Cotleur v. Danziger , 870 S.W.2d 234 ( 1994 )

COVINGTON, Chief Justice.

This case arises from a dissolution of marriage proceeding initiated by Katherine M. Cotleur against Andrew C. Danziger. Ms. Cotleur appealed from an order overruling a motion to set aside the judgment entered in the dissolution proceeding. The issues are whether the judgment entered in the case was a default judgment, and whether the attorney in the case abandoned his client so that his inexcusable neglect would not be attributable to the client. The Missouri Court of Appeals, Western District, affirmed in part and vacated in part. The western district’s opinion conflicts with the eastern district’s opinions in Schulte v. Venture Stores, Inc., 832 S.W.2d 13 (Mo.App.1992), and Hoskin v. Younger Cemetery Corp., 838 S.W.2d 476 (Mo.App.1992). This Court sustained appellant’s application for transfer. Judgment of the trial court is affirmed.

The parties were married on May 19,1985, and had a daughter approximately one year later. On June 5, 1990, Ms. Cotleur filed a petition for dissolution of marriage. Mr. Danziger filed an answer and a cross-petition. Ms. Cotleur filed a timely answer to the cross-petition. The parties participated in pretrial discovery.

Ms. Cotleur’s first attorney withdrew by leave of court, after which Ms. Cotleur engaged the services of L. Michael Kelly. Mr. Kelly failed to enter his appearance on Ms. Cotleur’s behalf. Mr. Danziger’s attorney secured a trial setting and, unaware of Mr. Kelly’s representation of Ms. Cotleur, sent notice of the trial setting directly to Ms. Cotleur. Ms. Cotleur telephoned Mr. Kelly and told him of the trial setting.

No one appeared on behalf of Ms. Cotleur on the scheduled date of the hearing on September 25, 1991. The trial court proceeded with the hearing, at which Mr. Dan-ziger testified and offered twelve exhibits. The trial judge questioned Mr. Danziger about the parties’ property, child custody, and support. In a decree entered on September 30, the court dissolved the marriage, apportioned property, and entered an order of joint physical and legal custody of the minor child. In lieu of child support as directed by the child support guidelines in Rule 88.01, the court ordered Danziger to pay the cost of tuition at a private school the child attended.

On October 25, 1991, attorney Kelly entered his appearance and filed a motion to set aside the judgment, which he denominated a default judgment. Attached to and included in the motion to set aside the judgment was a copy of a report of a social worker expressing concerns of possible sexual interaction between the child and her father. The motion was not heard until November 18, 1991. At the motion hearing Kelly testified that he failed to appear at the scheduled dissolution hearing because he was out of town on other matters, that he thought the September 25 court date was simply a docket call, not a trial, and that he had asked another lawyer to appear on Ms. Cotleur’s behalf to obtain a continuance. The other lawyer, however, testified that he had no recollection of being asked to appear. The trial court overruled Ms. Cotleur’s motion to set aside the judgment. The court did not specify under which rule it based its order, but it did state that there was “no, absolutely no excusable neglect.”

Mr. Kelly filed an untimely appeal which the Missouri Court of Appeals, Western District, dismissed. Ms. Cotleur discharged Kelly and retained new counsel. On motion, the western district reinstated Ms. Cotleur’s appeal. The western district affirmed the trial court’s order as to the property settlement and dissolution decree, but vacated and remanded the matter for appointment of a guardian ad litem and further proceedings on the custody, visitation, and child support issues.

Ms. Cotleur contends on appeal that the trial court’s judgment was a default judgment, that she showed good cause and a meritorious defense, and, therefore, the motion court abused its discretion under Rule 74-05 by denying her request to set aside the judgment. Ms. Cotleur argues in the alternative that the motion court’s order violated Rule 74..06(b) because she was not guilty of “inexcusable neglect” and her counsel’s neglect is not imputable to her because he abandoned the defense of the ease without notice to her.

Supreme Court Rules 74-05, 74-06, and 75.01 each provide procedural means by which to set aside judgments, each rule having its own standard for relief. Rule 75.01 contains the least stringent standard because it inheres while the trial court retains jurisdiction of the case. The trial court may set aside its judgment before it becomes final, for “good cause.” Rule 75.01. Rule 74.05(c), governing defaults, requires more, allowing a court to set aside a default judgment for “good cause” if the party can show “facts constituting a meritorious defense.” (emphasis added). Finally, Rule 74.06(b), as pertinent here, allows a court to set aside a final judgment after a court has ruled on the merits of a case, but only if the party is able to show excusable neglect. Rule 74.06(b) is, therefore, read to require the highest standard of the three rules for setting aside a judgment, giving effect to the interests in stability of final judgments and precedent.

Recognizing that there is much greater liberality in reopening a judgment after a default than in reopening a judgment that comes after a hearing on the merits, Ms. Cotleur seeks to bring her appeal within the purview of the default provisions of Rule 74-05. In her motion to set aside, Ms. Cotl-eur denominated the judgment in the trial court a default judgment and takes that position on appeal. Before 1988, Missouri’s default rule provided:

If a defendant shall fail to file his answer or other pleading within the time prescribed by law or the rules of practice of the court, and serve a copy thereof upon the adverse party, or his attorney, when the same is required, an interlocutory judgment shall be given against him in default.

