BAKES, Chief Justice.
This is an appeal from the district court's denial of a motion to set aside a default judgment. The appellant, Robert Riplinger,
The Riplingers made payments on the note through January, 1976, and then ceased making further payments. In September, 1976, Sherwood & Roberts filed a complaint against the Riplingers to collect on the balance of the note. On October 7, 1976, Robert Thompson filed a notice of appearance as counsel for Riplingers. Thereafter, an answer and counterclaim were filed. On October 20, 1978, Thompson filed a motion for leave to withdraw as attorney for the appellant.
Two affidavits of personal service of the order permitting withdrawal of attorney appear in the record. Both were served on November 8 by the same process server at different addresses. The appellant admitted receiving a copy of the order, and he telephoned the court clerk on November 13, 1978. Riplinger maintains that he told the court clerk that he intended to defend the action, and if nothing else that he would represent himself. A note made by the clerk of that conversation was read by the trial court as follows:
Riplinger took no further action, and pursuant to Sherwood & Robert's request, the court entered an order of default and a judgment against Riplinger on the basis that he had "failed to file notice stating how said defendant shall represent himself ... ." Subsequently, respondent settled with Kathy Riplinger, and the action against her was dismissed by stipulation. Riplinger's first notice of the default judgment against him appears to have been when a writ of execution was served on his employer on April 20, 1979. He then contacted his present attorney who filed a motion to set aside the entry of the default and default judgment on May 16, 1979. After a hearing, the court denied that motion, and that denial is the subject of this appeal.
The appellant argues initially that having once appeared in the action, judgment should not have been rendered against him without first providing him with "written notice of the application for judgment at least three days prior to the hearing on such application," as required under I.R.C.P. 55(b)(2). In Radioear Corp. v. Crouse, 97 Idaho 501, 547 P.2d 546 (1976), this Court was faced with a similar question with regard to the application of I.C. § 3-206, since repealed and replaced with I.R.C.P. 11(b)(3), both of which address the provision of notice concerning counsel's withdrawal.
In that case the defendant Crouse was served with a notice to appear or appoint new counsel, and was then defaulted without further notice when he failed to appear or appoint new counsel. In that case, we held that the three day notice under I.R.C.P. 55(b)(2) was required, and that the default judgment entered without that notice was voidable. 97 Idaho at 503-4, 547 P.2d 548-9.
However, I.R.C.P. 11(b)(3), which is applicable to the case at bar, is different in several respects from its predecessor, I.C. § 3-206. Of particular importance here is that I.R.C.P. 11(b)(3) provides that following service of the prescribed notice, failure of a party "to appear in the action either in person or through a newly appointed attorney within [the required] 20 day period, ... shall be sufficient ground for entry of default against such party or dismissal of the action of such party, with prejudice, without further notice, which shall be stated in the order." (Emphasis added.) Thus, I.R.C.P. 11(b)(3), unlike I.C. § 3-206, clearly permits the entry of default
Additionally, in regard to the question of notice, it is urged that I.R.C.P. 11(b)(3) violates the appellant's right to due process under the fourteenth amendment in that it permits the entry of a default judgment without prior notice to him. However, I.R.C.P. 11(b)(3) itself clearly requires that notice be sent to the client of the withdrawing attorney, stating that failure to appear within twenty days will "be sufficient ground for entry of default against such party ... with prejudice ... without further notice." Such notice unambiguously apprises the party of the consequences of failing to appear, and thus satisfies his right to prior notice. If the notice were not received or were materially defective, then appellant would have good cause to have the default judgment set aside. Cf. Omega Alpha House Corp. v. Molander Assoc., supra. However, in this case the notice fully conformed with the requirements of I.R.C.P. 11(b)(3), and the defendant admitted that he timely received that notice.
