Grossman v. WillGrossman v. Will
- Reporters:
- , ,
- Before:
- Horowitz
Plaintiffs Perlin and Grossman each recovered a summary judgment by default on promissory notes, including attorney’s fees, against defendants Heide, husband and wife, “individually and as a community.” The court in each case denied defendants’ timely motions to set aside the judgment and then adhered to that denial on defendants’ respective motions for reconsideration. Defendants Heide appeal the judgments, the orders refusing to vacate them, and the denial of, the Heides’ motions for reconsideration. The appeals have been consolidated for hearing.
The basic question raised is whether Mrs. Heide’s showing in support of her motions to vacate and to reconsider prima facie establishes a defense on the merits to each action. A subsidiary question raised is whether an attorney purporting to serve and file an appearance for her in each case had authority by virtue of his office, and without her express knowledge and consent, to bind her to a stipulation claimed by plaintiff creditors to waive her defenses on the merits to the claims asserted against her. We answer the first question in the affirmative, the second in the negative, and accordingly reverse the orders from which the appeals are taken.
When the trial court finally refused to set aside the judgments in each case, the following were the controlling facts
Perlin Action
The facts are these: On September 24,1970, plaintiff filed an action on two installment notes against defendants Heide and others. The first note was for $5,000, executed and delivered on May 29, 1969, before marriage, and signed “Wakefield Investments, by: Oscar Will, by: Melvin G. Heide.” The second note was for $8,300, executed and delivered on December 22, 1969, after marriage, and signed “Wakefield Investments, Melvin G. Heide.”
On November 2, 1970, at Mr. Heide’s request, attorney Douglas R. Hendel served and filed a notice of appearance for all defendants, including “Jane Doe Heide.” Mrs. Heide (LaRayne M. Heide), however, neither knew of nor expressly authorized Mr. Hendel to appear for or represent her in the litigation.
On November 9, 1970, attorney William M. Robinson, at the request of Mrs. Heide, filed a notice of appearance for her and by mail served plaintiff’s attorneys with a copy of that appearance. The attorney substitution procedure provided by ROW 2.44.040-.050 was not utilized.
On November 12, 1970, settlement negotiations culminated in the execution of a stipulation by “the parties hereto” settling the litigation. Plaintiff Perlin and his attor
7. In the event that the defendants fail to make any of the payments above specified, it is agreed plaintiff shall be entitled to judgment against the defendants and each of them ... In such event, plaintiff shall file a motion for entry of judgment, which judgment is hereby confessed and consented to, provided only, that plaintiff give at least ten (10) days written notice of plaintiff’s application for entry of said judgment, and cause the same to be served by registered mail on the defendants’ counsel, Douglas R. Hendel, at his office address in Seattle, Washington . . .
Defaults in the stipulated payments occurred. Plaintiff on December 23, 1971, then filed an affidavit-supported “Motion for Summary Judgment” based on the defaults mentioned. The supporting affidavit referred to the “stipulation filed herein”; stated “[t]hat under the terms of said stipulation, defendants were to pay . . .” The affidavit did not note the absence of Mrs. Heide’s signature on the stipulation, nor the absence of attorney Hendel’s signature on that stipulation on her behalf. Plaintiff also served on attorney Hendel a note for motion docket fixing January 7, 1972, as the hearing date. Neither defendants Heide nor attorney Robinson were served with copies of the motion and notice, nor knew of them. Attorney Hendel’s affidavit in support of the defendants’ motion to vacate the summary judgment explains that:
At the time of service, I was not aware that I was the attorney of record for defendants Heide and assumed that William M. Robinson, an attorney at law, whom I knew to be Mr. Heide’s personal attorney, would appear on their behalf and resist said motion.
On January 19, 1972, defendants Heide, pursuant to CR 60(b) (1), served upon the plaintiff’s attorneys of record and filed a “Motion to Vacate Default Summary Judgment.” Plaintiff was not otherwise served. On January 20, 1972, attorney Robinson likewise served and filed an appearance for defendant Melvin G. Heide and the marital community composed of the Heides. The motion to vacate was supported by affidavits of attorneys Hendel and Robinson, and the Heides. At the same time, the Heides obtained an ex parte injunction enjoining the collection of the judgments. The injunction was later vacated and is no longer material to the issues here. Plaintiff’s attorneys appeared generally to resist the motion and injunction. The record of the case before the court, together with the affidavits supporting the motion to vacate the default judgment, subject to what is next stated, embodies the substance of the facts heretofore reviewed. The affidavits also contain a claimed defense apparently argued below, but no longer relied upon.
