FIFTH THIRD BANK v. TERRY R. BRADY, Defendant-Respondent

Missouri Court of Appeals
Southern District
Division One
FIFTH THIRD BANK, )
)
Plaintiff-Appellant, )
)
vs. ) No. SD35636
)
TERRY R. BRADY, ) Filed June 4, 2019
)
Defendant-Respondent. )
APPEAL FROM THE CIRCUIT COURT OF PHELPS COUNTY
Honorable John D. Beger, Circuit Judge
AFFIRMED
Fifth Third Bank (“Bank”) appeals the trial court’s judgment denying its Rule 74.06(b)(3)
motion (the “motion”) to set aside a judgment entered against it and in favor of Terry R. Brady
(the “underlying judgment”). 1 Bank asserts two points relied on, claiming that the trial court
erred in denying the motion because the trial court “applied the incorrect standard for timeliness”
and the underlying judgment is irregular. Determining that Bank’s first point has no merit and
that its denial is dispositive, we affirm.
1
All rule references are to Missouri Court Rules (2018).
1
The motion was made over eleven months after entry of the underlying judgment. 2 The
motion contains no factual allegations addressing this delay and is unverified. Bank has failed to
provide us with a record of any evidence presented to the trial court related to or addressing in
any manner the reason for this delay. Bank concedes in its brief on appeal that the trial court
denied its motion because, among other reasons, it was not made within a reasonable time after
the judgment was entered.
In its first point relied on, Bank contends that the trial court “applied the incorrect
standard for timeliness” because the motion was “made within one year after the judgment was
entered.”
In the argument under its point, however, Bank changes its contention to claim that the
trial court erred in denying the motion because it “was made within a reasonable period of time
that was not more than one year after the judgment was entered.” 3 (Emphasis added). In support
of its new “reasonable time” argument, Bank argues that, “[w]hile Missouri courts have favored
[a] ‘sooner-better-than-later concept’, it is clear through the plain reading of the Rule, that the
motion may be reasonable if made within one year of the judgment.” (Emphasis added).
Reciting the underlying facts in Capital One Bank v. Largent, 314 S.W.3d 364, 367 (Mo.App.
2010), Bank posits that the Eastern District of our court “found that the movant’s eight-month
delay in challenging the default judgment [under Rule 74.05] was reasonable.” In an effort to
2
The trial court entered the underlying judgment on August 2, 2017, and the Bank filed the motion on July 6, 2018.
3
“When an appellant fails to support a point with relevant legal authority or argument…, the point is deemed
abandoned.” Smith v. Med Plus Healthcare, 401 S.W.3d 573, 576 (Mo.App. 2013). Similarly, “[i]ssues to which
an appellant alludes only in the argument portion of [appellant’s] brief are not presented for review.” In re
Marriage of Flud, 926 S.W.2d 201, 206 (Mo.App. 1996). While Bank’s change in contentions between its point
and argument results in neither being reviewable on appeal, we ex gratia consider whether the trial court abused its
discretion in determining that the motion was not made within a reasonable time after the judgment was entered
because that is the sole focus of Bank’s argument.
2
demonstrate that the underlying factual basis for its delay here is similar to that in Largent, 4
Bank then proffers a two-sentence factual explanation for its delay in making the motion. That
explanation, however, is not supported by any citations to the record on appeal, as required by
Rule 84.04(e), 5 and, upon our independent review, is not supported by the record on appeal.
Finally, in conclusion, Bank requests that this court find that its motion “was filed within a
reasonable period of time[.]”
Bank had the burden of proving in the trial court that it was entitled to Rule 74.06(b)
relief. First Bank of The Lake v. White, 302 S.W.3d 161, 165 (Mo.App. 2009). “[A] Rule
74.06 motion to set aside a final judgment does not prove itself any more than does any other
unverified motion or pleading.” Agnello v. Walker, 306 S.W.3d 666, 675 (Mo.App. 2010)
(citing Weidner v. Anderson, 174 S.W.3d 672, 677 (Mo.App. 2005)). “The motion court is
afforded broad discretion when acting on a Rule 74.06 motion, and an appellate court should not
interfere unless the record demonstrates an abuse of the motion court’s discretion.” First Bank
of The Lake, 302 S.W.3d at165 (citing Jeffries v. Jeffries, 840 S.W.2d 291, 293 (Mo.App.
