Calhoun v. Greening

636 P.2d 69, 1981 Alas. LEXIS 560

• Court: Alaska Supreme Court
• Decided: November 13, 1981
• Docket: File 5097
• Status: Published

Opinions

OPINION

RABINOWITZ, Chief Justice.

Dale Calhoun appeals from the superior court’s refusal to vacate a judgment against him pursuant to Alaska Civil Rule 60(b).¹ We hold that Calhoun’s motion to vacate is barred by the doctrine of res judicata, and hence affirm the superior court’s judgment denying the Civil Rule 60(b) motion.

It is not necessary for us to set out all the details of this proeedurally convoluted case, so we will only state the points relevant to our decision. In July 1976, John Greening filed a complaint against a corporation and seven individuals, including Calhoun. The complaint alleged that the individuals had mismanaged the corporation and had not properly compensated Greening for his $5,000 contribution to the corporation. Calhoun and most of the other defendants answered, with no cross-claims asserted at that time. In June 1978, a pretrial order was entered, setting the pretrial conference for Friday, September 22, and trial for the following week. On September 1, the superior court calendaring department notified counsel, including Calhoun’s counsel Mike Stepovich, that the pretrial conference had been changed to Monday, September 25.

In late September the posture of the case changed drastically. On the 21st attorney Charles Silvey, representing three defendants, filed a pretrial memorandum indicating that all the non-defaulting defendants ² except Calhoun had tentatively reached an agreement with Greening and would join Greening in pursuing claims against Calhoun. A copy of this memorandum was mailed to Stepovich on September 20. A formal stipulation incorporating the agreement was filed in court on September 25; the record does not indicate that Stepovich was served with this document.

On September 25, the scheduled date for the pretrial conference, Judge Van Hoomis-sen was snowbound in Galena, and the parties were informed of this fact by posted notice. Neither Calhoun nor Stepovich was present at court on that date. The calendar clerk then set the pretrial conference, with trial to follow, for September 27.³ On that date again neither Calhoun nor Stepovich was present. Judge Van Hoomissen heard testimony concerning the case, and on October 25 signed findings of fact and conclusions of law prepared by Silvey as well as a judgment against Calhoun in favor of Greening and four of the defendants.

Irwin Ravin replaced Stepovich as Calhoun’s counsel, and on November 22, 1978, Ravin moved, pursuant to Civil Rule 60(b), to set aside the judgment as obtained in violation of Calhoun’s due process rights. He did not accompany his motion with any memorandum in support, but relied only on two brief and conclusory affidavits by Calhoun and Stepovich, in which they denied receiving notice of the hearing at which judgment was entered and claimed that the judgment was unfair. This motion was opposed, and was denied by Judge Van Hoom-issen on December 13, 1978. The denial of the motion was not appealed.

In August 1979, Silvey, representing all the prevailing parties, moved to set aside as fraudulent a property conveyance made by Calhoun. According to Silvey, Calhoun had sold his successful sole proprietorship construction business for ten dollars to an unincorporated association owned by his father and his wife. Calhoun, now represented by his present counsel, responded with an opposition to Silvey’s motion, and “in the alternative a motion for relief from judgment.” Judge Van Hoomissen denied the motion for relief from judgment on November 27, 1979, and this appeal followed.

We have previously discussed the doctrine of res judicata, and have stated:

Res judicata is a doctrine judicial in origin which has as its primary objective claim preclusion or judicial finality. The term is used to denote two things in respect to the effect of a valid, final judgment:

(1) that such a judgment, when rendered on the merits, is an absolute bar to a subsequent action, between the same parties or those in privity with them, upon the same claim or demand; and,

(2) that such a judgment constitutes an estoppel, between the same parties or those in privity with them, as to matters that were necessarily litigated and determined although the claim or demand in the subsequent action is different.

Drickersen v. Drickersen, 546 P.2d 162, 169 (Alaska 1976), quoting IB J. Moore, Moore’s Federal Practice ¶ 0.405, at 621 (2d ed. 1980) (footnote omitted). Calhoun’s instant motion is his second attempt to have the judgment against him set aside. We believe that this motion constitutes a “subsequent action . .. upon the same claim or demand” within the meaning of Drickersen,⁴

Calhoun advances three arguments against application of res judicata here. He first contends that the instant motion is his first attack on the amended judgment, signed by Judge Van Hoomissen on February 15, 1979. That amended judgment, however, merely corrected an arithmetical error in the original judgment; it cannot be regarded as a new judgment as far as Calhoun’s motion is concerned.

