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Rogue Valley Memorial Hospital v. Salem Insurance Agency Inc.

June 1, 1973

ROGUE VALLEY MEMORIAL HOSPITAL, RESPONDENT,
v.
SALEM INSURANCE AGENCY, INC. ET AL, DEFENDANTS, OETINGER, APPELLANT



Appeal from Circuit Court, Jackson County. L. L. Sawyer, Judge.

John P. Cooney, Medford, argued the cause and filed the briefs for appellant.

William V. Deatherage, Medford, argued the cause for respondent. With him on the brief were Frohnmayer & Deatherage, Medford.

In Banc. Tongue, J.

Tongue

This is an appeal from an order denying the motion of defendant Oetinger to set aside a default judgment. We affirm.

Defendant's motion was based upon ORS 18.160.*fn1 Although that statute is to be construed to the end that every defendant should have an opportunity to have his day in court, a motion to vacate a default judgment is nevertheless addressed to the sound discretion of the trial judge. That discretion must not be exercised arbitrarily, but in accordance with established legal principles. The refusal of a trial judge to grant such a motion will not be overruled, however, except for manifest abuse. Coleman v. Meyer, 261 Or 129, 134, 493 P2d 48 (1972).

In this case the trial judge, after considering affidavits filed by the parties and argument by counsel, denied defendant's motion, based upon findings that defendant "* * * failed to establish his excusable negligence or that he has a valid defense to the complaint * * *."

1. The trial court did not abuse its discretion in finding that defendant failed to establish his "excusable neglect."

The complaint in this case was filed on July 14, 1972. On July 24, 1972, defendant was personally served with a summons and a copy of the complaint. The complaint sought to foreclose a hospital lien claimed by plaintiff against a former patient as the result of hospital expenses incurred by the patient. It alleged that the patient had an insurance policy with an insurance company, incorporated in Georgia, which

was also named as defendant; that defendant Oetinger was an agent for that company; that the policy covered the hospital expenses of the patient; that plaintiff had "duly filed a lien substantially in the form prescribed by ORS 87.570 with the county clerk"; that "defendants acknowledged receipt" of a copy of that lien and thereafter "made payments" to the patient, but none to the hospital, and prayed for judgment in the sum of $1144.38, plus interest, costs and attorneys fees.

It appeared from the affidavit of plaintiff's attorney that the lien was filed "on or about February 15, 1972" and was served on defendant on that date and that letters demanding payment were then addressed to defendant, dated April 7, April 11, April 17, and May 22, 1972. It also appears from that affidavit that after the summons and complaint were served upon defendant Oetinger, on July 24, 1972, and after the entry of the default judgment on August 16, plaintiff's attorney called defendant Oetinger on September 21, by telephone and notified him of the judgment; that on September 22, 1972, the defendant insurance company filed an answer, but that plaintiff's attorney heard nothing from defendant Oetinger until the filing of his motion to set aside the judgment on December 11, 1972.

That motion was supported by the affidavit of defendant Oetinger that he sold a policy of insurance providing for coverage for loss of income during hospitalization and time off work; that a claim was made under that policy and on December 28, 1971, January 20, 1972, and February 22, 1972, checks to the insured were transmitted to her by the insurance company through Oetinger; that thereafter, near the end of

February, a copy of the hospital lien was sent to Oetinger and was forwarded by him to the insurance company, and that when he was served with summons and complaint he contacted the insurance company by telephone, informed it of the service, and mailed the summons and complaint to it.

The affidavit also stated that defendant Oetinger took no steps to respond to the summons and complaint because he understood that he did all that was necessary by forwarding the documents to Coastal States; that he did not know he needed an attorney to represent him in the matter and felt that the insurance company would take care of the entire matter; and that he further understood that no judgment could be taken without a trial.

Subsequently, defendant's attorney also filed an affidavit stating that he was retained by defendant Oetinger on November 16, 1972, that after conference with Oetinger he prepared the documents supporting the Motion to Set Aside Default Judgment and that the Motion, tendered Answer, and Affidavit were filed December 11, 1972, the delay between the date when he was retained and the filing of the documents being ...


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