Rojas v. Montoya

Decision Date13 November 2020
Docket NumberNo. 20180497-CA,20180497-CA
Citation477 P.3d 38
Parties Alfredo ROJAs, Appellee, v. Derrick MONTOYA and Valerie Swanson, Appellants.
CourtUtah Court of Appeals

J. David Milliner and Jacob B. Stone, Attorneys for Appellants

Justin Wayment, Cedar City, Christian Thomas Jones, and Matthew D. Carling, Attorneys for Appellee

Judge Gregory K. Orme authored this Opinion, in which Judges David N. Mortensen and Diana Hagen concurred.


ORME, Judge:

¶1 Derrick Montoya and Valerie Swanson (collectively, Appellants) challenge the district court's denial of their motion to set aside default judgment. They primarily argue that the court exceeded its discretion under rule 60(b) of the Utah Rules of Civil Procedure in determining that their previous counsel's failure to provide their correct mailing addresses in his notice of withdrawal, which they contend resulted in their failure to appear at the pretrial conference where default judgment was entered, did not warrant relief. They also assert that because they acted with due diligence, any neglect on their part in not appearing for the pretrial conference was excusable. We decline to disturb the district court's ruling because any mistake made by the court, plaintiff Alfredo Rojas, or Appellants’ previous counsel was a result of Appellants’ unreasonable behavior in failing, for a period of nearly two years, to keep the court apprised of their correct mailing addresses.


¶2 In 2012, Appellants and Rojas entered into an agreement regarding a taco shop in Beaver, Utah. In 2015, a dispute arose concerning the nature of that agreement, with Appellants claiming that the agreement was a profit sharing arrangement in which Rojas merely took over as manager, while Rojas contended that the agreement was for him to lease and operate the shop as its owner. Appellants subsequently terminated the agreement and took control of the shop. Rojas then brought suit. Because Montoya owned the shop before the arrangement with Rojas, and because Swanson, Montoya's sister and business partner, lived in California, Appellants decided that Montoya would "take [the] lead" in handling the case and would inform Swanson of any developments.

¶3 At the beginning of the case, Rojas had Montoya personally served at the home of Montoya's friend's widow in Beaver, Utah, but that service was quashed with the help of an attorney (Attorney 1) because the sheriff's deputy who served it failed to endorse the date of service or sign his name on the return of service. Attorney 1 then withdrew from the case without providing Appellants’ mailing addresses on his notice of withdrawal, contrary to the express requirement of the Utah Rules of Civil Procedure. See Utah R. Civ. P. 74(a). Accordingly, the district court allowed service on Appellants through (1) publication, (2) serving any employee of the taco shop, and (3) sending a copy of the summons and complaint by first class mail and certified mail to the taco shop. As a result, Appellants received the complaint and they answered on December 10, 2015, with the help of a different attorney (Attorney 2).

¶4 Approximately five months later, in April 2016, Attorney 2 withdrew and, on his notice of withdrawal, he provided a street address in St. George, Utah, for Montoya and a street address in Beaver, Utah for Swanson. These addresses were incorrect.1 Appellants then engaged another attorney (Attorney 3), who made his appearance in July 2016.

¶5 After a scheduled pretrial conference was continued, an attempted mediation failed, and some discovery was undertaken, Attorney 3 withdrew on March 22, 2017, and he provided a Beaver street address for Montoya and an Oceanside, California street address for Swanson on his notice of withdrawal. 2

That same day, Rojas mailed a notice to appoint counsel or appear personally to Appellants at the addresses listed in the notice of withdrawal. See id. R. 74(c). Rojas additionally mailed a copy of the notice to the widow's address, where Montoya was originally served, albeit ineffectively. The notices sent to Montoya in Beaver were returned as undeliverable, but the notice sent to Swanson was not returned, and it is undisputed that this California address was her correct mailing address. But Swanson, who was out of the country on a month-long vacation, claims she did not see the notice until she returned home on April 21.

¶6 On April 13, 2017, Rojas mailed notice of an upcoming pretrial conference scheduled for May 8, 2017, to Swanson at her California mailing address and to Montoya at the flawed Beaver street address, as well as to the widow's street address. Again, the notices sent to Montoya in Beaver were returned as undeliverable, but the notice sent to Swanson was not returned. Nevertheless, Swanson asserted that she did not receive notice of the hearing. The district court also emailed a notice of the pretrial conference to Attorney 1's email address.3

¶7 The court held the scheduled pretrial conference on May 8. Rojas and his attorney were present, but neither Appellants nor any attorney on their behalf appeared. As a result, Rojas moved for default judgment, which the court granted. As required by rule 58A(c)(1) of the Utah Rules of Civil Procedure, Rojas sent copies of the judgment to Appellants at the same addresses as the previous mailings, which were their only addresses on file.

¶8 On June 15, 2017, with the help of a new attorney (Attorney 4), Appellants moved to set aside judgment, arguing that under rule 60(b)(1) of the Utah Rules of Civil Procedure, "[t]he judgment should be set aside based on [Appellants’] excusable neglect." They also invoked rule 60(b)(4), arguing that the judgment was void because it "was entered in violation of [Appellants’] right to due process." At a subsequent hearing on the matter held in October 2017, the court orally denied the motion, finding that there was "a lot of neglect" by Appellants that was "not excusable" and that "[t]his was a long term problem."

¶9 In November, well beyond the 90-day limit for motions to seek relief from judgment under subsections (1)(3) of rule 60(b), Appellants had yet another attorney (Attorney 5) enter a limited appearance for the purpose of requesting a rehearing. Appellants argued that a rehearing was necessary because "it appear[ed] that the prior briefing on [Appellants’] Motion to Set Aside was not sufficient to convey ... to the Court" that "the Due Process principles of fundamental fairness require[d] that the default judgment be set aside." They alleged that Attorney 3 "made a mistake when he failed to include a good mailing address for [Montoya]," which Montoya had provided to him, "when he filed and served his Notice of Withdrawal." Due to this mistake, "[Montoya] never received [Attorney 3's] Notice of Withdrawal or any subsequent notice from either the Court or [Rojas]," which directly resulted in Appellants’ failure to "appear[ ] and defend[ ] at the May 8, 2017 pretrial conference." Appellants also argued that judgment should be set aside on the separate ground of excusable neglect because they "act[ed] in a reasonably prudent manner under the circumstances of this case." Lastly, Appellants asserted that the judgment should be set aside on the basis that it was void because "judgment was entered without the notice required by due process."

¶10 The district court granted the motion for rehearing and again heard oral argument on the matter, with a different judge presiding. In a written order, the court again denied Appellantsmotion to set aside, ruling that "[Appellants] neglected to keep the Court updated as to their whereabouts or otherwise remain apprised of developments in this case" and thus could not "demonstrate specific details of due diligence on their part" that would warrant setting aside the judgment. This appeal followed.


¶11 Appellants challenge the district court's denial of their motion to set aside default judgment on two grounds. First, they argue that under rule 60(b)(1) of the Utah Rules of Civil Procedure, their failure to appear at the pretrial conference was due to both reasonable mistake and excusable neglect. "A district court has broad discretion to rule on a motion to set aside a default judgment under rule 60(b) of the Utah Rules of Civil Procedure." Menzies v. Galetka , 2006 UT 81, ¶ 54, 150 P.3d 480. But this "discretion is not unlimited," and due to the "equitable nature of the rule ... a district court should exercise its discretion in favor of granting relief so that controversies can be decided on the merits rather than on technicalities." Id. (quotation simplified). "Based on these principles, ... it is quite uniformly regarded as an abuse of discretion to refuse to vacate a default judgment where there is reasonable justification or excuse for the defendant's failure to appear, and timely application is made to set it aside." Lund v. Brown , 2000 UT 75, ¶ 11, 11 P.3d 277 (emphasis added) (quotation otherwise simplified). Additionally, the "court's ruling must be based on adequate findings of fact and on the law." Id. ¶ 9 (quotation simplified). The court's findings of fact are reviewed "under a clear error standard of review." Menzies , 2006 UT 81, ¶ 55, 150 P.3d 480.

¶12 Second, Appellants contend that the court should have set aside the default judgment under rule 60(b)(4) of the Utah Rules of Civil Procedure because the judgment was void because Rojas did "not send notice reasonably calculated to properly inform [Appellants] of the need to appear or appoint counsel." As discussed above, we normally review a court's denial of a rule 60(b) motion for an abuse of discretion. "But the district court has no discretion with respect to a void judgment because the determination that a judgment is void implicates the court's jurisdiction." Migliore v. Livingston Fin., LLC , 2015 UT 9, ¶ 25, 347 P.3d 394. Thus, "the propriety of the jurisdictional determination, and hence the decision...

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