{ "id": 2772750, "name": "Elmer A. HERRERA, Plaintiff-Appellee, v. SPRINGER CORPORATION, Defendant-Appellant", "name_abbreviation": "Herrera v. Springer Corp.", "decision_date": "1973-03-09", "docket_number": "No. 1024", "first_page": "6", "last_page": "18", "citations": [ { "type": "official", "cite": "85 N.M. 6" }, { "type": "parallel", "cite": "508 P.2d 1303" } ], "court": { "name_abbreviation": "N.M. Ct. App.", "id": 9025, "name": "Court of Appeals of New Mexico" }, "jurisdiction": { "id": 52, "name_long": "New Mexico", "name": "N.M." }, "cites_to": [ { "cite": "189 F.2d 242", "category": "reporters:federal", "reporter": "F.2d", "case_ids": [ 483984 ], "opinion_index": 0, "case_paths": [ "/f2d/189/0242-01" ] }, { "cite": "263 F.2d 166", "category": "reporters:federal", "reporter": "F.2d", "case_ids": [ 433300 ], "opinion_index": 0, "case_paths": [ "/f2d/263/0166-01" ] }, { "cite": "359 F.2d 913", "category": "reporters:federal", "reporter": "F.2d", "case_ids": [ 828964 ], "opinion_index": 0, "case_paths": [ "/f2d/359/0913-01" ] }, { "cite": "68 N.M. 421", "category": "reporters:state", "reporter": "N.M.", "case_ids": [ 2719519 ], "weight": 2, "year": 1961, "opinion_index": 0, "case_paths": [ "/nm/68/0421-01" ] }, { "cite": "75 N.M. 488", "category": "reporters:state", "reporter": "N.M.", "case_ids": [ 5377021 ], "weight": 2, "year": 1965, "opinion_index": 0, "case_paths": [ "/nm/75/0488-01" ] }, { "cite": "383 F.2d 249", "category": "reporters:federal", "reporter": "F.2d", "case_ids": [ 2078582 ], "opinion_index": 0, "case_paths": [ "/f2d/383/0249-01" ] }, { "cite": "41 F.R.D. 7", "category": "reporters:specialty", "reporter": "F.R.D.", "case_ids": [ 5874773 ], "opinion_index": 0, "case_paths": [ "/frd/41/0007-01" ] }, { "cite": "49 F.R.D. 139", "category": "reporters:specialty", "reporter": "F.R.D.", "case_ids": [ 3740765 ], "opinion_index": 0, "case_paths": [ "/frd/49/0139-01" ] }, { "cite": "419 F.2d 4", "category": "reporters:federal", "reporter": "F.2d", "case_ids": [ 2162617 ], "opinion_index": 0, "case_paths": [ "/f2d/419/0004-01" ] }, { "cite": "32 F.R.D. 190", "category": "reporters:specialty", "reporter": "F.R.D.", "case_ids": [ 3779491 ], "weight": 2, "opinion_index": 0, "case_paths": [ "/frd/32/0190-01" ] }, { "cite": "80 N.M. 612", "category": "reporters:state", "reporter": "N.M.", "case_ids": [ 5362282 ], "weight": 2, "year": 1969, "opinion_index": 0, "case_paths": [ "/nm/80/0612-01" ] }, { "cite": "82 N.M. 183", "category": "reporters:state", "reporter": "N.M.", "case_ids": [ 5326296 ], "weight": 2, "year": 1970, "opinion_index": 0, "case_paths": [ "/nm/82/0183-01" ] }, { "cite": "83 N.M. 372", "category": "reporters:state", "reporter": "N.M.", "case_ids": [ 5334256 ], "weight": 2, "year": 1971, "opinion_index": 0, "case_paths": [ "/nm/83/0372-01" ] }, { "cite": "75 N.M. 367", "category": "reporters:state", "reporter": "N.M.", "case_ids": [ 5378417 ], "weight": 2, "year": 1965, "opinion_index": 0, "case_paths": [ "/nm/75/0367-01" ] }, { "cite": "420 F.2d 1364", "category": "reporters:federal", "reporter": "F.2d", "case_ids": [ 2159508 ], "weight": 2, "opinion_index": 0, "case_paths": [ "/f2d/420/1364-01" ] }, { "cite": "75 N.M. 241", "category": "reporters:state", "reporter": "N.M.", "case_ids": [ 5374967 ], "weight": 2, "year": 1965, "opinion_index": 0, "case_paths": [ "/nm/75/0241-01" ] }, { "cite": "154 P. 708", "category": "reporters:state_regional", "reporter": "P.", "year": 1916, "opinion_index": 0 }, { "cite": "21 N.M. 320", "category": "reporters:state", "reporter": "N.M.", "case_ids": [ 2387528 ], "year": 1916, "opinion_index": 0, "case_paths": [ "/nm/21/0320-01" ] }, { "cite": "83 N.M. 34", "category": "reporters:state", "reporter": "N.M.", "case_ids": [ 5341565 ], "weight": 2, "opinion_index": 0, "case_paths": [ "/nm/83/0034-01" ] }, { "cite": "78 N.M. 168", "category": "reporters:state", "reporter": "N.M.", "case_ids": [ 5323353 ], "weight": 2, "year": 1967, "opinion_index": 0, "case_paths": [ "/nm/78/0168-01" ] }, { "cite": "35 N.M. 491", "category": "reporters:state", "reporter": "N.M.", "case_ids": [ 1557886 ], "weight": 2, "year": 1931, "opinion_index": 0, "case_paths": [ "/nm/35/0491-01" ] }, { "cite": "72 N.M. 142", "category": "reporters:state", "reporter": "N.M.", "case_ids": [ 2855529 ], "weight": 2, "year": 1963, "opinion_index": 0, "case_paths": [ "/nm/72/0142-01" ] }, { "cite": "297 F.Supp. 1285", "category": "reporters:federal", "reporter": "F. Supp.", "case_ids": [ 5410006 ], "opinion_index": 0, "case_paths": [ "/f-supp/297/1285-01" ] }, { "cite": "73 N.M. 387", "category": "reporters:state", "reporter": "N.M.", "case_ids": [ 5322732 ], "weight": 2, "year": 1964, "opinion_index": 0, "case_paths": [ "/nm/73/0387-01" ] }, { "cite": "140 P. 1107", "category": "reporters:state_regional", "reporter": "P.", "year": 1914, "opinion_index": 0 }, { "cite": "19 N.M. 21", "category": "reporters:state", "reporter": "N.M.", "case_ids": [ 4704704 ], "year": 1914, "opinion_index": 0, "case_paths": [ "/nm/19/0021-01" ] }, { "cite": "80 N.M. 517", "category": "reporters:state", "reporter": "N.M.", "case_ids": [ 5365154, 5361212 ], "weight": 2, "year": 1969, "opinion_index": 0, "case_paths": [ "/nm/80/0517-02", "/nm/80/0517-01" ] }, { "cite": "70 N.M. 99", "category": "reporters:state", "reporter": "N.M.", "case_ids": [ 2851344 ], "weight": 3, "year": 1962, "opinion_index": 0, "case_paths": [ "/nm/70/0099-01" ] }, { "cite": "42 N.M. 626", "category": "reporters:state", "reporter": "N.M.", "case_ids": [ 1569681 ], "weight": 2, "year": 1938, "opinion_index": 0, "case_paths": [ "/nm/42/0626-01" ] }, { "cite": "430 F.2d 1065", "category": "reporters:federal", "reporter": "F.2d", "case_ids": [ 2232111 ], "opinion_index": 0, "case_paths": [ "/f2d/430/1065-01" ] }, { "cite": "166 S.E.2d 649", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1969, "opinion_index": 0 }, { "cite": "275 N.C. 229", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8558328 ], "year": 1969, "opinion_index": 0, "case_paths": [ "/nc/275/0229-01" ] }, { "cite": "78 N.M. 359", "category": "reporters:state", "reporter": "N.M.", "case_ids": [ 5326183 ], "weight": 2, "year": 1967, "opinion_index": 0, "case_paths": [ "/nm/78/0359-01" ] }, { "cite": "80 N.M. 541", "category": "reporters:state", "reporter": "N.M.", "case_ids": [ 5364799 ], "weight": 2, "year": 1969, "opinion_index": 0, "case_paths": [ "/nm/80/0541-01" ] }, { "cite": "72 N.M. 163", "category": "reporters:state", "reporter": "N.M.", "case_ids": [ 2855241 ], "weight": 2, "year": 1963, "opinion_index": 0, "case_paths": [ "/nm/72/0163-01" ] }, { "cite": "62 N.M. 391", "category": "reporters:state", "reporter": "N.M.", "case_ids": [ 2713829 ], "weight": 7, "year": 1957, "opinion_index": 0, "case_paths": [ "/nm/62/0391-01" ] }, { "cite": "75 N.M. 741", "category": "reporters:state", "reporter": "N.M.", "case_ids": [ 5377318 ], "weight": 4, "year": 1966, "opinion_index": 0, "case_paths": [ "/nm/75/0741-01" ] }, { "cite": "74 N.M. 254", "category": "reporters:state", "reporter": "N.M.", "case_ids": [ 2805038 ], "weight": 5, "year": 1964, "opinion_index": 0, "case_paths": [ "/nm/74/0254-01" ] }, { "cite": "37 N.M. 479", "category": "reporters:state", "reporter": "N.M.", "case_ids": [ 1575437 ], "weight": 4, "year": 1933, "opinion_index": 0, "case_paths": [ "/nm/37/0479-01" ] }, { "cite": "67 N.M. 137", "category": "reporters:state", "reporter": "N.M.", "case_ids": [ 2715751 ], "weight": 4, "year": 1960, "opinion_index": 0, "case_paths": [ "/nm/67/0137-01" ] }, { "cite": "71 N.M. 444", "category": "reporters:state", "reporter": "N.M.", "case_ids": [ 5349041 ], "weight": 5, "year": 1963, "opinion_index": 0, "case_paths": [ "/nm/71/0444-01" ] }, { "cite": "78 N.M. 132", "category": "reporters:state", "reporter": "N.M.", "case_ids": [ 5324783 ], "weight": 3, "year": 1967, "opinion_index": 0, "case_paths": [ "/nm/78/0132-01" ] }, { "cite": "164 A.2d 492", "category": "reporters:state_regional", "reporter": "A.2d", "year": 1960, "opinion_index": 1 }, { "cite": "63 N.J.Super. 