IN THE SUPREME COURT OF IOWA

No. 19–0431

Submitted December 16, 2020—Filed January 22, 2021

NO BOUNDRY, LLC,

Appellee,

vs.

CORNELL HOOSMAN,

Appellant.

On review from the Iowa Court of Appeals.

Appeal from the Iowa District Court for Black Hawk County, 

Andrea J. Dryer, Judge.

On further review from the court of appeals, applicant contends the 

court of appeals erred in affirming the district court’s denial of his motion 

to set aside default judgment. DECISION OF COURT OF APPEALS 

VACATED; DISTRICT COURT ORDER REVERSED AND REMANDED.

McDonald, J., delivered the opinion of the court, in which all 

participating justices joined. McDermott, J., took no part in the 

consideration or decision of the case.

Todd Schmidt (argued) of Iowa Legal Aid, Dubuque, Nathan Peters 

of Iowa Legal Aid, Waterloo, and Alexander Vincent Kornya of Iowa Legal 

Aid, Des Moines, for appellant.
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Charles P. Augustine (argued) of Klatt, Augustine, Treinen & 

Rastede, P.C., Waterloo, for appellee.
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McDONALD, Justice.

Cornell Hoosman stands to lose his home for $220 in delinquent but 

disputed property taxes. Hoosman claims he is legally disabled and is 

exempt from paying property taxes. Hoosman alleges he has been trying 

to resolve the property tax issue with Black Hawk County for some time. 

Plaintiff No Boundry, LLC, obtained title to Hoosman’s home by way of a 

tax sale deed. No Boundry filed its petition for recovery of real property

and obtained a default judgment awarding it immediate and exclusive 

possession of Hoosman’s home. The district court denied Hoosman’s 

motion to set aside the default judgment. The court of appeals affirmed 

the district court, and we granted Hoosman’s application for further 

review. The question presented is whether the district court erred in 

denying Hoosman’s motion to set aside the default judgment. 

The record reflects the following. No Boundry obtained title to 

Hoosman’s home by way of a tax sale deed issued by the Treasurer of Black 

Hawk County dated November 30, 2018, and filed December 11. No 

Boundry filed a petition for recovery of real property on January 14, 2019, 

in which it sought immediate and exclusive possession of Hoosman’s 

home. No Boundry personally served the petition and original notice on 

Hoosman two days later. Hoosman did not timely file an answer. No 

Boundry served on Hoosman its ten-day notice of intent to file an 

application for default and default judgment. See Iowa R. Civ. P. 1.972(2).

After waiting the required time, No Boundry sought the entry of default 

and default judgment. The district court entered default judgment on 

February 21 and issued a writ of removal on February 25. 

Hoosman took action approximately two weeks after the district 

court issued the writ of removal. On March 13, Hoosman filed an 

application in which he sought to enjoin his removal from the property. In 
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the application, Hoosman averred that he has been legally disabled since 

June 2013 and that, because of his legal disability, he is exempt from 

paying property taxes. The application further averred that Hoosman 

received a letter of exemption from the Iowa Department of Human 

Services and that Hoosman presented the letter of exemption to the Black 

Hawk County Supervisors Office, which took no action. 

The day after Hoosman filed his application, Hoosman filed his

motion to set aside the default judgment. In the motion, Hoosman stated 

he is legally disabled as evidenced by medical records. The motion stated 

Hoosman was found to be incompetent in two criminal matters. Hoosman 

asserted he had a statutory basis for defending against the claim. 

Specifically, he asserted he had a statutory right of redemption afforded 

persons with a legal disability under Iowa Code section 447.7(2). 

Hoosman and his counsel appeared before the district court at order 

hour the following day. Order hour is a time set aside for the court to hear 

motions and address other miscellaneous matters brought to the court’s 

attention. Order hour typically is unscheduled and informal. A court 

reporter was not available during this particular order hour. Following a 

hearing on Hoosman’s motion, the district court entered an order denying 

the motion to set aside. The district court’s order did not make any 

findings or provide any reason for denying Hoosman’s motion. The order 

stated: “The court heard the arguments of counsel and finds that the 

application for injunction and the motion to set aside default and stay writ 

should be denied.” 

Hoosman filed a motion to enlarge and amend the district court’s 

denial of his motion to set aside. In the motion, Hoosman alleged the 

district court did not allow him to submit medical evidence in support of 

his motion to set aside. Hoosman alleged that he is legally disabled and 
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not competent to defend himself. He alleged he needs a guardian ad litem. 

