Court Opinion

ID: 4747596
Source: CourtListenerOpinion
Date Created: 2021-08-12 17:41:54.21619+00
Date Added: 2024-06-11T08:08:37.032100
License: Public Domain

¶24 (dissenting) — Matia Investment Fund, Inc. (Matia), appeals an order vacating a default judgment it obtained against the city of Tacoma (City). The majority holds that the City made an informal appearance, thus the court did not err in vacating the default by Matia. I respectfully disagree. I would hold that there was not an informal appearance by the City. The majority does not address CR 60(b); but because a judgment was entered, CR 60(b) must provide the basis for vacation. And none of the basis for vacating judgments under CR 60(b) cited by the City are applicable: I would reverse the order vacating the default judgment.
Bridgewater, J.
I. Standard of Review
¶25 Civil Rule 55(c) provides for the “Setting Aside Default.” It states as follows:
(1) Generally. For good cause shown and upon such terms as the court deems just, the court may set aside an entry of default, and, if a judgment by default has been entered, may likewise set it aside in accordance with rule 60(b).
CR 55(c) (emphasis added). Civil Rule 60 provides the grounds and procedures to use in vacating a judgment. *550Ellison v. Process Sys. Inc. Constr. Co., 112 Wn. App. 636, 641, 50 P.3d 658 (2002). We review a trial court’s decision to vacate a judgment under CR 60 for an abuse of discretion. Hwang v. McMahill, 103 Wn. App. 945, 949, 15 P.3d 172 (2000), review denied, 144 Wn.2d 1011 (2001). A trial court abuses its discretion when it exercises it on untenable grounds or for untenable reasons. Prest v. Am. Bankers Life Assurance Co., 79 Wn. App. 93, 97, 900 P.2d 595 (1995), review denied, 129 Wn.2d 1007 (1996). Abuse of discretion is less likely to be found if the default judgment is set aside. White v. Holm, 73 Wn.2d 348, 351-52, 438 P.2d 581 (1968).
II. Informal Appearance
¶26 The City claims that it made an informal notice of appearance and was entitled to notice of the motion for default under CR 55(a)(3) because it sent a letter denying the claim for damages months before Matia commenced their lawsuit. I would hold that the claim fails.
¶27 If a party has appeared before an opposing party files a motion for default, then the party is entitled to notice of the motion for default. CR 55(a)(3). RCW 4.28.210 provides that a party “appears” in an action at the time the party “answers, demurs, makes any application for an order therein, or gives the plaintiff written notice of his appearance.” The methods outlined in RCW 4.28.210 are not exclusive and courts may view other informal acts as an appearance. Skilcraft Fiberglass, Inc. v. Boeing Co., 72 Wn. App. 40, 45, 863 P.2d 573 (1993). Whether a party has appeared informally is generally a question of intent. Skilcraft, 72 Wn. App. at 45-46. Where a trial court finds that a party has informally appeared, that finding must be supported by evidence of actions that manifest “an unquestionable intent to appear and defend the matter in court.” Smith v. Arnold, 127 Wn. App. 98, 105,110 P.3d 257 (2005).
f 28 Where a plaintiff fails to notify a defendant who had appeared in an action of the plaintiff’s intent to seek an order of default judgment, the defendant is entitled to have *551a court vacate the order of default. CR 55(a)(3). This court reviews the trial court’s order for an abuse of discretion where a defendant seeks relief under CR 60 or where the defendant moved to have the default order vacated under CR 55(c) for good cause. In re Marriage of Scanlon, 110 Wn. App. 682, 686, 42 P.3d 447, review denied, 147 Wn.2d 1024 (2002). Whether a party has appeared, and is thus subject to notice of a motion for a default order, is a question of fact the court reviews for substantial evidence. Arnold, 127 Wn. App. at 105. If a party has failed to file a notice of appearance or in some other way submitted to the trial court’s jurisdiction, “any finding of an appearance must rest on substantial actions that could leave no reasonable doubt about whether the party intended to defend the matter.” Arnold, 127 Wn. App. at 106.
f 29 In Arnold, we disagreed with the broad definition of a party’s appearance in a yet-to-be commenced lawsuit found in Ellison, 112 Wn. App. at 643-44. Instead, we held that whether a party has appeared for the purpose of invoking the right to notice of a default judgment was a question of fact the court should narrowly construe. Arnold, 127 Wn. App. at 107. We further stated that by “adhering to a narrow meaning of ‘appearance,’ we recognize that controversies should be determined on the merits rather than by default orders and judgments.” Arnold, 127 Wn. App. at 108. But, a trial court still retains authority to set aside a default order under CR 55 where the party has demonstrated good cause by a showing of excusable neglect and due diligence.