Rule 74.045, repealed and amended by Rule 74-05. Missouri courts uniformly interpreted the rule to mean that where a defendant filed an answer, but failed to appear for trial, the judgment was not in default, but instead, rested on the merits. See Ozark Mountain Timber Products, Inc. v. Redus, 725 S.W.2d 640 (Mo.App.1987); Ward v. Davis, 701 S.W.2d 192 (Mo.App.1985); Meyerhardt v. Fredman, 131 S.W.2d 916 (Mo.App.1939).

On May 22, 1987, this Court adopted a new default judgment rule which became effective on January 1, 1988. The rule now provides: “When a party against whom a judgment for affirmative relief is sought has failed to plead or otherwise defend as provided by these Rules, an interlocutory order of default may be entered against that party.” Rule 74.05(a).

Ms. Cotleur’s argument in essential part turns on the interpretation of the words “or otherwise defend.” Ms. Cotleur urges a reading of the phrase “or otherwise defend” to mean “and fails to defend in ways in addition to filing pleadings, pretrial motions, challenges to such motions as service, jurisdiction, venue, and the sufficiency of prior pleading.” There is not unanimity of authority in other jurisdictions with respect to the interpretation of the words “or otherwise defend.” Ms. Cotleur urges that the current language of Rule 74.05(a) changed the rule so that the rule now should be broadly construed to include a wide range of failures on the part of counsel and parties as bases for default judgment, including circumstances such as hers in which a party actively participates in litigation, then fails to appear at a hearing or trial.

It is first worth noting, apart from the disagreements over the meaning of the amendment in other respects, that there is one plain and essential change effected by the amendment. Prior to 1988, the rule required a trial court to enter a default judgment against a defendant who failed to file an answer or other pleading within the time prescribed. The requirement is removed by the current rule under which, should a defendant appear and state a desire to contest the action, the court may, in the exercise of its discretion, refuse to enter a default.

In respect of the arguments made by the parties in this case, interpretation of the language of the rule calls simply for a policy decision. Having fully considered the interpretation urged by Ms. Cotleur and the effects of that interpretation, this Court rejects the broad brush in favor of interests affecting the orderly conduct of judicial process and the stability of judgments. The rule continues to be that where a party such as Ms. Cotleur files a petition, then files an answer to a cross-petition, but fails to appear for trial, the judgment is not a default judgment but, rather, is a judgment on the merits. This interpretation allows a party to come into court, abide by the Rules of Civil Procedure, and obtain a judgment upon which the party seeking affirmative relief should, absent circumstances found according to Rule 74-06, be able to depend.

Ms. Cotleur also suggests that, even though she may not otherwise come within the purview of Rule 74-05, the Court must treat the case as a true default because strict rules pertaining to the setting aside of judgments are less rigorously applied where custody of children is involved. She cites in support Hinson v. Hinson, 518 S.W.2d 330, 332 (Mo.App.1975).

The trial court did not abuse its discretion in matters affecting the welfare of the minor child in this case. The present case is entirely distinguishable from Hinson, where specific allegations of neglect of the minor child and unfitness of each of the parties were asserted by each of the parties from the outset. Ms. Cotleur’s petition for dissolution of marriage requested that joint legal custody be awarded to the parties. From this position Ms. Cotleur did not deviate, even when filing a first amended petition after Mr. Danziger had cross-petitioned seeking primary physical custody.¹ Not until the motion to set aside was filed was there any allegation with respect to the concern for the welfare of the minor child, and the expression did not come from Ms. Cotleur herself. She filed no affidavit, nor did she ultimately testify at the hearing on the motion to set aside. At the hearing on the motion to set aside, Ms. Cotleur’s counsel and Mr. Danziger’s counsel stipulated to admission of records relating to the allegations with respect to the child contained in the motion to set aside. There is no indication that the court failed to view them. Subsequent to the hearing, Mr. Kelly argued vehemently in a twelve page post-hearing motion all facts most favorable to his client, including those relating to the minor child. The trial court cannot be said to have abused its discretion in refusing to set aside the judgment on the basis of allegations touching upon the custody of the minor child under the facts and circumstances of this case.

This brings the Court to Ms. Cotleur’s alternative claim on appeal, that the motion court violated Rule 74..06(b) because Ms. Cotleur, herself, was not guilty of inexcusable neglect and her lawyer’s neglect is not imputable to her because he abandoned the defense of the case without notice to her.

Rule 74.06(b) provides in pertinent part that upon such terms as are just, the court may relieve a party or the party’s legal representative from a final judgment or order for “excusable neglect.” Rule 74.06(b). The rule permits, but does not require, Missouri courts to set aside a final judgment where a party is able to show excusable neglect.² Missouri trial courts have broad discretion in deciding whether to grant a motion to set aside a final judgment. Jeffries v. Jeffries, 840 S.W.2d 291 (Mo.App.1992); Burris v. Terminal R.R. Ass’n, 835 S.W.2d 535 (Mo.App.1992); In re Marriage of Clark, 813 S.W.2d 123 (Mo.App.1991).

