Crawford Ex Rel. Crawford v. Gipson

DOOLIN, Justice,

concurring in part, dissenting in part:

I find no fault with the majority opinion which affords standing to State Farm in seeking vacation of the default judgment. I concur in Part I.

I dissent to Part II of the majority opinion, when it holds the trial court abused its discretion in refusing to vacate the default judgment.

In affirming the decision of the trial court, we follow the general rule that where it is contended that the trial court abused its discretion in refusing to vacate a default judgment, and the question of such abuse depends on a disputed question of fact pertaining to the ground relied on for vacating the judgment, the presumption is that the finding of fact was consistent with the order denying the motion to vacate and, therefore, there was no abuse of discretion. Woodruff v. Moore, 182 Okl. 120, 77 P.2d 62 (1938.)

I am authorized to state that SIMMS and OPALA, JJ., support the views expressed in this opinion.

OP ALA, Justice,

concurring in part and dissenting in part:

The insurer — who was a stranger to the injured person’s [plaintiff] tort action against the insured [defendant] — met with an adverse district court disposition of its *252§ 10311 petition for vacation of the default judgment against the insured. The Court of Appeals, Div. 1, reversed. Our decision on certiorari reaches the same result as that of the Court of Appeals. For the reasons to be outlined, I recede from the court’s pronouncement. I would affirm the trial judge’s refusal to vacate the plaintiff’s judgment.

I

ISSUES ON CERTIORARI

The case presents two first-impression questions:

(1) Does a judgment-debtor’s public liability indemnitor (insurer) have standing — independent of the insured — to prosecute a § 1031 proceeding? and
(2) Assuming the insurer has such standing, does its alleged failure to receive from the insured a timely notice of the plaintiff’s suit constitute “unavoidable casualty or misfortune, preventing . . . [one] from prosecuting or defending” within the meaning of Subdiv. 7 of § 1031?

To the first question posed I would give an affirmative answer and to the second a negative one.

II

INSURER’S STANDING TO INVOKE THE § 1031 REMEDY IS INDEPENDENT OF THE INSURED

In every action arising from negligent use of the insured vehicle, a judgment against the insured subjects the insurer— qua contractual indemnitor under public liability coverage of an automobile policy — to at least potential exposure. On any such suit’s termination adverse to the insured, the insurer has a legally recognized interest of its own to protect and is deemed “injuriously” or “prejudicially” affected. Even though the insurer be a stranger to the judgment roll, emerging case law confers on him standing independent of the insured to invoke available post-judgment vacation remedies.2 I accede to this doctrine and join the court in its adoption.

Ill

ALTHOUGH INSURER’S STANDING TO PROSECUTE A § 1031 PROCEEDING IS DOUBTLESS INDEPENDENT OF THE INSURED, ITS CLAIM FOR RELIEF IS VICARIOUS AND HENCE NOT BROADER THAN THAT OF THE INSURED

The framework of remedies created by § 1031 et seq. provides the unsuccessful litigant with opportunity for relief from that class of judgments which is statutorily defined as vulnerable to vacation. Privies and other strangers to the record, though they may have standing to prosecute a § 1031 proceeding, are merely incidental beneficiaries of the legislative largesse. Intended as the primary beneficiary of a § 1031 process was neither privy nor stranger but rather the party. The cluster of interrelated statutes that follow § 1031 is replete with references to the party’s claim for redress. Not a single mention of either privy or stranger is to be found in any of the pertinent sections. The language used throughout the enactments that deal with vacation remedies leaves absolutely no doubt as to the primary object of the legislator’s concern. We recognized this basic principle long ago. A non-party accorded standing in a § 1031 proceeding has “. . . the same right to move for its [the judgment’s] vacation as a party . . . might have, but . . . certainly ... no greater right.” [emphasis supplied].3 In short, although a *253non-party’s standing may be “independent ”, its claim is nonetheless vicarious and merely co-extensive with one of the party in whose shoes the stranger to the record must stand.

The very ground invoked for vacation in this ease — Subdiv. 7 of § 1031 — illustrates most clearly the vicarious nature of the insurer’s claim for the relief sought. The subdivision plainly requires that relief judicially afforded under its terms be circumscribed to instances of “unavoidable casualty or misfortune, preventing the party from prosecuting or defending.” [emphasis added]. The statute’s focus is on the party’s “casualty or misfortune”. It is hence not to be doubted that a non-party with standing to press for Subdiv. 7 relief has but a vicarious claim which is circumscribed by the right of another — that of the party in whose shoes the stranger must stand.

The insurer’s claim to § 1031 relief is therefore measured by, and merely co-extensive with, that of the insured. As a non-party to the judgment record the insurer stands here in the shoes of the insured. Only if the latter could himself have maintained a Subdiv. 7 claim for vacation, would the insurer be entitled to the relief which was denied him in the district court. In short, the legal efficacy of the insurer’s plea and evidence must be tested by its sufficiency to support a claim by the insured. Neither the petition nor the facts adduced below, if pressed by the insured, would have been sufficient to secure a vacation order on the basis of Subdiv. 7, § 1031.

