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Enz v. Raelund

Supreme Court of Montana

June 5, 2018

ERICK M. ENZ, KEELEE M. ENZ, and LYN C. REHM, Plaintiffs and Appellees,

          Submitted on Briefs: April 4, 2018

          APPEAL FROM: District Court of the Eleventh Judicial District, In and For the County of Flathead, Cause No. DV 17-016 (D) Honorable Dan Wilson, Presiding Judge

          For Appellants: David Duke, Duke Law Firm, Billings, Montana

          For Appellees: Kim T. Christopherson, Christopherson Law Office, P.C., Kalispell, Montana


          Ingrid Gustafson, Justice

         ¶1 Anthony Raelund, Candice Raelund, Raelund Family Trust, (collectively "the Raelunds") and Brooke Anthony Weeks (Weeks) appeal from an order of the Eleventh Judicial District Court, Flathead County, denying two motions filed by the Raelunds: Motion to Set Aside Default and Motion to Set Aside Default Judgment, and two motions filed by Weeks: Motion for Leave to Intervene by Brooke Anthony Weeks and Motion for Brooke Weeks to Join Anthony Raelunds [sic] Motion to Set [sic] Default and Judgment. We affirm.

         ¶2 We restate the issues on appeal as follows:

1. Did the District Court slightly abuse its discretion when it denied the Raelunds' motions to set aside default and default judgment?
2. Did the District Court err when it denied Weeks' motion for leave to intervene?
3. Did the District Court err in its determination of damages?


         ¶3 Lyn C. Rehm (Rehm), her son Erick M. Enz (Erick), and Erick's wife Keelee M. Enz (Keelee) (collectively "the Enzes") own a residential property in Kila which they decided to sell. On November 7, 2014, they entered into a "Lease Option Agreement" (Lease) with the Raelunds. "Anthony Raelud [sic] of the Raelund Family Trust" and "Candice Raelund of The Raelund Family Trust" signed the Lease.

         ¶4 Erick handled the negotiation and administration of the Lease. As Erick later testified, and the District Court found credible, he met with an "older" couple who introduced themselves as Anthony and Candy Raelund. Anthony introduced a younger man as his son Anthony Raelund, Jr. Erick and Keelee witnessed the older man sign the Lease as "Anthony Raelund." Erick did not witness anyone sign for Candice Raelund; rather, the document was later returned signed.

         ¶5 The Lease provided that upon signing, the Raelunds would pay $5, 000, which Erick would deem as $850 in rent and $4, 150 as a down payment toward the future purchase of the property. The Raelunds would thenceforth pay $2, 500 per month; Erick would deem $1, 500 as rent and credit $1, 000 toward future purchase. Once the Raelunds made down payments totaling $30, 000, they would have 60 days to submit $239, 900 "paid in cash, certified check, or cashier's check at closing" to purchase the property. Somewhat inconsistently, the Lease also provided that after the Raelunds made a total of $30, 000 in down payment, Erick would deliver a quit claim deed and the Raelunds would assume the existing mortgages. The Lease also provided that if the Raelunds defaulted, the Enzes would keep all monies paid as liquidated damages.

         ¶6 Upon signing the Lease, the Raelunds presented Erick with $3, 500, rather than $5, 000 as agreed upon. Erick accepted the payment, considering $850 as prorated rent for November, and crediting the Raelunds with $2, 650 towards the down payment.

         ¶7 From then forward, per the Lease, the Raelunds were expected to pay $2, 500 by the fifth day of each month. The Raelunds did not submit a payment by December 5, 2014. On December 8, 2014, they paid only $1, 500, informing Erick they intended to pay the additional $1, 000 in one year. From January 2015 through July 2016, the Raelunds paid $2, 500 each month, albeit sometimes late and sometimes in two installments. When Erick did not timely receive the August 2016 payment, he sent the Raelunds a "Notice to Pay or Quit" on August 18, 2016, which stated they were required to make the August payment, in full, within three days. The Notice provided that if the Raelunds failed to do so, the Lease would terminate and they would have to vacate the property immediately.

         ¶8 Erick testified that he gave the Raelunds "the benefit of the doubt" when they began making late payments. When he contacted the woman he knew as Candice Raelund to discuss the payment issues, she accused Erick of failing to disclose a mold problem in the bathroom. Erick offered to address the issue, but she informed him the Raelunds had fixed it. Candice Raelund also asked Erick for information about the property's mortgages. He initially answered her questions since she was a potential purchaser. However, he soon decided not to share more information because the Raelunds were only renting at that point.

         ¶9 The Kila property has two mortgages, both in Rehm's name with Nationstar as the lender. At around this time, Nationstar (Nationstar) contacted Erick and informed him Rehm had given permission for other people to access her mortgage account. Nationstar produced a written document purporting to authorize "Antonius Anthony Raelund and CC Raelund to be added to my account . . . . Please accept payments from either party." Rehm denied she had given such permission and she denied the signature on the document was hers.

