Court of Appeals Holds That Legal Department's Clerical Error Not "Excusable Neglect" Under Ark. Rule Civ. P. 55
The Arkansas Court of Appeals issued an unpublished opinion that that illustrates how powerful the abuse of discretion standard of review is for the appellee: Beverley Enterprises - Arkansas, Inc. v. Mike Jarrett, as Administrator of the Estate of Sylvia Jarrett, CA 06-330.
The corporate appellant in this nursing-home malpractice case filed its answer thirty days late and appealed from the trial court's grant of default judgment. The appellant acknowledged that it had been properly served, as its agent for service forwarded service of process to its legal department and the legal department verified receipt.
Despite valid service and possession of the complaint, the appellant argued "it was 'unaware' of the lawsuit because the complaint was misplaced by appellant's clerical help and was never received by appellant's in-house counsel," and that this constituted "excusable neglect" under Rule 55(c)(1) of the Arkansas Rules of Civil Procedure.
The Court of Appeals disagreed and affirmed in an unpublished opinion. Incorporating the standard of review -- grants of default judgment are reviewed under an abuse of discretion standard --the Court, through Judge Pittman, reasoned that "although appellant's legal department may indeed have been busy, the trial properly could have viewed this as a negligent failure to secure adequate help rather than as an instance of excusable neglect." (emphasis added).
