NPC International, Inc., d/b/a Pizza Hut of West Helena v. Sylvia Hill et al.

ARKANSAS COURT OF APPEALS
NOT DESIGNATED FOR PUBLICATION

DIVISION II

NPC INTERNATIONAL, INC., d/b/a PIZZA HUT OF WEST HELENA

APPELLANT

V.

SYLVIA HILL, Individually and on behalf of her minor children, RYNDAD CHEATUM and KHADIJA CHEATUM; KENNETH HILL; ARETHA HOUSE Individually and on behalf of her minor children, JAZMYNE CROCKETT and KODIE BRYANT; JAMES DAY; LINDA DAY; JAMES HOLMES; WINSON JACKSON; and ERICA MITCHELL

APPELLEES

CA03-890

April 21, 2004

APPEAL FROM THE PHILLIPS COUNTY CIRCUIT COURT

[NO. CV-2002-388]

HON. L. T. SIMES, II

CIRCUIT JUDGE

AFFIRMED AND REMANDED

Josephine Linker Hart, Judge

In this interlocutory appeal, NPC International, Inc. d/b/a Pizza Hut of West Helena (hereinafter Pizza Hut) appeals from a Phillips County Circuit Court order striking its answer and granting a default judgment to appellees Sylvia Hill, Rendad Cheatum, Khadija Cheatum, Kenneth Hill, Aretha House, Kazmyne Crockett, Kodie Bryant, James Day, Linda Day, James Holmes, Winston Jackson, and Erica Mitchell (hereinafter Hill et al.). On appeal, Pizza Hut argues that the trial court abused its discretion in 1) granting a default judgment and 2) striking its anwer. We affirm and remand to the trial court for further proceedings.1

On November 19, 2002, Hill and eleven others filed an amended complaint against Pizza Hut and separate defendant Summer Harris. The complaint alleged that on November 3, 2002, Harris had spit and placed the contents of her nose on food that Sylvia Hill had purchased that day from the Pizza Hut restaurant in West Helena and that the named plaintiffs had consumed the food. According to the complaint, Harris was reputed to be "a potential carrier of an infectious STD" and had adulterated the food for the "purpose of her spreading an infectious disease." Hill et al. claimed that they suffered a variety of gastric maladies since consuming the food and have as well "been in an agitated state of fear" since learning that they "may have been infected with HIV." The complaint also alleged that Harris had engaged in similar conduct in the past, of which Pizza Hut was aware, and that it had negligently retained her in her position as shift supervisor. Hill et al. sought $4,000,000 in compensatory damages and $2,000,000 in punitive damages.

Pizza Hut was served on November 25, 2002. Harris was not served, although a motion for extension of time to complete service was filed on March 7, 2003. On December 6, 2002, the attorney for Pizza Hut, Jonathan C. Hancock of the Memphis, Tennessee law firm of Glankler Brown PLLC, contacted counsel for Hill et al. and secured an agreement to allow him to file an answer on January 10, 2003. According to Hancock, he had sought to extend the answer date beyond the twenty days specified by the Arkansas Rules of Civil Procedure because "the Answer date fell on Christmas, and . . . it would be fairly cumbersome to perform an adequate investigation in this matter in between the time served and Christmas." He also stated that "the other reason" for the extension was to allow counsel for Hill et al. to send him a settlement demand.

However, when the new, agreed-on deadline approached, and Pizza Hut had failed to make its answer ready in time to overnight it to Phillips County, its counsel tried, without success, to contact counsel for Hill et al. for a further extension. On January 14, 2003, Hill et al. filed the motion for a default judgment that they had prepared the day before, the same day that Pizza Hut had filed its answer. On January 16, 2003, Hill et al. filed a motion to strike Pizza Hut's answer.

At an April 3, 2003 hearing on the motions filed by Hill et al., Hancock asserted that his answer was not sent out by Federal Express on January 9, 2003, due to "inadvertent mistake" - he neglected to sign the answer and he subsequently was involved in a lengthy deposition that kept him away from his desk for most of the day. According to Hancock, when he discovered the problem, he attempted, without success, to contact the attorneys for Hill et al. that night and at least three times on January 10, 2003. Hancock claimed that when he left messages regarding a further extension of time to file the answer, he was told by office staff that at least one of the two attorneys were in the office and available to respond, but he did not receive a return phone call. Failing to get an agreement, Hancock simply put Pizza Hut's answer in the outgoing mail for delivery on the following business day, Monday, January 13, 2003. He claimed that he handled the filing in this way because he wanted "to avoid the expense of driving it down from Memphis" and expected "professional courtesy" in allowing him to file the response on Monday.

Orally and in its brief, Pizza Hut relied on the general principles regarding default judgments articulated in NCS Healthcare of Arkansas, Inc. v. WP Malone, Inc., 350 Ark. 520, 88 S.W.3d 852 (2002) and the Reporter's Notes to Rule 55 of the Arkansas Rules of Civil Procedure2 to argue that the default was merely "technical," and therefore "disfavored" under Arkansas law, that it had very clear and understandable defenses, that it was ready to defend, and that Hill et al. were not prejudiced by his untimely answer. The trial court, however, apparently considered none of these factors and granted both of the plaintiffs' motions.

On appeal, Pizza Hut first argues that the trial court abused its discretion by granting the default judgment because it "clearly demonstrated adequate grounds for the denial of the default" pursuant to Rule 55(c) of the Arkansas Rules of Civil Procedure. It characterizes the default in this case as "purely technical" and therefore, "contrary to the intention of Rule 55." It asserts that it made "reasonable efforts" to obtain a one-day extension, it set forth defenses to Hill et al.'s claim, demonstrated its ability and intention to defend itself, and most importantly, demonstrated that Hill et al. would not be prejudiced if the default was denied. Pizza Hut quotes extensively from the Reporter's Notes for the 1990 Amendment to Rule 55 as support for the proposition that Rule 55 should be applied liberally and that the rule reflects a "clear preference" for deciding cases on the merits rather than on technicalities. It notes that no reason other than the fact that the answer was filed one day late was advanced by Hill et al. for the entry of the default judgment, and relying on that basis alone was an abuse of discretion. This argument fails to persuade.

