Inherent judicial power does not amount to a “do-over”

Mollie Pawlosky Iowa Banking Law Dickinson Law Des Moines, Iowa

Posted on 07/28/2016 at 12:00 AM by Mollie Pawlosky

The Iowa Court of Appeals in Osthus v. Russell reversed a trial court’s exercise of inherent judicial power that set aside damages previously awarded by default.

Osthus filed suit, alleging the Russells’ dog bit him. A default judgment was entered in favor of Osthus. Based on Osthus’ affidavit, the court awarded judgment for medical bills and pain and suffering. Four months later, the Russells moved to vacate the default judgment under Iowa Rule of Civil Procedure 1.1012(2), alleging irregularity or fraud. After a hearing, the district court found no irregularity or fraud in granting the default judgment, but the court was troubled that the judgment was entered for pain and suffering without a hearing. The district court held that it had “inherent power to correct its own judgments” and chose to correct the Osthus judgment.

The court ordered the default judgment previously entered “shall not be disturbed,” but the court set aside the pain and suffering award and ordered a hearing on the award of damages. After the damages hearing, the district court denied all damages for pain and suffering. Osthus appealed the order setting aside the earlier award of pain and suffering and the later denial of all pain and suffering damages.

The Iowa Court of Appeals held that the district court found neither irregularity or fraud as required in Rule 1.1012(2) and denied the motion. However, the district court then granted relief by vacating the previously awarded pain and suffering damages and ordered a hearing on those damages. The Court of Appeals ruled that because the motion was denied, the district court had no authority under Rule 1.1012(2) to grant relief on the motion.

The Court of Appeals next considered whether the trial court acted under Rule 1.973(2). However, Rule 1.973(2) applies only prior to entry of default, and the district court acted after default was entered.

The Court of Appeals then considered whether the trial court had the “inherent power”—to set aside the pain and suffering damages and require the hearing that the court could have required under Rule 1.973(2) before the default. “Inherent judicial power” is the court’s broad power to do whatever is reasonably necessary to discharge the court’s traditional responsibilities.

The Osthus opinion lists the types of cases wherein inherent judicial authority had previously been upheld. Recognizing the compelling interest in the finality of judgments, the Court of Appeals ruled that vacating a final money judgment, entered by default or otherwise, without a rule, statute, or case law authorizing such action, is not the type of exercise of authority that has ever been recognized in Iowa as an inherent power. Because the trial court lacked authority to set aside the judgment, the district court erred and abused its discretion. The Court of Appeals, thus, reversed and reinstated the judgment as provided in the default judgment.

Osthus reminds that court’s use of inherent judicial power is fairly limited and typically allows the courts only to take ancillary actions necessary to achieve the court’s basic functions. For additional information regarding Osthus v. Russell or other topics of commercial litigation, contact Mollie Pawlosky.

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