Camping World, Inc. v. Michael McCurdy

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REL: 11/16/2012 Notice: T h i s o p i n i o n i s s u b j e c t t o formal r e v i s i o n b e f o r e p u b l i c a t i o n i n t h e advance s h e e t s o f Southern R e p o r t e r . R e a d e r s a r e r e q u e s t e d t o n o t i f y t h e Reporter of Decisions, Alabama A p p e l l a t e C o u r t s , 300 D e x t e r A v e n u e , M o n t g o m e r y , A l a b a m a 3 6 1 0 4 - 3 7 4 1 ((334) 2 2 9 - 0 6 4 9 ) , o f a n y t y p o g r a p h i c a l o r o t h e r e r r o r s , i n o r d e r t h a t c o r r e c t i o n s may b e made b e f o r e t h e o p i n i o n i s p r i n t e d i n Southern R e p o r t e r . ALABAMA COURT OF CIVIL APPEALS OCTOBER TERM, 2012-2013 2110241 Camping World, Inc. v. Michael McCurdy Appeal from Coffee C i r c u i t (CV-11-77) Court I n c . , appeals a judgment PITTMAN, J u d g e . Camping World, from ofthe Coffee C i r c u i t Court denying i t s motion t o s e t aside a d e f a u l t judgment e n t e r e d against i t i n favor of Michael McCurdy. 2110241 On April 26, 2011, McCurdy initiated a civil action n a m i n g Camping W o r l d as a d e f e n d a n t . Camping W o r l d was s e r v e d w i t h M c C u r d y ' s c o m p l a i n t on May McCurdy filed a motion under 13, 2011. On Rule 55(a), June 21, A l a . R. 2011, Civ. P., s e e k i n g t h e e n t r y o f a d e f a u l t judgment a g a i n s t Camping W o r l d . On June 27, 2011, t h e t r i a l c o u r t g r a n t e d M c C u r d y ' s m o t i o n and e n t e r e d a d e f a u l t judgment a g a i n s t Camping W o r l d . On J u l y 8, 2011, t h e a t t o r n e y s f o r Camping W o r l d a p p e a r e d i n t h e a c t i o n . On July the 20, 2011, Camping W o r l d f i l e d a motion to set aside d e f a u l t judgment p u r s u a n t t o R u l e 5 5 ( c ) , A l a . R. C i v . P., which motion i n c l u d e d supporting a f f i d a v i t s . file anything i n opposition Camping W o r l d ' s to, the motion otherwise respond to, motion. On O c t o b e r 3, 2011, t h e t r i a l on or McCurdy d i d n o t to set aside court heard o r a l the default arguments judgment and, t h e r e a f t e r , d e n i e d the m o t i o n , s t a t i n g t h a t the motion had not b e e n s u p p o r t e d by " c o m p e t e n t meritorious defense to the p r o o f " t h a t Camping W o r l d had a action. Camping World timely appealed. McCurdy's negligently complaint handled and alleged damaged 2 that a Camping World recreational had vehicle 2110241 belonging for t o him t h a t he had t a k e n t o Camping W o r l d ' s repairs. The complaint s o u g h t damages i n t h e facility amount $50,000 and $299.04 i n c o u r t c o s t s . I n i t s m o t i o n t o s e t aside t h e d e f a u l t j u d g m e n t , Camping W o r l d c o n t e n d e d t h a t i t was the proper defendant as support Brent for that Moody, Clifton, vice president a senior claims S e r v i c e s , Inc. World a meritorious submitted of to demonstrated that n o t be h e l d r e s p o n s i b l e f o r n o t h a v i n g and World, granted affidavit, in Camping W o r l d ' s particular, Rule was between Clifton 55(c) supported commenced sometime b e f o r e and M a r c h 25, motion. by McCurdy's 2011. t o McCurdy's a t t o r n e y from C l i f t o n than McCurdy sought the one week b e f o r e complaint, trial Clifton's correspondence settlement attorney d a