B & F ENGINEERING, INC. v. Cotroneo

¶1dissenting. This case involves a tragic accident, and the allegations are of the most serious kind. Nevertheless, the circumstances of this case are precisely the kind that the expanded Ark. R. Civ. P. 6(b) was intended to embrace — a good faith mistake resulting in a failure to answer a complaint on time.

¶2The former Rule 6(b) provided for an extension of time only when failure to act was due to “excusable neglect, unavoidable casualty or other just cause.” The current Rule 6(b), which became effective on February 1, 1991, broadened the scope of “just causes” considerably:

(b) Enlargement: When by these rules or by a notice given thereunder or by order of the court an act is required or allowed to be done at or within a specified time, the Court for cause shown may at any time in its discretion ... (2) upon motion made after the expiration of the specified period permit the act to be done where the failure to act was the result of mistake, inadvertence, surprise, excusable neglect, or other just cause ....

¶3In the Matter of the Changes to the Arkansas Rules of Civil Procedure, the Arkansas Inferior Court Rules, and the Administrative Orders of the Arkansas Supreme Court, 304 Ark. 733 (1990). (Emphasis added.) The majority decision states the obvious, which is that the amendment was intended “to liberalize Arkansas practice.”

¶4Here, B & F Engineering contends by its agent’s affidavit that it mistook the second complaint arising out of this accident as duplicative of the first compliant which it had already forwarded to the company’s counsel. Because of this erroneous assumption, the agent failed to act on Cotroneo’s complaint. Service of process was had on B & F on January 25, 1991. No responsive pleading was filed by B & F by February 14, 1991, and on February 19, 1991, Cotroneo moved for a default judgment. B & F countered that the court should extend the period to answer under Rule 6(b) because its failure to answer was the result of mistake, inadvertence, surprise, exclusable neglect, or other just cause. Also, on February 28, 1991, B & F answered Cotroneo’s complaint.

¶5The trial judge heard the motion for default judgment on March 19, 1991,-and ruled in Cotroneo’s favor. In doing so he stated:

There was a late filing of the answer, there was sufficient time to file the answer. Just simply making, assuming a fact that did not exist, assuming a fact that was contradicted by the face of the pleadings, to me, is not any kind of an excuse for a default judgment. And I don’t necessarily think a default judgment is a harsh remedy. (Emphasis added.)

¶6He then added later on in his ruling: “The answer was simply filed late and there is absolutely no excuse [for] it.” (Emphasis added.)

¶7The trial judge hinged his decision on the fact that no legitimate excuse existed for B & F’s inaction. His ruling under former Rule 6(b) would be correct in that B & F’s neglect does not appear to be excusable. However, this failure to act does qualify as a mistake or inadvertence, and B. & F’s explanation, under oath, as to how it happened seems entirely plausible. Certainly, two complaints had been filed as a result of the same accident.

¶8The clear purpose behind our change in Rule 6(b) and Rule 55(c) is best expressed in the Reporter’s Note to Rule 55:1

Rule 55 has been substantially amended to liberalize Arkansas practice regarding default judgments. The revised rule, which reflects a clear preference for deciding cases on the merits rather than on technicalities, is intended to avoid the harsh results that often flowed from the previous version. Because the rule represents a significant break from prior practice, many cases decided under the old rule and the statute from which it was derived will no longer be of precedential value.

Under revised Rule 55(a), the entry of a default judgment is discretionary rather than mandatory. In deciding whether to enter a default judgment, the court should take into account the factors utilized by the federal courts, including: whether the default is largely technical and the defendant is now ready to defend; whether the plaintiff has been prejudiced by the defendant’s delay in responding; and whether the court would later set aside the default judgment under Rule 55(c).

¶9As the majority says, defaults are not favored, and we have announced a clear preference in favor of trial on the merits in the Rule 6(b) amendment. The default in this case is due to a technicality, and Cotroneo is not prejudiced by a fourteen-day delay in B & F’s answer. Moreover, B & F is ready to defend. A meritorious defense need not be espoused to the trial judge in Rule 6(b) situtations, and B & Fmade it clear at oral argument that it had proceeded under Rule 6(b) for an enlargement of time in which to answer and not Rule 55(c). All of these factors militate in B & F’s favor; none were considered by the trial judge on the record.

¶10The case cited by the majority supports this position. See Stuski v. United States Lines, 31 F.R.D. 188 (E.D. Pa. 1962). There, two complaints were involved and, as in the present case, the second complaint was not forwarded to counsel due to a mistaken belief that the complaints were duplicative. However, one complaint was filed in state court and one was filed in federal court. Facially, the two complaints were contradictory as in the present case. Nevertheless, the district court set the default aside.

¶11The trial judge has wide discretion in these matters, a point which I readily concede. But, here, it appears clear that the trial judge used the old standard of excusable neglect in reaching his decision.2 Had he found that B & F had concocted its defense for failure to answer after the fact, this would take the mistake out of the good-faith category. But the judge did not make such a finding.

¶12This is an important case, as it is the first to be decided since the 1990 amendment broadening Rule 6(b) and Rule 55(c). If that amendment is to have any meaning, this case should be reversed and remanded for a trial on the merits.

¶13I respectfully dissent.