1992)). Bank, therefore, had the burden to prove that the motion was “made within a reasonable
time and . . . not more than one year after the judgment or order was entered.” Rule 74.06(c)
(emphasis added). While the legal file establishes the latter, Bank has failed to cite us to
anything in the record on appeal providing a purported factual basis upon which the trial court
could have found that the motion was made within a “reasonable time,” much less demonstrating
4
While Bank cites to and relies on Largent for its factual similarities to Bank’s alleged underlying facts here, Bank
cites no legal authority supporting the contention, somewhat implied by its shifting contentions between its point
and its argument, that because its Rule 74.06(b) motion was made within one year after the judgment was entered, it
was made within a “reasonable time” as a matter of law. Due to the obscurity of this contention in Bank’s point and
argument and the complete absence of relevant legal authority and a cogent supporting legal argument, we need not
address that contention.
5
Rule 84.04(e) provides, in relevant part, that “[a]ll factual assertions in the argument shall have specific page
references to the relevant portion of the record on appeal, i.e., legal file, transcript, or exhibits.”
3
that the trial court abused its discretion in rejecting that purported factual basis. Bank’s attempt
in its brief to provide an explanation for its delay is unavailing. “[T]his Court will not consider
documents and testimony outside the record on appeal.” In re Adoption of C.M.B.R., 332
S.W.3d 793, 823 (Mo. banc 2011) (abrogated on other grounds by S.S.S. v. C.V.S., 529 S.W.3d
811, 816 (Mo. banc 2017)). Where an appellant proffers evidence outside the record, it will not
be considered on appeal. Id.
The factual basis for determining the “reasonable time” issue is considered on appeal as
having been found by the trial court in accordance with the judgment adverse to Bank, i.e., the
trial court found no such factual basis. See Rule 73.01(c) (“All fact issues upon which no
specific findings are made shall be considered as having been found in accordance with the result
reached.”). Bank’s failure to offer any evidence 6 to support a “reasonable time” factual basis
necessarily dooms any abuse of discretion challenge to the trial court’s adverse factual finding on
that issue. See First Bank of The Lake, 302 S.W.3d at 169 (no abuse of discretion in failure to
find factual issue when movant failed to present any evidence to the motion court of existence of
that issue and presuming otherwise would effectively shift the burden of proof to non-moving
party). Bank has provided us with no factual or legal basis for a decision on its first point other
than the trial court did not abuse its discretion in denying the motion because it was not made
within a reasonable time after the underlying judgment was entered. On that basis, Bank’s first
point is denied.
Because the motion was not timely made, Bank’s second point challenging the
substantive basis for its denial is moot and need not be considered.
6
“[A]rgument of counsel does not qualify as sworn and competent testimony and does not replace movant’s burden
of proof requirement to produce competent and sworn testimony or evidence.” Agnello, 306 S.W.3d at 675.
4
For the above reasons, the trial court’s judgment is affirmed. 7
GARY W. LYNCH, J. – OPINION AUTHOR
DON E. BURRELL, P.J. – concurs
NANCY STEFFEN RAHMEYER, J. – concurs in result in separate opinion
7
Brady filed a Rule 84.19 motion for sanctions. “An appeal is frivolous if it presents no justiciable question and is
so readily recognizable as devoid of merit on the face of the record that there is little prospect it can ever succeed.”
Papineau v. Baier, 901 S.W.2d 190, 192 (Mo.App. 1995) (internal quotations and citation omitted). “We will
award damages under Rule 84.19 only with great caution lest we chill others from filing meritorious appeals.”
Johnson v. Aldi, Inc., 971 S.W.2d 911, 913 (Mo.App. 1998). Bank’s appeal is not so devoid of merit it warrants
sanctions. Brady’s motion for sanctions is denied.
5
FIFTH THIRD BANK, )
)
Plaintiff-Appellant, )
)
v. ) No. SD35636
)
TERRY R. BRADY, ) Filed: June 4, 2019
)
Defendant-Respondent. )
APPEAL FROM THE CIRCUIT COURT OF PHELPS COUNTY
Honorable John D. Beger, Circuit Judge
CONCURS IN RESULT
I concur with the result in the majority opinion but for a different reason. I
believe, even if we assume the trial court found the motion was not filed in a reasonable
time, there are substantive reasons to affirm the judgment.
On July 13, 2016, Bank filed a petition for breach of contract against Terry R.
