Scott Eaton v. Carin Hallam White & a.

THE STATE OF NEW HAMPSHIRE

SUPREME COURT

In Case No. 2016-0434, Scott Eaton v. Carin Hallam White
& a., the court on February 15, 2017, issued the following order:

Having considered the briefs and limited record submitted on appeal, we
conclude that oral argument is unnecessary in this case. See Sup. Ct. R. 18(1).
We reverse and remand.

The defendants, Carin Hallam White and Matthew White, appeal the
payment order of the Circuit Court (Patten, J.) entered against them in favor of
the plaintiff, Scott Eaton. Among other arguments, the defendants contend
that the court erred in: (1) denying defendant Matthew White’s motion for
reconsideration of the default judgment entered against him; and (2) entering a
default judgment against defendant Carin White.

The record shows that the plaintiff filed a small claim complaint against
the defendants, his former tenants, seeking $7,500 for nonpayment of rent and
damages to the leased premises. The return date, the date by which the
defendants were required to file a response with the court or be defaulted, was
November 25, 2015. On November 18, 2015, Carin filed her response, and on
November 30, 2015, the court defaulted Matthew for failing to timely file his
response, entering judgment against him in the total amount of $7,693.49.
Two days later, on December 2, 2015, Matthew moved for reconsideration,
asserting that a representative from the court’s call center had informed his
wife that he was not required to file a separate response due to the defendants’
marital status and alleged joint liability. Matthew checked the box on the
motion form indicating that the opposing party agreed with the relief requested
in the motion. However, the plaintiff objected to the motion, and on January 4,
2016, the court denied the motion on the sole basis that, “based upon this
objection, defendant’s representation that plaintiff had agreed to his motion to
reconsider, was a misrepresentation.”

For reasons that are unclear on this record, the trial court did not
thereafter schedule a hearing on the claim against Carin. Instead, on July 8,
2016, the court held a periodic payment hearing “to establish a payment order
on [the] default judgment entered [against] the defendant Matt White on
11/30/2015.” In its order, the court entered a default judgment against Carin
in the same amount it had entered against Matthew, finding that she “did not
file her response to the small claim complaint in a timely manner.” The court
ordered each defendant to pay $50.00 per month toward the judgment entered
against them.
 We first address the defendants’ argument that the trial court erred in
denying Matthew’s motion for reconsideration of the default judgment entered
against him. We note that the default entered against Matthew did not become
a final and appealable “decision on the merits” for purposes of Rule 3 until the
trial court had entered judgment against Carin, thereby finally resolving the
claims against all parties to the action. See Germain v. Germain, 137 N.H. 82,
84 (1993). “We will uphold a trial court’s decision on a motion for
reconsideration absent an unsustainable exercise of discretion.” Walker v.
Walker, 158 N.H. 602, 607 (2009) (quotation omitted). “To show that the trial
court’s decision is not sustainable, the defendant must demonstrate that the
court’s ruling was clearly untenable or unreasonable to the prejudice of his
case.” Id. (quotation omitted). “Our inquiry is whether the record establishes
an objective basis sufficient to sustain the discretionary judgment made.” Id.
(quotation omitted).

In substance, the motion for reconsideration, filed only two days after the
entry of default, sought to set the default aside on the basis that the parties
had misunderstood that Carin’s demand for a hearing would cover Matthew.
The defendants were married, and there is no indication that the liability being
asserted against them was anything other than joint. The trial court, however,
denied the motion solely because Matthew had “misrepresented” the plaintiff’s
position as to the relief requested in the motion, and not based upon its merits.
As discussed below, Carin had, in fact, timely filed a response to the small
claim complaint and demand for a hearing, and there is nothing in the record
indicating that the parties’ misunderstanding as to Matthew’s obligation to file
a separate response by the return date caused the plaintiff any prejudice.
Bearing in mind “[o]ur policy favoring resolution of disputes on their merits,”
American Express Travel v. Moskoff, 144 N.H. 190, 193 (1999), we conclude
that, under the unique circumstances of this case, the trial court
unsustainably exercised its discretion in denying the motion for
reconsideration.

We next address the defendants’ argument that the trial court erred in
entering a default judgment against Carin. We will affirm the trial court’s
factual findings unless they are unsupported by the evidence and its legal
rulings unless they are erroneous as a matter of law. Osman v. Gagnon, 152
N.H. 359, 361 (2005). At the July 8, 2016 hearing to establish a payment
order against Matthew, the court deemed Carin to have defaulted, and entered
a default judgment against her, after noting that she “did not file her response
to the small claim complaint in a timely manner.” However, the record
provided on appeal, which includes a notice from the court confirming receipt
of Carin’s November 18, 2015 response to the small claim complaint,
demonstrates that her response was timely.

Accordingly, we reverse the court’s orders entering a default judgment
against Carin, denying Matthew’s motion for reconsideration of the default
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judgment entered against him, and ordering both parties to make periodic
payments, and we direct the trial court, upon remand, to hold a hearing on the
merits of the plaintiff’s claims.

In light of our decision, we need not address the defendants’ remaining
arguments.

Reversed and remanded.

Dalianis, C.J., and Hicks, Conboy, Lynn, and Bassett, JJ., concurred.

Eileen Fox,
Clerk

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