Bodell Construction v. Robbins , 334 P.3d 1004 ( 2014 )

2014 UT App 203_________________________________________________________
THE UTAH COURT OF APPEALS
BODELL CONSTRUCTION COMPANY,
Plaintiff and Appellee,
v.
MARK ROBBINS,
Defendant and Appellant.
Opinion
No. 20120446-CA
Filed August 28, 2014
Third District Court, Salt Lake Department
The Honorable John Paul Kennedy
No. 030917018
James E. Nesland and Eric W. Pearson, Attorneys
for Appellant
Matthew R. Lewis and Ryan B. Bell, Attorneys
for Appellee
JUDGE MICHELE M. CHRISTIANSEN authored this Opinion, in
which JUDGE STEPHEN L. ROTH and SENIOR JUDGE RUSSELL W.
BENCH concurred.1
CHRISTIANSEN, Judge:
¶1 Mark Robbins appeals the district court’s denial of his
motion to set aside the default judgment entered against him and
in favor of Plaintiff Bodell Construction Company (Bodell). We
affirm.
1. The Honorable Russell W. Bench, Senior Judge, sat by special
assignment as authorized by law. See generally Utah Code Jud.
Admin. R. 11-201(6).
Bodell Construction Co. v. Robbins
¶2 In 2003, Bodell filed suit against Robbins and others, alleging
fraud, civil conspiracy, negligent misrepresentation, and unjust
enrichment. The litigation stemmed from a dispute concerning a
series of loans and other transactions among Bodell and the
defendants. Robbins and other defendants moved for summary
judgment. In 2007, the district court granted the defendants’
motions for summary judgment, and Bodell appealed. In 2009, the
Utah Supreme Court reversed the district court’s grant of summary
judgment and remanded the case for further proceedings. Bodell
Constr. Co. v. Robbins, 2009 UT 52, ¶ 40, 215 P.3d 933.
¶3 Soon after the remand, Robbins’s attorneys submitted an ex
parte motion for leave to withdraw as counsel, claiming, among
other things, that they had “been unable to communicate with
[Robbins] for several months, and correspondence to [Robbins]
ha[d] been returned undeliverable.” Robbins’s attorneys informed
the district court that Robbins’s last known address was in Park
City, Utah. Although Robbins had not lived at the Park City
address since October 2008, he had failed to provide his attorneys
or the court with his new address. The court granted the motion to
withdraw.
¶4 After his counsel withdrew, Robbins did not appear before
the district court, retain new counsel, or update his address with
the court. As the case proceeded without Robbins’s involvement,
counsel for Bodell served all filings, including those relating to a
potential default judgment, to Robbins’s last known address—the
Park City address on file with the district court. In November 2011,
the court entered a default judgment against Robbins.2 In February
2012, Robbins filed a motion to set aside the default judgment in
accordance with rule 60(b) of the Utah Rules of Civil Procedure. On
April 25, 2012, the court denied Robbins’s motion, and Robbins
filed a notice of appeal on May 25, 2012. Robbins’s notice of appeal
indicates that his appeal is from the district court’s April 2012 order
2. By 2010, Bodell had settled its claims with all of the other
defendants in this case.
20120446-CA 2 2014 UT App 203Bodell Construction Co. v. Robbins
denying his motion to set aside the default judgment, not the
underlying November 2011 default judgment itself. Robbins
requests that we reverse the court’s April 2012 order denying his
motion to set aside the default judgment, set aside that default
judgment, and remand for further proceedings.
ISSUES AND STANDARDS OF REVIEW
¶5 Robbins argues that the district court erred by denying his
rule 60(b) motion to set aside the default judgment. “A district
court has broad discretion to rule on a motion to set aside a default
judgment under rule 60(b) . . . .” Menzies v. Galetka, 2006 UT 81,
¶ 54, 150 P.3d 480. “Thus, we review a district court’s denial of a
[rule] 60(b) motion under an abuse of discretion standard of
review.” Id. And “in the context of a denial of a rule 60(b) motion,
‘[w]e review a district court’s findings of fact under a clear error
standard of review,’ while ‘[w]e review a district court’s
conclusions of law for correctness, affording the trial court no
deference.’” Swallow v. Kennard, 2008 UT App 134, ¶ 19, 183 P.3d
1052 (alterations in original) (quoting Menzies, 2006 UT 81, ¶ 55). In
addition, we note that our review of a district court’s rule 60(b)
order is “limited in scope” because such an appeal must only
address “the propriety of the denial or grant of relief,” not the
correctness of the underlying judgment. Franklin Covey Client Sales,
Inc. v. Melvin, 2000 UT App 110, ¶ 19, 2 P.3d 451 (citation and
internal quotation marks omitted).
