Court Opinion

ID: 4470797
Source: CourtListenerOpinion
Date Created: 2020-01-09 17:04:29.257426+00
Date Added: 2024-06-11T13:25:20.352332
License: Public Domain

IN THE COURT OF APPEALS OF IOWA

                                 No. 19-0431
                            Filed January 9, 2020

NO BOUNDRY, LLC,
     Plaintiff-Appellee,

vs.

CORNELL HOOSMAN,
     Defendant-Appellant.
________________________________________________________________

      Appeal from the Iowa District Court for Black Hawk County, Andrea Dryer,

Judge.

      Cornell Hoosman appeals the denial of his motion to set aside default

judgment. AFFIRMED.

      Todd Schmidt of Iowa Legal Aid, Dubuque, Nathan Peters of Iowa Legal

Aid, Waterloo, and Alexander Vincent Kornya of Iowa Legal Aid, Des Moines, for

appellant.

      Charles P. Augustine of Klatt, Augustine, Treinen & Rastede, P.C.,

Waterloo, for appellee.

      Heard by Bower, C.J., and May and Greer, JJ.
                                         2

MAY, Judge.

       Cornell Hoosman appeals from the district court’s denial of his motion to set

aside a default judgment. We affirm.

I. Facts and Prior Proceedings

       Hoosman owned the property described as the west thirty feet of lot eleven

in Shilliam’s Second Subdivision, Waterloo, Black Hawk County, Iowa.            But

Hoosman failed to pay the property taxes. In 2016, an entity named Wago 131

purchased the property at a public sale.       In 2018, Wago 131 assigned the

certificate of sale, its rights, and deed to the property to No Boundry, LLC.

       On January 14, 2019, No Boundry commenced this action to recover the

property from Hoosman pursuant to Iowa Code chapter 646 (2019). Hoosman

was served two days later. On February 6, No Boundry mailed Hoosman its Notice

of Intent to File Written Application for Default Judgment. But he never filed an

answer or counterclaim.

       No Boundry then filed its application for default judgment. The court entered

default judgment and issued a Writ of Removal and Possession.

       Twenty-one days later, Hoosman filed a motion to set aside the default

judgment and stay the writ.1 Hoosman claimed he was legally disabled. Therefore,

he claimed, his right of redemption under Iowa Code section 447.7(2) remains for

one year following removal of his disability. Moreover, he contended, Iowa Rule

of Civil Procedure 1.211 prohibited entry of judgment against him because he was

“a party . . . adjudged incompetent.”        As support, Hoosman submitted a

1Hoosman filed an application for an injunction the day before. The district court
denied the application.
                                          3

competency evaluation from May 2013. The competency evaluator, a licensed

psychologist, opined Hoosman was not competent to stand trial in two criminal

cases.

         But nothing in the record shows that any court has ever found Hoosman

incompetent. And nothing in the record shows Hoosman was impaired in 2019,

when he was served with process but failed to timely respond.

         Hoosman’s motion came before the district court in an unrecorded hearing.

The court denied Hoosman’s motion. This appeal followed.

II. Standard of Review

         “We vest district courts with broad discretion in ruling on a motion to set

aside a default. We reverse such a ruling only if this discretion is abused.” Cent.

Nat’l Ins. Co. of Omaha v. Ins. Co. of N. Am., 513 N.W.2d 750, 753 (Iowa 1994).

“We resolve all doubts in favor of setting aside a default judgment, as we prefer ‘to

allow a determination of controversies on their merits rather than on the basis of

nonprejudicial inadvertence or mistake.’” Beal v. Crowder, No.16-0246, 2017 WL
361997, at *4 (Iowa Ct. App. Jan. 25, 2017) (quoting Brandenburg v. Feterl Mfg.

Co., 603 N.W.2d 580, 584 (Iowa 1999)).

III. Discussion

         A. Motion to Set Aside Default

         Iowa Rule of Civil Procedure 1.977 states: “On motion and for good cause

shown, . . . the court may set aside a default . . . for mistake, inadvertence,

surprise, excusable neglect or unavoidable casualty.” Good cause is established

by proving one of these enumerated exceptions. Brandenburg, 603 N.W.2d at

584.
                                           4

       Hoosman does not explicitly identify which exception he relies upon. But

he discusses the test used for “excusable neglect.” It involves consideration of

four factors:

       First, did the defaulting party actually intend to defend? Whether the
       party moved promptly to set aside the default is significant on this
       point. Second, does the defaulting party assert a claim or defense
       in good faith? Third, did the defaulting party willfully ignore or defy
       the rules of procedure or was the default simply the result of a
       mistake? Last, whether relief is warranted should not depend on who
       made the mistake.

Cent. Nat’l Ins. Co. of Omaha, 513 N.W.2d at 756.

       With respect to the first factor, Hoosman contends he intended to defend

himself but was unable to do so without counsel due to his mental disability. He

claims he moved to set aside as soon as he secured counsel. But the record

contains no explanation for his delay.

       The focus of Hoosman’s argument, though, is the second factor—whether

he has a good faith claim or defense. Hoosman purports to have a right to redeem

the property under Iowa Code section 447.7. It provides, in relevant part:

       2. a. If a parcel of a person with a legal disability is sold at tax sale
       and the county treasurer has delivered the treasurer’s deed, the
       person with the legal disability or the person’s legal representative
       may redeem the parcel at any time prior to one year after the legal
       disability is removed by bringing an equitable action for redemption
       in the district court of the county where the parcel is located, unless
       the action is required to be brought sooner in time by operation of
       subsection 3 or 4.
               ....
               3. If a person with a legal disability remains in possession of
       the parcel after the recording of the treasurer’s deed, and if the
       person claiming under the tax title properly commences an action to
       remove the person from possession, the person with a legal disability
       shall forfeit any rights of redemption that the person may have under
       this section, unless either of the following actions is timely filed by or
       on behalf of the person:
                                           5

               a. A counterclaim in the removal action asserting the
       redemption rights under subsection 2 of the person with a legal
       disability.
               b. A separate action under subsection 2. Such action shall be
       filed within thirty days after the person with a legal disability and the
       person’s legal representative were served with original notice in the
       removal action.