IV

THE INSURER’S VICARIOUS CLAIM TO SUBDIV. 7 RELIEF WAS CORRECTLY DENIED

(a)

The record on appeal discloses two § 1031 petitions to vacate. The first of these, dated November 29, 1977, was filed by the insurer in its own name; the second one, dated February 9, 1978, was in the name of the insured who later refused to join in it and disclaimed any interest in its prosecution. Neither petition contained more than a purely eonclusory allegation of “unavoidable casualty”. The petitions were hence insufficient in law and the trial judge correctly sustained the plaintiff’s demurrer to the defective pleadings.4

(b)

The proof adduced in support of the insurer’s Subdiv. 7 plea came in two contradictory versions. While the insurer’s agent who had dealt with the insured testified that the company had received no notice of the plaintiff’s suit, the insured insisted he had personally conveyed to the agent actual knowledge of the suit’s commencement and had provided him with the suit’s case number in ample time for the company to undertake his defense.

It matters not which of these versions be true. If we assume the insured told the truth, the insurer is not entitled to Subdiv. 7 relief because once given notice the insurer had the duty to defend. Its negligence is imputable to the insured.5 Were we, on the other hand, to accept the insurer’s version, it follows that the insured was himself neg*254ligent in failing to do everything that was necessary to secure the insurer’s defense.

Negligence of an insured defendant, or of insurer as his legally recognized agent, in failing to prevent the entry of a default judgment is not unavoidable casualty.6 The Subdiv. 7 claim before us is vicarious. The insurer cannot prevail under either version of the testimony proffered. It simply failed to show facts consistent with the exercise of proper diligence or care on the part of the insured — the person in whose shoes it must stand here.

“Unavoidable casualty or misfortune” refers to events which human prudence or foresight cannot prevent. Negligence by the defendant or his agent is the very antithesis of an event or happening against which Subdiv. 7 was intended to guard.7 In the final analysis, the plaintiff should not suffer the loss of her default judgment because the insured defendant failed in his efforts to procure effective legal defense services from his insurer.

It is immaterial how this failure came about. The insured defendant’s non-performance of his contractual obligation to the insured or vice versa, whether defensible or not, is not ground for vacation under Subdiv. 7, although a breach by the insured in not delivering a summons may afford the insurer a shield from liability in a garnishment or in a declaratory judgment proceeding.

This ease is distinguishable from Burroughs v. Bob Martin Corporation8 and Latson v. Eaton.9 There is no proof here that some untoward event — occurring after the service of summons — prevented the defendant from launching his defense. Because this is a vicarious Subdiv. 7 claim, the cited cases are clearly inappropriate.

The insured defendant’s legal duty to defend or suffer default is — from the plaintiff’s point of view — indivisible and cannot be shared with the insurer. The breach of this legal duty cannot be exonerated, in a Subdiv. 7 claim, by the insurer’s failure to do its contractual duty to defend. Nor can the insured defendant’s neglect of contract duty timely to deliver notice of the suit to the insurer exonerate the insured of his legal duty to defend.

Since it is clear that the insured could not claim Subdiv. 7 relief either on the basis of his own breach of contract duty to the insurer or on the insurer’s breach of contract duty to him, neither can the insurer prevail on these grounds in its vicarious § 1031 claim.

V

SUMMARY

The plaintiff should not have to lose her judgment because either the insurer failed to defend or the insured failed to give the insurer timely notice of the suit. In this vicarious vacation claim there is simply no proof of casualty or misfortune that prevented the defendant himself from defending. The bottom line is this: since the defendant himself could not have prevailed by shifting the blame for the default to the insurer, neither can the insurer extinguish the plaintiff’s judgment by attributing the legal fiasco to the insured defendant’s fault. Fault allocation between the insured and his insurer inter se cannot be the gravamen of a Subdiv. 7 proceeding. It is an issue to be litigated in a garnishment proceeding or in a declaratory judgment suit.

The trial judge correctly refused to grant Subdiv. 7 relief.

.12 O.S.1971 § 1031. The insurer rested its petition to vacate on Subdiv. 7 of § 1031 whose terms authorize relief “[f]or unavoidable casualty or misfortune, preventing the party from prosecuting or defending.”

. Kollmeyer v. Willis, 408 S.W.2d 370 [Mo.App.1966]; see cases collected in the annotation beginning at 27 A.L.R.3d 350.

. Simmons v. Howard, 136 Okl. 118, 276 P. 718, 719 [1929]; the same principle was followed in Frost v. Blockwood, Okl., 408 P.2d 300, 304 [1965] where we held that a transferee of a *253party’s interest “has the same right to challenge the validity of the judgment” that the original party had.

A different statutory rule applies when the judgment sought to be vacated is alleged to be void. Under the provisions of 12 O.S.1971 § 1038 any party affected by a void judgment has an independent claim for vacation. It may seek vacation at any time. Jent v. Brown, Okl., 280 P.2d 1005, 1008 [1955].

. In syllabus 3 of Lindsey v. Goodman, 57 Okl. 408, 157 P. 344 [1916] it was held: “When ‘unavoidable casualty or misfortune’ is alleged, the facts must be so stated as to make it appear that no reasonable or proper diligence or care could have prevented the trial or judgment; that is, that the party complaining is not himself guilty of any laches.”

This statement of the law was reaffirmed by this court in Davidson v. Pickens, Okl., 261 P.2d 872, 874 [1953].

. Leslie v. Spencer, 170 Okl. 642, 42 P.2d 119, 121-122 [1935].

. Leslie v. Spencer, supra note 5 at 119, 42 P.2d 119.

. Wagner v. Lucas, 79 Okl. 231, 193 P. 421, 423 [1920]; Cunningham v. Cunningham, Okl., 571 P.2d 839, 842 [1977].

. Okl., 536 P.2d 339, 341 [1975],

. Okl., 311 P.2d 231 [1957],