The appellant also argues that his verbal contact with the clerk of the court was sufficient to constitute an appearance. However, the order unambiguously required a written notice of how the appellant intended to represent himself. In Cuoio v. Koseris, 68 Idaho 483, 200 P.2d 359 (1948), a judge, by telephone, orally extended the time limit for filing an answer for "a few days." Nevertheless, three days before the answer was filed, a default was entered. The district court later set the default aside on the basis of the oral extension. However, on appeal, this Court reversed the setting aside of the default, holding that the oral communication by the judge "was not a recognizable order effective to grant further time." 68 Idaho at 485, 200 P.2d at 360. If a specific oral extension of time by a judge was insufficient in Cuoio to alter the procedural requirements imposed by law upon the defendant in that case, then certainly in this case the defendant's telephonic communication with a clerk of the court, in which the clerk did nothing more than advise the defendant that "he should decide as soon as possible how he intend[ed] to proceed and then notify the court," is insufficient to relieve the defendant of the requirement of filing a written notice as set forth in both I.R.C.P. 11(b)(3) and the order of the court. Thus, we hold that the defendant's oral communication with the clerk of the court did not constitute an appearance.
It is next contended that the due process clause of the fourteenth amendment prohibits the entry of a default judgment against a party who has timely appeared and filed responsive pleadings. The appellant relies in particular upon Hovey v. Elliott, 167 U.S. 409, 17 S.Ct. 841, 42 L.Ed. 215 (1897). In Hovey, the defendants who had already appeared and answered in the action were ordered by the court to deposit into the court registry certain sums which were the subject of the suit. The defendants failed to obey the order and the plaintiffs moved the court to punish the defendants for disobedience of the order. Thereafter, the court ordered that the defendants' answer "be stricken out and removed from the files of the court, and that this cause do proceed as if no answer herein had been interposed." 167 U.S. at 412, 17 S.Ct. at 842. Then, judgment was entered against the defendants pro confesso. The United States Supreme Court, in reviewing the judgment, held that the judgment was invalid. The Court stated that "[t]he right which was here denied by rejecting the answer and taking the bill for confessed, because of the contempt, involved an essential element of due process of law," and that "the [court below] did not possess the power to disregard an answer which was in all respects sufficient." 167 U.S. at 444, 17 S.Ct. at 854.
Subsequently, in Hammond Packing Co. v. Arkansas, 212 U.S. 322, 29 S.Ct. 370, 53 L.Ed. 530 (1908), the Supreme Court "substantially modified"
The court in Hammond also recognized that the ability of a court to default a defendant for failure to appear or file an answer rested as well on the court's power to create a presumption that, by failing to appear or plead, the defendant admits the material facts of the complaint. 212 U.S. at 351, 29 S.Ct. at 380.
In comparing Hovey with Hammond, it appears that the reason the sanction in Hovey was determined to be "mere punishment" was because the objective of the underlying order in Hovey required an act which was ancillary to obtaining an adjudication of the merits. The paying in of moneys to the court registry was not an essential step in determining the validity of Hovey's claim, and it had no bearing on the merits of the defendant's defense. In contrast, a defendant's appearance, answer, and compliance with discovery requests are all central to the adjudicative process, and concern "the rightful decision of the cause." Id. The courts have inherent power to establish reasonable rules to manage their own affairs and achieve the orderly and expeditious disposition of cases. Link v. Wabash RR. Co., 370 U.S. 626, 630-31, 82 S.Ct. 1386, 1388-1389, 8 L.Ed.2d 734 (1962). Thus, when defendants fail to proceed with their defense in accordance with those rules, the courts are justified in creating such presumptions as addressed in Hammond.
In the present case, the defendant failed to file a written notice of appearance or the appointment of new counsel within the prescribed time limit. This failure to comply with I.R.C.P. 11(b)(3) justifies a presumption that he abandoned his defense. In Rio Grande Irr. & Colonization Co. v. Gildersleeve, 174 U.S. 603, 19 S.Ct. 761, 43 L.Ed. 1103 (1899), decided two years after Hovey, the United States Supreme Court held that a defendant could be defaulted for failure to appear where his counsel, having already appeared once in his behalf, withdrew his appearance without leave of court.
The presumption of abandonment raised by a defendant's failure to proceed in an action in accordance with court rules may be rebutted by any reasonable showing of inability to comply with those rules. Societe Internationale pour Participations Industrielles et Commerciales v. Rogers, 357 U.S. 197, 210, 78 S.Ct. 1087, 1094, 2 L.Ed.2d 1255 (1958). However, in this case the defendant made no showing of inability to comply with I.R.C.P. 11(b)(3). Thus, it was within the district court's power to enter a default judgment against the defendant for failure to proceed in accordance with I.R.C.P. 11(b)(3).
