Halberstam v. Cokeley

872 P.2d 109, 1994 Wyo. LEXIS 44, 1994 WL 111957
CourtWyoming Supreme Court
DecidedApril 1, 1994
Docket93-155
StatusPublished
Cited by11 cases

This text of 872 P.2d 109 (Halberstam v. Cokeley) is published on Counsel Stack Legal Research, covering Wyoming Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Halberstam v. Cokeley, 872 P.2d 109, 1994 Wyo. LEXIS 44, 1994 WL 111957 (Wyo. 1994).

Opinion

*110 CARDINE, Justice.

David and Jean Halberstam (Halberstams) appeal from a default judgment. The Hal-berstams challenge the propriety of the entry of default and the subsequent determination by the district court that a damages hearing was unnecessary because the damages were liquidated.

We affirm in part and reverse in part.

The Halberstams raise the following issues:

1. Did the trial court abuse its discretion in granting default judgment without a hearing on damages?
2. Did the court abuse its discretion in denying the motion to set aside entry of default and default judgment?

FACTS

On October 1, 1990, the Halberstams entered into a contract to buy ten acres of land on Fish Creek Road near Jackson in Teton County, Wyoming from Craig and Martha Cokeley (Cokeleys) for the sum of $375,000. However, when the time for closing came, the Halberstams had second thoughts and decided against purchasing the property.

After fruitless attempts at settlement and an intervening bankruptcy, the Cokeleys filed suit on April 29,1992. The Cokeleys, as part of their requested relief, asserted damages of $145,000 from the Halberstams’ breach of the contract. That amount was the difference between the contract price and the fair market value of the land, which was determined by an appraiser hired by the Cokeleys.

What began as an ordinary contract dispute quickly descended into the bizarre when the Cokeleys’ lawyer, Cohen, attempted to serve the summons and complaint on the Halberstams. First, Cohen asked the Hal-berstams’ lawyer in the real estate transaction, Moyer, to accept service on behalf of the Halberstams. Moyer responded that he was not going to be representing the Halber-stams and he could not accept service. Moyer referred Cohen to Moore, the lawyer retained by the Halberstams to represent them in this matter. Moore declined to accept service for the Halberstams, stating it was contrary to his policy to accept service.

Cohen then attempted to serve the Halber-stams personally at their residence in New York City. A deputy sheriff of New York City attempted to serve the Halberstams but could not because they were in Europe. In late June 1992, the Halberstams returned to New York and contacted the deputy sheriff. The deputy went to the Halberstams’ apartment on June 26, 1992, and successfully served the complaint and summons on them. The Halberstams did not inform their attorney that they had been served.

On June 29, 1992, Moore wrote a letter to Cohen wherein he requested that Cohen inform him when the complaint had been served on the Halberstams. On July 15, Cohen replied to the Moore letter stating, “I expect that I will hear from you after we have obtained service upon' the Halber-stams.” The parties dispute whether Cohen had knowledge of the June 26 service on the Halberstams at the time that letter was sent. On August 18, Moore sent another letter to Cohen again requesting to be told when service is made on the Halberstams.

Since the Halberstams failed to inform their lawyer that they had been served, an answer to the Cokeleys’ complaint was not filed within the required thirty days. The Cokeleys filed a request for an entry of default on October 9,1992. The request was granted, and the clerk of court entered default against the Halberstams on the same day. The Halberstams subsequently learned of the entry of default and unsuccessfully attempted to convince the court to vacate the order.

The Cokeleys made a motion for a default judgment which was granted by the court on December 18,1992. The district court decided that an evidentiary hearing on damages was unnecessary because the damages suffered by the Cokeleys were liquidated. The court defined liquidated damages as those “which can be determined with exactness from the parties’ agreement or by arithmetical process or application of definite rules of law.” The court determined the damages by subtracting the fair market value of the property from the sale price of the contract, *111 which are found in the Cokeleys’ complaint. Accordingly, a judgment of $145,000 was entered against the Halberstams. The judgment was subsequently modified by the court to include an award of $5,300 in attorney fees.

The Halberstams now appeal the distriét court’s denial of their motion to vacate the entry of default and the district court’s decision that a hearing on damages was unnecessary because the damages were liquidated.

STANDARD OF REVIEW

We review a district court’s entry of default and a default judgment for an abuse of discretion. Vanasse v. Ramsay, 847 P.2d 993, 996 (Wyo.1993). In Vanasse we stated:

Judicial discretion is a composite of many things, among which are conclusions drawn from objective criteria; it means a sound judgment exercised with regard to what is right under the circumstances and without doing so arbitrarily or capriciously. ⅝: ⅜ ⅜ ⅜ ⅝ ⅜
Judicial discretion is necessarily broad— but it is not absolute. Abuse occurs when a material factor deserving significant weight is ignored, when an improper factor is relied upon, or when all proper and no improper factors are assessed, but the court makes a serious mistake in weighing them, [citations omitted]

Id., at 996 (quoting, respectively, Martin v. State, 720 P.2d 894, 897 (Wyo.1986) and Independent Oil & Chem. Workers v. Procter & Gamble Mfg. Co., 864 F.2d 927, 929 (1st Cir.1988)).

DISCUSSION

ENTRY OF DEFAULT

We address Halberstams’ second issue first: Whether the district court abused its discretion in denying the motion to vacate the entry of default. A district court may set aside an entry of default pursuant to the requirements of W.R.C.P. 55. Vanasse, at 997. The rule provides:

Rule 55. Default.
(a) Entry. — When a party against whom a judgment for affirmative relief is sought has failed to plead or otherwise defend as provided by these rules and that fact is made to appear by affidavit or otherwise, the clerk shall enter the party’s default. ⅜ * ⅜ # * *
(c) Setting aside default. — For good cause shown the court may set aside an entry of default * * *.

Relevant to the inquiry of “good cause” are the factors described in W.R.C.P. 60(b), which provides:

Rule 60. Relief from judgment or order.
(b) Other reasons.—

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Cite This Page — Counsel Stack

Bluebook (online)
872 P.2d 109, 1994 Wyo. LEXIS 44, 1994 WL 111957, Counsel Stack Legal Research, https://law.counselstack.com/opinion/halberstam-v-cokeley-wyo-1994.