ANALYSIS
¶6 For a district court to set aside a default judgment pursuant
to rule 60(b), “a defendant must show: (i) that the judgment was
entered against him through excusable neglect (or any other reason
specified in rule 60(b)), (ii) that his motion to set aside the judgment
was timely, and (iii) that he has a meritorious defense to the
action.” Hernandez v. Baker, 2004 UT App 462, ¶ 3, 104 P.3d 66420120446-CA 3 2014 UT App 203Bodell Construction Co. v. Robbins
(citation and internal quotation marks omitted). Rule 60(b)
provides, in relevant part, that the “court may in the furtherance of
justice relieve a party or his legal representative from a final
judgment, order, or proceeding for the following reasons: (1)
mistake, inadvertence, surprise, or excusable neglect; . . . or (6) any
other reason justifying relief from the operation of the judgment.”
Utah R. Civ. P. 60(b). Both before the district court and on appeal,
Robbins argues that he should be relieved from the default
judgment pursuant to three of the grounds provided in rule 60(b):
mistake, excusable neglect, and just cause under subsection (6). The
district court determined that Robbins failed to establish mistake,
excusable neglect, or just cause, and thus, the court declined to
consider whether Robbins’s motion was timely or whether he had
any meritorious defense to the action. We conclude that the district
court properly rejected each of Robbins’s asserted grounds for
relief.
I. Mistake
¶7 In Fisher v. Bybee, the Utah Supreme Court addressed the
type of “mistake” contemplated by rule 60(b) that would allow
relief from a default judgment. 2004 UT 92, 104 P.3d 1198. In
endorsing one of this court’s prior decisions, the supreme court
observed that we have “pared back [our] definition of judicial
‘mistake’ to include only the correction of ‘a minor oversight, such
as the omission of damages, which in most cases would be
obvious.’” Fisher, 2004 UT 92, ¶ 11 (quoting Franklin Covey Client
Sales, Inc. v. Melvin, 2000 UT App 110, ¶ 22, 2 P.3d 451). By contrast,
“a fundamental error of law, which in many cases would not be as
clear,” is not the type of mistake covered by rule 60(b). Franklin
Covey, 2000 UT App 110, ¶ 22 (citation and internal quotation
marks omitted). In other words, rule 60(b) is “proper to remedy
only a clerical mistake, not a major judicial misapprehension of the
law.” Fisher, 2004 UT 92, ¶ 9.
¶8 Here, Robbins asserts that Bodell made three separate
mistakes in calculating the amount of the default judgment, each
20120446-CA 4 2014 UT App 203Bodell Construction Co. v. Robbins
of which, he alleges, “incorrectly and materially increased the
amount” of the default judgment entered by the court. These
mistakes are “(1) misallocation by Bodell of a $3 million payment,
(2) use of an incorrect starting date for the accrual of prejudgment
interest, and (3) use of the wrong rate for prejudgment interest.”
The district court determined that these mistakes “concern alleged
errors of law committed by the Court” and that, “[a]s such, they
fall outside the scope of Rule 60(b)(1) and do not provide a basis for
setting aside the default judgment.”3 We agree.
¶9 None of the mistakes alleged by Robbins constitute an
obvious clerical mistake or a minor oversight meriting relief under
rule 60(b). For example, both in his memorandum before the
district court and on appeal, Robbins cites extensively to case law,
statutes, and secondary sources to support his arguments that the
$3 million payment allocation, the starting date for prejudgment
interest, and the prejudgment interest rate were mistakes. In
arguing that these mistakes are of the type subject to relief
pursuant to rule 60(b), Robbins asserts that “[a]lthough each of the
mistakes involves legal rulings and/or principles (as any calculation
of damages must),” Robbins “did not call those legal rulings or
principles into question but rather contended only that Bodell did
not correctly follow the appropriate legal rulings and principles.”
3. Robbins claims that the district court “sidestepped” addressing
the merits of any of the three mistakes he identified because the
court concluded that those mistakes, if true, would have been
committed by the court and therefore did not relate to the conduct
of counsel or the parties. “[T]he term ‘mistake,’ as used in rule
60(b)(1), has general application to the activities of counsel and
parties, but seldom extends to judicial decisions . . . .” Fisher v.