¶30 Applying the Arnold holding to the present case finds that the City did not informally appear. All of the City’s contact with Matia Investment came before the commencement of a lawsuit. And all the City did was to deny the claim. It defies logic to say that a denial is an informal appearance, otherwise all denials coupled with some reason act as an informal appearance without using terms that specifically demonstrate affirmatively that the party will defend. The City’s letter does not express an *552unambiguous intention to defend a lawsuit filed upon the claim. This language is simple to insert, but was omitted. There was not sufficient evidence to support the trial court’s finding of an informal appearance. Thus, the City did not informally appear under Arnold and the trial court erred in setting aside the judgment unless the City can properly rely on one of the remedies from CR 60(b).
III. Application of the Civil Rules
f31 Matia contends the trial court erred by applying certain civil rules to vacate the default judgment. Because the City filed its motion to vacate over a year after the order for default judgment, the trial court could not set aside the order under CR 60(b)(1), which normally would have provided a basis for the City’s “mistaken” or “excusable neglect.” The City claims that the application of CR 60 was appropriate concerning three provisions, CR 60(b)(4), (5), and (11) not subject to the one-year time limitation. The majority fails to address CR 60(b); but CR 55(c)(1) clearly addresses the circumstance of setting aside a default judgment only by employing CR 60(b). No provision of CR 60(b) provides relief for the City.
A. Misconduct — CR 60(b)(4)
¶32 The court may relieve a party from a final judgment, order, or other proceeding where the court finds fraud, misrepresentation, or other misconduct by an adverse party. CR 60(b)(4). In this case, Matia did not obtain the default judgment through any of the prohibited means.
¶33 The City’s letter to Matia denying its claim provided sufficient information to Matia regarding who to contact if it had further questions. Matia moved for a default judgment exactly 21 days after the service of process on the city clerk’s office. Moreover, after Matia secured the judgment, it waited to enforce the judgment for a year and three days after the date it obtained the judgment. Objectively, Matia filed a claim as required under RCW 4.96.010; the City *553denied the claim; Matia filed a lawsuit two months after the denial; the City was served with the summons and complaint; after 20 days when no answer or notice of appearance was received a motion for default was filed. Default judgment was entered on June 26, 2003, and the City filed a motion to vacate on July 7, 2004. The summons and complaint were in the city clerk’s office since June 4, 2003, but had not been transmitted to the city attorney. Thus, more than one year after the default had been taken, the City moved to set the judgment aside. It is upon these facts that the City claims misconduct.
¶34 In considering whether to vacate a default judgment, the court determines whether justice is being done and the court grants or denies relief based on equitable principles. Hwang, 103 Wn. App. at 950.
¶35 The City relies upon Suburban Janitorial Services v. Clarke American, 72 Wn. App. 302, 311, 863 P.2d 1377 (1993), review denied, 124 Wn.2d 1006 (1994), for its proposition that silence of opposing counsel was the equivalent of misrepresentation. In Suburban, the court vacated a default judgment under CR 60(b)(4) 17 months after the entry of the judgment based on the “ ‘knowing silence’ ” of a party’s counsel. Suburban, 72 Wn. App. at 311 (quoting Cavalliotis v. Salomon, 357 F.2d 157, 159 (2d Cir. 1966)). Suburban served a summons and complaint on Clarke on May 28, 1991. Clarke failed to respond within 20 days of service. Suburban then filed a complaint and obtained a default judgment on June 19, 1991. Suburban, 72 Wn. App. at 304.
¶36 But, between the service and the answer deadline, Clarke’s attorney drafted a notice of appearance, answer, and cover letter and sent the items to Clarke for approval. Clarke’s attorney forwarded the materials to Suburban after the entry of the default judgment. In his cover letter, Clarke’s attorney requested that Suburban tell him of its intentions. Clarke’s attorney received no answer from Suburban. Clarke’s attorney sent a second letter to Suburban two months later asking Suburban if he should presume it *554had dropped its claim against Clarke. Again, Clarke received no response. Clarke did not receive actual notice of the default judgment until 17 months after the court had entered it. Clarke immediately moved to vacate the judgment. Suburban, 72 Wn. App. at 304.
