No. 91-329
IN THE SUPREME COURT OF THE STATE OF MONTANA
BOARD OF DIRECTORS OF THE EDELWIESS OWNERS' ASSOCIATION, a n0n-
profit corporation, in its corporate capacity, and on behalf of
individual owners of Edelweiss Condominiums,
Plaintiff and Respondent,
M.V. (MAX) McINTOSH and MAURICE THOMAS SAULINER, individually and
d/b/a D & M Property Management, Inc., METRO CITY REALTY AND
INSURANCE OF EDMONTON, ALBERTA, and JOHN DOE I, 11, AND 111,
Defendants and Appellants.
APPEAL FROM: District Court of the Eleventh Judicial District,
In and for the County of Flathead,
The Honorable ~ichael Keedy, Judge presiding.
H.
For Appellant:
William E. Hileman, Jr., Hedman, Hile
Whitefish, Montana.
For Respondent:
Debra D. Parker, Murphy, Robinson, Heckathorn &
Phillips, Kalispell, Montana.
Submitted on briefs: October 24, 1991
" F
a
Decided: December 19, 1991
Filed: 1'
Justice Fred J. Weber delivered the Opinion of the Court.
Defendants McIntosh and ~aulnier, individually and doing
business as D & M Property Management, Inc., and Metro City Realty
and Insurance of Edmonton, Alberta (herein called defendants),
appeal from the order of the ~istrict Court for the Eleventh
Judicial District, Flathead County, refusing to set aside the
default judgment entered against them. We affirm.
The only issue is whether the District Court erred by refusing
to set aside the default judgment against the defendants.
The complaint of the plaintiff alleges that the Edelweiss
Owners' Association is an incorporated, non-profit association of
owners of fractional interest in the Edelweiss Condominiums Project
on Big Mountain, Whitefish, Montana. The complaint further alleges
that the defendants submitted a proposal to manage the condominium
project and to act as brokers for the purpose of renting units for
owners who elected to make the units available for rent; the
proposal was accepted by the plaintiff; and that the defendants
assumed the management and control of the property on August 1,
1989. The further allegation is that the defendants were
terminated as managers effective February 28, 1990. The complaint
alleges that during the period of time the defendants managed the
property they collected various association fees and rents. Next
the complaint alleges that the defendants failed to provide a
detailed and itemized accounting of plaintiff's funds or of rents
and deposits collected; that the defendants were obligated to
collect and hold funds for the benefits of the plaintiff and to
provide an accounting; and in the alternative that despite the
repeated demands of the plaintiff, the defendants have refused to
deliver money collected and to account for the same, and that the
defendants' actions constitute conversion. Following are
significant dates and events:
June 8, 1990 Personal service made on defendant
Saulnier, individually and d/b/a D &
M Property Management, Inc.
June 18, 1990 Personal service made on defendant,
McIntosh
July 3 , 1990 "Statement of Defence" (sic) was
received by clerk of District Court
without an appearance fee
July 5, 1990 Clerk of district court letter to
defendants requesting appearance fee
of $160. (Note that $160 fee has
never been paid.)
July 9, 1990 Default of the defendants McIntosh
and Saulnier and D & M Property
Management, Inc. was entered in the
district court.
August 7 , 1990 D e f e n d a n t M c l n t o s h w r o t e t o t h e clerk
of the District Court requesting
further information with regard to
fees .
September 10, 1990 Personal service on the defendant
Metro City Realty and Insurance of
Edmonton, Alberta.
September 12, 1990 Hearingontheplaintiffs' motion for
default judgment, and entry of
findings of fact and judgment
establishing that based on pleadings
and testimony the court found that
the defaults of McIntosh, Saulnier
and D & M Property Management, I n c .
were properly entered and that the
plaintiffs were entitled to judgment
in the amount of $183,593.70 and
costs. Judgment entered for
$183,593.70 together with costs of
$161.24.
October 3, 1990 Default entered of defendant
Metro City Realty and Insurance of
Edmonton, Alberta.
October 26, 1990 Amendment to findings of fact and
judgment so that previous judgment
included Metro City Realty and
Insurance of Edmonton, Alberta.
April 9, 1991 Defendants1 motion to set aside
default judgment.
May 10, 1991 Trial court's memorandum and order
denying motion to set aside default
judgment .
The "Statement of Defence" (sic), which was not filed because of
the failure to pay the appropriate appearance fee of $160.00
remained in the court file. At the time of the hearing prior to
judgment, the District Court acknowledged an awareness of that
Statement but refused to consider the same because it had not been
properly filed. The Statement is a number of pages in length and
contains a literate explanation of theories of defense and purports
to have been signed by defendants Saulnier and McIntosh.
The issue presented is whether the District Court erred in
refusing to set aside the default judgment against the defendants.