Bybee, 2004 UT 92, ¶ 12, 104 P.3d 1198. However, the district court
specifically concluded that the purported mistakes would have
been “errors of law.” (Emphasis added.) This conclusion addresses
the type of mistake at issue, which, regardless of who commits the
error, is the proper focus for purposes of rule 60(b)(1).
20120446-CA 5 2014 UT App 203Bodell Construction Co. v. Robbins
Robbins’s argument on this point presents a distinction without a
difference, at least in the context of this case. Whether Bodell, and
by extension the district court, “correctly follow[ed] the
appropriate legal rulings and principles” is simply another way of
asking whether the district court applied the correct rule for
measuring damages. And “[w]hether the district court applied the
correct rule for measuring damages is a question of law.” Mahana
v. Onyx Acceptance Corp., 2004 UT 59, ¶ 25, 96 P.3d 893. We
therefore conclude that the district court properly determined that
no “mistake” existed that would justify setting aside the November
2011 default judgment, even assuming without deciding that the
court incorrectly applied the law. See Franklin Covey, 2000 UT App
110, ¶ 22 (stating that “[i]f a court merely wrongly decided a point
of law, that is not [mistake]” under rule 60(b) (alterations in
original) (citation and internal quotation marks omitted)).4
II. Excusable Neglect
¶10 Whether excusable neglect exists is an equitable inquiry.
Jones v. Layton/Okland, 2009 UT 39, ¶ 17, 214 P.3d 859. However,
“diligence on the part of the party claiming excusable neglect is an
essential element of that inquiry, and relief may not be granted
based on other ‘equitable considerations’ ‘where a party has
exercised no diligence at all.’” White Cap Constr. Supply, Inc. v. Star
4. Additionally, Robbins asserts that the district court abused its
discretion in holding that no mistake existed, because the court
failed to make adequate findings of fact or conclusions of law.
Generally, “a district court’s ruling on a motion to set aside a
default judgment must be based on adequate findings of fact and
on the law.” Menzies v. Galetka, 2006 UT 81, ¶ 55, 150 P.3d 480.
However, the district court determined that the mistakes alleged by
Robbins, even if factually true, were not of the type meriting relief
under rule 60(b). Because the district court resolved this issue as a
matter of law, it was unnecessary for the court to make specific
findings of fact regarding each mistake alleged by Robbins.
20120446-CA 6 2014 UT App 203Bodell Construction Co. v. Robbins
Mountain Constr., Inc., 2012 UT App 70, ¶ 5, 277 P.3d 649 (quoting
Jones, 2009 UT 39, ¶ 23); see also Mini Spas, Inc. v. Industrial Comm’n,
733 P.2d 130, 132 (Utah 1987) (per curiam) (defining excusable
neglect as “the exercise of due diligence by a reasonably prudent
person under similar circumstances” (citation and internal
quotation marks omitted)). Thus, “[i]n determining whether a party
has exercised due diligence” sufficient “‘to justify excusing it from
the full consequences of its neglect’” under rule 60(b), “the trial
court must consider whether the actions of the party seeking relief
were ‘sufficiently diligent and responsible, in light of the attendant
circumstances.’” White Cap Constr., 2012 UT App 70, ¶ 5 (quoting
Jones, 2009 UT 39, ¶ 22).
¶11 The district court entered judgment against Robbins after he
“neglected to keep his counsel or the Court updated as to his
whereabouts or otherwise remain apprised of developments in the
case.” Robbins argues that his neglect was excused by his mistaken
belief that Bodell was no longer pursuing its claims against him
and that Bodell or its counsel would ensure that Robbins received
actual notice if it continued to press its claims.
¶12 As for his first excuse, Robbins asserts that because he and
Bodell had engaged in several business transactions while the
underlying suit was progressing, he believed that Bodell had
dropped its claims against him. However, Robbins does not allege
that Bodell ever actually communicated to him an intention to
terminate this litigation or that the business transactions were
initiated as a way to settle Bodell’s claims. As the district court
observed in denying Robbins’s motion, we agree that “[s]imply
conducting business with an opposing party to a lawsuit is not a
clear signal that all is forgiven.” Also, as the district court noted,
Bodell continued to pursue its appeal to the Utah Supreme Court
during the same time that Bodell and Robbins were transacting
business with each other, and Robbins was aware of Bodell’s
appeal. Bodell’s willingness to expend the time and resources
necessary to carry out such an appeal undermines Robbins’s claim
that he reasonably believed Bodell had dropped its claims against
20120446-CA 7 2014 UT App 203Bodell Construction Co. v. Robbins
him. Moreover, even after Robbins became aware of the supreme
court’s decision reversing the district court’s grant of Robbins’s
summary judgment motion, which allowed Bodell’s claims to
proceed against him, Robbins made no effort to contact his
attorneys or the court. Such conduct falls outside “the exercise of
due diligence by a reasonably prudent person under similar
circumstances.” Mini Spas, 733 P.2d at 132 (citation and internal
quotation marks omitted).
