SALT LAKE CITY, Utah -- The Utah Supreme Court ruled in favor of Wheeler RV, which is located in Las Vegas, and returned a breach of contract case to lower courts for further consideration, Leagle reported today.

The case was brought by William and Donna Judson, who secured a default judgment against Wheeler RV Las Vegas on a complaint asserting breach of contract and misrepresentation claims arising out of the Judsons' purchase of a recreation vehicle from Wheeler.

According to Leagle, the allegations in the plaintiffs' complaint noted the Judsons purchased an RV from Wheeler in 2002 for $124,527.50. Wheeler failed to disclose at the time of sale that the RV was a manufacturer's buyback, the complaint read. Though the Judsons later sold the RV, they were forced to buy it back when it came to light that the vehicle was a manufacturer's buyback.

The Judsons then filed suit in the Fifth District Court, asserting claims for breach of contract and misrepresentation and seeking compensatory damages of $147,274.08, including punitive damages, attorney fees, and costs. No answer was filed on behalf of Wheeler, and on Nov. 27, 2007, the Judsons moved for a default judgment.

However, on Feb.29, 2008, Wheeler filed a timely motion to set aside the default judgment. Submitted together with the Rule 60 motion were a pair of affidavits that, among other things, attempted to justify Wheeler's failure to answer the complaint on the basis of an unwritten agreement. Specifically, Sharon Nelson, Wheeler's attorney, stated that in the fall of 2007 she "contacted plaintiff's counsel to inform him that the company he sued was not the company from which his clients purchased their recreational vehicle."

She further attested as follows, "Based upon our conversation, certain documentation was requested by Plaintiffs' counsel, which I provided. During the exchange of documentation, it was understood that [Wheeler] would be given an open extension to answer. Despite the fact that the amount of money involved in the dealer's change of ownership is wholly irrelevant to this proceeding, Plaintiffs' counsel demanded this information, and refused to sign a confidentiality agreement to cover any unredacted portions of documents pertaining to amounts paid for the dealership."

According to Leagle, a similar affidavit, submitted by the Judsons, conceded the existence of this agreement but noted that the extension was to be for a short time to allow Wheeler's counsel to produce evidence that the Judsons had sued the wrong party. The Judsons asserted that their counsel contacted Nelson on Oct. 15, 2007, demanding that either the requested information be provided or that an answer be filed.

On Oct. 30, 2007, the Judsons' counsel allegedly received a bill of sale, but not the entire agreement related to the alleged sale of the dealership. On Nov. 1, 2007, the Judsons received a second fax from Nelson requiring that they sign a confidentiality agreement before any further documents were to be provided. After allegedly receiving no response and having no further contact with Nelson, the Judsons filed an application for entry of default and a motion for default judgment on Nov. 27, 2007.

In moving to set aside the default judgment, Wheeler made explicit reference to separate subdivisions of Rule 60(b), which allows courts to relieve a party from a final judgment for "mistake, inadvertence, surprise, or excusable neglect. On this point, Wheeler asserted that the repeated contact between counsel for both Wheeler and the Judsons, as well as the absence of effective notice of the default proceedings, rendered Wheeler's failure to respond to the default proceedings the result of "surprise, or excusable neglect."

To read the full ruling on Leagle.com, click here.