¶37 The court found that Suburban deliberately failed to answer Clarke’s letters, hoping that the silence would make Clarke think the matter had ended. The court ruled that its holding was strictly limited to the facts of the case. Suburban, 72 Wn. App. at 310. It held that Suburban’s counsel’s silence justified relief under CR 60(b)(4). Suburban, 72 Wn. App. at 311.
¶38 Suburban is distinctly different from the instant case. There is noting in the record to support misconduct or fraud on the part of Matia or its counsel. Matia properly made its claim, filed its lawsuit, served the City at the appropriate office, and waited for a response which never came until a year had elapsed. There is no fraud or misconduct in waiting over one year to begin collecting on a judgment. Friebe v. Supancheck, 98 Wn. App. 260, 267, 992 P.2d 1014 (1999). Matia’s conduct was not fraud, misconduct, or misrepresentation that is contemplated under CR 60(b)(4).
B. Void Judgments CR 60(b)(5)
¶39 Under CR 60(b)(5), a court may vacate a void judgment at any time. CR 60(b)(5) states in pertinent part:
On motion and upon such terms as are just, the court may relieve a party or his legal representative from a final judgment, order, or proceeding for the following reason! ]:
(5) The judgment is void.
A judgment is void if entered without personal jurisdiction, subject matter jurisdiction, or if entered by a court which lacks the inherent power to enter the particular order involved. In re Marriage of Ortiz, 108 Wn.2d 643, 649, 740 *555P.2d 843 (1987) (citing Dike v. Dike, 75 Wn.2d 1, 7, 448 P.2d 490 (1968) (quoting with approval from Robertson v. Commonwealth, 181 Va. 520, 536, 25 S.E.2d 352 (1943))). See also Bour v. Johnson, 80 Wn. App. 643, 910 P.2d 548 (1996); State ex rel. Turner v. Briggs, 94 Wn. App. 299, 971 P.2d 581 (1999); Summers v. Dep’t of Revenue, 104 Wn. App. 87, 14 P.3d 902, review denied, 144 Wn.2d 1004 (2001).
¶40 The rationale of the City for the application of CR 60(b)(5) rests on the reasons it previously expressed for the application of misconduct under CR 60(b)(4). These are not identical to the basis on which relief can be granted under CR 60(b)(5) as I explained above. Also, a meritorious defense is not a basis under CR 60(b)(5). Clearly, the superior court had jurisdiction over the parties and the subject matter and it had the authority to enter the particular order and judgment. There is no basis under CR 60(b)(5) to grant the City relief.
C. Other Reasons — CR 60(b)(ll)
¶41 CR 60(b)(ll) states a court may grant relief of a judgment for “[a]ny other reason justifying relief from the operation of the judgment.” That rule is not applicable to the present case.
¶42 First, it should be noted that it is not clear whether the trial court relied on CR 60(b)(ll) when it vacated the default judgment. There is no mention of the rule in the court’s order granting the motion to vacate default judgment. Nor did the court mention the rule in its oral ruling. The City argued in its motion to vacate default judgment that Matia’s actions constituted manifest injustice and bad faith and that the court should vacate the judgment under CR 60(b)(ll). But the law does not support its argument.
¶43 Despite the broad language of CR 60(b)(ll), the court should use the rule only in a situation involving extraordinary circumstances that are not covered by any other section of CR 60(b). In re Marriage ofYearout, 41 Wn. App. 897, 902, 707 P.2d 1367 (1985). Those circumstances *556must relate to “irregularities extraneous to the action of the court or questions concerning the regularity of the court’s proceedings.” Yearout, 41 Wn. App. at 902. Here, no such irregularity existed. Nor do we find any extraordinary circumstances in this case. I reiterate the holding in Friebe:
The . . . failure to appear may be attributed only to mistake, inadvertence, or excusable neglect under CR 60(b)(1), and relief under that section is precluded due to the one-year time limit. CR 60(b)(ll) may not be used to circumvent the time limit imposed in CR 60(b)(1).
Friebe, 98 Wn. App. at 267.
¶44 Therefore, CR 60(b)(ll) does not provide a basis for granting relief to the City. That rule is not applicable to the present case.
¶45 Thus, I would hold that there is no basis under CR 60 upon which the City may obtain relief. The trial court’s order granting the motion to vacate Matia’s judgment should be reversed, and the court should be instructed to reinstate the prior judgment.
Review granted at 157 Wn.2d 1016 (2006).