Shull v. Walcker

• Citation: 770 N.W.2d 274,2009 ND 142
• Decision Date: 21 July 2009
• Docket Number: No. 20090021.,20090021.
• Parties: Marlan SHULL, Plaintiff and Appellee v. Clint WALCKER, Defendant and Appellant and Noreen Walcker, Defendant.
• Court: United States State Supreme Court of North Dakota

770 N.W.2d 274

2009 ND 142

Marlan SHULL, Plaintiff and Appellee v. Clint WALCKER, Defendant and Appellant and Noreen Walcker, Defendant.

No. 20090021.

Supreme Court of North Dakota.

July 21, 2009.

Rehearing Denied August 18, 2009.

DeWayne A. Johnston (argued) and Jacey L. Johnston (appeared), Grand Forks, ND, for plaintiff and appellee.

David A. Garaas, DeMores Office Park, Fargo, ND, for defendant and appellant.

VANDE WALLE, Chief Justice.

[¶ 1] Clint Walcker appealed from a district court judgment, an order correcting clerical error and denying Walcker's post-judgment motions, and an order denying Walcker's motion to vacate the clerical error correction. We affirm, holding the district court did not err when it denied Walcker's motions for post-judgment relief under N.D.R.Civ.P. 60(b), and did not err in its judgment finding Walcker liable for damages in the amount of $30,433.40.

I.

[¶ 2] In November of 2006, Marlan Shull, a land developer in Grand Forks, entered into an agreement with Clint and Noreen Walcker for the purchase of a town home. The parties agreed upon a purchase price of $179,900, and included in the purchase agreement two earnest-money clauses, which together required the Walckers to deposit $1,000 in earnest money. Shull further agreed to rent the Grand Forks property to the Walckers pending the sale of their home in Omaha, Nebraska at a rental price of $1,450 per month.

[¶ 3] The Walckers rented the town home from November 17, 2006 to May 16, 2007. Each rental payment the Walckers made during this time period was returned for non-sufficient funds. In March of 2007, the Walckers sent Shull a check for $8,025 to cover the past rent due; however, this check was also returned for nonsufficient funds. Although the Walckers indicated to Shull they would obtain a loan to cover the past rent due, they did not pay the money while residing in the town home. In May of 2007, Shull told the Walckers they would have to leave the premises as "[t]here was no effort to buy the place," and the Walckers vacated the residence.

[¶ 4] On May 31, 2007, Shull filed a complaint against the Walckers, asking for $10,650 for past rent due and a $500 security deposit owed by the Walckers. Shull further asked for damages to reflect lost opportunity to sell to another buyer. Specifically, Shull claimed that, over the period of time the Walckers occupied the town home the value of the property decreased due to the weaker real estate market in Grand Forks, and he was unable to sell the home as new since the Walckers had lived there for several months. After the Walckers vacated the home, Shull attempted to sell it for the original contract price of $179,900; however, Shull was eventually able to sell the house in the fall of 2007 for $148,000.

[¶ 5] The Walckers did not file an answer to Shull's complaint. At a scheduling conference on October 4, 2007, the district court informed Clint Walcker that Shull intended to bring a motion for default judgment and advised him to consult with an attorney. On October 25, 2007, Shull moved for default judgment under N.D.R.Civ.P. 55. The motion was served on Walcker but he did not file a response to Shull's motion. The district court held a hearing on February 20, 2008, announcing it would grant Shull's motion for default judgment as "there was never any Answer served in response to the Complaint at any time; not only not timely, but at any time." However, the court stated it would hear testimony to determine the proper amount of damages. Shull testified that, a few weeks prior to the hearing date, the Walckers paid $10,650, which he considered a payment on the outstanding rent. Shull further agreed to drop the $500 for the security deposit from the damages sought, as the judge indicated such money could only be applied to physical property damages and the balance returned to the renters.

[¶ 6] Clint Walcker testified at the hearing that his purchase agreement with Shull was conditioned upon his obtaining financing, which he had not received. Walcker stated he did not believe he owed Shull any damages beyond damages for past rent due, which he had already paid. He also claimed that Shull had miscalculated the amount owed for rent at seven months, when the Walckers had only occupied the town home for a six-month period from November 17, 2006 to May 16, 2007. Walcker argued the amount owed for rent was $9,200.