Attached to the motion to enlarge and amend was a psychologist’s report 

prepared for the purposes of evaluating Hoosman’s competency to stand 

trial in an unrelated criminal matter. In the report, the psychologist 

opined Hoosman was not competent to stand trial. The district court 

declined to rule on the motion to enlarge and amend because the writ 

already had been executed by the sheriff and because Hoosman already 

had filed his notice of appeal. 

This brings us to the question presented. We begin our answer to 

the question by noting there is a longstanding policy in our state favoring 

the resolution of legal disputes on the merits. See Wharff v. Iowa Methodist 

Hosp., 219 N.W.2d 18, 21 (Iowa 1974) (“The general policy in this 

jurisdiction has been to allow trial on the merits.”); Hobbs v. Martin 

Marietta Co., 257 Iowa 124, 129, 131 N.W.2d 772, 775 (1964) (“[C]ourts 

prefer a trial on the merits.”); Newell v. Tweed, 241 Iowa 90, 95, 40 N.W.2d 

20, 23 (1949) (“Courts look with favor upon trials and the rights of a 

litigant should not be denied proper hearing by strict application of legal 

formalities.”). Pursuant to this longstanding policy, default judgments are 

disfavored. This court will resolve all doubt on whether a default judgment 

should be set aside in favor of setting aside the default judgment. See 

Brandenburg v. Feterl Mfg. Co., 603 N.W.2d 580, 584 (Iowa 1999). “We are 

more reluctant to interfere with a court’s grant of a motion to set aside a 

default and a default judgment than with its denial.” Id. We are not alone 

in this regard. “Courts almost universally favor a trial on the merits, and, 

when there has been a reasonable excuse shown for the default, there 

should be no objection to such a trial to those who are reasonably diligent.” 

Barto v. Sioux City Elec. Co., 119 Iowa 179, 186, 93 N.W. 268, 271 (1903).
6

With that principle in mind, we turn to the text of the relevant rule. 

Iowa Rule of Civil Procedure 1.977 provides “[o]n motion and for good 

cause . . . the court may set aside a default or the judgment thereon, for 

mistake, inadvertence, surprise, excusable neglect or unavoidable 

casualty.” Rule 1.977 further provides “[s]uch motion must be filed 

promptly after the discovery of the grounds thereof, but not more than 60 

days after entry of the judgment. Its filing shall not affect the finality of 

the judgment or impair its operation.” “The burden is on the movant to 

plead and prove good cause.” Cent. Nat’l Ins. Co. of Omaha v. Ins. Co. of N. 

Am., 513 N.W.2d 750, 754 (Iowa 1994). “Good cause is a sound, effective, 

and truthful reason. It is something more than an excuse, a plea, apology, 

extenuation, or some justification, for the resulting effect.” Id.; see also

Hansman v. Gute, 215 N.W.2d 339, 342 (Iowa 1974). 

Although the movant bears the burden to plead and prove good 

cause, our case law requires a liberal construction of the rule to afford an 

opportunity for adjudication on the merits. See Brandenburg, 603 N.W.2d 

at 584 (stating disfavor of denials of motions to set aside default judgment 

is consistent with the purpose of the rule); Whitehorn v. Lovik, 398 N.W.2d 

851, 853–54 (Iowa 1987) (en banc) (holding the purpose of the rule is “to 

allow determination of controversies on their merits rather than on the 

basis of nonprejudicial inadvertence or mistake” given the weight of 

“justice inherent in a trial on the merits”); First Nat’l Bank in Lenox v. 

Claiser, 308 N.W.2d 1, 3 (Iowa 1981) (en banc) (“Because trial on the merits 

is favored, a liberal approach is to be taken in granting relief from 

defaults.”); Handy v. Handy, 250 Iowa 879, 885, 96 N.W.2d 922, 926 

(1959) (“[T]he liberality of Rule 236 [now rule 1.977] and its construction 

is aimed to assure, if possible, that all litigants have a fair opportunity to 

have their cases decided by the courts on the merits.”).
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Hoosman argues default judgment should be set aside on the 

ground of excusable neglect. See Cent. Nat’l Ins. Co. of Omaha, 513 N.W.2d 

at 753, 755–56 (identifying excusable neglect as a ground for setting aside 

default and default judgment). In determining whether the movant has 

established excusable neglect we look at the particular facts and 

circumstances of each case. No single fact is dispositive. Relevant 

considerations include the cause for the movant’s failure to timely answer, 

whether the movant intended to defend, whether the movant asserted a 

meritorious defense in good faith, and whether the movant ignored or 

willfully defied the rules of procedure. See id. at 756. We address each of 

these considerations in turn. 

