Hutton v. Fisher

HASTIE, Circuit Judge.

In this personal injury case defendants are appealing from an order denying their motion to set aside a default and a judgment entered thereon pursuant to a jury’s assessment of damages in the amount of $195,000.

The accident in suit occurred August 5, 1958 and admittedly resulted in very severe permanently incapacitating injury to Eddie Graybeal, a minor on whose behalf this action was subsequently instituted. A week after the accident, Lawrence MacElree, Esquire, who had been retained in the interest of the injured youth wrote the defendant Joseph Fisher asking that Fisher’s lawyer get in touch with him concerning a possible amicable settlement. Subsequently, Mr. MacElree met Francis Tworzydlo, Esquire, in the Chester County Courthouse and was informed that Tworzydlo was representing the Fishers in this matter. Settlement negotiations did not materialize.

This suit was filed on July 7, 1960 naming as defendants Joseph Fisher, his wife Florence and their minor son Howard. Mr. Tworzydlo asserts that he telephoned Mr. MacElree on July 29, 1960, requesting additional time to answer and was assured that he might have whatever time he wanted. Mr. MacElree states that he does not remember the conversation, but the court below credited Mr. Tworzydlo’s statement, and so do we.

On October 5, 1960, Richard Reifsny-der, Esquire, who very recently had become associated with Mr. MacElree in the practice of law and to whom Mac-Elree had assigned this case without mention of Tworzydlo’s involvement in the matter, filed a motion for the entry of a default and for judgment against the three defendants, correctly averring that no appearance or answer had been filed on their behalf. The motion also contained an averment under oath that “to the best of his knowledge, information and belief”, no defendant was an infant. It is now admitted that the defendant Howard Fisher was a minor, although that fact was then unknown to Reifsny-der. On October 5, 1960, the very day the motion was filed, the court entered a default as prayed and listed the case for future trial by jury to assess damages.

Jury trial had originally been demanded in the complaint, but on November 2, 1960 the plaintiff moved to transfer the case to the nonjury list and this motion was promptly granted. Then, on February 8, 1961, the plaintiff moved to place the case again on the jury list and this motion was granted.

All of the above outlined judicial proceedings after the filing and serving of the complaint were ex parte and without notice to the defendants.

Almost three years later, on October 30, 1963 the deputy clerk of the district court in charge of the calendar mailed to the defendants a notice to appear in court November 1 at 10:00 A.M. if they wished to contest the question of damages which would be tried that day. The defendants received this letter on October 31, 1963 and appeared in court the next morning accompanied by their attorney, Mr. Tworzydlo. They had received no other notice that a default had been entered against them or that damages were to be assessed.

It also appears that on October 30, 1963, before notice to the defendants, a jury was selected to try the issue of damages. When the defendants and their counsel appeared on the morning of November 1, counsel moved for a continuance on the ground that, because notice had been received only the preceding evening, the defendants were unavoidably unprepared for trial. This motion was denied, for the stated reason that a jury had already been selected and was waiting to try the matter. The court then suggested, and defense counsel orally agreed, that if subsequent consideration of the circumstances should result in setting aside the default and the question of liability should be litigated, the defendants would not seek a second assessment of damages but would be bound by whatever finding the jury should make in the hearing about to begin. The issue of damages was then tried forthwith. The jury returned a verdict of $195,000 and the same day judgment was entered on that verdict.

On November 12, 1963 the defendants moved to set aside the default and the judgment entered thereon. This matter was heard on affidavits and agreed facts. The motion was denied as to the adult defendants, Joseph and Florence Fisher, and granted as to the minor Howard Fisher.¹ Joseph and Florence Fisher have appealed.

The failure of counsel who had been retained by the defendants to ask the court for an extension of time for the filing of an answer soon after opposing counsel had given his consent was plainly negligent. Subsequently, despite his ignorance of the default entry, counsel’s failure to file any pleading or take any step in the litigation in his client’s interest for nearly three years and until notice of an imminent hearing to assess damages was grossly negligent and inexcusable.

Yet, we think it should be considered that the entry of default in all likelihood would have been avoided or quickly challenged but for questionable procedure and one serious, though unintentional, misrepresentation of fact by the plaintiff’s counsel. The plaintiff’s original and senior counsel knew that Francis Tworzydlo, a local attorney with whom he was acquainted, had been retained to defend against this claim. Moreover, about three weeks after the complaint had been filed he had acquiesced in Tworzydlo’s request for more time to answer. Yet, two months later plaintiff’s junior counsel requested and obtained an order of default without notice to Tworzydlo and without advising the court of the informal agreement between opposing counsel. It is candidly admitted that these omissions occurred because junior counsel was ignorant of conversations in which his senior associate had participated. In these circumstances, junior counsel undoubtedly acted in good faith and in accordance with applicable rules. But if his more informed senior associate had obtained this default without advising the court that he had consented to whatever additional time the defendant might require to answer, this withholding of relevant information would in itself have been enough to justify the setting aside of the default. In these circumstances we think failure of communication within a law office should not be permitted to impose a disadvantage upon the opposing party. Cf. Elias v. Pitucci, E.D.Pa.1952, 13 F.R.D. 13; Rogers v. Arzt, S.D.N.Y. 1941, 1 F.R.D. 581.

