Opinion ID: 1964752
Heading Depth: 2
Heading Rank: 1

Heading: Setting Aside the Default Judgment

Text: The ruling on a motion to vacate default judgment is within the sound discretion of the trial judge. Dunn v. Profitt, 408 A.2d 991, 992 (D.C.1979). However, we have often noted that [a] strong judicial policy favors deciding cases on their merits rather than by default judgment. Hawkins v. Lynnhill Condominium Unit Owners Ass'n, 513 A.2d 242, 244 (D.C.1986) (per curiam). Where a timely motion is made to vacate a default judgment, the policy of favoring trial on the merits will often justify reversal where even a slight abuse of discretion has occurred in refusing to set aside a judgment. Dunn, 408 A.2d at 993. In exercising its discretion, the trial court must choose what is right and equitable under the circumstances and the law and state the reasons which support its conclusion. Firemen's Ins. Co. v. Belts, 455 A.2d 908, 909 (D.C.1983) (per curiam) (internal quotation omitted).
Superior Court Civil Rule 60(b) provides that the Court may relieve a party or a party's legal representative from a final judgment, order, or proceeding for ... (6) any other reason justifying relief from the operation of the judgment. Super. Ct. Civ. R. 60(b)(6). Miranda argues that the default judgment should have been set aside under Rule 60(b)(6) because he has demonstrated good cause for the failure to file an answer or other responsive document; namely, that the parties promptly and in good faith engaged in negotiations and that Contreras' counsel agreed to consent to striking of the default if settlement negotiations were unsuccessful. Rule 60(b)(6) is properly invoked in extraordinary circumstances or where a judgment may work an extreme and undue hardship, but is not narrowly defined. Starling v. Jephunneh Lawrence & Assocs., 495 A.2d 1157, 1161 (D.C. 1985). In order to determine whether to set aside a default judgment, the court considers the following factors: whether the movant 1) had actual notice of the proceeding; 2) acted in good faith; 3) presented an adequate prima facie defense; and 4) acted promptly. See Dunn, 408 A.2d at 993. It is the trial court's responsibility to inquire where matters are raised which might entitle the movant to relief under Rule 60(b). Starling, 495 A.2d at 1162. In the present case the record fails to show that the trial judge even considered these factors, despite their applicability. Dunn, 408 A.2d at 993. In Miranda's Opposition to Motion for Judgment and Motion to Set Aside Default, and again in Miranda's Motion to Alter, Amend or Vacate Judgment, Mr. Green indicated that [p]laintiff's counsel agreed to consent to striking the default if settlement negotiations were unsuccessful. Mr. Escoto, for his part, appears to have generally denied that Mr. Green was misled. [3] In the appellate brief and at oral argument, Mr. Escoto has stated that he made no such representation as alleged. The trial court did not inquire into, and the record is silent as to whether it considered, counsels' discussions in rejecting Miranda's opposition to entry of judgment. With respect to Miranda's motion to set aside the default, the trial court noted only that the alleged `motion' included in the opposition ... was not properly before the court, apparently because it was not filed separately from the opposition to entry of judgment. There is also no indication that the trial court considered, or, if so, how it resolved, counsels' conflicting allegations in the order denying in part Miranda's motion to alter, amend or vacate the judgment, which was properly presented to the court. [4] Although Miranda's counsel concedes that he could have filed a paper with the court once he was on notice of the attempted service so as to prevent the original default, [5] we nevertheless believe that a judgment secured by misrepresentations by one counsel to another is an extraordinary circumstance warranting relief under Rule 60(b)(6). See, e.g., D.C. Prof'l. Conduct R. 8.4 (2000) (It is professional misconduct for a lawyer to: ... (c) Engage in conduct involving dishonesty, fraud, deceit or misrepresentation[ ]....); D.C. Bar Voluntary Standards for Civility in Prof'l. Conduct ¶ 6 (2000) (While we owe our highest loyalty to our clients, we will discharge that obligation in the framework of the judicial system in which we apply our learning, skill, and industry in accordance with professional norms. In this context, we will strive for orderly, efficient, ethical, fair, and just disposition of litigation....). As colleagues at bar and officers of the court, and to ensure the efficient, accurate and just operation of judicial proceedings, counsel must be able reasonably to rely on representations made by fellow counsel in the context of litigation. Conversely, counsel should not be able to reap the windfall of his or her misrepresentation to fellow counsel. Accordingly, the record before the trial court, as well as facts asserted on appeal, indicates circumstances which may entitle [Miranda] to relief ... for `any other reason' under Rule 60(b)(6). Starling, 495 A.2d at 1162. As these facts are in dispute, a hearing on the issue is required. Mr. Green represented to this court at oral argument that if the default judgment were set aside under Rule 60(b)(6) his client would waive the issue of sufficiency of service. Thus, if on remand the trial court finds that the default judgment should be set aside, it need not reach the issue of sufficiency of service. If the trial court finds that no such misrepresentation was made and other factors do not warrant setting aside the default, or makes the unlikely determination that a misrepresentation was made but does not satisfy the Rule 60(b)(6) standard applied to this case, then it will be necessary for the trial court to make a factual determination on the record regarding the adequacy of service. [6]