t e d June 15, entry a should A copy o f a j u d g m e n t , e x p r e s s l y i n d i c a t e d t h a t C l i f t o n had 3 Camping i f the b e t w e e n C l i f t o n and M c C u r d y ' s a t t o r n e y t o show t h a t negotiations Bassett Camping W o r l d answered the of Gary establishing showed t h a t M c C u r d y w o u l d n o t be p r e j u d i c e d court and affidavits, evidence and, affidavits r e p r e s e n t a t i v e at Gallagher amounted defense, the Camping ( " G a l l a g h e r B a s s e t t " ) . The asserted, not t o have b e e n named i n t h e c o m p l a i n t contention, of of letter 2011, a had less default engaged i n the 2110241 settlement negotiations on Recreational Vehicle Centers, W o r l d R.V. Sales Emerald doing business Coast as Camping appeal, and offer. Camping W o r l d d i c t a t e s t h a t the t r i a l to LLC, of ("ECRVC"), an a f f i l i a t e o f Camping W o r l d , set forth a settlement On behalf contends t h a t Alabama c o u r t s h o u l d have g r a n t e d caselaw i t s motion s e t a s i d e t h e d e f a u l t j u d g m e n t . S p e c i f i c a l l y , Camping W o r l d raises two issues whether the trial denying Camping on appeal. court World's The is i t s discretion in to motion appeal outside acted first issue aside set on the default j u d g m e n t b a s e d on t h a t c o u r t ' s c o n c l u s i o n t h a t Camping W o r l d had failed defense. The have g r a n t e d to establish second i s s u e i s whether the of a trial meritorious court Camping W o r l d ' s m o t i o n t o s e t a s i d e t h e judgment a f t e r Fort "competent p r o o f " weighing Morgan A u t h . Sewer the factors Serv., Inc., that trial set 524 out So. should default in Kirtland 2d 600 v. (Ala. 1988). It is discretion well to settled determine judgment; a t r i a l whether to courts set are aside afforded a default c o u r t ' s d e c i s i o n i n t h a t r e g a r d w i l l not r e v e r s e d u n l e s s the r e c o r d r e v e a l s t h a t the t r i a l 4 court be acted 2110241 outside that discretion. See Bennett R e g i s t r a t i o n S y s . , I n c . , 966 So. 2d 935 v. Mortgage Elec. ( A l a . C i v . App. 2007). "'A t r i a l c o u r t has b r o a d d i s c r e t i o n i n d e c i d i n g whether t o g r a n t o r deny a motion to set aside a d e f a u l t judgment. K i r t l a n d v. F o r t Morgan A u t h . Sewer S e r v . , I n c . , 524 So. 2d 600 ( A l a . 1 9 8 8 ) . ... T h a t d i s c r e t i o n , although broad, r e q u i r e s the t r i a l c o u r t t o b a l a n c e two c o m p e t i n g p o l i c y interests associated with default j u d g m e n t s : t h e need t o p r o m o t e judicial economy and a l i t i g a n t ' s r i g h t t o d e f e n d an a c t i o n on t h e m e r i t s . 524 So. 2d a t 604.' " Z e l l e r v. B a i l e y , 950 So. 2d 1149, 1152 ( A l a . 2006). This court has explained the following principles t h a t guide our r e v i e w of the trial court's decision: "'Our supreme c o u r t has h e l d t h a t t h e t r i a l court's use of d i s c r e t i o n a r y a u t h o r i t y should be resolved in favor of the d e f a u l t i n g p a r t y where t h e r e i s d o u b t as t o the p r o p r i e t y of the d e f a u l t judgment. J o h n s o n v. Moore, 514 So. 2d 1343 ( A l a . 