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Truman v. Browne
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MAINE SUPREME JUDICIAL COURT					Reporter of Decisions
Decision:	2001 ME 182
Docket:	Oxf-01-124
Submitted
on Briefs:	September 19, 2001
Decided:	December 28, 2001


Panel:SAUFLEY, C.J., and RUDMAN, DANA, ALEXANDER, and CALKINS, JJ.{*}
Majority:	SAUFLEY, C.J., and RUDMAN, ALEXANDER, JJ.
Dissent:		DANA, and CALKINS, JJ.



									

JANET E. TRUMAN

v.

MARJORIE BROWNE

ALEXANDER, J.

	[¶1]  Marjorie Browne appeals from the default judgment entered in
the Superior Court (Oxford County, Gorman, J.) awarding compensatory
damages to Janet E. Truman on Truman's libel claim and permanently
enjoining Browne from publishing the libel.  Browne argues that the court
erroneously entered judgment on her default, that Truman waived her right
to a default, and that the preliminary injunction unduly limited her ability to
develop evidence relating to liability.  She also argues that the court erred by
awarding attorney fees and by entering a permanent injunction.  We affirm
the entry of the default judgment but modify the award and the injunction.

I. CASE HISTORY

	[¶2]  The facts and procedural history of the present dispute may be
summarized as follows:  On September 29, 1999, Truman, a real estate
broker, filed a libel action against Browne claiming that Browne had sent
letters to the Secretary of State, several real estate purchasers, and a bank
falsely accusing her of improperly inducing Browne's elderly parents to
grant an easement across their property.  Truman sought compensatory and
punitive damages as well as preliminary and permanent injunctions.  The
court (Kravchuk, J.) granted Truman's request for a preliminary injunction
and restrained Browne from publishing "to any person or entity . . . any
statements, allegations, letters, comments, demands or other
communications whatsoever" regarding Truman or her brokerage agency. 
	[¶3]  Browne was served with the complaint and summons on
October 14, 1999.  On October 28, she moved to dismiss the complaint.  A
hearing on Browne's motion to dismiss was held on December 21, 1999. 
Browne failed to appear at that hearing.  The court denied Browne's motion
to dismiss that day.  
	[¶4]  An answer must be filed within twenty days after the service of
the complaint and summons.  M.R. Civ. P. 12(a).  A motion such as Browne's
motion to dismiss tolls the time for filing an answer.  Id.  However, if the
court denies the motion, a defendant must answer the complaint "within 10
days after notice of the court's action."  Id.  
	[¶5]  Browne filed an answer to the complaint on January 10, 2000,
twenty days after the denial of the motion to dismiss.  In her answer she
maintained that her statements were not libelous because they were true. 
The same day that Browne filed her answer, Truman filed a request for
default for Browne's untimely answer, and the clerk of the Superior Court
entered Browne's default. 
	[¶6]  Browne moved to set aside the entry of default.  The court
(Humphrey, J.) denied the motion and ordered that a hearing on damages
and the permanent injunction be scheduled. 
	[¶7]  Browne later moved for relief from the preliminary injunction,
but the court (Perkins, A.R.J.) denied the motion.  In her memorandum in
opposition to Browne's motion for relief, Truman noted that "there is no
danger that the preliminary injunction now in place will extend indefinitely
beyond the date of a final decision on the merits of this action."  She also
stated that Browne would have an adequate opportunity to prove her
allegations at trial. 
	[¶8]  After a hearing, the court (Gorman, J.) entered judgment on
the default.  It awarded Truman $18,703 in compensatory damages,
including $8703 for attorney fees, and it granted her request for a
permanent injunction.  Browne moved for a new hearing on damages
challenging, among other things, the award for attorney fees that had been
included in the court's compensatory damage assessment.  Browne argued
that some of the fees claimed were attributable to services rendered prior to
litigation.  Browne also moved to amend the judgment.  The court denied
both motions, and Browne brought this appeal. 

II.  JUDGMENT ON DEFAULT

	[¶9]  A court may set aside a default judgment for "good cause
shown."  M.R. Civ. P. 55(c).  To establish "good cause," a party must show a
good excuse for his or her untimeliness and a meritorious defense.  Boit v.
Brookstone Company, Inc., 641 A.2d 864, 865 (Me. 1994).  We review a trial
court's ruling on a motion to set aside a default for abuse of discretion and
will vacate the judgment only "if the denial works a plain and unmistakable
injustice against the defendant."  LaFosse v. Champagne, 2000 ME 81, ¶ 10,
750 A.2d 1254, 1256.  
	[¶10]  In the present case, Browne has presented an arguably
meritorious defense.  She alleges, in her answer, that the statements she
published to third parties are true.  Browne has not, however, established
that the court exceeded the bounds of its discretion in determining that she
had not stated a good excuse for her untimely answer.  Browne argues that
she mistakenly thought that she had twenty days from the denial of her
motion to dismiss in which to file her answer.  However, the trial court
could reasonably consider her claim in the context that Browne had recently
filed a motion to dismiss that served to delay her answer and then had failed
to appear at the scheduled hearing on the motion to dismiss.  These actions
suggested significant carelessness in her defense of the matter which the
trial court could view as confirmed by her untimely answer.  
	[¶11]  Although Browne is representing herself, we afford her no
bending of the rules or other "special consideration."  See Dumont v. Fleet
Bank of Maine, 2000 ME 197, ¶ 13, 760 A.2d 1049, 1054.  Rule 12(a) of the
Maine Rules of Civil Procedure provides that "if the court denies the motion
[in this case, the motion to dismiss] . . . the responsive pleading shall be
served within 10 days after notice of the court's action."  M.R. Civ. P. 12(a). 
Browne's misunderstanding of this rule, taken in the context of her prior
actions in this case, does not constitute a good excuse for her late answer. 
The court, therefore, did not exceed the bounds of its discretion by refusing
to set aside the entry of default.  Because entry of the default was proper, we
need not address whether the preliminary injunction unduly limited
Browne's capacity to develop evidence on liability issues.  

