Opinion
Case No. 20080688-CA.
Filed July 23, 2009.
Appeal from the Fifth District, St. George Department, 070501867 The Honorable Eric A. Ludlow.
Steven R. Bangerter, William E. Frazier, and Daniel P. Wilde, St. George, for Appellant.
Gary G. Kuhlmann, St. George, for Appellees.
Before Judges Thorne, Bench, and Davis.
MEMORANDUM DECISION
Wheeler RV Las Vegas, LLC (Wheeler) appeals from the district court's denial of its motion to set aside a default judgment in favor of William and Donna Judson. We affirm.
The Judsons sued Wheeler over a recreational vehicle that they had purchased from Wheeler's predecessor in interest. There were some negotiations between the parties, and Wheeler did not file an answer to the Judsons' complaint. When negotiations broke down, the Judsons requested and were granted a default judgment against Wheeler. Wheeler timely filed a rule 60(b) motion seeking to set aside the default judgment on the grounds of mistake, inadvertence, surprise, or neglect.See Utah R. Civ. P. 60(b)(1). The district court denied Wheeler's motion, and Wheeler appeals.
Wheeler's motion also cited to rule 60(b)(6), which allows for relief from a judgment for "any other reason justifying relief from the operation of the judgment," see Utah R. Civ. P. 60(b)(6). However, Wheeler's motion did not specifically identify any such other grounds justifying relief from judgment.
Wheeler now argues that the district court erred in failing to set aside the default judgment pursuant to rule 60(b)(4) because the judgment was void for lack of personal jurisdiction over Wheeler, a Nevada entity. See generally id. R. 60(b)(4) (allowing for relief from a "void" judgment). When a party asserts lack of personal jurisdiction as a ground for attacking a default judgment, the district court is granted no discretion, and we review its personal jurisdiction determination as a matter of law. See Saysavanh v. Saysavanh, 2006 UT App 385, ¶ 7, 145 P.3d 1166. Here, however, we conclude that Wheeler did not request relief from the district court under rule 60(b)(4), and thus, the district court committed no error in failing to grant such relief regardless of the merits of Wheeler's personal jurisdiction claim.
Personal jurisdiction defenses may be raised in a party's initial 60(b) motion attacking a default judgment, see State v. 736 N. Colo. St., 2005 UT 90, ¶¶ 8-11, 127 P.3d 693, and a party who fails to raise a personal jurisdiction defense in its initial 60(b) motion waives that defense, see id. ¶ 11 ("We therefore conclude that a party waives the right to bring [a personal jurisdiction] defense if the party does not raise that defense in his initial rule 60(b) motion.").
As to Wheeler's request for relief under rule 60(b)(1), we agree with the district court that Wheeler failed to adequately present the district court with any meritorious defense against the Judsons' claims. In order to prevail on a 60(b) motion, "a party must 'present[] a clear and specific proffer of a defense that, if proven, would preclude total or partial recovery by the claimant.'" Hernandez v. Baker, 2004 UT App 462, ¶ 6, 104 P.3d 664 (quoting Lund v. Brown, 2000 UT 75, ¶ 29, 11 P.3d 277). "[I]t is the proffer of the defense, not the supporting facts, that must be clear and specific." Id. (internal quotation marks omitted).
Here, Wheeler's motion stated merely that "the evidence will show that [the Judsons] have sued the wrong party" because Wheeler "did not own the subject dealership when [the Judsons] purchased the recreational vehicle," and that Wheeler "will be able to demonstrate that . . . any assertion of personal jurisdiction over [Wheeler] is highly questionable." Wheeler's motion failed to assert that Wheeler did not assume the liabilities of its predecessor in interest when it purchased the dealership, and it also failed to identify any particular problem with personal jurisdiction. We agree with the trial court that Wheeler's summary assertions of potential defenses, even when supplanted by the attached affidavits, did not constitute "a clear and specific proffer of a defense" under the circumstances. See Hernandez, 2004 UT App 462, ¶ 6. Accordingly, we affirm the district court's rule 60(b)(1) ruling on the ground that Wheeler did not make a clear and specific proffer of a meritorious defense. See id.
This is apparently the very issue on which the Judsons attempted, unsuccessfully, to obtain documentation from Wheeler prior to seeking a default judgment.
Finally, Wheeler argues that the district court abused its discretion in denying Wheeler's 60(b) motion because there is a strong policy in favor of allowing parties to resolve their disputes on the merits.See, e.g., Erickson v. Schenkers Int'l Forwarders, Inc., 882 P.2d 1147, 1149 (Utah 1994) ("Generally, courts should be liberal in granting relief against default judgments so that cases may be tried on the merits."). Although we recognize the public policy in favor of resolution of cases on the merits, the district court is nevertheless entitled to considerable discretion in deciding whether to set aside a default judgment. See Lund, 2000 UT 75, ¶ 9 ("A trial court has broad discretion in deciding whether to set aside a default judgment."). The district court's discretion is not unlimited, see id., but in light of the district court's factual findings and Wheeler's pleading failures, we do not conclude this to be such a close case that the district court was deprived of the discretion to deny Wheeler's motion to set aside the default judgment.
We conclude that the district court did not exceed the boundaries of its discretion or otherwise err when it denied Wheeler's rule 60(b) motion, even if the default judgment itself may have been improvidently granted under the totality of the circumstances now alleged by Wheeler.See Franklin Covey Client Sales, Inc. v. Melvin, 2000 UT App 110, ¶ 19, 2 P.3d 451 ("An appeal of a Rule 60(b) order addresses only the propriety of the denial or grant of relief . . . [and] doesnot, at least in most cases, reach the merits of the underlying judgment from which relief was sought." (internal quotation marks omitted)). Accordingly, we affirm the ruling of the district court.
I CONCUR: Russell W. Bench, Judge.
I CONCUR IN THE RESULT: James Z. Davis, Judge.