8 NICS App. 8, HOOPA VALLEY HOUSING AUTHORITY v. DAVIS-REED (January 2007)
IN THE HOOPA VALLEY TRIBAL COURT OF APPEALS
HOOPA VALLEY INDIAN RESERVATION
HOOPA, CALIFORNIA
Hoopa Valley Housing Authority, Appellant,
v.
Robyn Davis-Reed, Respondent.
No. A-06-004 (January 4, 2007)
SYLLABUS*
Trial court granted Defendant’s motion to vacate a default judgment and writ of possession. Court of Appeals holds that Defendant failed to establish good cause supporting the motion and that the trial court therefore abused its discretion in granting the motion. Trial court order reversed.
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Eric Nielsen, Chief Justice; Matthew Fletcher, Justice; Suzanne Ojibway Townsend, Justice. |
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David Dehnert, Attorney for Hoopa Valley Housing Authority. |
OPINION
Nielsen, C.J.:
The Hoopa Valley Housing Authority (HVHA) appeals the trial court’s June 17, 2006 order granting Ms. Davis-Reed’s motion to vacate an April 27, 2006 default judgment and staying a May 19, 2006 Writ of Possession of Real Property.
We REVERSE the trial court’s order.
I. Factual and Procedural History
On October 4, 2004, the HVHA filed a Complaint for Unlawful Detainer against Ms. Davis-Reed. The HVHA alleged Ms. Davis-Reed breached the Mutual Help and Occupancy
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Agreement (MHOA) because she failed to make timely monthly homebuyer payments, failed to have the home connected to utilities and failed to live in the home as her primary residence.1
After the HVHA filed its complaint, the parties entered into negotiations and reached a stipulated agreement (agreement) on April 15, 2005. The trial court entered the agreement as its order on April 29, 2005. The court further ordered that the agreement “…will become an entry in the court record for future reference by this court.”
In the agreement, Ms. Davis-Reed admitted she owed $3,671.58 under the MHOA. The agreement required Ms. Davis-Reed to make $200.00 monthly payments to the HVHA ($85.00 on the amount owed and $115.00 on the ongoing current monthly payment) until the past debt was paid.2 Ms. Davis-Reed acknowledged that if she failed to timely make the agreed payments, “a Judgment of Unlawful Detainer” would be entered and “enforced by the Court” and she would be required to vacate the home upon service of a “Writ of Possession of Real Property.”
On February 6, 2006, the HVHA filed a motion for show cause, supported by affidavit, alleging Ms. Davis-Reed failed to timely make the $200.00 monthly payments. A hearing on the motion was set and the motion and notice of hearing were mailed to Ms. Davis-Reed at the address on file with the HVHA and the address she used on her previous pleadings filed with the court.
Ms. Davis-Reed failed to respond to the motion and failed to attend the show cause hearing. The court found Ms. Davis-Reed was properly notified of the hearing by mail and that the notice was not returned to the court as undeliverable. On April 27, 2006, the court entered a default judgment against Ms. Davis-Reed and terminated the MHOA and agreement. The order also directed that a request to set aside the default judgment had to be filed within 10 days.
On May 19, 2006, the court entered a Writ of Possession of Real Property. The writ directed the Hoopa Valley Chief of Police to take possession of the house, which was the subject of the MHOA, and release it to the HVHA.
On June 2, 2006, Ms. Davis-Reed filed a motion to reconsider and requested the court set aside the default judgment. In her declaration in support of her motion, Ms. Davis-Reed claimed she was not notified of the show cause hearing and did not learn the default judgment had been entered until she was served with the Writ of Possession of Real Property on May 24, 2006. She claimed the notice of the show cause hearing was mailed to “an erroneous” address. In the caption of her declaration Ms. Davis-Reed listed her address as the same address where the
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notice was sent and at the end of her declaration she listed her address as “General Delivery” Somes Bar, California. The HVHA opposed the motion, arguing that it was untimely and that Ms. Davis-Reed failed to establish any justifiable reasons why the default judgment should be set aside.
