Showalter v. Wild Oats

101 P.3d 867
CourtCourt of Appeals of Washington
DecidedNovember 30, 2004
Docket30998-0-II
StatusPublished
Cited by43 cases

This text of 101 P.3d 867 (Showalter v. Wild Oats) is published on Counsel Stack Legal Research, covering Court of Appeals of Washington primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Showalter v. Wild Oats, 101 P.3d 867 (Wash. Ct. App. 2004).

Opinion

101 P.3d 867 (2004)

Cheryl SHOWALTER, Appellant,
v.
WILD OATS d/b/a Nature's Grocery, Respondent.

No. 30998-0-II.

Court of Appeals of Washington, Division 2.

October 26, 2004.
Publication Ordered November 30, 2004.

*868 Craig Frazier Schauermann, Attorney at Law, Vancouver, WA, for Petitioner.

William R Hickman, Attorney at Law, Seattle, WA, for Other Party.

Donald Arrington Greig, Landerholm Law Office, for Respondent.

VAN DEREN, J.

Cheryl Showalter appeals the trial court's order vacating her default judgment against Wild Oats Markets, Inc. (Wild Oats) on her personal injury claim. Showalter contends that the trial court erred because Wild Oats' motion to set aside the default judgment failed to demonstrate a prima facie defense and excusable neglect. Holding that the trial court did not abuse its discretion under the facts here, we affirm.

FACTS

Showalter filed a personal injury complaint against Wild Oats in April 2003. Wild Oats has retail grocery stores in 23 states, including Nature's Marketplace in Vancouver, Washington.[1] Showalter's lawsuit alleged that she slipped on a snow pea pod and suffered serious injuries in Nature's Marketplace on August 10, 2001, and that the store was negligent for failing to remove this debris.

Before the lawsuit was filed, Showalter attempted to negotiate a settlement with Wild Oats' outside claims administrator and upon filing the lawsuit Showalter's counsel mailed a "courtesy copy" of the summons and complaint to the outside claims administrator, who was not Wild Oats' registered agent. On April 14, 2003, Wild Oats' registered agent in Olympia, Washington, was properly served. The registered agent forwarded the pleadings to Wild Oats' legal department, which received them on April 21, 2003.

Upon the receipt of a complaint alleging personal injury, Wild Oats' protocol is to have the legal department forward the served papers to an internal claims administrator in the safety and risk department. The internal claims administrator notifies the outside claims administrator of the lawsuit, and the outside claims administrator hires *869 local defense counsel. Here, the paralegal gave Showalter's summons and complaint to the manager of the safety and risk department, who happened to be near the paralegal's office at the time she prepared the papers for forwarding to the internal claims administrator. The paralegal routinely gave the manager copies of lawsuits for informational purposes only; however, in this instance she asked the manager to give the internal claims administrator Showalter's served summons and complaint. The manager misunderstood the paralegal and did not give them to the internal claims administrator. Consequently, Wild Oats did not timely file an answer to Showalter's complaint.

On May 7, 2003, twenty four days after the date of service, Showalter obtained a default order against Wild Oats, and on June 3, 2003, she obtained a default judgment against Wild Oats for over $28,000.

Wild Oats learned of the default and judgment for the first time on June 23, 2003, when Showalter's counsel sent a letter demanding payment and a copy of the default judgment to the outside claims administrator. About 10 days later, Wild Oats filed a motion to vacate the default judgment. Wild Oats' motion included declarations from the company's paralegal, the manager of the safety and risk department, and the outside claims administrator to support its proposed affirmative defenses, in addition to stipulated terms that it pay reasonable attorney fees to Showalter's attorney for the default proceedings.

The trial court held a hearing and granted Wild Oats' motion to vacate the default judgment under CR 60(b)(1). The trial court's order also certified immediate review under RAP 2.3(b)(4). After briefing by both sides, the court commissioner granted discretionary review.

ANALYSIS

I. MOTION TO VACATE DEFAULT JUDGMENT

A. Standard of Review

Default judgments are generally disfavored in Washington based on an overriding policy which prefers that parties resolve disputes on the merits. See, e.g. Griggs v. Averbeck Realty, Inc., 92 Wash.2d 576, 581, 599 P.2d 1289 (1979). We review a trial court's ruling on a motion to vacate a default judgment for an abuse of discretion. In Re Estate of Stevens, 94 Wash.App. 20, 29, 971 P.2d 58 (1999). A trial court abuses its discretion by issuing a manifestly unreasonable or untenable decision. Stevens, 94 Wash.App. at 29, 971 P.2d 58. Accordingly, if a trial court's ruling "`is based upon tenable grounds and is within the bounds of reasonableness, it must be upheld.'" Stevens, 94 Wash.App. at 30, 971 P.2d 58 (quoting Lindgren v. Lindgren, 58 Wash.App. 588, 595, 794 P.2d 526 (1990)).

Our primary concern is that a trial court's decision on a motion to vacate a default judgment is just and equitable. Calhoun v. Merritt, 46 Wash.App. 616, 619, 731 P.2d 1094 (1986). The trial court must balance the requirement that each party follow procedural rules with a party's interest in a trial on the merits. See Johnson v. Cash Store, 116 Wash.App. 833, 841, 68 P.3d 1099, review denied, 150 Wash.2d 1020, 81 P.3d 120 (2003) ("Justice is not done if hurried defaults are allowed, but neither is it done if continuing delays are permitted."). Consequently, we evaluate the trial court's decision by considering the unique facts and circumstances of the case before us. Calhoun, 46 Wash.App. at 619, 731 P.2d 1094. And we are less likely to reverse a trial court decision that sets aside a default judgment than a decision which does not. Colacurcio v. Burger, 110 Wash.App. 488, 494-95, 41 P.3d 506 (2002), review denied, 148 Wash.2d 1003, 60 P.3d 1211 (2003) (relying on Griggs, 92 Wash.2d at 581, 599 P.2d 1289).

B. Wild Oats' Motion to Vacate Default Judgment

When reviewing a motion to vacate a default judgment, the trial court determines whether the movant has demonstrated four factors:[2]

*870 The primary factors are: (1) the existence of substantial evidence to support, at least prima facie, a defense to the claim asserted; (2) the reason for the party's failure to timely appear, i.e., whether it was the result of mistake, inadvertence, surprise or excusable neglect. The secondary factors are: (3) the party's diligence in asking for relief following notice of the entry of the default; and (4) the effect of vacating the judgment on the opposing party.

Calhoun, 46 Wash.App. at 619, 731 P.2d 1094 (relying on

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Bluebook (online)
101 P.3d 867, Counsel Stack Legal Research, https://law.counselstack.com/opinion/showalter-v-wild-oats-washctapp-2004.