Court Opinion

ID: 9545475
Source: CourtListenerOpinion
Date Created: 2023-08-07 17:13:09.462018+00
Date Added: 2024-06-11T15:14:52.489322
License: Public Domain

SUTIN, Judge (dissenting). I dissent. Plaintiff’s complaint alleged that “Defendant Gary W. Grice or Defendant Richard G. Patton, negligently drove a 1971 GMC diesel truck tractor owned by Defendant United Salt Corporation, which negligent operation proximately caused the death of Mona V. McKee.” [Emphasis added.] The complaint also alleged that Grice and Patton individually were entrusted with the vehicle. No judgment was entered on the entrustment theory alleged in plaintiff’s complaint. The complaint also sought compensatory damages in the sum of $250,000.00 and punitive damages in the sum of $100,000.00. The default judgment entered as a Final Judgment found that “Defendant Gary W. Grice and Defendant Richard G. Patton, negligently drove a 1971 GMC diesel truck tractor * * * which negligent operation proximately caused the death of Mona V. McKee”; “That the operation * * * by Gary W. Grice and Richard G. Patton was reckless, wanton, willful and with total disregard for the life and property of others, including Mona V. McKee”; “That the sole and proximate cause of the actions of Defendants Gary W. Grice and Richard G. Patton * * * and plaintiff * * * has been damaged in the sum of $250,000.00.” [Emphasis added.] The same allegations were made with reference to punitive damages in the sum of $100,000.00 and special damages. The judgment “ORDERED, ADJUDGED AND DECREED that Plaintiff have and recover of Defendants Gary W. Grice and Richard G. Patton, and each of them, the sum of $359,899.00 for which said Defendants are jointly and severally liable * * [Emphasis added.] In Gallegos v. Franklin, 89 N.M. 118, 123, 547 P.2d 1160 (Ct.App.1976), this Court said: By virtue of the default, the defendants have admitted the allegations of the complaint. These averments are taken as true. For those matters which require an examination of details, the plaintiff must furnish the proof. [Emphasis added.] What Grice and Patton admitted was that one or the other was driving the truck tractor. They did not admit that both drove the vehicle in a reckless, wanton and willful manner. Without proof of which one was operating the vehicle at the time of the collision, the default judgment cannot stand. “The entry of a default judgment against a defendant is not considered an admission by the defendant of the amount of unliquidated damages claimed by plaintiff.” Gallegos, supra. [Id. 123, 547 P.2d 1160.] “A punitive damage claim is not admitted by a default.” Gallegos, supra. [Id. 125, 547 P.2d 1160.] It is obvious that if Grice and Patton had filed motions to vacate the default judgment, we would have reversed the district court. The law steps in and gives United Salt the benefit of this reversible error. The trial court was without authority or power to enter a default judgment fixing the amount of recovery in the absence of evidence, and, if it does, such judgment is void and not merely erroneous or voidable. Graves v. Walters, 534 P.2d 702 (Okl.Ct. App.1975). The rule appears to be uniform that “a judgment which is absolutely void is entitled to no authority or respect, and therefore may be impeached at any time, in any proceeding in which it is sought to be enforced or in which the validity is questioned, by anyone with whose rights or interests it conflicts.” 49 C.J.S. Judgments § 401, p. 794 (1947); 46 Am.Jur.2d, Judgments, § 641, p. 800 (1969). United Salt was allowed to attack plaintiff’s default judgment because of its relationship with Grice and Patton. Rule 55(b) and (c) of the Rules of Civil Procedure provide for judgment by default and setting it aside under Rule 60(b). Grice and Patton were defaulting defendants. United Salt was an appearing defendant. When one of several defendants who is alleged to be jointly liable defaults, it is an abuse of discretion to enter a default judgment against him until the matter has been adjudicated with regard to all defendants. Reliance Ins. Cos. v. Thompson-Hayward Chem. Co., 214 Kan. 110, 519 P.2d 730 (1974). This rule flows from Frow v. De La Vega, 82 U.S. (15 Wall.) 552, 21 L.Ed. 60 (1872); 10 C. Wright and Miller, Federal Practice and Procedure, § 2690 (1973); 6 Moore’s Federal Practice, ¶ 55.06 (1976); Exquisite Form Indus., Inc. v. Equisite Fabrics of London, 378 F.Supp. 403 (S.D.N.Y. 1974). This doctrine typically arises where the party who has defaulted is appealing for relief. Grice and Patton did not appeal. However, the above rule should insure to the benefit of United Salt. To avoid extending this opinion, I have refrained from setting out the innumerable legal problems