262", "category": "reporters:state", "reporter": "N.J. Super.", "case_ids": [ 421849 ], "year": 1960, "opinion_index": 1, "case_paths": [ "/nj-super/63/0262-01" ] }, { "cite": "66 N.M. 458", "category": "reporters:state", "reporter": "N.M.", "case_ids": [ 2848200 ], "weight": 2, "year": 1960, "opinion_index": 1, "case_paths": [ "/nm/66/0458-01" ] }, { "cite": "449 F.2d 51", "category": "reporters:federal", "reporter": "F.2d", "case_ids": [ 799074 ], "opinion_index": 1, "case_paths": [ "/f2d/449/0051-01" ] }, { "cite": "36 N.M. 122", "category": "reporters:state", "reporter": "N.M.", "case_ids": [ 1586501 ], "weight": 2, "year": 1932, "opinion_index": 1, "case_paths": [ "/nm/36/0122-01" ] }, { "cite": "1 N.M. 400", "category": "reporters:state", "reporter": "N.M.", "case_ids": [ 8300809 ], "year": 1867, "pin_cites": [ { "page": "407-408" } ], "opinion_index": 1, "case_paths": [ "/nm/1/0400-01" ] }, { "cite": "42 F.R.D. 589", "category": "reporters:specialty", "reporter": "F.R.D.", "case_ids": [ 3713982 ], "opinion_index": 1, "case_paths": [ "/frd/42/0589-01" ] }, { "cite": "28 F.Supp. 952", "category": "reporters:federal", "reporter": "F. Supp.", "case_ids": [ 4198030 ], "pin_cites": [ { "page": "953" } ], "opinion_index": 1, "case_paths": [ "/f-supp/28/0952-01" ] }, { "cite": "269 F.2d 18", "category": "reporters:federal", "reporter": "F.2d", "case_ids": [ 1969937 ], "pin_cites": [ { "page": "23" } ], "opinion_index": 1, "case_paths": [ "/f2d/269/0018-01" ] }, { "cite": "235 N.Y.S.2d 1017", "category": "reporters:state", "reporter": "N.Y.S.2d", "year": 1962, "opinion_index": 1 }, { "cite": "174 A.L.R. 10", "category": "reporters:specialty", "reporter": "A.L.R.", "year": 1948, "pin_cites": [ { "page": "59, 132" } ], "opinion_index": 1 }, { "cite": "173 N.E.2d 525", "category": "reporters:state_regional", "reporter": "N.E.2d", "year": 1961, "opinion_index": 1 }, { "cite": "29 Ill.App.2d 374", "category": "reporters:state", "reporter": "Ill. App. 2d", "case_ids": [ 5219680 ], "year": 1961, "opinion_index": 1, "case_paths": [ "/ill-app-2d/29/0374-01" ] }, { "cite": "208 N.E.2d 118", "category": "reporters:state_regional", "reporter": "N.E.2d", "year": 1965, "opinion_index": 1 }, { "cite": "59 Ill. App.2d 165", "category": "reporters:state", "reporter": "Ill. App. 2d", "case_ids": [ 2602343 ], "year": 1965, "opinion_index": 1, "case_paths": [ "/ill-app-2d/59/0165-01" ] }, { "cite": "93 N.W. 268", "category": "reporters:state_regional", "reporter": "N.W.", "year": 1963, "opinion_index": 1 }, { "cite": "119 Iowa 179", "category": "reporters:state", "reporter": "Iowa", "case_ids": [ 2136410 ], "year": 1963, "opinion_index": 1, "case_paths": [ "/iowa/119/0179-01" ] }, { "cite": "172 N.E.2d 260", "category": "reporters:state_regional", "reporter": "N.E.2d", "year": 1961, "opinion_index": 1 }, { "cite": "341 Mass. 708", "category": "reporters:state", "reporter": "Mass.", "case_ids": [ 3853476 ], "year": 1961, "opinion_index": 1, "case_paths": [ "/mass/341/0708-01" ] }, { "cite": "112 N.E.2d 675", "category": "reporters:state_regional", "reporter": "N.E.2d", "year": 1952, "opinion_index": 1 }, { "cite": "93 Ohio App. 201", "category": "reporters:state", "reporter": "Ohio App.", "case_ids": [ 1409959 ], "year": 1952, "opinion_index": 1, "case_paths": [ "/ohio-app/93/0201-01" ] }, { "cite": "42 N.M. 674", "category": "reporters:state", "reporter": "N.M.", "case_ids": [ 1569746 ], "weight": 2, "year": 1938, "opinion_index": 1, "case_paths": [ "/nm/42/0674-01" ] }, { "cite": "178 P. 842", "category": "reporters:state_regional", "reporter": "P.", "year": 1919, "opinion_index": 1 }, { "cite": "25 N.M. 160", "category": "reporters:state", "reporter": "N.M.", "case_ids": [ 4734670 ], "year": 1919, "opinion_index": 1, "case_paths": [ "/nm/25/0160-01" ] }, { "cite": "69 N.M. 476", "category": "reporters:state", "reporter": "N.M.", "case_ids": [ 2790389 ], "weight": 2, "year": 1961, "opinion_index": 1, "case_paths": [ "/nm/69/0476-01" ] }, { "cite": "49 F.R.D. 3", "category": "reporters:specialty", "reporter": "F.R.D.", "case_ids": [ 3741651 ], "opinion_index": 1, "case_paths": [ "/frd/49/0003-01" ] }, { "cite": "251 A.2d 634", "category": "reporters:state_regional", "reporter": "A.2d", "case_ids": [ 8080534 ], "opinion_index": 1, "case_paths": [ "/a2d/251/0634-01" ] }, { "cite": "294 F.Supp. 1153", "category": "reporters:federal", "reporter": "F. Supp.", "case_ids": [ 2912298 ], "opinion_index": 1, "case_paths": [ "/f-supp/294/1153-01" ] }, { "cite": "411 F.2d 123", "category": "reporters:federal", "reporter": "F.2d", "case_ids": [ 2191443 ], "weight": 2, "opinion_index": 1, "case_paths": [ "/f2d/411/0123-01" ] }, { "cite": "319 N. Y.S.2d 191", "category": "reporters:state", "reporter": "N.Y.S.2d", "year": 1971, "opinion_index": 1 }, { "cite": "36 A.D.2d 71", "category": "reporters:state", "reporter": "A.D.2d", "case_ids": [ 3234840 ], "year": 1971, "opinion_index": 1, "case_paths": [ "/ad2d/36/0071-01" ] }, { "cite": "35 N.M. 262", "category": "reporters:state", "reporter": "N.M.", "case_ids": [ 1558027 ], "weight": 2, "year": 1931, "opinion_index": 1, "case_paths": [ "/nm/35/0262-01" ] }, { "cite": "189 F.2d 242", "category": "reporters:federal", "reporter": "F.2d", "case_ids": [ 483984 ], "opinion_index": 1, "case_paths": [ "/f2d/189/0242-01" ] }, { "cite": "32 F.R.D. 190", "category": "reporters:specialty", "reporter": "F.R.D.", "case_ids": [ 3779491 ], "weight": 5, "pin_cites": [ { "page": "196" } ], "opinion_index": 1, "case_paths": [ "/frd/32/0190-01" ] }, { "cite": "75 N.M. 241", "category": "reporters:state", "reporter": "N.M.", "case_ids": [ 5374967 ], "weight": 2, "year": 1965, "opinion_index": 1, "case_paths": [ "/nm/75/0241-01" ] }, { "cite": "78 N.M. 168", "category": "reporters:state", "reporter": "N.M.", "case_ids": [ 5323353 ], "weight": 2, "year": 1967, "opinion_index": 1, "case_paths": [ "/nm/78/0168-01" ] } ], "analysis": { "cardinality": 1570, "char_count": 44072, "ocr_confidence": 0.79, "pagerank": { "raw": 3.100361543484072e-07, "percentile": 0.8592948855319364 }, "sha256": "3a5e6ea52087dd152c5e92bbec91e9ca3dcabdaf1e9912b2b6b4be06f45e1c90", "simhash": "1:971ab2056cccbdfa", "word_count": 7272 }, "last_updated": "2023-07-14T15:38:26.265107+00:00", "provenance": { "date_added": "2019-08-29", "source": "Harvard", "batch": "2018" }, "casebody": { "judges": [ "HENDLEY, J., concurs.", "SUTIN, J., concurring in part and dissenting in part." ], "parties": [ "Elmer A. HERRERA, Plaintiff-Appellee, v. SPRINGER CORPORATION, Defendant-Appellant." ], "opinions": [ { "text": "OPINION\nWOOD, Chief Judge.\nThe appeal involves a default judgment against Springer Corporation. There are two issues: (1) is a workmen\u2019s compensation insurer, who has paid compensation, an indispensable party in the workman\u2019s action against a third party and (2) did the trial court err in refusing to set aside the default judgment.\nIndispensable party.