TERRY A. VANDERSTOEP and CELESTE VANDERSTOEP, husband and wife, Respondents,
GARY GUTHRIE and KATHLEEN GUTHRIE, as Guardians of HOWIE I. GUTHRIE, a minor, Appellants.
and Kathleen Guthrie appeal the trial court's denial of
their motion to set aside a default order and vacate a
default judgment entered against them and in favor of Terry
and Celeste VanderStoep. The VanderStoeps' lawsuit
against the Guthries arose from an automobile collision
caused by the negligence of Howie Guthrie, the Guthries'
minor son, in which Terry suffered serious injuries.
the Guthries were served with the lawsuit, they notified
their insurer, American Family Insurance Company, and
followed up with two telephone messages. American
Family's adjuster handling the matter claimed that, for
unexplained reasons, she never received notice of the
lawsuit. Nobody appeared for the Guthries, and the
VanderStoeps obtained a default judgment in the amount of
$374, 580.36 for Terry's medical expenses, income loss
and noneconomic damages, Celeste's loss of consortium,
Guthries argue that the trial court erred in denying their
motion to set aside the default judgment under CR 60(b)(1)
because (1) they presented evidence of a prima facie defense
to the VanderStoeps' noneconomic damages claim and (2)
their failure to timely appear was the result of mistake,
inadvertence, or excusable neglect because they properly
notified American Family and followed up on that notice, even
if American Family did not have a legitimate excuse for not
responding to the complaint. We agree and hold that the
portion of the trial court's default judgment relating to
the VanderStoeps' noneconomic damages should be set
we reverse the trial court's denial of the Guthries'
motion to set aside the noneconomic damages portion of the
default judgment, and we remand for further proceedings.
Accident and Injuries
2014, Howie and Terry were involved in an automobile
collision when Howie turned across oncoming traffic without
yielding and collided with Terry's car. As a result of
the collision, Terry suffered serious injuries to his low
back, right knee, and left shoulder in addition to other
injuries. A herniated disc in Terry's low back caused
right hip and right leg pain.
was 67 years old at the time of the collision. He worked as a
golf course groundskeeper. He was off work for about a month
after the accident, returned to work part time for light duty
for several months, and then was taken off work by his doctor
in January 2015.
February, Terry underwent low back surgery for his herniated
disc. The surgery relieved most of his leg symptoms, but he
claimed that he continued to suffer hip pain. He also
experienced various aches and pains that he attributed to the
returned to work in March, but he claimed that he no longer
could perform the physical tasks associated with his job. He
was suffering more pain and was concerned that he might be
reinjured. Terry retired in November 2015.
after the accident occurred, the Guthries reported a claim to
their insurer, American Family. Kathleen understood that
American Family would work directly with the VanderStoeps or
their attorney to settle the claim on the Guthries'
behalf. The Guthries had no contact with the VanderStoeps or
American Family for over a year.
Family adjusters engaged in settlement negotiations with the
VanderStoeps' attorney, William Robison. American Family
did not contest that Howie was liable and conceded that
Terry's surgery was causally related to the accident.
February 16, 2016, American Family adjuster Stacy Thrush had
a telephone conversation with Robison. Robison stated that
the VanderStoeps' final demand was $225, 000, and Thrush
stated that American Family's final offer was $145,
060.44. According to Robison, he told Thrush that she should
alert the Guthries that they would soon be served with a
summons and complaint. According to Thrush, Robison said that
he would obtain the VanderStoeps' permission to file a
lawsuit. Thrush called Kathleen and advised her that a
lawsuit might be filed.
VanderStoeps filed a lawsuit against the Guthries on February
18. Robison did not inform Thrush that the VanderStoeps had
filed suit or send her a copy of the complaint. The Guthries
were served with the summons and complaint on February 27.
That same day, Kathleen called American Family's general
claims number and spoke for 13 minutes with a representative
assigned to take such calls. Kathleen advised the
representative that she had been served with the summons and
complaint, provided pertinent information regarding the
lawsuit, and answered questions posed to her.
Kathleen did not receive further communications from American
Family, she called American Family's general claims
number, once on February 29 or March 1 and again on March 7.
On both occasions, she entered what she believed to be
Thrush's extension number and left a voicemail stating
she had been served with the summons and complaint. Kathleen
believed that these communications sufficiently informed
American Family of the lawsuit, and her understanding and
expectation was that American Family would handle the
stated that she did not receive any information or voicemails
regarding the summons and complaint. She also told Kathleen
later that she had no record of Kathleen's calls.