1987) . Our supreme court has also established guidelines to assist a t r i a l judge i n e x e r c i s i n g h i s d i s c r e t i o n . ' "'"'A trial court's broad discretionary authority under Rule 55(c) should not be e xe r c i s e d w i t ho u t c o n s i d e r i n g the f o l l o w i n g three f a c t o r s : 1) w h e t h e r t h e def endant has a m e r i t o r i o u s d e f e n s e ; 2) whether the plaintiff 5 2110241 will be unfairly prejudiced if the d e f a u l t judgment i s s e t a s i d e ; and 3) whether the default judgment was a r e s u l t of the defendant's own culpable conduct.' " ' " K i r t l a n d , 524 [(Ala. 1988)]." So. 2d " " M a r t i n v. C r u m p t o n, 883 (Ala. C i v . App. 2 0 0 3 ) . ' [600] So. 605 700, 2d at 703 "'Rudolf [v. P h i l y a w ] , 909 So. 2d [200] a t 202-03 ( A l a . C i v . App. 2 0 0 5 ) ] . 'The law i n A l a b a m a i s c l e a r t h a t t h e d e f a u l t i n g p a r t y has t h e i n i t i a l b u r d e n o f demonstrating the existence of the Kirtland f a c t o r s . ' I d . a t 203 ( c i t i n g Ex p a r t e F a m i l y D o l l a r Stores, 906 So. 2d 892, 899-900 (Ala. 2005); P h i l l i p s v. R a n d o l p h , 828 So. 2d 269, 278 (Ala. 2 0 0 2 ) ; and K i r t l a n d , 524 So. 2d a t 6 0 5 - 6 0 8 ) . " Bennett, 966 So. 2d a t When r e v i e w i n g Ala. we P., R. C i v . P., 937. a trial m o t i o n and court's 55(c) motion, Constitution a Rule 55(c), Rule 55(c), [ A l a . ] R. Civ. c o u r t w i t h d i s c r e t i o n i n r u l i n g on a R u l e Article of on c o n s i d e r i n g the K i r t l a n d f a c t o r s , keep i n m i n d t h a t , " [ a ] l t h o u g h v e s t s the t r i a l ruling 1901 I, §§ 6, requires 10, that and 13, a trial of the court Alabama exhibit a l a r g e and l i b e r a l d i s c o n t e n t a g a i n s t a d j u d i c a t i o n o f r i g h t s by default." Sanders v. Weaver, 583 6 So. 2d 1326, 1328 (Ala. 2110241 1 9 9 1 ) . I n r u l i n g on a R u l e 5 5 ( c ) m o t i o n , a t r i a l begin with right the presumption to defend that on t h e m e r i t s a litigant and t h a t , court "must has a paramount therefore, cases s h o u l d be r e s o l v e d on t h e m e r i t s w h e n e v e r p r a c t i c a b l e . " J o n e s v. Hydro-Wave o f A l a b a m a , I n c . , 524 So. 2d 610, 613 ( A l a . 1988). The trial first court issue acted r a i s e d b y Camping W o r l d outside i t sdiscretion i s whether the by d e n y i n g Camping W o r l d ' s R u l e 5 5 ( c ) m o t i o n b a s e d on i t s c o n c l u s i o n t h a t Camping World had n o t e s t a b l i s h e d "competent p r o o f " of a meritorious d e f e n s e . The e v i d e n c e p r o v i d e d by Camping W o r l d t e n d e d t o show t h a t Camping W o r l d h a d b e e n i m p r o p e r l y According was, named i n t h e l a w s u i t . t o Camping W o r l d , t h e p r o p e r d e f e n d a n t i n t h e a c t i o n i n s t e a d , ECRVC, b e c a u s e ECRVC, an a f f i l i a t e o f Camping World, had o p e r a t e d t h e r e p a i r f a c i l i t y t o w h i c h McCurdy had t a k e n h i s v e h i c l e t o be r e p a i r e d ; d e s p i t e t h e a f f i l i a t i o n a n d s i m i l a r names, ECRVC a n d Camping W o r l d a r e s e p a r a t e e n t i t i e s , and Camping W o r l d contended ECRVC was t h e o n l y and r e p a i r entity entrusted with testified i n h i s a f f i d a v i t t h a t ECRVC, n o t Camping W o r l d , h a d entered the care that o f t h e v e h i c l e . Moody i n t o a c o n t r a c t t o p e r f o r m work on M c C u r d y ' s v e h i c l e . 