\nPlaintiff received an injury arising out of and in the course of his employment and was paid workmen\u2019s compensation by his employer\u2019s insurer, USF&G (United States Fidelity & Guaranty Company). Plaintiff sued Springer alleging Springer\u2019s breach of warranty and negligence was the cause of the accident and resulting injury. Default judgment was entered against Springer. Prior to entry of the default judgment, plaintiff\u2019s counsel informed the court of his agreement with USF&G \u201c . . . that they will be reimbursed in the amounts they have expended or will expend for medical and compensation benefits.\u201d Subsequent to entry of the judgment, a formal assignment was filed with the court. This assignment, executed by plaintiff, affirmed the declaration made in open court by his counsel.\nSeeking to set aside the default judgment, defendant claims that USF&G was an indispensable party to plaintiff\u2019s suit against Springer and, not being a party at the time of entry of the judgment, the trial court had no jurisdiction to enter the judgment.\nA court cannot proceed to judgment in the absence of an indispensable party. State v. Scarborough, 78 N.M. 132, 429 P.2d 330 (1967). The question is whether USF&G was such a party.\nAny interest of USF&G in plaintiff\u2019s suit against Springer arises under \u00a7 59-10-25, N.M.S.A.1953 (Repl.Vol. 9, pt. 1). The 1971 amendment to that section is not applicable since the amendment was enacted subsequent to the date of plaintiff\u2019s accident and injury. Section 59-10-25, supra, provides that the right of a workman to recover damages for injuries occasioned by the negligence or wrong of a person other than the employer is not affected by the Workmen\u2019s Compensation Act. It also provides that a workman may not recover such damages and also claim compensation \u201c . . . and in such case the receipt of compensation . . . shall operate as an assignment to the employer, his or its insurer ... or [of] any cause of action, to the extent of the liability of such employer to such workman which the workman . . . may have against any other party for such injuries.\nOur Supreme Court has consistently held that \u00a7 59-10-25, supra is a reimbursement statute; it has also consistently held that there is but one cause of action. Varney v. Taylor, 71 N.M. 444, 379 P.2d 84 (1963); Royal Indem. Co. v. Southern Cal. Petroleum Corp., 67 N.M. 137, 353 P.2d 358 (1960); Kandelin v. Lee Moor Contracting Co., 37 N.M. 479, 24 P.2d 731 (1933). As to the workman\u2019s position under \u00a7 59-10-25, supra, Castro v. Bass, 74 N.M. 254, 392 P.2d 668 (1964) states: \u201c . . our statute contemplated that an employee receiving compensation had a right to sue a third party tortfeasor responsible for his injury; that this right was for the entire amount of damages suffered by the workman with the employer or his insurer to be reimbursed out of any amoiints received.\u201d We emphasize two .points: the workman sues the third party for the entire amount of damages; the employer or insurer is reimbursed out of amounts received by the workman.\nWe examine Springer\u2019s contentions in the light of the foregoing explanation of \u00a7 59-10-25, supra. Springer contends that since there is but one cause of action and since, upon payment of compensation, a portion of the cause of action is assigned to the employer or insurer, the employer or insurer becomes an indispensable party. Springer\u2019s argument is based both on general law and on cases under our workmen\u2019s compensation law.\nExamples of general law decisions are Torres v. Gamble, 75 N.M. 741, 410 P.2d 959 (1966) and Sellman v. Haddock, 62 N.M. 391, 310 P.2d 1045 (1957). See Home Fire & M. Ins. Co. v. Pan American Petroleum Corp., 72 N.M. 163, 381 P.2d 675 (1963) for an explanation of Sellman v. Haddock, supra. Torres v. Gamble, supra, states: \u201cSince our decision in Sellman v. Haddock . . . there can be no question that in this jurisdiction an insurer that has paid its insured for a loss, in whole or in part, is a necessary and indispensable party to an action to recover the amounts paid from a third party allegedly responsible therefor. . . . \u201d\nWe do not deem this general law to be inapplicable because the workman is the statutory beneficiary of workmen\u2019s compensation insurance rather than the insured. Section 59-10-3, N.M.S.A.1953 (Repl.Vol. 9, pt. 1). Rather, we look to the reason behind the general law. The reason i.s that the insurer has the right to collect the amount it has paid from the party who caused the damage. If it has this right, it owns the right sought to be enforced and is in a position to release the third party from the liability upon which the action is grounded. In this situation the insurer is an indispensable party. Sellman v. Haddock, supra; Crego Block Co. v. D. H. Overmyer Co., 80 N.M. 541, 458 P.2d 793 (1969).\nThe \u201cright to collect\u201d in the above situation is based on the fact that the insurer has paid what another should have paid and, having done so, the rights and remedies of the original creditor are assigned to the insurer. This is the the right of subrogation. See State Farm Mut. Auto. Ins. Co. v. Foundation R. Ins. Co., 78 N.M. 359, 431 P.2d 737 (1967).\nSection 59-10-25, supra, does not deal with the right of subrogation, but with the right of reimbursement. Royal Indem. Co. v. Southern Cal. Petroleum Corp., supra. The reimbursement is out of amounts received by the workman because the workman sues for the entire amount of damages suffered. Castro v. Bass, supra. Since the \u201cright to collect\u201d is in the workman, the compensation insurer does not own the right to enforce liability and cannot release the third party from liability. The result in this case is that USF&G was not an indispensable party under the concepts applied in Torres v. Gamble, supra, and Sellman v. Haddock, supra.\nWe now consider the workmen\u2019s compensation decisions. Varney v. Taylor, supra, states:\n\u201c . . . under prior rulings of this court, it would seem that unless the insurance company is allowed to become a party-plaintiff, it will forfeit its right to reimbursement under \u00a7 59-10-25, N.M.S.A. 1953. This is because we specifically held in Royal Indemnity Co. v. Southern Cal. Petroleum Corp., 1960, 67 N.M. 137, 353 P.2d 358, that the statute was a reimbursement statute, and that there was but one cause of action in the employee, even though a part of the recovery is to be paid to the employer or his insurer. The opinion in Royal was a logical result from our holdings in Kandelin v. Lee Moor Contr. Co., 1933, 37 N.M. 479, 24 P.2d 731, and Sellman v. Haddock, 1957, 62 N.M. 391, 310 P.2d 1045. Therefore, for the trial court to have found that the insurance company would not be bound by the judgment is in error, for otherwise it would contemplate the splitting of a cause of action, and, even if this were allowed, not all the parties would be before the court in the second case. Thus, as we .said in Royal, there would be the lack of an indispensable party.\u201d\nThe reference to \u201cindispensable party\u201d in Royal does not aid Springer because the reference is to the workman as the indispensable party. The workman is an indispensable party because it is the workman who has the claim against the third party. The intimation that the compensation insurer is indispensable appears in Kandelin v. Lee Moor Contracting Co., supra, and Varney v. Taylor, supra. We discuss those decisions.