Razorsoft, Inc. v. Maktal, Inc.

Razorsoft, Inc. v. Maktal, Inc.
1995 OK CIV APP 115
907 P.2d 1102
66 OBJ 3844
Case Number: 84090
Decided: 09/12/1995

RAZORSOFT, INC., APPELLEE,
v.
MAKTAL, INC., D/B/A PARK PLACE PRODUCTIONS, MICHAEL A. KNOX, AND RICHARD KNOX, SR., APPELLANTS, and TROY LYNDON, JOHN SMEDLEY AND KNIGHT TECHNOLOGIES, DEFENDANTS.

Appeal from the District Court of Oklahoma County, Oklahoma, James B. Blevins, Judge.

REVERSED AND REMANDED.

R. Kevin Layton, Sheila M. Powers, Boesche, McDermott & Eskridge, Tulsa, for Appellants.
Larry Glenn Ball, Mark R. McPhail, Spradling, Alpern, Friot & Gum, Oklahoma City, for Appellee.

MEMORANDUM OPINION

GARRETT, Chief Judge

¶1 Appellee, Razorsoft, Inc. (Razorsoft), an Oklahoma corporation, sued Appellant, Maktal, Inc., d/b/a Park Place Productions (Maktal), Appellants, Michael A. Knox and Richard Knox, Sr. (the Knoxes) individually, Troy Lyndon (Lyndon). John Smedley (Smedley) and Knight Technologies (Knight) for breach of contract,

¶2 The Journal Entry of Judgment recites the trial court heard the evidence. It also provides:

Defendants are in default and have thus admitted the substantial allegations of the Petition.

¶3 Appellants moved to vacate the default judgment. The record shows their motions were filed thirty-two days after the March 18, 1994 judgment, which would appear to be untimely, under 12 O.S.Supp. 1993 § 1031.1 (B) (Since amended).

¶4 The trial court entered its order overruling the motions to vacate on July 6, 1994. It is from that order Appellants perfected this appeal.

¶5 In its motion to vacate, Maktal contended it was prevented from timely answering Razorsoft's petition because of unavoidable casualty and misfortune. In the narrative statement approved by the trial court under Rule 1.22. Rules of Appellate Procedure, the evidence shows Maktal's financial condition was deteriorating rapidly at the time this lawsuit was filed. At that time, Maktal's major customer, SONY, canceled contracts with Maktal, and many of its employees left to work for SONY, including its corporate counsel. Maktal also lost other customers at the same time, and Maktal's collapse came quickly and harshly.

¶6 In their briefs, the parties debate issues relating to the application of 12 O.S. 1991 § 1031 (Seventh). However, the motions to vacate default judgment were filed within term time. Even if § 1031 (Seventh) were applicable, Appellants have made a showing of unavoidable casualty and misfortune. The logical person in charge of responding to a petition was the corporation's counsel. However, in this case, that person had terminated his employment with Maktal to work for SONY. At a time when Maktal's business was falling apart, the loss of its legal counsel was particularly devastating. Under these circumstances, we hold it was an abuse of discretion to overrule Maktal's motion to vacate the default judgment.

¶7 In the Knoxes' motion to vacate, they contended it was an abuse of discretion not to vacate the default judgment because the court had no personal jurisdiction over them.

¶8 All Appellants contend the trial court further abused its discretion in awarding damages to Razorsoft without requiring evidence of damages. Appellants correctly cite 12 O.S. 1991 § 2008 (D):

D. EFFECT OF FAILURE TO DENY.

Averments in a pleading to which a responsive pleading is required, other than those as to the amount of damage, are admitted when not denied in the responsive pleading. . . . (Emphasis added).

¶9 The court's finding that the Appellants' default constituted an admission of the substantial allegations in the petition cannot be understood to apply to an assessment of damages, unliquidated at the time of the petition. Production of proof as to amount of unliquidated damages is required before a default judgment is rendered. See Reed v. Scott, 820 P.2d 445 (Okl. 1991). Razorsoft contends the Appellants failed to raise this issue in their petition in error. However, the petition in error, under the Summary, Part B., raises this issue in sufficient terms. It is not fatal to consideration on appeal if it is not contained under Part C, which lists the issues and errors on appeal.

¶10 Considering all of the factors involved in the vacation of a default judgment, we hold it was an abuse of discretion to overrule the motions to set aside the default judgment entered against these Appellants.

¶11 The order overruling their motions to vacate is reversed, and this case is remanded for further proceedings consistent with the views expressed in this opinion.

¶12 REVERSED AND REMANDED.

¶13 JONES, P.J. and JOPLIN, J., concur.

Footnotes:

1 The contract between the parties was not attached to Razorsoft's petition.

2 12 O.S.Supp. 1993 § 1031.1 (B) provides:

B. On motion of a party made within thirty (30) days after a judgment, decree or appealable order prepared in conformance with Section 10 of this act has been filed with the court clerk, the court may correct, open, modify or vacate the judgment, decree or appealable order. . . .

3 The court's jurisdiction over Maktal is not at issue in this appeal.