Tallman v. Aune

446 P.3d 928

Michael Eugene TALLMAN, Plaintiff-Appellant,

v.Richard AUNE, Defendant-Appellee.

Court of Appeals No. 17CA2254

Colorado Court of Appeals, Division VI.

Announced January 24, 2019

Rehearing Denied February 21, 2019

Miller Steiert, P.C., Christopher J. Forrest, Stephen J. Woolsey, Littleton, Colorado, for Plaintiff-Appellant

The Law Office of Ahson Wali LLC, Ahson B. Wali, Greenwood Village, Colorado, for Defendant-Appellee

Opinion by JUDGE DUNN

¶ 1 Michael Eugene Tallman obtained a default judgment in 1996 against Richard Aune. Twenty years after the judgment entered, and after the court file had been destroyed, the district court granted Mr. Aune’s motion to vacate the default judgment under C.R.C.P. 60(b)(3), finding that Mr. Tallman "failed to establish by clear and convincing evidence that [Mr. Aune] was ever properly served in this case." Mr. Tallman asks us to reverse that ruling because, in his view, (1) the district court erred in declining to apply the presumption of regularity to the default judgment and presume it was entered with jurisdiction and (2) Mr. Aune’s unsworn statements in his motion to vacate the default judgment were not sufficient to overcome the presumption of regularity or meet his threshold burden to establish that the default judgment was void.

¶ 2 Because we agree with Mr. Tallman, we reverse the district court’s judgment and remand the case for reinstatement of the default judgment.

I. Background

A. The Court Record

¶ 3 This case comes to us under unusual circumstances. Though asked to consider whether the district court erred in vacating Mr. Tallman’s default judgment obtained nearly two decades ago, we are limited by the district court’s destruction of the case file under its records retention policy (nearly fifteen years after the default judgment entered). Only the register of actions survived the purge, reflecting what was filed and when. Nothing in the register indicated that the parties were notified about the records retention policy or the destruction of the case file.

¶ 4 While the original court pleadings were destroyed, Mr. Tallman possessed copies of two pleadings that his attorney had, at some point, provided him: (1) the September 1996 "verified motion for entry of default" (default motion) and (2) the district court’s December 1996 "judgment and order" entering default judgment against Mr. Aune (1996 default judgment). Given the destruction of the case file, Mr. Tallman filed a verified motion for new order or record under section 13-1-104, C.R.S. 2018, asking the court to enter the two pleadings in "the record with the same effect which the original record would have had if [the pleadings] had not been lost or destroyed." Mr. Aune did not dispute that the two pleadings in Mr. Tallman’s possession were true and accurate. The district court granted the motion, making these pleadings part of the record.

¶ 5 We therefore take the facts and procedural history from the register of actions and the limited replaced portions of the district court’s record.

B. The 1996 Default Judgment

¶ 6 Those records show that Mr. Tallman filed a complaint against Mr. Aune in 1996. Mr. Aune did not file an answer or otherwise respond to the complaint. Mr. Tallman then filed the default motion under C.R.C.P. 55. As relevant here, the motion stated that

• Mr. Tallman filed his complaint on May 23, 1996; • "a copy of the [c]omplaint and [s]ummons was served upon [Mr. Aune] in Honolulu, Hawaii, on July 16, 1996, a copy of which [was] filed with this Court, (See copy of [s]ummons and [a]ffidavit attached hereto as Exhibits 1 and 2, respectively)";¹

• more than thirty days had passed since "personal service"; and

• Mr. Aune had not answered or responded.

¶ 7 The default motion was verified via Mr. Tallman’s counsel’s sworn and notarized statement that the information was "true to the best of [his] knowledge, information and belief."

¶ 8 The surviving register of actions showed several entries consistent with the default motion, including a complaint filed on May 23, 1996, "SVC" on July 16, 1996, and "[s]ummons" on August 2, 1996. The register of actions also reflected that the clerk of court entered default in October 1996.

¶ 9 The district court later granted Mr. Tallman’s verified motion for default judgment. In the 1996 default judgment, the court made the following relevant factual findings:

• The complaint was filed on May 23, 1996.

• "Service was effectuated on [Mr. Aune] on July 16, 1996."

• A responsive pleading "should have been filed" no later than August 15, 1996.

• Mr. Tallman had "complied with all applicable rules for entry of default judgment."

• Mr. Tallman was entitled to judgment in the amount of $91,574.45.

• And Mr. Tallman was "entitled to execute upon this judgment in accordance with law."

¶ 10 The 1996 default judgment was signed by District Court Judge Kenneth Barnhill and dated December 11, 1996. It was entered in the register of actions on that date.

