Biella v. State Department of Highways , 652 P.2d 1100 ( 1982 )

VAN CISE, Judge.

Defendants, State Department of Highways and the State of Colorado, appeal the trial court’s award of damages to the plaintiff and its order denying defendants’ motion to vacate default judgment. Plaintiff has abandoned his cross-appeal. We affirm.

On April 19, 1978, the plaintiff’s prize heifer wandered onto Colorado Highway 36 and was killed by an oncoming car. Plaintiff’s lawyer demanded payment from the State of Colorado, claiming that the State had failed to maintain the fence which separated plaintiff’s land from the highway. The State, acting through its insurance company, denied the claim on the ground that Colorado’s right-of-way fence law did not create an actionable duty toward the plaintiff on the part of the State.

On March 5, 1979, the plaintiff filed a complaint which alleged that § 35-46 — 111, C.R.S.1973, imposes a duty on the defendants to maintain a fence along the highway; that the defendants had violated the statute; and that this violation was a direct and proximate cause of the heifer’s death. The plaintiff also alleged that the State had failed to exercise ordinary care in inspecting, discovering defects in, maintaining, and repairing the fence. The plaintiff claimed damages of $7,500. Although both the Department of Highways and. the State were served with a copy of the complaint, no appearance was entered and no timely responsive pleading was filed.

On April 18, 1979, plaintiff filed a motion for default judgment. No copy of his motion was served on the defendants or sent to the attorney general. On April 30, 1979, the court directed entry of default against the defendants. On May 10,1979, the court set a hearing on plaintiff’s motion for default judgment, and sent a copy of this notice to the plaintiff only. On May 23, 1979, a hearing was held ex parte on plaintiff’s motion for default judgment. Final judgment was entered in plaintiff’s favor on March 26, 1980, in the sum of $13,500.

On April 25, 1980, the attorney general received a letter from plaintiff’s counsel demanding payment of the judgment. As a result, defendants moved to set aside entry of default pursuant to C.R.C.P. 55(c) and for relief from judgment pursuant to C.R. C.P. 60, attaching an answer. The motions were denied, as was the motion for new trial. The court did, however, reduce the damages awarded from $13,500 to $7,500, the amount prayed for in the complaint.

I.

The defendants first contend that the default judgment was defective because of the failure to serve a three-day notice as required by C.R.C.P. 55(b)(2). They argue that defendants “appeared” within the meaning of the rule because they evidenced a desire to defend when their insurance company denied liability for the claim. We disagree.

Colorado has taken a liberal approach in determining what constitutes an “appearance” under C.R.C.P. 55(b)(2). See R.F. v. D.G.W., 192 Colo. 528, 560 P.2d 837 (1977); Best v. Jones, Colo.App., 644 P.2d 89; Carls Construction, Inc. v. Gigliotti, 40 Colo.App. 535, 577 P.2d 1107 (1978). However, the rule of these cases is not sufficiently expansive to embrace defendants’ conduct here.

To be entitled to notice of application for judgment under C.R.C.P. 55(b)(2), a party’s appearance must be responsive to the plaintiff’s formal court action. The plaintiff’s knowledge that the defendants plan to resist the suit is not enough. Baez v. S.S. Kres'ge Co., 518 F.2d 349 (5th Cir. 1975), cert, denied, 425 U.S. 904, 96 S.Ct. 1495, 47 L.Ed.2d 754 (1976). Nor do the provisions of § 24-31-101, C.R.S.1973 (1981 Cum.Supp.), which imposes upon the attorney general the statutory obligation to represent state agencies, transform the attorney general’s inaction to an appearance. Hence, the trial court correctly concluded that no notice was required under C.R.C.P. 55(b)(2).

II.

Arguing that C.R.C.P. 55(e) requires an adversary hearing after notice to the State, defendants assert that the court erred by failing to vacate the default judgment, since no such hearing was held. We find no such requirement.

C.R.C.P. 55(e), which governs default judgments against an agency of the State, provides:

“No judgment by default shall be entered against an officer or agency of the State of Colorado unless the claimant establishes his claim or right to relief by evidence satisfactory to the court.”

Defendants’ reliance on Campbell v. East-land, 307 F.2d 478 (5th Cir. 1962), cert, denied, 371 U.S. 955, 83 S.Ct. 502, 9 L.Ed.2d 502 (1963), is misplaced because that case concerned the interplay between C.R.C.P. 55(e) and C.R.C.P. 37(b). Under such circumstances, an adversary hearing is the probable result of a request for default judgment as a sanction for failure to make discovery when the government is already a litigant.

