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Wood v. James W. Fowler Co.6/7/2000
Argued and submitted March 30, 2000.
Reversed and remanded.
Defendant appeals from the trial court's denial of its motion to set aside a judgment of default. ORS 19.205(2)(c). The dispositive issue is whether the trial court erred in determining that defendant had not established that its failure to appear was the product of "excusable neglect" within the meaning of ORCP 71 B(1)(a). We conclude that this case is materially indistinguishable from Reitz v. Coca-Cola, 36 Or App 487, 584 P2d 791 (1978), and, consequently, reverse and remand.
The material facts are uncontroverted. In late March 1997, plaintiffs' attorney sent a demand letter to defendant, asserting that defendant had committed trespass and timber trespass on plaintiffs' property. The letter stated that, if defendant did not respond within 20 days, plaintiffs would file suit. Defendant did not respond.
In July 1997, plaintiffs filed this action, alleging claims of trespass and timber trespass. On August 4, 1997, a deputy sheriff served the summons and complaint on a receptionist at defendant's office. The receptionist gave the complaint to James Fowler, defendant's president and registered agent. Fowler reviewed the complaint and decided that it should be transmitted to defendant's insurance agent "to be tendered to our liability carrier for defense." Consequently, Fowler gave the complaint to defendant's comptroller, Paul Beals, and told Beals to transmit the original summons and complaint to defendant's insurance agent.
Beals's "ordinary" or "usual" practice was to give the original summons and complaint to a member of defendant's clerical staff with instructions to mail those documents to defendant's insurance agent. For unknown reasons, that did not occur in this case. As a result, defendant failed to file a timely responsive pleading and, on September 10, 1997, plaintiffs obtained an order of default against defendant.
On September 25, 1997, Beals telephoned defendant's insurance agent to ask about the status of the action and was told that the agent had never received any notice of the action. Beals then searched his office and found the original summons and complaint. Defendant immediately sent the summons and complaint to its insurance agent who, in turn, forwarded the documents to defendant's insurer.
On October 6, 1997, defendant filed a motion to set aside the order of default, along with an answer to plaintiffs' complaint. Defendant contended that its failure to appear was the result of "inadvertence" or "excusable neglect" within the meaning of ORCP 71 B(1)(a). The court denied defendant's motion and, on December 12, 1997, entered a judgment of default. Defendant appealed from that judgment, and we ultimately dismissed that appeal in December 1998. See n 1 above. Meanwhile, however, in November 1998, defendant moved to set aside the judgment of default, again on grounds of "inadvertence" or "excusable neglect." After issuing a comprehensive letter opinion, the trial court denied that motion. This appeal followed.
We begin with our standard of review. We review denials of motions to set aside default judgments for abuse of discretion. See, e.g., Duvall v. McLeod, 160 Or App 685, 690, 984 P2d 287, rev allowed 329 Or 527 (1999); Walters v. Kmart Corp., 149 Or App 65, 68, 942 P2d 286, rev den 326 Or 59 (1997). Nevertheless, that discretion is hardly unlimited--indeed, there may be no context in which we have so frequently reversed for abuse of discretion--and its contours are, in Judge Joseph's phrase, "murkily defined." Hackett v. Alco Standard Corp., 71 Or App 24, 33 n 7, 691 P2d 142 (1984), rev den 298 Or 822 (1985). Perhaps as a result
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