Court Opinion

ID: 9560248
Source: CourtListenerOpinion
Date Created: 2023-08-21 17:45:57.157792+00
Date Added: 2024-06-11T09:12:31.780025
License: Public Domain

BURNETT, Judge,
dissenting.
When asked to grant relief from a default judgment, a court must weigh the goals of judicial efficiency and substantive justice. Regrettably, in the present case, our judicial system has achieved neither efficiency nor justice.
This is a straightforward debt collection suit against a corporation and two individual defendants. It has been on appeal since August, 1984, when a magistrate refused to grant relief from a default judgment against the corporation. Since that time the plaintiff has clung tenaciously to the judgment, obtaining no adjudication of her claim against the individuals. For two and one-half years, the sole issue pending in the district court and in our court has been whether to set aside the default judgment and to examine the merits of the plaintiff’s claim against all defendants. Finite judicial resources, as well as the time and money of the litigants, would have been allocated more efficiently if the magistrate originally had set aside the judgment, scheduling the case promptly for trial and imposing a monetary sanction against the corporation’s attorney for his delay in filing an answer.
*747Indeed, this would have been the result if the case had been decided before 1975. As many practitioners will recall, the Legislature in that year repealed a statute, I.C. § 5-905, which mandated relief from any default caused solely by an attorney’s neglect. The statute authorized sanctions to be imposed against the lawyer. Although the statute may have been criticized in some quarters as an infringement upon judicial discretion, I think it embodied sound jurisprudence and common sense. The statute recognized that lawyers are more than agents of litigants; they are officers of the courts. When attorneys neglect their work they not only disserve their clients, they also bring discredit to the judicial system. If the system exists to serve people and to do justice, it should not treat attorney neglect merely as a client’s misfortune. It should do as the statute did — preserve the client’s interests and vindicate the integrity of the system by placing the cost of attorney neglect squarely on the attorney himself.
When a monetary sanction is imposed as a condition for setting aside a default judgment, the public and private costs of delay are borne directly by the lawyer at fault. The court need not slap an innocent client with a judgment regardless of the merits, leaving the client with a Hobbesian choice of suffering in silence or of making a distasteful claim against his own lawyer.5 Punishing the client for a default caused solely by an officer of the court is crude, shortsighted and profoundly unfair.
Such an outcome is especially inappropriate here. This is not a case where the client has exhibited indifference to the litigation. Compare Avondale on Hayden, Inc. v. Hall, 104 Idaho 321, 658 P.2d 992 (Ct.App.1983) (defendant took no action for three months in response to lawsuit). Nor is it a case where grossly excessive delay has generated a presumption of prejudice to the opposing party. Cf. Nagel v. Wagers, 111 Idaho 822, 727 P.2d 1250 (Ct.App.1986) (lack of prosecution for nineteen months justified dismissal of action under I.R.C.P. 41(b)). To the contrary, the corporation here acted promptly. According to counsel’s unrefuted affidavit, the corporation, acting through its president Jared Lowe, requested legal representation in the suit. Counsel entered an appearance less than twenty days after process had been served. Due to counsel’s admitted “oversight,” the appearance referred only to Lowe individually. The court granted a thirty-day extension of time to file an answer, signing a proffered order that again mistakenly failed to mention the corporation. Forty-two days later, counsel filed his answer on behalf of both clients. Unfortunately, the answer came two days after a default judgment had been entered against the corporation. Upon learning of the judgment, counsel moved immediately for relief.
These time frames reflect delay but they do not suggest — and plaintiff has never contended — that any unfair prejudice would have resulted if the magistrate had set aside the default judgment and proceeded directly to the merits of the suit. Rather, the magistrate denied relief on other grounds. He held that counsel had been “careless” and that “carelessness” was not a form of “mistake, inadvertence ... or excusable neglect” for which relief could be granted under I.R.C.P. 60(b)(1). My colleagues today have adopted the same reasoning.
I submit that the scope of Rule 60(b)(1) is obscured, not clarified, by postulating a broad exception based upon the malleable notion of “carelessness.” What, exactly, does “carelessness” mean? Upon what principled and predictable basis can it be differentiated from mistake, inadvertence or excusable neglect? In the present case, why should counsel’s oversight in omitting the corporation from the pre-answer pleadings be characterized as “carelessness” rather than as a mistake, as inadvertence or as excusable neglect? It could be any of *748these. The choice of a label that denies relief is arbitrary and result-oriented.6
The unfortunate demise of I.C. § 5-905 has left us without a clearly defined policy in cases where defaults are caused by attorney neglect. See Marano v. Dial, 108 Idaho 680, 701 P.2d 300 (Ct.App.1985) (dissenting opinion). Absent statutory guidance, I believe we should adhere to the long-standing principle that “in doubtful cases, relief should be granted to reach a judgment on the merits.” Avondale, 104 Idaho at 326, 658 P.2d at 997. See also, e.g., Stoner v. Turner, 73 Idaho 117, 247 P.2d 469 (1952); Orange Transportation Company, Inc. v. Taylor, 71 Idaho 275, 230 P.2d 689 (1951). This principle is undermined by arbitrarily characterizing an attorney’s conduct as mere “carelessness” and using that semantic device to strip a hapless client of protection otherwise available under Rule 60(b)(1).
I do not condone counsel’s neglect in this case. But I would not punish his client for it. I would hold that the magistrate misapplied the criteria of Rule 60(b)(1) and thus abused his discretion in refusing to set aside the default judgment.7 On remand I would direct the magistrate to grant relief from the judgment upon condition that the corporation’s counsel pay the costs (including reasonable attorney fees incurred by plaintiff) of proceedings on the default issue in the magistrate division.