A hearing was held on Ms. Davis-Reed’s motion. Ms. Davis-Reed maintained she never received notice of the April 27, 2006 show cause hearing because it was not mailed to her current mailing address, which she claimed was “General Delivery” Somes Bar, California. Although Ms. Davis-Reed never provided the court that new address, the court appeared to excuse her oversight on the grounds that Ms. Davis-Reed was unaware the “matter was in court.” The court concluded Ms. Davis-Reed did not receive proper notice of the show cause hearing and her motion was timely because it was filed within 10 days from the date she was served with the Writ of Possession of Real Property.
On July 17, 2006, the court entered a written order granting Ms. Davis-Reed’s motion, setting the case for a hearing on the unlawful detainer action and staying the Writ of Possession of Real Property pending the outcome of the hearing.
The HVHA timely appeals the order. The HVHA argues the court abused its discretion when it granted Ms. Davis-Reed’s motion and set aside the default judgment.
II. Standard of Review
We review the trial court’s decision to grant the motion to reconsider its April 29, 2006 order and vacate the default judgment under the abuse of discretion standard.
The trial court can vacate a default judgment upon a showing of good cause or under 3HVTC Rule 413. 3HVTC Rule 30. Under 2HVTC 2.1.01, the Federal Rules of Civil Procedure
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(FRCP) and federal cases may be cited as authority were the federal rules are analogous to Hoopa Valley law. 3HVTC Rule 30, also provides that FRCP 55 and federal cases interpreting that rule may be cited as authority when interpreting 3HVTC Rule 30.
A court’s decision to vacate a default judgment under FRCP 55 is reviewed under the abuse of discretion standard. See State Street Bank & Trust Co. v. Inversiones Errazuriz Limitada, 374 F.3d 158, 166 (2d Cir.2004); Alan Neuman Prods., Inc. v. Albright, 862 F.2d 1388, 1391 (9th Cir.1989). We held in Hoopa Valley Housing Authority v. Doolittle, No. A-04-009, at 3, (May 26, 2005) that the trial court’s decision to grant a motion for reconsideration is reviewed under the abuse of discretion standard as well.
Under the abuse of discretion standard of review, we will reverse the trial court only if we conclude that no reasonable person could agree with the trial court's ruling. Doolittle, No. A-04-009, at 4 (citation omitted); See United States v. Indoor Cultivation Equipment from High Tech Indoor Garden Supply, 55 F.3d 1311, 1313 (7th Cir.1995). The court abuses its discretion under the “no reasonable person” standard if it commits “(1) a clear error of judgment in its conclusions based on the weight of the relevant factors, (2) applied the wrong law or (3) its decision rested on clearly erroneous findings of material fact.” Doolittle, No. A-04-009, at 3, citing United States v. Washington, 3954 F.3d 1152, 1157 (9th Cir. 2005).
III. Decision
The court granted Ms. Davis-Reed’s motion and vacated the default judgment based on her claim that she did not receive notice of the show cause hearing because it was mailed to an address she no longer uses.4 We hold that even if Ms. Davis-Reed did not receive actual notice of the show cause hearing because she was no longer using the address where the notice of the hearing was mailed, that fact does not support the court’s decision.
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A trial court can vacate a default judgment upon a showing of “good cause.” 3HVTC Rule 30. In the context of a motion to vacate a default judgment under the similar federal rule, FRCP 55, the good cause analysis considers three factors: (1) whether the defendant’s culpable conduct led to the default; (2) whether there is a meritorious defense; or (3) whether reopening the default judgment would prejudice the non-defaulting party. TCI Group Life Ins. Plan v. Knoebber, 244 F.3d 691, 696 (9th Cir.2001). The party in default bears the burden of establishing that these factors militate in favor of vacating the default judgment. Falk v. Allen, 739 F.2d 461, 463 (9th Cir. 1984).
Although the trial court failed to analyze the above factors in making its decision, based on the record, Ms. Davis-Reed failed to meet her burden of proving the factors justify vacating the default judgment.