Respondent requests an award of attorney fees. In signing the promissory note, Riplinger agreed that in case a suit or action to collect the note was instituted he would "pay such sum as the court may adjudge reasonable as attorney fees in such suit or action." Attorney fees are therefore allowed pursuant to the agreement. I.C. § 3-205.
The order of the district court is affirmed. Costs and attorney fees to respondent.
DONALDSON and SHEPARD, JJ., concur.
McFADDEN, Justice, dissenting.
There is a rule of statutory construction followed in this state, that where earlier and later acts are not necessarily in conflict and may be reconciled by reasonable construction, enactment of a later act will not result in repeal of an earlier act. This is because repeals by implication are not favored. Ada County v. State, 93 Idaho 830, 475 P.2d 367 (1970); State v. Roderick, 85 Idaho 80, 375 P.2d 1005 (1962). The majority ignores this rule and instead resolves the matter in favor of I.R.C.P. 11(b)(3) "since it is the more specific and the more recent rule." The conclusion of the majority is incorrect for two reasons. The first reason is that I.R.C.P. 55(b)(2) is the more recent rule, not I.R.C.P. 11(b)(3). While it is true that I.R.C.P. 55(b)(2) was originally enacted in 1958 it was amended in 1976. In amending the rule the court recognized the validity of the rule, as written, as late as 1976, after the enactment of I.R.C.P. 11(b)(3).
The second reason that the majority's conclusion is incorrect is that there is no conflict between I.R.C.P. 11(b)(3) and 55(b)(2), so as to apply the doctrine of "repeal by implication." These two rules can be construed to give viability to both. Under I.R.C.P. 11(b)(3), when an attorney is permitted to withdraw his representation of his client, he is obligated to serve his client with copies of the court order allowing the withdrawal, which order shall state that if the client "fails to appear within ... [a] 20 day period, such failure shall be sufficient ground for entry of default against such party or dismissal of the action of such party, with prejudice, without further notice... ." Under I.R.C.P. 55(b)(2), when a party has appeared in an action, as appellant did in this case through his attorney, he "shall be served with written notice of the application for judgment at least three (3) days prior to the hearing on such application." There is a two step proceeding to obtain a default judgment. The first step is the entry of default. It is to this step of the proceeding that I.R.C.P. 11(b)(3) applies. That rule provides that default may be entered without further notice, it does not provide that judgment may be entered without further notice. Once the default is entered the second step is the entry of default judgment. It is to this step that I.R.C.P. 55(b)(2) applies. That rule requires notice to appellant that judgment will be entered against him.
Therefore, even if default may be entered under I.R.C.P. 11(b)(3) the party is still entitled to an additional three days notice by reason of the fact that he has previously appeared in the action. This conclusion comes from construing the rules together instead of in conflict with each other and is also in keeping with the policy of this court that default judgments are not favored. Garren v. Saccomanno, 86 Idaho 268, 385 P.2d 396 (1963); Orange Transportation Co. v. Taylor, 71 Idaho 275, 230 P.2d 689 (1951); Mead v. Citizen's Automobile Inter-Ins. Exch., 78 Idaho 63, 297 P.2d 1042 (1956).
BISTLINE, Justice, dissenting.
When it befell my lot to write the Court's unanimous opinion in Sierra Life Insurance Co. v. Magic Valley Newspapers, Inc., 101 Idaho 795, 623 P.2d 103 (1980), I labored under the premise that the Court was firmly of the belief that entry of a default judgment as a punishment for failure to comply with a direct order of the trial court compelling revelation of sources was improper. Now, two years later, upon observing the Court's gross misapplication of its own rules, with little regard for the underlying facts, and no regard for Sierra Life, I am brought to wonder how I would have voted in Sierra Life if that case had followed today's case in point of time — rather than preceding it. Surely the two cases cannot stand together in the same reporter system. If the losers in Sierra Life are outraged at seeing the disparity in the Court's philosophical meanderings, they may not be without justification. In Jensen v. Doherty, 101 Idaho 910, 623 P.2d 1287 (1981), which followed shortly after Sierra, there was some forewarning that the Court would apply its own rules on an ad hoc basis and as it saw fit, but at least the issue in that case was more difficult to comprehend, and perhaps my effort was inadequate to forestall the Court's movement in the wrong direction.
