Pamelin Industries, Inc. v. Sheen-U.S.A., Inc.

Williams, J. —

This case concerns a collateral attack on a default judgment entered against defendants (respondents) Sheen-U.S.A., Inc., and others. The Court of Appeals held the default judgment void and set it aside. We reverse.

Plaintiffs (petitioners) Pamelin Industries, Inc., and others, sued defendants for breach of a contract to purchase Pamelin by assuming its debts and purchasing the stock of the individual plaintiffs. Pamelin has since been adjudged a bankrupt.

At a deposition of individual defendants a promise was made to furnish various documents, and plaintiffs later served requests for production of these documents. Not all *400of the documents were produced, however. Upon the expiration of the 20-day period provided by CR 34, plaintiffs served defendants with the following motion:

Plaintiff . . . hereby moves this court for an Order striking the pleadings of Defendants, and rendering a judgment by default against defendants pursuant to CR. 37(b). If, but only if said motion is not granted, moving plaintiff requests an order pursuant to CR 37(a)(2) for an order compelling defendants to produce records pursuant to CR 34. Moving plaintiff further asks for a reasonable attorneys' fee.

Defendants did not appear at the hearing. The court found plaintiffs were "entitled to the relief requested pursuant to CR 37(b)", ordered defendants' pleadings stricken, and granted a default judgment against all defendants.

Thereafter defendants filed a notice for discretionary review which was never perfected. Over 2 months after entry of the judgment defendants moved to vacate it under CR 60(b)(1), (4), (9), and (11). The motion was granted on condition that defendants pay plaintiffs' attorney fees and post a $50,000 performance bond. The court found " [tjhat defendants' dilatory conduct prior to the entry of defendants' present counsel were prejudicial to plaintiffs" and concluded "[tjhat, in the interests of justice, defendants should be entitled to their day in court albeit only upon equitable terms to plaintiff." Although it is not clear, apparently the court acted under CR 60(b)(ll), which permits vacation for "[ajny other reason justifying relief from the operation of the judgment."

The defendants appealed the conditional order of vacation, contending that the court improperly granted plaintiffs' motion under CR 37(b) without first ordering defendants to produce documents pursuant to CR 37(a) and granting relief pursuant to CR 37(d), which was not within the scope of the motion. Defendants further contended the court acted arbitrarily, capriciously, and in excess of its discretionary powers in imposing conditions on the order granting defendants' motion to vacate the default *401judgment. Finally, defendants argued they were denied due process and equal protection of the law.

The Court of Appeals reversed, holding that the order of default and judgment were void and that the trial court therefore had the duty to annul the judgment without conditions attached. Pamelin Indus., Inc. v. Sheen-U.S.A., Inc., 24 Wn. App. 224, 600 P.2d 651 (1979). It reasoned that the court had exceeded its jurisdiction by granting plaintiffs' motion pursuant to CR 37(b) without prior entry of an order compelling discovery pursuant to CR 37(a). Implicit in that determination is a finding that plaintiffs' motion did not seek relief under CR 37(d). Plaintiffs' petition for review sought to have the order vacating the judgment on conditions reinstated.

We believe that the Court of Appeals construed the plaintiffs' motion too narrowly and that sanctions under CR 37(d) as well as CR 37(a) were within the scope and prayer of the motion. See State ex rel. Adams v. Superior Court, 36 Wn.2d 868, 872, 220 P.2d 1081 (1950).

Civil rule 37 is the enforcement section for the discovery process. Section (a) provides for an order to compel discovery; section (b) authorizes imposition of sanctions upon failure to obey an order and also lists several sanctions, and section (d) provides authority to impose section (b) sanctions, among others, for failure of a party to respond to requests for discovery. Thus, it can be seen the rule provides two alternative sources of authority for granting sanctions under CR 37(b)(2). They are: (1) failure of a party to comply with an order entered pursuant to CR 37(a); and (2) failure of a party to respond to a request for discovery under CR 33 or CR 34, or to appear after proper notice before a deposition officer. CR 37(d). See Robison v. Transamerica Ins. Co., 368 F.2d 37 (10th Cir. 1966).

These methods are the only means by which a moving party may get sanctions under CR 37. Since plaintiffs' motion sought an order compelling defendants to produce records and documents under CR 37(a) only in the alternative, it is obvious that plaintiffs also sought sanctions *402under CR 37(d), for that section provides the only other way to achieve application of CR 37(b)(2) sanctions. To read the motion otherwise would give the first sentence of the motion no meaning whatsoever. This is made clear by the supporting affidavit which is part of the motion and which provides the factual basis for granting relief under the provisions of either CR 37(a) or CR 37(d).