Another consideration stems from the fact that one of the three defendants, apparently the individual who is said to have been operating the tractor on the occasion of the plaintiff’s injury, was the minor son of the two adult defendants. Rule 55, Federal Rules of Civil Procedure, clearly prohibits the entry of a default judgment against a minor until a guardian shall have been appointed for him and he shall have received notice of the application for judgment by default. In this case, the plaintiff erroneously informed the court that all of the defendants were adults and then proceeded against all of them without notice. Technically, no wrong may have been done to the adult defendants. However, the giving of legally required notice to their son and co-defendant, who was a member of their household, would have informed them of the imminence of action against them as defaulters and thus would have enabled them to take appropriate steps.

It is also noteworthy that the plaintiff, after asking in his complaint for a jury trial, subsequently moved for and obtained an order for a non jury hearing to assess damages. Still later he again changed his position, moving for and obtaining an order for a jury trial on the issue of damages. Both of these motions were filed and granted without any notice to the defendants. While the provisions of Rules 38 and 39, Federal Rules of Civil Procedure, concerning notice and consent in connection with requests for and waivers of jury trial are not expressly made applicable to default situations in which the issue of damages must be tried, we think the requirements of notice or consent stated in those rules should in fairness and logic be applied to cases of the present type. For even one who fails to contest liability on an unliquidated claim has a vital interest in the subsequent determination of damages and is entitled to be heard on that matter. Cf. Bass v. Hoagland, 5th Cir. 1949, 172 F.2d 205; Cinque v. Langton, E. D.N.Y.1944, 8 F.R.Serv. 55b.224, case 1. Here again notice to the defendants that the plaintiff was requesting orders changing the method of trial would have alerted the defendants to the fact that the case was active and that steps needed to be taken in their behalf.

In weighing the considerations set out in the preceding paragraphs we have been mindful that this court has clearly stated its reluctance to permit the final disposition of substantial controversies by default. “Matters involving large sums should not be determined by default judgments if it can reasonably be avoided. * * * Any doubt should be resolved in favor of the petition to set aside the judgment so that cases may be decided on their merits.” Tozer v. Charles A. Krause Milling Co., 3d Cir. 1951, 189 F. 2d 242, 245. See also Bridoux v. Eastern Air Lines, D.C.Cir. 1954, 214 F.2d 207, 210.

The matter involved in this case is substantial and the defendants have represented that if permitted to offer a defense they will show that the injured party was himself a negligent trespasser and that, in any event, the operation of the tractor involved no such extreme fault as must be established to enable a trespasser to recover. In addition, the defendant Florence Fisher seeks to show that she was neither the owner of the tractor nor in any way responsible for its operation. All of these circumstances considered, though original defense counsel may well have been the person most at fault in grossly neglecting this litigation, we think the plaintiff should not be allowed to take advantage of a default which would probably have been avoided or corrected had the plaintiff proceeded as could reasonably be expected or required at any of several stages of the litigation.

We have also considered the oral stipulation of the defendants’ original counsel when the damage issue was called for trial that in the event a new trial should later be granted as to liability the issue of damages need not be tried again. Normally, any such commitment by counsel is binding upon the party who has entrusted management of the case to counsel. Yet, we cannot avoid observing that this was a remarkable stipulation. Notice of the November 1 hearing on damages had been received only the preceding evening. Counsel’s motion for a continuance, made at the court’s convening on November 1, had just been denied on the ground that a jury had already been selected and was waiting. Thus, it is clear that the defendants had no opportunity to prepare for trial on the issue of damages or to participate in the selection of a jury to decide this issue. We cannot see what advantage counsel may have hoped to gain for his client by agreeing to accept as finally determinative of damages an assessment made under circumstances about as disadvantageous to his clients as could be imagined. Accordingly, we would be reluctant to give effect to the stipulation were it not for still another consideration.

Even now the defendants’ present new counsel does not urge that the jury’s award of $195,000 is excessive. This is entirely understandable. It is admitted that the accident has made a 16 year old boy an almost helpless invalid for life. For such injury an award of $195,000 is not shocking and does not appear in any way unreasonable. Thus, we cannot say that the consequence of the stipulation has been to impose a harsh assessment upon the defendants. Absent any showing of harm to the defendants, we are constrained to let the assessment stand as agreed by counsel.

The default judgment will be vacated and the cause remanded for a trial limited to the issue of liability. If the defendants or either of them shall be found liable, judgments shall be entered for the plaintiff in the amount of $195,000.

1 . The district court subsequently dismissed the action as to Howard Fisher.