On the positive side, the Court's opinion today, compared to its summary disposition in Jensen, is a monumental effort, and goes to extremes in explaining to Mr. Riplinger why he doesn't deserve a day in court and why a $20,000 judgment against him will stand because he failed to provide a written statement to the effect that when his case — at issue and ready for trial — came up for trial, he would represent himself if he could not afford or otherwise was unable to obtain an attorney who would speak for him. In days gone by, the default judgment involved in this case would have been set aside out-of-hand:
A lay litigant's failure to give a written statement of his intentions, after having done so verbally, does not in any way delay or prejudice the disposition of a cause which is at issue and ready for trial. Cf. Dustin v. Beckstrand, Idaho (1982) (defendants appeared pro se, remained pro se, and despite their non-attendance at trial, were awarded a reversal of the judgment against them. Note the dissenting opinion of Bakes, C.J., which advocated setting aside the judgment of liability as well, notwithstanding that the defendants failed to furnish the trial court with an address).
I concur with Justice McFadden that I.R.C.P. 55(b)(2) was applicable to the entry of the default judgment in this case and that the judgment is voidable because of the failure to give notice to Riplinger as required by that rule. My deeper concern, however, is the Court's sanctioning of a clearly unconstitutional rule that allows a default judgment to be entered without notice against a party who has already appeared in a case. That rule is I.R.C.P. 11(b)(3).
On October 20, 1978, Riplinger's attorney, Robert Thompson, filed a motion for leave to withdraw, stating "that repeated efforts to contact the defendant(s) have not been productive and the attorney-client relationship cannot continue." Thompson also filed an affidavit for service by certified mail, stating that he had not been able to contact Riplinger and that Riplinger's last known address was "Rt. 3 Box 710B, Post Falls, Kathy Riplinger — c/o Kenneth Jacobsen, 118 N. 7th St., CDA." On October 27, 1978, the court entered the following order granting withdrawal:
Two affidavits of personal service of the order permitting withdrawal of attorney, one served at Rt. 3, Box 710B, Post Falls, Idaho, and one served at 315 West Garden, Coeur d'Alene, Idaho, appear in the record. Both were served on November 8th by the same process server. Riplinger telephoned the court clerk on November 13, 1978, about this order. Riplinger maintains that he told the clerk that he intended to defend the action, and if nothing else that he would represent himself. A note made by the clerk of that conversation was read by the trial court as follows:
Riplinger took no further action, and on December 14, 1978, Sherwood filed an affidavit of failure to plead or otherwise defend in support of its application for entry of default
A writ of execution was served on Riplinger's employer on April 20, 1979; Riplinger asserts that this was his first knowledge of the default judgment that had been entered against him. He was then able to retain his present attorney who with reasonable alacrity moved to set aside the entry of default and default judgment. In the affidavit in support of this motion Riplinger stated that during the period of time involved in this lawsuit he had been undergoing a traumatic period of marital problems, including a separation and divorce from Kathy Riplinger, followed by a marriage to his second wife, another separation, and another divorce. Riplinger also stated that he had never resided at Rt. 3,
After hearing oral argument, the trial court denied the motion to set aside the entry of default and default judgment. The court in its comments from the bench explained why it was denying the motion:
While I.R.C.P. 55(b)(2) provides that "[i]f the party against whom judgment by default is sought has appeared in the action,
Under the majority's incorrect application of the general rule that a more specific statute controls over a general one, the majority's inappropriate application of I.R.C.P. 11(b)(3) governs the present situation. The fundamental question raised by the majority's reliance on I.R.C.P. 11(b)(3) is whether a strict application of I.R.C.P. 11(b)(3) under the particular facts of this case violates due process.