Brady (“Brady”). The case was dismissed without prejudice by the trial court on
November 17, 2016, after Bank failed to furnish costs as previously ordered. Bank filed
a Motion to Set Aside Dismissal on December 14, 2016, and deposited $100 as Security
for Costs. On that same day, the trial court set aside the dismissal.
On March 10, 2017, Brady filed a Motion to Continue Trial and for Leave to File
Responsive Pleadings. On March 13, 2017, Bank filed a Motion for Default Judgment
based on Brady’s failure to file responsive pleadings. The following day, the trial court
granted Brady’s Motion to Continue Trial and for Leave to File Responsive Pleadings.
Brady filed his Answer to Bank’s Petition on March 27, 2017.
On April 5, 2017, Brady served Bank with his First Interrogatories Directed to
Plaintiff, First Request for Production of Documents Directed to Plaintiff, and First
Request for Admissions Directed to Plaintiff. On May 8, 2017, Brady filed a Motion to
Compel Bank’s responses. Bank filed a Motion for Extension of Time to Respond to
Discovery on May 11, 2017. In its motion, Bank stated that it “mistakenly believed that
[Brady] had agreed to extensions of time to respond to discovery requests while
settlement negotiations were ongoing.” On May 15, 2017, the trial court took up Brady’s
Motion to Compel and Bank’s Motion for Extension of Time. The trial court granted
Brady’s Motion to Compel and denied Bank’s Motion for Extension of Time.
In its Order, the trial court ordered Bank to provide responses without objection to
Brady within 20 days and noted that the cause was set for bench trial on September 5,
2017. On July 7, 2017, Brady filed a Motion for Sanctions for Failure to Provide
Discovery. In his motion, Brady argued that Bank’s failure to provide complete
discovery responses impeded his ability to prepare his defense against Bank’s allegations.
Brady requested that the trial court strike Bank’s pleadings, or in the alternative, restrict
Bank’s testimony and evidence at trial concerning matters within the scope of Brady’s
request. On July 25, 2017, Bank filed three certificates of service indicating it had served
its discovery responses on that date. On July 26, 2017, Bank filed a response to Brady’s
2
Motion for Sanctions and stated that its delay was “a case of excusable neglect.” The
following day, the trial court heard arguments on Brady’s Motion for Sanctions. On July
28, 2017, Brady filed a Brief in Support of His Motion for Sanctions for Failure to
Provide Discovery. In Brady’s Brief in Support of His Motion for Sanctions for Failure
to Provide Discovery, Brady alleged that Bank failed to participate in discovery in good
faith.
On August 2, 2017, the trial court entered its Judgment granting Brady’s Motion
for Sanctions and ordering that Bank’s Petition be stricken and entered a judgment by
default pursuant to Rule 61.01. 1 In its Judgment, the trial court found “[Bank] has shown
contumacious and deliberate disregard for the authority of the court.”
On July 6, 2018, 338 days after the entry of the Judgment, Bank filed a Motion to
Set Aside Judgment and a Memorandum of Points and Authorities in Support of its
Motion to Set Aside Judgment. On July 19, 2018, the trial court denied Bank’s Motion to
Set Aside Judgment. Bank filed its Notice of Appeal on July 27, 2018.
Bank’s second point argues that the original judgment was “premature” and
“materially contrary to an established form and mode of procedure for the orderly
administration of justice.” 2 I find neither of these arguments convincing.
1
A “default judgment” entered pursuant to Rule 61.01 is treated as a judgment on the merits. Greasel
Conversions, Inc. v. Massa, 399 S.W.3d 456, 461 (Mo.App. S.D. 2013). The default judgment rule does
not apply because the judgment is not a “default” in the ordinary sense; it is a product of a sanction. Id.
“‘Rule 74.05 is inapplicable where a trial court strikes a party’s pleadings and enters judgment as a sanction
for the party’s failure to comply with a discovery order.’” Id. (quoting Lindsey v. Lindsey, 336 S.W.3d
487, 492 (Mo.App. E.D. 2011)). Rule 74.06 rather than Rule 74.05 applies to setting aside judgments on
the merits. See Cotleur v. Danziger, 870 S.W.2d 234, 236 (Mo. banc 1994) (“Rule 74.06(b) . . . allows a
court to set aside a final judgment after a court has ruled on the merits of a case[.]”)
2
In its argument, Bank argues that the judgment is “irregular.”
