Pfaff v. State Farm Mutual Automobile Insurance Company12/21/2000
Maureen Pfaff appeals an order setting aside a default judgment on condition that State Farm pay terms. We affirm.
On April 29, 1996, Maureen Pfaff was injured in an auto accident. Because the other motorist was not insured, she submitted a claim to her underinsured motorist carrier, State Farm. She sought $23,000 for her injuries, and her husband sought $3,500 for loss of consortium. State Farm offered to settle for a lesser amount.
The parties could not agree on an arbitrator, so the superior court appointed one. When the arbitration hearing was held, counsel for State Farm did not call any witnesses and, according to Pfaff, was inattentive. The arbitrator awarded $24,413.40, which included $1,000 for loss of consortium.
State Farm attempted to condition payment of the award on a release of all claims. Pfaff declined to sign a release that broad. State Farm ultimately paid the award in exchange for a release of Pfaff's personal injury claim.
On November 25, 1998, Pfaff sued State Farm for bad-faith refusal to settle. On November 30, 1999, she served the insurance commissioner as statutory agent for State Farm, pursuant to RCW 48.05.210. State Farm failed to answer within the prescribed forty day period, which ended on Monday, January 11, 1999.
The next day, Tuesday, January 12, 1999, Pfaff obtained an order of default. On January 14, 1999, she moved for a default judgment, and on January 19, 1999, she obtained a default judgment in the amount of $22,562.96.
On January 28, 1999, State Farm filed a motion to vacate the default order and judgment pursuant to CR 60. In accompanying affidavits, it showed that it had timely received Pfaff's complaint from the insurance commissioner, but that one of its administrative assistants had then faxed the complaint to a wrong number. Its counsel had learned of the complaint on January 18 and appeared in the action on January 19, the same day on which Pfaff took her default judgment. Also in accompanying affidavits, it set forth facts sufficient to support findings that it had not acted in bad faith. In responsive affidavits, Pfaff set forth facts sufficient, we assume, to support findings that State Farm acted in bad faith.
On March 1, 1999, over Pfaff's objection, the superior court granted the motion to vacate. The court also required State Farm to pay Pfaff $1,850 in terms. Pfaff then filed this appeal.
According to CR 60(b)(1), a party may move to vacate a final judgment, whether entered by default or otherwise, for '{m}istakes, inadvertence, surprise, excusable neglect or irregularity{.}' According to CR 60(e)(1), a party must show 'the facts or errors upon which the motion is based' and, if he or she is the defendant, 'the facts constituting a defense to the action{.}'
Application of these provisions turns on at least four factors. They are:
(1) That there is substantial evidence extant to support, at least prima facie, a defense to the claim asserted by the opposing party; (2) that the moving party's failure to timely appear in the action, and answer the opponent's claim, was occasioned by mistake, inadvertence, surprise or excusable neglect; (3) that the moving party acted with due diligence after notice of entry of the default judgment; and (4) that no substantial hardship will result to the opposing party.{}
These factors emanate from White v. Holm, a pre-CR 60 case. In that case, White and Holm were both pedestrians on a sidewalk. They collided, and White was injured. White sued Holm for negligence, and Holm failed to make a timely appearance. White took a default judgment, which Holm moved to vacate a we
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