It appears the cause for Hoosman’s failure to timely answer was his 

alleged legal disability. In his motion papers, Hoosman asserted that he 

is legally disabled, that he receives disability income, that his disability is 

recognized by the Iowa Department of Human Services, and that he may 

have been adjudged incompetent in at least two criminal matters. He 

further alleged that he needed the assistance of a guardian ad litem to 

assist him in defending against this claim. 

Hoosman’s claimed disability was supported by the competency 

evaluation attached to his motion to enlarge and amend. The twelve-page 

competency evaluation was prepared by a psychologist for the purposes of 

evaluating Hoosman’s competency to stand trial in a criminal matter. The 

report shows Hoosman suffered from a severe mental impairment of a 

permanent nature. Hoosman had intracranial surgery in June of 2012 

that left him with headaches. The psychologist concluded Hoosman’s 

cognitive abilities likely declined as a result of the intracranial surgery. 

Hoosman tested at a seventh grade level in spelling and a sixth grade level 

in math. 
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Throughout the report, the psychologist noted Hoosman had 

impaired memory. Hoosman could not remember simple things: the last 

time he had a checkup, the spelling of his children’s names, the length of 

his marriage, the names and birth order of his siblings, and the last date 

of his employment. During the evaluation, Hoosman used the restroom 

“on multiple occasions” yet “repeatedly required directions to the 

bathroom.” The psychologist notes that “[m]emory was problematic for 

remote events, intact for recent events and impaired for immediate 

retention and recall.” The report further stated that Hoosman was “unable 

to remember any of 3 unrelated words following a five minute delay,” which 

“suggest[ed] that [he] would have difficulty retaining information presented 

during a trial.”

The report also indicated Hoosman had lapses in concentration and 

suffered confusion. The psychologist noted that Hoosman’s “response 

latency was lengthy” and that Hoosman “had lapses in concentration and 

staring episodes lasting several seconds during which time he was 

unresponsive to verbal stimulation.” The psychologist also noted, 

“Attention span was short and concentration was impaired [possibly 

because of seizures]. At times, he appeared to drift off and had to have his 

attention redirected to the tasks at hand.” (Brackets in original.) Although 

the report noted Hoosman lived alone, the psychologist cited limitations in 

Hoosman’s ability to independently function: Hoosman “rarely drives 

because of suspected seizures,” shops with the assistance of his friend, 

and prepares “very simple meals.” The psychologist reported Hoosman’s

“scores strongly suggest[ed] organic confusion as supported by records 

from the University of Iowa Hospitals and Clinics.” 

The psychologist concluded Hoosman suffered from “Delirium vs. 

Dementia” due to a cerebral aneurysm without rupture. The psychologist 
9

concluded Hoosman’s low cognitive functioning would detrimentally 

impact Hoosman’s “ability to follow trial proceedings.” The psychologist 

concluded Hoosman’s “capacity to plan legal strategy was impaired.” The 

psychologist ultimately opined Hoosman’s impairments would make him 

incompetent to stand trial, unable to understand trial proceedings, and 

unable to contribute to his own defense. 

Although not dispositive, Hoosman’s apparent cognitive impairment

weighs in favor of setting aside the default judgment. This State has a 

long history of protecting the property rights of wards deemed unable to 

protect their own economic interests without assistance: 

It is unquestionably true, however, that from very early times 

the property rights of children and lunatics have been favored 

in law, and the courts have regarded such persons as their 

wards, whose interest should not be sacrificed to mere 

technicalities . . . . Keeping that just and humane purpose in 

view, the legislature has attempted to provide certain definite 

laws by which the rights of such wards may be preserved.

Hawley v. Griffin, 121 Iowa 667, 676, 92 N.W. 113, 116 (1903); see also 

Nels v. Rider, 185 Iowa 781, 785, 171 N.W. 150, 152 (1919) (“No guardian 

appeared; no defense was interposed; no guardian ad litem was appointed. 

The default judgment, therefore, was irregular.”). 