Under 2HVTC 2.3.06, after a suit has been commenced, “…plaintiffs may serve defendants at the address the defendant provides on the defendant's filings.” The show cause motion was an action brought after the unlawful detainer suit “commenced.” Notice of the hearing was mailed to the address Ms. Davis-Reed provided on all her “filings” in that lawsuit. Under Hoopa Valley law, Ms. Davis-Reed was properly served notice of the hearing.
Whether Ms. Davis-Reed actually received the notice of the hearing because she changed her address without notifying the court or the HVHA does not favor vacating the default judgment. There is nothing in the record to indicate that Ms. Davis-Reed had reason to believe the lawsuit was dismissed or that the HVHA would need to file a separate lawsuit, which would require it to personally serve her with notice, based on her failure to comply with the conditions of the agreement. 5 See 2HVTC 2.3.04 (when a lawsuit is initiated, a plaintiff is required to personally serve the defendant a copy of the summons and complaint). If she did not receive notice because she was no longer using the address she provided on her filings in this suit, it was because she alone failed to provide the court and HVHA with another address.
An analysis of the first factor shows Ms. Davis-Reed is to blame for her failure to respond to the show cause motion and failure to attend the subsequent hearing. Thus, Ms. Davis-Reed’s failure to receive notice was due to her culpability.
Even if Ms. Davis-Reed’s conduct was not culpable, that is only one of the three factors in the analysis. The second is whether there is a meritorious defense. If the defendant’s failure
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to respond is excusable but the defendant presents no meritorious defense, then nothing but pointless delay results from reopening the judgment. Hawaii Carpenters' Trust Funds v. Stone, 794 F.2d 508, 513 (9th Cir.1986). If reopening the judgment would only cause delay because there is not a meritorious defense, then the interest in finality should prevail. Id.
In order to establish the existence of a meritorious defense, the defaulting party must present a proffer of evidence, which, if believed, would permit either the court or the jury to find for the defaulting party. Cent. Operating Co. v. Util. Workers of Am., 491 F.2d 245, 252 n.8 (4th Cir. 1974). In her declaration accompanying her motion, Ms. Davis-Reed states her tenant moved out in January, 2006.6 That was the only proffer of evidence she made in support of her motion. The HVHA supported its show cause motion with evidence that Ms. Davis-Reed stopped making the agreed upon payments in November, 2005. Thus, even if Ms. Davis-Reed’s tenant did not move until January, 2006, that is not a defense to the allegation she violated the agreement because of her failure to make timely payments.
The record shows Ms. Davis-Reed did not present a meritorious defense in her motion to reconsider. This factor does not support the trial court’s decision.
The third factor in the analysis is whether reopening the case would prejudice the HVHA. Our decision in Doolittle, supra, is instructive.
In Doolittle, the HVHA filed an unlawful detainer suit against the homebuyer, Doolittle. The HVHA and Doolittle reached a stipulated agreement, which the trial court entered. Hoopa Valley Housing Authority v. Doolittle, No. A-04-009, at 2. The HVHA subsequently filed a show cause motion alleging breach of the stipulated agreement. The court found a breach and issued a Writ of Possession of Real Property. Id. A few months later, Doolittle moved the court to reconsider its decision on the grounds another tribal agency had offered him assistance, which would enable him to comply with the stipulated agreement. Id. at 4. The trial court granted the motion and the HVHA appealed. We reversed the trial court’s decision based in part on the prejudice the HVHA would suffer if the case were reopened.
It is an abuse of discretion of the judiciary to exercise its discretion in a manner such as it has here that runs contrary to the overall statutory scheme by causing delays and legal liabilities that may result in Tribal Housing units remaining vacant for months or even years at a time because the Housing Authority cannot have confidence that a determination of its rights and obligations is truly final and binding. This would constitute severe prejudice to the Housing Authority and undermine public confidence in the judicial process.
Hoopa Valley Housing Authority v. Doolittle, No. A-04-009, at 5.
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The HVHA will suffer a similar prejudice in this case. Because Ms. Davis-Reed failed to present any meritorious defense, the court’s decision to vacate the default judgment and stay the Writ of Possession of Real Property causes an unnecessary delay, which will leave the home unavailable for use by another family, contrary to public policy that favors finality in these types of cases.
