Judson v. Wheeler RV Las Vegas, LLC

IN THE UTAH COURT OF APPEALS

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William Judson and Donna Judson, ) MEMORANDUM DECISION
)
Plaintiffs and Appellees, ) Case No. 20080688‐CA
)
v. )
) FILED
Wheeler RV Las Vegas, LLC dba ) (June 14, 2012)
Wheeler’s Las Vegas RV, )
) 2012 UT App 169
Defendant and Appellant. )

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Fifth District, St. George Department, 070501867
The Honorable Eric A. Ludlow

Attorneys: Steven R. Bangerter, William E. Frazier, and Daniel P. Wilde, St.
George, for Appellant
Gary G. Kuhlmann, St. George, for Appellees

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Before Judges Davis, Thorne, and Roth.

THORNE, Judge:

¶1 This matter returns to this court on remand from the Utah Supreme Court with
directions to review the district court’s 2008 determination that the default judgment
against Wheeler RV Las Vegas, LLC (Wheeler) did not result from surprise or excusable
neglect. See Judson v. Wheeler RV Las Vegas, LLC, 2012 UT 6, ¶¶ 26–30, 270 P.3d 456. We,
in turn, remand the matter to the district court for the entry of findings on the factual
issues identified in the supreme court’s decision.
¶2 The district court entered a default judgment against Wheeler in November 2007
after it failed to file an answer to William and Donna Judson’s complaint.1 In June 2008,
the district court denied Wheeler’s motion to set aside the default judgment, ruling that
the judgment did not arise from surprise or excusable neglect and that Wheeler had
failed to proffer a meritorious defense. On appeal, this court affirmed the district court
on its meritorious defense analysis without addressing surprise or neglect. See generally
Judson v. Wheeler, 2009 UT App 199U, paras. 4–5 (mem.), rev’d, 2012 UT 6, 270 P.3d 456.
The supreme court reversed this court’s decision on the meritorious defense issue and
remanded the matter to us to address Wheeler’s arguments pertaining to surprise and
excusable neglect. See Judson, 2012 UT 6, ¶¶ 25–26.

¶3 Wheeler argues that the district court abused its discretion when it failed to grant
relief from the default judgment on grounds of surprise or excusable neglect. The
district court made numerous factual findings regarding the events leading up to the
default judgment and concluded that Wheeler had not demonstrated either surprise or
excusable neglect. These findings, which Wheeler does not challenge, include the
following: that in September 2007 the Judsons’ counsel gave Wheeler an extension of
time to answer in order to allow Wheeler’s counsel “a short time to provide [the
Judsons’ counsel] with evidence that [Wheeler] was not the proper party in this case”;
that on October 15, the Judsons’ counsel made demand by telephone that the evidence
be provided or that an answer be filed; that on October 30, Wheeler’s counsel provided
the Judsons’ counsel with a bill of sale, which the Judsons’ counsel informed Wheeler’s
counsel was insufficient; that on November 1, Wheeler’s counsel informed the Judsons’
counsel that no further documents would be forthcoming absent a confidentiality
agreement, which the Judsons’ counsel refused to sign; and that there was no further
contact between the parties until November 27, when “[the Judsons’] counsel advised
[Wheeler’s counsel] that [the Judsons] would be seeking the entry of default and default
judgment” and filed a default application with the district court. The district court
entered a default certificate on December 3 and default judgment on December 4.

¶4 On their face, these factual findings appear to amply support the district court’s
exercise of its discretion in determining that there was no surprise or excusable neglect.

1
A detailed account of the allegations underlying the Judsons’ complaint, the
events leading up to the default judgment, and Wheeler’s attempt to have it set aside
can be found in Judson v. Wheeler RV Las Vegas, LLC, 2012 UT 6, ¶¶ 3–10, 270 P.3d 456.

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See generally Harrison v. Thurston, 2011 UT App 231, ¶¶ 7–9, 258 P.3d 665 (mem.)
(discussing the district court’s discretion to address rule 60(b) motions); Stevens v.
LaVerkin City, 2008 UT App 129, ¶ 27, 183 P.3d 1059 (defining excusable neglect as “‘the
exercise of “due diligence” by a reasonably prudent person under similar
circumstances’” (quoting Mini Spas, Inc. v. Industrial Comm’n, 733 P.2d 130, 132 (Utah
1987))); Rukavina v. Sprague, 2007 UT App 331, ¶¶ 3–4, 170 P.3d 1138 (discussing the
“surprise” element of rule 60(b)(1) in terms of due diligence by counsel). However, in
light of the supreme court’s statements in Judson v. Wheeler RV Las Vegas, LLC, 2012 UT
6, 270 P.3d 456, we nevertheless remand this matter to the district court for the entry of
more detailed findings in support of its June 2008 ruling.

¶5 In Judson, the supreme court remanded the surprise and excusable neglect issues
to this court “for their final disposition by the court of appeals.” See id. ¶ 30. But the
supreme court also strongly suggested that the existing record is insufficient to allow
adequate review. See id. ¶ 26 (stating that the “resolution [of the surprise and neglect
issues] is not apparent on the record”). The supreme court expressed its reservations
about exactly when and how Wheeler received notice that Judson was abandoning
negotiations and seeking default judgment, see id. ¶¶ 28–29, and seemed particularly
troubled by Wheeler’s assertion on appeal that “the only way it was ‘informed’ of the
default proceedings was by the [Judsons’] mailing of the Application for Entry of
Default—which arrived [on December 5, 2007,] one day after the default judgment was
entered.” See id. ¶ 29. The supreme court stated, “The district court made no findings
on these specific matters and we do not purport to resolve them here. Our point is only
to observe that there may be more to Wheeler’s assertion of surprise and excusable
neglect than the district court seemed to acknowledge.” Id. ¶ 30.

¶6 Despite the district court’s detailed factual findings, the supreme court’s
comments in Judson indicate to us that the existing record and findings are not sufficient
to allow appellate review of the surprise and neglect issue. We therefore remand this
matter to the district court with instructions to make further factual findings addressing
the concerns raised in paragraphs 28 and 29 of Judson. Specifically, the district court is
directed to make additional findings regarding the relationship between Wheeler’s
failure to answer and the ongoing settlement process; the reasonableness of any belief
on Wheeler’s part that “it would not be defaulted without further notice and an
opportunity to file an answer”; and when and how Wheeler actually received notice that

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the Judsons were seeking a default. See id. ¶¶ 28–29. The district court, of course, has
the discretion to take additional evidence should it consider it appropriate to do so.

¶7 Once the district court has addressed these factual issues, it may revisit the issue
of whether Wheeler “acted with reasonable diligence.” See id. ¶ 29. The district court
may then either reaffirm its original ruling or alter it in light of the additional factual
findings.

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William A. Thorne Jr., Judge

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¶8 WE CONCUR:

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James Z. Davis, Judge

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Stephen L. Roth, Judge

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