*1 175 ENGINEERING, COTRONEO INC. v. Michael B & F S.W.2d 835 91-217 Arkansas Court of Supreme delivered April Opinion *2 Munson, P.A., Huckabay, Rowlett & Bruce Tilley, by: Denton, Munson and Valerie for appellant. Firm, Kitterman', Law
Kitterman S. and Per- by: Gregory roni, Rawls, Barnes, Perroni, & Looney by: Samuel A. for appellee. Hays, Justice. This is a tort case arising from an
Steele 23, 1990, automobile accident. On the afternoon of October Cotroneo, Michael was his appellee, driving truck west- pickup bound on Interstate 30 when he was struck head-on a vehicle by driven G.W. Franks. The Franks vehicle was owned B & F Engineering, Inc. appellant, F), Frank’s employer. (B & Franks was intoxicated and driving side of the wrong G.W. died highway. following Franks the collision and Michael Cotroneo sustained serious injuries, as did his passenger, Anthony Martin.
Two lawsuits were filed as a result of the collision. Anthony filed suit in November of Martin 1990 in Saline Circuit Court Franks, for G.W. Eisele, Administrator Special Martin against was answered That deceased, F Engineering. B & B & F on against was filed lawsuit The other manner. timely in a summons Cotroneo’s Cotroneo. Michael January Beavers, agent on Donald served were properly and complaint No insurer. liability F’s to B & F, them who forwarded B & to Cotroneo’s & F in response of B filed on behalf answer complaint. motion for default 19, 1991, filed a Cotroneo February
On since elapsed twenty days more than alleging judgment B Nine later days it had failed respond. was served and B & F default denial and response F filed a general & mistake, was due to motion, failure to answer that its asserting *3 to falling notify insurer in its neglect by or excusable inadvertence the court to also asked The response of the complaint. counsel Ark. R. to file an answer pursuant time for B & F to extend the and to default judgment motion for P. to Cotroneo’s deny Civ. accident. out of the same arising two actions consolidate the of Samuel M. Min was an affidavit to the response Attached Regional the Nashville Claims Examiner for Senior gledorff, his affidavit Auto Insurance Companies. Office of the State facsimile transmission that he had received stated Mingledorff v. B & F Michael Cotroneo summons styled that it was a Inc., recognize separate he failed to but Engineering, Eisele, Special suit entitled Martin of action from the cause Franks, B & F Engineer Deceased and G.W. Administrator for and which the insurance Inc., same accident arising out ing, he misconception, Due to that defending. was already company second summons and complaint. did not counsel of the notify default judgment, the motion for hearing After a B & F against judgment entered a default Saline Circuit Court The damages. jury the issue of trial on jury and scheduled dollars four hundred thousand one million awarded Cotroneo dollars in punitive and one million damages compensatory error on four appeal. B & F raises damages. points the trial court erred in is whether The first on appeal point F. Cotroneo B & judgment against default an order of entering issue on appeal to raise this right waived its that B & F contends default The judgment. aside a a motion to set failing to file grounds setting for aside such entries are in 55(c) of the however, Arkansas Rules of Civil Procedure. B & F argues, since it extension time to file its requested answer before the entered, default judgment Ark. R. Civ. P. actually 6(b)1 applies.
B &
to
F’s
Cotroneo’s default
motion
response
judgment
asked
to
the court
the motion. A
was held in
deny
hearing
which
argued against
appellant
entry
judgment.
default
We
have not had the
consider
this issue since the
opportunity
amendment Rule
Accordingly,
55.
we have turned to federal
court decisions since the
standard
aside a default
setting
55(c)
in Ark. R. Civ. P.
taken from federal rule
and should be
in accordance
interpreted
with federal case law.
See Addition to
Notes to Rule
Reporter’s
1990 Amendment.
regard
federal courts
to a motion for
opposition
entry of a
default judgment as a motion to set aside a default judgment,
hence,
governs
Rule 55
the resolution of this issue. See Kohlik v.