We next consider whether Hoosman established an intent to defend

against the claim. Whether Hoosman “moved promptly to set aside the 

default is significant on this point.” Cent. Nat’l Ins. Co. of Omaha, 513 

N.W.2d at 756; see also Paige v. City of Chariton, 252 N.W.2d 433, 437 

(Iowa 1977) (“It is significant defendants moved promptly to set aside the 

default.”). Hoosman disputed the legality of the property tax assessment 

with Black Hawk County but to no avail. After entry of the default 

judgment, Hoosman obtained counsel. Counsel immediately filed the 

application for injunction and motion to set aside. The motion to set aside 
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was filed only twenty-one days after default judgment was entered, well 

within the sixty days allowed by Iowa Rule of Civil Procedure 1.977. Cf.

Brandenburg, 603 N.W.2d at 583 (reversing a denial of a motion to set 

aside where the party filed the motion one month and nine days after the 

entry of default). At the hearing on the motion to set aside, Hoosman 

appeared personally with his counsel with evidence to substantiate his 

legal disability. After the district court denied his motion to set aside, 

Hoosman filed a motion to enlarge and amend and pursued this appeal. 

This record reflects Hoosman intended to defend against the petition for 

removal, and this factor favors setting aside the default judgment.

The next factor we consider is whether Hoosman asserted a 

meritorious defense in good faith. “[W]hether a meritorious defense has 

been shown ‘must be determined on a case by case basis and with an 

awareness of the policies behind default judgments and the circumstances 

under which they should be set aside.’ ” Flexsteel Indus. Inc. v. Morbern 

Indus. Ltd., 239 N.W.2d 593, 600 (Iowa 1976) (quoting 10 Charles Alan 

Wright & Arthur R. Miller, Federal Practice and Procedure § 2697). 

Hoosman asserts he has a statutory defense to No Boundry’s 

removal proceeding pursuant to Iowa Code section 447.7. It provides, in 

relevant part:

2. a. If a parcel of a person with a legal disability is 

sold at tax sale and the county treasurer has delivered the 

treasurer’s deed, the person with the legal disability or the 

person’s legal representative may redeem the parcel at any 

time prior to one year after the legal disability is removed by 

bringing an equitable action for redemption in the district 

court of the county where the parcel is located, unless the 

action is required to be brought sooner in time by operation of 

subsection 3 or 4.

. . . .

3. If a person with a legal disability remains in 

possession of the parcel after the recording of the treasurer’s 
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deed, and if the person claiming under the tax title properly 

commences an action to remove the person from possession, 

the person with a legal disability shall forfeit any rights of 

redemption that the person may have under this section, 

unless either of the following actions is timely filed by or on 

behalf of the person:

a. A counterclaim in the removal action asserting the 

redemption rights under subsection 2 of the person with a 

legal disability.

b. A separate action under subsection 2. Such action 

shall be filed within thirty days after the person with a legal 

disability and the person’s legal representative were served 

with original notice in the removal action.

Iowa Code § 447.7.

The court of appeals concluded Hoosman failed to establish a

meritorious defense. The court of appeals reasoned as follows: 

Hoosman’s right of redemption was forfeited unless he 

“timely” responded to No Boundry’s action by (a) filing a 

“counterclaim in the removal action asserting his redemption 

rights,” or (b) filing a “separate action” to assert his 

redemption rights “within thirty days” after being served “with 

original notice in the removal action.” Hoosman did neither.

So it appears Hoosman’s redemption rights are forfeited.

We respectfully disagree. The overarching question presented in 

this appeal is whether the district court should have set aside the default 

judgment to allow Hoosman to file an answer and defend on the merits. 

To conclude, as the court of appeals did, that the district court should not 

have set aside the default because Hoosman failed to file an answer and 

defend on the merits strikes us as circular. The court of appeals framed 

the question too broadly with respect to its analysis of this factor. The 

specific question presented is whether the movant would have a 

meritorious defense if the motion to set aside the default were granted. We 

ask that question because there would be no reason to set aside the default 

judgment if it were simply a fait accompli that the district court would 

eventually reenter the same judgment. See Brandenburg, 603 N.W.2d at 
12

584 (stating the underlying purpose of rule 1.977 is “to allow a 

determination of controversies on their merits rather than on the basis of 

nonprejudicial inadvertence or mistake” (quoting Whitehorn, 398 N.W.2d 

at 853)). In this case, if the motion to set aside default judgment were 

granted, the case would proceed and Hoosman would be entitled to timely 

file a responsive pleading, including his statutory counterclaim. See Iowa 

R. Civ. P. 1.241 (discussing compulsory counterclaims); Iowa R. Civ. P. 

1.401 (defining allowable pleadings); Iowa R. Civ. P. 1.405 (discussing the 

answer). The court of appeals erred in concluding otherwise.

