Kim Miсhael COOK, Appellant, v. Hallie A. ROWLAND, Personal Representative of the Estate of James A. Rowland, Appellee.
No. S-9410
Supreme Court of Alaska
June 21, 2002
48 P.3d 1141
Eric Jensen, Jensen & Jensen, Wasilla, and Kenneth J. Goldman, Law Office of Kenneth J. Goldman, Palmer, for Appellee.
Before: FABE, Chief Justice, MATTHEWS, EASTAUGH, BRYNER, and CARPENETI, Justices.
OPINION
PER CURIAM.
I. INTRODUCTION
Following the entry of a default judgment against him in excess of $7,000,000, Kim Michael Cook filed a peremptory challenge of the assigned judge and a motion to set aside the default judgment. The superior court rejected the peremptory challenge as untimely and refused to set aside the default judgment. Because three members of the court—Chief Justice Fabe, Justices Matthews and Bryner—have concluded that Cook has shown both excusable neglect and a potentially meritorious defense as to damages, we set aside the default judgment and remand for a redetermination of damages. Because three members of the court—Justices Eastaugh, Bryner, and Carpeneti—have concluded that Cook‘s peremptory challenge should be given effect, proceedings concerning the determination of damages on remand should be conducted before a different judge.
II. FACTS AND PROCEEDINGS
In the early morning hours of May 15, 1999, Palmer Police Officer James Rowland approached a parked car in which Kim Michael Cook was sleeping. In the series of events that followed, which are not the immediate concern of this case, both men fired gunshots and both were hit. Officer Rowlаnd died as a result of his injuries.
Cook was arrested and charged with first-degree murder in connection with Rowland‘s death. As a result of his own injuries, Cook was hospitalized and underwent two surgeries before being transferred to a maximum security cell at Cook Inlet Pretrial Facility.
On May 27, 1999, Hallie Rowland, Officer Rowland‘s widow and the personal representative of his estate, filed suit against Cook for wrongful death. The complaint sought compensatory and punitive damages. Cook was served with the complaint when he appeared at a criminal arraignment on May 28, but he failed to answer the complaint within twenty days as required by law. As a result, Hallie Rowland applied to the clerk for entry of Cook‘s default on June 18.
Three days after the default was entered, Rowland requested a hearing to establish damages for the default judgment. She later withdrew that request and proposed that the court enter a default judgment without a hearing. She provided the court with affidavits supporting her claims for damages. One affidavit, from an economist, calculated Rowland‘s lost lifetime earnings at $1,353,975.00. The other affidavit, from Rowland, claimed the estate‘s entitlement to $400,000 for non-economic damages, the maximum allowable award. Rowland calculated her total compensatory damages at $1,753,975, and proposed an award of punitive damages of three times that amount, or $5,261,925.
Superior Court Judge Beverly W. Cutler entered the default judgment against Cook on June 28, 1999, accepting in full Rowland‘s calculation of damages for a total judgment of $7,015,900.
On July 21 Cook responded to the civil suit for the first time, by moving to set aside the entry of default and the default judgment. He also then filed a peremptory challenge to the assigned judge pursuant to
Judge Cutler denied Cook‘s peremptory challenge as untimely, and scheduled a hearing for two weeks later on Cook‘s motion to set aside the default judgment in order to determine “whether there is an evidentiary basis for defendant‘s claims.” Cook sent a handwritten response to the court and Rowland‘s attorney stating that he would not be able to arrange for transportation from his maximum security cell in the prison to attend
Cook filed this appeal challenging two decisions of the superior court. First, Cook argues that the court improperly denied his peremptory challenge. Second, Cook argues that the court erred by not setting aside the default judgment against him.
Subsequent to the entry of all briefs in this case, Cook was found guilty of first-degree murder in connection with Rowland‘s death.1
III. STANDARD OF REVIEW
We review an order refusing to set aside a default judgment for abuse of discretion.2 “We will not find an abuse of discretion unless wе are left with a definite and firm conviction on the whole record that a mistake has been made.”3 The interpretation and application of the right to disqualify a judge under
IV. DISCUSSION
A. The Superior Court Abused Its Discretion in Refusing To Set Aside the Default Judgment against Cook.
Cook argues that the superior court erred when it refused to set aside the default judgment against him because his failure to respond was excusable neglect. The superior court denied Cook‘s motion at a hearing on September 15 because it found “no evidence to support Mr. Cook‘s claims.”