\nIn Kandelin, the compensation carrier was a party in the proceedings against the alleged tortfeasor, but was removed from the case prior to adjudication of the liability issue by the trial court\u2019s ruling on a plea in bar. The appellant-defendant was the tortfeasor. Our Supreme Court held the trial court erred, saying: \u201c . upon the record, the defendant is entitled to an adjudication as to whether the Pacific Indemnity Company has an interest in the recovery. . . .\u201d Our Supreme Court did not, however, disturb the verdict, but remanded the cause for determination of the insurer\u2019s right to participate in the recovery.\nWe question a defendant\u2019s right to an adjudication as to a compensation insurer\u2019s right to participate in the workman\u2019s recovery from the defendant. We do so because Kandelin also states: \u201c. Whether the insurance carrier is entitled to any part of the recovery in this case is no concern of the appellant [defendant], .\u201d The result in Kandelin may be explained on the basis the insurer was a party to the suit and had been improperly removed therefrom. This explanation is consistent with the tortfeasor\u2019s \u201cno concern\u201d with the insurer\u2019s right to participate in the recovery.\nVarney v. Taylor, supra, following Kandelin and Royal Indem. Co. v. Southern Cal. Petroleum Corp., supra, establishes clearly that a compensation insurer has the right to intervene in the workman\u2019s suit against a third party. It does not hold that the insurer is an indispensable party to that suit. Varney states that unless the insurer is allowed to intervene it will forfeit its right to reimbursement. This statement is incorrect. The insurer\u2019s right to reimbursement is established by \u00a7 59-10-25, supra. That right is not waived by failure to participate in the trial of the workman\u2019s action against the third party. Byers v. North Carolina State Highway Commission, 275 N.C. 229, 166 S.E.2d 649 (1969). That statutory right may be protected in a variety of ways. In McDonald v. E. J. Lavino Company, 430 F.2d 1065 (5th Cir.1970), the insurer\u2019s rights were protected by allowing intervention after judgment had been entered against the tortfeasor. See the method of protecting the insurer\u2019s rights in Varney and Royal. Under the facts of this case it is not claimed that USF&G has lost its right of reimbursement ; yet, it is not a party.\nVarney also states that the insurer is bound by the judgment in the workman\u2019s suit against the allegedly liable third party. This statement is consistent with: (a) Royal Indem. Co. v. Southern Cal. Petroleum Corp., supra, where the third party settled the claims of the workman and the insurer\u2019s right to reimbursement was by the fact of settlement held to be established; (b) Castor v. Bass, supra, where the workman\u2019s recovery from the third party was less than the insurer\u2019s contingent workmen\u2019s compensation liability and because of the third party recovery, the employee could recover no further compensation; (c) White v. New Mexico Highway Commission, 42 N.M. 626, 83 P.2d 457 (1938), where the workman\u2019s settlement with the tortfeasor resulted in the workman being unable to recover any compensation; and, (d) Brown v. Arapahoe Drilling Company, 70 N.M. 99, 370 P.2d 816 (1962), where the workman\u2019s failure to recover from the third party did not foreclose his right to compensation. In each of these cases, resolution of the issues between the workman and the third party controlled both the rights and liabilities of the compensation insurer.\nThe cases referred to in the preceding paragraph show that reimbursement of the insurer is necessarily affected by the results of the litigation between the workman and the third party. If the workman obtains a settlement, or recovers from the tortfeasor, the right to reimbursement is established. If the workman fails to recover, the right to reimbursement is lost.\nSince the interests of the compensation insurer are necessarily affected, does that result in USF&G being an indispensable party in this case ? \u201c. ... An indispensable party is one whose interests will necessarily be affected by a judgment in a particular case. . . .\u201d Home Fire & Marine Insurance Company v. Schultz, 80 N.M. 517, 458 P.2d 592 (1969); State Farm. Mut. Auto. Ins. Co. v. Foundation R. Ins. Co., supra; State v. Scarborough, supra. Definition of indispensable party in terms of \u201cnecessarily affected\u201d requires elaboration. Miller v. Klasner, 19 N.M. 21, 140 P. 1107 (1914) states:\n. . It is a familiar and fundamental rule that a court can make no decree affecting the rights of a person over whom it has not obtained jurisdiction, or between the parties before it, which so far involves or depends upon the rights of an absent person, that complete and final justice can not be done between the parties to the suit without affecting those rights. . . . The interest of Ellen Casey was necessarily so interwoven with the interests of the parties to this suit, that no decree could possibly be made, affecting the rights of those before the court, without operating upon her interest. . . . \u201d [Emphasis added]\nSee C. de Baca v. Baca, 73 N.M. 387, 388 P.2d 392 (1964).\nAlthough the results of the litigation between the workman and the third party necessarily affect the insurer because that result determines whether the insurer will in fact be reimbursed, the third party litigation does not involve the insurer\u2019s right to reimbursement. That right is conferred by \u00a7 59-10-25, supra. Further, the issues in the third party litigation do not depend upon the insurer\u2019s right to reimbursement. Complete and final justice can be done between the workman and the third party without affecting any right of the insurer to the reimbursement accorded by \u00a7 59 \u2014 10\u2014 25, supra.\nIn summary \u2014 the general law of subrogation is not applicable to the right of reimbursement accorded by \u00a7 59-10-25, supra. The absence of USF&G as a party to this action did not result in splitting the cause of action because the cause of action is the workman\u2019s. The absence of USF&G as a party did not forfeit USF&G\u2019s right to reimbursement. Its right to reimbursement did not depend on it being a party to the third party litigation at the time judgment was entered. While USF&G is bound by the results of the third party litigation, it is bound whether or not it is a party to that litigation. To be an indispensable party, the rights of the absent party must be involved or the issues between the parties must depend upon the rights of the absent party. Our conclusion is that USF&G was not an indispensable party to plaintiff\u2019s suit against Springer. Compare Sharrock v. Perkins, 297 F.Supp. 1285 (W.D.Okl.1969).\nSetting aside default judgment.\nThe indispensable party issue, which has been discussed and decided, attacked the propriety of entering the default judgment. This issue attacks the correctness of the trial court\u2019s decision in refusing to set that judgment aside.\nThe motion to set aside the default judgment was pursuant to \u00a7\u00a7 21-1-1(55) (c) and 21-1-1(60) (b), N.M.S.A.1953 (Repl.Vol. 4). See Starnes v. Starnes, 72 N.M. 142, 381 P.2d 423 (1963).\nTwo issues were raised by the motion: (1) the existence of grounds for setting aside the default judgment and (2) the existence of a meritorious defense. Singleton v. Sanabrea et al., 35 N.M. 491, 2 P.2d 119 (1931); see Wakely v. Tyler, 78 N.M. 168, 429 P.2d 366 (1967); Compare Brown v. Lufkin Foundry & Machine Company, 83 N.M. 34, 487 P.2d 1104 (Ct.App.1971).