Calhoun’s second contention is that his second motion raises issues not addressed by his first. Ravin’s motion simply asserted denial of due process, while this motion claims a violation of Civil Rule 55(c).⁵ However, a fundamental tenet of the res judicata doctrine is that it precludes relitigation between the same parties not only of claims that were raised in the initial proceeding, but also of those relevant claims that could have been raised then. Calhoun had a full opportunity to present his Rule 55(c) argument as part of his initial motion; his failure to raise it then precludes him from raising it now. See Engebreth v. Moore, 567 P.2d 305 (Alaska 1977).⁶

Calhoun’s final contention is' that we should not as a policy matter accord res judicata effect to the denial of a motion to set aside judgment. His position is that:

[A] party subject to a questionable judgment should not be required, at his peril, to raise all issues affecting the validity of the judgment in one motion. Rather, in light of the burden a judgment imposes upon him, he should be allowed to take immediate action on the grounds which he readily perceives.

In light of the substantial authority to the contrary,⁷ we find this argument unpersuasive. Moran v. Poland, 494 P.2d 814 (Alaska 1972), involved a situation that was very similar to the case at bar. After judgment was entered against him in federal district court, Moran retained new counsel and moved in federal court to have the judgment set aside pursuant to. Fed.R. Civ.P. 60(b). Id. at 815. This motion was apparently not diligently pursued and was ultimately denied. Id. In response to the appeal of the superior court’s denial of a subsequent motion to set aside the judgment in a state court proceeding, we held:

Res judicata prevents the relitigation in a second suit for relief from judgment of matters which were adjudged or could fairly have been adjudged in a prior proceeding between the same parties raising the same claim for relief.

Id. (footnote omitted). The section in Moore to which that statement is cited is clear: “[A] judgment rendered in a 60(b) proceeding is res judicata as to matter that was adjudged or was fairly open for ad-judgment.” 7 J. Moore, Moore’s Federal Practice ¶ 60.28[3], at 413 (2d ed. 1979) (footnote omitted). Moran is dispositive of this appeal. Since appellant’s Rule 55(c) claim “could fairly have been adjudged” in the prior Civil Rule 60(b) proceeding, it is now barred.⁸

COMPTON, J., not participating.

1 . Alaska R.Civ.P. 60(b) provides:

Mistakes — Inadvertence—Excusable Neglect — Newly Discovered Evidence — Fraud— Etc. On motion and upon such terms as are just, the court may 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;

(2) newly discovered evidence which by due diligence could not have been discovered in time to move for a new trial under Rule 59(b);

(3) fraud (whether heretofore denominated intrinsic or extrinsic), misrepresentation, or other misconduct of an adverse party;

(4) the judgment is void;

(5) the judgment has been satisfied, released, or discharged, or a prior judgment upon which it is based has been reversed or otherwise vacated, or it is no longer equitable that the judgment should have prospective application; or

(6)any other reason justifying relief from the operation of the judgment.

The motion shall be made within a reasonable time, and for reasons (1), (2) and (3) not more than one year after the judgment, order or proceeding was entered or taken. A motion under this subdivision (b) does not affect the finality of a judgment or suspend its operation. This rule does not limit the power of a court to entertain an independent action to relieve a party from a judgment, order or proceeding, or to grant relief to a defendant not personally served, or to set aside a judgment for fraud upon the court. Writs of coram nobis, coram vobis and audita querela are abolished, and the procedure for obtaining any relief from a judgment shall be by motion as prescribed in these rules or by an independent action.

2 . One of the seven individual defendants had not answered Greening’s complaint, and a default judgment had already been entered against him.

3 . No indication of how the parties were notified of the new date appears in the record. It is likely that it was set by the calendar clerk in the presence of those attorneys who were at the courthouse on the 25th.

4 . We realize that the denial of a motion to set aside judgment is not, strictly speaking, a “judgment.” However, since we treat such denials as appealable final judgments for purposes of Appellate Rule 202, we will also treat them as final judgments for res judicata purposes.

