Court Opinion

ID: 9698228
Source: CourtListenerOpinion
Date Created: 2023-08-25 19:45:18.325568+00
Date Added: 2024-06-11T18:20:39.491042
License: Public Domain

*305UHLENHOPP, Justice
(concurring specially).
Did the trial court abuse its discretion in refusing to vacate the default judgments of $135,000 against defendant Piper Aircraft Corporation? Piper did not flout the process of the court. On the contrary, it desired to defend the suits.
The incident leading to this litigation occurred on May 26, 1974, as plaintiff Fred Williams attempted to land an airplane manufactured by Piper and rented from defendants Fisher Aviation, Inc. and Robert Fisher. The original petitions alleged that due to a malfunction of the throttle, the airplane crashed injuring Williams and his passenger, plaintiff Nolan Kreft.
Plaintiffs filed their respective petitions on May 6, 1975, in Sac County District Court. Fisher Aviation and Fisher were personally served in Carroll County the following day. Also on May 7, 1975, an original notice directed to Piper was filed with the Iowa Secretary of the State. On May 9, 1975, plaintiffs’ attorney mailed copies of the original notices and notices of filing to Piper in Lock Haven, Pennsylvania. On May 13,1975, the notices were received and signed for by Fred Yarnell, a clerk for Piper, and were transmitted to Piper’s claim and litigation department for handling. An inexperienced clerical employee in the product claim and litigation department mistakenly filed the notices in an inactive accident investigation file without bringing them to the attention of anyone in authority.
Fisher Aviation and Fisher entered their appearances on May 23, 1975. Stipulations between plaintiffs and these defendants were filed on May 30 and June 27, 1975, giving these defendants additional time to answer. Piper was not served with copies of these stipulations. Fisher Aviation and Fisher answered on July 18, 1975.
Since Piper had not appeared, on July 14, 1975, the district court declared Piper in default. On September 22, 1975, after assessing damages, the district court entered default judgments against Piper for $75,000 plus court costs in the Williams case and for $60,000 plus court costs in the Kreft case. Copies of these judgments were not mailed to Piper.
On December 12, 1975, 81 days after the default judgments were entered — and 21 days too late for Piper to proceed under more flexible rule 236 of the Rules of Civil Procedure — Piper received a letter inquiring about satisfaction of the judgments. This was the first communication to Piper concerning the case after May 9,1975, when it received the notices which were misfiled. Piper promptly retained counsel, who filed a petition to set aside the judgments.
I. Rule 252(e) compels me to concur with the court majority in denying relief. Piper’s filing error was not “unavoidable” as that rule requires. Windus v. Great Plains Gas Co., 255 Iowa 587, 595, 122 N.W.2d 901, 906; Lemke v. Lemke, 206 N.W.2d 895, 897-898 (Iowa); Claeys v. Moldenschardt, 260 Iowa 36, 43, 148 N.W.2d 479, 483. I concur reluctantly because of the unfairness of the result which our procedural rules necessitate, preventing Piper from defending on the merits because of a minor human error.
II. While I agree that rule 252(e) compels the result reached, I think it is not a good result. Procedural rules are not ends in themselves but are the means for achieving just results. In this case we are transferring $135,000 from one party to another because a file clerk put a paper in a wrong file, not because Piper built a bad airplane. The penalty we impose on Piper is out of proportion to the file clerk’s faux pas which brings the penalty down on Piper; plaintiffs’ lawsuit against Piper was no worse after the misfiling than before. A similar result could ensue to some plaintiff whose file clerk made a similar slip. The result we reach is inconsistent with our policy of trials on the merits, Jacobsen v. Gamber, 249 Iowa 99, 86 N.W.2d 147; First National Bank v. Federal Reserve Bank, 210 Iowa 521, 231 N.W. 453, and with the Federal Rules of Civil Procedure. We should consider a change in our rules at this point to coincide with the federal rules.