\nThe moving party has the burden of showing he is entitled to the relief sought, Singleton v. Sanabrea et ah, supra, and, thus, must carry that burden on each of the issues. The motion is properly denied if the moving party fails to show the existence of grounds for setting the default judgment aside. Stalick v. Wilson, 21 N.M. 320, 154 P. 708 (1916); see Wooley v. Wicker, 75 N.M. 241, 403 P.2d 685 (1965). The motion is also properly denied if the moving party fails to show the existence of a meritorious defense. Gomes v. Williams, 420 F.2d 1364 (10th Cir.1970),\nDefendant\u2019s motion alleged that its default was due to mistake, inadvertence and excusable neglect \u2014 thus, it alleged the existence of grounds for setting aside the default judgment. See \u00a7 21-1-1 (60) (b)(1), supra. The motion also alleged \u201c . a meritorious defense to all or part of plaintiff\u2019s claim.\u201d The motion was supported by several affidavits. Plaintiff did not file opposing affidavits, but did introduce one exhibit in opposition to the motion. In denying the motion, the trial court found that \u201c . . . Defendant has failed to prove the allegations contained in its motion. . . .\u201d\nThe showing made by defendant\u2019s affidavits, which go to the existence of grounds for setting aside the default judgment are essentially uncontroverted. \u201c . . . [Wjhere there are no intervening equities, the trial court should be liberal in detemining what is a good excuse. .\u201d Weisberg v. Garcia, 75 N.M. 367, 404 P.2d 565 (1965). The exhibit introduced by plaintiff in opposition to the motion is not directed to the grounds asserted for setting aside the default judgment. The record before us does not show any intervening equities.\nSince no intervening equities have been shown, the trial court was required to be liberal in examining defendant\u2019s affidavits in determining whether defendant\u2019s default was due to mistake, inadvertence, or excusable neglect. A liberal reading of the affidavits, which are not controverted, established grounds for setting aside the default judgment. In ruling against defendant on the first issue, the trial court erred because the only showing before the trial court was that grounds existed for setting aside the default judgment. In so holding, we have not overlooked the rule that the trial court\u2019s decision was discretionary and is to be set aside only for an abuse of discretion. Sears v. Board of Trust. of Anton Chico Land Grant, 83 N.M. 372, 492 P.2d 643 (1971); Guthrie v. United States Lime and Mining Corporation, 82 N.M. 183, 477 P.2d 817 (1970). On the record here, the trial court acted unreasonably in disregarding the only showing made and, thus, abused its discretion. Conejos County Lbr. Co. v. Citizens Savings & L. Ass\u2019n, 80 N.M. 612, 459 P.2d 138 (1969).\nWe reach a different result in considering the second issue raised by the motion \u2014 the existence of a meritorious defense. In resolving this issue we follow the statement in Singleton v. Sanabrea et al., supra, to the effect that the existence of a meritorious defense, as shown by the moving party\u2019s affidavits, cannot be controverted by counter affidavits. Thus, we do not consider the exhibit' introduced by plaintiff; we consider only the showing made by defendant.\nThe only showing in defendant\u2019s affidavits going to the existence of a meritorious defense is a statement which reads:\n\u201c . . . that based upon a preliminary investigation of the accident or incident, which is the subject matter of the above suit, affiant is informed and believes that it was not caused by the negligence or conduct of Springer Corporation, but probably by conduct on the part of the manufacturer of the equipment involved, which equipment was delivered by Springer Corporation, as delivering agent for the manufacturer, to plaintiff\u2019s employer.\u201d\nSince the quoted statement is on \u201cinformation and belief,\u201d there is a question as to whether it is entitled to any consideration at all. Singleton v. Sanabrea et al., supra. In this appeal we assume the statement in the affidavit may be considered.\nThe motion asserts that defendant has a meritorious defense; that defendant has a meritorious cause of action against third parties; that to permit the judgment to stand will prevent defendant from protecting itself by asserting legal rights it has against others; that there have been no intervening equities; that the judgment is excessive and not supported by evidence; and, that to permit the judgment to stand would work a gross injustice upon defendant.\nThe argument to the trial court restated the grounds named in the motion. Defense counsel also stated:\n\u201c. . . Although we are not clearly aware of all the circumstances surrounding the plaintiff\u2019s injury in this case, our preliminary investigation since last week when the Writ of Execution was served on us, indicates that the plaintiff was operating a piece of machinery which was delivered to his employer by Springer Corporation. And that the machinery was made by a company called Wabco. Apparently what happened, as far as we can find out, something went wrong with the machinery and the plaintiff was thereby injured \u2014 a wheel came off. Well now, Springer delivered that machine as the agent for the manufacturer and Springer is informed and fully believes they have a cause of action in this case over and against the manufacturer Wabco which is a meritorious crossclaim. As a matter of fact, Springer feels that it was not negligent in any way. Now this machine was brand new and Springer feels that it has a meritorious defense \u2014simply that it wasn\u2019t negligent, that somebody else was negligent. And also the default judgment was entered on the basis of the prayer of the complaint and Mr. Cowper tells me that it was on the testimony with respect to the damages, but I can\u2019t imagine a $250,000.00 judgment being actually justified on litigated basis. . . .\u201d\nCounsel for defendant also referred to the statement quoted above from one of the defense affidavits; asserted that a simple denial of negligence is equivalent to a showing of a meritorious defense; reiterated that somebody other than Springer was negligent; and contended it would be a gross injustice to let the default judgment stand because Springer is a significant contributor to the area\u2019s economic base and \u201c$250,000.00 is a lot of money.\u201d\nWhat satisfies the requirement that a party show a meritorious defense ? Trueblood v. Grayson Shops of Tennessee, Inc., 32 F.R.D. 190 (E.D.Va.1963) states:\n\u201c. . . the bare wording of Rule 60(b) does not require the showing of the existence of a meritorious defense but this is judicially established and apparently is left within the sound discretion of the trial court. [Tjhere is no universally accepted standard among courts as to what satisfies the requirement that a party show a meritorious defense. Roughly the cases fall into three categories. Some courts have insisted upon a specific recitation of facts in the motion, answer or affidavit which, if proven, would constitute a meritorious defense (citations omitted). Another approach to the problem is that group of cases which accepts allegations, conclusions and even denials in the moving party\u2019s motion or supporting affidavit (citations omitted). Finally, the courts have treated oral statements, affidavits or the court\u2019s own assumption as sufficient indication of the existence of a meritorious defense. . . . \u201d\nWe assume, but do not decide, that statements in the motion and the arguments of counsel, could be properly considered. Thus, our review includes the affidavit, the motion and the argument of counsel. Having assumed that everything presented to the trial court is to be considered, regardless of the form of the presentation, we now must determine what showing is required to be made in that presentation.