[¶ 7] On April 17, 2008, the district court issued its findings of fact, conclusions of law, and order for judgment granting Shull's motion for default judgment. The court dismissed the action brought against Noreen Walcker, as no service had been made upon her. Regarding damages for past rent due, the court agreed with Clint Walcker that he was only responsible for six months of rent totaling $9,183.30. However, the court held under N.D.C.C. § 32-03-14 that Walcker was responsible for $31,900, the difference between the contract price of $179,900 and the $148,000 which the town home was ultimately sold for. The court credited $10,650 for the amount already paid to Shull, and found that Walcker owed Shull damages in the amount of $30,433.30.

[¶ 8] On May 9, 2008, Walcker moved the district court for post-judgment relief. First, Walcker made a motion under N.D.R.Civ.P. 52(b) for the court to make additional findings regarding a condition precedent that was not fulfilled regarding the purchase agreement, and which would prevent the agreement from forming a binding contract. Specifically, Walcker pointed to language in the purchase agreement noting that the agreement was "subject to appraisal of sales price or greater" as proof that there was a condition precedent. Second, due to this condition precedent, Walcker moved to vacate the judgment under N.D.R.Civ.P. 59(b)(6). Third, Walcker moved to alter or amend the judgment under N.D.R.Civ.P. 59 because of the condition precedent. Finally, Walcker moved that he be relieved from the monetary judgment under N.D.R.Civ.P. 60(b)(i).

[¶ 9] On August 14, 2008, the district court held a hearing on Walcker's post-judgment motions. Walcker argued it did not matter that he had failed to file an answer to Shull's complaint, as he had appeared at the default judgment hearing. Walcker further argued he was not required to file an answer because the issue of a condition precedent was not an affirmative defense, but rather was an issue that Shull, as plaintiff, was required to address to prove the existence of a valid contract. On December 3, 2008, the district court issued its memorandum decision denying Walcker's post-judgment motions. The court dismissed Walcker's N.D.R.Civ.P. 52(b), 59, and 59(b)(6) motions, as "the judgment entered ... was entered by default with the evidentiary hearing being held pursuant to Rule 55(a)(2)(A) for the purpose of assessing damages." Regarding Walcker's N.D.R.Civ.P. 60(b) motion, the court stated that Walcker had "every opportunity to raise the condition precedent defense prior to entry of the default judgment," and had been advised he needed to serve an answer and response to the default judgment motion. The court noted Walcker had not proved the existence of exceptional circumstances to justify relief from a default judgment. Further, the court noted the contract was silent as to who bore the responsibility to obtain the appraisal, and that Walcker had effectively waived the condition precedent when he did not himself obtain an appraisal or insist upon Shull obtaining an appraisal.

[¶ 10] The court's December 3 order amended its April 17 order granting Shull default judgment and $30,433.40 in damages. Specifically, the court noted that it had made a typographical error by marking down the November 2006 value of the town home as $179,000, rather than $179,900. On December 18, Walcker petitioned the court to vacate the court's amendment, arguing testimony on the market value at that time stated that the total value was "around" $179,900, but did not specify the precise amount. Walcker stated this was a substantive, and not clerical, error in which the court had changed its mind. The court denied his motion, stating the change was clerical and resulted from a typographical error.

II.

[¶ 11] Walcker argues the district court erred in denying Walcker's motions for post-judgment relief. First, Walcker contends the district court should have provided post-judgment relief under N.D.R.Civ.P. 52(b) and 59(b)(6). N.D.R.Civ.P. 52(b) states that:

On motion served and filed no later than 15 days after notice of entry of judgment the court may amend its findings—or make additional findings—and may amend the judgment. The motion may accompany a motion for a new trial under Rule 59. When findings of fact are made in actions tried without a jury, the sufficiency of the evidence supporting the findings may be later questioned whether or not the party raising the question in the district court objected to the findings, moved to amend them, or moved for partial findings.

Walcker further requested a new trial under N.D.R.Civ.P. 59(b)(6), which provides that a new trial might be granted if there was insufficient evidence to justify the verdict. The underlying root of both arguments is Walcker's contention that a condition precedent barred his agreement with Shull from being an enforceable contract, and that the court should have ordered a new trial or amended its judgment to account for the application of such a condition.

[¶ 12] The district court denied Walcker's motion to apply either N.D.R.Civ.P. 52(b) or 59(b)(6), because it had already issued its default judgment by the time the issue of a condition precedent had been raised for the first time. Rule 60(b) N.D.R.Civ.P. is the exclusive means for opening a default judgment. Filler v. Bragg, 1997 ND 24, ¶ 8, 559 N.W.2d 225. Because the issue of a condition precedent was raised after default judgment was ordered, we decline to consider the merits of Walcker's...