Hunt v. Hunt

Hunt v. Hunt

IN THE UTAH COURT OF APPEALS

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Diane E. Rich Hunt,

Petitioner and Appellee,

v.

Kelly R. Hunt,

Respondent and Appellant.

MEMORANDUM DECISION
(Not For Official Publication)
 

Case No. 20020921-CA
 

F I L E D
(February 12, 2004)
 

2004 UT App 26

 

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Third District, Tooele Department

The Honorable David S. Young

Attorneys: Debbie A. Robb, Salt Lake City, for Appellant

Randall D. Cox, Salt Lake City, for Appellee

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Before Judges Billings, Davis, and Orme.

BILLINGS, Presiding Judge:

Kelly R. Hunt (Husband) appeals the trial court's entry of an order of default against him. Husband asserts that the trial court abused its discretion by refusing to set aside the default under rule 60(b)(1) of the Utah Rules of Civil Procedure.

On September 5, 2001, Kelly R. Hunt (Wife) filed a Verified Petition for Annulment or Divorce. Husband was served on September 7, 2001. On October 4, 2001, Wife filed a Motion for Default Judgment, arguing that default was proper because Husband had failed to file an answer within twenty days after being served as required by rule 12 of the Utah Rules of Civil Procedure. On October 11, 2001, the trial court entered an order of default against Husband. The following day Husband filed an answer.

On October 22, 2001, pursuant to rule 60(b) of the Utah Rules of Civil Procedure, Husband filed a Motion to Set Aside Default Judgment on the grounds that: (1) he has valid defenses to the causes of action in the case; (2) his answer was untimely due to inadvertence, mistake, and excusable neglect; and (3) because no final judgment or decree had been entered, Wife would suffer no prejudice if the case were adjudicated on the merits.

On March 4, 2002, Husband filed a Verified Amended Answer and Counterclaim. On that same date, the trial court held a hearing regarding Wife's motion for entry of default judgment and Husband's motion to set aside the order of default. The trial court granted Wife's motion for entry of default judgment, entered Wife's proposed Findings of Fact and Conclusions of Law and Decree of Annulment, and denied Husband's motion to set aside the order of default. The trial court denied Husband's motion "[d]ue to [Husband's] failure to answer [Wife's] Verified Petition in a timely manner and failure to present any evidence in support of his Motion to Set Aside." However, the trial court made no other findings with respect to the denial of Husband's rule 60(b) motion to set aside the order of default.

Husband filed another rule 60 motion on June 6, 2002, captioned as a Verified Motion for Relief from Judgment. Husband asserted for the first time that he should be excused from failing to answer Wife's Verified Petition in a timely manner because he had been suffering from anxiety and depression. In support of this assertion, Husband provided documentation that he had been in the emergency room for anxiety on August 14, 2001, six weeks before his answer was due, and had been prescribed Ativan to treat his anxiety. Husband also provided information from Dr. Alan Heap, dated March 12, 2002, which indicates that "[Husband] was so depressed through September and October of 2001, that he was unable to function and went off his medication (antidepressants) suddenly and [this] made him unable to maintain [a] normal life and activities." Wife disputed Husband's allegations regarding his inability to function. The trial court denied this motion without taking evidence and entering findings. On January 2, 2003, the court entered the Amended Decree of Annulment. Husband appeals.

Husband asserts that the trial court erred when it denied his rule 60(b) motion to set aside the order of default. While "judgments by default are disfavored by the law," Wright v. Wright, 941 P.2d 646, 649 (Utah Ct. App. 1997), in general, "a trial court has broad discretion in deciding whether to set aside a default judgment." Lund v. Brown, 2000 UT 75,¶9, 11 P.3d 277 (per curiam). However, a trial court's discretion is not limitless and "must be 'based on adequate findings of fact' and 'on the law.'" Id. (quoting May v. Thompson, 677 P.2d 1109, 1110 (Utah 1984) (per curiam)).

Husband argues that the trial court erred in entering a default against him and in refusing to set it aside. "To be relieved from the default, [Husband] must show that his motion to set aside was timely, that he has a meritorious defense, and that the default occurred for a reason specified in [r]ule 60(b)." Black's Title, Inc. v. Utah State Ins. Dep't, 1999 UT App 330,¶6, 991 P.2d 607. The parties do not dispute that the rule 60(b) motion was timely, as it was filed less than two weeks after the default judgment was entered. See Utah R. Civ. P. 60(b) ("The motion shall be made . . . not more than 3 months after the judgment, order, or proceeding was entered or taken.").

Rule 60(b) provides that a "court may in the furtherance of justice relieve a party or his legal representative from a final judgment, order, or proceeding for the following reasons: (1) mistake, inadvertence, surprise, or excusable neglect." Utah R. Civ. P. 60(b)(1). "To demonstrate that the default was due to excusable neglect, [Husband] 'must show that he has used due diligence and that he was prevented from appearing by circumstances over which he had no control.'" Black's Title, Inc., 1999 UT App 330 at ¶10 (quoting Airkem Intermountain, Inc. v. Parker, 30 Utah 2d 65, 513 P.2d 429, 431 (1973)).

Husband presented evidence that the default resulted from excusable neglect. Specifically, Husband presented evidence that he was unable to answer Wife's Verified Petition in a timely manner because Wife had cut him off from all marital assets, and he thereby had been prevented from retaining counsel. Husband further presented evidence that he had been suffering from anxiety and depression and had been unable to function at the time the answer was due. Because the trial court made no findings with respect to excusable neglect and stated only that Husband does not have a meritorious defense, we remand for findings on excusable neglect.

Husband also argues that the trial court erred in denying his rule 60(b) motion on the grounds that his answer lacks a meritorious defense. We agree. In Utah, "[a] defense is sufficiently meritorious to have a default judgment set aside if it is entitled to be tried." Erickson v. Schenkers Int'l Forwarders, Inc., 882 P.2d 1147, 1149 (Utah 1994). The court stated that "Husband appears to have no meritorious defense, particularly in relation to the ownership of the business, all of which stock is acknowledged to have been in her name."

Husband argues that he raised several meritorious defenses in his answer. First, Husband requested custody of the parties' daughter (Child) and claimed an interest regarding the best interests of Child in connection with the care, custody, and control of Child. Second, Husband claimed an equitable interest in The Matchbox Club, a business formed by Wife during the marriage and at which both parties worked.

The trial court addressed only the issue of ownership of The Matchbox Club and found that because Wife held all of the stock in the club, Husband did not have any property interest subject to division upon annulment. However, when a spouse makes a contribution of time and resources to the other spouse's business interests, those business interests may become part of the marital estate and be subject to property division. See Elman v. Elman, 2002 UT App 83,¶24, 45 P.3d 176. The trial court made no findings about whether Husband was entitled to an equitable interest in the club. In addition, the trial court was presented with the issue of who should have custody of Child. As both of these appear to be "defense[s] which [are] entitled to be tried," Erickson, 882 P.2d at 1148, we hold that the trial court erred in finding no meritorious defenses in Husband's answer.

Thus, we reverse the trial court's conclusion that Husband had no meritorious defenses. We also remand for findings on whether Husband's inaction constituted excusable neglect. If so, the default should be set aside. If not, it will stand.

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Judith M. Billings,

Presiding Judge

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WE CONCUR:

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James Z. Davis, Judge

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Gregory K. Orme, Judge