477 S.W.3d 565
Ark. Ct. App.2015Background
- Wise contracted to build a house on land he owned; title transferred to Harper by warranty deed in January 2012.
- Harper sued Wise (Jan. 21, 2014) alleging negligent electrical, plumbing, and septic work; the complaint did not specify a damages amount.
- Wise was served (record shows service), did not answer, and no motion for default judgment was filed before the court’s default-judgment order.
- On Sept. 19, 2014 the circuit court entered default judgment against Wise, awarding $6,000 in damages and $2,000 in attorney’s fees; the order referenced statements by Harper’s husband as the basis for damages.
- No transcript, affidavit, deposition, or other on-the-record proof of damages appears in the record; the court reporter confirmed no hearing occurred in the case that day.
- Wise moved to set aside the default judgment, alleging misrepresentation and lack of proof of damages; the circuit court denied the motion and Wise appealed.
Issues
| Issue | Plaintiff's Argument (Harper) | Defendant's Argument (Wise) | Held |
|---|---|---|---|
| Whether default judgment should be set aside for misrepresentation | Default judgment valid; no fraud shown | Misrepresentations in complaint and alleged statement by Harper’s husband that no answer was necessary justify setting aside under Ark. R. Civ. P. 55(c) | Denied. Mere dispute over complaint allegations is not "misrepresentation"; Wise offered no evidence of the alleged conversation so no fraud shown. |
| Whether proof of damages was required before entering default judgment | Court’s order language referencing statements is sufficient | Because complaint did not specify a damages amount, proof of damages on the record was required before awarding more than nominal damages | Reversed as to damages. Where liability is established by default, an on-the-record damages hearing or admissible proof is required; remanded for such a hearing. |
Key Cases Cited
- Lone v. Koch, 467 S.W.3d 152 (Ark. App. 2015) (denial of motion to set aside default-judgment reviewed for abuse of discretion)
- Marcinkowski v. Affirmative Risk Mgmt. Corp., 910 S.W.2d 679 (Ark. 1995) (order denying motion to set aside a default judgment is appealable)
- Nationwide Ins. Enterprise v. Ibanez, 246 S.W.3d 883 (Ark. 2007) (abuse-of-discretion standard explained)
- Gardner v. Robinson, 854 S.W.2d 356 (Ark. App. 1993) (default admits liability but proof of damages beyond nominal is required)
- Kohlenberger, Inc. v. Tyson’s Foods, Inc., 510 S.W.2d 555 (Ark. 1974) (proof of damages required after default)
- B & F Eng’g, Inc. v. Controneo, 830 S.W.2d 835 (Ark. 1992) (on remand for damages, defendant cannot introduce evidence to defeat plaintiff’s cause of action when liability established by default)