III. ATTORNEY FEES

	[¶12]  Browne argues that the court erred by awarding Truman
$8703 in attorney fees as part of its award for compensatory damages. 
Browne did not directly challenge the court's authority to award attorney
fees in the trial court.{1}  However, because the award of attorney fees was
objected to, we will consider the issue because it is purely legal, its
resolution does not require the introduction of additional facts, its proper
resolution is clear, and a failure to consider it may result in a miscarriage of
justice.  See United States v. Krynicki, 689 F.2d 289, 291-92 (1st Cir. 1982)
(discussing factors relating to exercise of appellate court's discretion to
consider issues not directly raised below).  Whether a court is authorized to
award attorney fees is a question of law that we review de novo.  Baker v.
Manter, 2001 ME 26, ¶ 12, 765 A.2d 583, 585.  
	[¶13]  An award of attorney fees must be based on: (1) a contractual
agreement between the parties; (2) a specific statutory authorization; or
(3) the court's inherent authority to sanction serious misconduct in a
judicial proceeding.  Id., ¶ 17, 765 A.2d at 586.  In the present case,
Truman did not plead or prove that she was entitled to attorney fees under
any statutory provision, nor did she attempt to establish that there had been
any contract authorizing award of attorney fees.  The record does not
indicate that Browne abused the litigation process in any way.  The court,
therefore, was without authority to award Truman her attorney fees.  
	[¶14]  Truman argues that the default judgment contains only an
award of $18,703 in compensatory damages, with no separate award of
attorney fees.  She maintains that nothing in the record explains how the
court determined the amount of compensatory damages.  However, the
record demonstrates that $8703 of the award for compensatory damages
represents Truman's attorney fees.  Truman herself acknowledged, in her
memorandum objecting to Browne's motion for new hearing on damages,
that she represented to the court that she had incurred $8703 in attorney
fees, and she asserted that the court was correct to award attorney fees. 
Truman cannot now assert that the court did not award attorney fees.  The
compensatory damages award must be reduced by the amount intended to
compensate for attorney fees.

IV.  PERMANENT INJUNCTION

	[¶15]  Browne also challenges the trial court's authority to
permanently enjoin her from publishing certain statements to others.  The
injunction permanently restrains Browne from "publication by any medium,
. . . to any person or entity, of any statements, allegations, letters,
comments, demands or other communications whatsoever" regarding
Truman or her real estate agency with respect to the present real estate
dispute.  This language is over broad.  Any person has a qualified privilege to
make statements to law enforcement or regulatory agencies regarding the
conduct of others, where the person making the statement believes in good
faith that the statement is true and indicates that a statutory standard
administered by the agency may have been violated.  See Baker v. Charles,
919 F. Supp. 41, 44 (D. Me. 1996); Packard v. Central Maine Power Co., 477
A.2d 264, 267-68 (Me. 1984); Restatement (Second) of Torts § 598 (1976).{2} 
Only extraordinary circumstances could justify prior restraint on such
communications to proper authorities, and such circumstances are not
indicated here.
	The entry is:

Judgment vacated in part.  Remanded to the
Superior Court with instructions to reduce the
compensatory damages award to $10,000 and to
modify the permanent injunction consistent with
this opinion.  In all other respects, the judgment is
affirmed.

DANA, J., with whom CALKINS, J., joins, dissenting.

	[¶16] I respectfully dissent.  The Court has not considered the
particular circumstances of Browne's late answer in relation to the legal
precedent that default judgments are appropriate only when there is
unconscionable delay.
	[¶17] We have held that when a defendant is tardy in filing an
answer and the plaintiff moves for the entry of a default, the trial court must
balance

the importance of the parties being diligent in the trial of
cases against the general disfavor with which the law views
judgments by default.  As has been said: [S]ubstantial rights
should not be determined by default if that procedure can
reasonably be avoided and no substantial prejudice has
resulted.

