Case Title: Kevin W. Layman v. James Larry Bone

Citation: 

Docket Number: 

State: arkansas

Court: Arkansas Supreme Court

Date: 1998-05-07T00:00:00Z

Document:
Kevin W. LAYMAN v. James Larry BONE

97-948                                             ___ S.W.2d ___

                    Supreme Court of Arkansas
                  Opinion delivered May 7, 1998


1.   Civil procedure -- enlargement of time for filing answer -- trial court did not abuse
     discretion in denying. -- Arkansas Rule of Civil Procedure 6(b)(2),
     as amended in 1990, allows a trial court, "in its discretion,"
     to enlarge the time for answering, even after the initial
     period for answering has passed; the revision of the rule
     enlarged the discretion of the trial courts to permit late
     answers, but it did not require them to permit such answers in
     any circumstance; where appellant's actions might have been
     best characterized as "neglect" that was not "excusable"
     rather than "mistake," the supreme court could not say that
     the trial court abused its discretion in declining to enlarge
     the time for appellant to file his answer.

2.   Civil procedure -- default judgment -- basic rule. -- Under Ark. R. Civ. P.
     55(a), when a party against whom a judgment for affirmative
     relief is sought has failed to appear or otherwise defend as
     provided by the rules of civil procedure, judgment by default
     may be entered by the court; no criteria for considering the
     motion are provided in the rule.

3.   Civil procedure -- default judgment -- setting aside -- meritorious defense required. -
     - Among other things, Ark. R. Civ. P. 55(c) requires the party
     moving to set aside a default judgment to demonstrate a
     meritorious defense, except in cases where the judgment is
     alleged to be void.

4.   Civil procedure -- timely answer -- trial court did not abuse discretion in finding
     no mistake or other reason for appellant's failure to comply with requirement. -- The
     supreme court did not reach the question whether a meritorious
     defense to a default judgment had been demonstrated because it
     could not say that there was an abuse of discretion in the
     trial court's ruling that there was no mistake, inadvertence,
     surprise, excusable neglect, or other just cause for
     appellant's failure to comply with the requirement of a timely
     answer under Ark. R. Civ. P. 12(a).

5.   Civil procedure -- default judgment -- granting of -- abuse-of-discretion standard
     applied on review. -- Where Ark. R. Civ. P. 55(a) provides that the
     court "may" grant a default-judgment motion in the event of
     failure to answer or otherwise defend, the appellate court
     applies an abuse-of-discretion standard in reviewing the
     granting of a default judgment pursuant to the rule; in this
     instance, an abuse of discretion was not shown, and the
     judgment was affirmed.


     Appeal from Sebastian Circuit Court; John G. Holland, Judge;
affirmed.
     Gilker & Jones, P.A., by: N. Donald Jenkins, for appellant.
     Hardin, Dawson & Terry, by: Rex M. Terry, for appellee.

     David Newbern, Justice.
     This is a default-judgment case arising from an action to
recover on a promissory note.  The payee, appellee James Larry
Bone, sued one of the makers, appellant Kevin W. Layman, for
payment.  Mr. Layman's answer was filed more than twenty days from
the date he was served, and thus it was untimely and not in
compliance with Ark. R. Civ. P. 12(a).  The Trial Court declined to
enlarge the time to file the answer and entered the default
judgment in favor of Mr. Bone, stating that there was no "mistake,
inadvertence, surprise, or excusable neglect or other just cause"
for the failure to make a timely answer.  We hold there was no
abuse of discretion and affirm the judgment.
     The operative language of the promissory note was as follows:

     WE PROMISE TO PAY TO THE ORDER OF JAMES LARRY BONE OR HIS
     ASSIGNS THE SUM OF FIVE HUNDRED SEVENTY ONE THOUSAND, FIVE
     HUNDRED SIXTY ONE AND 08\100 ($571,561.08) FOR VALUE RECEIVED,
     NEGOTIABLE AND PAYABLE AT 310 LEXINGTON AVE., FT. SMITH,
     ARKANSAS (OR WHEREVER HEREAFTER DIRECTED), WITHOUT DEFALCATION
     OR DISCOUNT, WITH INTEREST FROM THE DATE ABOVE UNTIL PAID IN
     FULL AT THE RATE OF SIX (6%) PERCENT PER ANNUM.  IN THE EVENT
     THE INDEBTEDNESS HEREBY BE NOT PAID ON MATURITY ACCORDING TO
     THE TERMS HEREOF, AND COLLECTION HEREOF IS EFFECTED BY SUIT OR
     OTHERWISE, OR SAID INDEBTEDNESS IS REDUCED TO JUDGMENT,
     THROUGH SERVICES OF AN ATTORNEY, THEN MAKERS FURTHER AGREE TO
     INDEMNIFY AND REPAY THE HOLDER ANY ATTORNEY'S FEES INCURRED
     AND PAID BY THE HOLDER NOT EXCEEDING 10% OF THE PRINCIPAL DUE,
     PLUS ACCRUED INTEREST.
     PRESENTATION, NOTICE, PROTEST AND DEMAND IS HEREBY WAIVED BY
     US.
     THE ENTIRE PRINCIPAL TOGETHER WITH INTEREST IS DUE AND PAYABLE
     ON DEMAND BY THE HOLDER.  THIS NOTE IS SECURED BY THE ASSETS
     OF INTERNET PARTNERS OF AMERICA, AND MAY BE PREPAID AT ANY
     TIME WITHOUT PENALTY.
     _______________    _______________   _______________
     K. WAYNE KING      KEVIN W. LAYMAN   JAMES LARRY BONE


