Opinion
January 13, 1964.
PRESENT: Condon, C.J., Roberts, Powers and Joslin, JJ.
1. JUDGMENT. Default Judgment. Accident, Mistake or Unforeseen Cause. Where petitioner notified his insurer of automobile accident, but failed to notify it of suits filed against him and default judgments were entered,
Held, allegations of petitions to remove default clearly did not show that failure to appear and defend the suits was the result of an accident, and if it was because of a mistake it was one of law and not of fact, hence no relief could be granted unless based upon unforeseen cause. G.L. 1956, § 9-21-4.
2. JUDGMENT. Default Judgment. Removal of Default. Unforeseen Cause.
Statute providing for removal of default and trial because of accident, mistake or unforeseen cause is to be interpreted literally, but court has wide discretion in determining whether unforeseen cause exists. Whether fact situation is such as to call for exercise of court's discretion is to be resolved with liberality. G.L. 1956, § 9-21-4.
3. INSURANCE. Default Judgment Against Insured. Reliance an Insurer to Defend Suit.
It is generally held that a default judgment should be vacated when a defaulted party has notified his insurer of the commencement of suit against him and has relied, to his detriment, on its undertaking to defend. G.L. 1956, § 9-21-4.
4. DEFAULT JUDGMENT. Removal of Default. Circumstances Favorable to Petitioner.
Defendant operator of car was sued in tort actions but failed to notify his insurer of the suits, although he had advised insurer of the accident and prepared accident report for it. Default judgments were entered and defendant petitioned for trials alleging accident, mistake or unforeseen cause.
Held, that certain circumstances were favorable to petitioner, especially fact that plaintiffs had dealt with insurance company both before and after suit as the real though not legal defendant, and the company was kept advised of each and every stage of the suit, hence relief would be granted petitioner since it did not appear the respondents would be prejudiced thereby. G.L. 1956, § 9-21-4.
5. JUDGMENT. Removal of Default Judgment. Costs and Counsel Fees Awarded Respondents.
Where, following default judgments, petitioner was granted trials because of showing of unforeseen cause sufficient to move discretion of court,
Held, respondents should not be made to suffer and trials would be granted to petitioner only upon payment of costs and counsel fees.
PETITIONS for trials filed within one year of default judgments entered in superior court. Petitions granted provided petitioner pay costs and counsel fee in each action, otherwise petitions denied and dismissed. Papers in each case, returned to superior court with decision endorsed thereon.
Louis Baruch Rubinstein, Leo Sonkin, for petitioner.
James Cardono, for respondents.
These are petitions for trials which were filed in this court pursuant to G.L. 1956, § 9-21-4, within one year after entry of judgment by default against the petitioner in the superior court. Each is an action at law, the first having been brought by Betty Ann Jakubiak v. Joseph B. Wells, No. 164548, and the second by Stanley J. Jakubiak v. Joseph B. Wells, No. 164549. In compliance with the citation, the superior court has certified the papers in each case to this court.
The petitioner seeks relief under the statute on the grounds that by reason of accident, mistake, or unforeseen cause he did not have his day in court and that he has meritorious defenses to the actions brought against him. The cases were consolidated for hearing before us. Since the issues are the same in each case, we shall refer only to the petition in which Betty Ann Jakubiak is respondent but our conclusions shall apply equally to both cases.
The action is trespass on the case for negligence for injuries which respondent allegedly suffered when the car by which she was standing was struck by an automobile operated by petitioner. The case was defaulted because it was unanswered and judgment for $8,000 was entered for the plaintiff, respondent here. Thereafter this petition was filed.
The affidavit of petitioner sets forth that shortly after the accident he related all the facts concerning it to a representative of the carrier insuring him against liability for damages arising from motor vehicle accidents; that he signed an accident report at the offices of said company; and that thereafter a representative of the company advised him that he "was protected, and that the company would take care of any matter arising out of the said accident."
