. CIV. P. 12(a), which requires 
a defendant to file an answer within twenty days after service of the summons 
and complaint upon that defendant.

[¶11]   Stinger's argument confuses the 
requirements of these two rules. Even though the answer is due within twenty 
days after service of the summons and complaint, WYO. R. CIV. P. 12(a) does not 
address the motion to disqualify a judge. Rule 40.1(b)(1) specifically addresses 
the time requirements for the motion to disqualify. The rule states that the 
motion on the part of the defendant is timely filed if it is made within thirty 
days of service of the complaint or is filed with the defendant's responsive 
pleading, whichever occurs first. If a responsive pleading is filed, the motion 
for disqualification must be filed at the same time, but it may be filed without 
any responsive pleading if it is filed within thirty days after service upon the 
defendant. These provisions apply even though the defendant may have been in 
default under WYO. R. CIV. P. 12(a).

[¶12]   Stinger relies upon Whitney v. 
McDonough, 892 P.2d 791 (Wyo. 1995), and Vanasse v. Ramsay, 847 P.2d 993 (Wyo. 
1993). This reliance is misplaced to the extent Stinger argues these cases hold 
that a party in default does not have standing to file a motion to disqualify a 
judge. These cases offer no support for Stinger's position and specifically do 
not support its contention that Olsten did not have standing to file the motion 
to peremptorily disqualify the judge. In neither of them did the defendant file 
a motion, timely or otherwise, to disqualify the judge. In each, the default 
judgment had been entered. Here, only an entry of default, not a default 
judgment, had been entered. 

[¶13]   Key Bank supports Olsten's position 
that Olsten's motion was timely because WYO. R. CIV. P. 40.1(b)(1) only requires 
the defendant to both file the motion at the time of its first responsive 
pleading and within thirty days of the service of the complaint. Key Bank argues 
the judge should have disqualified himself. Stinger contends Key Bank has 
neither standing to peremptorily disqualify the judge since it was in default, 
nor to appeal from the order denying Olsten's motion to disqualify the 
judge.

[¶14]   We have no reason to rule upon Key 
Bank's standing because of our ruling in Olsten's appeal. It is appropriate, 
however, to comment upon the position that WYO. R. CIV. P. 40.1(b)(1) requires a 
defendant to both file the motion at the time of its first responsive pleading 
and file the motion within thirty days of service of the complaint. In Matter of 
Voss' Adoption, 550 P.2d 481, 485 (Wyo. 1976), we addressed the effect of the 
use of "or," saying:

Webster defines "or" as a 
function word to indicate (1) an alternative between different or unlike things, 
states or actions; (2) choice between alternative things, states or courses. The 
word "or" is ordinarily used as a disjunctive generally corresponding to 
"either" as "either this or that." Where two clauses or phrases are expressed in 
the disjunctive, they are coordinate and either is applicable to any situation 
to which its terms relate. Generally, use of the disjunctive indicates 
alternatives and requires separate treatment of those alternatives, hence a 
clause following a disjunction is considered inapplicable to the subject matter 
of the preceding clause. (Citations omitted.)

We also have 
discussed using "or" as a conjunctive:

The contention that the 
word "or" should be read as conjunctive rather than alternative in the context 
of this statute is contrary to the rule of statutory construction generally 
espoused by this court. The word "or" usually is used in a disjunctive sense and 
can be interchanged with the word "and" only when necessary to harmonize the 
provisions of a statute.

Amoco Production 
Co. v. Bd. of Comm'rs of Carbon County, 876 P.2d 989, 993 (Wyo. 
1994).

[¶15]   Invoking these concepts in 
connection with WYO. R. CIV. P. 40.1(b)(1), we conclude Key Bank's 
interpretation is erroneous. A defendant might successfully file a motion to 
peremptorily disqualify a judge without ever filing a responsive pleading. In 
such an instance, the defendant might not avoid a default judgment. The default 
judgment would have to be entered by a different judge. The position urged by 
Key Bank is, however, of no moment in this case because Olsten did meet both 
requirements of the rule.

[¶16]   In Spitzer v. Spitzer, 777 P.2d 587, 592 (Wyo. 1989), we said:

The distinction between 
an entry of default and a default judgment must here be recognized. Entry of 
default is normally a clerical act which may be performed by the clerk of court, 
and it does not constitute a judgment. The entry of default generally 
forecloses the party found to be in default from making any further defense or 
assertion with respect to liability or an asserted claim. Although the entry of 
default generally establishes the fact of liability according to the complaint, 
it does not establish either the amount or the degree of relief. (Citations 
omitted, emphasis added.)

This language 
was quoted in Vanasse, 847 P.2d  at 996-97, and in McGarvin-Moberly Constr. Co. 
v. Welden, 897 P.2d 1310, 1313-14 (Wyo. 1995). In both cases, we addressed the 
situation of a party in default in connection with claims of 
negligence.

[¶17]   Our holding here is congruent with 
McGarvin-Moberly, in which we held that the sanction of default prohibited a 
defendant from filing a cross-claim or third-party complaint and from contending 
it was not liable. The default does not, however, prohibit the defendant from 
appearing and defending on the question of damages. Such a defendant is afforded 
the opportunity to participate fully in the discovery process and on all issues 
concerning proximate cause and damages. 

[¶18]   Applying that rule here, Olsten and 
Key Bank are foreclosed from making any further defense or assertions with 
respect to liability or any asserted claim until the entry of default is set 
aside. If the entry of default is upheld, that does not abrogate their rights to 
participate in the proceedings with respect to issues of proximate cause and 
damage pursuant to our comparative negligence rules.

[¶19]   We do not address the other issues 
presented by the case. "It is axiomatic that if the court had no jurisdiction we 
do not reach the other causes of appeal." Rhoads v. Gilliland, 514 P.2d 202, 203 
(Wyo. 1973). Since the effect of a timely motion to peremptorily disqualify a 
judge is to deprive that judge of any jurisdiction except the assignment of 
another judge, this court proceeded without jurisdiction. Any remaining issues 
will need to be presented to the finder of fact for determination.

[¶20]   We hold that Olsten complied with 
WYO. R. CIV. P 40.1(b)(1) when it filed the motion to disqualify the judge at 
the time it filed its first responsive pleading, even though it was in default. 
When the motion was filed, "[t]he presiding judge was without jurisdiction in 
the case for any purpose except the calling in of another district judge, not 
disqualified." Gilliland, 514 P.2d  at 203. The rulings and orders issued by the 
judge who was disqualified are void and of no effect. We reverse and remand the 
cases for reassignment and for further proceedings in accordance with this 
opinion.