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Brown v. Gehring

Supreme Court of Montana

June 5, 2018

ROB BROWN and DESIREE BROWN, Plaintiffs and Appellants,
WENDY GEHRING, Defendant and Appellee.

          Submitted on Briefs: March 14, 2018

          APPEAL 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.

          For Appellants: Steven T. Potts, Steven T. Potts, PLLC, Great Falls, Montana

          For Appellee: KD Feeback, Toole & Feeback, PLLC, Lincoln, Montana



         ¶1 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 Montana Reports.

         ¶2 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 affirm.

         ¶3 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.[1] 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.

         ¶4 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.

         ¶5 "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.

         ¶6 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).

         ¶7 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. . . .").

         ¶8 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, ...

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