John B. Mitchell v. Arco Industrial Sales, Arco Packaging/Janitorial Sales, and John A. Mitchell

Summary

The Utah Court of Appeals held that Utah Rule of Civil Procedure 55 does not require an evidentiary hearing in every default case involving unliquidated damages when the damages can be calculated with mathematical accuracy. However, defaulted defendants must receive a full opportunity to be heard on damages, which the district court failed to provide because it allowed only the plaintiff to submit supporting expert evidence. The court vacated the damages award and remanded, while upholding the waiver of the statute-of-limitations defense and the propriety of prejudgment interest.

Holdings

1. Rule 55(b)(2) does not require an actual evidentiary hearing in every case involving unliquidated damages. Depending on whether the damages can be calculated with mathematical certainty, the district court may have discretion to determine damages through methods other than an in-person evidentiary hearing.
2. A defaulted defendant is entitled to a full opportunity to be heard on the issue of damages, even when the court determines damages without an in-person evidentiary hearing.
3. The statute of limitations defense was waived because the defendants' answer asserting the affirmative defense had been struck and the defendants could not revive the defense after default.
4. Prejudgment interest was proper because the damages were calculable, even though the parties disagreed about the appropriate method of calculation.

Questions Presented

1. Whether Utah Rule of Civil Procedure 55(b)(2) required an evidentiary hearing before the district court determined damages following entry of default.
2. Whether the defaulted defendants were nevertheless entitled to a full opportunity to be heard on the amount of damages.
3. Whether the statute of limitations defense was waived when the defendants' answer asserting it was struck.
4. Whether prejudgment interest was proper when the parties disagreed about the calculation of damages.

Disposition

vacated