At the outset I note that the withdrawal of an attorney does not result in withdrawing the client's appearance or pleadings. Harris v. Juenger, 367 Ill. 478, 11 N.E.2d 929 (1937); Dealers Warehouse Co. v. Wahl & Associates, 216 N.W.2d 391 (Iowa 1974); Sawyer v. Sawyer, 261 Iowa 112, 152 N.W.2d 605 (1967); Overmyer v. Eliot Realty, 83 Misc.2d 694, 371 N.Y.S.2d 246, 258 (Sup.Ct. 1975); Tiffin v. Hendricks, 44 Wn.2d 837, 271 P.2d 683 (1954); Annot. 64 A.L.R.2d 1424, 1434-35, 1443-44; 6 C.J.S. Appearances § 30a; 5 Am.Jur.2d Appearance § 37. This rule is based on the common-sense proposition that an attorney's withdrawal from a case does not affect the merits of his or her client's position and
Thus I.R.C.P. 11(b)(3) cannot be equated with a withdrawal of appearance by the party such that the order permitting withdrawal and the notice to file again, in essence, take on the status of new summons to which response must be made. A summons is issued if the defendant has not appeared, and its purpose is to hail him into court. In this case Riplinger had amply shown not only his intention to defend the action brought against him, but was prosecuting a substantial counterclaim. In such circumstances, assuming that an order was directed to him, requiring a notice as to how he intended to proceed was more akin to an order of the court that a party answer interrogatories than to the direction of an initial summons. If a full answer and counterclaim have been filed, a deposition has been given and interrogatories have been answered, the entry of judgment by default can be viewed only as a sanction imposed by the court for failure to obey an order of the court. The majority admits as much. The question, then, is whether this sanction, which denied Riplinger his day in court and which was imposed without notice or hearing, violates due process.
In Sierra Life Insurance Co. v. Magic Valley Newspapers, Inc., 101 Idaho 795, 623 P.2d 103 (1980), this Court noted that "there are constitutional limitations upon the power of courts, even in aid of their own valid processes, to dismiss an action without affording a party the opportunity for a hearing on the merits of his cause." Id. at 799, 623 P.2d at 107 (quoting Societe Internationale Pour Participations Industrielles et Commerciales, S.A. v. Rogers, 357 U.S. 197, 78 S.Ct. 1087, 2 L.Ed.2d 1255 (1958)). In Sierra this Court held that the trial court erred in striking defendant's pleadings and entering a default judgment because the sanctions were overly harsh and in the nature of punishment rather than being justified in order to allow Sierra to develop its case. Id. 101 Idaho at 800, 623 P.2d at 108.
While it is unquestioned that a court has the power to dismiss lawsuits and default defendants in order to control its own processes, see, e.g., Link v. Wabash RR, 370 U.S. 626, 82 S.Ct. 1386, 8 L.Ed.2d 734 (1962) (long delays culminating in missing pretrial conference justify dismissal without notice or hearing); Shapiro, Bernstein & Co. v. Continental Record Co., 386 F.2d 426 (2d Cir.1967) (one year refusal to obtain counsel in cavalier disregard of court's order justified default), such power is not unlimited. See, e.g., Hovey v. Elliott, 167 U.S. 409, 17 S.Ct. 841, 42 L.Ed. 215 (1897); Sierra Life Insurance Co. v. Magic Valley Newspapers, supra. The question before us now is whether entering a default judgment against Riplinger in the present case, without notice, and when there had been no evidence of an intent to delay the lawsuit by Riplinger, constituted imposition of an impermissible sanction in violation of due process.
In Hovey v. Elliott, 167 U.S. 409, 17 S.Ct. 841, 42 L.Ed. 215 (1897), the defendants refused to obey an order of the court directing them to pay a sum of money into the court registry. The trial court held them in contempt, struck their answer, and entered a default for plaintiff. The United States Supreme Court held "[i]t is therefore clear that the supreme court of the District of Columbia did not possess the power to disregard an answer which was in all respects sufficient, and had been regularly filed, and to ignore the proof taken in its support ...," and that a judgment based on such an assumed power is void for want of jurisdiction. Id. at 444, 17 S.Ct. at 854. In so holding the Court stated:
In Hammond Packing Co. v. Arkansas, 212 U.S. 322, 29 S.Ct. 370, 53 L.Ed. 530 (1908), the Court upheld a trial court order striking an answer and entering a default for refusal to comply with a court order to produce the books and papers of the company and the requested witnesses. The Court, noting that the mere fact the trial court had acted under statutory authority did not take the case out of the Hovey v. Elliott rule, distinguished Hovey as follows:
This distinction was approved in Societe Internationale Pour Participations Industrielles et Commerciales, S.A. v. Rogers, 357 U.S. 197, 78 S.Ct. 1087, 2 L.Ed.2d 1255 (1958). In that case the Court held that dismissal of petitioner's complaint was improper in that its noncompliance with a pretrial production order was due to inability, and not to willfulness, bad faith or any fault of petitioner. The court noted that the presumption created in Hammond might well falter where the plaintiff, despite good-faith efforts, was unable to comply with a pretrial production order.
