Wallinder v. Lagerquist

No. 81-556
IN THE SUPREME COURT OF THE STATE OF MONTANA
1382

JOHN WALLINDER,
Plaintiff and Respondent,
-vs-
GLENN LAGERQUIST, et al.,
Defendants and Appellants.

Appeal fron: District Court of the Eighth Judicial District,
In and for the County of Cascade, The Honorable
H. William Coder, Judge presiding.

Counsel of Record:
For Appellants:
Paul G Paul; John P. Paul, Great Falls, Montana

For Respondent :
Asselstine & Cruikshank, Great Falls, Montana

Submitted on Briefs: July 2, 1982
Decided: November 10, 1982
Mr. J u s t i c e F r e d J . Weber d e l i v e r e d t h e O p i n i o n of t h e C o u r t .

T h i s is a n a p p e a l from t h e o r d e r o f t h e D i s t r i c t C o u r t of t h e
E i g h t h J u d i c i a l D i s t r i c t f o r t h e County of C a s c a d e i n which t h e

court concluded t h a t defendant, Grace Marchwick, had b e e n p e r -
s o n a l l y s e r v e d so t h e c o u r t had p e r s o n a l j u r i s d i c t i o n o v e r h e r ,
and i n which the court denied defendants' R u l e 6 0 ( b ) m o t i o n to

vacate default judgment because of mistake, inadvertence,
surprise and/or excusable neglect, because the court lacked

jurisdiction. W e a f f i r m t h e District Court.

John Wallinder (plaintiff) filed an original complaint
which alleged that he was employed as a t r u c k d r i v e r by the
defendant, Glenn Lagerquist, either individually or as an

authorized agent of one or more of the named defendant cor-

porations. The d e f e n d a n t s , Donald Marchwick and Grace Marchwick
( M a r c h w i c k s ) , were n o t named as p a r t i e s d e f e n d a n t i n t h e o r i g i n a l

complaint. The o r i g i n a l c o m p l a i n t a l l e g e d t h a t p l a i n t i f f was to
be paid 20 percent of the amount received b y v a r i o u s of the

defendants p l u s expenses incurred i n t h e o p e r a t i o n of a truck.

Plaintiff a l s o a l l e g e d a demand f o r payment and r e f u s a l to p a y .
I n response to t h e o r i g i n a l complaint, L a g e r q u i s t , p r o se, f i l e d

an answer in behalf of all of the defendants (not including

Marchwicks ) . The answer contained denials, allegations of
payments, and ultimately concluded by claiming a balance due
plaintiff of $75.09. P l a i n t i f f t h e n made a m o t i o n f o r j u d g m e n t

on the pleadings but did not call that motion up for con-
sideration, so it was not ruled upon by the court.
On A p r i l 2 4 , 1 9 8 2 , p l a i n t i f f f i l e d a n amended c o m p l a i n t w i t h
allegations substantially identical to those in the original
complaint, with the exception that it added the Marchwicks as

parties defendant and added the following paragraph:

" T h a t Donald Marchwick and Grace Marchwick,
e i t h e r i n d i v i d u a l l y o r a s j o i n t t e n a n t s , o r as
t e n a n t s i n common, own 49 p e r c e n t of t h e
i s s u e d and o u t s t a n d i n g c a p i t a l s h a r e s o f
W e s t e r n A u t o m o t i v e S a l e s and S e r v i c e , I n c .
[ o n e of named d e f e n d a n t s ] ."
By o r d e r d a t e d May 1 3 , 1 9 8 1 , the District Court authorized the

f i l i n g of t h e amended c o m p l a i n t . S e r v i c e was made p e r s o n a l l y on

the Marchwicks on May 2 6 , 1981, a l t h o u g h Grace Marchwick con-

tested the personal service. R e q u e s t t o e n t e r d e f a u l t was f i l e d

on June 17, 1981. Default judgment was e n t e r e d against only

defendants Marchwicks on June 18, 1981, in the amount of

$5,572.20, plaintiff's costs and disbursements of $112, and

attorney's f e e s of $1,142.50, making a t o t a l of $6,826.70. No

judgment was entered as t o a n y o f the o t h e r named defendants.

