Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca10-90-06352/USCOURTS-ca10-90-06352-0/pdf.json

Nature of Suit Code: 190
Nature of Suit: Other Contract Actions
Cause of Action: 

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FIT~ En 

UNITED STATES COURT OF APPEALS Unimd Statei~11rtofAp,calo 

Tenth C1reult 

FOR THE TENTH CIRCUIT 

NISSAN MOTOR ACCEPTANCE CORPORATION, ) 

) 

Plaintiff-Appellee, ) 

) 

v. ) 

) 

SALYER OLDS-CADILLAC-NISSAN CO.; BRAD F.) 

SALYER; CAROLYN JANE SALYER, ) 

) 

Defendants-Appellants, ) 

) 

and ) 

) 

GENERAL MOTORS ACCEPTANCE CORPORATION, ) 

) 

Defendant. ) 

ORDER AND JUDGMENT* 

SEP O G 1991 

ROBERT L. HOECKER 

Clerk 

Nos. 90-6179 

& 

90-6352 

(D.C. No. CIV-88-1018-A) 

(W. D. Okla. ) 

Before SEYMOUR, EBEL, Circuit Judges, and BABCOCK,** District 

Judge. 

**Honorable Lewis T. Babcock, District Judge, 

District Court for the District of Colorado, 

designation. 

United States 

sitting by 

After examining the briefs and appellate record, this panel 

has determined unanimously that oral argument would not materially 

assist the determination of these appeals. See Fed. R. App. P. 

* This order and judgment has no precedential value and shall 

not be cited, or used by any court within the Tenth Circuit, 

except for purposes of establishing the doctrines of the law of 

the case, res judicata, or collateral estoppel. 10th Cir. R. 

36.3. 

Appellate Case: 90-6352 Document: 010110089378 Date Filed: 09/06/1991 Page: 1 
' 

34(a); 10th Cir. R. 34.1.9. The cases are therefore ordered 

submitted without oral argument. 

The district court granted default judgment in favor of 

plaintiff on counts III and IV of the third amended complaint and 

granted attorney's fees to plaintiff on all counts. The court 

also granted plaintiff's motion for summary judgment on 

defendants' counterclaim. Defendants argue on appeal that (1) the 

district court erred in granting plaintiff a default judgment on 

counts III and IV; (2) the district court erred in granting 

summary judgment on the counterclaim; and (3) the district court 

erred in granting attorney's fees to plaintiff. We affirm. 

I. 

On January 19, 1990, plaintiff filed a motion for leave to 

file its third amended complaint, which sought relief in counts 

III and IV for additional retail installment contracts. The order 

allowing plaintiff to file this complaint was dated January 22, 

1990. On March 16, 1990, plaintiff filed a motion for default 

judgment on counts III and IV because defendants had not answered. 

The district court granted the motion. 

Defendants contend that the district court erred in entering 

the default judgment because they were never served with the third 

amended complaint or with the district court's order permitting 

its filing, and they have a meritorious defense to those counts. 

Defendants concede in their brief on appeal that they were 

consulted by plaintiff prior to its seeking permission from the 

court to file the third amended complaint, and that defendants had 

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no objection. Amended Brief of Appellant at 6. Defendants then 

state: 

"Thereafter, defense counsel received the application to 

file the third amended complaint with the pleading 

attached. However, contrary to Federal Rules of Civil 

Procedure, Rule 15, no service was ever made of the 

third amended complaint upon the Defendants. The 

Defendants knew that a third amended complaint was 

contemplated by the Plaintiff. However, mere contemplation does not equate with service. No service date was 

ever accomplished, so therefore, no answer date was 

docketed within defense counsel's office." 

Id. at 6-7 (emphasis in original). Defendants also assert that 

they never received a copy of the district court order permitting 

the filing of the third amended complaint, and that they therefore 

were not obligated to answer. 

The district court did not specifically address the issue of 

service. Instead, the court granted the default based on its 

conclusion that defendants' awareness of the motion for leave to 

file the third amended complaint was sufficient to put defendants 

on notice of the new allegations, and on defendants' failure to 

assert a meritorious defense in their request to file an answer to 

the third amended complaint. 

The defendant bears the burden of establishing that a default 

judgment should be set aside. Nikwei v. Ross School of Aviation, 

Inc., 822 F.2d 939, 941 (10th Cir. 1987). We accord great 

deference to the district court's determination regarding default 

judgment, since it is most familiar with the circumstances of the 

case and in the best position to evaluate the good faith and 

credibility of the parties. Id. We will not disturb the district 

court's decision unless it is "clearly wrong". Id. 

