A Rapid City, S.D., apartment owner, Barker & Little Inc., owes more than $24,000 in damages because it waited too long to defend itself against a lawsuit filed by a woman who was kicked out of her apartment, a split South Dakota Supreme Court has ruled.
In the opinion issued last week, the court upheld a circuit judge’s ruling that found Barker & Little owes damages to Laura Peters after the company let five years go by without taking the legal steps necessary to keep its defense alive. The award includes $15,000 in punitive damages.
Peters alleged she paid her share of the rent but was locked out of the apartment in September 2002. She said the company took her possessions, destroyed her property, caused her to lose her subsidized housing and caused her to suffer humiliation and emotional distress.
When Barker & Little did not answer the lawsuit on time, Peters sought a default judgment in 2003. The company then sought to set aside that default judgment because of excusable neglect, arguing the paperwork might have been misplaced when the company moved locations.
Circuit Judge Jeff W. Davis ruled at a hearing in 2003 that he would set aside the default judgment, but the company never prepared a written order as directed by the judge so the default judgment never was formally thrown out. In the following years, Peters and the company failed to reach a settlement.
After Barker & Little learned in 2007 that the original default judgment still existed, it again sought last year to set it aside because of excusable neglect. Davis rejected the request and affirmed the $24,231 judgment.
Three Supreme Court justices upheld the circuit judge’s ruling, agreeing that the company did not establish excusable neglect.
“Barker & Little failed to show its five-year delay was reasonable under the facts of the case,” Justice Judith K. Meierhenry wrote for the court majority.
Justice John J. Konenkamp said he also would uphold the default judgment but believes additional court hearings should be held to determine the correct amount of damages.
Justice Richard Sabers said the default judgment should be thrown out so a hearing can be held on all the damages. The $24,000 default judgment gave Peters an inappropriate windfall, he said.
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