On June 25, 1981, seven days after the entry of default

judgment, defendants Marchwicks, moved the court for an order

vacating the default judgment under Rule 6 0 ( b ) ( l ) r M.R.Civ.P.,

f o r t h e reasons of m i s t a k e , inadvertence, s u r p r i s e and/or excu-

sable neglect, and a l s o moved for an order setting aside the

j u d g m e n t a g a i n s t Grace Marchwick f o r t h e r e a s o n t h a t s h e was n o t

properly served. By order dated June 26, 1981, the District

Court set t h e motion f o r hearing on J u l y 6 , 1981. Rule 6 0 ( c )

p r o v i d e s t h a t m o t i o n s u n d e r R u l e 60 ( b ) a r e t o be h e a r d and d e t e r -

mined w i t h i n t h e times p r o v i d e d by R u l e 59. Rule 59 r e q u i r e s a

hearing on a motion t o be had in ten days after it h a s been

served. I n t h i s c a s e , t h e t e n t h d a y from J u n e 2 6 , 1 9 8 1 , f e l l o n

a Sunday so t h a t J u l y 6 , 1 9 8 1 , was p r o p e r u n d e r R u l e 6 ( a ) . By

stipulation, the court entered i t s o r d e r of J u l y 6 , 1981, con-

t i n u i n g t h e h e a r i n g on M a r c h w i c k s ' motion to J u l y 1 7 , 1981. By

order dated July 17, 1981, the District Court stated that the

m o t i o n had b e e n p r e v i o u s l y s e t f o r h e a r i n g o n J u l y 1 7 , b u t t h e r e

b e i n g a c o n f l i c t i n t h e c o u r t ' s c a l e n d a r , t h e matter w a s v a c a t e d

a n d r e s e t f o r O c t o b e r 7, 1 9 8 1 . On O c t o b e r 7 , a h e a r i n g was h e l d

with testimony being presented and by o r d e r dated O c t o b e r 20,

1981, the District Court found that Grace Marchwick was per-

s o n a l l y served with a copy of the summons and complaint. The

court further ordered that the motion of the Marchwicks for

relief u n d e r R u l e 6 0 ( b ) was d e n i e d a s t h e c o u r t l a c k e d j u r i s d i c -

t i o n to g r a n t such r e l i e f because the t i m e f o r hearing pursuant
t o R u l e 59 h a d p a s s e d p r i o r to t h e h e a r i n g d a t e . By n o t i c e of

a p p e a l d a t e d November 1 2 , 1 9 8 1 , Marchwicks a p p e a l e d t h e O c t o b e r

20, 1981, o r d e r .
The i s s u e s a r e :

(1) Did t h e D i s t r i c t C o u r t e r r i n d e n y i n g M a r c h w i c k s 1 R u l e

6 0 ( b ) motion t o v a c a t e t h e d e f a u l t judgment?
(2) Did the District Court err in finding that Grace

Marchwick had b e e n p e r s o n a l l y s e r v e d and t h a t t h e c o u r t had p e r -
sonal j u r i s d i c t i o n over her?
Unfortunately, n e i t h e r c o u n s e l f o r t h e p a r t i e s n o r t h e lower

c o u r t c o m p l i e d w i t h t h e e x p r e s s r e q u i r e m e n t s of R u l e s 6 0 ( b ) and
59. The r e s u l t is t h a t t h e d e f a u l t j u d g m e n t w i l l s t a n d w i t h o u t
t r i a l on t h e m e r i t s . The m o t i o n of t h e Marchwicks u n d e r R u l e

6 0 ( b ) was sufficient in form. In pertinent part, Rule 60(b)
provides :

"On m o t i o n and upon s u c h terms as are j u s t ,
t h e c o u r t may r e l i e v e a p a r t y . . .
from a
f i n a l judgment . . . f o r the following
reasons :
" (1) m i s t a k e , inadvertence , surprise, or
excusable neglect . . ."
The t i m e r e q u i r e m e n t s are s e t f o r t h i n R u l e 60 ( c ) w h i c h p r o v i d e s :

