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Whitefish Credit Union v. Russell Sherman and Joan Sherman

November 20, 2012

WHITEFISH CREDIT UNION, PLAINTIFF AND APPELLEE,
v.
RUSSELL SHERMAN AND JOAN SHERMAN, DEFENDANTS AND APPELLANTS.



APPEAL FROM: District Court of the Twentieth Judicial District, In and For the County of Lake, Cause No. DV 11-174 Honorable Deborah Kim Christopher, Presiding Judge

The opinion of the court was delivered by: Justice James C. Nelson

Submitted on Briefs: August 29, 2012

Decided: November 20, 2012

Filed:

Clerk

Justice James C. Nelson delivered the Opinion of the Court.

¶1 Russell and Joan Sherman*fn1 appeal from the District Court's December 29, 2011 order denying in part and granting in part their motion to vacate and to set aside the default judgment entered against them on November 2, 2011 (henceforth referred to as the Shermans' Motion).

¶2 We address the following, restated issue on appeal, and we affirm: Did the District Court slightly abuse its discretion in denying the Shermans' Motion?

Background

¶3 The District Court did not enter any findings of fact, conclusions of law or a rationale in support of its order. Rather, in entering its summary ruling, the court simply stated that it had considered the Shermans' Motion, the briefs, the affidavits, and the pleadings on file. Thus, we are not privy to exactly the District Court's rationale. Yet, in Caplis v. Caplis, 2004 MT 145, ¶ 14, 321 Mont. 450, 91 P.3d 1282, we proceeded to address the entry of default judgment at issue there, despite the similarly summary nature of the court's order. Accordingly, from our review of the District Court record, we proceed to address the issue on appeal.

¶4 The following pertinent facts are established in the record. Between January 2007 and July 2010, Russell, a sophisticated borrower and real estate developer, obtained loans for over $1,594,282 from the Whitefish Credit Union (WCU). This total was comprised of various loans made at different times and for different reasons. Russell defaulted in paying the loans. Unable to resolve the delinquencies satisfactorily through negotiations and exchanges of correspondence between WCU and the Shermans' counsel, WCU gave notice of default by a 10-day demand letter dated February 18, 2011. WCU filed its Complaint for Foreclosure on July 1, 2011, and twice requested the Shermans' counsel to accept service on behalf of his clients. Receiving no response from the Shermans' counsel, WCU waited an additional 30 days and then requested that the sheriff serve the Shermans. According to the sheriff's affidavit, service was effected on the Shermans on September 8, 2011. As it turned out, however, only Russell was, in fact, served; Joan was not personally served with process. Russell failed to enter a timely appearance or answer WCU's complaint. Accordingly, WCU requested entry of default, and the Shermans' default was entered on October 7, 2011. After waiting an additional 20 days, WCU filed its request for entry of a default judgment. The District Court entered default judgment on November 2, 2011.

¶5 The Shermans learned of the court's entry of default judgment on November 5, 2011, and they then filed their motion to vacate and set aside the default judgment on November 16, 2011. As already noted above, on December 29, 2011, the District Court entered its order on the Shermans' Motion. The court summarily denied the motion insofar as it applied to the default judgment entered against Russell, but the court granted the motion insofar as it applied to Joan. Based on WCU's concession that Joan was not properly served by the sheriff, the court ruled that it had no personal jurisdiction over her, and that the default judgment was, as a result, void as to her. There is no argument on appeal that the court's dismissal of the default judgment against Joan was in error. Therefore, we consider only whether the District Court slightly abused its discretion in not vacating and setting aside the default judgment as to Russell.*fn2

ΒΆ6 We also note that the parties' briefs on appeal refer to a number of other facts, mostly regarding the underlying loan transactions and the demands and negotiations between the Shermans, their counsel, and WCU, that preceded WCU filing its complaint. We do not set out those ...


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