The rules of civil procedure “provide relief from judgments which, for one reason or another, are unjust.”5
1. Cook presented sufficient evidence of excusable neglect.
Specifically, Cook claims that his actions showed excusable neglect. In an affidavit filed July 21 Cook described the circumstances that made it difficult for him to respond to the May 28 summons. These circumstances included: injuries suffered as a rеsult of gunshot wounds that led to two surgeries, the administration of pain medication, and limited use of his right hand; confinement in a maximum security unit at Cook Inlet Correctional Facility where he did not have use of a phone until June 22; lack of familiarity with court rules; and preoccupation with his criminal defense. As a result of these circumstances, Cook claims that he was not able to respond to the summons before the twenty-day period had expired on June 18.
In response to Cook‘s claims, Rowland alleges that those claims are “incredible,” that Cook shows a level of sophistication that would have allowed him to understand the significance of the complaint, and that Cook acted in bad faith, choosing to ignоre the action on the belief that his assets were beyond the reach of the court.
We have also held that setting aside a default judgment may be warranted where “a pro se litigant‘s default results from lack of familiarity with the rules, rather than gross neglect or lack of good faith, and where the litigant is unversed in the rules of civil procedure.”9 Although Cook was later able to obtain legal assistance to respond, he was initially unable to contact an attorney during the time relevant to the default.
Based upon the circumstances presented by Cook, we find that his failure to respond to the complaint in a timely fashion is excusable. Cook was served with this lawsuit within two weeks of suffering multiple serious gunshot wounds. As a result, his claims that he underwent extensive medical treatment and was heavily medicated appear legitimate. In addition to his physical incapacitation, Cook was being held in a confined setting which allowed him minimal contact with the outside world. He was engaged in and likely preoccupied with defense of the extremely serious criminal charges filed against him. Based upon these circumstances, his neglect in responding before the superior court entered a default and awarded default judgment in his case was excusable. Rowland suggests that Cook acted in bad faith, but provides no reason to believe that Cook could profit by purposefully allowing a default to be taken against him. The suggestion of bad faith appears to be speculation and is not supported by any evidence.
2. Cook presented sufficient evidence to find “good cause” to set aside the default judgment.
We have directed that in determining whether “good cause” exists to set aside a default under
a. Cook has established a potential meritorious defense to the amount of damages.
In addition to the specific showing of excusable neglect to satisfy
Showing a meritorious defense demands “more than a perfunctory statement that a meritorious defense exists.”13 The defaulting party “may be required to show that there is a factual or legal basis for the tendered defense.”14 Cook contends that this requirement only means that a defendant must say more than the conclusory
Rowland argues that a meritorious defense requires both a claim of defense and a factual representation supporting that claim. Rowland relies upon our finding in Wright v. Shorten that a meritorious defense existed where the defendant pleaded a defense and presented evidence to support the claim.15 However, in several other cases we have not required evidence but have found a meritorious defense when facts supporting a claim of defense are merely alleged.16 Again, the existence and quality of evidence establishing a meritorious defense is a factor to be weighed in determining whether good cause exists to set aside the default judgment.
Cook has presented two different theories to attempt to meet the meritorious defense requirement. First, Cook contends that he was acting in self defense when he shot Officer Rowland. Cook states that he was fearful because he believed Officer Rowland “was going to kill or severely injure me.” But Cook was found guilty of first-degree murder for the killing of Officer Rowland.17 Cook‘s conviction precludes him from presenting a merits defense to liability in the civil action.18
But Cook also claims that he has a meritorious defense against the amount of damages requested by Rowland and awarded by the superior court. To be meritorious a defense need not provide a complete defense to the action. Rather, a defense is meritorious if it will “reduce a plaintiff‘s award, and thereby alter the outcome of the suit.”19 Cook claims that if he were allowed to present his story of the events leading to Officer Rowland‘s death punitive damages might be assessed differently, or not at all, and that in any case testimony about his assets could support a reduced punitive damage award. In addition, he points out that in certain respects Rowland‘s award for past and future economic damages are not supported by underlying data and calculations, and thus may be vulnerable to challenge.
We agree that Cook has established a potentially meritorious defense insofar as he has shown that the amount оf damages awarded against him might be lower if he were allowed to participate in a damages hearing. Therefore we conclude that although Cook may not deny liability for Officer Rowland‘s death, he has shown a meritorious defense with respect to damages.
b. The award in this case is substantial.