" M o t i o n s p r o v i d e d by s u b d i v i s i o n s ( a ) and ( b )
o f t h i s r u l e s h a l l be h e a r d and d e t e r m i n e d
w i t h i n t h e times p r o v i d e d b y R u l e 59 i n t h e
case of m o t i o n s f o r new t r i a l s . . ."
The k e y p r o v i s i o n s o n t i m e as t o t h i s case, are s e t f o r t h i n R u l e

59(d) as follows:
" H e a r i n g o n t h e m o t i o n s h a l l be had w i t h i n 1 0
d a y s a f t e r it h a s b e e n s e r v e d . . . except
t h a t a t a n y t i m e a f t e r t h e n o t i c e of h e a r i n g
o n t h e m o t i o n h a s b e e n s e r v e d t h e c o u r t may
for not
i s s u e a n o r d e r c o n t i n u i n g t h e h e a r i n g - --
t o e x c e e d -30 - a y s .
- d
- I n case t h e h e a r i n g is
c o n t i n u e d b y t h e c o u r t , it s h a l l be t h e d u t y
o f t h e c o u r t t o h e a r t h e same a t t h e e a r l i e s t
practicable date thereafter . . , If the
c o u r t s h a l l f a i l t o r u l e upon t h e m o t i o n
w i t h i n s a i d t i m e , t h e motion s h a l l , a t t h e
e x p i r a t i o n o f s a i d p e r i o d , b e deemed denied.

"If the motion is n o t n o t i c e d up f o r h e a r i n g
and no h e a r i n g is h e l d t h e r e o n , it s h a l l be
deemed d e n i e d as o f t h e e x p i r a t i o n of t h e
period of time w i t h i n which hearing is
 r e q u i r e d t o be h e l d under this Rule 59."
(Underscoring added. )
In t h i s case, t h e Marchwicks p r o p e r l y made t h e i r m o t i o n and
served the same, w i t h h e a r i n g i n i t i a l l y set f o r J u l y 6. That

h e a r i n g w a s c o n t i n u e d t o J u l y 1 7 , u s i n g e l e v e n of t h e t h i r t y d a y s
allowed under Rule 59 for a continuance. On July 17, the
D i s t r i c t C o u r t had t h e power u n d e r R u l e 59 t o c o n t i n u e a g a i n f o r

a maximum o f n i n e t e e n d a y s , b u t i n s t e a d c o n t i n u e d t h e h e a r i n g to

October 7. By w a i t i n g u n t i l O c t o b e r 7 , c o u n s e l and t h e D i s t r i c t

Court placed the m o t i o n beyond the jurisdiction of the court.
T h i s case i s s i m i l a r t o O s t e r v. Oster (1980)r Mont .
-- , 606 P.2d 1 0 7 5 , 37 S t . R e p . 264. I n O s t e r a h e a r i n g was s e t
f o r F e b r u a r y 7. Due t o w e a t h e r , t h e D i s t r i c t C o u r t w a s u n a b l e to

g e t t o t h e h e a r i n g and t h e m a t t e r was c o n t i n u e d t o March 1 9 , a t

which time the hearing was h e l d . In holding that t h e motion

c o u l d n o t be g r a n t e d ( i n t h e O s t e r case t h e m o t i o n was f o r a new

t r i a l , b u t was c o n t r o l l e d b y Rule 5 9 ) t h i s Court said:
"Rule 5 9 ( d ) s a y s t h a t a h e a r i n g on a motion
f o r a new t r i a l s h a l l be had w i t h i n t e n d a y s
a f t e r t h e motion h a s been s e r v e d , e x c e p t t h a t
t h e c o u r t may c o n t i n u e t h e h e a r i n g n o t t o
e x c e e d 30 d a y s . I f the court f a i l s t o rule
upon t h e m o t i o n w i t h i n t h e t i m e g i v e n u n d e r
Rule 5 9 ( d ) t h e n t h e m o t i o n s h a l l be deemed
denied. I n t h e p r e s e n t case, t h e m o t i o n was
made on J a n u a r y 2 5 , b u t t h e h e a r i n g was n o t
h a d u n t i l March 1 9 . T h i s is m o r e t h a n t h e
time a l l o w e d u n d e r t h e r u l e .
" I n C a i n v . H a r r i n g t o n ( 1 9 7 3 ) , 1 6 1 Mont. 4 0 1 ,
506 P.2d 1 3 7 5 , t h i s C o u r t c o n s i d e r e d R u l e 5 9
i n a similar c o n t e x t . W s t a t e d :
e