       Hoosman focuses on section 447.7(2), which provides legally disabled

persons with a right to redeem “at any time prior to one year after the legal disability

is removed by bringing an equitable action for redemption . . . unless the action is

required to be brought sooner in time by operation of subsection 3 or 4.” No

Boundry counters that section 447.7(2) is inapplicable because it requires the filing

of a separate equitable action.

       In our view, section 447.7(3)(a) defeats No Boundry’s argument.                It

expressly permitted Hoosman to assert his redemption rights by filing a

“counterclaim” to No Boundry’s removal action.

       At the same time, it appears subsection 447.7(3) is also fatal to Hoosman’s

claim. Under it, Hoosman’s right of redemption was forfeited unless he “timely”

responded to No Boundry’s action by (a) filing a “counterclaim in the removal action

asserting his redemption rights,” or (b) filing a “separate action” to assert his

redemption rights “within thirty days” after being served “with original notice in the

removal action.” Hoosman did neither. So it appears Hoosman’s redemption

rights are forfeited.

       Moreover, even if section 447.7(3) did not extinguish Hoosman’s alleged

right of redemption, there is a more fundamental problem: Hoosman provides

limited support to show he is a person with a “legal disability” who may invoke

section 447.7’s protections.      See Iowa Code § 447.7(2)(b) (“[T]the person
                                          6

maintaining the action shall prove to the court that the owner of the parcel is a

person with a legal disability entitled to redeem prior to the delivery of the

treasurer’s deed.”). Section 445.1(6) defines “person with a legal disability” as “a

minor or a person of unsound mind.” So, because Hoosman is an adult, he must

show he is a “person of unsound mind.” As support, Hoosman only provided the

court with a copy of a six-year-old competency evaluation related to past criminal

proceedings. This does not show Hoosman is currently of unsound mind.

       We conclude Hoosman has not shown section 447.7(2) applied to him.

Moreover, if Hoosman did enjoy a right of redemption under section 447.7(2), it

was extinguished pursuant to section 447.7(3). So we conclude he does not have

a good faith claim or defense to assert. The second factor in the excusable neglect

analysis does not support reversal.

       As to the third factor, Hoosman asserts there is nothing to suggest his

inaction resulted from him willfully ignoring or defying the rules of civil procedure.

When a person willfully defies or ignores the rules, their conduct “goes beyond

negligent or careless conduct.” Brandenburg, 603 N.W.2d at 585. Rather, their

conduct demonstrates “a deliberate intention to ignore, and resist any adherence

to, the rules of procedure.” Id.

       Hoosman     contends     his   purported   disability   prevented   him   from

understanding the rules. And he could not ignore or resist rules he could not

understand. As No Boundry points out, though, Hoosman also contends he “has

been trying to defend himself in this action for many months.” This demonstrates

he was aware of what was going on and chose not to participate in this proceeding.
                                            7

And it would seem to show “a deliberate intention to ignore” or resistance to the

rules of civil procedure.

          Finally, we recognize the final factor ensures we do not view Hoosman’s

inaction more severely than had the inaction stemmed from his counsel or some

other party. See id. at 585–86.

          After consideration of the four factors, we cannot conclude Hoosman

demonstrated “good cause” for purposes of Rule 1.977. The district court did not

abuse its discretion in denying his motion to set aside the default judgment.

          B. Applicability of Iowa Rules of Civil Procedure 1.211 and 1.212

          Hoosman also argues the judgment must be set aside because the district

court did not appoint a guardian ad litem prior to entering a default judgment.

Hoosman relies on Iowa Rule of Civil Procedure 1.211 and 1.212. Rule 1.211

states:

          No judgment without a defense shall be entered against a party then
          a minor, or confined in a penitentiary, reformatory or any state
          hospital for the mentally ill, or one adjudged incompetent, or whose
          physician certifies to the court that the party appears to be mentally
          incapable of conducting a defense. Such defense shall be by
          guardian ad litem; but the conservator (and if there is no conservator,
          the guardian) of a ward or the attorney appearing for a competent
          party may defend unless the proceeding was brought by or on behalf
          of such fiduciary or unless the court supersedes such fiduciary by a
          guardian ad litem appointed in the ward’s interest.

Rule 1.212 states:

          If a party served with original notice appears to be subject to rule
          1.211, the court may appoint a guardian ad litem for the party, or
          substitute another, in the ward’s interest. Application for such
          appointment or substitution may be by the ward, if competent, or a
          minor over 14 years old; otherwise by the party’s conservator or
          guardian or, if none, by any friend or any party to the action.
                                         8

       We do not believe these rules apply. Hoosman does not claim he was “a

minor” or “confined” when the default judgment was entered. And the record does

not show Hoosman has been “adjudged incompetent.” Nor did any physician

certify to the court that he was “mentally incapable of conducting a defense” in this

case. Certainly, the district court had no reason to question Hoosman’s mental

capability at the time the court entered default judgment. So there was no reason

to appoint a guardian ad litem.

IV. Conclusion

       The district court did not abuse its discretion in denying Hoosman’s motion

to set aside the default judgment.

       AFFIRMED.