The trial court denied the motion to vacate, the order reciting “that no valid defense exists on the part of defendants Heide . . .” He later denied the motion for reconsideration notwithstanding Mrs. Heide meanwhile had filed a supplemental affidavit stating in part:
[T]hat at the time of execution of said Stipulation by Mr. Hendel, I had never met him, never retained him, and never authorized him to act on my behalf in this or any other matter, had no knowledge of the Stipulation and had retained William M. Robinson to act as my attorney in this matter; and that to the extent that Mr. Hen-del may have purported to act on my behalf in executing said Stipulation, said acts were without my authorization and knowledge and that at no time did I ever agree to personally assume any obligations in this or any otheraction on behalf of my marital community or myself individually for any separate debts of my husband, defendant Melvin G. Heide.
The statement of facts certified by the trial court includes the following narrative statement:
No court reporter was present during these proceedings. During the proceedings before the court, Mr. Hendel advised the court that he had never met the defendant, LaRayne M. Heide; that he had never been authorized by her to represent her; that he was not authorized to execute the stipulation filed herein on her behalf; that the former interest of the defendant Melvin G. Heide in Wakefield Investments was Mr. Heide’s separate property and not community property; and that the defendant LaRayne M. Heide had received no consideration for the execution by Mr. Hendel of the stipulation filed herein.
It does not appear whether Mr. Hendel’s statements to the court were made at the time of the hearing on the motion to vacate or at the time of the hearing on the motion for reconsideration, or on both occasions.
Grossman Action
The controlling facts in Grossman are largely similar to and parallel those in the Perlin case. There are differences, including amounts and dates, but, as in Perlin, the showing is the notes were the separate obligations of defendant Melvin G. Heide; were not community obligations; and that Mrs. Heide was not individually liable thereon. Other differences include the following: The Grossman stipulation of settlement is signed by Douglas R. Hendel on behalf of his law firm as “Attorneys for Defendants.” It is also signed by defendants Oscar K. Will, Melvin G. Heide, and Wake-field Investments, a limited partnership, by Arthur Cooper-stein, Trustee, General Partner. Mrs. Heide is not a specifically mentioned “party hereto,” and she did not sign the stipulation. It is at least not clear whether Mr. Hendel’s use of the word “defendants” after his signature was intended to bind any defendant “party hereto” other than those who actually signed the stipulation. Furthermore, in Grossman, unlike in Perlin, only attorney Hendel served and filed an
A moving party may have a judgment set aside under CR 60(b) (1) for “[mjistakes, inadvertence, surprise, excusable neglect or irregularity in obtaining a judgment or order.” The motion to vacate must be supported by an affidavit of the applicant or his attorney “setting forth a concise statement of the facts or errors upon which the motion is based, and if the moving party be a defendant, the facts constituting a defense to the action or proceeding.” CR 60(e) (1). The facts stated must support at least prima facie the defense to the claim asserted. See generally White v. Holm, 73 Wn.2d 348, 438 P.2d 581 (1968); Yeck v. Department of Labor & Indus., 27 Wn.2d 92, 176 P.2d 359 (1947); National Sur. Corp. v. Shoemaker, 195 N.W.2d 134 (S.D. 1972).
The orders refusing to vacate the judgments appealed from do so on the basis there is no valid defense to the actions involved. The defenses referred to apparently involve defenses to the merits of plaintiffs’ actions without regard to the validity of the settlement stipulations and the possible waiver of any such defenses resulting from the stipulations. The record does not support the recital. Plain
It clearly appears that, except as to defendant Melvin G. Heide, the judgments were entered as a result of the kind of mistake and inadvertence described in CR 60 (b) (1). Mr. Heide had a right to authorize attorney Hendel to enter an appearance for him in each case. Mr. Heide likewise signed the settlement stipulations in each case. He is bound by the judgments against him because entered in conformity with the stipulations he signed. The presumption the judgments against Mr. Heide are binding on his marital community is rebuttable. Heide’s showing prima facie rebuts the presumption.
Mrs. Heide’s appeal is a different matter. The record shows she is a victim of a series of mistakes for which she is personally not responsible — mistakes which should not prevent her from showing she has a defense to the merits of the respective plaintiff’s claims. Thus, Mr. Heide mistakenly believed that as Mrs. Heide’s husband he had authority to authorize Mr. Hendel to appear for and bind Mrs.
Furthermore, the stipulation neither contains her signature nor the signature of attorney Hendel as an attorney on her behalf. Even had attorney Hendel purported to sign the stipulation on her behalf, he would have exceeded his authority. An attorney, even with authority to appear for a client, absent an emergency otherwise requiring, does not have implied authority to compromise and settle his client’s rights. Express authority is required. See Barton v. Tombari, 120 Wash. 331, 336, 207 P. 239 (1922); In re Bouts, 7 Wn. App. 476, 499 P.2d 1276 (1972); 7 Am. Jur. 2d Attorneys at Law §§ 121, 126, 128 (1963); 7 C.J.S. Attorney and Client §§ 79, at 897, 100(a) (1), at 918, 100(c), 105 (1937).