i"We b e l i e v e t h e p u r p o s e o f t h e r u l e s h o u l d be
a d h e r e d t o and w h i l e w d o n o t w i s h t o be
e
t e c h n i c a l , a t t h e same t i m e w e c a n n o t p e r m i t
deviations. ( C i t a t i o n omitted. )
"The D i s t r i c t C o u r t i n t h e p r e s e n t case was
correct i n r u l i n g as it d i d . The D i s t r i c t
C o u r t - -- - i c t i o n t o g r a n t a new t r i a l
had n o j u r i s d
u n d e r Rule 59. " (Underscoring added. ) 606
P.2d a t 1 0 7 8 , 37 S t . R e p . a t 267-268.
I n t h i s case w e f i n d a d i r e c t l y comparable f a c t s i t u a t i o n .

The D i s t r i c t C o u r t h e r e c o n t i n u e d the hearing to O c t o b e r 7 a n d

counsel concurred i n t h a t order. When t h e t i m e a l l o w e d f o r a
c o n t i n u a n c e u n d e r R u l e 59 e x p i r e d , t h e D i s t r i c t Court l o s t its
jurisdiction t o g r a n t t h e m o t i o n , r e g a r d l e s s of i t s v i e w of the
v a l i d i t y of t h e reasons urged. I n a n o t h e r r e c e n t case of d i f -
f i c u l t y w i t h t h e s e r u l e s , Winn v . Winn ( 1 9 8 2 ) , Mont . I

-- P.2d , 39 S t . R e p . 1831, 1835-1836, t h i s Court s t a t e d
w i t h r e g a r d t o t h e matter o f j u r i s d i c t i o n :
" T h a t t h e p a r t i e s may h a v e s t i p u l a t e d t h e
j u r i s d i c t i o n of t h e D i s t r i c t C o u r t , o r may
h a v e a g r e e d n o t t o r a i s e t h e q u e s t i o n of l a c k
of j u r i s d i c t i o n , does not confer j u r i s d i c t i o n
o n t h e D i s t r i c t C o u r t t o d e c i d e a case beyond
t h e t i m e l i m i t a t i o n s e x p r e s s l y provided by
R u l e 5 9 , M.R.Civ.P. Marvel B r u t e S t e e l
B u i l d i n g v. B a s s ( 1 9 8 0 ) , Mont . , 616
P.2d 3 8 0 , 37 S t . R e p . 1 A courtwhich
l a c k s j u r i s d i c t i o n c a n n o t a c q u i r e it by con-
s e n t of t h e p a r t i e s . C o r b a n v. C o r b a n ( 1 9 7 2 ) ,
1 6 1 Mont. 9 3 , 5 0 4 P.2d 9 8 5 . "
I n t h e p r e s e n t case, f o l l o w i n g t h e i m p r o p e r o r d e r c o n t i n u i n g

t h e m o t i o n t o O c t o b e r 7 , t h e h e a r i n g was h e l d and t h e c o u r t d i d

make i t s o r d e r d e n y i n g t h e m o t i o n d a t e d O c t o b e r 20, 1 9 8 1 . That
i s c o m p a r a b l e t o -M a r v e l B r u t e S t e e l B l d g . w h e r e t h e c o u r t s t a t e d :

"Even though t h e t r i a l c o u r t i s s u e d an o r d e r
o n May 1 5 , 1979 denying t h e d e f e n d a n t s 1
m o t i o n f o r a new t r i a l , t h e o r d e r was a
n u l l i t y b e c a u s e it was i s s u e d a f t e r t h e t i m e
h a d e x p i r e d u n d e r R u l e 5 9 , w i t h i n which to
r u l e on a m o t i o n f o r new t r i a l . W e have
r e p e a t e d l y h e l d t h a t t h e t i m e and p r o c e d u r a l
l i m i t a t i o n s f o r post-judgment motions under
R u l e 59 a r e m a n d a t o r y ( c i t a t i o n s o m i t t e d ) . "
616 P.2d a t 3 8 2 , 37 S t . R e p . a t 1 6 7 2 .

