Sewell v. Xpress Lube
2013 UT 61
| Utah | 2013Background
- Plaintiff Sewell fell into a service pit at Xpress Lube (a sole proprietorship of Bruce Anderson) and negotiated with Anderson’s insurer, Travelers, for ~8 months without resolving the claim. Sewell then sued, naming only “Xpress Lube, a Utah business entity.”
- Process server left summons and complaint with employee Brian Deuel at the business; Deuel placed the papers on Anderson’s desk. Anderson later gave them to his insurance agent, who attempted to fax them to Travelers but misdialed; Travelers never received the complaint.
- Sewell moved for and obtained a default judgment for $600,000 without an evidentiary hearing on damages; Anderson first learned of the default when the judgment arrived by mail and immediately notified his insurer and counsel.
- Xpress Lube moved promptly to set aside the default judgment; the district court denied relief and entered an order making Anderson personally liable. Xpress Lube appealed.
- The Utah Supreme Court reviewed whether service was proper (jurisdiction), whether relief under Utah R. Civ. P. 60(b)(1) for mistake/excusable neglect was warranted, and whether the court erred by entering unliquidated damages without an evidentiary hearing.
Issues
| Issue | Sewell's Argument | Xpress Lube's Argument | Held |
|---|---|---|---|
| Was service sufficient to confer jurisdiction? | Service on an employee who was "person in charge" satisfied rule 4 requirements | Service on an employee was insufficient because Xpress Lube is a sole proprietorship and Anderson (the proprietor) was not personally served under rule 4(d)(1)(A) | Judgment void for lack of jurisdiction; service was insufficient |
| Should default be set aside under Rule 60(b)(1) (mistake/excusable neglect)? | Default was proper; plaintiff had mailed motion for default and defendant had prior negotiations with insurer | Failure to answer was due to mistake (agent misdialed fax), defendant acted with due diligence and promptly moved to set aside | Court abused discretion in denying relief under Rule 60(b)(1); requirements satisfied (timely, excusable neglect, meritorious defenses) |
| Was the $600,000 default damages award valid without a hearing? | Damages were sufficiently pleaded and defined | Damages were unliquidated (medical, lost wages, pain & suffering) and required an evidentiary hearing under Rule 55(b)(2) | Court erred by entering unliquidated damages without hearing; hearing required |
| Remedy / disposition | Affirm default judgment | Vacate default judgment and remand for further proceedings | Default judgment vacated on three independent grounds; remanded |
Key Cases Cited
- Lund v. Brown, 11 P.3d 277 (Utah 2000) (district court has broad discretion to set aside default judgments; mercy to allow hearings)
- Judson v. Wheeler RV Las Vegas, L.L.C., 270 P.3d 456 (Utah 2012) (judgment void if rendered without required notice or court lacked jurisdiction)
- Helgesen v. Inyangumia, 636 P.2d 1079 (Utah 1981) (courts should incline toward granting relief from default to allow a hearing)
- Murdock v. Blake, 484 P.2d 164 (Utah 1971) (service of process under prescribed mode is jurisdictional; actual notice insufficient to confer jurisdiction)
- Cadlerock Joint Venture II, LP v. Envelope Packaging of Utah, Inc., 251 P.3d 837 (Utah Ct. App. 2011) (defaulting defendants usually must be afforded evidentiary hearing on unliquidated damages)
- Amica Mut. Ins. Co. v. Schettler, 768 P.2d 950 (Utah Ct. App. 1989) (plaintiff must prove damages by competent evidence even after default)