Dethloff v. Dethloff

SANDSTROM, Justice,

dissenting.

[¶ 26] Because the entry of default judgment as a sanction is too harsh under the circumstances of this ease, I would reverse the entry of default judgment and remand for consideration of a lesser sanction. I therefore dissent.

I

[¶ 27] Generally, William Dethloffs April 9, 1997, answer — even if late — would preclude the entry of a default judgment because it was filed prior to the entry of judgment. See Filler v. Bragg, 1997 ND 24, ¶ 11, 559 N.W.2d 225 (“By its very language, Rule 55 provides default judgment may not be obtained against a party who has appeared. If a party appears by motion following notice but prior to entry of default judgment, a trial court, if it denies the party’s motion, must allow a reasonable time for the party to file a responsive pleading prior to the entry of default judgment.”); see also Colorado Compensation Ins. Auth. v. Raycomm Transworld Indus., 940 P.2d 1000, 1001 (Colo.Ct. App.1997) (“Thus, although defendant’s answer here was filed late, because it was filed before a default had been entered and before the trial court had ruled on the motion for default judgment, the court should have denied the motion and erred in not doing so.”); Estate of Snyder, 562 So.2d 403, 404 (Fla. Dist.Ct.App.1990) (“If a defendant files an untimely answer before a default is entered, the entry of the default is avoided.”); Moore v. Sullivan, 123 N.C.App. 647, 473 S.E.2d 659, 660 (1996) (“After an answer has been filed, even if the answer is untimely filed, a default may not be entered.”); cf. Resolution Trust Corp. v. Gosbee, 536 N.W.2d 698, 702 (N.D.1995). I thus agree the result in this case is an exercise of the trial court’s inherent power to sanction.

II

[¶ 28] The facts of record support the trial court’s finding William Dethloff had chosen delay as part of his litigation strategy. After the first default judgment had been entered on November 4, 1996, he waited until Janu*874ary 23, 1997, to move to vacate the default, even though in an affidavit he admits he had met with an attorney as early as November 18, 1996, regarding the judgment entered against him. Additionally, the motion to vacate the judgment appears to have been made only in response to Sandra Dethloffs motion for a finding of contempt based on William Dethloffs failure to comply with the provisions of the November 4, 1996, judgment. Furthermore, the transcript of the May 12, 1997, hearing also discloses the trial court was concerned about the effect of a delay in light of the possibility William Deth-loff was concealing and dissipating assets. Based upon these facts, sanctions are appropriate.

[¶ 29] Sanctions, however, must be reasonably proportionate to the misconduct. See Vorachek v. Citizens State Bank, 421 N.W.2d 45, 51 (N.D.1988) (“Sanctions must be tailored to the severity of the misconduct-”). In Bachmeier v. Wallwork Truck Centers, 544 N.W.2d 122, 125 (N.D.1996), we stated:

“In sanctioning a party, the district court should at least consider ‘the culpability, or state of mind, of the party against whom sanctions are being imposed; a finding of prejudice against the moving party, and thé degree of this prejudice, including the impact it has on presenting or defending the case; and, the availability of less ■ severe alternative sanctions.’ ”

We have previously recognized default judgment is “the ultimate sanction” and “should be used sparingly and only in extreme situations.” Dakota Bank & Trust Co. v. Brakke, 377 N.W.2d 553, 558 (N.D.1985). Under the facts of this ease, the sanction of default is too harsh.

[¶30] During the May 12, 1997, hearing, the trial court stated:

“I think I made it very clear at [the January 23, 1997, hearing] that even though I didn’t specifically issue another order that an Answer should be filed, that I didn’t think that what had been given to Attorney Robinson was anything close to approaching an Answer. I guess I didn’t think I needed to issue another order because I thought I made it pretty clear that there wasn’t an Answer filed.”