Millet v. Dumais, 365 A.2d 1038, 1040 (Me. 1976) (quoting Field, McKusick
& Wroth, Maine Civil Practice § 55.4 at 21-22 (2d ed. 1970 & Supp. 1981)
(internal quotation marks omitted)).  In Millet the Court decided although
"admittedly the defendant was tardy in filing his answer," the trial court
properly denied the motion for a default judgment.  Id. at 1039.  The Court
recognized that "there are circumstances under which default judgments
become appropriate, such as cases in which the action is not contested, or
where the record indicates unconscionable delay or contumacious conduct." 
Id. at 1040 (emphasis added).   
	[¶18] We have defined what "good cause" means on a case by case
basis.  In Thomas v. Thompson, 653 A.2d 417, 419 (Me. 1995), the
defendant forwarded a complaint to the insurance representative who
answered late, because he had been on vacation and returned to over 15 new
suits demanding attention.  Id.  The trial court denied the motion to set
aside the default; we vacated that decision.  Id. at 421. We highlighted that
"[t]here is a strong preference in our law for deciding cases on the merits." 
Id. at 420.  Furthermore, 

[c]onsistent with this preference, we note that under Fed. R.
Civ. P. 55(c), which is identical to M. R. Civ. P. 55(c), motions
to set aside a default have been granted in cases when no
gross neglect was involved in the late filing, the
nondefaulting party will not be substantially prejudiced by
reopening the case, and a meritorious defense exists.

Id. (emphasis added).  Here, there was "good cause" to set aside the default
because the conduct of both the insured and insurer revealed an honest
effort to comply with filing rules.  See id.   
	[¶19] We will assess the validity of an excuse in the "particular
circumstances" of a case.  See, e.g., Design Build of Maine v. Paul, 601 A.2d
1089, 1091 (Me. 1992).  There is a difference between a "failure to respond
at all to the initial complaint," and "a failure to comply with the rules
governing pretrial procedures," the latter being less egregious, at least in
the context of the particular facts of the case.  Id.   In Design Build the
plaintiff did not answer an amended counterclaim, the defendant moved for
a default, and the court denied the plaintiff's ensuing motion to set aside the
default.  Id.  Because the "failure to respond arose solely from confusion
surrounding the entrance of new counsel shortly after the filing of the
amended counterclaim," and the circumstances of the case did not reflect
either "'an unresponsive party's needless protraction of litigation' or a case
'fraught with delay . . . caused by [a party],'" the court had erred in denying
the motion to set aside the default.  Id. (quoting Porges v. Reid, 423 A.2d
542, 544 (Me. 1980)).  
	[¶20] Although Browne failed to respond to the complaint in a timely
fashion (i.e., within ten days), she did not do so to "protract" the litigation,
or cause undue delay; this is evidenced by her filing the answer on the
schedule from which she had been operating, that is the typical twenty days
to answer a complaint prescribed by Rule 12.  Whereas Rule 12 dictates that
service of a motion will alter the twenty day time period to ten days when
the court denies the motion, Browne's lack of knowledge of this time
change is not gross neglect.
	[¶21] We have firmly recognized that time limits set by the rules of
civil procedure, and by the trial court in its orders, must be followed. 
However, in the context of an entry of a default, which declares the
defendant's liability without the truth-seeking function of a trial, though
necessary to conclude stagnant cases, narrowly missing a time deadline
should not automatically result in a default judgment.   Ignoring a time
deadline altogether justifies the entry of a default.   See Interstate Food
Processing Corp. v. Pellerito Foods, Inc., 622 A.2d 1189 (Me. 1993); 
Erskine v. Comm'r of Corr., 682 A.2d 681, 683 (Me. 1996);{3} Mockus v.
Melanson, 615 A.2d 245 (Me. 1992); see, e.g., Cutillo v. Gerstel, 477 A.2d
750, 752 (Me. 1984) (affirming the trial court's denial of a motion to set
aside the entry of a default, because the appellant had "no basis for assuming
that the suit against him came to a standstill" when his attorney filed a
motion to withdraw).  Browne did not completely ignore a deadline. 
Compare Firth v. City of Rockland, 580 A.2d 694, 696 (Me. 1990) (affirming
the trial court's decision that the defendants' explanation for a late answer,
that their insurance company failed for over a year to respond to the
plaintiff's notice of claim, was "no excuse").
	[¶22] Courts "exist to do justice, and are properly reluctant to lend
their processes to the enforcement of an unjust judgment."  Field, McKusick
& Wroth § 55.7 at 24.  Because Browne presented a meritorious defense as
required by Rule 55(c), see Hart v. Terry L. Hopkins, Inc., 588 A.2d 1187
(Me. 1991), did not cause an unconscionable delay with the late filing of the
answer, and because the rights of the plaintiff were not substantially affected
by the ten day delay, I would hold that the trial court exceeded the bounds
of its discretion in denying Browne's motion to set aside the entry of default.
                                  
Attorney for plaintiff:

Stephen P. Beale, Esq.
Skelton, Taintor & Abbott, P.A.
P O Box 3200
Auburn, ME 04212-3200

For defendant:

Marjorie Browne
P O Box 670
Norway, ME 04268-0670