\nTrueblood v. Grayson Shops of Tennessee, Inc., supra, required a prima facie showing of a meritorious defense. In Gomes v. Williams, supra, the attorney seeking to set aside the default judgment asserted defendant had a good defense to plaintiff\u2019s claim. The federal Court of Appeals stated:\n\u201c. . . Such a bald allegation, without the support of facts underlying the defense, will not sustain the burden of the defaulting party under Rule 60(b). In an attempt to determine the meritorious nature of a defense, the trial court must have before it more than mere allegations that a defense exists. This alone was sufficient basis to deny Rule 60(b) relief. . . .\u201d\nOther federal cases requiring a showing of the facts underlying the defense are: Madsen v. Bumb, 419 F.2d 4 (9th Cir.1969); Robinson v. Bantam Books, Inc., 49 F.R.D. 139 (S.D.N.Y.1970); Nelson v. Coleman Company, 41 F.R.D. 7 (D.S.C.1966). See also Consolidated. Masonry & Fireproof, Inc. v. Wagman Const. Co., 383 F.2d 249 (4th Cir.1967). The federal decisions are of importance because \u00a7 21 \u2014 1\u2014 l(60)(b), supra, is derived from the federal rule of the same number. See Compiler\u2019s note to \u00a7 21-1-1(60) (b), supra.\nSingleton v. Sanabrea et al., supra, decided prior to our Rule 60(b), supra, quotes with approval from a legal text, as follows:\n\u201c \u2018. . . on the application to vacate the court does not try and determine whether or not a . defense exists in point of fact, but only whether such a prima facie case has been made as ought to be tried and determined in a regular way.\u2019 \u201d [citation omitted]\nTo make a prima facie showing that a defense exists, the moving party must, consistent with the above cited federal decisions, allege facts underlying the defense. An unsupported statement of \u201cno negligence\u201d is insufficient.\nHere, the affidavit, the motion and the argument of counsel all conclude that there is a meritorious defense but there are no underlying facts in support of this contention. Assuming, but not deciding, that the conclusion of a claim over against a third party may be included within a \u201cmeritorious defense,\u201d there are no underlying \u2022facts in support of the third party claim.\nNew Mexico decisions recognize that liability and damages are separate concepts. See Cherry v. Stockton, 75 N.M. 488, 406 P.2d 358 (1965); Baros v. Kazmierczwk, 68 N.M. 421, 362 P.2d 798 (1961). Compare N.M.U.J.I. 14.1. Matters involving large sums of money should not be determined by default judgment if it can be reasonably avoided. Hutton v. Fisher, 359 F.2d 913 (3rd Cir.1966); Rooks v. American Brass Company, 263 F.2d 166 (6th Cir.1959); Tozer v. Charles A. Krause Milling Co., 189 F.2d 242 (3rd Cir.1951). Accordingly, we assume, but do not decide, that the damages awarded in the default judgment should be considered separately from any question of liability.\nThe defense affidavit, quoted above, does not refer to the amount of damages. The motion asserts the judgment is excessive and not supported by substantial evidence. Counsel\u2019s argument questions whether a judgment of $250,000.-00 would have been returned if the matter had been litigated and reminds us that the judgment is for a substantial sum. None of the foregoing indicates any underlying fact as a defense to the amount of the damages awarded. Only in this Court was a theory of excessive damages revealed; here, it was argued that there was a lack of proof as to plaintiff\u2019s lost future earnings and plaintiff\u2019s permanent disability. On the showing made concerning the amount of damages, the trial court could properly conclude that it provided no reasonable basis for opening up the damage award.\nNo underlying facts having been presented, to the trial court concerning a defense to plaintiff\u2019s claim on the theory of nonliability, of liability over against a third party or of excessive damages, the trial court could properly rule that defendant had failed to show a meritorious defense. Whether the judges of this Court would have reached the same result is not the issue. The issue is whether the trial court abused its discretion in reaching this result \u2014 that is, whether it acted arbitrarily or unreasonably. Conejos County Lbr. Co. v. Citizens Savings & L. Ass\u2019n, supra. On this record, we cannot say as a matter of law that the trial court\u2019s action was arbitrary or unreasonable.\nThere remains for consideration the contention that it would be a gross injustice to allow the judgment to stand. Such a claim involves \u00a7 21-1-1 (60) (b)(6), supra, which authorizes relief for \u201c. any other reason justifying relief from the operation of the judgment. . . .\u201d Our understanding is that this provision also requires a showing of a meritorious defense. See 7 Moore\u2019s Federal Practice \u00b660.27 (1972). The trial court could properly rule that such a showing was not made in this case.\nThe default judgment is affirmed.\nIt is so ordered.\nHENDLEY, J., concurs.\nSUTIN, J., concurring in part and dissenting in part.", "type": "majority", "author": "WOOD, Chief Judge." }, { "text": "SUTIN, Judge\n(concurring in part and dissenting in part).\nI concur with the majority opinion that U.S.F.&G. is not an indispensable party, and I dissent for failure to set aside the default judgment, or at least to reverse the judgment to try the issue of damages.\nI. U.S.F.&G. is not an Indispensable Party.\nDefendant contends that U.S.F.& G. was an indispensable party. This was an afterthought. Under this record, U.S.F.&G. had no claim against defendant for reimbursement of compensation benefits because U.S.F.&G. was to be reimbursed from plaintiff\u2019s judgment. U.S.F.&G. was, therefore, not an indispensable party.\nThe reason for the lengthy analysis in the majority opinion was to clear up the judicial mess of the past caused by language used in \u00a7 59-10-25, supra. The time has come to avoid skirting around a conflict in decisions, error appearing therein, and vagueness of expression. A definite rule is necessary to guide the legal profession and district courts in the future. Legislative amendment of \u00a7 59-10-25, supra, is mandatory.\nII. The Trial Court Failed to Exercise Discretion Before Entry of Default Judgment.\nThe onerous consequences which follow a default judgment require perspective of our approach to this subject.\nIn Gilbert v. New Mexico Const. Co., 35 N.M. 262, 295 P. 291 (1931), Justice Watson said:\nTo deprive a party of his day in court is a severe penalty for his merely negligent failure to appear. Such penalty should be avoided if it can be done without impeding or confusing administration or perpetrating injustice.