¶13 Regarding Robbins’s second excuse—that Bodell or its
counsel should have ensured that Robbins received actual notice as
Bodell continued to press its claims—we note that the Utah Rules
of Civil Procedure mandate that personal service of process occur
only once, at the beginning of a case. Utah R. Civ. P. 4(d)(1). Once
a defendant appears before the court, it is that defendant’s
responsibility to maintain contact with the court. Id. R. 76 (“An
attorney and unrepresented party must promptly notify the court
in writing of any change in that person’s address, e-mail address,
phone number or fax number.”); Volostnykh v. Duncan, 2001 UT
App 26U, para. 4 (per curiam) (recognizing the parties’ duties to
inform the court of any address changes and to “keep themselves
apprised of ongoing court proceedings”). We agree with the district
court that Robbins’s attempt to excuse his lack of diligence with his
reliance on an adverse party for notice “plac[es] on Bodell and its
counsel a duty not recognized in Utah law.”
¶14 Due to Robbins’s failure to make a reasonable effort to
protect his interests, the district court properly determined that
Robbins’s “actions were not ‘sufficiently diligent and responsible,
in light of the attendant circumstances, to justify excusing [him]
from the full consequences of [his] neglect.’” (Alterations in
original) (quoting White Cap Constr., 2012 UT App 70, ¶ 5).5 Robbins
5. Likewise, to the extent that Robbins raises other “equitable
considerations” that we have not addressed in this opinion, we
(continued...)
20120446-CA 8 2014 UT App 203Bodell Construction Co. v. Robbins
therefore has not shown a “reasonable justification for [his] failure”
to update his address with the court and stay apprised of the
proceedings. See Menzies v. Galetka, 2006 UT 81, ¶ 54, 150 P.3d 480.
III. Just Cause
¶15 Rule 60(b)(6) provides that a party may be relieved from a
judgment for “any other reason justifying relief from the operation
of the judgment.” Utah R. Civ. P. 60(b)(6) (emphasis added). The
Utah Supreme Court has explained that this “catch-all” provision
of rule 60(b) “is meant to operate as a residuary clause” and
therefore “may not be relied upon if the asserted grounds for relief
fall within any other subsection of rule 60(b).” Menzies, 2006 UT 81,
¶ 71. “In other words, the grounds for relief under 60(b)(6) are
exclusive of the grounds for relief allowed under other
subsections.” Id. The court further explained that “relief under rule
60(b)(6) is meant to be the exception rather than the rule” and
“should be sparingly invoked and used only in unusual and
exceptional circumstances.” Id. (citation and internal quotation
marks omitted).
¶16 Here, Robbins merely recycles the same failed argument for
relief based on mistake that he previously raised under rule
60(b)(1) and asserts that the existence of such mistakes caused the
district court to abuse its discretion “by not finding that just cause
existed under Rule 60(b)(6).” Accordingly, because Robbins raises
no new arguments or independent reasons for setting aside the
district court’s default judgment under rule 60(b)(6), he cannot
prevail on this ground.
5. (...continued)
determine that his failure to exercise due diligence necessarily
forecloses a finding of excusable neglect and any resulting relief
from the default judgment. See Jones v. Layton/Okland, 2009 UT 39,
¶ 23, 214 P.3d 859.
20120446-CA 9 2014 UT App 203Bodell Construction Co. v. Robbins
CONCLUSION
¶17 The district court properly rejected Robbins’s claims of
mistake, excusable neglect, and just cause; therefore, like the
district court, it is unnecessary for us to evaluate whether Robbins’s
motion was timely filed and whether he had a meritorious defense
to the action. We thus conclude that the district court did not abuse
its discretion by denying Robbins’s rule 60(b) motion to set aside
the default judgment. Affirmed.
20120446-CA 10 2014 UT App 203