I n a similar f a s h i o n , t h e o r d e r of O c t o b e r 20, 1981, also w a s a
nullity, as it was beyond t h e j u r i s d i c t i o n a l power of the court
t o make t h a t o r d e r .
We therefore find i n t h e p r e s e n t case t h a t o n J u l y 6 , the

D i s t r i c t C o u r t had t h e a u t h o r i z a t i o n t o c o n t i n u e t h e h e a r i n g f o r

a p e r i o d n o t to e x c e e d t h i r t y d a y s . A s a r e s u l t , when t h e t h i r t y

day period ended on August 5, 1981, under Rule 59(d), as

i n t e r p r e t e d b y t h i s C o u r t , t h e m o t i o n w a s deemed d e n i e d . A t that

point, Rule 5, Mont .R.App.Civ.P. applies. Rule 5 states :

"The t i m e w i t h i n which a n a p p e a l from a
j u d g m e n t or a n o r d e r m u s t be t a k e n s h a l l be
30 d a y s from t h e e n t r y t h e r e o f . ..
"The r u n n i n g o f t h e t i m e f o r f i l i n g a n o t i c e
o f a p p e a l is s u s p e n d e d a s t o a l l p a r t i e s by a
t i m e l y m o t i o n f i l e d i n t h e d i s t r i c t c o u r t by
a n y p a r t y p u r s u a n t t o t h e Montana R u l e s of
 C i v i l Procedure h e r e a f t e r enumerated i n t h i s
s e n t e n c e , and t h e f u l l t i m e f o r a p p e a l f i x e d
b y t h i s r u l e commences t o r u n and is t o be
computed from m a i l i n g by t h e c l e r k of n o t i c e
o f t h e e n t r y of a n y of t h e f o l l o w i n g o r d e r s
made upon a t i m e l y m o t i o n u n d e r s u c h r u l e s :
. . . ( 3 ) g r a n t i n g o r denying a motion under
R u l e 59 t o a l t e r o r amend t h e judgment ."
A s p o i n t e d o u t by t h i s C o u r t i n -
Marvel B r u t e S t e e l B l d g .
- -
a motion
f o r new t r i a l o r a m o t i o n t o v a c a t e a d e f a u l t judgment u n d e r R u l e

6 0 ( b ) made p u r s u a n t t o Rule 5 9 ( d ) s t o p s t h e r u n n i n g of t h e t h i r t y

day period f o r an a p p e a l . The t h i r t y d a y p e r i o d s t a r t s r u n n i n g
a f t e r the t r i a l court has entered its o r d e r denying t h e motion

a f t e r hearing. I n t h e a b s e n c e of a d e t e r m i n a t i o n by t h e c o u r t

within the t i m e periods involved, t h e motion is c o n s i d e r e d or

deemed denied, and the appeal time starts running. Here the
appeal time started running on A u g u s t 5 and terminated thirty

days thereafter. The r e s u l t is t h a t t h e a p p e a l was n o t filed
within the allowable t i m e period and t h i s Court d o e s n o t have

j u r i s d i c t i o n t o hear the appeal.

Warning.
- - W renew t h e w a r n i n g p r e v i o u s l y
e stated in recent
c a s e s by t h i s C o u r t . A t t o r n e y s and ~ i s t r i c tC o u r t s m u s t keep i n
mind t h e v e r y r e a l r i s k s i n v o l v e d i n t h e a p p l i c a t i o n of R u l e s 59
a n d 6 0 , M.R.Civ,P. These r u l e s a r e s i g n i f i c a n t l y d i f f e r e n t from
t h e companion r u l e s i n t h e F e d e r a l R u l e s of C i v i l P r o c e d u r e . The