We are mindful that decisions to vacate an entry of default are within the sound discretion of the court and any doubts should be resolved in favor of a trial on the merits. Meehan v. Snow, 652 F.2d 274, 276-77 (2d Cir. 1981). If, however, the court commits a clear error of judgment based on the weight of the relevant factors used to determine whether to vacate a default judgment, it abuses its discretion. Because an analysis of the relevant factors shows the trial court committed a clear error of judgment granting Ms. Davis-Reed’s motion to reconsider and vacating the default judgment, we hold it abused its discretion.
We REVERSE the trial court’s July 17, 2006 order granting Ms. Davis-Reed’s motion to reconsider, vacating the default judgment and staying the Writ of Possession of Real Property.
The syllabus is not a part of the Court’s Opinion. The syllabus is a summary of the Opinion prepared by the publishers of this Reporter only for the convenience of the reader. Therefore, the syllabus should not be cited in whole or part as legal authority. Only the Opinion, which follows the syllabus, may be cited as legal authority.
Under a United States Department of Housing and Urban Development (HUD) program called Mutual Help, HUD provides funding to a tribal housing authority to assist low-income Indian families in purchasing a home. See 24 C.F.R. Part 905 Subpart E (1995). A MHOA is a contract between the HVHA and an eligible Indian homebuyer under the Mutual Help program. The contract is essentially a 25 year lease-purchase agreement.
There were other conditions in the stipulated agreement but those have no bearing on the issue in this case.
That provision reads:
A new trial may be granted to all of the parties and on all or part of the issues (1) in an action in which there has been a trial by jury, for any of the reasons for which new trials have heretofore been granted in actions at law in the court; and (2) in an action tried without a jury, for any of the reasons for which rehearing has heretofore been granted in suits in equity in the court. On a motion for a new trial in an action tried without a jury, the court may open the judgment if one has been entered, take additional testimony, amend findings of fact and conclusions of law or make new findings and conclusions, and direct the entry of a new judgment.
(a) Time for Motion. A motion for a new trial shall be served not later than 10 days after the entry of judgment.
(b) On Initiative of the Court. Not later than 10 days after entry of judgment the court on its own initiative may order a new trial for any reason for which it might have granted a new trial on motion of a party. After giving the parties notice and an opportunity to be heard on the matter, the court may grant a motion for a new trial, timely served, for a reason not stated in the motion. In either case, the court shall specify in the order the grounds thereof.
(c) Motion to Alter or Amend a Judgment. A motion to alter or amend the judgment shall be served not later than 10 days after entry of the judgment.
We take this opportunity to remind the trial judge that under 3HVTC Rule 24, the court is required to state separately its conclusions of law and findings of fact. The importance of entering detailed findings and conclusions is self-evident. The purpose of written findings and conclusions is to allow the reviewing court to determine the basis for the court’s decision. And, the absence of detailed findings and conclusions hampers an appellate court’s ability to intelligently review the trial court’s decision. See, e.g., Marziliano v. Heckler, 728 F.2d 151, 156 (2d Cir. 1984). Here, the July 17, 2006 order does not separately state the court’s findings of fact or conclusions of law. The order also states “due process issues are the presenting issue,” but nowhere does the court explain the nature of the alleged due process issues or what it means by that statement. The lack of separate findings and conclusions made it difficult for this Court to determine what facts informed the court’s ultimate decision to grant the motion to reconsider, the factors it analyzed in making that decision and why the facts supported the decision.
Ms. Davis-Reed could not claim she believed the unlawful detainer lawsuit was dismissed following the entry of the agreement and therefore claim ignorance that the case was still before the court. The agreement provided that if Ms. Davis-Reed failed to timely make the agreed payments “a Judgment of Unlawful Detainer” would be entered and “enforced by the Court.” In its April 29, 2005 order the court specifically ruled the agreement “…will become an entry in the court record for future reference by this court.” (emphasis added). Additionally, the court filed the show cause motion under the suit’s cause number.
Under the agreement, Ms. Davis-Reed was allowed to temporarily sublet the house.