Inc.,
Atlantic
The standard which we review or granting denial *4 of a motion to vacate a default judgment whether the trial court abused Chalmers, its discretion. v. Cammack Ark. 284 680 S.W.2d 689 (1984). Default judgments are not favorites of the law and be fact, should avoided possible. when Id. In the purpose for the 1990 amendment to R. Ark. Civ. P. 55 was to liberalize Arkansas default practice regarding judgments and the revised rule reflects a preference deciding cases on the merits rather than on technicalities. See Addition to Reporter’s Notes to Rule just cause. specified time, motion made after the failure to thereunder or [1] Ark. R. Civ. P. act was the . . .” the court for cause order result expiration of the 6(b) of provides court an mistake, of the shown in act is specified period permit inadvertence, part, may required “[w]hen at anytime suprise, or allowed to in its these rules exclusable the act to discretion be done at or or be neglect, done ... notice where the (2) within a or other given upon
179 55, 1990 Amendment. af inconsistent with our seem may
That observation case; however, we do not in this default judgment firmance the recent amend intent and spirit from the mean to retreat in conflicting those choosing policies between to Rule 55 and ment to the concept While we subscribe task. easy this case was not recognize we litigation, disposition and expeditious of efficient when best served generally are justice as well that the interests Nevertheless, under the circum on the'merits. cases are resolved the trial court to hold that this case we are constrained stances of default by granting did not abuse its discretion would, believe, give we To hold otherwise favor of the appellant. of writs of summons by to a treatment sanction slipshod defendants. P. that a court set aside 55(c) may
Arkansas R. Civ. provides entered if it finds that the default a default judgment previously mistake, inadvertence, neglect. or excusable surprise was due to n failure to that the insurance argues company’s appellant concerned a different lawsuit could recognize that be characterized as a mistake. only granting
“The court’s have not been
liberal in
particularly
inaction of
relief from defaults attributable to the
insurance
against
which have assumed the defense of lawsuits
companies
Procedure,
(1984).
their
21 Federal
L. Ed. 51:22
See
insureds.”
§
Comerial,
(9th
811
Cir.
also Pena v.
La
S.A. 770 F.2d
Seguros
(E.D.
1978);
F.R.D.
Pa.
1985);
Garczynski,
v.
78
134
Spica
Stores, Inc.,
1976);
(5th
Davis v.
argument granted the motion to set aside a default that the defendant had not been noting gross guilty any neglect, no would result to the from prejudice plaintiff setting aside the default and that the defendant had a meritorious defense to the action. court,
Like the Stuski we see no substantial to the prejudice in appellee default, however, this case from aside the setting Stuski is distinguishable First, and instructive in two respects. the style of the two pleadings that were confused in Stuski were identical, whereas in this case the two styles had marked dissimilarities. The were different plaintiffs and Cotroneo’s solely against B & F whereas the other lawsuit named an additional defendant.2 We think the Stuski incident of “mistake” represents type 55(c) seeks to remedy while the error insurer this case must be classified as inexcusable neglect. We are aware of no case that would require us to set aside a default judgment when any mistake was made by a defaulting party. That would render almost meaningless the discretion a trial court has when deciding a motion to set aside a default judgment. We believe the more reasoned is to approach consider the nature of an alleged mistake on a case by case basis.