Montana R u l e s a r e much s t r i c t e r . A s demonstrated h e r e , a f a i l u r e

t o comply r e s u l t s i n a l o s s of j u r i s d i c t i o n and i n a b i l i t y of t h e
t r i a l c o u r t and t h i s C o u r t t o c o n s i d e r q u e s t i o n s r a i s e d on t h e
merits.
T h i s c a s e d e m o n s t r a t e s t h e p o s s i b l y i n e q u i t a b l e r e s u l t s from
a f a i l u r e t o comply w i t h t h e s e r u l e s : The c o m p l a i n t a g a i n s t t h e
Marchwicks in substance stated only t h a t t h e y were 49 p e r c e n t

s t o c k h o l d e r s i n a d e f e n d a n t c o r p o r a t i o n , b u t o t h e r w i s e f a i l e d to
s t a t e a claim for r e l i e f a g a i n s t t h e Marchwicks; t h e a f f i d a v i t s

filed in behalf of t h e Marchwicks indicated that Mr. Marchwick

had advised Lagerquist promptly upon service of summons and
c o m p l a i n t , and L a g e r q u i s t had a d v i s e d M r . Marchwick t h a t he would

t a k e c a r e of h a n d l i n g a l l of t h e m a t t e r s r e q u i r e d ; and f u r t h e r
t h a t both M r . and Mrs. Marchwick s i g n e d an answer prepared by

L a g e r q u i s t which was n o t f i l e d i n t h i s c a s e , b u t which led the

Marchwicks to b e l i e v e t h a t everything had been taken care of;
d e f a u l t judgment was e n t e r e d o n l y a g a i n s t t h e Marchwicks and n o t
t h e o t h e r d e f e n d a n t s , r a i s i n g a q u e s t i o n as to t h e e q u i t y of t h i s

a c t i o n ; and f i n a l l y t h e D i s t r i c t C o u r t o b v i o u s l y t h o u g h t it had
t h e power t o c o n t i n u e t h e h e a r i n g to O c t o b e r and h a v i n g d o n e so
w i t h o u t o p p o s i t i o n by c o u n s e l , t h e j u r i s d i c t i o n of t h e c o u r t was

eliminated.
In the second issue plaintiff argues t h a t the evidence in

b e h a l f o f G r a c e Marchwick shows t h a t s h e had n o t b e e n p e r s o n a l l y

s e r v e d and t h a t as a r e s u l t t h e D i s t r i c t C o u r t d i d n o t g a i n per-
sonal jurisdiction over her. The District Court reached its

conclusion t h a t Grace Marchwick had been properly served only
a f t e r a h e a r i n g i n which t h e D i s t r i c t C o u r t a c t e d a s t h e f i n d e r
of fact, f o l l o w i n g t h e p r e s e n t a t i o n of t e s t i m o n y and o t h e r e v i -
d e n c e i n b e h a l f of b o t h s e t s of p a r t i e s . The s t a n d a r d of r e v i e w

is set forth in Rule 52(a), M.R.Civ,P., as follows:
" F i n d i n g s o f f a c t s h a l l n o t be s e t a s i d e
u n l e s s c l e a r l y e r r o n e o u s , and d u e r e g a r d s h a l l
b e g i v e n t o t h e o p p o r t u n i t y of t h e t r i a l c o u r t
t o j u d g e of t h e c r e d i b i l i t y of t h e w i t n e s s e s ."
The t r a n s c r i p t d o e s d i s c l o s e a d i r e c t c o n t r a d i c t i o n i n t h e e v i -
d e n c e on t h e q u e s t i o n of s e r v i c e . However, t h e r e is s u b s t a n t i a l

evidence i n the record t o s u p p o r t t h e f i n d i n g of p e r s o n a l ser-
vice. A s a r e s u l t , w e c o n c l u d e t h a t t h i s f i n d i n g of f a c t on t h e

p a r t o f t h e D i s t r i c t C o u r t c a n n o t be s e t a s i d e b e c a u s e i t is n o t
c l e a r l y erroneous.
W e t h e r e f o r e close w i t h t h e w a r n i n g t h a t R u l e s 59 and 6 0 m u s t

b e c a r e f u l l y f o l l o w e d by c o u n s e l and t h e t r i a l c o u r t s , o t h e r w i s e
a d d i t i o n a l c a s e s w i l l be d i s m i s s e d w i t h o u t t r i a l on t h e merits.
Af f i r m e d .
We Concur:

Chief Justice