C. Garnishment and Motion to Vacate

¶ 11 Beyond a 2011 notation that the case file was "[d]estroyed," the register of actions reflected no activity until 2016 when Mr. Tallman filed writs of garnishment, seeking to enforce the 1996 default judgment. The writs issued, and Mr. Tallman served them on several banks.

¶ 12 Shortly after, Mr. Aune filed what he captioned a "verified motion to vacate default judgment and quash writ of garnishment" (motion to vacate). In this motion, Mr. Aune asserted that (1) he was not previously "aware that he had been sued or that a judgment had been entered against him"; (2) Mr. Tallman "could not provide a copy of the [a]ffidavit of [s]ervice"; and (3) he "would have defended this matter had he been properly served." Mr. Aune then asserted, in conclusion, that he "was never served in this case" and "a default judgment obtained without service of process" is void. He therefore asked the district court "to vacate the [1996 default judgment] and quash all writs of garnishment."

¶ 13 In response, Mr. Tallman admitted that he could not produce the affidavit of service but argued that he properly served Mr. Aune and complied with the rules for entry of default judgment. As evidence that he did, Mr. Tallman attached the default motion, the 1996 default judgment, and email exchanges with the court regarding the destruction of the case file. He also pointed to the register of actions entry, noting "SVC on 7-16-96." And Mr. Tallman argued that Mr. Aune "failed to present any proof that he was not served or that the judgment [was] void" and had not satisfied his burden to establish by clear and convincing evidence that the 1996 default judgment should be vacated.

¶ 14 Mr. Tallman later filed an affidavit from the attorney who obtained the 1996 default judgment. That affidavit stated that "he was the attorney of record in this matter in 1996" and that he "understand[s] and [was] informed that service on [Mr. Aune] in this case was effectuated in Hawaii." Counsel also stated he "specifically recall[ed] looking into the issue of service of process in Hawaii" and he only handled one case that required service there.

¶ 15 The district court granted Mr. Aune’s motion to vacate. In doing so, it found that Mr. Tallman "failed to produce" the affidavit of service and, without the affidavit of service, nothing showed "the essential facts to demonstrate adequacy of service." Accordingly, the court concluded that Mr. Aune had "met [his] burden." It then shifted the burden to Mr. Tallman and concluded that he had not established that Mr. Aune was properly served.

D. The Motion to Reconsider

¶ 16 Mr. Tallman moved the court to reconsider, arguing that the presumption of regularity must apply. He specifically contended that the court must presume that the 1996 default judgment was properly entered and that Mr. Aune was properly served—a requirement for entry of a default judgment. He further argued that Mr. Aune’s unsworn statements did "not affirmatively show that service did not occur, nor [did they] overcome the presumption of regularity."

¶ 17 The district court rejected the argument, noting that Mr. Tallman "cited no authority indicating that the presumption ha[d] been applied to a [district] court’s review of its own record in Colorado." The court added that even if the presumption of regularity does apply to a district court, it is "not the standard by which to judge [Mr. Aune’s motion to vacate]."

¶ 18 The district court later dismissed the case.

II. Vacating the 1996 Default Judgment

¶ 19 Mr. Tallman contends that the district court erred in vacating the 1996 default judgment. More to the point, he argues that the district court should have applied the presumption of regularity to presume the 1996 default judgment was entered with jurisdiction.

A. Standard of Review

¶ 20 We review de novo a district court’s order granting relief from a default judgment under C.R.C.P. 60(b)(3). Goodman Assocs., LLC v. WP Mountain Props., LLC , 222 P.3d 310, 314 (Colo. 2010).

¶ 21 Mr. Aune, however, argues that because Mr. Tallman didn’t raise the presumption of regularity until the motion for reconsideration, we should review only for an abuse of discretion.² See Hytken v. Wake , 68 P.3d 508, 512 (Colo. App. 2002). While Mr. Aune is correct on the timing, the district court considered the argument and concluded the presumption of regularity didn’t apply. And whether the district court applied the correct legal standard is a question of law that we review de novo. Wal-Mart Stores, Inc. v. Crossgrove , 2012 CO 31, ¶ 7, 276 P.3d 562. In any event, a district court abuses its discretion if it applies the wrong legal standard. Id.

B. Requirements for Default Judgment

¶ 22 When a defendant fails to defend against a civil lawsuit, the plaintiff may request "a judgment by default." C.R.C.P. 55(b).³ To obtain one, the plaintiff must provide the court with the following:

• "[t]he original summons showing valid service on the particular defendant in accordance

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