Opinion ID: 1568305
Heading Depth: 3
Heading Rank: 1

Heading: The Nature and Legitimacy of the Defendant's Reasons for Default

Text: ¶ 11. American States argues that all three prongs of the balancing test weigh in favor of setting aside the default judgment entered against it. The first prong concerns the defendant's reasons for defaulting. American States claims that it has a legitimate reason for its default. American States concedes that its registered agent was properly served by Rogillio. It claims that the support staff at its home office in Seattle, Washington committed an inadvertent clerical error by placing Rogillio's summons and complaint in the claims file for the Clover Hill policy rather than the claims file for the J & N Timber policy. American States explains that it was first informed of Rogillio's lawsuit by a representative of its codefendant Bi-County, and that this representative provided a courtesy copy of the complaint to American States on March 14, 2007. American States further contends that, although Anderson later saw Rogillio's complaint in the Clover Hill claims file, he assumed it was the courtesy copy of the complaint provided by Bi-County and that American States had still not been officially served by Rogillio. American States asserts that it was only when counsel for Farm Bureau informed American States of the default judgment on August 2, 2007 that it realized that it had been served, had failed to answer, and was, therefore, in default. ¶ 12. This Court has found that similar excuses do not constitute bona fide excuses. In Pointer v. Huffman , the defendant, after being served, mailed information regarding the lawsuit to the proper company officers, but took no further action until discovering that a default judgment had been entered. Pointer, 509 So.2d at 871, 876. The defendant argued that default was unintentional and was the result of his complete reliance on his insurance carrier to take all necessary action. Id. at 876. The trial court noted that, despite being an astute businessman with years of experience dealing with insurance claims and litigation, the defendant never took any steps to determine whether the papers were received or whether an answer had been filed. Id. The trial court denied the defendant's motion to set aside the default judgment. Id. at 872. On appeal, this Court concluded that [t]o be sure, [the defendant] could have been more diligent in his actions to defend this suit. The trial court, in the exercise of his discretion, so held, and this Court finds no abuse of this discretion. Id. at 876. ¶ 13. In H & W Transfer & Cartage Service, Inc., the defendant, after being served with substituted service, delivered copies of the summons and complaint to its insurance agent, who delivered them to the defendant's liability insurance carrier. H & W Transfer & Cartage Serv., Inc., 511 So.2d at 896. As in Pointer, the defendant then took no further action until it was informed that a default judgment had been entered. Id. In commenting on the defendant's lack of diligence, this Court stated that the defendant prudently forwarded the summons and complaint to its insurance agent upon receipt, but [i]mprudently, [the defendant] thereafter did nothing, made no follow-up inquiry, and for all practical purposes let the matter drop until some five months later when it found out about the default judgment. Id. at 899. This Court concluded that the defendant's story did not amount to good cause justifying a default under the first prong of the balancing test. Id. ¶ 14. In this case, the trial court found American States' excuse to be inadequate. At the hearing before the trial court, counsel for American States characterized the reason for default as a simple mistake by Mr. Anderson. It was a simple mistake by someone in the home office putting the actual served copy of the complaint in the 2004 Clover Hill file, as opposed to putting it in the active J & N file. But that was an honest mistake. ... I think the reasons for the default are simple neglect-negligence, a clerical error in putting the claim-the summons and the complaint in the wrong file, but certainly not a bold face [sic] attempt just to ignore the summons and complaint and ignore the plaintiff's lawsuit on a claim that they had denied. After arguments from both sides, the following exchange occurred: THE COURT: All right. Mr. Hill [counsel for American States] what about this? This does sound pretty bad now. MR. HILL: Well, Your Honor  THE COURT: Well, let me say this: I've set aside default judgments in the past and everything, but why should-this case-this sounds bad. MR. HILL: Yeah. What happened, Your Honor, again, was: The first copy that Mr. Anderson got was the courtesy copy. He didn't know at that time that they had been officially served with the complaint. When American States was served  THE COURT: Isn't that enough to check further, I mean to go a little bit further? Why aren't you sitting right there with this date checking when the statute runs, checking to see if a lawsuit had been filed or something? I'm just saying that this looks bad. This looks bad. This is one of the worst ones that I've seen. Shortly thereafter, when discussing Anderson's failure to monitor the status of Rogillio's lawsuit, the trial court stated: This just doesn't add up. This doesn't add up. ¶ 15. This Court agrees. American States' excuse for defaulting defies logic. Misfiling the summons and complaint does not explain how American States failed to answer it. American States does not claim that it did not receive the complaint, or that it did not recognize or understand the import of a summons and complaint. Based on the evidence in the record and the relevant legal precedent, this Court finds that the first prong of the balancing test weighs in favor of Rogillio.