Overboe v. Odegaard

• Citation: 496 N.W.2d 574
• Decision Date: 26 February 1993
• Docket Number: No. 920182,920182
• Parties: David A. OVERBOE, Plaintiff and Appellee, v. Marvin ODEGAARD, Defendant and Appellant. Civ.
• Court: United States State Supreme Court of North Dakota

Page 574

496 N.W.2d 574

David A. OVERBOE, Plaintiff and Appellee, v. Marvin ODEGAARD, Defendant and Appellant.

Civ. No. 920182.

Supreme Court of North Dakota.

Feb. 26, 1993.

David A. Overboe (argued), pro se, West Fargo, for plaintiff and appellee.

Vogel, Brantner, Kelly, Knutson, Weir & Bye, Ltd., Fargo, for defendant and appellant; argued by Charles A. Stock.

MESCHKE, Justice.

Marvin Odegaard appeals denial of his motion to vacate a default judgment against him obtained by David A. Overboe. We see no abuse of discretion by the trial court, and we affirm.

Beginning in 1973, attorney Overboe and an associate performed various legal services for Odegaard. Odegaard lived in North Dakota until May 1980, when he moved to the state of Missouri. Overboe mailed Odegaard billing statements through mid-1982, and Odegaard made some payments on account until November 1982. Odegaard was discharged in bankruptcy in Missouri in 1987, but he did not list Overboe as a creditor because, Odegaard said, "I was not aware that I owed him any money...."

On September 9, 1990, Overboe served Odegaard in Missouri with a summons and complaint for $9,453.08 "for legal services performed for [Odegaard] while he was residing in North Dakota and service charges." In his complaint, Overboe alleged that "[d]emand has been made for payment, and [Odegaard] refuses or has neglected to pay the amount owed." Odegaard failed to answer the complaint.

On October 26, 1990, Overboe moved the trial court for default judgment in his favor, submitting an affidavit of default and an affidavit of proof that said:

[Overboe] states that [Odegaard] is indebted to [Overboe] in the amount of $9,453.08, upon the following reasons: [Overboe] rendered legal services together with service charges in the amount of $9,453.08, although demand for payment of the same has been made by [Overboe].

The trial court entered default judgment against Odegaard on November 5, 1990 for $9,453.08 plus costs. On November 27, 1990, by mail, Overboe served notice of entry of the judgment on Odegaard.

Later, Overboe learned that Odegaard would inherit property from his mother's estate in North Dakota. In January 1992, Overboe garnished the personal representative of Odegaard's mother's estate to attempt to collect the judgment.

On February 19, 1992, Odegaard moved under NDRCivP 60(b)(vi) to set aside Overboe's default judgment. Odegaard's affidavit said, "I did not respond to the Summons and Complaint nor did I tell any attorney about the same because I did not feel I owed any money to ... Overboe and further because I had gone through bankruptcy...." Odegaard claimed that the default judgment was improper under NDRCivP 55 because the trial court failed to require that there be "produced and presented to the Court a written instrument upon which the claim was founded," and failed "to hear evidence and assess damages...." Odegaard claimed that his discharge in bankruptcy and a statute of limitation were meritorious defenses.

After an evidentiary hearing, the trial court found that Odegaard "had in fact employed [Overboe] to perform legal services and that he knew he owed [Overboe] at least $3,000," and that Odegaard was "no stranger to litigation as he had been sued at least twelve times." The trial court determined that Odegaard "made a free and calculated choice to ignore process until it appeared he might actually be in jeopardy of [losing] his property;" that while the default judgment "may have been voidable" because Overboe's affidavit seeking damages did not describe a "sum certain," the judgment "clearly is not a void judgment;" and that, "[t]herefore, relief would not be available under 60(b)(iv)." The trial court concluded that "[Odegaard] is clearly limited to a period of one year under NDRCivP 60(b)(i) and since he brings his Motion outside the time frame provided and has no extraordinary facts to justify relief from the Judgment, [Odegaard]'s Motion is hereby denied."

Odegaard appeals, arguing that the trial court "erred, as a matter of law, in granting default judgment on the question of liability without requiring the production of any supporting evidence" under NDRCivP 55(a). Furthermore, Odegaard contends, the trial court abused its discretion by refusing to vacate the default judgment under NDRCivP 60(b)(vi). Overboe responds that the public interest in finality of judgments supports the trial court's denial of Odegaard's motion.