The standard by which we review the granting of a motion for default judgment is whether the trial court abused its discretion. NCS Healthcare of Arkansas, Inc. v. WP Malone, Inc., supra. Although appellate court decisions of this state repeatedly recite that default judgments are not favorites of the law and should be avoided when possible, see, e.g., id.; Divelbliss v. Suchor, 311 Ark. 8, 841 S.W.2d 600 (1992); B & F Eng'g, Inc. v. Cotroneo, 309 Ark. 175, 830 S.W.2d 835 (1992), decisions to grant default judgments are afforded great deference on appeal. Truhe v. Grimes, 318 Ark. 117, 884 S.W.2d 255 (1994)(referring to the trial court's authority as "wide discretion"). For us to consider whether the trial court abused its discretion in entering a default judgment, we must first find that an appellant has satisfied the threshold requirements of Rule 55 (c), that its untimely answer was due to "(1) mistake, inadvertence, surprise, or excusable neglect; (2) the judgement is void; (3) fraud, misrepresentation, or other misconduct of an adverse part; or (4) any other reason justifying relief from the operation of the judgement." See Morgan v. Century 21 Perry Real Estate, 78 Ark. App. 180, 79 S.W.3d 878 (2002).

We hold that Pizza Hut has failed to meet its threshold burden of proving that any of the reasons articulated in Rule 55 (c) are present here. Stare decisis compels us to echo our holding in Moore v. Taylor Sales, Inc., 59 Ark. App. 30, 953 S.W.2d 889 (1997) where we said, "Although we realize that most litigants strive to resolve their differences outside of the courtroom and that many controversies are in fact settled on the courthouse steps, a party to a suit is not relieved of the responsibility of adhering to the rules of civil procedure and must file an answer within the statutory time." We note that the attorney for Pizza Hut was aware of the deadline and could have hand-delivered the answer to the Phillips County courthouse had he only been willing to incur the "expense, " which we believe would have been a relatively minor expense in terms of both time and money. Accordingly, we cannot but interpret this concession as treating the time for answering Hill et al.'s complaint as the kind of indifference to the deadlines specified in our rules of civil procedure that the appellate courts of this state have never countenanced. See, e.g., Divelbliss v. Suchor, supra, (affirming a trial court's refusal to set aside a default judgement where the "record discloses nothing more than carelessness on the part of the agent"); Tyrone v. Dennis, 73 Ark. App. 209, 39 S.W.3d 800 (2001)(holding the rule does not permit the filing of late answers in any circumstance when a defendant's actions can be characterized as "neglect" that was not "excusable"); Moore v. Taylor Sales, Inc., 59 Ark. App. 30, 953 S.W.2d 889 (1997)(holding a trial judge does not abuse his discretion in granting a default judgment where the delay was due to carelessness or a failure to attend to business). While it is true that Ark. R. Civ. P. 55 (c) requires that the party seeking to have the judgment set aside must demonstrate a meritorious defense to the action, that fact is of no moment if the reason for the late filing is not compelling. See Truhe v. Grimes, supra. The lack of prejudice to Hill et al., similarly will not overcome an appellant's lack of diligence in answering a complaint. Id.

Pizza Hut next argues that the trial court abused its discretion in striking its answer. It asserts that its argument is "intrinsically related" to the trial court's decision to grant a default judgment. Citing Burns v. Madden, 271 Ark. 572, 609 S.W.2d 572 (1980), Pizza Hut contends that it had "just cause" for filing its answer one day late because it had a "good-faith belief" that Hill et al. would grant an additional one-day extension. This argument fails to persuade.

First, Pizza Hut's resort to Burns v. Madden is unavailing because, this precedent did not dispose of an appeal of an order to strike an answer. Accordingly, this assignment of error is not supported by any relevant authority and would therefore be affirmable on this basis alone. Tyrone v. Dennis, supra (holding that we do not consider assignments of error that are unsupported by convincing legal authority or argument unless it is apparent without further research that the argument is well taken). Furthermore, for the reasons cited above, we reject Pizza Hut's major premise, that it had a "just cause" for its untimely filing. Under Rule 12(a) of the Arkansas Rules of Civil Procedure, a resident defendant is required to file an answer within 20 days of the date of service. We will not reverse a trial court's decision to strike an answer, absent an abuse of discretion. Webb v. Lambert, 295 Ark. 438, 748 S.W.2d 658 (1988). Here, there was no showing of excusable neglect, unavoidable casualty, or other just cause, therefore we cannot say that the trial court abused its discretion.

Affirmed and remanded.

Vaught and Baker, JJ., agree.

1 This appeal satisfies the finality requirement of Arkansas law because Rule 2 (a)(4) of our Rules of Appellate Procedure - Civil specifically provide for interlocutory appeals from orders striking an answer to a pleading. See Arnold & Arnold v. Williams, 315 Ark. 632, 870 S.W.2d 365 (1994).

2 The Reporter's note, 1990 Amendment states in pertinent part: "In deciding whether to enter a default judgment, the court should take into account the factors utilized by the federal courts, including whether the default is largely technical and the defendant is now ready to defend; whether the plaintiff has been prejudiced by the defendant's delay in responding; and whether the court would later set aside the judgment under Rule 55(c)."