We have held that the magnitude of a default judgment is a factor in considering whether it should be set aside. In Hertz, the plaintiffs were awarded $463,319.43, which led us to comment that “[u]nless there are intervening equities, a controversy concerning damages of this magnitude should be resolved on its merits whenever possible.”20 In the present case this factor is certainly present.
We emphasize that the conduct relevant to this factor is nоt the conduct underlying the initial claim, in this case Cook‘s shooting of Officer Rowland (which was highly culpable), but the conduct related to entry of the default.21 Our finding that Cook‘s default was the result of “excusable neglect” sufficiently establishes that his failure to answer in a timely manner was not significantly culpable.
d. The duration of the default was minimal; setting aside the default judgment does not prejudice the plaintiff.
Default judgments are more likely to be set aside when the length of time the defendant is in default is minimal and setting aside will not result in prejudice to the plaintiff.22
In this case, Cook filed his motion to set aside the judgment on July 21, only twenty-three days after the default judgment had been entered. The default judgment itself followed quickly upon the events giving rise to the cause of action. Rowland has not presented this court with any argument that she will be prejudiced if the default judgment against Cook is set aside. This court has previously held that “[t]he mere fact that the nondefaulting party will be required to prove his case without the inhibiting effect of the default upon the defaulting party does not constitute prejudice which should prevent a reopening.”23
Further, on remand, the only relevant issue will be the amount of damages. Potential prejudice to the plaintiff can be reduced by not requiring the return of any seized property unless the final judgment turns out to be less than the value of the property seized.
B. Cook‘s Peremptory Challenge Must Be Given Effect on Remand.
Because the default judgment as to damages has been vacated by this opinion, on remand the superior court must determine damages in accordance with the provisions of
V. CONCLUSION
For the reasons stated:
1. The default judgment as to damages is VACATED under the conditions expressed herein.
2. This case is REMANDED for a determination of damages.
3. Proceedings on remand shall be conducted before a new judge.
CARPENETI, Justice, with whom EASTAUGH, Justice, joins, concurring and dissenting.
BRYNER, Justice, concurring.
FABE, Chief Justice, with whom MATTHEWS, Justice, joins, concurring in part and dissenting in part.
CARPENETI, Justice, concurring and dissenting, with whom EASTAUGH, Justice, joins.
I agree with the opinion of the court that this case should be remanded for further proceedings before another judge. But I disagree as to how this result is reached. I write separately to set out (1) why Cook‘s peremptory challenge must be given effect
1. The Superior Court Erroneously Denied Cook‘s Peremptоry Challenge as Untimely.
Cook argues that the superior court erred when it dismissed his peremptory challenge as untimely. Litigants have a statutory right to peremptory disqualification of a judge under
Timeliness. Failure to file a timely notice precludes change of judge as a matter of right. Notice of change of judge is timely if filed before the commencement of trial and within five days after notice that the case has been assigned to a specific judge. Where a party has been served or enters an action after the case has been assigned to a specific judge, a notice of change of judge shall also be timely if filed by the party before the commencement of trial and within five days after a party appears or files a pleading in the action.4
Cook‘s challenge falls under the second part of the rule, because he was “served ... after the case ha[d] been assigned to a specific judge.” Cook was initially served on May 28, after Judge Cutler had been assigned to the case on May 27.5 As a result,
The superior court ruled that Cook‘s motion was not timely because the normal time limits of
Cook points to our decision in Staso v. State, Department of Transportation8 to support his position that allowing his peremptory challenge will not lead to abuse. In that case, we held that a party has the right to peremptorily challenge the judge in a new case filed after an identical case is dismissed, even if the party had exercised its peremptory challenge in the earlier, dismissed case.9 Despite the argument by the state that allowing such challenges would encourage judge shopping by parties who simply allowed their cases to be dismissed, we observed that other civil rules provided adequate sanctions against bad faith dismissal and refiling of cases. Specifically, we noted that the threat of sanctions as provided in the Civil Rules against a party who refiles a dismissed case “afford[s] courts the tools necessary to deter litigants from judge shopping.”10
Similar controls exist in the rules to protect against any theoretical abuse considered here. There are at least two ways in which the current rules would dissuade parties who might attempt, as the superior court feared, to sit by and allow a default, and then disqualify the judge.