\nCourts should bear in mind that default judgments are not favored since the law prefers that claims be tried on their merits, Wooley v. Wicker, 75 N.M. 241, 403 P.2d 685 (1965), in the absence of a showing of prejudice to the plaintiff. Ballard v. Billings & Spencer Co., 36 A.D.2d 71, 319 N. Y.S.2d 191 (1971); Tolson v. Hodge, 411 F.2d 123 (4th Cir.1969); Horn v. Intelectron Corp., 294 F.Supp. 1153 (S.D.N.Y.1968).\nRule 55(b) [\u00a7 21-1-1(55) (b), N.M.S.A. 1953 (Repl.Vol. 4)] did not declare \u201copen season\u201d against defaulting defendants. Ballard, supra. It must be liberally construed in order to provide relief from the onerous consequences of defaults arid default judgments. Any doubts about whether relief should be granted should be resolved in favor of the defaulting defendant. Tolson, supra. In fact, only a slight abuse of discretion may justify reversal. Barr v. Rhea Radin Real Estate, Inc., 251 A.2d 634 (D.C.App.Ct.1969).\nIt has often been said that matters involving large sums .of money should not be determined by default judgment if it can reasonably be avoided. Tozer v. Charles A. Krause Milling Co., 189 F.2d 242 (3rd Cir.1954); Horn v. Intelectron Corp., supra; Trueblood v. Grayson Shops of Tennessee, Inc., 32 F.R.D. 190 (D.C.Va.1963).\nA careful reading of the cases on this subject will prove that default judgments should be granted only where a party has evidenced a disregard for the judicial process or hardship will result. Kinnear Corporation v. Crawford Door Sales Company, 49 F.R.D. 3 (D.S.C.1970).\nWe must remember that Rules of Civil Procedure are in the administration of justice and transcend in importance mere inconvenience to a party litigant. Every man is entitled to his fair day in court. Salitan v. Carrillo, 69 N.M. 476, 368 P.2d 149 (1961).\nWith this philosophical legal approach,' we encounter a new basis for reversal under Rule 55(b), supra, a matter of first impression on this subject.\nDoes the district court have a duty to investigate the failure of defendant to appear and then, based upon the facts and circumstances, exercise his discretion in granting or denying a default judgment? In my opinion, the answer is \u201cyes.\u201d\nRule 55(b), supra, provides in part: Judgment by default may be entered as follows: in all cases the party entitled to a judgment by default shall apply to the court therefor; ... If, in order to enable the court to enter judgment . it is necessary to take an account or to determine the amount of damages or to establish the truth of any averment by evidence or to make an investigation of any other matter, the court may conduct such hearings or order such references as it deems necessary and proper. . . . (Emphasis added).\nThis division of the rule was derived from Rule 55(b) of The Federal Rules of Procedure with deletion of paragraph (1) dealing with the entry of default judgment by the clerk. Because paragraph (1) exists in The Federal Rules of Procedure, the question of hearings and references has not arisen in federal courts.\nThe grant or denial by the court of entry of \u201ca default judgment lies within the sound discretion of the trial court. This proposition is supported by good sense. And its soundness is also demonstrable by reference to Rule 55(c), which authorizes the trial court to set aside an entry of default on a showing of good cause.\u201d 6 Moore\u2019s Federal Practice \u00a7 55.05(2). (1972).\nWhat is meant by \u201cjudicial discretion?\u201d It has been variously defined in Independent, etc., Co. v. N.M. C.R. Co., 25 N.M. 160, 178 P. 842 (1919), and Pankey v. Hot Springs Nat. Bank., 42 N.M. 674, 84 P.2d 649 (1938). When these definitions are coalesced they mean to me that a trial judge should act honestly in accordance with what is fair, equitable and wholesome as discerned by his personal wisdom and experience. He should note the difference between right and wrong, and he should avoid mere whim and caprice, prejudice and affectation. This discretion is governed by principle and by regular procedure for the accomplishment of the ends of right and justice.\nHuman nature dictates that the exercise of discretion will change from judge to judge.\n\u201cAn abuse of discretion is said to occur when the court exceeds the bounds of reason, all the circumstances before it being considered.\u201d Independent, etc., Co., supra. It is obvious that if a trial judge does not exercise discretion, his ruling is arbitrary and capricious.\nWhen plaintiff appeared for default judgment, the following occurred:\nMR. COWPER: Your honor, this is a default matter but the Court wanted to hear evidence from Mr. Herrera before setting damages.\nTHE COURT: How much damages are you asking?\nMR. COWPER: We are asking for $250,000.00.\nTHE COURT: What happened to the Defendant ?\nMR. COWPER: The Defendant has simply not answered, not responded at all.\nTHE COURT: Alright, let\u2019s hear the testimony.\nAt this point in the proceedings, no discretion was exercised. No facts or evidence relative to non-appearance was presented.\nThe defendant is a well known, large, solvent corporation. Should inquiry have been made about the failure of defendant to appear? Does common sense indicate that defendant would abhor a default judgment of $250,000.00? Does justice dictate that defendant would want to have its day in court? Was this a matter about which the trial court should make an investigation?\nAn \u201cinvestigation\u201d is a \u201cjudicial inquiry.\u201d State ex rel. Smilack v. Bushong, 93 Ohio App. 201, 112 N.E.2d 675 (1952). When a defendant is served with process and fails to appear, inquiry should be made. The defendant should be notified that a default has been entered; that defendant may appear and may offer, orally or by affidavit, such evidence as it may desire, and it may file a proposed answer to show whether it has a meritorious defense, together with statements of witnesses and reports of any investigation.\nIf a hearing is held, the court will then determine, upon a review of the foregoing, whether defendant has evidenced a disregard for judicial process, whether defendant has a meritorious defense, and whether hardship to plaintiff will result. See Trueblood, supra; Kinnear Corporation, supra. Trueblood, supra, was cited in Wakely v. Tyler, 78 N.M. 168, 429 P.2d 366 (1967).\nBased upon the facts, evidence and testimony, the trial court can then exercise its discretion and determine whether to grant or deny default judgment. This procedure is necessary to enable the court to enter judgment.\nSince the trial court did not exercise its discretion for entry of the default judgment, the default judgment should be vacated and this cause should be remanded to the trial court to make an inquiry, and to conduct a hearing, if necessary, before entry of its order.\nIII. The Existence of Grounds for Setting Aside the Default Judgment are Present.\nI concur with the majority opinion that grounds for setting aside the default judgment exist pursuant to Rule 60(b) because defendant\u2019s default was due to excusable neglect.\nIV. Defendant Established a Meritorious Defense to Plaintiffs Complaint.\nWhat is a \u201cmeritorious defense\u201d to a claim for relief based on negligence ?\nA meritorious defense means \u201ca defense worthy of presentation, not one which is sure of success.