7 2110241 Additionally, counsel, a letter which was from Gallagher attached as an Bassett exhibit t o McCurdy's to Clifton's a f f i d a v i t , e x p r e s s l y s t a t e d t h a t G a l l a g h e r B a s s e t t had engaged in settlement negotiations with McCurdy's c o u n s e l solely i n i t s c a p a c i t y as a c l a i m s r e p r e s e n t a t i v e on b e h a l f o f ECRVC and n o t on b e h a l f o f Camping W o r l d . McCurdy o f f e r e d no e v i d e n c e t o rebut Camping W o r l d ' s p o s i t i o n t h a t named i n the lawsuit, except to i t h a d been state that improperly McCurdy d i r e c t e d payment f o r t h e r e p a i r s t o Camping W o r l d . The does n o t i n c l u d e a c o p y o f a c h e c k o r o t h e r in any event, evidence o f McCurdy's had record f o r m o f payment; purported payment to "Camping W o r l d " w o u l d n o t have n e c e s s a r i l y u n d e r m i n e d , much less disposed o f , Camping W o r l d ' s a r g u m e n t t h a t i t had not been t h e e n t i t y w i t h whom McCurdy h a d c o n t r a c t e d for repair work b e c a u s e s u c h payment v e r y w e l l may have been d i r e c t e d t o ECRVC, w h i c h does b u s i n e s s as Camping W o r l d RV S a l e s . In h i s b r i e f t o t h i s c o u r t , McCurdy s t a t e s t h a t G a l l a g h e r B a s s e t t h a d engaged i n s e t t l e m e n t behalf of Camping n e g o t i a t i o n s w i t h McCurdy's a t t o r n e y World, which i s inconsistent with on the w r i t t e n c o r r e s p o n d e n c e b e t w e e n C l i f t o n and M c C u r d y ' s a t t o r n e y , 8 2110241 which, as noted, was attached as an e x h i b i t to Clifton's affidavit. We in c o n c l u d e t h a t t h e e v i d e n c e s u b m i t t e d by Camping W o r l d s u p p o r t o f i t s m o t i o n t o s e t a s i d e t h e d e f a u l t judgment s u f f i c i e n t t o e s t a b l i s h a m e r i t o r i o u s d e f e n s e , and, t h u s , was this K i r t l a n d f a c t o r weighs i n f a v o r of g r a n t i n g i t s motion t o s e t a s i d e t h e d e f a u l t judgment. Aspen M e d i c a l Products, Alabama P a i n C o n s u l t a n t s , I n c . , 963 So. 2d 666 2007) (upon w h i c h Camping W o r l d aside and in i t s brief satisfactorily allegations and relied on a p p e a l ) , made a s h o w i n g v. ( A l a . C i v . App. i n i t s motion to set "'a d e f a u l t i n g p a r t y of a m e r i t o r i o u s has d e f e n s e when ... i n a m o t i o n t o s e t a s i d e t h e d e f a u l t j u d g m e n t i t s supporting affidavits, i f proven at c o n s t i t u t e a complete defense to the a c t i o n s a t 668 LLC trial, would '" 963 So. 2d ( q u o t i n g K i r t l a n d , 524 So. 2d a t 6 0 6 ) . I n t h i s c a s e , i f Camping W o r l d ' s a l l e g a t i o n t h a t i t h a d n o t u n d e r t a k e n any d u t y to McCurdy i s p r o v e n a t t r i a l , defense to McCurdy's evidentiary challenged showing by demonstrated in McCurdy. the i t w o u l d o p e r a t e as a c o m p l e t e claims; moreover, support Because existence of 9 of i t s position Camping a Camping World meritorious World's was not sufficiently defense, this 2110241 Kirtland aside f a c t o r weighs i n f a v o r of g r a n t i n g the motion to the denying default the W o r l d had judgment, motion based not p r e s e n t e d N e x t , we whether the on and trial court's F i r s