*306The federal counterpart of rule 252(e) is rule 60(b)(1), Federal Rules of Civil Procedure:
(b) Mistakes; Inadvertence; Excusable Neglect; Newly Discovered Evidence, Fraud, etc. 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 reasons: (1) mistake, inadvertence, surprise, or excusable neglect.
The liberal policy of the federal courts in applying rule 60(b) is stated in Tolson v. Hodge, 411 F.2d 123, 130 (4 Cir.):
It has been held in an extensive line of decisions that Rules 55(c) and 60(b) are to be liberally construed in order to provide relief from the onerous consequences of defaults and default judgments . . Any doubts about whether relief should be granted should be resolved in favor of setting aside the default so that the case may be heard on the merits.
This liberal approach allows the federal courts to vacate default judgments and permit trials on the merits when strict enforcement of procedural rules is not in the interest of justice. Tozer v. Charles A. Krause Milling Co., 189 F.2d 242 (3 Cir.). See 11 Wright & Miller, Federal Practice & Procedure, § 2858 (1973).
Our rule 252(e) differs from the federal rule in present circumstances by requiring that the mistake leading to the default be “unavoidable.” The federal requirement is that the mistake be “excusable.” In contrast to our rule, the federal rule allowed vacation of a default judgment when the defendant’s mistake was in not registering its new address with the secretary of the commonwealth. Tozer v. Charles A. Krause Milling Co., supra. Similarly, a clerical error by defendant’s former counsel did not bar vacation of a default judgment in Horn v. Intelectron Corp., 294 F.Supp. 1153 (S.D.N.Y.). An attorney’s mistake in not filing a defense was an excusable mistake of the party under the approach taken in Transport Pool Div. v. Joe Jones Trucking Co., 319 F.Supp. 1308 (N.D.Ga.). When the carelessness cannot be attributed to an officer or agent in charge of litigation, a federal court has vacated a default judgment. Ellington v. Milne, 14 F.R.D. 241 (E.D.N.C.). Some federal courts have even stated that the mistake need not always be excusable in order to vacate a default judgment. Teal v. King Farms Co., 18 F.R.D. 447 (E.D.Pa.); Rasmussen v. W. E. Hutton & Co., 68 F.R.D. 231 (N.D.Ga.).
The federal courts have, however, prevented abuse of their rule by refusing to vacate default judgments that result from neglect which cannot be condoned. Ben Sager Chemicals International, Inc. v. E. Targosz & Co., 560 F.2d 805 (7 Cir.). There the court refused to vacate a default judgment because no satisfactory justification was given for the attorney’s admitted neglect. In another case the defendant’s clerical error prevented the formal notice from reaching the proper desk. Greenspun v. Bogan, 492 F.2d 375 (1 Cir.). The court refused to vacate the default judgment, however, because three additional mailings of papers had been made which should have put the defendant on notice.
Federal courts couple the excusable neglect ground with a requirement that the defaulting party show he has a meritorious cause or defense in the main action. Central Operating Co. v. Utility Workers of America, 491 F.2d 245, 252 (4 Cir.) (“In order to obtain relief under Rule 60(b)(1), a party must show that he had an acceptable excuse for lapsing into default and that he has a meritorious defense to the action.”); Wokan v. Alladin International, Inc., 485 F.2d 1232, 1234 (3 Cir.) (“On a motion to set aside a default or a default judgment, the moving party must show that he has a meritorious defense.”). The combination of these requirements assures that a default judgment is vacated only when the merits of the main case itself also justify that result.
Our rules already require a showing of a meritorious cause or defense: “Unless the pleadings in the original action alleged a meritorious action or defense the petition shall do so.” Rule 253(a). By changing the standard of rule 252(e) from “unavoidable” *307to “excusable,” our rules would follow the more flexible federal approach. Such a change would allow us to avoid the undesirable result which is necessary here and to apply the approach I have quoted from Tolson v. Hodge, supra, 411 F.2d 123, 130 (4 Cir.).