During the January 23, 1997, hearing, the trial court had stated:

“Okay. All right, well I think my Order was pretty clear too and the Order I’m referring to is the Order of October 7th in which Mr. Dethloff was ordered to file an Answer. I do find it a little bit difficult to believe that a person of Mr. Dethloffs obvious intelligence would think that bringing a one line, two line letter over to Mr. Robinson would constitute an Answer. Even though obviously Mr. Dethloff is not a lawyer, it’s just very difficult for me to believe that he thought that that actually complied. Having said that though, I think I’m going to grant the motion to vacate the judgment and that’s for one reason and one reason only, that if I don’t, I suspect that it will be in here on a weekly basis with contempt motions for Mr. Deth-loffs failure to follow the judgment and I would rather see this case either settled or tried so that Mr. Dethloff and Ms. Dethloff can work things out because in my experience, if you can come to a mutual decision whether you like the decision or not, it’s a lot easier and a lot better than having a judge shove it down your throat.
“I will say another thing though and that is in reviewing the file and the chronology that Mr. Robinson went through, I’m getting the impression that Mr. Dethloff, you’re delaying things as much as you possibly can. You’re pushing things right up to the limit and then when it’s clear that I’m serious about things, then you go, oh, wait a minute and I’m not going to have that anymore. What we are going to do is from here on in comply with the rules, specifically Rule 8.3 and Ms. Deth-loff, I’m not going [sic] set a specific deadline for you to get another lawyer because I know that that might not be that easy but what I am going to do is — there hasn’t really been an official Answer filed. There’s enough I guess to get by the default judgment but what I’m going to require is that pursuant to Rule 8.3, within 60 days of today you have the joint meeting that’s required under the Rule and then from there on, the Rule sets out time lines for filing the informational statement and that sort of thing. So 60 days from today, or no later than 60 days from today, obviously if you can do it sooner, *875great but no later than 60 days from today I want the meeting to be accomplished and then I think you have 30 days after that to file the informational statement, that way the case will get rolling and from what you’ve said, it sounds like there’s been considerable discussion with regard to settlement already. Obviously if the ease can be settled between now and then, -that’s fine too.” (Emphasis added).

[¶31] While, as stated above, the record supports the conclusion William Dethloff had adopted delay as a litigative strategy, this excerpt shows, contrary to the trial court’s later recollection, its statements during the January 23, 1997, hearing did not direct Dethloff to file a “formal” answer. While the trial court emphasized N.D.R.O.C. 8.3, it did not specify it was requiring William Dethloff to file a “formal” answer or when it should be filed. Furthermore, at the May 12, 1997, hearing, William Dethloffs attorney, Ralph Vinje, acknowledged the failure to file the answer was his fault:

“I screwed up. I got busy with preparing to deal with everything else and I just simply neglected to file an Answer. Had Mr. Tuntland contacted me and said where’s your Answer, he’d have gotten one in the return mail. As soon as I got this motion, he got one.”

The majority opinion at ¶ 11 states, during the May 12, 1997, hearing, “Sandra’s attorney also mentioned that ‘[t]he meeting was delayed two times because of Mr. Vinje’s schedule.’ ” The majority ignores Mr. Vin-je’s reply: “Actually it was because of my dying mother-in-law, who finally did it on Sunday.” I recognize the possible prejudice to Sandra Dethloff if William Dethloff is in fact dissipating assets; however, the lack of an answer, as was stated by his attorney, “has had really no effect on our continuing— the fact like Mr. Tuntland said, we went ahead and had our meeting on the 8.3.” Indeed, the N.D.R.O.C. 8.3 informational statement signed by both parties and their attorneys and filed with the court May 13, 1997, had set a suggested trial date of July 15, 1997.

[¶ 32] The minimal effect of the lack of an answer and the stage to which this case has progressed make it clear justice would be best served by an on-the-merits resolution.

Cf. Murdoff v. Murdoff, 517 N.W.2d 402, 403 (N.D.1994) (“We also prefer a judgment on the merits over a default judgment when it is fair to do so.”). Sanctions, however, are appropriate here, because William Dethloff, while apparently not to blame for the late filing of the “formal” answer, has been less than cooperative, and the record does support a finding of delay. As such, I would remand this case to the district court for consideration of a lesser sanction, “such as a deadline with an automatic imposition of a sanction so that the parties may be apprised of the alternatives for noncompliance.” Dakota Bank & Trust Co. at 558. This would not eliminate default as a sanction option should William Dethloff continue to delay the proceedings. Additionally, Sandra Dethloffs brief states William Dethloff has not timely, and completely, responded to discovery requests. Should he fail to comply with any further discovery requests, default may be an appropriate sanction, if she employs the mechanism provided under N.D.R.Civ.P. 37. See Rudh v. Rudh, 517 N.W.2d 632, 635 (N.D.1994) (noting a trial court may not impose sanctions for discovery violations under N.D.R.Civ.P. 37 “until a party violates a discovery order”).

[¶ 33] MARING, J., concurs.