Spiremedia Inc. v. Wozniak

487 P.3d 1211

SPIREMEDIA INC., d/b/a Spire Digital, Plaintiff-Appellant,

v.Timothy Richard WOZNIAK, a/k/a Timmy Wozniak, Defendant-Appellee.

Court of Appeals No. 18CA2098

Colorado Court of Appeals, Division VI.

Announced January 16, 2020

Bighorn Legal, Jonathan Hagn, Englewood, Colorado, for Plaintiff-Appellant

No Appearance for Defendant-Appellee

Opinion by JUDGE WELLING

¶1 Spiremedia Inc. appeals the district court's order denying its motion for default judgment and dismissing the case for violation of the district court's delay reduction order (DRO).

¶2 This case raises an issue of first impression: What is a court required to tell a party when it denies a motion for default judgment pursuant to C.R.C.P. 55(b) and 121, section 1-14, and dismisses a case for failure to comply with the rules? We conclude that a court is required to identify the deficiencies in the motion that supports its decision, particularly before taking the extraordinary step of dismissing the case. Such an explanation provides a party an opportunity to remedy the deficiencies in its motion. Because the court here didn't adequately articulate its basis for denying the motion for default judgment before dismissing the case, we reverse the judgment and remand the case for further proceedings.

I. Background

¶3 On February 8, 2018, Spiremedia filed its complaint against Timothy Richard Wozniak for breach of contract and treble damages for a dishonored check pursuant to section 13–21–109(2), C.R.S. 2019. Four days later, the district court issued a DRO, stating that "application for entry of default under C.R.C.P. 55(a) must be filed within 14 days after default has occurred. ... Motions for entry of default judgment must comply with C.R.C.P. 121, § 1-14." The DRO also warned (in bold and all capital letters) that "IF AN ATTORNEY OR PRO SE PARTY FAILS TO COMPLY WITH THIS ORDER, THE COURT MAY DISMISS THE CASE WITHOUT PREJUDICE."

¶4 On May 8, 2018, Spiremedia filed an affidavit of service attesting that Wozniak was served outside of Colorado on May 6, 2018. (Under C.R.C.P. 12(a)(2), a defendant served outside of Colorado has thirty-five days from the date of service to file an answer or other initial response.) Thus, Wozniak had until June 10, 2018, to respond to the complaint. By June 15, 2018, however, Wozniak had not filed any responsive pleadings or motion to dismiss, so Spiremedia filed a motion for default judgment under C.R.C.P. 55.

¶5 On July 11, 2018, the district court denied Spiremedia's motion for default judgment, stating only: "A motion for default judgment must comport with the requirements of C.R.C.P. 121, § 1-14. The Motion as filed does not do so, and is therefore presented in an improper format. Accordingly, the Motion is DENIED." The court did not provide any explanation of those purported deficiencies.

¶6 Two days later, Spiremedia, apparently uncertain was deficient about its first motion — but suspecting it may have been a failure to include an affidavit stating Wozniak is not a minor, incompetent, or a servicemember, see C.R.C.P. 121, § 1-14(1)(c) — refiled the motion for default judgment, this time adding what it referred to as an "affidavit equivalent" pursuant to the Uniform Unsworn Declarations Act (UUDA), § 13–27–104(1), C.R.S. 2019, averring compliance with C.R.C.P. 121, section 1-14(1)(c).

¶7 On September 10, 2018, the district court ruled on Spiremedia's second motion for default judgment as follows:

Plaintiff previously filed a motion for default judgment on June 15, 2018. That motion was denied for failure to comport with the requirements of C.R.C.P. 121 § 1-14. The current Motion is substantially identical to that motion, with the addition of a[n] unnotarized affidavit regarding Defendant's servicemember status. Thus, as with the prior motion, this Motion does not comport with C.R.C.P. 121 § 1-14, and is therefore presented in an improper format. Accordingly, the Motion is DENIED. Furthermore, because Plaintiff has twice filed the Motion in an improper format, Plaintiff is in violation of this Court's Delay Reduction Order. The action is accordingly DISMISSED.

We will refer to this order as the Dismissal Order.

¶8 On September 19, 2018, Spiremedia filed a motion for reconsideration of the Dismissal Order. It asserted that, after a review of the requirements for a motion for default judgment listed in C.R.C.P. 121, section 1-14, it was "unable to discern any substantive defect in the papers already filed with the Court." And it told the court that, even if there was a defect, the court "has still never notified [Spiremedia] as to what ‘further documentation, proof, or hearing is required’ to resolve the Motion ...." (Quoting C.R.C.P. 121, § 1-14(2).) Thus, Spiremedia contended, the district court should vacate its order dismissing the case and either enter default judgment in its favor or "notify [Spiremedia] and its counsel as to the specific defect(s) with the Motion [for default judgment] under C.R.C.P. 121 [,] § 1-14."

