J.B. v. MKBS, LLC.
2024 COA 117. No. 23CA1415. Default—Codefendants—Entry of Clerk’s Default—Default Judgment—Relief from Judgment or Order—Excusable Neglect—Testimony of Non-Defaulting Codefendant.
October 24, 2024
E.B. is an adult who is visually impaired, has reduced cognitive ability, and uses a wheelchair. She attended a day program (the program) for people with neurological conditions and brain injuries and was transported to and from the program by Metro Taxi, Inc. Ortiz was employed by Metro Taxi, and he drove E.B. at all times relevant to this case. J.B., E.B.’s mother, filed a lawsuit on behalf of E.B. against Metro Taxi and Ortiz alleging that Ortiz sexually assaulted E.B. while taking her to the program and caused E.B. to suffer injuries. J.B.’s claims against Metro Taxi alleged negligent hiring and retention, negligent supervision, negligence, negligent infliction of emotional distress, respondeat superior liability, and outrageous conduct. J.B.’s claims against Ortiz alleged intentional infliction of emotional distress, battery, assault, and outrageous conduct. J.B. effected service on both defendants in 2019. Metro Taxi filed a timely answer denying J.B.’s claims, but Ortiz did not respond to the complaint. The court granted J.B.’s motion for entry of a CRCP 55(a) clerk’s default against Ortiz and ordered her to file a motion for default judgment against Ortiz within 35 days, but J.B.’s counsel did not move for a default judgment for more than two years. Meanwhile, Ortiz was charged and acquitted of unlawful sexual contact on E.B., and J.B.’s civil claims against Metro Taxi proceeded to trial. The court granted J.B.’s motion in limine to exclude evidence of Ortiz’s acquittal in the criminal case. At a pretrial conference, Metro Taxi’s counsel said he intended to subpoena Ortiz to testify at trial. J.B.’s counsel moved to preclude Ortiz from presenting testimony that contradicted J.B.’s allegations against him (the motion) because Ortiz was deemed to have admitted those allegations upon entry of the clerk’s default. The case proceeded to trial, but during voir dire, a prospective juror advised that he had heard Ortiz say in the hallway that he had not touched E.B. inappropriately, and the court declared a mistrial. J.B.’s counsel then filed a motion for reconsideration of the motion, which the court denied.
At the second trial, Ortiz testified for Metro Taxi, denying that he had sexually assaulted E.B. The jury found for Metro Taxi. J.B.’s counsel then moved for entry of a default judgment against Ortiz pursuant to CRCP 55(b). The court granted the motion and entered judgment against Ortiz for $698,929.81. Ortiz moved to set aside the default judgment on grounds of excusable neglect, asserting that he thought Metro Taxi’s lawyer also represented him and that J.B.’s counsel did not provide him with notice of her motion for entry of default judgment. The court granted Ortiz’s motion to set aside the default judgment and entered judgment in Ortiz’s favor based on the jury verdict in Metro Taxi’s favor.
On appeal, J.B. contended that the court reversibly erred by allowing Ortiz to testify at Metro Taxi’s jury trial. However, a non-defaulting codefendant may call the defaulting codefendant to testify because the codefendant’s default cannot restrict the non-defaulting codefendant’s right to defend itself. Here, the court did not abuse its discretion by allowing Ortiz to testify because (1) Ortiz’s testimony was relevant to whether Metro Taxi was liable to J.B., the central question at trial; and (2) Metro Taxi’s ability to defend itself would have been materially prejudiced without Ortiz’s testimony. Further, J.B. did not show that the probative value of Ortiz’s testimony was substantially outweighed by the danger of unfair prejudice to her.
J.B. also argued that the district court abused its discretion by setting aside the default judgment against Ortiz because it improperly considered the first and third CRCP 60(b) factors. J.B. maintained that in analyzing the first factor of excusable neglect, the court wrongly focused on Ortiz’s subjective understanding of whether Metro Taxi’s lawyers also represented him and disregarded case law holding that a pro se litigant must comply with the rules of civil procedure. However, the court expressly found that it was reasonable for Ortiz to assume that Metro Taxi’s lawyers were representing him because J.B.’s claims arose from Ortiz’s alleged conduct during his employment. Further, the court set aside the default judgment only after thoroughly considering the reason for the neglect, and it provided a detailed explanation for its determination that Ortiz established excusable neglect. As to the third factor—that setting aside the default would be consistent with equity considerations—J.B. maintained that the court gave insufficient weight to her reliance on the effect of Ortiz’s failure to appear as a consequence of the entry of the clerk’s default against him. However, in deciding whether the default judgment should be set aside, the court correctly considered J.B.’s alleged reliance on the default judgment entered after the trial on J.B.’s claims against Metro Taxi rather than her alleged reliance on the clerk’s default. Accordingly, the court did not abuse its discretion in setting aside the default judgment against Ortiz.
J.B. further asserted that the court reversibly erred by entering judgment in Ortiz’s favor. Here, the court did not abuse its discretion by entering judgment for Ortiz because it purposely avoided entering logically inconsistent judgments: one predicated on the jury’s finding that Ortiz did not sexually assault E.B. and that E.B. suffered no damages from such assault, and a second predicated on the presumptions that Ortiz did sexually assault her and that she suffered damages as a result. And the court explained in detail why it had previously erred by entering the default judgment.
Lastly, J.B. requested that the court’s award of costs to Ortiz be set aside. But given the disposition of J.B.’s contentions, there is no basis for reversing the cost award.
The judgment was affirmed.