Ms. Cotleur presumes neglect on the part of Mr. Kelly and presumes the neglect is inexcusable; she does not contest the trial court’s finding in that respect. Her contentions in the alternative under this point are that her own neglect was not inexcusable, and that Kelly’s neglect should not be imputed to her because Kelly abandoned the defense of her case without notice.

Ms. Cotleur’s argument regarding whether her own lack of culpability formed a basis for relief under Rule 74.06(b) was not placed at issue in the trial court. Since the issue was not before the trial court, it is not a proper subject for review.

It remains to address Ms. Cotleur’s argument that Mr. Kelly’s neglect should not be imputed to her. Generally, actions of a party’s attorney, including procedural neglect that precludes a Ghent’s substantive rights, are imputed to the client. Sprung v. Negwer Materials, Inc., 775 S.W.2d 97, 100 (Mo. banc 1989); Whitledge v. Anderson Air Activities, Inc., 276 S.W.2d 114 (Mo.1955); Rice v. Rice, 757 S.W.2d 644 (Mo.App.1988); Rucker v. Thrower, 559 S.W.2d 40, 42 (Mo.App.1977). Culp v. Culp, 216 S.W.2d 551 (Mo.App.1948).

The rule attributing an attorney’s neglect to the party is a harsh rule. The effect of imputing the neglect of the attorney in this case to Ms. Cotleur is to impose the judgment on her despite her having given responsibility for prosecuting and defending the cáse to one upon whom she should have been able to rely. The consequence of not imputing the neglect to the party, however, is to excuse the attorney of professional negligence, an excuse the law does not and cannot countenance.

A narrow exception to the rule imputing an attorney’s neglect to a client applies when an attorney abandons a client without notice. Whitledge v. Anderson Air Activities, Inc., 276 S.W.2d 114 (Mo.1955); Parks v. Coyne, 156 Mo.App. 379, 137 S.W. 335 (1911). Negligence is not equivalent to abandonment. Circumstances in which an attorney engages in representation of a client but fails properly to handle the matter is not abandonment. Rucker v. Thrower, 559 S.W.2d 40, 42 (Mo.App.1977).

Examination of the record shows that Mr. Kelly did not abandon Ms. Cotleur. Mr. Kelly represented Ms. Cotleur at the pleading stages and through discovery. Mr. Kelly, having learned of the trial setting, simply did not insure that the matter was covered. He continued in Ms. Cotleur’s representation after the hearing. After learning of the judgment, he filed two motions attempting to have the judgment set aside and later attempted to initiate an appeal.³ Failure to appear at trial is not enough, standing alone, to constitute grounds for setting aside a judgment. Clinton v. Clinton, 444 S.W.2d 677, 680-81 (Mo.App.1969).

This case is not similar to Parks v. Coyne, 156 Mo.App. 379, 137 S.W. 335 (1911), upon which Ms. Cotleur relies, where a defendant was caused to believe that his insurance company’s attorney would provide a defense, but completely failed to do so. The Parks court held that the negligence of an attorney is attributed to the client, but where an attorney abandons a client’s cause without notice, the client should be given a reasonable time to secure counsel before the attorney’s neglect is attributed to the client. Parks, 137 S.W. at 340. Here, Mr. Kelly represented Ms. Cotleur throughout the pleading and discovery stages of the litigation and continued to represent Ms. Cotleur after trial.

The facts of this case are of the sort that tempt courts to make “bad law,” because no court takes pleasure in viewing the possibility of damage to a client at the hands of a member of the legal profession. The question of the existence of damage is, however, a question for another day, in a different context, and under the law governing the points on appeal in this case, the judgment must be affirmed.

In summary, the judgment entered in this case was not a default judgment. Schulte v. Venture Stores, Inc., 832 S.W.2d 13 (Mo.App.1992), and Hoskin v. Younger Cemetery Corp., 838 S.W.2d 476 (Mo.App.1992), to the extent that they conflict, are overruled. The inexcusable neglect of counsel was imputable to his client, counsel not having abandoned his client.

The judgment is affirmed.

BENTON, PRICE and LIMBAUGH, JJ., concur.

ROBERTSON, J., dissents in separate opinion filed.

HOLSTEIN and THOMAS, JJ., concur in opinion of ROBERTSON, J.

1 . In her answer to Mr. Danziger’s cross-petition, Ms. Cotleur denied the respondent's boilerplate assertion that he was a fit and proper person to have custody of the child, preliminary to his request that the child’s primary residence be with him.

2 . See generally Nanette K. Laughrey, Judgments — The New Missouri Rule, 44 J.MO.B. 11, 16-18 (1988).

3 . Mr. Kelly, of course, did not present the claim of abandonment to the trial court. The first time the question of abandonment could reasonably have been raised in this case was on appeal because Mr. Kelly was representing Ms. Cotleur at the proceeding on the motion to set aside.