THURMAN BAIRD v. ODCH, INC., D/B/A OWENSBORO DAVIESS COUNTY HOSPITAL; and OWENSBORO MERCY HEALTH SYSTEM, INC.
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RENDERED: December 18, 1998; 10:00 a.m.
NOT TO BE PUBLISHED
C ommonwealth O f K entucky
C ourt O f A ppeals
No.
1997-CA-002016-MR
THURMAN BAIRD
APPELLANT
APPEAL FROM DAVIESS CIRCUIT COURT
HONORABLE GARLAND W. HOWARD, JUDGE
ACTION NO. 97-CI-0446
v.
ODCH, INC., D/B/A OWENSBORO
DAVIESS COUNTY HOSPITAL; and
OWENSBORO MERCY HEALTH SYSTEM,
INC.
APPELLEES
OPINION
AFFIRMING IN PART
REVERSING IN PART AND REMANDING
* * * * * * *
BEFORE:
GUIDUGLI, JOHNSON, and KNOPF, Judges.
KNOPF, JUDGE:
The appellee, ODCH, Inc., d/b/a Owensboro Daviess
County Hospital and Owensboro Mercy Health System, Inc., (the
Hospital), filed a civil action against the appellant, Thurman
Baird, on April 15, 1997.
24, 1997.
Summons was issued to Baird on April
The Hospital sought to recover payment for medical
services rendered to Baird’s deceased wife in the amount of
$21,098.25.
Baird failed to respond to the complaint within
twenty (20) days.
On May 13, the twenty-first (21st) day after
issuance of the summons, the Hospital filed a motion for default
judgment.
The trial court granted the motion the following day,
and entered a judgment in favor of the Hospital in the requested
amount.
On May 16, Baird filed a motion to set aside the
default judgment.
An affidavit by the secretary for Baird’s
attorney was attached, stating that she had inadvertently
neglected to note the due date for the response on counsel’s
calendar.
In subsequent pleadings, Baird asserted that this
claim had previously been presented in probate to his wife’s
estate, in an amount substantially less than what the Hospital
now claimed.
Baird also contested the amount owed to the
Hospital.
On June 24, 1997, the trial court entered an order
denying the motion to set aside the default judgment.
On July 7,
Baird filed a “motion to amend findings and to make additional
findings.”
On July 28, 1997, following additional oral arguments
on the question, the trial court entered an additional order,
finding as follows:
Defendant did not show a valid excuse for
default, and did not make a showing of a
meritorious defense. The Court also finds
that there would be prejudice to the other
party in setting aside the Default judgment.
The Court further finds that the filing of
the motion pursuant to CR 52.02 was not filed
timely since it was not filed within 10 days
after entry of the judgment.
The Judge has previously ruled on these same
questions in this matter, and counsel for the
Defendant has made the same arguments that he
made prior to the last ruling in an order
issued by this Court on June 24, wherein the
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Defendant’s Motion to set aside the Default
Judgment was Overruled. However, with the
second argument presented to the Court,
counsel conceded the issue of liability on
the part of the Defendant, but seeks to
preserve the issue of amount owed by the
Defendant.
Record on Appeal [ROA], at pp. 43-44.
This appeal followed.
On the preliminary issue of
timeliness of the motion, the procedural posture of this case
presents several issues.
First, Baird filed his initial motion,
pursuant to CR 55.02, two (2) days after entry of the default
judgment.
While his counsel made several procedural missteps and
corrections, the initial motion was timely.
We interpret Baird’s July 7 pleading as a motion for
additional findings pursuant to CR 52.02, coupled with a motion
to alter amend or vacate a default judgment pursuant to CR 59.05.
Insofar as the motion sought to vacate or amend the trial court’s
prior order denying the motion to set aside the default judgment,
we agree that the motion was neither timely nor proper.
A motion
pursuant to CR 55.02 effectively functions as a motion to alter,
amend or vacate a judgment.
Once the trial court denied his
motion to set aside a default judgment, he was not entitled to a
second bite at the apple under CR 59.05.
However, insofar as the pleading served as a motion for
additional findings pursuant to CR 52.02, we find that the motion
was timely and proper.
When a court denies a motion to set aside
a default judgment, the court's order should be accompanied by
some articulation of the factual, legal and discretionary issues
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presented.
Greathouse v. American National Bank & Trust Co., Ky.
App., 796 S.W.2d 868, 870 (1990).
Baird was entitled to seek
more specific findings to preserve his rights on appeal.1
Furthermore, considering the intervening holiday, we find that
Baird filed his motion within ten (10) days from entry of the
order denying his motion to set aside the default.
We now turn to the substantive issue in this appeal.
Baird contends that the trial court abused its discretion when it
denied his motion to set aside the default judgment.