Guthries did not appear in the VanderStoeps' lawsuit. On
March 24, the VanderStoeps filed a motion for default and a
motion for a default judgment. The support for the default
judgment motion was a four-page declaration from Robison
describing the accident and summarizing Terry's injuries,
treatment, and employment situation. The declaration did not
attach any medical records, medical bills, or income loss
documentation. Robison simply stated in a declaration that
Terry's total medical expenses were $61, 836.44, claimed
that Terry had lost $12, 000 in income, and stated that he
believed a reasonable value for the case was $361, 836.44. He
also stated that a reasonable sum for Celeste's loss of
consortium claim was $15, 000.
March 30, the trial court conducted a short hearing on the
motion for a default judgment. Both Terry and Celeste
provided very brief testimony. Robison recommended $300, 000
for noneconomic damages. The court entered an order of
default and a default judgment along with findings of fact
and conclusions of law. The judgment included $61, 836.44 in
medical expenses, $12, 000 in income loss, and $300, 000 in
April 21, over two months after Robison told Thrush that he
would file suit, Thrush left a voicemail with Robison
following up with the parties' settlement negotiations.
Robison stated that he returned the call and received a
voicemail recording, but he was not allowed to leave a
message. Thrush called again on June 7 and learned of the
default judgment. Thrush then called Kathleen, who said that
she had notified American Family of the lawsuit.
to Vacate Default Judgment
8, American Family retained an attorney to represent the
Guthries and the attorney filed a notice of appearance on
June 13. On July 6, the Guthries filed a motion under CR
60(b)(1) to set aside the default order and vacate the
default judgment. They challenged only the damages portion of
the default judgment, not the liability portion.
establish a prima facie defense to the VanderStoeps'
damages claim, the Guthries submitted as evidence two
progress notes from Terry's doctor. A note dated February
12, 2015, a week after the low back surgery, stated that
Terry's right leg pain had resolved and he was returning
to daily activities without difficulty, but he would continue
with pain medication as needed and would wear a lumbosacral
corset for the next six weeks. A note dated March 11, five
weeks after surgery, stated that Terry's right leg pain
still was resolved, he only had occasional low back
discomfort, he was off medication, and he was returning to
his usual daily activities. The doctor discussed lifting and
activity restrictions, but told Terry that he could perform a
light exercise program and play golf.
the Guthries also informed the court that they did not have
enough information to fully challenge the damages award.
Although Robison had supplied some medical records to
American Family, the Guthries did not have all the medical
records and had no opportunity to obtain a defense medical
examination of Terry or take depositions of Terry and
the reason they had not appeared in the action before the
default judgment, the Guthries claimed that there had been a
miscommunication between them and American Family. But
American Family provided no explanation for why
Kathleen's notice that she had been served had not caused
American Family to retain defense counsel or why
Kathleen's messages were not forwarded to Thrush.
trial court denied the Guthries' motion. It explained its
ruling orally, stating that "the disputing of the
noneconomic damages by itself seems to be insufficient
grounds for oversetting [sic] the default." Report of
Proceedings (RP) (July 29, 2016) at 28. The court further
explained that there was evidence of a substantial injury and
medical expenses, and that based on substantial evidence and
representations of counsel the damages award was appropriate.
Guthries appeal the trial court's order denying their
motion to set aside the default order and the default
Standards for Setting Aside Default Judgment
55(c) provides that a trial court may set aside an entry of
default and a default judgment in accordance with CR 60(b).
Under CR 60(b)(1), a party may obtain relief from a default
judgment based on "[m]istakes, inadvertence, surprise,
excusable neglect or irregularity in obtaining a judgment or
Application of White Test
a trial court should set aside a default judgment under CR
60(b)(1) depends upon application of a four-part test first
articulated in White v. Holm, 73 Wn.2d 348, 352, 438
A party moving to vacate a default judgment must be prepared
to show (1) that there is substantial evidence supporting a
prima facie defense; (2) that the failure to timely appear
and answer was due to mistake, inadvertence, surprise, or
excusable neglect; (3) that the defendant acted with due
diligence after notice of the default judgment; and (4) that
the plaintiff will not suffer a substantial hardship if the
default judgment is vacated.
Little v. King,
160 Wn.2d 696, 703-04, 161 P.3d 345
(2007). The first two factors are "primary" and the
second two are "secondary." Id. at ...