Revisiting Default Judgments

You may remember reading here about the case of Sumlin v. Sumlin and the factors governing when a trial court should grant a motion to set aside a default judgment. Now the Alabama Court of Civil Appeals has withdrawn its original opinion in that case and changed its ruling.

The revised opinion appears as Sumlin v. Sumlin, Case No. 2040238 (Ala. Civ. App. November 4, 2005). It applies the same set of factors but interprets the results differently. In so doing, the Appeals Court reversed the trial court’s refusal to set aside its default judgment.

You can read the facts in the original post. Basically, the Appeals Court’s majority opinion now adopts the reasoning of Judge Murdock’s dissent in June, first that the two-step analysis of Kirtland (Kirtland v. Fort Morgan Auth. Sewer Serv., Inc., 524 So. 2d 600, 604 (Ala. 1988) clearly requires a presumption in favor of hearing a case on the merits, and second that there could hardly be a more compelling reason to set aside a default judgment than the one presented in this case, namely the decision on the custody of a child.

The Appeals Court articulated from the Kirtland case the two-step analysis a court should use in considering a motion to set aside a default judgment. The first step in the analysis is a presumption that the court should hear a case on its merits whenever practicable. The second step is a three-factor weighing test, “1) whether the defendant has a meritorious defense; 2) whether the plaintiff will be unfairly prejudiced if the default judgment is set aside; and 3) whether the default judgment was a result of the defendant’s own culpable conduct.”

The Appeals Court then considered each of these three factors in order. Concerning whether the defendant has a meritorious defense, the Appeals Court noted that this is not the typical default case involving failure to file an answer. The defendant had appeared and filed an answer and counterclaim, specifically alleging that the child’s interest would be served by her living with the defendant rather than with the plaintiff and attaching a letter from the child expressing a preference for living with the defendant.

Concerning whether the defendant’s own culpable conduct was the cause of the default judgment, the Appeals Court stated that there was genuine issue whether the defendant’s counsel was absent because of willful failure or simply negligence. “Conduct committed wilfully or in bad faith constitutes culpable conduct for purposes of determining whether a default judgment should be set aside. Negligence by itself is insufficient.”

And concerning whether the plaintiff would be prejudiced by setting aside the default judgment, the Appeals Court first acknowledged that the movant (in this case the defendant) would normally have the burden of proving the grounds for the requested relief. In the case of prejudice, however, the Appeals Court said that placing on the defendant the burden of showing lack of prejudice not only requires the defendant to prove a negative but also requires the defendant to prove facts that only the plaintiff can provide.

After discussing a two-step process to consider prejudice, the Appeals Court summarized its holding:

We are aware of no case in which this court or our Supreme Court has held that a “consideration” of the Kirtland factors and the necessary “balancing of the equities” made it appropriate to deny relief from a default judgment under circumstances such as those present here. The meritorious-defense factor weighed in favor of such relief, and there is at least a genuine issue as to whether the culpable-conduct factor did also. Neither the record nor the nonmovant suggests that there would be substantial prejudice if relief were granted. Nor do we believe it appropriate to interpret Phillips [v. Randolph, 828 So. 2d 269 (Ala. 2002) – stating that the party seeking to set aside a default motion has the burden of proof] as supporting a denial of relief under such circumstances, particularly in a case such as this, where so much (the proper custody of a child) is at stake and the record reflects that the defaulting party moved so promptly for relief.

As noted at the outset, a trial court’s discretion in deciding whether to grant or to deny a motion for relief from a default judgment is not absolute. In reviewing trial-court decisions denying relief from default judgments, we must take care not to abdicate our responsibility as an appellate court to ensure that trial courts, within the discretion afforded them, are fairly balancing the equities in such cases and preserving the “strong bias” in favor of deciding cases on their merits.

Applying the foregoing principles, we conclude that the trial court erred in this particular case in denying the wife’s motion for relief from the default judgment. Accordingly, that judgment is reversed, and the cause is remanded to the trial court for further proceedings.

In his special concurrence, Judge Crawley sharply criticized the defendant’s counsel for failing to use the Attorney Calendar Conflict Resolution Order “which our Supreme Court adopted in 1990 — 15 years ago!” Judge Crawley said the failure to use the Order constituted “flagrant disrespect for court rules” and should be considered in weighing whether the party’s conduct was culpable.

If you’re interested, here’s the text of the Alabama Attorney Calendar Conflict Resolution Order:

Whenever an attorney receives notice of the setting of any case for trial or of any motion for a hearing, the attorney shall immediately review his or her calendar and determine if the setting causes a scheduling conflict.

When an attorney is scheduled to appear in more than one court at the same time, or within such a short period that the attorney cannot reasonably be expected to appear in both courts, he or she shall, upon receipt of the notice producing the conflict, immediately attempt to make adequate arrangements for representation of each client’s interest by substitution of counsel or shall otherwise attempt to resolve the conflict by consulting with counsel representing the adverse parties in the conflicting cases.

If the attorney is unable to resolve the conflict by the means suggested in the [preceding] paragraph, he or she shall promptly attempt to resolve the conflict by filing an appropriate motion with one or more of the courts involved.

If the attorney is unsuccessful in resolving the conflict by motion, he or she shall forthwith consult the judges involved in the conflicting cases, notifying them of the efforts he or she has made to resolve the conflict and of the fact that those efforts have been unsuccessful.

It shall be the duty of the judges involved to resolve the conflict by consultation and to notify the attorney of the resolution. In the event the judges involved cannot resolve the conflict, then either attorney may request that the conflict be resolved by a judge or a panel of judges appointed by the chief justice.

No resolution of a conflict shall result in a continuance unless a continuance is expressly ordered by a trial judge.

Once there has been entered an order establishing a priority among conflicting cases, that order will not relieve an attorney from appearing in secondary proceedings in the event the priority case is settled, dismissed, or rescheduled for whatever purpose.