Frye v. Roseburg Forest Prods. Co.
Decision Date | 21 January 2020 |
Docket Number | DA 19-0410 |
Citation | 2020 MT 10,398 Mont. 347,456 P.3d 573 |
Parties | Jerome "Jerry" FRYE, Plaintiff and Appellee, v. ROSEBURG FOREST PRODUCTS COMPANY, a foreign corporation; and DOE Defendants 1-3, Defendants and Appellants. |
Court | Montana Supreme Court |
For Appellants: Jeffrey B. Smith, Luc L. Brodhead, Garlington, Lohn & Robinson, PLLP, Missoula, Montana
For Appellee: David C. Berkoff, Berkoff Law Firm, P.C., Missoula, Montana
¶1 Roseburg Forest Products Company (Roseburg) appeals from the order of the Fourth Judicial District Court, Missoula County, denying its motion to set aside default judgment under M. R. Civ. P. 60(b)(1). We address the following issue on appeal:
Whether the District Court slightly abused its discretion in denying Roseburg’s Rule 60(b)(1) motion to set aside default judgment.
¶2 We affirm the District Court.
¶3 Jerome Frye worked for Roseburg until November 2018 when Roseburg terminated him. Roseburg is a large, multistate corporation with its headquarters in Oregon. On December 21, 2018, Frye filed a complaint against Roseburg in Missoula County, alleging violations of the Wrongful Discharge from Employment Act. Frye served Roseburg through its registered agent Minta Y. Johnson at the physical address of Roseburg’s Missoula office on January 4, 2019. The summons directed Roseburg "to file [its] answer and serve a copy thereof upon Plaintiff’s attorney within 21 days after the service of this summons" and advised, "in case of [Roseburg’s] failure to appear or answer, judgment will be taken against [Roseburg] by default, for the relief demanded in the Complaint."
¶4 Johnson is a controller at Roseburg’s Missoula facility. She is not an attorney. Johnson transmitted the summons and complaint to John Mikkelson, who is the Human Resources Manager at the Missoula office. Mikkelson also is not an attorney. Neither Johnson nor Mikkelson transmitted the documents to an attorney or the company’s legal department. Rather, Mikkelson attested that upon receiving the summons the Missoula office opened an investigation into Frye’s allegations, reviewed Frye’s work history with Roseburg, and interviewed relevant parties at the Missoula office. Roseburg did not file an appearance or an answer to the complaint with the District Court.
¶5 The Clerk of Court entered default against Roseburg on February 8, 2019. Frye moved for default judgment on March 7, 2019. The court set a hearing for March 21, 2019, and sent courtesy notice of the hearing to Roseburg’s physical address.1 Roseburg did not appear at the hearing. The court entered default judgment against Roseburg on March 25, 2019, in the amount of $237,659.60.
¶6 Frye mailed notice of the entry of judgment to the P.O. Box listed as Roseburg’s mailing address on the Secretary of State’s website. Roseburg received the notice on April 12, 2019. Counsel for Roseburg entered a notice of appearance and moved to set aside the entry of default judgment on April 19, 2019—105 days after Roseburg received the summons.
¶7 The District Court denied Roseburg’s motion to set aside default judgment. In its order, the District Court applied the four-part test from Blume v. Metropolitan Life Insurance Co. , 242 Mont. 465, 467, 791 P.2d 784, 786 (1990). The District Court found Roseburg had established a prima facie case that it had a meritorious defense to the allegations against it and judgment against Roseburg would be injurious to the company. The District Court denied the motion, however, because it determined Roseburg failed to proceed with diligence and Roseburg’s neglect was not excusable.
¶8 This Court reviews a district court’s denial of a motion to set aside a default judgment for a slight abuse of discretion. Detienne v. Sandrock , 2017 MT 181, ¶ 22, 388 Mont. 179, 400 P.3d 682 (citing Lords v. Newman , 212 Mont. 359, 364, 688 P.2d 290, 293-94 (1984) ). This standard requires this Court to weigh "the conflicting concerns of respecting the trial court’s sound discretion while recognizing the policy favoring trial on the merits." Lords , 212 Mont. at 364, 688 P.2d at 293.
¶9 A district court may set aside a default judgment under the provisions of M. R. Civ. P. 60(b). See M. R. Civ. P. 55(c). Under Rule 60(b)(1)—the provision at issue in this case—a default judgment may be set aside for "mistake, inadvertence, surprise, or excusable neglect." When reviewing the ruling from a district court on a motion to set aside default judgment under Rule 60(b)(1), we apply the conjunctive, four-part test set out in Blume . See Detienne , ¶ 29 ; Essex Ins. Co. v. Jaycie, Inc. , 2004 MT 278, ¶ 12, 323 Mont. 231, 99 P.3d 651. Under the Blume test, we consider: (1) whether the defaulting party proceeded with diligence; (2) whether the defaulting party’s neglect was excusable; (3) whether the defaulting party had a meritorious defense to the claim; and (4) whether, if permitted to stand, the judgment would affect the defaulting party injuriously. See Detienne , ¶ 29 ; Mont. Prof’l Sports, LLC v. Nat’l Indoor Football League, LLC , 2008 MT 98, ¶ 35, 342 Mont. 292, 180 P.3d 1142. Our review is guided by the "policy that every litigated case should be tried on the merits and thus judgments by default are not favored." Grizzly Sec. Armored Express, Inc. v. Armored Grp., LLC , 2009 MT 396, ¶ 12, 353 Mont. 399, 220 P.3d 661 (internal quotations omitted).
¶10 Roseburg challenges the District Court’s findings on the first and second Blume factors—that is, whether Roseburg proceeded with diligence and whether its neglect was excusable. We turn then to consideration of whether Roseburg’s neglect was excusable.
¶11 Roseburg argues that its neglect in answering the complaint was excusable under the circumstances. It maintains that it did not seriously disregard the judicial process because, although Johnson and Mikkelson failed to appreciate the procedural requirement of filing a response, they reacted to the allegations in earnest by opening an internal investigation into Frye’s employment with the company. Beyond that, Roseburg maintains that its neglect was rendered excusable, because Frye failed to make a reasonable attempt to reach out to it before obtaining default judgment. Roseburg acknowledges that the Rules of Civil Procedure did not require Frye to provide it with notice the clerk entered default, the motion for default judgment, or the order setting a hearing for default judgment, but Frye’s lack of consideration and indifference in failing to provide copies of these proceedings to Roseburg are factors that should have weighed heavily in the District Court’s analysis. Roseburg argues it lacked the opportunity to step in before the court entered default judgment because Frye did not provide these notices or attempt to contact it about the default proceedings.
¶12 In determining whether a litigant’s neglect was excusable, Grizzly Sec. Armored Express , ¶ 17 (internal quotations and citations omitted). But Whitefish Credit Union v. Sherman , 2012 MT 267, ¶ 20, 367 Mont. 103, 289 P.3d 174 (internal citations omitted). The court must consider the circumstances surrounding the default, including whether plaintiff’s actions contributed to the Defendant’s default. See, e.g. , Grizzly Sec. Armored Express, Inc. , ¶ 25 ( ).
¶13 Roseburg’s argument that Johnson’s and Mikkelson’s ignorance of legal procedure excuses...
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