\u201d If there is a conflict in evidence over whether the defendant was guilty of negligence, or the plaintiff guilty of contributory negligence, it is obviously a meritorious defense. Medford Red Cab, Inc. v. Duncan, 341 Mass. 708, 172 N.E.2d 260 (1961). We have no occasion to determine at this time whether the statements made or facts pleaded are sufficient in law. Barto v. Sioux City Electric Co., 119 Iowa 179, 93 N.W. 268 (1963); Spencer v. American United Cab Association, 59 Ill. App.2d 165, 208 N.E.2d 118 (1965); Dann v. Gumbiner, 29 Ill.App.2d 374, 173 N.E.2d 525 (1961); see, Annot., 174 A.L.R. 10 at 59, 132 (1948). On page 132, the author says:\nIn connection with actions for injuries to person or property based on defendant\u2019s negligence the commonest defense is a simple denial of any negligent conduct, and, as has been previously pointed out, this is generally regarded as meritorious for purposes of relief against a judgment.\nHowever, even though no precedent on the precise point has been uncovered, a \u201cdefense\u201d which will warrant opening of a default judgment is not made out by a claim over against a third party as defendant contends. Stone Conveyor Company v. Nickerson, Sup., 235 N.Y.S.2d 1017 (1962).\nIn its motion to set aside the default judgment, defendant stated it had a m\u00e9ritorious defense to all or part of plaintiff\u2019s claim. In support thereof, defendant submitted an affidavit of the vice president and secretary of defendant corporation. By sworn affidavit, defendant stated:\n. ; that based upon a preliminary investigation of the accident or incident, which is the subject matter of the above suit, affiant is informed and believes that it was not caused by negligence or conduct of Springer Corporation, but probably by conduct on the part of the manufacturer of the equipment involved, which equipment was delivered by Springer Corporation, as delivering agent for the manufacturer, to plaintiffs employer. (Emphasis added).\nSection 21-1-1(8) (b), N.M.S.A.1953 (Repl.Vol. 4) is entitled \u201cDefenses \u2014 Form of Denials.\u201d It reads in part:\nA party shall state in short and plain terms his defenses to each claim asserted and shall admit or deny the averments upon which the adverse party relies. If he is without knowledge or information sufficient to form a belief as to the truth of an averment, he shall so state and this has the effect of a denial. (Emphasis added).\n\u201cAnswers that set forth that defendant has not sufficient knowledge or information to form a belief in legal effect constitute denials.\u201d McHenry v. Ford Motor Co., 269 F.2d 18, at 23 (6th Cir.1959). This is typical where denials are-made by corporations because an officer of a corporation rarely has personal knowledge and must rely on information received from subordinates. National Millwork Corp. v. Preferred Mut. F. Ins. Co., 28 F.Supp. 952, at 953 (D.C.N.Y.1939).\nThus, in Wagg v. Hall, 42 F.R.D. 589 (D.C.1967) the court said:\n. . . Before granting a motion to vacate a default judgment, the courts invariably require either a specific recitation of facts that support a \u201creasonable showing\u201d of a meritorious defense . or else at least a credible alie gation that such a defense exists. (Emphasis added).\nA footnote says:\nThe single statement to the contrary in Trueblood v. Grayson Shops of Tennessee, Inc., 32 F.R.D. 190, 196 (E.D.Va.1963) is not supported by the cases cited therein.\nThis footnote is applicable to the quotation from Trueblood, supra, quoted in the majority opinion.\nPlaintiff claims that defendant, by contract of sale, sold the Wabco scraper to plaintiff\u2019s employer; that pursuant to this contract, defendant delivered the scraper to plaintiff\u2019s employer; that defendant was negligent in delivering the self loader to plaintiff\u2019s employer. If defendant\u2019s statement of facts, supra, were inserted in an answer, it would constitute \u201ca defense worthy of presentation.\u201d\nIn territorial days, in considering a motion to set aside a default judgment, the court, in Metzger v. Waddell, 1 N.M. 400, at 407-408 (1867) said:\nMotions of this kind are addressed to the sound discretion of a court, and in all ordinary cases where merit is shown, the courts consider it the exercise of sound discretion to grant such motions. In the effort to administer justice, which is the plain duty of all courts, such a motion is never refused unless there is no merit in-the defense set up, or there has been gross negligence on the part of a defendant. In the effort to administer justice, courts must look to the rights of all the parties litigant, and be guided by the lights of the decisions of other courts upon similar questions, under similar circumstances.\n\u201cJustice, justice shalt thou pursue,\u201d has been the guiding light in the administration of these legal principles.\nV. The Judgment was Excessive.\nDefendant\u2019s motion to set aside the default judgment claimed the judgment excessive and not supported by the evidence. In support of this point, defendant submitted requested findings that plaintiff was 31 years old with net take home pay of $540.-00 (per month); that plaintiff is not permanently disabled. See Dyne v. McCullough, 36 N.M. 122, 9 P.2d 385 (1932). These requested findings were based on plaintiff\u2019s testimony at the time of hearing on default.\nThe trial court found that defendant failed to prove the allegations contained in the motion and its motion was denied. The record supports defendant\u2019s requested finding that plaintiff was not permanently disabled and the court\u2019s finding is in error.\nThe entry of a default judgment against a defendant is not considered an admission by defendant of the amount of unliquidated damages claimed by plaintiff. 6 Moore\u2019s Federal Practice \u00a7 55.07 (1972 Ed.). A default judgment entered on well-pleaded allegations in a complaint establishes defendant\u2019s liability. Where damages are unliquidated and uncertain, Rule 55(b), supra, requires plaintiff to prove the extent of the injuries established by the default. Trans World Airlines, Inc. v. Hughes, 449 F.2d 51 (2nd Cir.1971).\nThis court has the power to remit an excessive judgment, Jackson v. Southwestern Public Service Company, 66 N.M. 458, 349 P.2d 1029 (1960), or reverse to try the issue of damages. Foster v. New Albany Machine & Tool Co., Inc., 63 N.J.Super. 262, 164 A.2d 492 (1960).\nA judgment of $250,000.00 for the injuries sustained by plaintiff is shockingly excessive. The least we can do in seeking justice is to reverse and require a hearing on the issue of damages.\nVI. Reversal Should be \"Upon Such Terms as are Just.\u201d\nRule 60(b), supra, provides that a trial court may relieve a party from a final judgment \u201cupon such terms as are just.\u201d That same rule should apply to this court. The defendant should be required to pay all costs, expenses and attorney fees incurred by plaintiff in this court and in the court below as a penalty in lieu of its day in court. 7 Moore\u2019s Federal Practice, at 239, 240 (1972).", "type": "concurring-in-part-and-dissenting-in-part", "author": "SUTIN, Judge" } ], "attorneys": [ "William H. Oldaker, Oldaker & Oldaker, Albuquerque, for defendant-appellant.", "Dennis Cowper, Chavez & Cowper, Belen, for plaintiff-appellee." ], "corrections": "", "head_matter": "508 P.2d 1303\nElmer A. HERRERA, Plaintiff-Appellee, v. SPRINGER CORPORATION, Defendant-Appellant.\nNo. 1024.\nCourt of Appeals of New Mexico.\nMarch 9, 1973.\nCertiorari Granted April 16, 1973.\nWilliam H. Oldaker, Oldaker & Oldaker, Albuquerque, for defendant-appellant.\nDennis Cowper, Chavez & Cowper, Belen, for plaintiff-appellee." }, "file_name": "0006-01", "first_page_order": 68, "last_page_order": 80 }