The purpose of a motion under the civil rules is to give the other party notice of the relief sought. CR 7(b)(1) requires that a motion "shall state with particularity the grounds therefor, and shall set forth the relief or order sought." Plaintiffs' motion stated the relief sought (i.e., an order striking pleadings of defendants and rendering a judgment by default against defendants pursuant to CR 37(b)). It likewise stated "with particularity the grounds therefor". The affidavit attached to the motion set forth the grounds in the following language:

[P]laintiffs served upon defendants a Request for Production pursuant to CR 34 . . . setting October 13, 1977 as the date for production.
B. Defendants have made no request for a protective order, nor have they in any way responded to the request for production on the basis that the request was in any way inappropriate.
C. On October 13, 1977 defendants' attorney produced certain records for inspection and copying by plaintiffs, but defendants did not comply in full with the request for production of documents. Defendants' production of documents was deficient in the following respects . . .

It is not necessary for a moving party to analyze CR 37 in order to get relief under its provisions. It is enough to state the relief sought and the grounds justifying the relief. CR 7(b)(1). Where the facts fit the criteria of CR 37(d), a party is entitled to CR 37(b)(2)(C) relief. Plaintiffs' motion and supporting affidavit did just that, and the relief granted by the court did not exceed the scope of the motion. The trial court thus had jurisdiction to strike the pleadings and enter its default judgment. CR 37(d).

*403Since the court had jurisdiction of the matter, the judgment was not void, and the court was not obligated to vacate it without terms. Rather, the court was authorized to set aside the judgment "upon such terms as are just." CR 60(b); CR 60(b)(ll). If there is sufficient justification, a trial court may impose sanctions pursuant to the above quoted language.

We are mindful of the rule that an error of law may not be corrected by a motion pursuant to CR 60(b), but must be brought up on appeal. State ex rel. Green v. Superior Court, 58 Wn.2d 162, 361 P.2d 643 (1961); Bjurstrom v. Campbell, 27 Wn. App. 449, 618 P.2d 533 (1980). In this case, however, the parties are not disputing over defendants' failure to appeal the vacation of the default judgment. Defendants originally moved to set aside the default judgment, and plaintiffs do not quarrel with the court's order of vacation, contending only that the trial court could impose conditions.1

If there was an error of law, then, plaintiffs have certainly waived any reliance of it. Defendants, of course, are in no position to rely on error of law as the basis for avoiding the conditions. Defendants did not appeal the vacation order, presumably because it granted the relief sought, which was vacation of the default judgment.

Since neither side urges that defendants' failure to appeal should result in reinstatement of the default judgment, the only remaining question is whether the trial judge abused his discretion in imposing terms. We have previously explained that

*404A motion to vacate a judgment is to be considered and decided by the trial court in the exercise of its discretion, and its decision should be overturned on appeal only if it plainly appears that it has abused that discretion. Martin v. Pickering, 85 Wn.2d 241, 533 P.2d 380 (1975). In that case we cited White v. Holm, 73 Wn.2d 348, 438 P.2d 581 (1968), where we said that a proceeding to set aside a default judgment is equitable in nature, and relief is in accord with equitable principles and terms. The court is to exercise its authority liberally to preserve substantial rights and do justice between the parties.

Haller v. Wallis, 89 Wn.2d 539, 543, 573 P.2d 1302 (1978).

On the record before him, the trial judge had sufficient justification to impose conditions on the order setting aside the default judgment. There was evidence in the affidavit supporting plaintiffs' motion for sanctions, which, if believed by the trial judge, showed that defendants had failed to respond to a request for production under CR 34. Defendants failed to request a protective order or to indicate in any way that the request for production was improper. When defendants finally responded to the request, their production of documents was deficient in several important respects. Further evidence in the record could support a finding that plaintiffs were prejudiced by other dilatory conduct of defendants. Indeed, there has been no showing of abuse of discretion, and we find none. The decision of the Court of Appeals is reversed.

Rosellini, Utter, Dolliver, and Hicks, JJ., concur.

Indeed, at the hearing on defendants' motion to vacate the default judgment, defendants' counsel stated:

I respectfully ask the court to vacate the judgment and set the earliest trial date, as we asked for in our motion. And if the court feels that Mr. Seinfeld and Mr. Arnold are entitled to terms, let them go on that.

(Italics ours.)

Defendants' counsel also stated:
I can see that if the court awards a thousand, two thousand in terms, that's a different story, but requiring a $250,000 supersedeas bond—