First, parties who invite a default face the additional burden of successfully moving to set aside a default judgment before earning a trial on the merits with a different judge. A peremptory challenge entered after a default judgment would not automatically nullify that judgment.11 Instead, a defendant would have to proceed before a new judge with a motion to set aside a default judgment under the requirements contained in
Second, if for any reason a party were to invite a default in order to subsequently exercise a peremptory challenge, that party would be guilty of bad faith and would risk losing the motion to set aside the default for that reason. A plaintiff who can establish that a defendant has intentionally defaulted as a way to engage in judge shopping can argue that the default judgment should not be set aside because the defaulting party has acted in bad faith.15 In Melendrez v. Bode,16
In fact, in this case, Rowland has alleged that Cook acted in bad faith. Rowland claims that Cook‘s failure to respond to the complaint in a timely fashion was the result of bad faith. Allowing Cook to maintain his peremptory challenge would not defeat Rowland‘s right to claim that the default should stand because Cook acted in bad faith.
In sum, Cook‘s peremptory challenge satisfied the language of
2. The New Judge Should Decide All Remaining Matters, Including Cook‘s Motion To Set Aside the Default Judgment.
Since the superior court erroneously denied Cook‘s peremptory challenge, decisions made by that court subsequent to the denial are void.19 The valid exercise of a peremptory challenge divests the challenged judge of authority to act in the case. As we stated in Channel Flying, Inc. v. Bernhardt,20
The only meaning that can be given to the requirement [in
AS 22.20.022(a) ] that the matter be assigned “at once and without requiring proof” to another judge, is that when a timely and proper affidavit is filed the judge concerned is at once disqualified from acting as a judge in the particular action or proceeding. When [s]he is disqualified [s]he no longer possesses the qualities ... of power, capacity, fitness or competency to proceed further. In short, when a proper affidavit has been timely filed, the judge involved is without power or jurisdiction to take any further action in the proceeding.21
We have consistently followed this rule.22 No reason appears in this case to depart from it. Therefore, Cook‘s motion to set aside the default judgment should be remanded to the superior court for assignment to a new judge. That new judge should decide all matters arising after the peremptory challenge was made.
The decision that the challenge was timely does not invalidate the default judgment itself, which was entered by the superior court before Cook filed his peremptory challenge. Since the superior court was without jurisdiction to rule on the motion to set aside the default judgment, Cook‘s appeal of that decision is moot. There is, therefore, no reason for this court to rule on any issue—including the pending motion to set aside the default—that is not properly before it. For this reason, I dissent from today‘s per curiam opinion to the extent it reaches the question of setting aside the default judgment. Instead,
BRYNER, Justice, concurring.
I join the per curiam opinion in holding that Cook‘s default judgment must be set aside and the case remanded for a dеtermination of damages. I also join Justices Eastaugh and Carpeneti in concluding that Cook‘s peremptory challenge must be treated as timely on remand; but I set out my reasons separately, because they differ from those adopted in Justice Carpeneti‘s concurring opinion.
Cook‘s motion to set aside the judgment under
But now that satisfactory grounds have been found for relief under
I thus would set aside the default judgment, would remand for further proceedings as directed in the per curiam opinion, and would require the case to be reassigned to another judge on rеmand.
FABE, Chief Justice, with whom MATTHEWS, Justice, joins, concurring in part, and dissenting in part.
Although I agree that the default judgment must be set aside and the case remanded for a determination of damages, I disagree with the majority‘s holding today that Cook‘s peremptory challenge of Judge Cutler was timely. In my view, this case should be remanded for a trial on damages before Judge Cutler, the originally assigned trial judge.
Moreover, in many default cases, the judge holds a damages hearing prior to entry of a default judgment, a proceeding that is tantamount to a “trial” on the issue of damages.3 And if either party has requested a jury trial prior to entry of default, the issue of damages must be tried to a jury, despite one party‘s absence at trial.4 If Judge Cutler had held a damages hearing, listening to the same witness who prepared the damages affidavit in this case, Cook‘s peremptory challenge would not have been timely filed as it would have occurred after “trial.” The right to file a peremptory challenge after a default judgment should not depend оn whether the trial court has determined the amount of damages based on the testimony in an affidavit or that of a live witness.
As a result of the court‘s decision today, careful practitioners will request a damages hearing or “trial” in every future default case, to avoid the possibility that a defendant, unhappy with the result of the case, will enter an appearance, preempt the judge, and move to set aside the default judgment. This will result in time-consuming and unnecessary hearings in cases where the amount of damages is easily ascertainable from documentary evidence.
For these reasons, I respectfully disagree with the majority‘s view that Cook‘s peremptory challenge was timely and should be givеn effect. I would remand for a damages trial before Judge Cutler.