¶9 On October 11, 2018, the district court denied Spiremedia's motion to reconsider. In its order, the district court said, without further explanation, that "[t]he supporting documents for both prior motions were wholly incomplete for the purposes of default judgment, sworn or not."

II. Analysis

¶10 Spiremedia appeals both the Dismissal Order and the order denying its motion for reconsideration, raising two contentions. First, it asserts that the district court erred by denying its second motion for default judgment because it complied with C.R.C.P. 121, section 1-14. Second, Spiremedia asserts that, even if its second motion for default judgment was deficient, the district court erred by failing to notify Spiremedia as to what further documentation or proof was required for the motion to comply with the rules. While we disagree with Spiremedia's first contention — that its second motion for default judgment complied with C.R.C.P. 121, section 1-14 — we are persuaded by its second contention. Accordingly, we reverse the Dismissal Order and remand the case with instructions for the court to provide further explanation for the denial of the motion such that Spiremedia may, if possible, remedy the deficiencies.

A. Appellate Jurisdiction

¶11 Before reaching Spiremedia's contentions, we must first consider our jurisdiction over this appeal, on our own accord if necessary. See Allison v. Engel , 2017 COA 43, ¶ 22, 395 P.3d 1217 ("We must determine independently our jurisdiction over an appeal, nostra sponte if necessary." (first citing People v. S.X.G. , 2012 CO 5, ¶ 9, 269 P.3d 735 ; then citing Meridian Ranch Metro. Dist. v. Colo. Ground Water Comm'n , 240 P.3d 382, 385 (Colo. App. 2009) )). At issue in this appeal are both finality and timeliness. We address each in turn.

1. Finality

¶12 With some exceptions not relevant here, we have jurisdiction only over appeals from final judgments. § 13–4–102(1), C.R.S. 2019; C.A.R. 1(a). Generally, "an order of dismissal without prejudice is not a final judgment" subject to appeal. SMLL, L.L.C. v. Daly , 128 P.3d 266, 268–69 (Colo. App. 2005).

¶13 The district court's Dismissal Order was silent as to whether the case was being dismissed with or without prejudice. Under C.R.C.P. 41(b)(3), "orders that do not so specify [whether the dismissal is with or without prejudice] shall be deemed motions for dismissal without prejudice ...." And, under C.R.C.P. 121, section 1-10(5), which provides the steps required for dismissal of an action under C.R.C.P. 41(b), "[a]ny dismissal under this rule shall be without prejudice unless otherwise specified by the court ." (Emphasis added.) See also C.R.C.P. 41(b)(2) (requiring that orders of dismissal under this rule must comport with the requirements in C.R.C.P. 121, section 1-10). Further, the district court dismissed the case for noncompliance with the DRO, which provided that "if an attorney ... fails to comply with this order, the court may dismiss the case without prejudice ." (Emphasis added.) Accordingly, though the Dismissal Order itself is silent, we conclude that it dismissed the case without prejudice.

¶14 Notwithstanding the general rule discussed above, a dismissal without prejudice is a final judgment if the statute of limitations period has expired or the dismissal otherwise results in prohibiting further proceedings. See SMLL, L.L.C. , 128 P.3d at 268–69 ; see also Golden Lodge No. 13, I.O.O.F. v. Easley , 916 P.2d 666, 667 (Colo. App. 1996) ; Wyler/Pebble Creek Ranch v. Colo. Bd. of Assessment Appeals , 883 P.2d 597, 599 (Colo. App. 1994).

¶15 We conclude the Dismissal Order is a final, appealable order because the statute of limitations has run. Spiremedia filed suit for breach of contract and treble damages under section 13–21–109(2). The latter claim has a statute of limitations of two years from the date the cause of action accrues. § 13–80–102(1)(k), C.R.S. 2019. In its complaint, Spiremedia alleged that the statutory violation occurred on or around February 12, 2016, when Wozniak's check was allegedly dishonored. Thus, the statute of limitations on Spiremedia's statutory claim had run by February 12, 2018, just four days after the complaint was filed. And by the time the district court denied the motion for default judgment the second time and dismissed the action on September 10, 2018, the statute of limitations period for Spiremedia's statutory claim had expired nearly seven months earlier. Accordingly, the judgment was final for purposes of appeal. See, e.g. , SMLL, L.L.C. , 128 P.3d at 268–69.

2. Timeliness

¶16 Under Colorado Appellate Rule 4(a), a notice of appeal in a civil case must "be filed with the appellate court ... within 49 days of the date of the entry of the judgment, decree, or order from which the party appeals." However, the forty-nine-day period does not begin to run if a party timely files — that is, within fourteen days of the final judgment — a motion under C.R.C.P. 59. C.R.C.P. 59(a)(3), (...