Opinion ID: 2612242
Heading Depth: 2
Heading Rank: 2

Heading: effect of default

Text: The Church first contends on appeal that the superior court erred in refusing to enter a judgment against Farr for the same amount as the judgment against Bradley & Associates. In its Second Amended Complaint, the Church set forth various allegations as to Bradley & Associates' breach of contract in the construction of the building. In Paragraph XII, the Church alleged that Farr is a partner or an associate of Bradley & Associates. The superior court apparently concluded that the Church properly alleged a cause of action against Farr as a partner of Bradley & Associates for breach of contract. The court was initially of the opinion that the entry of default against Farr precluded him from contesting this liability. Even Farr's counsel conceded this much at the beginning of the trial and only argued that Farr had the right to contest the damages claimed by the Church. Nonetheless, during trial Farr attempted on various occasions to introduce evidence, through his own testimony and the testimony of Bradley, that Farr was not a partner of Bradley & Associates. In each instance, the superior court sustained the Church's objection to this line of inquiry. After trial, however, the court concluded that it was not persuaded that Farr was in fact a partner of Bradley & Associates as alleged by the Church's complaint. The Church contends that the court is not permitted to question a defendant's liability after a default has been entered against him. We disagree with this contention, but nonetheless agree with the Church that circumstances in this case require it to be remanded to the superior court for further proceedings. Civil Rule 55, which governs the entry of defaults and default judgments, states in part as follows: If, in order to enable the court to enter judgment or to carry it into effect, it is necessary to take an account or to determine the amount of damages or to establish the truth of any averment by evidence or to make and [sic] investigation of any other matter, the court may conduct such hearings or order such references as it deems necessary and proper. Alaska R.Civ.P. 55(c)(1) (emphasis added). We interpret this rule as permitting the superior court to question a defendant's liability after a default has been entered against him. See 10 C. Wright, A. Miller & M. Kane, Federal Practice and Procedure § 2685, at 420-29 (2d ed. 1983). If the court determines that in order to enter the judgment it is necessary for the plaintiff to present evidence supporting one or more of the plaintiff's allegations and if the plaintiff is unable to adduce any evidence tending to support the questioned allegations, then a judgment should be entered dismissing the plaintiff's complaint. The plaintiff need not, however, establish the truth of the allegations by a preponderance of the evidence. As indicated in Thomson v. Wooster, 114 U.S. 104, 108, 5 S.Ct. 788, 790, 29 L.Ed. 105, 107 (1885), a default establishes the well pleaded allegations of the complaint unless they are incapable of proof or are contrary to facts judicially noticed or to uncontroverted evidence presented by the parties. Uncontroverted evidence disproving the allegations of plaintiff's complaint refers to evidence that could not possibly be rebutted if the non-defaulting party were permitted a trial. Trans World Airlines, Inc. v. Hughes, 449 F.2d 51, 63 (2d Cir.1971), rev'd on other grounds, 409 U.S. 363, 93 S.Ct. 647, 34 L.Ed.2d 577 (1973). If the evidence offered by the defaulted party merely tends to show that an allegation is not true, then the allegation must be taken as true. In re West Securities Litigation, 436 F. Supp. 1281, 1289 (N.D.Cal. 1977). As the court further stated in In re Air West Securities Litigation, [O]nce a default has been entered and entry of judgment pursuant to the default is sought, the function of the trial court is not to weigh conflicting evidence; rather, the court must make the sole determination whether the allegations of the party in whose favor the default has been entered are susceptible of proof.... [G]iven conflicting but legitimate evidence on both sides, the court is bound to enter judgment for the party in whose favor the default has been entered. 436 F. Supp. at 1286. It is apparent that the superior court did not apply this rule. The court merely stated, after reviewing the evidence presented at trial, that it was not persuaded that Farr was a partner of Bradley & Associates. The superior court could refuse to accept as true the Church's well pleaded allegation that Farr was a partner only if the evidence presented at trial tending to disprove this could not possibly be rebutted by the Church. Trans World Airlines, Inc. v. Hughes, 449 F.2d at 63. The record indicates that the Church never offered any evidence as to the partnership relationship between Farr and Bradley & Associates because it was relying upon the court's statement that Farr's liability was established by the entry of default against him. Under these circumstances, it is necessary to remand this case to the superior court for further proceedings. The court must permit the Church an opportunity to rebut the evidence presented by Farr that tended to disprove the existence of a partnership between Farr and Bradley & Associates. If the Church is able to present any evidence in support of its allegation, the court is bound to enter judgment for [the Church] in whose favor the default has been entered. In re Air West Securities Litigation, 436 F. Supp. at 1286. [2]