Myers v. All West Transport
| Decision Date | 22 December 1988 |
| Docket Number | No. 88-375,88-375 |
| Citation | 766 P.2d 864,235 Mont. 233 |
| Parties | Robert A. MYERS, Plaintiff and Respondent, v. ALL WEST TRANSPORT, Defendant and Appellant. |
| Court | Montana Supreme Court |
Stewart A. Pearce, II, Missoula, for defendant and appellant.
Don Vernay, Bigfork, for plaintiff and respondent.
All West Transport (All West) appeals from an order refusing to set aside a default judgment against it. The District Court for the Twentieth Judicial District, Lake County, ruled that All West had failed to satisfy any of the requirements of Rule 60(b), M.R.Civ.P. We affirm.
The issue is whether the District Court abused its discretion in refusing to set aside the default judgment.
On January 14, 1988, plaintiff Mr. Myers filed his complaint against All West for wrongful delivery of lumber to a consignee in Denver, Colorado. The complaint alleges that while the shipment was in transit Mr. Myers contacted All West to order that the shipment be stopped and rerouted, but that All West intentionally and wrongfully delivered the lumber as originally instructed. Damages of $6,800, for the value of the lumber, plus interest, attorney fees, and costs, were claimed. All West was served with the complaint on January 15, 1988. On February 9, 1988, the clerk of court entered default judgment against All West.
On March 14, 1988, All West filed its affidavit and motion to set aside the default judgment. The motion was orally argued and on May 2, 1988, the court entered its order refusing to set aside the default judgment.
Did the District Court abuse its discretion in refusing to set aside the default judgment?
Rule 60(b), M.R.Civ.P., allows a court to relieve a party from a final judgment if, within a reasonable time, not more than 60 days after the judgment was entered, a showing is made of mistake, inadvertence, surprise, or excusable neglect. All West argues that it has made such a showing. This Court has stated that if a district court slightly abused its discretion in refusing to set aside a default judgment, its refusal is reversible. Griffin v. Scott (Mont.1985), 710 P.2d 1337, 1338, 42 St.Rep. 1695, 1697. The party seeking to set aside the default has the burden of proof. Siewing v. Pearson Co. (Mont.1987), 736 P.2d 120, 122, 44 St.Rep. 800, 802.
The affidavit submitted with the motion to set aside the default sets forth the following statement of facts. The complaint was served upon Betty Edwards at the offices of All West. (Betty Edwards and her husband do business as All West.) She delivered the complaint and summons to the office of All West's attorney about two weeks later, on January 29, 1988. The attorney was out of town at that time and did not return until February 3, 1988. On that date, the attorney phoned Betty Edwards and told her that, to represent All West, he would require all supporting documentation underlying this claim, a retainer fee, and filing fees. On February 8, 1988, All West's truck suffered transmission failure, requiring immediate repair. That depleted All West's cash reserves, and All West was unable to forward the required money to the attorney. The default judgment was entered with no further notice to All West and the judgment was executed upon on February 23, 1988. All West then filed its notice to set aside the default.
In its brief, All West argues that its motion to set aside the default judgment should have been granted. It stated that the motion was filed promptly, there is a good possibility that a trial on the merits would have produced a different result, and any reasonable doubt as to whether to set aside a default judgment is to be resolved by setting aside the default. This Court stated the standard of review to which All West refers in Kootenai Corp. v. Dayton (1979), 184 Mont. 19, 26, 601 P.2d 47, 51: the party moving to set aside the default must show that it proceeded with diligence, that its excusable neglect caused the default to be entered against it, and that there is evidence of a meritorious defense.
In discussing the arguments of All West for setting aside the default, the District Court stated:
The affidavit of Mrs. Edwards and her testimony introduced at oral argument upon Defendant's motion establish a factual situation of financial hardship on the part of the Defendant. As a practical matter, Defendant applied its limited funds to the unexpected repairs needed for one of its trucks rather than pay the costs and fee retainer requested by its counsel.
Failure by a client to pay its attorney does not constitute excusable neglect by a party within the meaning of Rule 60(b). Neither does failure of an attorney to file an appearance because he has not been paid constitute excusable neglect by an attorney within said rule if, in fact, the attorney agreed to timely file an appearance.
In either event, the Defendant has presented the Court no authority to support a finding of excusable neglect sufficient to set aside the Default Judgment merely because the Defendant failed to pay the advance costs and fee retainer requested by the attorney as a consequence of which no appearance was filed before default was entered.
The Court suggests that the Defendant has not cited any such authority in support of its motion because there is no such authority nor should there be any. The Defendant has wholly failed to satisfy any of the requirements of Rule 60(b), and its motion to set aside the Default Judgment of February 9, 1988 is denied.
The above discussion indicates that the District Court was not convinced that there was excusable neglect.
The test to determine whether the neglect is excusable and sufficient to set aside a default is:
... whether the reasons given for the neglect are such that reasonable minds might differ in their conclusions concerning excusable neglect. If so, doubt should be resolved in favor of a trial on the merits.
United States Rubber Co. v. Community Gas & Oil Co. (1961), 139 Mont. 36, 39, 359 P.2d 375, 376.
Here, the actions of both Betty Edwards and her attorney may be said to have contributed to the entry of the default. All West's attorney should have been aware of the need to act quickly, as there were only a few days left to answer the complaint when he first saw it in his office. The general rule is that neglect of an attorney is attributable to the client. Lords v. Newman (1984), 212 Mont. 359, 367-68, 688 P.2d 290, 295. In Lords, an exception to that...
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