Furthermore, the sanctions imposed must be justified in order to enable the opposing party to develop his case, Sierra Life Insurance Co. v. Magic Valley Newspapers, Inc., supra, i.e., the sanction must further the legitimate end of advancing the lawsuit rather than being a mere punishment. As stated in Fields v. Stauffer Publications, Inc., 2 Kan.App.2d 323, 578 P.2d 1138 (1978), "[t]he object of a sanction should be to prevent the party against whom sanctions are being imposed from profiting by his own violation." Id. at 1143.
In the present case the sanction can only be viewed as a punishment, not intended in any way to advance the adjudicative process, and the presumption of Hammond cannot stand. This lawsuit had been underway for over two years before the default was entered, and Riplinger at no time had delayed or impeded the progress of this suit. He had filed his answer and counterclaim, given his deposition, and answered interrogatories.
The majority attempts to dispose of Hovey and Societe Internationales by examining the objectives of the underlying orders which the defaulted parties failed to comply with in those cases. The majority concludes that default judgments may not be entered as a sanction for failure to obey orders on issues ancillary to the adjudication on the merits, but may enter a default for failure to obey an order which is "central to the adjudicative process... ." Overcoming an inclination to label this as the pure unsupported sophistry which it is, and assuming that this distinction properly tracks the contours of the due process clause, it is nevertheless apparent that the majority has misapplied the distinction in this case. The order, if order it was, did not require Riplinger to proceed with the case; it merely instructed him to inform the court as to how he would thereafter be proceeding once the next step in the adjudicative process was initiated. At this point in time there remained nothing to be done except setting the case for trial. A litigant's choice of attorneys is not "central to the adjudicative process;" it is even more ancillary than the payment of funds at issue in Hovey. The court in this case struck Riplinger's entire pleadings — and entered judgment against him — because he did not inform the court in the precise rule-dictated legal form
A few final points are necessary regarding the possible prejudice to Sherwood that would result from setting aside the default. First, since the default was entered in violation of due process, any prejudice to Sherwood is irrelevant. Subsequent actions cannot affect the initial unconstitutionality of the default judgment. Second, it was improper for a default judgment to be entered against one of the defendants in this case while the suit was still pending against the other. As stated in 6 Moore's Federal Practice § 55.06 (2d ed. 1976), "[i]f ... the alleged liability is joint a default judgment should not be entered against a defaulting defendant until all of the defendants have defaulted; or if one or more do not default then, as a general proposition, entry of judgment should await an adjudication as to the liability of the nondefaulting defendant(s)." (Footnotes omitted.) As stated in Frow v. De La Vega, 15 Wall. 552, 554, 21 L.Ed. 60 (1872):
In the present case, both Kathy and Robert Riplinger had signed the note, and the lawsuit was identical against each. So long as one defendant remained actively in the case, it was error to enter a default judgment against the other. Any prejudice to Sherwood, a self-manufactured result, therefore should not affect a proper determination.
The last paragraph of this affidavit was a misconception. The default could not be sought for failure to answer or defend, but simply for failure to state how he would be thereafter represented — whether by new counsel, or pro se (assuming the validity and applicability of the court's unusual rule). Riplinger, having appeared and pleaded was engaged in defending. Moreover, the order had not directed him to do anything.
I.R.C.P. 11(b)(3) was adopted to correct this situation, but the drafters unfortunately went to the other extreme and provided that after counsel notifies his client that he has withdrawn, no further notice need be given by anyone. The intermediate position, of course, would be simply to require Rule 55(b)(2) notice of an application for judgment.