MacDowall v. MMG Insurance

SILVER, J. [¶ 1] MMG Insurance Company appeals from a judgment entered in the Superior Court (Somerset County, Jabar, J.) granting John MacDowall’s motion for a summary judgment in a reach and apply action to obtain insurance proceeds. MMG contends it did not receive a meaningful opportunity to participate in the underlying tort action and thus did not receive due process in the reach and apply action. We disagree and affirm the judgment. I. BACKGROUND A. The Tort Action [¶ 2] On March 22, 2001, during a snowstorm, John MacDowall was walking his bicycle along Route 100 in Palmyra when he was struck by a car driven by Corey Burrill. Burrill was driving his then-girlfriend’s father’s car. At the time of the accident, Burrill and the automobile were covered by liability insurance under a policy issued by Maine Mutual Fire Insurance Company. Maine Mutual is a predecessor of MMG, and MMG succeeded to all claims made against Maine Mutual policies. [¶ 8] After the accident, MacDowall’s attorney commenced settlement negotiations with a representative of MMG. These negotiations began on September 1, 2001, and ended without resolution on November 19, 2001. [¶ 4] On June 12, 2002, MacDowall brought an action for negligence against Burrill. Burrill was served with the complaint on September 27, 2002. Burrill failed to respond to the complaint and a default judgment was entered on November 20, 2002. In December 2002, MMG became aware of the default judgment, and on January 28, 2003, it moved to remove the entry of default. The Superior Court denied the motion to remove the default. The court held a hearing on damages, which MMG participated in on behalf of Burrill. The court then entered a judgment of $124,874.96 against Burrill. Bur-rill appealed that decision to us, and we affirmed the judgment in a Memorandum of Decision on July 30, 2004. See MacDowall v. Burrill, No. Mem-04-112 (July 30, 2004). B. The Reach and Apply Action [¶5] Pursuant to the reach and apply statute, 24-A M.R.S. § 2904 (2006), Mac-Dowall brought suit against MMG to satisfy the judgment he had obtained against Burrill. MacDowall moved for a summary judgment. The Superior Court granted the motion, awarding $141,252.56 to Mac-Dowall. [¶ 6] Pursuant to M.R. Civ. P. 59(e), MMG moved to alter or amend the judgment to an award of $100,000, the insurance policy limit. The court granted the motion. MacDowall objected to the motion, and, in the alternative, moved to amend the judgment to include post-judgment interest and costs. The court granted the motion in part and amended the judgment to include interest and costs. This appeal followed. II. DISCUSSION [¶ 7] We review questions of law de novo. Blanchard v. Sawyer, 2001 ME 18, ¶ 5, 769 A.2d 841, 843. Pursuant to the reach and apply statute, if a judgment is recovered for loss or damage as specified in section 2903, the judgment creditor is allowed to have insurance money satisfy [1046] the judgment. 24-A M.R.S. § 2904.1 The statute imposes two requirements: (1) “when the right of the action accrued, the judgment debtor was insured against such liability,” and (2) “before the recovery of the judgment the insurer had had notice of such accident.” Id. [¶ 8] Although the plain language of the statute merely requires notice before the judgment is recovered, we have determined that to comport with due process notice must be given at a “meaningful time in the proceedings.” Michaud v. Mut. Fire, Marine & Inland Ins. Co., 505 A.2d 786, 789-90 (Me.1986). Presented with facts similar to the facts of the present case, we determined in Michaud what procedural moment is “meaningful.” Id. [¶ 9] In Michaud, the defendant, Mutual Fire, an insurance company, received notice of a malpractice claim against its insured only after a default judgment as to liability was entered against the insured. Id. at 787. Although Mutual Fire was informed of the entry of the default judgment before the hearing on damages, it chose not to participate in the hearing, and the plaintiff was awarded a final monetary judgment. Id. We determined that meaningful notice was afforded to Mutual Fire after the entry of a default, but before that default was rendered final. Id. at 790. We supported that holding by reasoning that Mutual Fire could be relieved from the entry of default through a showing of good cause. Id. As the judgment was not final, Mutual Fire did not have to face the higher burden of setting aside the judgment pursuant to M.R. Civ. P. 60(b). Id. Instead, under a good cause standard, Mutual Fire had to show: (1) a good excuse for a failure to answer or appear, and (2) a meritorious defense. Id. at 790-91. Mutual Fire was afforded the opportunity to present a claim for good cause, and that opportunity was “sufficiently meaningful to satisfy due process.” Id. at 791. [¶ 10] We have “long recognized that the essence of due process is notice and an opportunity to be heard.” Patrons Oxford Ins. Co. v. Harris, 2006 ME 72, ¶ 13, 905 A.2d 819, 825 (quotation marks omitted). In a reach and apply action pursuant to section 2904, an insurer must be given “notice of a claim such that it has a ‘meaningful opportunity to defend its interests.’ ” Id. (quoting Jacques v. Am. Home Assurance Co., 609 A.2d 719, 721 (Me.1992)). In the context of section 2904, due process seeks to ensure that an opportunity is afforded to the insurer; “[w]e evaluate only the opportunity available at the time [the insurer] received notice to determine whether that opportunity was sufficiently meaningful to satisfy due process.” Michaud, 505 A.2d at 791. [¶ 11] Thus, the factual distinctions between Michaud and the present case— MMG moved to remove the entry of default entered against its insured and contested damages — do not matter. MMG was afforded the same opportunities as the insurer in Michaud, and we have deter [1047] mined that those opportunities meet the requirements of due process. [¶ 12] The dissent properly outlines the circumstances of the accident in the light most favorable to MMG. However, those circumstances are only minimally relevant to our decision. [f 13] Armed with the very facts outlined by the dissent, MMG attempted to remove the default. The Superior Court rejected MMG’s contentions. On appeal, we determined that the Superior Court did not abuse its discretion in determining that MacDowall’s failure to notify MMG did not provide good cause for Burrill’s failure to respond to MacDowall’s complaint. Thus, we rejected MMG’s contention, now advanced by the dissent, that the facts of this case constitute a good excuse for Burrill’s failure to answer. [¶ 14] Further, whether MMG had a good excuse or not is irrelevant to our inquiry in the present case. Our judgment is based on whether MMG received due process. We make that determination by examining the opportunities afforded to MMG. See id. MMG had the opportunity to remove the default. It was unsuccessful. MMG also had the opportunity to contest damages. Those opportunities are sufficiently meaningful to satisfy due process. [¶ 15] MMG’s other contention that the court erred in awarding MacDowall costs and post-judgment interest does not merit discussion. The entry is: Judgment affirmed. Footnotes [1] Section 2904 reads in relevant part: Whenever any person, administrator, executor, guardian, recovers a final judgment against any other person for any loss or damage specified in section 2903, the judgment creditor shall be entitled to have the insurance money applied to the satisfaction of the judgment by bringing a civil action, in his own name, against the insurer to reach and apply the insurance money, if when the right of the action accrued, the judgment debtor was insured against such liability and if before the recovery of the judgment the insurer had had notice of such accident, injury or damage. The insurer shall have the right to invoke the defenses described in this section in the proceedings. None of the provisions of this paragraph and section 2903 shall apply: