Production Credit Ass'n of Minot v. Dobrovolny, 870142

• Decision Date: 19 November 1987
• Docket Number: No. 870142,870142
• Parties: PRODUCTION CREDIT ASSOCIATION OF MINOT, North Dakota, Plaintiff and Appellee, v. Robert DOBROVOLNY and Virginia Dobrovolny, Defendants and Appellants. Civ.
• Court: North Dakota Supreme Court

Page 489

415 N.W.2d 489

PRODUCTION CREDIT ASSOCIATION OF MINOT, North Dakota, Plaintiff and Appellee, v. Robert DOBROVOLNY and Virginia Dobrovolny, Defendants and Appellants.

Civ. No. 870142.

Supreme Court of North Dakota.

Nov. 19, 1987.

Olson, Sturdevant & Burns, Minot, for plaintiff and appellee; argued by Richard P. Olson. Appearance by Douglas Leif Mattson.

Bickle, Coles & Snyder, Bismarck, for defendants and appellants; argued by James J. Coles.

ERICKSTAD, Chief Justice.

Robert and Virginia Dobrovolny appeal from a district court order denying their motion for relief from a default judgment of foreclosure on a real estate mortgage held by Production Credit Association of Minot (PCA). We affirm.

On April 27, 1983, PCA loaned the Dobrovolnys $60,000. As security for that loan the Dobrovolnys executed a mortgage covering a 920 acre and a 360 acre tract of land. PCA received a first mortgage against the 360 acre tract and a second mortgage against the 920 acre tract. The Federal Land Bank of St. Paul (FLB) held the first mortgage against the 920 acre tract as security for an $83,000 loan made on August 4, 1977, and in May 1984, it initiated a foreclosure action against the Dobrovolnys on that mortgage. FLB obtained a default judgment against the Dobrovolnys in that action on August 9, 1984. On September 26, 1984, FLB purchased the 920 acre tract at a sheriff's sale for $77,754.63. On September 25, 1985, two days before the redemption period for the 920 acre tract expired, FLB assigned its sheriff's certificate for the 920 acre tract to PCA, and on September 30, 1985, a sheriff's deed was issued to PCA.

On August 9, 1985, PCA initiated this action to foreclose its mortgage on both the 920 acre and the 360 acre tract of land. The Dobrovolnys did not answer the complaint, and on September 27, 1985, PCA obtained a default judgment of foreclosure on the 360 acre tract of land. That judgment was not appealed, and on December 19, 1985, PCA purchased the 360 acre tract at a sheriff's sale for $69,694.14.

On December 17, 1986, the Dobrovolnys filed a motion for relief from the judgment pursuant to N.D.R.Civ.P. 60(b), ¹ requesting that the September 27, 1985 judgment be modified or vacated on the grounds that it was "void for the reason that it ... [was] unlawful and contrary to the laws of the State of North Dakota and that reason will be shown which will justify relief from the operation" of the judgment. In support of their motion, the Dobrovolnys raised the following issues:

"(1) Does North Dakota law allow a party that is a statutory redemptioner to buy a sheriff's certificate from the purchaser at a foreclosure sale; and (2) if such a purchase is not allowed, what is the result of the plaintiff's failure to redeem by statute as to their claim in this action and the lien on the 360-acre tract?"

The district court denied the Dobrovolnys' motion and further determined that PCA was authorized to purchase the sheriff's certificate for the 920 acre tract from FLB and still foreclose its mortgage on the 360 acre tract, citing Bank of Steele v. Lang, 399 N.W.2d 293 (N.D.1987) [Lang I ].

On appeal the Dobrovolnys have raised the following issues:

"1. DID THE PLAINTIFF IMPROPERLY AND CONTRARY TO LAW OBTAIN A JUDGMENT IN EXCESS OF THAT TO WHICH IT WAS ENTITLED BY FAILING TO PROPERLY REDEEM OTHER PROPERTY; AND DID THE PLAINTIFF THEN UTILIZE THAT JUDGMENT AMOUNT TO THE DETRIMENT OF THE DEFENDANTS?

"2. DID THE PLAINTIFF IMPROPERLY AND CONTRARY TO LAW OBTAIN A JUDGMENT IN EXCESS OF THAT TO WHICH IT WAS ENTITLED BY IMPROPERLY OBTAINING WHAT AMOUNTED TO A DEFICIENCY JUDGMENT ON THE FORECLOSURE OF OTHER PROPERTY CONTRARY TO NORTH DAKOTA LAW; AND DID THE PLAINTIFF THEN UTILIZE THAT JUDGMENT AMOUNT TO THE DETRIMENT OF THE DEFENDANTS?"

However, the threshold issue for our consideration is the interrelationship of those issues with the district court's denial of the Dobrovolnys' Rule 60(b) motion.

In First National Bank of Crosby v. Bjorgen, 389 N.W.2d 789 (N.D.1986), the movant contended that a partial summary judgment should have been set aside as void pursuant to N.D.R.Civ.P. 60(b)(iv). We said that a motion under subdivision (iv) asserting that a judgment is void, unlike a motion under the other five subdivisions of Rule 60(b), is not left to the court's discretion and, if the judgment is valid, the subdivision (iv) motion must be denied, but if the judgment is void the court has no discretion to protect it. In Bjorgen, supra, we recognized that a judgment may be void if the court lacks subject matter jurisdiction over the action or personal jurisdiction over the parties. In Bjorgen, supra, no issue was raised about jurisdiction over the parties, and we concluded that the district court had subject matter jurisdiction over the action and did not err in failing to vacate the partial summary judgment under N.D.R.Civ.P. 60(b)(iv). We said that subject matter jurisdiction of a district court is not determined by whether or not it correctly applied a statute to a particular cause of action because, to hold otherwise, would vest subject matter jurisdiction in a district court subject to divestment upon an erroneous ruling.

The Dobrovolnys have not raised an issue about subject matter jurisdiction or personal jurisdiction. Their argument relates to whether or not the district court correctly applied North Dakota's redemption statutes in rendering its judgment. We therefore conclude that the district court judgment was not void and our analysis turns to the remaining grounds for setting aside the judgment pursuant to N.D.R.Civ.P. 60(b).

In Bjorgen, supra, we stated that the remaining grounds for setting aside a judgment under N.D.R.Civ.P. 60(b) are left to the sound discretion of the trial court and will not be disturbed on appeal absent an abuse of discretion. We surveyed the factors to evaluate whether a trial court abuses its discretion in denying a Rule 60(b) motion:

"An abuse of discretion by the trial court is never assumed and must be affirmatively established. Dvorak v. Dvorak, 329 N.W.2d 868, 870 (N.D.1983); Avco Financial Services v. Schroeder, 318 N.W.2d 910, 912 (N.D.1982). An abuse of discretion is defined as an unreasonable, arbitrary, or unconscionable attitude on the part of the trial court. Dvorak, 329 N.W.2d at 870; Avco, 318 N.W.2d at 912. A movant for relief under Rule 60(b) has a burden of establishing sufficient grounds for disturbing the finality of the judgment. Avco, id.; Gajewski v. Bratcher, 240 N.W.2d 871, 886 (N.D.1976). The moving party must also show more than that the lower court made a 'poor' decision, but that it positively abused the discretion it has in administering the rule. Bender v. Liebelt, 303 N.W.2d 316, 318 (N.D.1981). We will not overturn that court's decision merely because it is not the one we may have made if we were deciding the motion. [State Bank of Burleigh County Trust v. ] Patten, 357 N.W.2d at 242 [ (N.D.1984) ]; [State v. ] Red Arrow [Towbar Sales Co.], 298 N.W.2d at 516 [ (N.D.1980) ].

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"A 60(b) motion is not to be used to relieve a party from free, calculated, and deliberate choices. Hefty v. Aldrich, 220 N.W.2d at 846 [ (N.D.1974) ].

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"A 60(b) motion is not to be used as a substitute for an appeal. Hefty, 220 N.W.2d at 846." Bjorgen, supra, 389 N.W.2d at 794-796.

As previously noted, the Dobrovolnys' argument relates to whether PCA could purchase the sheriff's certificate from FLB or was required to redeem the property. However, the Dobrovolnys have not presented any reason to set aside the judgment within the criteria enumerated...