that arise if the default is allowed to stand. Prejudice, confusion and inconsistent verdicts that may result to the appearing defendant would show that the doctrine should be applied in this case. See generally, Annot. Successful defense by one codefendant, or a finding for “defendants” as inuring to benefit of defaulting defendant, 78 A.L.R. 938 (1932). For example, if one joint debtor defaults, no separate judgment may be entered against him, since remaining joint debtors have the right to defend for all of them. Diamond National Corp. v. Thunderbird Hotel, Inc., 85 Nev. 271, 454 P.2d 13 (1969); State ex rel. Everett v. Sanders, 274 Or. 75, 544 P.2d 1043 (1976). But in a suit by a city against owners of various tracts or land to foreclose paving liens, a plea of limitations by owners who appeared did not inure to the benefit of owners who defaulted. City of Albuquerque v. Huddleston, 55 N.M. 240, 230 P.2d 972 (1951). To avoid multiple and complex legal problems, judicial history has shown that a good rule of law applicable in one factual situation will be applied to a comparable one under common sense principles. It is fair to withhold entry of judgment of defendants who default until the matter has been adjudicated with regard to all appearing defendants who are jointly liable. Appearing defendants should be entitled to the benefit of that principle in the defense of their case together with the right to appeal for relief when an abuse of discretion occurs. Common sense dictates that all defendants jointly and severally liable should be treated as one entity for procedural purposes to avoid vexatious results. If United Salt loses, plaintiff wins. If United Salt wins, plaintiff loses. A default judgment, disfavored in the law, should not be used as a crutch to support plaintiff’s claim for relief. Rule 54(b)(2) of the Rules of Civil Procedure set forth in the majority opinion is not applicable to default judgments. It reads in pertinent part: When multiple parties are involved, judgment may be entered adjudicating all issues as to one or more, but fewer than all parties. [Emphasis added.] A default judgment absent a hearing is not an “adjudication of all issues.” “Notice and hearing, or an opportunity to be heard, is essential to a decision upon the merits. Any other conclusion could well give rise to serious injustice and that without remedy.” Otero v. Sandoval, 60 N.M. 444, 446, 292 P.2d 319 (1956). Grice and Patton did not receive notice of hearing on an application of plaintiff for judgment by default and no hearing was held. Evidence was not presented. If a trial court wants to adjudicate the issues, it can refuse to enter a default judgment and dismiss the action upon failure of plaintiff to offer evidence or demonstrate entitlement to judgment. Wagner v. Hunton, 76 N.M. 194, 413 P.2d 474 (1966). An “adjudication” essentially implies a hearing by a court, after notice, of legal evidence on the factual issue involved. Genzer v. Fillip, 134 S.W.2d 730 (Tex.Civ. App.1939); People v. Hugo, 168 N.Y.S. 25, 101 Misc. 481 (1917); People v. Sohmer, 207 N.Y. 450, 101 N.E. 164 (1913); Western Assur. Co. v. Klein, 48 Neb. 904, 67 N.W. 873 (1896); Rank v. (Krug) United States, 142 F.Supp. 1 (D.C.Cal.1956); State v. Hoffman, 236 Or. 98, 385 P.2d 741 (1963). It has long been held that default judgments are not favored in the law. Rule 55(b) of the Rules of Civil Procedure does not declare “open season” against defaulting defendants, especially where large sums of money are involved. When a defendant is served with process and fails to appear, inquiry should be made. A defendant should be notified that a default has been entered. If a hearing is held, based upon the facts, evidence and testimony, the trial court can determine in its discretion whether to grant or deny default judgments. This procedure is necessary to enable the court to enter judgment. Herrera v. Springer Corporation, 85 N.M. 6, 508 P.2d 1303 (Ct.App.1973), Sutin, J., dissenting, rev’d, 85 N.M. 201, 510 P.2d 1072 (1973). See also, Gengler v. Phelps, 89 N.M. 793, 558 P.2d 62 (Ct.App.1976), Sutin, J., specially concurring. United Salt Corporation attacked the default judgment pursuant to Rule 60(b) of the Rules of Civil Procedure. Based upon the fact (1) that the default judgment went beyond the allegations of the complaint and held both Grice and Patton liable; (2) that the judgment was void due to a large judgment for compensatory and punitive damages without evidence in support thereof; (3) the trial court abused its discretion in awarding plaintiff a default judgment; and (4) United Salt Corporation interests were adversely affected; denial of its motion to set aside the default judgment was reversible error.