Proper signatures appeared in each of the prepared blocks. 
Internet Partners of America ("IPA") was a limited-liability
company established by Mr. Layman, Mr. King, and Mr. Bone to
provide computer services to the public.
     Mr. Bone alleged that Mr. Layman owed one third of the
principal, or $190,520.36, plus interest and an attorney's fee.  
He served Mr. Layman with a summons and complaint on January 14,
1997.  The answer was due to be filed on or before February 3,
1997.
     Following his receipt of the complaint on January 14, Mr.
Layman forwarded it to his attorney who, apparently at some point
thereafter, asked Mr. Layman when he had been served.  Mr. Layman,
who had failed to note the precise date of service, incorrectly
guessed that service had occurred on January 16, 1997.  Relying on
that erroneous information, the attorney noted on his calendar that
the answer was due to be filed on or before February 5.  He
prepared the answer and, on February 3, mailed copies of it to the
office of the Circuit Court Clerk and to Mr. Bone's counsel, who
received it on February 4, 1997.  The answer was filed on that
date.
     The answer admitted the validity of the note but seemed to
suggest that IPA was the actual obligor and that Mr. Layman and the
other two partners were merely "guarantors."  It stated that Mr.
Layman did not know whether any demand had been made on IPA or the
other "guarantors." 
     Mr. Bone moved to strike Mr. Layman's answer as untimely and
for default judgment in accordance with Ark. R. Civ. P. 55(a).   
Mr. Layman responded to the motion and moved to enlarge the time
for filing his answer in accordance with Ark. R. Civ. P. 6(b)(2). 
He asserted that Mr. Bone had not been prejudiced by the delay in
the filing of the admittedly late answer.  Mr. Layman explained
that the late filing was "due to the inadvertence and mistake of
his attorney who did not ascertain from the Defendant the exact
date that he was served."  
     At a hearing on the matter, Mr. Layman's attorney reiterated
the statements made in his affidavit that was attached to Mr.
Layman's response to the motion for default judgment.  He
emphasized that Mr. Bone had not been prejudiced and that he had
not intentionally disregarded the twenty-day requirement but that
his error was due to mistake or inadvertence.
     The Trial Court granted the motion for default judgment. 
Remarks from the bench included the following: "It [the answer] was
not filed within 20 days, and I don't believe the failure to do so
was [the] result of mistake, inadvertence, surprise, or excusable
neglect or other just cause, so it will be judgment for the
plaintiff."
     The order directed that Mr. Layman's untimely answer should be
stricken and that Mr. Bone was entitled to judgment by default
under Rule 55.  Although the Trial Court did not expressly refer to
Mr. Layman's request under Rule 6(b)(2) to enlarge the time for
filing the answer, the language he used from the bench quoted that
of Rule 6(b)(2), and thus he clearly made a ruling refusing to
enlarge the time for answer.  Mr. Layman did not, thereafter, file
a motion under Ark. R. Civ. P. 55(c) to set aside the default
judgment.  The issues are, therefore, whether the time for filing
the answer should have been enlarged under Rule 6(b)(2) and whether
the default judgment was properly granted under Rule 55(a).

                         1. Rule 6(b)(2)
     Presumably, any failure to file an answer on time could be
referred to as a "mistake" in the sense that an error of some sort
caused the failure to file on time.  To hold, however, that any
error whatsoever should excuse compliance with Rule 12(a) would
deprive the trial courts of the discretion to which the rule
refers.  That is not the intent behind the rule.       
     In B&F Eng'g Inc. v. Cotroneo, 309 Ark. 175,