Default
judgments are covered by CR 55.01, which provides, in pertinent
part:
When a party against whom a judgment for
affirmative relief is sought has failed to
plead or otherwise defends as provided by
these rules, the party entitled to a judgment
by default shall apply to the court
therefor....The motion for judgment against a
party in default for failure to appear shall
be accompanied by a certificate of the
attorney that no papers have been served on
him by the party in default. If, in order to
enable the court to enter judgment or to
carry it into effect, it is necessary to take
into account or to determine the amount of
damages or to establish the truth of any
averment by evidence or to make an
investigation of any other matter, the court,
without a jury, shall conduct such hearings
or order such references as it deems
necessary and proper, unless a jury is
demanded by a party entitled thereto or is
mandatory by statute or by the constitution.
A party in default for failure to appear
shall be deemed to have waived his right of
trial by jury.
1
In fact, in its order entered July 24, 1997, the trial
court set out its reasons for denying the motion to set aside the
default judgment in greater detail.
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A default judgment may be set aside for good cause
shown in accordance with CR 60.02. CR 55.02.
Among other
reasons, CR 60.02 permits relief from a judgment due to “mistake,
inadvertence, surprise or excusable neglect.”
disfavors default judgments.
The law clearly
Moreover, the trial court has wide
discretion to set aside a default judgment.
A liberal attitude
should be observed toward a timely application to set aside a
default judgment, although delay in pleading without reasonable
excuse cannot always be overlooked.
335 S.W.2d 351, 354 (1960).
Childress v. Childress, Ky.,
Nonetheless, a motion to set aside a
default judgment addresses itself to the sound discretion of the
trial court and the exercise of that discretion will not be
disturbed on appeal except for abuse.
Richardson v. Brunner,
Ky., 327 S.W.2d 572, 574 (1959).
The moving party cannot have the judgment set aside and
achieve his day in court if he cannot show good cause and a
meritorious defense.
Good cause is most commonly defined as a
timely showing of the circumstances under which the default
judgment was procured.
Green Seed Co. v. Harrison Tobacco
Storage Warehouse, Inc., Ky.App., 663 S.W.2d 755, 757 (1984).
To
set aside a default judgment, the moving party must show:
1) a valid excuse for the default;
the claim;
party.
(2) a meritorious defense to
and (3) absence of prejudice to the non-defaulting
Perry v. Central Bank & Trust Co., Ky.App., 812 S.W.2d
166, 170 (1991).
Absent a showing of all three (3) elements, the
default judgment need not be set aside.
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Sunrise Turquoise, Inc.
v. Chemical Design Co. Inc., Ky.App., 899 S.W.2d 856, 859 (1995).
We take issue with the trial court’s finding that the
Hospital would be prejudiced by setting aside the default
judgment.
There was no evidence offered that the Hospital’s
prosecution of its claim against Baird would be prejudiced in any
way.
Indeed, the Hospital had previously asserted that Baird was
liable, by written agreement, to reimburse it for attorney fees
and expenses incurred in enforcing payment of the indebtedness.
Therefore, the trial court’s finding of prejudice was clearly
erroneous.
Nonetheless, we must agree that Baird’s counsel failed
to present sufficient grounds to set aside the default judgment.
Mere inattention on the part of a defendant does not constitute
good cause to set aside a default judgment.
Perry v. Central
Bank & Trust Co., Ky.App., 812 S.W.2d 166, 170 (1991).
The
failure by counsel’s office staff to note the due date for a
responsive pleading is not a valid excuse for default.
While the
trial court would have been within its discretion to accept the
excuse, the trial court was not required to do so.
However, we conclude that the trial court did err in
refusing to allow Baird to contest the issue of damages.
A
defaulting party admits liability, but generally does not admit
the amount of unliquidated damages.
749 S.W.2d at 690, 693 (1988).
Howard v. Fountain, Ky.App.,
Furthermore, even when a trial
court grants default judgment, the plaintiff must still prove
entitlement to recover, and the amount of its damages.
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CR 55.01.
As the trial court pointed out, even without the
default judgment, Baird has admitted liability for his wife’s
hospital bills.
He contests only the amount of those bills.
The
trial court entered the default judgment based upon the
allegations in the Hospital’s complaint.
Yet while the Hospital
alleges that Baird is contractually liable for attorney’s fees
incurred in the collection of these bills, no such contract
appears in the record.
Likewise, this Court finds none of the
Hospital bills in the record either.
Consequently, this Court
agrees with Baird that the trial court erred in denying his
motion to set aside the default judgment with respect to damages.
Note however, that a party in default for failure to appear shall
be deemed to have waived his right to a trial by jury.
CR 55.01.
Therefore, the issue of the amount of damages shall be determined
by the trial court.
Accordingly, the order of the Daviess Circuit Court
denying Baird’s motion to set aside the default judgment is
affirmed, except as to the amount of damages, and this action is
remanded for an evidentiary hearing to determine the amount owed
by Baird.
ALL CONCUR.
BRIEF FOR APPELLANT:
BRIEF FOR APPELLEE:
Joseph R. Flaherty
Flaherty & Flaherty
Owensboro, Kentucky
Ronald L. Presser
Wilson, Johnson & Presser
Owensboro, Kentucky
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