         ¶10 On August 20, 2016, the Raelunds sent a payment for $1, 123.30, in the form of a money order made out to both Erick and Nationstar Mortgage, via certified mail. On August 23, Erick served the Raelunds with a Notice of Eviction. The Raelunds continued to occupy the property and to send payments in lesser amounts, with money orders issued dual-payee to Erick and Nationstar, as follows: $1, 132.00 on September 19; $1, 173.30 on October 21; $1, 132.00 on November 24; and $1, 123.30 on December 14. Erick endorsed each money order and forwarded it to Nationstar.

         ¶11 After the December 2016 payment, the Raelunds ceased paying altogether. According to Erick's records, they had paid $22, 650 towards the $30, 000 down payment.

         ¶12 On January 4, 2017, the Enzes, appearing pro se, filed a Complaint in the Eleventh Judicial District Court in which they sought: a writ of possession; past due rent and pre- and post-judgment interest; actual damages for breach of contract; treble damages for refusal to pay rent pursuant to § 70-24-422(5), MCA; quiet title; the right to retain all monies paid under the Lease; an order declaring that the Raelunds were not entitled to reimbursement for any alleged repairs, maintenance, or improvements; and attorney fees and costs.

         ¶13 On January 5, 2017, the Enzes received a "NOTICE and BILL" regarding the property. The document stated, in part:

Please produce the verifiable documents proving that . . . you actually own this property. . . . As a mere tenant living on this property I will be happy to return it to its rightful owner, provided that the owner compensates me for my labor, time, efforts, payments, materials, and cash outlay for services rendered to improve and maintain this property, to its maximum habitability, and safe to dwell within and upon. I shall now present this court and you and your company with an itemized invoice payable on demand. . . . If not paid by the specified time, I shall place a Mechanics lien and begin other collections actions as necessary to receive my just compensation.

         The itemization of the alleged expenses included $12, 000 for a foundation for a root cellar, $89, 000 for mold abatement, $23, 000 to renovate a bathroom, $75, 000 to clear felled trees and remove the trunks, $9, 600 for "House Cleaning Services, " and $188, 160 for "Total Maintenance at $10.00 per hour 24/7, " for a grand total of $605, 888. The document was signed "Anthony-B: Raelund a natural man."

         ¶14 The Enzes unsuccessfully attempted to have the Raelunds personally served with the Summons and Complaint. Process Server Lazzaro A. Cutrone filed Affidavits of Due Diligence, in which he averred he visited the Kila property on numerous occasions and although he saw signs of occupation, no one answered the door.

         ¶15 Cutrone also called several telephone numbers Erick provided. His calls usually went unanswered. On one occasion, a male answered and refused to identify himself, but stated he would give the Raelunds a message. On another occasion, a female who identified herself as "Bailey" answered, but claimed she did not know the Raelunds. On January 22, Cutrone reached a male who identified himself as "Dimitri" and who informed Cutrone the Raelunds were out of town but would meet with Cutrone on January 25. Neither "Dimitri" nor any of the Raelunds contacted Cutrone on January 25 and Cutrone was unable to make further contact with "Dimitri."

         ¶16 The Enzes then moved to serve the Raelunds by publication. The District Court granted the motion and the Enzes published the summonses in the Flathead Beacon three times in March 2017.

         ¶17 On April 17, 2017, with no response from the Raelunds, Erick filed a Notice of Intent to Request Entry of Default and Entry of Default Judgment against Anthony Raelund, Candice Raelund, and Raelund Family Trust. Erick posted a copy of this Notice at the Kila property.

         ¶18 On April 18, 2017, "Antonius Raelund" filed a Motion to Vacate Judgment for Fraud and Surprise, [1] with the parties captioned as:

"Antonius-Damascus; Raelund" Candi-Raelund CounterPLAINTIFF,
"Erick M.EnzKeelee M.Enz. And Lyn C Rehm" CounterDEFENDANT

         ¶19 On April 21, 2017, the Enzes, now represented by counsel, filed a Motion for Entry of Default against Candice Raelund and Raelund Family Trust. The Enzes also moved the District Court to set a hearing on their Complaint, and to require "Antonius-Damascus; Raelund" to establish he is a real party in interest prior to the hearing.

         ¶20 On April 24, 2017, "Antonius-Damascus; Raelund" filed a "Notice of Pendancy [sic] of Action a.k.a Notice of Lis Pendens." He also filed a counterclaim.[2]

         ¶21 On April 25, 2017, the District Court granted the Enzes' motion to set a hearing, but denied their motion to require "Antonius-Damascus; Raelund" to establish he is a real party in interest prior to the hearing.

         ¶22 The hearing occurred on May 1, 2017. At the outset, the District Court asked if "Anthony Raelund" was present. A man responded in the affirmative and the court seated him at the counsel table. Upon questioning, the man further stated he was the person who had filed documents under the name "Antonius-Damascus; Raelund."

         ¶23 The District Court also asked if "Candace Raeland" was present.[3] A woman responded in the affirmative. Another woman, who later identified herself as "Candy Raelund, " interposed that "Candace Raeland" was not a defendant because "she didn't pay anything." The District Court asked "Candy Raelund" if she was "Candace Raeland." "Candy Raelund" denied being Candice Raelund. The woman who identified herself as "Candace Raeland" confirmed to ...

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