Submitted on Briefs: March 14, 2018
FROM: District Court of the Eighth Judicial District, In and
For the County of Cascade, Cause No. DDV 16-0751 Honorable
John W. Parker, Presiding Judge.
Appellants: Steven T. Potts, Steven T. Potts, PLLC, Great
Appellee: KD Feeback, Toole & Feeback, PLLC, Lincoln,
JEREMIAH SHEA JUSTICE.
Pursuant to Section I, Paragraph 3(c), Montana Supreme Court
Internal Operating Rules, this case is decided by memorandum
opinion and shall not be cited and does not serve as
precedent. Its case title, cause number, and disposition
shall be included in this Court's quarterly list of
noncitable cases published in the Pacific Reporter and
Rob Brown and Desiree Frankos appeal the Eighth Judicial
District, Cascade County District Court's Order granting
Wendy Gehring's Motion to Set Aside Default Judgment. We
The dispute arises from a real estate contract Brown and
Frankos entered into to buy a parcel of land from Gehring and
her husband. Brown and Frankos paid for the property, but, at
the time the final payment was made, Gehring was unable to
convey the warranty deed. On September 16, 2016, Brown and
Frankos filed the Complaint commencing the present action
against Gehring. In the Complaint, Brown and Frankos sought
rescission of the Contract with Gehring and a return of all
payments made to Gehring, plus prejudgment interest. In the
alternative, Brown and Frankos sought damages under §
27-1-314, MCA, or specific performance of the Contract. On
September 21, 2016, the District Court issued a summons in
Cascade County for Gehring to respond to Brown and
Frankos' Complaint. On October 2, 2016, Gehring was
served with the Summons and Complaint. Gehring did not file
an answer or other responsive pleading. On November 2, 2016,
the Clerk of Court entered a default against Gehring. The
same day, the District Court entered a Findings of Fact and
Conclusions of Law. The District Court determined that
Gehring failed to subdivide and transfer the property as
agreed upon following payment, and the District Court granted
Brown and Frankos' request for rescission. The District
Court awarded Brown and Frankos the money paid to Gehring for
the property, plus prejudgment interest, for a total judgment
award of $176, 711.53.
On November 30, 2016, Gehring served Brown and Frankos with a
Motion to Set Aside Default Judgment ("Motion"). On
December 5, 2016, Gehring filed the Motion on the grounds of
mistake and excusable neglect as a pro se litigant who
misunderstood the issue or was inadvertently mislead. In the
affidavit attached to her Motion, Gehring alleged that after
being served, she contacted counsel representing Brown and
Frankos, but that counsel did not return her calls. Gehring
argued she was mistaken about her procedural obligations and
incorrectly believed contacting opposing counsel and
explaining the situation sufficed. Gehring alleged she was
waiting to hear back from opposing counsel. Brown and Frankos
opposed Gehring's Motion. Gehring also filed a Motion for
Change of Venue to Lewis and Clark County, the location of
the real property that is the subject of the action, and the
county in which Gehring resides. On February 3, 2017, Gehring
filed a Notice of Issue that the Motion was "fully
briefed and ready for disposition." On April 7, 2017,
Gehring submitted a Status Notice with the District Court
advising that she completed the subdivision process and could
convey the warranty deed for the property to Brown and
Frankos. On April 13, 2017, Brown and Frankos responded to
Gehring's Status Notice. The parties dispute whether
Brown and Frankos currently "have" the property. On
June 20, 2017, the District Court issued an Order setting
aside the November 2, 2016 default judgment pursuant to Mont.
R. Civ. P. 60(b)(5) and (6). The District Court ordered
Gehring's case reopened for a proceeding on the merits.
Brown and Frankos appeal the District Court's Order
setting aside the default judgment.
"Our standard of review of a district court's ruling
on a motion pursuant to M. R. Civ. P. 60(b) depends on the
nature of the final judgment, order, or proceeding from which
relief is sought and the specific basis of the [M. R. Civ. P]
60(b) motion." Essex Ins. Co. v. Moose's Saloon,
Inc., 2007 MT 202, ¶ 16, 338 Mont. 423, 166 P.3d
451. Whether a district court untimely granted a M. R. Civ.
P. 60(b) motion is a question of law we review de novo.
See Green v. Gerber, 2013 MT 35, ¶¶ 12,
24-29, 369 Mont. 20, 303 P.3d 729 (non-compliance with
deadline objectionable error but not jurisdictional). Where a
district court grants a motion to set aside a default
judgment and opens the action for a decision on the merits,
this Court will only reverse on a showing of manifest abuse
of discretion. Ditton v. Dep't of J. Motor Vehicle
Div., 2014 MT 54, ¶ 15, 374 Mont. 122, 319 P.3d
1268; Essex Ins. Co., ¶ 17; Lords v.
Newman, 212 Mont. 359, 364, 366, 688 P.2d 290, 293, 294
(1984). We review the deemed denial of a motion to set aside
a default judgment for a slight abuse of discretion.
Green, ¶ 13.
It is within this Court's power to consider any trial
court proceedings that affect the parties' substantial
rights, and we may, for good cause, remand a case for further
proceedings. Section 3-2-204, MCA; United Farm Agency v.
Blome, 198 Mont. 435, 438, 646 P.2d 1205, 1207 (1982).
Every litigated case should be tried on the merits, and
judgments by default are not favored. Essex Ins.
Co., ¶ 17 (internal citations omitted); Brilz
v. Metro. Gen. Ins. Co., 2012 MT 184, ¶ 15, 366
Mont. 78, 285 P.3d 494; Keller v. Hanson, 157 Mont.
307, 309, 485 P.2d 705, 707 (1971) ("this Court will not
interfere except upon a showing of manifest abuse; and the
trial court should exercise liberality since judgment by
default is not favored. . . .").
A district court may set aside a default judgment in
accordance with M. R. Civ. P. 60(b) if, for example, applying
a default judgment prospectively is no longer equitable.
See Green, ¶ 15. M. R. Civ. P. 60 provides:
(b) Grounds for Relief from a Final Judgment, Order, or
Proceeding. On motion and just terms, the court may relieve a
party or its legal representative from a final judgment,