3
Point II challenges the trial court’s denial of Bank’s Motion to Set Aside
Judgment entered as a sanction for failure to comply with a discovery order. Rule
74.06(b) provides that a court,
[o]n motion and upon such terms as are just, . . . may relieve a party . . .
from a final judgment or order for the following reasons: (1) mistake,
inadvertence, surprise, or excusable neglect; (2) fraud (whether heretofore
denominated intrinsic or extrinsic), misrepresentation, or other misconduct
of an adverse party; (3) the judgment is irregular; (4) the judgment is void;
or (5) the judgment has been satisfied, released, or discharged, or a prior
judgment upon which it is based has been reversed or otherwise vacated, or
it is no longer equitable that the judgment remain in force.
(Emphasis added).
In Point II, Bank argues that the “trial court erred in denying the Motion to Set
Aside Default Judgment, because the premature judgment is materially contrary to an
established form and mode of procedure for the orderly administration of justice, in that
the trial court reached procedural errors which, if known, would have prevented entry of
a judgment.” 3 Bank seems to address “irregularity” 4 in Point II, arguing that the
Judgment is “irregular” because the trial court should have imposed lesser sanctions
before entering a default judgment for failing to comply with the discovery order. Bank’s
analysis is wrong for several reasons.
An irregular judgment is one “materially contrary to an established mode of
procedure for the orderly administration of justice.” Burris v. Terminal R.R. Ass’n, 835
S.W.2d 535, 538 (Mo.App. E.D. 1992). “The rule reaches only procedural errors which,
3
Bank’s Point II fails to comply with Rule 84.04(d) in that it fails to “[e]xplain in summary fashion, why,
in the context of the case, [the] legal reasons support the claim of reversible error.” Rule 84.04(d)(1)(C)
(emphasis added).
4
Likewise, Bank assumes the default judgment was “irregular” in Point I without explaining how the
judgment is irregular.
4
if known, would have prevented entry of a judgment.” Id. The default judgment against
Bank was expressly authorized by Rule 61.01(b)(1) and (d)(2). Rule 61.01 provides, in
relevant part:
(b) Failure to Answer Interrogatories. If a party fails to answer
interrogatories or serve objections thereto within the time provided by law,
or if objections are served thereto that are thereafter overruled and the
interrogatories are not timely answered, the court may, upon motion and
reasonable notice to other parties, take such action in regard to the failure
as are just and among others the following:
(1) Enter an order striking pleadings or parts thereof or dismissing the action
or proceeding or any part thereof or render a judgment by default against
the disobedient party;
....
(d) Failure to Produce Documents and Things or To Permit Inspection. If a
party . . . fails to produce documents and tangible items as requested under
Rule 58.01, or timely serves objections thereto that are thereafter overruled
and the documents and things are not timely produced or inspection
thereafter is not timely permitted, the court may, upon motion and
reasonable notice to other parties, take such action in regard to the failure
as are just and among others the following:
....
(2) Enter an order striking pleadings or parts thereof or staying further
proceedings until the order is obeyed or dismissing the action or proceeding
or any part thereof or render a judgment by default against the disobedient
party[.]
It cannot be a procedural error for a court to do what is expressly permitted in the
Missouri Rules of Civil Procedure. Bank’s interpretation of Rule 61.01 would render it a
hollow threat. I would decline to take such an approach.
Missouri courts hold that where a party receives notice and an opportunity to be
heard prior to the entry of the default judgment, the judgment is not “irregular” (i.e.,
materially contrary to established forms and modes of procedure). Bank has failed to cite
any Missouri case law to support its position that the Judgment violated an established
5
form and mode of procedure and does not allege it did not receive notice or an
opportunity to be heard at the hearing prior to entry of the Judgment.
There is nothing in the record that demonstrates the trial court’s entry of the
Judgment was contrary to established procedure. To the contrary, the entry of a default
judgment for failure to provide discovery responses is consistent with the procedure set
forth in Rule 61.01(b)(1) and (d)(2) of the Missouri Rules of Civil Procedure. Bank does
not claim they did not receive notice or an opportunity to be heard prior to the entry of
the default judgment. Accordingly, I cannot say the trial court abused its discretion in
denying Bank’s Motion to Set Aside Judgment. I would affirm the judgment based on
Bank’s substantive appeal that the judgment was irregular.
Nancy Steffen Rahmeyer, J. – Concurring Opinion Author
6