t , we by the two remaining Kirtland j u d g m e n t . See trial prejudiced, prejudiced court's thus, he does in his brief the i s not complaint on trial not the on So. appeal of reversing 2d a t 605. relating w h e t h e r Camping W o r l d , bad he he would would c u l p a b i l i t y on be be the p a r t f a i l u r e to s u f f i c i e n t to support the t r i a l factor in that t o Camping W o r l d ' s e v i d e n c e s a t i s f y i n g t h e f i r s t two or that judgment. appeal. o f Camping W o r l d ' s R u l e 5 5 ( c ) Kirtland default court contend c o n c l u d e t h a t any relating willfully defense. support 524 in Camping f a c t o r s weigh i n favor aside i n the Camping W o r l d consider that issue Kirtland, setting argue and S e c o n d , we third erred c o n c l u d e t h a t McCurdy w o u l d n o t have b e e n p r e j u d i c e d McCurdy d i d not denial court evidence of a m e r i t o r i o u s g r a n t i n g Camping W o r l d ' s m o t i o n and, the trial i t s determination must a d d r e s s t h e remaining the set faith, 524 10 to the answer court's motion i n l i g h t of Kirtland factors. culpability, of the As t o the we must defaulting party, acted So. 2d at 607, and, in 2110241 resolving t h a t i s s u e , we l o o k t o Sanders i n which a similar s i t u a t i o n was a d d r e s s e d . I n S a n d e r s , t h e r e c o r d r e v e a l e d an a n s w e r h a d n o t been f i l e d defendant's willful insurer's claims representative,"not disregard of court r u l e s . " In t h i s indicating behalf due t o t h e n e g l i g e n c e case, that the record Camping o f ECRVC, t o i n f o r m of the [due] t o 583 So. 2d a t 1329. includes World that expected McCurdy uncontested Clifton, evidence acting on t h a t ECRVC, n o t Camping W o r l d , s h o u l d have b e e n named i n t h e a c t i o n a n d t o n e g o t i a t e a settlement litigation on o f ECRVC. W h e t h e r Camping W o r l d ' s f a i l u r e t o f i l e behalf o r , i f necessary, proceed with an a n s w e r was t h e r e s u l t o f C l i f t o n ' s g o o d - f a i t h b e l i e f t h a t t h e ongoing settlement negotiations with o b v i a t e d t h e need t o answer t h e c o m p l a i n t Clifton's the inaction, correspondence such McCurdy's o r was t h e r e s u l t o f f a i l u r e was, a t w o r s t , between Clifton attorney negligence; and McCurdy's attorney r e g a r d i n g a s e t t l e m e n t , e s p e c i a l l y C l i f t o n ' s l e t t e r d a t e d June 15, 2011, e x t e n d i n g a settlement o f f e r t o McCurdy's d e m o n s t r a t e s t h a t C l i f t o n was a c t i v e l y case, which, i n turn, suggests that attorney, trying to s e t t l e the the f a i l u r e to f i l e an a n s w e r was b a s e d on C l i n t o n ' s g o o d - f a i t h b e l i e f t h a t he w o u l d 11 2110241 r e a c h a s e t t l e m e n t on b e h a l f o f ECRVC. B e c a u s e " [ n ] e g l i g e n c e by i t s e l f motion," evidence i s i n s u f f i c i e n t f o r r e f u s i n g t o grant a Rule 55(c) Sanders, 583 So. 2d a t 1328, a n d i n l i g h t satisfying the conclude that the t r i a l first two Kirtland of the factors, court acted outside i t s discretion we by d e n y i n g Camping W o r l d ' s R u l e 5 5 ( c ) m o t i o n . REVERSED AND REMANDED. Thompson, P . J . , and Bryan, concur. 12 Thomas, and Moore, J J . ,

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