The second difference is that in Stuski the defaulting party had a meritorious defense and here the defense counsel did not offer any defense on the merits to the original action. Arkansas R. Civ. P. 55(c) states in part, party seeking to have the “[t]he judgment set aside must demonstrate a meritorious defense to the action. . . .” The federal courts also some require showing of a meritorious defense before granting relief from a default judg- ment. 10 C. Wright, Kane, A. Miller & M. 2697; at supra § Procedure, Ed, Federal L. at supra 51-23. A of courts majority § that have considered the question refuse to general accept denials or conclusory statements that a defense exists and “the only real exception requirement void, where the judgment is such as Procedure, for lack of jurisdiction.” Ed., 21 Federal L. supra; Paxton, see also Bruce v. 31 F.R.D. (E.D. 1962). Ark. Engineering, Deceased and B & F [2] The first suit is Martin Inc. Engineering, The second lawsuit is Michael Cotroneo v. B & F Inc. Eisele, Special Administrator G.W. Franks, *6 is a whether there to determine theory for this basis underlying would be trial, of the suit the outcome that, a full after possibility an Finding Id. default. the result achieved to the contrary no defense is offers where the appellant discretion abuse of the least. say difficult to that it was error & F contends B
For its second point, of mitigation it proffered exclude evidence trial court to the was refused to admit the court The evidence damages. punitive that Franks presidents, current and past from B & F’s testimony, with any had never had problem was a dependable employee Also, of the custodian trucks. drinking driving company was to testify of Finance prepared the Department records from ending for the three years no citation Franks’ record showed that showed no of the records and an earlier search in October 1990 cause a of which would sufficient number points violation of the to allow refusing appellant to be on Franks. record kept above, stated that the forth the court admit the evidence set are in the complaint of facts that evidence applied phase the default judgment. the facts admitted by and it contradicts a default Arkansas Rules of Civil Procedure Under the the extent of dam- establishes but not liability, of to establish the amount Proof is still ages. required in which a verified account has in suits damages except right the defendant has the been submitted. After default witnesses, the to introduce to cross-examine plaintiff’s and to mitigation damages, evidence in question of the evidence to sufficiency support appeal damages amount of awarded. The defaulting defendant evidence to s cause may not introduce plaintiff defeat Brill, 8-1 (2nd ed.), action. H. Ark. Law Damages § (1990). [Emphasis added.] There is a fine line between contradiction and mitiga tion in this context. But in this case it appears appellant that sought to circumvent the in Cotroneo’s allegation drive, B & F to drink and knowledge of Franks’s propensity therefore, excluding the court did not err in it. to allow
B & F also the trial court’s decision challenges certain Dr. Charles Venus. Dr. Venus testified as testimony by for the he had regarding figures computed dollar expert appellee of income and loss of concerning the loss household appellee’s figures his when present services. Dr. Venus calculated value he was one hundred assumption appellee under the and testified two dollar amounts for loss of disabled percent *7 services, $629,688 future and loss of household and income $99,807, that if was Venus testified it determined respectively. than that Cotroneo’s was less one hundred then disability percent, the calculations would be based the correct upon percentage. On based figures twenty-four cross-examination the upon percent into evidence because to Venus’s came disability prior testimony, testified treating Cotroneo’s that the had a physician appellee twenty-four anatomical The ar- percent impairment. appellant gues the based figures having the one hundred upon appellee percent misleading were and disability confusing to the jury.