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Under Fed. R. Civ. P. 5(a) and (b), "every order required by 

its terms to be served, [and] every pleading subsequent to the 

original complaint" may be served by mail upon the opposing 

party's attorney. Service by mail upon opposing counsel is 

complete upon mailing, Fed. R. Civ. P. 5(b); Mid-Continent 

Casualty Co. v. Everett, 340 F.2d 65, 69 (10th Cir. 1965); 

Claybrook Drilling Co. v. Divanco, Inc., 336 F.2d 697, 700 (10th 

Cir. 1964), even if the mailing was not received, Dunlap v. 

Transamerica Occidental Life Ins. Co., 858 F.2d 629, 632-33 (11th 

Cir. 1988); Rivera v. M/T Fossarina, 840 F.2d 152, 155 (1st Cir. 

1988); 4A C. Wright & A. Miller, Federal Practice & Procedure,§ 

1148 at 431-32 (1987). 

Upon granting the motion for leave to file the third amended 

complaint, the district court directed plaintiff to mail a copy of 

the order granting the motion to defendants' counsel. In an 

affidavit supporting plaintiff's request to enter default, 

plaintiff's counsel stated that the order "was served on counsel 

of record for the defendants by mailing a copy, postage prepaid 

" Defendants do not dispute plaintiff's statement that it 

mailed the copy of the third amended complaint to defendants. 

Although defendants contend that they did not receive the copy, 

they did not file an affidavit to that effect. Because lack of 

receipt alone will not invalidate service, we conclude plaintiff 

met its burden of proving defendants were served. See Rivera, 840 

F.2d at 155; 4A Wright & Miller,§ 1148 at 431-32 ("nonreceipt 

•.. of the papers generally does not affect its validity, 

although nonreceipt may justify a finding of excusable neglect"). 

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Defendants also contend the district court abused its 

discretion in entering default judgment because they asserted a 

meritorious defense and consistently appeared in and defended this 

action. The record fully reflects the district court's findings 

that defendants failed to assert a meritorious defense and were 

dilatory in meeting their litigation responsibilities. Accordingly, defendants failed to meet their burden of establishing an 

abuse of discretion by the district court. 

II. 

Defendants' second argument is that the district court erred 

in granting plaintiff's motion for summary judgment on defendants' 

counterclaim. In their counterclaim, defendants alleged plaintiff 

breached the terms of their agreement. Plaintiff argued that 

because the automobile dealership had been sold, defendants no 

longer had an interest in the controversy raised in the 

counterclaim. In granting summary judgment, the district court 

determined, based on the clear, unambiguous language of the sales 

agreement, that the sale of the automobile dealership, which 

occurred after this action was commenced but before the 

counterclaim was filed, included all assets and choses in action, 

thereby precluding the counterclaim. Defendants contended in the 

district court, and continue to contend on appeal, that the sale 

did not include choses in action. 

We review a decision of the district court granting summary 

judgment de novo. Missouri Pac. R.R. v. Kansas Gas & Elec. Co., 

862 F.2d 796, 798 (10th Cir. 1988). Summary judgment is 

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appropriate when there is no genuine issue of material fact and 

the moving party is entitled to judgment as a matter of law. 

Fed. R. Civ. P. 56(c). 

The sales agreement provided for the sale of "the entire 

assets ••• of the business ••. , and Sellers' rights under or 

to all contracts ... made by or granted to the Sellers in 

connection with such business II Nothing in the agreement 

indicated defendants reserved choses in action when they sold the 

automobile dealership. Because the contract language is clear, it 

governs the interpretation of the contract. See Okla. Stat. tit. 

15, § 154. Accordingly, we conclude the district court correctly 

granted summary judgment in plaintiff's favor on the counterclaim. 

III. 

Defendants' final argument is that the district court erred 

in awarding attorney's fees to plaintiff. Defendants first 

contend that plaintiff is not entitled to attorney's fees because 

defendants made an offer of judgment in excess of the jury's 

verdict on counts I and II. This contention is without merit. 

Nothing in the record indicates defendants made a written offer of 

judgment. See Fed. R. Civ. P. 68; see also Hicks v. Lloyd's Gen. 

Ins. Agency, Inc., 763 P.2d 85, 86-87 (Okla. 1988)(formal offer 

made). 

Defendants also assert that plaintiff is not entitled to 

attorney's fees because the arbitration award on counts I and II 

was less than the jury verdict. Neither the 1989 nor the 1985 

version of Western District of Oklahoma Rule 43(P) precludes an 

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. . . 

award of attorney's fees to plaintiff even if, as here, the jury's 

award was less than the arbitration award. Because the agreement 

between the parties and Oklahoma law provided for an award of 

attorney's fees, see Okla. Stat. tit. 12, § 936, the district 

court did not err in awarding attorney's fees to plaintiff. 

The judgment of the United States District Court for the 

Western District of Oklahoma is AFFIRMED. 

Entered for the Court 

Stephanie K. Seymour 

Circuit Judge 

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