Opinion
No. 2-099 / 01-0895.
Filed June 19, 2002.
Appeal from the Iowa District Court for Jefferson County, ANNETTE J. SCIESZINSKI, Judge.
Peggy Conger appeals from an order setting aside the default decree dissolving her marriage to Chris Conger. AFFIRMED.
Thomas Walter of Johnson, Hester, Walter Breckenridge, Ottumwa, for appellant.
Douglas Tindal of Tindal Kitchen, P.L.C., Washington, for appellee.
Considered by MAHAN, P.J., and MILLER and HECHT, JJ.
Peggy Conger appeals from the order setting aside the default decree dissolving her marriage to Chris Conger. She contends Chris failed to show good cause to set aside the default decree on the basis of mistake, inadvertence, surprise, excusable neglect, or unavoidable casualty. We affirm and remand.
We note an order setting aside a default judgment is interlocutory in nature. See Hannan v. Bowles Watch Band Co., 180 N.W.2d 221, 222 (Iowa 1970). Accordingly, we elect to treat Peggy's notice of appeal as an application for interlocutory appeal and grant it. See Iowa Rule of Appellate Procedure 6.1(4).
I. Background Facts and Proceedings.
Peggy and Chris were married on August 3, 1991, and have one child, Dakota, born May 8, 1994. On November 20, 2000, Peggy filed a petition for dissolution of the marriage, and obtained a temporary writ of injunction enjoining Chris from acts of domestic violence. Chris was served with original notice of the action on November 23, 2000, but he failed to move, plead, or answer within twenty days of service. Consequently, on December 20, 2000, Peggy's counsel mailed to Chris a notice of intent to file a written application for default pursuant to Iowa Rule of Civil Procedure 1.972(3)(a). Chris did not respond to the notice.
Formerly Iowa Rule of Civil Procedure 231(c)(1).
Peggy filed an application for default on January 18, 2001. At the pretrial conference on March 19, 2001, of which Chris was never given notice, Peggy presented evidence and the court entered a default judgment against Chris. On that same day the court entered a decree dissolving the marriage.
On March 29, 2001, Chris, having obtained legal representation, filed a motion to set aside the default pursuant to rule 1.977, alleging the default was a result of inadvertence, mistake, excusable neglect, or unavoidable casualty. In particular, Chris complained of the inequitable terms of the decree. The district court granted the motion and set aside the decree. Peggy appeals.
Formerly Iowa Rule of Civil Procedure 236.
The default judgment and the ruling setting it aside were not decided by the same judge.
II. Standard of Review.
A motion to set aside a default decree is a proceeding at law. Williamson v. Casey, 220 N.W.2d 638, 639 (Iowa 1974). We vest district courts with broad discretion in ruling on a motion to set aside a default, and reverse such a ruling only if this discretion is abused. Cent. Nat. Ins. Co. of Omaha v. Ins. Co. of North America, 513 N.W.2d 750, 753 (Iowa 1994). Generally, we find such an abuse only when there is a lack of substantial evidence to support the district court's ruling. Paige v. City of Chariton, 252 N.W.2d 433, 437 (Iowa 1977). We are bound by the district court's findings of fact if supported by substantial evidence, and we view the evidence in the light most favorable to the district court's ruling. Flexsteel Indus., Inc. v. Morbern Indus. Ltd., 239 N.W.2d 593, 596 (Iowa 1976). We are more reluctant to interfere with the grant of a motion to set aside a default than with its denial. Insurance Co. of N. Amer. v. Sperry Hutchison Co., 168 N.W.2d 753, 756 (Iowa 1969).
III. Motion to Set Aside Default.
Iowa Rule of Civil Procedure 1.977 provides in pertinent part:
On motion and for good cause shown, and upon such terms as the court prescribes, but not ex parte, the court may set aside a default or the judgment thereon, for mistake, inadvertence, surprise, excusable neglect or unavoidable casualty.
The purpose of the rule is to allow determinations of controversies on their merits, rather than on the basis of non-prejudicial inadvertence or mistake. Paige, 252 N.W.2d at 437. Taking a liberal approach in interpreting inadvertence or mistake advances this principle. Cent. Nat. Ins. Co. of Omaha, 513 N.W.2d at 756.
In granting Chris's motion to set aside the default decree, the district court found that Chris was legitimately surprised at the expansive terms of the default decree and noted "[l]ittle testimonial record made in support of the decree foreshadowed or substantiated the harsh consequences effected upon Chris." The court recognized the "starkly disproportionate" nature of the decree's property and debt allocation and concluded that to allow the decree to stand would "undermine principles of justice that inure to even a risk-bearing, non-participating, pro se party." Our task is therefore to determine whether the circumstances of this case meet the requirements in order to set aside a default judgment under rule 1.977. Considering the decree's harsh terms and Chris's showing of interest in the proceedings, we conclude, the court properly set aside the default decree.
The court's characterization of the decree as grossly inequitable appears fully supported by the record. The decretal court granted Peggy assets valued at $102,900, but allocated to Chris assets valued at only $7,000. This inequitable division of assets was exacerbated by the decree's requirement that Chris pay all of the parties' debt including $47,000 owed on the homestead received by Peggy. Peggy was granted sole custody of their child and the decree allowed Chris only such visitation "as shall be agreed upon" by the parties. The decretal court also awarded Peggy $500 in monthly alimony, ordered child support of $614.93 per month, and directed immediate wage withholding. Moreover, the court ordered Chris to pay all day care expenses and to furnish all health care insurance and medical expenses for the child. Finally, the court ordered Chris to pay all court costs plus $2,500 for Peggy's attorney fees.
Chris received a pick-up truck, one-half of his pension, and certain other items of personal property in his possession.
These financial terms were ordered despite Peggy's testimony that she was unsure if Chris was then employed.
Substantial evidence supports the court's findings that Chris expressed some interest in this case prior to the default decree and that he moved promptly following the entry of the default decree to set it aside. See Cent. Nat. Ins. Co. of Omaha, 513 N.W.2d at 756 (instructing the court to inquire whether the party intended to defend and whether the party promptly moved to set aside the default). Chris testified that on March 2, 2001, he phoned Peggy's attorney and left a voice message inquiring about a potential trial date. Peggy's counsel never returned this call. Again on March 3, Chris called Peggy's attorney who did not tell Chris about the scheduled court date, but merely informed him of the potential for default and that he needed to secure an attorney.
As noted above, the default decree awarded Peggy substantial child support and alimony, and granted her the majority of the parties' assets. Peggy's petition requested an "equitable" division of assets acquired during the marriage. The district court's finding of stark disproportionality in the decree's property and debt distribution is supported by substantial evidence in the record. Thus, the default decree granted Peggy relief outside of the pleadings, in that those pleadings merely requested an equitable division of assets. The record also supports the district court's finding Chris was legitimately surprised at the decree's harsh and inequitable terms.
We conclude the district court's order setting aside the default decree was in accord with the directive from our supreme court that all doubt should be resolved in favor of setting aside a default. Brandenburg v. Feterl Mfg. Co., 603 N.W.2d 580, 584 (Iowa 1999). The order also reflects our view of the underlying purpose of rule 1.977: "to allow a determination of controversies on their merits rather than on the basis of nonprejudicial inadvertence or mistake." Whitehorn v. Lovik, 398 N.W.2d 851, 853 (Iowa 1987). We conclude the district court properly set aside the default decree on grounds of surprise under rule 1.977.
AFFIRMED.