Any prejudice associated with its introduction was alleviated the admission of the correct and Dr. figures Venus’s instruction to reduce the calculations if the proportionately less than was one hundred When there is disability percent. conflict in the evidence the jury determination the the issues conclusive. Butler Co. Ark. Mfg. Hughs, 292 Moreover, S.W.2d 142 the (1987). weight given and value to be to witnesses is the testimony expert exclusive of the province jury. Id. allegation
For its final of error the argues that appellant damages awarded are so excessive that to they have been appear given under the influence of or passion prejudice. Smith,
In W.M. Bashlin Co. v. 277 Ark. 463 S.W.2d 526 (1982), this court held the is whether question the verdict “shocks the conscience” of the court or demonstrates that jurors were motivated by or passion prejudice. presented extensive appellee evidence his medical
injuries suffered as a result of accident and the fact that Cotroneo was an active man who in engaged labor as physical Barnett, carpenter accident. Dr. David prior an orthopedic surgeon who treated the testified appellee, about his injuries. Barnett testified that upon arrival the emergency room after the accident Cotroneo very had a severe fracture of his right foot and foot, his heel bone. With reference to his the bone was literally crushed to pushed broken, off the side it when was As the bone out the side foot. bulging the bone leaving arteries, were displaced. and tendons nerves outward pushed which to his heel damage pad suffered permanent Cotroneo The doctor on bone. walking like as characterized Barnett surgery took Cotroneo surgeons that when testified that there was so broken see that it could they the bone stabilize skin foot also required it. Cotroneo’s toway fully repair was no an area of his the skin over accident removed because the grafts four undergone operations he had time of trial foot. theBy He also had an unstable traumatic arthritis. severe had developed in the wrist with a dislocation right on the of his forearm fracture fractures, fracture and in a skull He had facial of that bone. were bruises and where there trauma multiple general, contusions. Moffett, about surgeon, testified Bob Cotroneo’s plastic
Dr. Cotroneo bones, and bruises to the face. lacerations the broken *8 nose, bones and the his cheek hinges, fractured his bone and jaw been stabilized skull. After Cotroneo had bottom of his portion tracheotomy and a together had to wire his teeth perform Moffett he had five Moffett testified that airway. performed provide face and that Cotroneo will probably on Cotroneo’s surgeries never be free of pain. amount of about significant testimony
There was additional and how he having surgery of Cotroneo probability where normal movement in the area his bones never achieve may sight his were affected hearing were fused in his foot. Also Addition- longer and he can no chew without pain. the accident accident affected his regarding was how the testimony there ally, with his two sons and how the was young appellee relationship it difficult to obtain work. shown to finding Photographs jury injuries. reveal the of Cotroneo’s severity evidence of Cotroneo’s we do not light injuries In damages shocking. as Admit regard compensatory the award of high the amount awarded is but there was no tedly compelling or influence of such kind as to warrant proof prejudice Watkins, 502, v. Ark. disturbing the award. See Price jury 762 (1984). 678 S.W.2d evi damage
We also affirm award. The punitive dence that Franks was the vehicle while under the operating
influence of alcohol when his blood alcohol level .22 readily the verdict for supports punitive damages. Because Franks was acting in the of his accident, at the time of scope employment his acts of a vehicle when operating alcohol were impaired by Walden, to his imputed employer. Honeycutt 440, 294 Ark. 743 S.W.2d (1988), we addressed this situation:
We have held many times that malice be inferred may vehicle, from the operation a motor lethal potentially machine, by one whose judgment, responses coordina- tion are impaired alcohol. 442,
Id. at
Affirmed.
Brown, J., dissents. Brown, Justice, Robert L. dissenting. This case involves a accident, tragic and the allegations are of the most serious kind. Nevertheless, the circumstances of this case are the kind precisely that the Ark. R. Civ. P. expanded 6(b) was intended to embrace — a good faith mistake resulting a failure to answer a time.
The former Rule 6(b) provided an extension of time only when failure to act was due to “excusable neglect, unavoidable or other casualty just cause.” The current 6(b), which became effective on February broadened the scope “just causes” considerably:
(b) Enlargement: When these rules or aby notice *9 given thereunder or order of the court an is act required or allowed to be done at time, or within a specified Court for cause shown atmay time in any its discretion (2) ... motion upon made after the expiration of the specified period the act permit to be done where the failure mistake, inadvertence, to act was the result of surprise, excusable or neglect, other cause just ....