A default judgment entered in the absence of effective service of process is void, even though the defendant has actual notice of the action. McLaughlin v. Fidelity Sec. Life Ins., 667 A.2d 105, 107 (D.C.1995). Thus, Superior Court Civil Rule 60(b) provides that the Court may relieve a party ... from a final judgment, order, or proceeding for the following reasons:... (4) the judgment is void. Super. Ct. Civ. R. 60(b)(4). Whereas simply leaving a copy of the summons and complaint at a defendant's residence is insufficient service under either Maryland or District of Columbia law, and would warrant vacation of the judgment as void, personal service on the defendant is sufficient service under the law of the District of Columbia, as well as Maryland. [7] According to the process server's affidavit, personal service was made on Miranda at his home in Maryland. [T]he return of service by a process server may be impeached only by strong and convincing evidence. Firemen's Ins. Co., 455 A.2d at 909; see also Alexander v. Polinger Co., 496 A.2d 267, 271 (D.C.1985) ([C]lear and convincing proof is required to rebut the presumption of [a process server's returns] verity.). Contreras argues that Miranda's bare assertion that he was not served is insufficient to set aside the default judgment. Although we agree with that proposition, it does not address Miranda's point that he was entitled to a hearing on the question of service. A trial court may properly deny a motion to vacate a default judgment if the moving party fails or declines to present witnesses or other evidence to support his claim of lack of service, but the preference is clearly in favor of a hearing before such a determination is made. Hawkins, 513 A.2d at 244 n. 5 (noting cases which have denied motions to vacate default for lack of service only after a hearing on the sufficiency of service). Contreras' argument conflates the ultimate conclusion, that Miranda has or has not rebutted the presumption that the return of service by the process server is valid, with the opportunity to present evidence in support or derogation of that conclusion. The present case is readily distinguishable from both Firemen's Insurance and Castro v. Universal Acceptance Corp., 200 A.2d 202 (D.C.1964), each of which Contreras commends to this court in support of his contention that Miranda has failed to meet his burden of disproving service. Notably, in both cases the trial court determined that service was adequate only after the party was given an opportunity for a hearing. In Firemen's Insurance, the process server's affidavit showed service upon Dorothy Belts ... a person of suitable age and discretion then residing therein.... 455 A.2d at 908-09. At the hearing on the issue of service, the defendant-appellee denied receipt of the court papers but testified that his wife Dorothy resided with him at the address on the process server's return. Dorothy Belts did not testify at the hearing; nor did the appellee in Firemen's Insurance testify that his wife had not been served. See id. at 909. Thus, there was no issue whether service had been proper. In Castro, the process server's return stated that he had left copies of the court papers with an individual at the defendant-appellant's usual place of abode. See 200 A.2d at 202. The defendant thereafter submitted an affidavit averring that she had never maintained her dwelling at the address in the process server's return, although it was stipulated that the defendant leased the apartment at which the process was served. We specifically credited that [t]he trial court acted properly in giving defendant an opportunity to appear with witnesses to establish her true place of residence.... 200 A.2d at 203. The trial court found that the presumption of correctness in the official return of service had not been overcome only after the [d]efendant declined th[e] opportunity [for a hearing] and elected to stand on her affidavit. Id. The present case is similarly distinguishable from Brady v. Graham, 611 A.2d 534 (D.C.1992), in which, faced with the defendant-appellant's naked assertion that he had not been served, the court was presented with an affidavit of the process server that set forth in detail the circumstances surrounding the service on appellant, including a physical description of appellant and a summary of the process server's conversation with him at the time service was effected. 611 A.2d at 535-36. Brady never asked for a hearing on the issue of service and failed at the trial level to challenge, by affidavit or otherwise, the substance of the process server's affidavit.... 611 A.2d at 536. In light of the complete one-sidedness of the evidence, the court concluded that Brady had failed to articulate any basis for setting aside the default for lack of service. Id. In this case no additional affidavit or other evidence setting forth in detail the circumstances of service has been presented to the court in response to Miranda's challenge to the sufficiency of service. Moreover, in his opposition to Contreras' motion for entry of judgment and in his motion to alter, amend or vacate judgment, Miranda requested an oral hearing on the question of deficient personal service. The verified answer and counterclaim, signed and sworn by Miranda, claimed that his wife found the complaint lying in front of their front door, and that, as a result, service was insufficient. This document raises a significant factual dispute as to the verity of the process server's affidavit. Hawkins, 513 A.2d at 244. Having raised a factual issue over whether he was personally served, Miranda should have an opportunity to proffer[ ] or present[ ] evidence which would rebut the presumption that the [process server's] return[ ][is] valid. Alexander, 496 A.2d at 271. In this case, the process server's affidavit states that the process server personally served Miranda at his home address on November 8, 1997. At a hearing on this issue, the process server's affidavit could be impeached by Miranda's wife, who could confirm or deny that she discovered the summons and complaint as alleged. As the record does not include a return receipt signed by Miranda, the process server could be questioned as to why he did not state specific facts regarding service on the affidavit, as required on the service form. Likewise, Contreras could elicit additional evidence of the fact of service from the process server. If, after opportunity for a hearing, Miranda has mustered only the naked assertion that he was not served, Brady, 611 A.2d at 535, without some corroborating evidence, see Castro, 200 A.2d at 202, then he will have failed to meet his burden. See Alexander, 496 A.2d at 271; Firemen's Ins. Co., 455 A.2d at 909. At this juncture, however, such a determination is premature.