Defendants argue that the court should relieve them from the
judgment pursuant to Rule 60(b), M.R.Civ.P., which in pertinent
part states:
On motion and upon such terms as are just, the court may
relieve a party or a party's legal representative from a
final judgment, order, or proceeding for the following
reasons: (1) mistake, inadvertence, surprise, or
excusable neglect; (2) newly discovered evidence which by
due diligence could not have been discovered in time to
move for a new trial under Rule 59(b) ; (3) fraud (whether
heretofore denominated intrinsic or extrinsic),
misrepresentation, or other misconduct of an adverse
party; . .
. or (6) any other reason justifying relief
from the operation of the judgment. The motion shall be
made within a reasonable time, and for reasons (I), (2),
and (3) when a defendant has been personally served,
whether in lieu of publication or not, not more than 60
days after the judgment, order or proceeding was entered
or taken . . ..
The standard to be applied on the setting aside of default judgment
was stated in Blume v. Metropolitan Life Ins. Co. (1990), 242 Mont.
465, 791 P.2d 784. In Blume this Court stated that where a trial
court denies a motion to set aside a default judgment, the standard
of review is that no great abuse of discretion is needed to
reverse, or in other words, that slight abuse is sufficient to
justify reversal of such an order. In applying that test to the
present case, we have concluded there was no abuse of discretion on
the part of the District Court.
The defendants attempt to argue that relief should be granted
under subparagraphs (I), (2) and (3) of Rule 6 O ( b ) which cover the
elements of mistake, inadvertence, surprise, excusable neglect,
newly discovered evidence, and fraud, misrepresentation, or other
misconduct. Requests for relief from final judgment on those
grounds are required by the above quoted rule to be made not more
than 60 days after the judgment. Here the motion was made 165 days
a f t e r the e n t r y of judgment. W e t h e r e f o r e a f f i r m the ~istrict
Court's determination that the defendants are precluded from moving
to set aside the judgment on the grounds enumerated in Rule
60(b) (1)1 (2) and (3)
The remaining ground argued by the defendants is that they a r e
entitled to relief under subsection (61, the general catch-all
clause which covers any other reason justifying relief from the
operation of the judgment. In support of their motion, the
defendants filed a lengthy affidavit which purported to be the
affidavit of defendant Saulnier. That affidavit was nat signed by
Saulnier. The result is that the defendants have failed to
establish any of the facts which have been referred to in the
Saulnier affidavit. While the defendants contend that they are
Canadian citizens unfamiliar with the laws of Montana, that they
acted pro se, that they did file an answer, and that they would
have presented contradictory evidence, none of these factors have
been established in fact by affidavit or other appropriate proof.
We conclude that this case is similar to Gergen v. Pitsch
(1981), 194 Mont. 70, 634 P.2d 652. In Gerqen the defendant was
personally served with summons and complaint and the defendant
subsequently wrote a letter to the plaintiff's attorney. This
Court concluded that the letter which the defendant sent to
Gergen's attorney indicated that the defendant was both literate
and intelligent, that the summons and complaint were legally
sufficient and clearly stated a suit had been filed. We therefore
held that under those facts, we could not conclude that the
defendant was so mistaken as to the nature of what was transpiring
that the judgment against him should be set aside.
In a similar manner, in the present case, summons and
complaint were legally sufficient and complete. The "Statement of
Defence1' (sic) established that the defendants were literate.
Clearly the summons and complaint were legally sufficient to
establish that a suit had been filed against the defendants. The
defendants completely failed to present facts sufficient to
establish excusable neglect or any other basis or reason justifying
relief from the operation of the default judgment. In addition,
the defendants here acknowledged receipt of the notice from the
District Court of the requirement for filing fees but apparently
assumed that their "Statement of Defence" (sic) would still be
considered.
Defendants further contend that judgment should be set aside
because they never received notice of entry of the default
judgment. In Schmidt v. Jomac, Inc. (1982), 196 Mont. 323, 327,
639 P.2d 517, 520, this Court held that "under Rules 55(a) and
77 (d), M.R. Civ.P. , no notice of entry of a default judgment need be
sent to the defendant by the clerk of the district courtM.
We conclude that the defendants have failed to establish any
reason justifying relief from the operation of the default judgment
under Rule 60(b) (6). We hold that the District Court did not abuse
its discretion in refusing to set aside the default judgment. We
conclude that the defendants have failed to establish any abuse of
discretion on the part of the District Court under the test in
Blume
I 791 P.2d at 785.
Affirmed.
We Concur: /
Chief Justice
December 19, 1991
CERTIFICATE OF SERVICE
I hereby certify that the fdlowing order was sent by United States mail, prepaid, to the
following named:
William E. Hilernan, Jr.
HEDMAN, HILEMAN & LACOSTA
433 Second Street
Whitefish, MT 59937
Debra D. Parker
MURPHY, ROBINSON, HECKATHORN & PHILLIPS, P.C.
P.O. Box 759
Kalispell, MT 59903-0759
ED SMITH
CLERGQF THE SUPREME COURT