Odegaard argues that, under NDRCivP 55(a) on entry of a default judgment, "the judgment was not for a sum certain and even if it was, the written instrument upon which the claim was based was not produced." Odegaard misreads the rule. The relevant parts of NDRCivP 55(a) say:

Entry. If a party against whom a judgment for affirmative relief is sought has failed to plead or otherwise appear and the fact is made to appear by affidavit or otherwise, the court may direct the clerk to enter an appropriate judgment by default in favor of the plaintiff and against the defendant as follows:

(1) When the plaintiff's claim against a defendant is for a sum certain or for a sum which can by computation be made certain, the court, upon affidavit of the amount due and upon production of the written instrument, if any, upon which the claim is founded, may direct the entry of judgment.

(2) In all other cases, the court, before directing the entry of judgment, shall require such proof as may be necessary to enable it to determine and grant the relief, if any, to which the plaintiff may be entitled. To this end, the court may:

1. Hear the evidence and assess the damages;

2. Direct a reference for the purpose of an accounting or for the taking of testimony or for a determination of the facts; or

3. Submit any issue of fact to a jury.

* * * * * *

NDRCivP 55(a)(1) authorizes the court to direct entry of a default judgment "upon affidavit of the amount due and upon production of the written instrument, if any," when the claim is "for a sum certain or for a sum which can by computation be made certain." This part of the rule only requires production of a written instrument "if any" exists. (Our emphasis). Overboe's claim was for amounts due for contracted services, not for amounts due on a written instrument, so production of an instrument was not required. The knottier question is the certainty of the sum for entry of default judgment on a simple "affidavit of the amount due."

NDRCivP 55 "is derived from Rule 55, FRCivP, with several changes," according to the Explanatory Note. Several changes are described in the Explanatory Note:

The federal rule contains a two-step process: entry of default and then entry of judgment. The first step is not specifically required in this rule. Subdivision (a) is a combination of the first two subdivisions of the federal rule, but specifies that the clerk cannot enter judgment by default without being directed to do so by the court, unlike the federal rule where the clerk can enter judgment in certain cases ["when the plaintiff's claim against a defendant is for a sum certain or for a sum which can by computation be made certain"] without court direction.

In all cases, the North Dakota rule requires the trial court to direct entry of judgment, a judicial act rather than the ministerial act of a clerk.

Although the "sum certain" criterion in the North Dakota rule is similar to that for the federal clerk's ministerial duty, there is no production of a written instrument expected by the federal rule. "In all other cases," NDRCivP 55(a)(2) directs the trial court to "require such proof as may be necessary to enable it to determine and grant the relief, if any, to which the plaintiff may be entitled." This succinct direction contrasts with the sprawling one in FRCivP 55(b)(2): "If ... it is necessary to take an account or to determine the amount of damages or to establish the truth of any averment by evidence or to make an investigation of any other matter, the court may conduct such hearings or order such references as it deems necessary and proper...." Yet, essentially, both standards require "such proof as may be necessary," a matter of judicial discretion. Functionally, in North Dakota, there is little difference between an "affidavit of the amount due" and "such proof as may be necessary" under the separate subdivisions of NDRCivP 55(a)(1) and (2).

There is another procedural difference between NDRCivP 55(a) and the comparable federal rule. The Explanatory Note to NDRCivP 55 describes it:

The federal provision [subdivision (c) ] for setting aside default was not adopted. See Rule 60(b) regarding relief from a judgment or order.

The separate vacation procedure in FRCivP 55(c), "[f]or good cause shown the court may set aside an entry of default," is not available in NDRCivP 55, and the exclusive remedial procedure to set aside a default judgment in North Dakota is "in accordance with Rule 60(b)." Therefore, absent a timely appeal or motion within the time to appeal, a defaulting judgment debtor is not entitled to direct review of a trial court's Rule 55 compliance, and the debtor must demonstrate an abuse of discretion under NDRCivP 60(b).

These significant differences make federal precedents about the "sum certain" subdivision of FRCivP 55(a) questionable for guiding relief from a default judgment in North Dakota. Therefore, textbook citations and discussions of "good cause" under FRCivP 55 are not useful. ¹

Rather, we look to judicial interpretations of the "sum certain" language in our own state for guidance. For one example, consider NDCC 32-03-04 ("Every person who is entitled to recover damages certain or capable of being made certain by calculation, ... also is entitled to recover interest thereon...."), and cases like Robertson Companies, Inc. v. Kenner, 311 N.W.2d 194, 200 (N.D.1981), interpreting that language: "Kenner sustained lost profits on more than 500,000 pounds of sunflowers at two to...