Neither do we regard the statements made in 6 J. Moore's Federal Practice § 55.12 (2d ed. 1976) as being applicable here. The commentary relates to the case of Rank v. (Krug) United States, 142 F.Supp. 1 (S.D.Cal.1956), modified, 293 F.2d 340 (9th Cir. 1961), modified, 307 F.2d 96 (9th Cir. 1962), modified, 372 U.S. 609, 83 S.Ct. 999, 10 L.Ed.2d 15 (1963). In that case, a default judgment against the United States was reopened for the taking of testimony to establish a right to relief. The United States was in fact notified of this hearing, but the case does not stand for the proposition that such notice is mandatory.

A plaintiff is not entitled to a judgment by default as a matter of right when the defendant is an agency of Colorado. Norsworthy v. Colorado Department of Revenue, 197 Colo. 527, 594 P.2d 1055 (1979). C.R.C.P. 55(e) requires that the claimant establish his claim by “evidence satisfactory to the court.” But, “absent an express statutory mandate to the contrary, government agencies are to be treated as would [be] any other litigant while before the court.” Bostic v. Harris, 484 F.Supp. 686, 688 (D.W.Va.1979). Notice to these defendants is not required, see Fedor v. Ribicoff, 211 F.Supp. 520 (E.D.Pa.1962); neither is an adversary hearing.

III.

Defendants contend, nevertheless, that the trial court erred in failing to vacate the default judgment since defendants alleged meritorious defenses which, if proved, would defeat the action. We do not agree.

Because defendants failed to answer, this became a non-adversary proceeding. The averments in plaintiff’s complaint, not having been denied in responsive pleadings filed before judgment are deemed admitted, as they would be for any other litigant. Orebaugh v. Doskocil, 145 Colo. 484, 359 P.2d 671 (1961). Here, however, the court, sua sponte, conducted an ex parte evidentiary hearing on plaintiff’s motion for default judgment.

Plaintiff testified about the accident, the condition of the fence, previous incidents involving other livestock and the highway department, and details establishing the value of his heifer and the calf she was carrying. A livestock expert also testifiéd as to the damage to plaintiff from the loss of the heifer.

Based on and supported by that evidence, the court made findings and conclusions that the defendants were negligent, that this negligence was a proximate cause of the plaintiff’s damages, and that plaintiff had sustained damages of $13,500 (later reduced to $7,500) caused by defendants’ negligence. This, obviously, was “evidence satisfactory to the court” and met the requirements of C.R.C.P. 55(e).

Once it is established that there has been no procedural defect in the granting of the default judgment and that “evidence satisfactory to the court” has been presented to support plaintiff’s claim (see I and II, supra), the question then becomes whether, pursuant to C.R.C.P. 60(b), defendants were entitled to have the default judgment set aside. In making this determination, defendants again are to be treated like any other litigant. See Bostic v. Harris, supra.

Defendants must show not only that they have a meritorious defense but also that they come within one of the reasons specified in the rule. The mere existence of a meritorious defense is not sufficient alone to justify vacating the judgment. Riss v. Air Rental, Inc., 136 Colo. 216, 315 P.2d 820 (1957).

In its C.R.C.P. 60(b) motion for relief from judgment, defendants listed several claimed meritorious defenses and filed an answer setting them forth. The reason assigned for failing to answer was inadvertence and excusable neglect. To support the claim, defendants asserted that “the loss of the [summons and complaint] served on the State, considering the massive machinery of the State and the number of documents so served annually, constituted inadvertence or excusable neglect.” However, the trial court found, and we agree, that the facts admitted by defendants show that their own carelessness resulted in their failure to file a responsive pleading and that this carelessness did not constitute excusable neglect. Farmers Insurance Group v. District Court, 181 Colo. 85, 507 P.2d 865 (1973).

Therefore, even though defendants may have a meritorious defense or defenses and even though perhaps defendants would prevail at trial if the judgment were vacated, since there was no excusable neglect, there is no basis for setting aside the default. Riss v. Air Renta], Inc., supra; Craig v. Rider, Colo.App., 628 P.2d 623 (1980).

Having so concluded, we need not address the remaining contentions of defendants.

Judgment affirmed.

TURSI, J., concurs. KELLY, J., dissents.