The affidavit further acknowledges due service upon him of a writ commencing the instant suit, states that he lost the writ, and makes no averment that his insurance company was ever notified by him of the commencement of suit or that there was any communication between them other than that hereinbefore referred to. The respondent both in her brief and oral argument admits that she was in communication with petitioner's insurance company both prior and subsequent to the default judgment.
If petitioner is to be granted a trial, it must be on the ground of unforeseen cause. His failure to appear and defend was clearly not an accident, and if it was occasioned by mistake it was of law rather than fact for which no relief can be granted. McKeough v. Gifford, 30 R.I. 192.
Although the statute is to be interpreted literally, we have a wide discretion in determining whether unforeseen cause exists and we will grant a defaulted party a trial whenever we can "reasonably do so in order that no person should be deprived of his day in court unless through some fault peculiarly his own." Ktorides v. Kazamias, 75 R.I. 465, 469. Whether the fact situation here is such as to warrant the exercise of our discretion is to be resolved with liberality. Petition of deBrabant, 96 R.I. 61, 188 A.2d 901, and in deciding whether petitioner should be granted relief we will exercise "great leniency." Densereau v. Saillant, 22 R.I. 500.
It is generally held that a default judgment should be vacated when a defaulted party has notified his insurer of the commencement of suit against him and has relied, to his detriment, on its undertaking to defend. Dalton v. Alexander, 10 Ill. App.2d 273; Hinz v. Northland Milk Ice Cream Co., 237 Minn. 28; Scott v. McEwing, 337 Pa. 273; Newton v. De Armond, 60 Cal.App. 231; Pelegrinelli v. McCloud River Lumber Co., 1 Cal.App. 593; 30A Am. Jur., Judgments, § 665, p. 634. To grant petitioner the relief he seeks requires an extension of the general rule. In our opinion to do so in the peculiar circumstances of this case is appropriate especially since no injustice will result to respondent. See Daniel v. Morgan, Ky., 244 S.W.2d 752.
The petitioner according to his affidavit has never been involved in litigation or law suits and has no knowledge of legal procedures. He promptly notified his carrier that he had been involved in an accident and was assured that his rights would be protected. Moreover, he states in his affidavit that he believed the company knew of "the actions [commencement of suits] taken by the plaintiff herein." Caution for the preservation of his interests should have dictated that he do more than he did. We cannot, however, say that he as a lay person was unreasonable either in the belief that the company which insured him had notice of the commencement of the suit against him or in the expectation that having been advised, it would act on his behalf.
The exercise of our discretion in this instance is influenced in large measure by the actions of respondent in the prejudgment phases of this proceeding. She dealt with the insurance company both before and after the commencement of her suit. She advised it of each and every stage of the proceedings. She attempted unsuccessfully to induce it to answer the case and notified it of the date of its assignment on proof of claim in the superior court. Her course of conduct indicates that she considered the insurance company to be the real, though not the legal, defendant and is warrant for us to exercise great leniency in petitioner's behalf especially since respondent does not contend that such action on our part will either prejudice her or deprive her of any advantage to which she might otherwise be entitled. See Johnson v. McIntyre, 80 Idaho 135, 139.
The respondents, however, should not be made to suffer because we have afforded relief to petitioner. They should be reimbursed for the expense of the proceedings in the superior court wherein petitioner was defaulted as well as for the expense of preparing a brief and appearing in this court. See Ktorides v. Kazamias, supra.
The petition for a trial in M.P. No. 1552 is granted provided the petitioner shall pay the respondent's costs and a counsel fee of $100 on or before January 27, 1964; otherwise the petition is denied and dismissed.
The petition for a trial in M.P. No. 1553 is granted provided the petitioner shall pay the respondent's costs and a counsel fee of $100 on or before January 27, 1964; otherwise the petition is denied and dismissed.
The certified papers in each case are returned to the superior court with our decision endorsed thereon.