High court reverses ruling that awarded Joeten $206

The CNMI Supreme Court has reversed the Superior Court’s final judgment that awarded Joeten Motor Company Inc. $120 in attorney’s fees instead of its request for $475, and $86 in costs instead of its request for $261, in connection with its lawsuit against a customer who defaulted on car payments.

In their opinion on Monday, the justices found that Superior Court Associate Judge Wesley M. Bogdan erred in vacating the clerk of court’s entry of default judgment and abused his discretion in failing to award Joeten the full requested attorney’s fees and costs. The justices remanded the case to the Superior Court for reentry of the clerk’s default judgment.

Manglona

Associate Justice John A. Manglona penned the high courts’ decision. Associate Justice Perry B. Inos and Justice Pro Tempore Robert J. Torres Jr. concurred with Manglona.

According to court records, Alicia DLG Leon Guerrero bought a car from Joeten but, after defaulting on her payments, Joeten, through counsel Michael A. White, sued to recover the balance. When Leon Guerrero failed to answer the complaint, Joeten asked for a default judgment against her, which the court granted.

Joeten asked for a default judgment of $2,836, consisting of $2,100 in principal, $475 in attorney’s fees, and $261 in costs. At a later hearing, Bogdan allowed the entry of default judgment as to the principal amount but vacated the attorney’s fees and costs, deeming these as “damages” the clerk may not administratively enter. The judge did, however, grant Joeten the opportunity to substantiate its request for attorney’s fees and costs. After another hearing, Bogdan awarded attorney’s fees of $120—a reduction by $280.

Because Bogdan maintained this action should have been filed as a small claims case rather than a civil case, he awarded costs of $86—a reduction of $175.

Joeten appealed to the high court to reverse the final judgment, asserting through White, that Bogdan incorrectly vacated the clerk’s default judgment. The company also argued that the principal sum, attorney’s fees, and costs collectively constitute a “sum certain” for which the clerk may enter default judgment. Joeten argued the attorney’s fees are a sum certain that can be readily determined under the court’s 1992 schedule of attorney’s fees in default judgment cases. It maintained that the costs were also a sum certain because they were supported by a sworn declaration.

In reversing Bogdan’s final judgment, the justices cited that Rule 60(a) permits the court to correct “clerical mistakes in judgments, orders or other parts of the record and errors therein arising from oversight or omission.” In this case, the justices said, Bogdan incorrectly relied on Rule 60(a) to justify vacating the default judgment, stating that “the default judgment…is hereby vacated under Commonwealth Rule of Civil Procedure 60(a) as the default judgment contained awards of damages the clerk of court may not administratively enter.”

The justices said this language does not express that the clerk made a mechanical, typographical, or mathematical mistake. Rather, the justices said, the language implies the clerk did not possess the authority to enter default judgment. In other works, the judge’s justification is premised on an allegedly legal error rather than a clerical error, they said. The justices said Bogdan’s invocation of Rule 60(a) to vacate the default judgment was therefore an abuse of discretion.

On the issue of attorney’s fees, the justices found that Joeten’s request for such fees and costs was a sum certain for which the clerk properly entered default judgment.

Joeten argued Bogdan abused his discretion in awarding costs lower than requested based on his belief this action should have been filed as a small claims action. The justices said Rule 83 provides the party with flexibility in filing its case as a small claims case or as a civil case; therefore, a reduced award of costs cannot be justified because Rule 83 provides such flexibility.

The justices said Bogdan abused his discretion because Rule 83 leaves the choice concerning what type of action to file with the party. The justices said the judge should have awarded costs incurred in filing the case as a civil action.