5 . That rule states that when a party has appeared in an action, he shall be served with notice of the application for a default judgment at least three days prior to the hearing on the application. Because of our ruling on the res judicata issue, we do not address the several close questions raised by Calhoun concerning the applicability of Alaska R.Civ.P. 55(c) to this case.

6 . The dissent acknowledges that renewed motions for relief from a judgment should only be granted in compelling circumstances; then argues that there are compelling circumstances in this case requiring relief. Courts which have applied this standard have held that a second motion for relief should be granted only where new evidence which was not available at the time of the original motion is produced in support of the second motion, or where the moving party can establish that the earlier denial was entered and became final as the result of his inadvertence, mistake, surprise or excusable neglect. United States v. Cirami, 563 F.2d 26, 34 (2d Cir. 1977); Dellwo v. Petersen, 34 Idaho 697, 203 P. 472, 473 (1921); Rambush v. Rambush, 267 Cal.App.2d 734, 73 Cal.Rptr. 268, 273 (1968).

Calhoun’s second motion for relief was not based on any new evidence and no excuse or justification has been offered for his failure to appeal the denial of his original motion. In short, Calhoun has failed to establish compelling circumstances.

7 .We note that case authority is divided on the question of whether the principle which bars a second direct attack on a judgment, based on grounds which were or fairly could have been adjudged in a prior direct attack, is properly called “res judicata.” We have found no authority among the cases on either side of that issue, however, which would justify consideration of Calhoun’s second Rule 60(b) motion on the facts of this case.

The more recent cases on this issue, with which we now align ourselves, have simply applied res judicata in the present context. Perkins v. Salem, 249 So.2d 466, 467 (Fla.App.1971), for example, held that denial of a motion for relief from judgment is res judicata as to “matters of evidence and procedure which with due diligence could have been included in [the original] motion.” The courts of Maine have also held consistently that res judicata precludes a second Rule 60(b) attack where a party “was able to raise the issues in a first collateral attack but failed to do so.” Royal Coachman Color Guard v. Marine Trading & Transportation, Inc., 398 A.2d 382, 383-84 (Me. 1979). See also Willette v. Umhoeffer, 268 A.2d 617, 619 (Me.1970) (“Although res judica-ta is ordinarily applied to second independent actions between the same parties . . . the principles upon which the doctrine rests have equal application to successive attacks upon a judgment . .. where all of the issues were or could have been litigated on the first motion.”).

Other jurisdictions have held that although res judicata does not apply in situations like the present one, motions for relief from judgment can be renewed only with leave of court and good cause. Dellwo v. Petersen, 203 P. 472, 473 (Idaho 1921); Jensen v. Barbour, 12 Mont. 566, 31 P. 592, 593 (1892); Olson v. Advance Rumely Thresher Co., 178 N.W. 141, 142 (S.D.1920). The rule stated in Dellwo is typical of the approach adopted in these cases:

The doctrine of res adjudicata, in its strict sense, does not apply to such motions made in the course of practice, and the court may, upon a proper showing, allow a renewal of a motion of this kind once decided. But this leave will rarely be given upon the ground that the moving party can produce additional evidence in support of his motion, unless it also appears that a new state of facts has arisen since the former hearing, or that the then existing facts were not presented, by reason of the surprise or excusable neglect of the moving party.

Dellwo, 203 P. at 473, quoting Ford v. Doyle, 44 Cal. 635, 637 (1872). See Jensen, 31 P. at 593-94; Olson, 178 N.W. at 142-43.

Finally, at least one jurisdiction has barred a second motion to set aside a judgment without finding it necessary to determine whether res judicata applies. In Palmer v. Jackson, 188 Ga. 336, 4 S.E.2d 28, 30 (1939) (emphasis in original), the court held:

Whether or not such a defense to a repetition of the first attack, when filed in the same case, would fall strictly within the doctrine of res judicata, the movant under any view is precluded from a second attack, based either on the same grounds or on grounds which he knew or could by due diligence have discovered in time to include them in his former pleading.

This statement is as appropriate to the facts of the present case as it was to those under consideration by the Georgia court. Under res judicata principles, Calhoun’s claim is barred because it “could fairly have been adjudged” in his prior Rule 60(b) action, see Moran v. Poland, 494 P.2d 814, 815 (Alaska 1972); under the alternative approach, Calhoun’s claim would be barred because he has made no showing that “a new state of facts has arisen since the former hearing, or that the then existing facts were not presented, by reason of the surprise or excusable neglect of the moving part.” Dellwo, 203 P. at 473, quoting Ford, 44 Cal. at 637. We think it is clear that Calhoun’s second Rule 60(b) motion would be barred even if, as the dissent urges, res judicata were inapplicable in the present context.

8 . One of the grounds for vacating a judgment, pursuant to Civil Rule 60(b) is that the judgment is void (Alaska R.Civ.P. 60(b)(4), supra n. 1). Calhoun contends the default judgment is void because he did not receive the three day notice required by Civil Rule 55(c). Even assuming, as Calhoun asserts, that the original default judgment was entered without proper notice, we do not believe that the judgment must be vacated as a matter of law. Several courts have rejected renewed motions to vacate default judgments, despite arguments that the original judgments were void due to lack of notice.

In Collex Inc. v. Walsh, 74 F.R.D. 443 (E.D. Pa.1977), a default judgment was entered and the defendant’s subsequent motion to vacate was denied. The defendant failed to appeal this decision but four months later filed a motion asking the court to reconsider its refusal to vacate the judgment. In this second motion, the defendant argued that he had not received proper notice under Rule 55(b)(2) of the Federal Rules of Civil Procedure and that the default judgment must be vacated as a matter of law. The court rejected the argument that a lack of notice rendered the judgment per se void and held instead that the judgment was “voidable” at the court’s discretion pursuant to the standards governing a Rule 60(b) motion. Colley, 74 F.R.D. at 449. Applying these standards the court refused to vacate the judgment noting that its decision was based on the following factors: first, that there had been a four-month delay between the initial denial of the motion to vacate the default judgment and the subsequent motion for reconsideration; second, that the defendant had failed to appeal the prior denial; third, that the “new" argument which defendant raised (lack of notice) was one which could and should have been raised in the earlier proceedings. Id. at 449.

Calhoun’s second motion to vacate the default judgment was filed over eight months after the denial of his original motion on December 13, 1978. Calhoun failed to bring any appeal of this original adverse decision and the “new” argument which he raised in his second motion (lack of notice required by Civil Rule 55(c)(1)) could and should have been raised in the prior proceedings.

In Winfield Associates, Inc. v. Stonecipher, 429 F.2d 1087 (10th Cir. 1970), a default judgment was entered against the defendant and his initial motion to set aside the judgment was denied. No appeal was taken from the default judgment or the denial of the motion to vacate judgment. Subsequently, defendant attempted to prevent enforcement of the judgment by filing a second motion under Rule 60(b), attacking the judgment as null and void because he had failed to receive the notice required by Rule 55(b)(2). The trial judge refused to grant defendant’s renewed motion for relief on the ground that the defendant had deliberately bypassed his legal remedy of appeal from the original judgment and the subsequent denial of his first motion. On appeal it was held that the failure to give the required notice did not render the judgment necessarily void but that it was voidable at the court’s discretion. Winfield, 429 F.2d at 1091. The Tenth Circuit court affirmed the district court’s exercise of discretion, holding that the defendant’s unexcused neglect and failure to appeal were sufficient basis for denial of equitable relief from the default judgment. Id. at 1091.

The dissent asserts that the judgment on the cross-claims of Calhoun’s co-defendants is void because Calhoun was not given proper notice of or opportunity to defend against these claims. The dissent argues that the CoUex and Winfield cases are not applicable because the defendants in those cases had notice of the claim and opportunity to defend; the failure of notice went only to the entry of default hearing. By the time of Calhoun’s first Rule 60(b) motion, however, he had full knowledge of the claims asserted against him, the amount of the judgment, and the identity of the plaintiffs, since these were set out in the judgment and the trial court’s findings of fact and conclusions of law. Any objection for lack of notice or opportunity to defend could and should have been raised at that time.

The fact that the original judgment against Calhoun may have been improper, for lack of notice, does not mean that the superior court was required to grant Calhoun’s second motion to vacate under Civil Rule 60(b). Both Collex and Winfield stressed the defendant’s failure to appeal the original denial as a major factor in denying the renewed motion for relief, especially where the issue raised in the second motion could and should have been raised earlier.