Opinion · Colorado Court Opinions

CFI STEEL v. ROBB, 188 Colo. 155 (1975)

CFI Steel Corp., a Colo. Corp. v. Richard D. Robb, DistrictJudge for the Dist. Court in & for the Tenth Judicial Dist. of theState of Colo., 533 P.2d 491 (Colo. 1975)

Type
Opinion
Court
Colorado Court Opinions
Jurisdiction
Colorado
Date
1975-03-31
Topic
general

CFI STEEL v. ROBB, 188 Colo. 155 (1975) (533 P.2d 491) CFI Steel Corporation, a Colorado corporation v. Richard D. Robb, DistrictJudge for the District Court in and for the Tenth Judicial District of theState of Colorado No. 26629Supreme Court of Colorado. Decided March 31, 1975 Original proceeding arising under a petition for a writ in the nature of prohibition wherein corporation sought to have a default order against it set aside.

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CFI STEEL v. ROBB,188 Colo. 155(1975)
(533 P.2d 491)
CFI Steel Corporation, a Colorado corporation v. Richard D. Robb, District
Judge for the District Court in and for the Tenth Judicial District of the
State of Colorado
No. 26629
Supreme Court of Colorado.
Decided March 31, 1975
Original proceeding arising under a petition for a writ in the nature of prohibition wherein corporation sought to have a default order against it set aside. Rule to show cause issued.Rule Made Absolute
1.JUDGMENT—Attorney — Large Practice — Heavy Pressure — ExcusableNeglect — Negative.Where attorney whose firm had a large and substantial practice and who as a result of heavy schedule of appearances in litigation matters and conferences was under very heavy pressure which caused him to be two days late in entering an appearance for defendant,held, this, as such, did not constitute excusable neglect on his part.
2.Default — Set Aside — Promote — Substantial Justice.A motion to set aside a default judgment should be considered in a manner calculated to promote substantial justice.
3.Lateness — Counsel — Entry of Appearance — Corporation — Permission— Day in Court.In action by widow of subcontractor's employee — who was killed while working on defendant corporation's premises — to recover $1,500,000 against corporation, reviewing court is of the view that the ends of justice require that corporation be permitted to assert all the defenses that it has tendered so far and thus be entitled to have its dayPage 156in court, notwithstanding the fact that defense counsel was two days late in entering appearance on behalf of corporation.
Original Proceeding
Rector, Melat Wheeler, P.C., for petitioner.

Branney Griffith, Criswell Patterson, Albert E. Zarlengo, Jr., for respondents.
En Banc.
MR. JUSTICE GROVES delivered the opinion of the Court.
This original proceeding arises under a petition for a writ in the nature of prohibition wherein it is sought to have a default order set aside. We issued a rule to show cause why the requested relief should not be granted. The case is now at issue, and we make the rule absolute.

Richard B. Casaus was an employee of a subcontractor, which was acting under a construction contract upon premises of the petitioner CFI Steel Corporation (called CFI). While Casaus was at work on the premises, there was an accident in which molten metal caused his death. The surviving spouse and minor children brought action against CFI, asking for damages in the amount of $1,500,000.

Service of the summons and complaint was made upon CFI's registered agents for service of process in Denver on April 29, 1974. An appearance, therefore, was due in the case on May 20, 1974. On the 8th or 9th of May the summons and complaint reached the office of the attorney who was to represent CFI in the case.

Upon motion filed on May 22nd, apparently between 10:00 and 11:00 a.m. the court ordered entry of default and it entered a default judgment, setting down for hearing the amount of damages on June 19, 1974. The date for this hearing was continued and it has not been held. At about 2:00 o'clock p.m. on May 22nd the attorney for CFI went to the office of the clerk of the trial court and caused to be filed in the case a motion toPage 157strike portions of the complaint, accompanied by a supporting brief. Before making the filing, the attorney inquired as to matters which had been filed in the case, and was advised that nothing had been filed except the original complaint and return of the summons. The attorney learned about the default about a week later. On May 28th the plaintiffs filed a motion to strike the motion to strike for the reason that it was filed subsequently to the entry of the default judgment.[1]On June 12th CFI's counsel filed a motion to set aside the default judgment and tendered an answer. Accompanying the motion to set aside was the attorney's affidavit, which set forth the attorney's heavy schedule of appearances in litigation matters and conferences which, he asserted, caused him to be two days late in entering an appearance. There is no question but that this attorney and his firm have a large and substantial law practice and that during the time in question he was under very heavy pressure. This, however, does not constitute excusable neglect onhispart.