In the Matter
Procedure,
Changes
Arkansas Rules
Civil
of
of
Rules,
the Arkansas
Court
and the Adminis
Inferior
trative Orders
Court,
Arkansas Supreme
Here, contends Engineering & FB of this accident as arising out mistook the second that it already it had forwarded which compliant the first duplicative assumption, of this erroneous Because counsel. to the company’s of process Service complaint. Cotroneo’s to act on failed agent 25, responsive pleading 1991. No January & on on B F 14, 1991, February and on February B & F by was filed by B F& countered judgment. a default moved for Cotroneo 6(b) to answer under extend the period should that the court mistake, inadver- was the result to answer because its failure Also, on just other cause. tence, or neglect, exclusable surprise, 28, 1991, F Cotroneo’s complaint. B & answered February judgment for default heard the motion judge The trial so he 19, 1991,-and doing in Cotroneo’s favor. ruled March stated: answer, there was filing was a late
There making, Just simply time to file the answer. sufficient exist, did a fact that was assuming assuming a fact that not me, not any to is the face of the pleadings, contradicted excuse for a default And I don’t judgment. kind of an is a harsh remedy. think a default necessarily added.) (Emphasis filed ruling: his “The answer was simply
He added later on in then no excuse added.) (Emphasis it.” absolutely late and there [for] that no his decision on the fact judge hinged The trial under ruling for B & F’s inaction. His legitimate excuse existed & does neglect would be correct in that B F’s 6(b) former Rule However, to act does not this failure be excusable. appear inadvertence, & mistake or F’s explanation, as a qualify B. oath, entirely as how it seems plausible. under happened same filed as a result two had been Certainly, complaints accident. 6(b) in Rule and Rule change behind our
The clear purpose *10 to 55(c) is best in the Note Rule 55:1 expressed Reporter’s Rule 55 has been amended to liberalize substantially regarding judgments. Arkansas default re- practice rule, vised which reflects a clear for preference deciding technicalities, cases on the merits rather than on in- is tended avoid the harsh results that often flowedfrom the version. Because the rule represents significant a previous break from cases many decided under the prior practice, rule and the it old statute from which was derived nowill be longer value. precedential Under revised Rule 55(a), entry of default rather discretionary than mandatory. deciding whether to enter a judgment, default the court should take into account the factors utilized by the federal courts, including: whether the default is technical largely defend; and the defendant is ready now whether the has been plaintiff by the prejudiced defendant’s in delay responding; and whether the court would later set aside the default judgment under 55(c). Rule As the majority says, favored, defaults are not and we have announced a clear in preference favor of trial on the merits in the 6(b) Rule amendment. The default in this case is due to a technicality, Cotroneo is not prejudiced by fourteen-day in B & delay Moreover, F’s answer. B & F is ready to defend. A meritorious defense need not be espoused judge trial situtations, Rule 6(b) Band & Fmade it clear at argument oral that it had proceeded under Rule 6(b) enlargement of time in which to answer and not Rule 55(c). All of these factors favor; B militate in & F’s none were considered by the trial judge on the record.
The case cited by the majority supports this See position. Stuski v. United Lines, States 31 F.R.D. (E.D. Pa. 1962). There, two complaints and, were involved case, as in the present the second complaint was not forwarded to counsel due to a include “mistake,” 6(b) and Rule “inadvertence,” 55(c) were both amended “surprise.” the same Per Curiam Order to
187 However, duplicative. were the complaints belief that mistaken in federal court and one filed in state was filed one inas the contradictory were two complaints the Facially, court. aside. Nevertheless, set the default district court the case. present matters, a point discretion in these has wide judge The trial here, the trial But, it clear that appears which I concede. readily reaching his neglect in of excusable used old standard judge defense for B & F had concocted its Had he found that decision.2 fact, the mistake out of this would take answer after failure to did not make such a But the good-faith category. judge finding. case, first to be decided since as it
This is important 55(c). 6(b) and Rule If broadening amendment should be this case any meaning, is to have amendment for a trial on the merits. and remanded reversed dissent. I respectfully JAMISON, Young E. Val Mary
Everett L. YOUNG
County
Howard
Assessor and Tax Collector
91-335
Supreme delivered April Opinion six weeks when the The new standard, judge including made his decision on March mistake inadvertence had been in effect 1991. about