Cadlerock Joint Venture II, LP v. Envelope Packaging of Utah, Inc.
2011 UT App 98
| Utah Ct. App. | 2011Background
- Cadlerock garnished Michelex to collect a 2003 judgment against Envelope Packaging of Utah, Inc. and Fernando Delgado, and served fifteen interrogatories on Michelex.
- Michelex allegedly responded with written answers via New York counsel, but Cadlerock contends it never received them.
- District court issued an order to show cause under rule 64D(j)(2) for Michelex to appear and show why it should not be held in contempt or liable for the garnishment amount, including fees.
- Michelex failed to appear or respond; the court issued a $2,500 bench warrant for a hearing, which Michelex also did not attend.
- Cadlerock sought and obtained a default judgment against Michelex for $803,031.31 plus postjudgment interest, based on evidence of Michelex owing $775,000 to Enpack.
- Michelex moved to set aside the default under rules 55(c) and 60(b), arguing excusable neglect and lack of notice; the district court denied the motion.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the default judgment should be set aside under rule 60(b). | Michelex asserts excusable neglect based on reliance on counsel. | Cadlerock contends Michelex acted indifferently and lacked excusable neglect. | No abuse of discretion; denial affirmed for excusable neglect. |
| Whether the default judgment amount should be reconsidered via an evidentiary damages hearing. | Amount owed by Michelex to Enpack is liquidated by the 2003 judgment; no hearing necessary. | Amount Michelex may owe is unliquidated; due process requires a hearing. | Remand for an evidentiary hearing to determine unliquidated damages amount. |
| Whether garnishee due process required a hearing before entry of judgment against Michelex. | Garnishee status warrants heightened due process and a hearing under rule 64D. | Proceedings already proceeded with notice and opportunity; no separate hearing required. | Garnishee entitled to a hearing; remand for damages determination consistent with due process. |
| Whether the district court should sanction Michelex for failure to appear. | Sanctions may be appropriate for nonappearance. | Not addressed directly; focus on merits and damages. | Court may consider sanctions for failure to appear as part of remand proceedings. |
Key Cases Cited
- Pitts v. Pine Meadow Ranch, Inc., 589 P.2d 767 (Utah 1978) (remand for damages hearing when unliquidated damages evident)
- J.P.W. Enterprises, Inc. v. Naef, 604 P.2d 486 (Utah 1979) (remand for damages hearing; amounts unliquidated)
- Larsen v. Collina, 684 P.2d 52 (Utah 1984) (remand for damages hearing where damages unliquidated; Rule 55(b)(2) need for evidence)
- Russell v. Martell, 681 P.2d 1193 (Utah 1984) (damages hearing required for unliquidated damages; Rule 55(b)(2))
- Pangea Techs., Inc. v. Internet Promotions, Inc., 2004 UT 40 (Utah 2004) (garnishee due process requires hearing before liability)
- Webb v. Erickson, 134 Ariz. 182, 655 P.2d 6 (Ariz. 1982) (garnishee status raises due process concerns)