Fоllowing a granted interlocutory appeal, BellSouth Telecommunications, Inc. (“BellSouth”),
The rеcord reveals that BellSouth filed a claim for damages against Future based on two separate incidents in which Future’s employees allegedly damaged BellSouth’s undergrоund cables and equipment. Before filing suit, BellSouth and its counsel negotiated with Future and its insurer, Georgia Casualty Company, in an unsuccessful effort to resolve the claims without litigation. After notifying both Future and Georgia Casualty in writing of its intent to file suit if the matter was not resolved within five days, BellSouth filed its complaint on May 21, 2007, and served the complaint upon Future’s registerеd agent and president, John E. Marshall, on May 30, 2007.
Future failed to file a timely answer because Marshall, by his own admission, failed to forward the complaint to Georgia Casualty even though Future’s policy of insurance required it to “immediately” send copies of any legal papers pertaining to a lawsuit to Georgia Casualty. Marshall mistakenly assumed that since Georgia Casualty had been copied on correspondence between Future and BellSouth in the past, it had been provided with a courtesy copy оf the complaint and would respond to it on Future’s behalf. There is no evidence, however, that Marshall or any Future employee attempted to verify that Georgia Cаsualty had, in fact, been provided with a copy of the complaint and was responding to it.
After the case entered automatic default, Future filed an answer, a motion to open default, and a motion to withdraw admissions on August 10, 2007. After a hearing, the trial court granted Future’s motions and entered an order opening the default without an explanаtion of the legal or factual basis for doing so.
When, as here, no answer is filed within the statutory period and the time for responding has not been extended, the case is automatically in default. OCGA § 9-11-55 (a);
1
Chapman v. Commercial Nat. Bank &c.,
Although the rule is liberally applied, in order for relief to be granted under OCGA § 9-11-55 (b), there “must be a motion, [a] meritorious defense, a legal excuse for late filing, and payment of costs.” (Citation and punctuation omitted.)
Gowdey v. Rem Assoc.,
We review the grant of a motion to open default to determine whether all of the conditions of OCGA § 9-11-55 (b) have beеn met, and, if so, whether the trial court abused its discretion based on the facts peculiar to a particular case.
Majestic Homes, Inc. v. Sierra Dev.
Corp.,
not an arbitrary and unlimited discretion like that confided to the Roman praetors, but... is such a discretion as, when applied to a court of justice, means sound discretion guided by law. It must be governed by rule, not by humor; it must not be arbitrary, vague and fanciful, but legal and regular.
(Citations and punctuation omitted.)
Johnson v. Durrence,
1.
Excusable Neglect.
It is well settled that merely assuming that a complaint is being handled by аn insurer is insufficient to establish excusable neglect as a matter of law. We have repeatedly required the defendant to show the exercise of the diligence which, undеr the circumstances, is reasonably due. For example, in
Wright v. Mann,
It is well established that a defendant’s unconfirmed belief that [its] insurer had timely received suit papers and was preрaring a defense on the defendant’s behalf is not sufficient to constitute excusable neglect that would authorize the trial court to set aside a default judgment. To authorizе the setting aside of a default under circumstances where the defendant believes [its] insurer is handling the case, the defendant must demonstrate [its] own diligence and the insurer’s assuranсe that it is handling the case.
(Footnotes omitted.) Id. Like the defendant in
Wright,
Future did not demonstrate its own diligence. Future did nothing to ensure that the complaint was received by its insurer, and it did not attempt to obtain its insurer’s assurancе that it was handling the suit. Thus, the trial court was not authorized to open the default on the ground of excusable neglect. Id. See also
Flournoy v. Wells Fargo Bank,
2.
A Proper Case.
We have found no legal authority specifically defining “a proper case” as used in OCGA § 9-11-55 (b). The
Supreme Court of Georgia has stated that, although the “proper case” ground is the brоadest of the three set out in OCGA § 9-11-55 (b), “it is not so broad as to authorize the opening of a default for any reason whatsoever. Its purpose is to permit the reaching out in еvery conceivable case where injustice might result if the default were not opened.” (Citation and punctuation omitted.)
In the Matter of Turk,
In the instant case, Future’s only explanation for failing to answer is that it assumed its insurer had received a copy of the complaint and was handling the suit. First, this explanation falls in the category of “excusable neglect” as it is a rationalization for Future’s failure to take required action, аnd is thus properly addressed under those cases dealing with that principle. See Division 1, supra. Second, even if Future’s excuse could also fall within the category of “a proper case,” its explanation for untimely answering is unreasonable for the same reasons stated in Division 1, that is, that Future failed to take reasonable steps to ensure that its insurer had received the complaint and was handling its defense. Consequently, the trial court abused its discretion in opening the default. See OCGA § 9-11-55 (b); see
Sidwell v. Sidwell,
Judgment reversed and case remanded.
Notes
OCGA § 9-11-55 (a) provides, in relevant part:
If in any case an answer has not been filed within the time required by this chapter, the case shall аutomatically become in default unless the time for filing the answer has been extended as provided by law. The default may be opened as a matter of right by the filing of such defenses within 15 days of the day of default, upon the payment of costs.
OCGA § 9-11-55 (b) provides, in relevant part:
At any time before final judgment, the court, in its discretion, upon payment of costs, may allow the default to be opened for providential cause preventing the filing of required pleadings or for excusable neglect or where the judge, from all the facts, shall determine that a proper case has been made for the default to be opened, on terms to be fixed by the court.