In the answer, in addition to admissions and denials, CFI alleged the five following affirmative defenses:

1. Decedent's death resulted from the negligence of a supplier of scrap metal.

2. Decedent assumed the risk involved.

3. Decedent's death resulted from the negligence of his employer.

4. Decedent was contributorily negligent.

5. Decedent's employer was contractually bound with its insurer to pay any judgment rendered against CFI.

The respondent judge denied the motion to set aside the default judgment for the reasons that excusable neglect was not shown and that there were not set forth sufficient facts to indicate that CFI had a meritorious defense.

On July 18, 1974 the attorney representing CFI withdrew from the case and simultaneously CFI's present counsel appeared. New counsel filed a supplementary motion. This motion contains an additional defense pertaining to the Colorado Workers' Compensation Act, and, for the first time, raised the question of jurisdiction of the court to enter judgment. Briefly, CFI pleaded that the plaintiff's exclusive remedy falls under thePage 158Colorado Workers' Compensation Act and that the respondent court is without jurisdiction.

We have a strong and abiding conviction that under the circumstances of this case CFI should have its day in court. We believe that we are not proceeding contrary to the rulings and spirit of any of the opinions of this court and the Colorado Court of Appeals.1

It was stated inCoerber v. Rath,164 Colo. 294,435 P.2d 228(1967):

"It is true, as previously noted, that motions to vacate default judgments are addressed to the sound discretion of the trial court, but we have never hesitated to overrule a trial court where that discretion has been abused.Burlington Co. v. Fort Morgan Co.,59 Colo. 571,151 P. 432. Of course, one against whom a default judgment has been entered must allege a meritorious defense to the plaintiff's claim, otherwise there is a failure to show good cause.

"In the instant case the defendants had alleged a meritorious defense; the case was at issue before the entry of the default judgment. From the foregoing factual recitation it is clear that defendants' counsel was negligent. That neglect was the primary cause for the defendants' failure to answer the interrogatories. Counsel's neglect was inexcusable but, under the circumstances here, this neglect should not be imputed to the defendants."[2]InFS Construction Co. v. Christlieb,166 Colo. 67,441 P.2d 656(1968), it was stated:

"A motion to set aside a default judgment should be considered in a manner calculated to promote substantial justice.Walker v. Associates Loan Co.,153 Colo. 261,385 P.2d 421. Where the motion has been promptly made and aPage 159prima facie meritorious defense is shown, this Court had not hesitated to find abuse of discretion in a court's refusal to set aside a default judgment, particularly in cases where the defendant had no actual notice of the suit, or of the trial."

It was written inDudley v. Keller,33 Colo. App. 320,521 P.2d 175(1974):

"[G]enerally the determination of whether to vacate or set aside a default judgment has been held to be within the sound discretion of the trial court.Coerber v. Rath,164 Colo. 294,435 P.2d 228;Connell v.Continental Casualty Co.,87 Colo. 573,290 P. 274. However, the discretion of the court in considering any application to vacate a default is controlled by fixed legal principles, to be exercised in conformity with the spirit of the law, and in a manner to serve and not to impede or defeat, the ends of justice.Gumaer v. Bell,51 Colo. 473,119 P. 681."[3]We have given no consideration to whether CFI may ultimately prevail under any of its defenses. We simply hold that this is a case in which the ends of justice require that it be permitted to assert all the defenses that it has tendered thus far.

The ruling is made absolute with directions to the respondent court that the default judgment be vacated, the amended answer filed on July 18, 1974 be recognized, and that proceedings in the case continue.

MR. CHIEF JUSTICE PRINGLE dissents.
MR. CHIEF JUSTICE PRINGLE dissenting:

While I would set aside the default and allow the case to proceed under the answer originally tendered, I dissent because this court has gone too far in directing that CFI has the right to attempt to defend under the fifth affirmative defense tendered much later on July 18, 1974. I would direct, as a condition of setting aside this default, the requirement that CFI be bound by the answer it originally tendered.Page 160
  1. In addition to those cases quoted in the opinion, we have also studied the following cases which were cited in the briefs:Gumaer v.Bell,51 Colo. 473,119 P. 681(1911);Burlington Ditch Co. v. FortMorgan Co.,59 Colo. 571,151 P. 432(1915);Beyer v. Petersen,92 Colo. 462,21 P.2d 1115(1933);Browning v. Potter,129 Colo. 448,271 P.2d 418(1954);Burr v. Allard,133 Colo. 270,293 P.2d 969(1956);Riss v. Air Rental,136 Colo. 216,315 P.2d 820(1957);Ehrlinger v.Parker,137 Colo. 514,327 P.2d 267(1958);Moskowitz v. Michaels,29 Colo. App. 44,477 P.2d 465(1970);Temple v. Miller,30 Colo. App. 49,488 P.2d 252(1971); andFarmers Insurance Group v.District Court,181 Colo. 85,507 P.2d 865(1973). ↩