Mobley and Sons, Inc. v. Weaver

• Decision Date: 22 September 2009
• Docket Number: No. DA 09-0145.,DA 09-0145.
• Citation: 2009 MT 312,218 P.3d 472,352 Mont. 396
• Parties: MOBLEY AND SONS, INC., Plaintiff and Appellee, v. Matt WEAVER, Defendant and Appellant.
• Court: Montana Supreme Court

218 P.3d 472

2009 MT 312

352 Mont. 396

MOBLEY AND SONS, INC., Plaintiff and Appellee, v. Matt WEAVER, Defendant and Appellant.

No. DA 09-0145.

Supreme Court of Montana.

Submitted on Briefs August 12, 2009.

Decided September 22, 2009.

For Appellant: John H. Tarlow, Margaret C. Weamer, Tarlow Stonecipher & Steele, PLLC, Bozeman, Montana.

For Appellee: Donald E. White, Attorney at Law, Bozeman, Montana.

Justice PATRICIA O. COTTER delivered the Opinion of the Court.

¶ 1 Mobley and Sons, Inc. sued Matt Weaver in the Eighteenth Judicial District Court for Weaver's alleged failure to pay for services rendered pursuant to a contract between the parties. The District Court entered a default judgment against Weaver on the ground that Weaver failed to file a timely response to Mobley's Complaint. Weaver moved to have the default judgment set aside and the District Court did not issue an order within 60 days; therefore, the motion was deemed denied. Weaver appeals. We reverse and remand.

ISSUE

¶ 2 Did the District Court slightly abuse its discretion by denying Weaver's motion to set aside the default judgment?

FACTUAL AND PROCEDURAL BACKGROUND

¶ 3 Weaver is a shareholder and employee of Five Rivers, Inc., a corporation that designs and constructs ponds, streams and wetlands. Mobley and Sons (Mobley) is a Montana corporation that built ponds, installed power lines, dug ditches and performed other construction work in Wyoming on a Five Rivers' project in 2007. After Mobley completed the work, Five Rivers made payments to Mobley for several months but, according to Mobley, stopped making payments in June 2008, leaving an unpaid balance of $65,467.11. In October 2008, Mobley filed a Complaint naming Weaver, rather than Five Rivers, as the defendant, seeking payment of the above-referenced balance plus interest. The parties dispute whether Five Rivers or Weaver is the proper defendant. Weaver claims the contract with Mobley was between Five Rivers and Mobley. Mobley asserts that it contracted personally with Weaver.

¶ 4 Weaver was served with the Complaint on November 10, 2008, and had until December 2, 2008, to file his answer. He failed to do so. On December 3, Mobley moved for default judgment. Mobley's attorney filed an affidavit in support of Mobley's motion for default judgment in which he claimed Mobley and Weaver entered into a contract under which Mobley would perform the above-described work. Counsel also stated in the affidavit that under the contract Mobley was to bill Weaver directly for time and materials provided on the project and that Weaver failed to pay the billed amount. The affidavit included a statement of "amount due" that included the alleged unpaid balance, $272 in interest accrued from the last payment in June 2008 and $238 in costs, for a total of $65,977.11. On December 3, the Clerk of the Eighteenth Judicial District Court entered a default as well as the judgment by default against Weaver, ordering him to pay $65,977.11, plus 10% per annum interest from the date of judgment.

¶ 5 On December 11, Weaver moved to set aside the default judgment and Mobley filed a timely objection to the motion. On February 18, 2009, the District Court granted Weaver's motion. Mobley then challenged the District Court's jurisdiction to enter its February 18 order, arguing that the District Court lost jurisdiction of the matter on February 9, 2009, sixty days after Weaver filed his motion to set aside the default judgment. In response, Weaver filed an Emergency Motion to Reconsider, Remediate Clerical Error Pursuant to Rule 60(a), or Alternatively Motion for Nunc Pro Tunc and Brief in Support (Emergency Motion). Mobley then filed a special pleading in support of its challenge on March 4, 2009, arguing that under M.R. Civ. P. 59(d), the court was required to rule on Weaver's motion within 60 days. Mobley maintained that because the District Court did not respond within 60 days, the motion was deemed denied and the District Court no longer had jurisdiction over the matter.

¶ 6 Weaver, on the other hand, urged the District Court to exercise its authority to "correct a clerical error" or utilize its "nunc pro tunc" authority, both of which could be implemented by back-dating the order. Weaver asserted that such action was appropriate because it was "indisputably" the court's intention to meet the 60-day requirement.

¶ 7 The court held a hearing on Weaver's Emergency Motion on March 4. On March 10, the District Court denied Weaver's motion, set aside its February 18 order, and reinstated the December 3 default judgment. It also denied Mobley's request for attorney fees and costs.

¶ 8 Weaver appeals the court's March 10 order.

STANDARD OF REVIEW

¶ 9 We review a district court's decision to grant or deny a motion to set aside an entry of default for good cause under M.R. Civ. P. 55(c) under the slight abuse of discretion standard. To determine whether good cause exists we consider the factors originally set forth in Cribb v. Matlock Communications, Inc., 236 Mont. 27, 30, 768 P.2d 337, 339 (1989):(1) whether the default was willful, (2) whether the plaintiff would be prejudiced if the default should be set aside, and (3) whether the defendant has presented a meritorious defense to plaintiff's claim. The court must also balance the interests of the defendant in the adjudication of his defense on the merits, against the interests of the public and the court in the orderly and timely administration of justice. Legal Resources Agency, LLC v. Armstrong, 2008 MT 262, ¶¶ 18-19, 345 Mont. 115, 191 P.3d 368 (internal citations omitted).

DISCUSSION

¶ 10 Did the District Court slightly abuse its discretion by denying Weaver's motion to set aside the default judgment?

¶ 11 M.R. Civ. P. 55(a) (Rule 55) provides that "[w]hen a party against whom a judgment for affirmative relief is sought has failed to plead or otherwise defend as provided by these rules and that fact is made to appear by affidavit or otherwise, the clerk shall enter the party's default." Additionally, Rule 55(b) provides, in part, that "[w]hen the plaintiff's claim against a defendant is for a sum certain or for a sum which can by computation be made certain, the clerk upon request of the plaintiff and upon affidavit of the amount due shall enter judgment for that amount and costs against the defendant, if the defendant has been defaulted for failure to appear...."

¶ 12 The primary issue before us is the proper identity of the "party" and the "defendant" as referenced in the above statutes. Mobley sought a judgment against Weaver, individually, and argues on appeal the correctness of its position. Weaver asserted to the District Court and to this Court that Five Rivers is the correct party because Five Rivers contracted with Mobley, not Weaver, individually. Weaver professes that Mobley misrepresented, or...