In Grossman, unlike Perlin, Mrs. Heide made no showing she had not retained Mr. Hendel to represent her. Attorney Robinson did not appear in Grossman because attorney Hendel’s office informed him it was appearing for the Heides. There is no showing, however, that Mrs. Heide ever knew of this conversation or authorized attorney Robinson to refrain from entering an appearance in Grossman in reliance on the conversation mentioned.
Plaintiff Grossman, nevertheless, in executing the settlement stipulation, was charged with knowledge that, absent an emergency, an appearing attorney does not have implied authority by virtue of his office to compromise and settle his client’s rights.
Precious v. O‘Rourke,
270 Mass. 305, 170 N.E. 110 (1930);
Strauss v. Robe,
97 N.J. Eq. 208, 127 A. 188 (1925),
aff‘d,
98 N.J. Eq. 700, 130 A. 920 (1925);
Union
The absence of Mrs. Heide’s signature on the stipulation and the ambiguous reference to “defendants” under attorney Hendel’s signature — a reference capable of meaning defendants who were “parties hereto,” i.e., the signing defendants, was sufficient to put plaintiff Grossman on notice concerning attorney Hendel’s lack of actual authority to bind Mrs. Heide to the stipulation.
Plaintiff Perlin then argues he was required to recognize Mr. Hendel as Mrs. Heide’s attorney notwithstanding attorney Robinson’s appearance in Perlin because there was no compliance with
When an attorney is changed, as provided inRCW 2.44.040 , written notice of the change, and of the substitution of a new attorney, or of the appearance of the party in person, must be given to the adverse party; until then, he shall be bound to recognize the former attorney.
Assuming arguendo the statute applies when there is in fact no attorney-client relationship between the first appearing attorney and his purported client, the statute still does not help plaintiff Perlin. The attorney he is required to recognize must still have express authority to settle. There is no such express authority here.
Nor does
An attorney and counselor has authority:
(1) To bind his client in any of the proceedings in an action or special proceeding by his agreement duly made, or entered upon the minutes of the court; but the court shall disregard all agreements and stipulations in relation to the conduct of, or any of the proceedings in, an action or special proceeding unless such agreement or stipulation be made in open court, or in presence of the clerk, and entered in the minutes by him, or signed by the party against whom the same is alleged, or his attorney;
Plaintiffs then contend the judgments are consent judgments which cannot be reviewed on appeal. We do not agree the judgments are consent judgments. The Perlin judgment was based upon the stipulation to which Mrs. Heide was not a party either by the signature of herself or by attorney Hendel. In Grossman, the judgment was based upon an ambiguous stipulation which arguably could be construed as settling the rights of only the defendants who actually signed. Had Mrs. Heide had notice of the hearing, she might have made a showing to support the argument that when an ambiguity creates a material issue of fact, a summary judgment should not be entered.
Peoples Mortgage Co. v. Vista View Builders,
6 Wn. App. 744, 496 P.2d 354 (1972). Furthermore, an unauthorized consent judgment is not a valid judgment at all. It does not bind the alleged judgment debtor.
See Copeland Planned Futures, Inc. v. Obenchain,
9 Wn. App. 32, 510 P.2d 654 (1973). Had
Plaintiffs contend the court had no jurisdiction to vacate the judgments because the motions to vacate and for reconsideration were not served upon them. It is true CR 60 (e) (3) requires the motion to vacate, affidavit and order to show cause be “served upon all parties affected in the same manner as in the case of summons in a civil action . . .” However,
Plaintiffs argue the court properly denied the motions involved because the showing of attorney Hendel’s lack of authority was not made until after the denial of the motions to set aside the judgments. They repeat the judgments were taken strictly in accordance with the stipulations “signed by appellants’ attorney of record.” The argument fails to give effect to the fact that (1) in Perlin Mrs. Heide was not a party to and did not sign the stipulation; (2) in Grossman not only did Mrs. Heide not sign the stipulation, but it is at least unclear and questionable whether attorney Hendel, in purporting to sign the stipulation as attorney for the “defendants,” meánt any defendant other than those who actually signed; (3) in Grossman, as well as in Perlin, plaintiffs fail to show that Mrs. Heide had expressly authorized Mr. Hendel to sign a stipulation on her behalf containing paragraph 7 above quoted; (4) Mrs. Heide’s supplemental affidavit in Perlin — not disputed by attorney Hendel — further supported the showing of lack of authority apparent on the record when defendants’ motion to set aside the default summary judgment was argued.
Farris and Williams, JJ., concur.