The court of appeals also concluded Hoosman had not asserted a 

meritorious defense because there was insufficient evidence to establish 

Hoosman was a person with a “legal disability” within the meaning of 

section 447.7. Again, we respectfully disagree. For the purposes of 

establishing good cause to set aside a default judgment, the movant is not 

required to prove up the defense to the claim. Instead, the movant need 

only make a prima facie showing the movant has a meritorious defense. 

See Flexsteel Indus., Inc., 239 N.W.2d at 599 (holding that the movant 

must present evidence of a prima facie showing of a defense upon the 

merits); Handy, 250 Iowa at 884, 96 N.W.2d at 925 (“The court’s duty in 

this proceeding is to ascertain from the evidence whether any facts existed 

which . . . would prima facie constitute a defense.”); Hastings v. Espinosa, 

340 N.W.2d 603, 609 (Iowa Ct. App. 1983) (finding that assertion of 

statutory defense “is a meritorious defense allowing the trial court to set 

aside the default judgment”).

We express no opinion on whether Hoosman could ultimately prove 

he has a legal disability within the meaning of the statute, but he has at 

least made a prima facie showing he has a meritorious defense to the 

petition for writ of removal. A legally disabled person under chapter 447 
13

“means a minor or a person of unsound mind.” Iowa Code § 445.1(6). A 

person of unsound mind is someone who is “not . . . capable of exercising 

the judgment necessarily required in the management of his ordinary 

affairs.” Garretson v. Hubbard, 110 Iowa 7, 9, 81 N.W. 174, 174 (1899). 

“A person of unsound mind is one who is incapable of transacting the 

particular business [at] hand.” Id. (quoting Seerley v. Sater, 68 Iowa 375, 

376, 27 N.W. 262, 263 (1886)). “[I]t is evidently the purpose of these 

statutes to protect those who . . . are incapable of understanding their 

rights and obligations, and of caring for their own interests.” Hawley v. 

Griffin, 82 N.W. 905, 906 (Iowa 1900). The competency evaluation showed 

Hoosman suffered from a cognitive impairment of a permanent nature that 

may render him of “unsound mind” within the meaning of the statute. The 

competency evaluation showed Hoosman suffered from significant 

cognitive impairments to his memory and ability to comprehend matters. 

The evaluation referred to a payee who managed Hoosman’s finances. 

From this we can infer Hoosman was not competent to manage his own 

finances. In short, Hoosman made a prima facie showing he has a defense 

to the claim, and this factor favors setting aside the default judgment. 

Finally, we assess whether Hoosman willfully ignored or defied the 

rules of civil procedure. Willful defiance contemplates conduct that “goes 

beyond negligent or careless conduct.” Brandenburg, 603 N.W.2d at 585. 

Willful defiance means “conduct on the part of the defaulting party 

showing a deliberate intention to ignore, and resist any adherence to, the 

rules of procedure[,] . . . [e]xcusable neglect warranting relief from a 

default excludes conduct amounting to no care, no attention and 

approaching gross neglect or willful procrastination.” Id. Here, there is 

no evidence Hoosman willfully ignored or defied the rules of procedure. 

Instead, this record shows a man with an apparently significant cognitive 
14

impairment that limits his ability to remember, plan, and prepare, 

particularly with respect to legal matters. This factor, too, favors setting 

aside the default judgment. 

“The determination of whether a movant has established good cause 

is not a factual finding; rather, it is a legal conclusion and is not binding 

on us.” Sheeder v. Boyette, 764 N.W.2d 778, 780 (Iowa Ct. App. 2009). In 

light of the strong policy preference favoring the adjudication of claims on 

the merits, we find Hoosman has established good cause to set aside the 

default judgment. We thus conclude the district court erred in denying 

Hoosman’s motion to set aside the default judgment. We reverse and 

remand for an order granting the motion to set aside the default and 

default judgment and for further proceedings consistent with this opinion.

DECISION OF COURT OF APPEALS VACATED; DISTRICT COURT 

ORDER REVERSED AND REMANDED.

All justices concur except McDermott, J., who takes no part.