. Many lawyers will voluntarily compensate clients for the consequences of a default judgment. But some will not. In any event, there may be disagreement about the actual loss occasioned by a lawyer’s neglect — producing a "lawsuit within a lawsuit” on the merits of the initial litigation.

. I acknowledge that other courts have employed the term "carelessness” in denying relief under Rule 60(b). But they have not undertaken to define it. In fact, many have used the term in contexts wholly dissimilar to the present case. For example, Pullin v. City of Kimberly, 100 Idaho 34, 592 P.2d 849 (1979), a case cited by the magistrate and by the majority today, did not involve a default judgment at all. Rather, the plaintiffs in Pullin sought to set aside an adverse judgment entered after a trial. They asserted unsuccessfully that a material new fact had been discovered. In Nelson v. McGoldrick Lumber Co., 30 Idaho 451, 165 P. 1125 (1917), another cased cited by the majority, the defendant appeared and filed a timely demurrer to a complaint. The demurrer was denied. The defendant then was dilatory in filing a more detailed answer. Judgment was entered after ten months had elapsed. Although the judgment was termed a "default” judgment, the circumstances bore little resemblance to facts before us today. Rather, the judgment in Nelson was more akin to modern sanctions for noncompliance with discovery and for other misconduct resulting in delay. In such cases the term "carelessness” carries a connotation of indifference toward, or conscious disregard of, court orders. See, e.g., C.K.S. Engineers, Inc. v. White Mountain Gypsum Co., 726 F.2d 1202 (7th Cir.1984); International Corporate Enterprises, Inc. v. Toshoku Ltd., 71 F.R.D. 215 (N.D.Texas 1976); Frank v. New Amsterdam Casualty Co., 27 F.R.D. 258 (E.D.Pa.1961). "Carelessness” in this sense is a far cry from counsel’s conduct in the present case.

. A defendant seeking relief from a default judgment must assert a meritorious defense. The majority today does not discuss this requirement because it finds that Rule 60(b)(1) has not been satisfied. Extended discussion on my part would serve no purpose here. Suffice it to say that the corporation and Lowe have alleged that the plaintiffs action is predicated upon a promissory note obtained by fraud. • Although the pleading is not a model, it does set forth facts which, if true and if viewed in light of permissible inferences, would constitute a defense to the action. Hearst Corp. v. Keller, 100 Idaho 10, 592 P.2d 66 (1979).