JOHNSON v MATELICH
Annotate this Case
Download PDF
No. 12461 I N THE SUPREME COURT O THE STATE O MONTANA F F CHARLES G. JOHNSON and GUNNAR E. JOHNSON, a p a r t n e r s h i p d / b / a Park Motors Company, P l a i n t i f f s and Respondents, LOUIS B. MATELICH, i n d i v i d u a l l y , MATELICH TRAILER SALES & SERVICE, a Montana c o r p o r a t i o n , and ASSOCIATES FINANCIAL SERVICES, a Montana corporation, Defendants and A p p e l l a n t s . Appeal from: D i s t r i c t Court of t h e Third J u d i c i a l D i s t r i c t , Honorable S i d G . S t e w a r t , Judge p r e s i d i n g . Counsel of Record: For A p p e l l a n t s : John N . Radonich argued, Anaconda, Montana For Respondents : Knight, Dahood, Mackay and McLean, Anaconda, Montana Wade J . Dahood and David M. McLean argued, Anaconda, Montana Submitted : Filed : &.c 1 9 Clerk November 27, 1973 Chief J u s t i c e James T . H a r r i s o n d e l i v e r e d t h e Opinion of t h e C o u r t . Mr. T h i s i s a n a p p e a l by d e f e n d a n t , L o u i s M a t e l i c h , from a n o r d e r d e n y i n g h i s motion t o s e t a s i d e e n t r y of d e f a u l t s and a n o r d e r g r a n t i n g p l a i n t i f f s ' motion f o r e n t r y of d e f a u l t judgments. P l a i n t i f f s b r o u g h t two s e p a r a t e a c t i o n s i n t h e d i s t r i c t c o u r t of t h e t h i r d j u d i c i a l d i s t r i c t . The c a s e s a r e c o n s o l i - d a t e d f o r t h e p u r p o s e of t h i s a p p e a l b e c a u s e t h e i s s u e s r a i s e d a r e t h e same i n b o t h c a s e s . The f i r s t c l a i m f o r r e l i e f f i l e d by p l a i n t i f f s w a s f o r t h e p u r p o s e of c o l l e c t i n g i n s u f f i c i e n t f u n d s c h e c k s d u e and owing t o them i n t h e sum of $3,948.04, plus reasonable a t t o r n e y ' s fee. P l a i n t i f f s ' c o m p l a i n t was f i l e d on J a n u a r y 27, 1971. A motion t o d i s m i s s was f i l e d on b e h a l f of d e f e n d a n t on F e b r u a r y 5 , 1971, by t h e law f i r m of G a r l i n g t o n , Lohn and Robinson, M i s s o u l a , Mont a n a , and on F e b r u a r y 1 7 , 1971, t h e motion was d e n i e d , w i t h d e No f e n d a n t b e i n g g r a n t e d 30 d a y s w i t h i n which t o f u r t h e r p l e a d . f u r t h e r p l e a d i n g s were f i l e d b u t on March 9, 1971, a s u b s t i t u - t i o n of a t t o r n e y s was f i l e d showing t h e s u b s t i t u t i o n of t h e law f i r m of Murray & H o l t , M i s s o u l a , Montana, a s a t t o r n e y s f o r d e - fendant. On August 2 6 , 1971, a n amended c o m p l a i n t was s e r v e d on Murray & H o l t , who moved t o d i s m i s s t h e same on September 7 , 1971. The motion was d e n i e d on September 1 5 , 1971, w i t h d e f e n d - a n t b e i n g g r a n t e d 30 d a y s w i t h i n which t o f u r t h e r p l e a d . he second c l a i m f o r r e l i e f was b r o u g h t by p l a i n t i f f s i n t h e sum of $52,595.53 f o r t h e purpose of f o r e c l o s i n g l i e n s . c o m p l a i n t was f i l e d on F e b r u a r y 11, 1971. was f i l e d by Murray & H o l t on May 25, 1971. The A motion t o d i s m i s s On J u n e 9 , 1971, t h e motion was d e n i e d and d e f e n d a n t was g r a n t e d 30 d a y s w i t h i n which to further plead. In this cause Associates Financial Services was a party defendant, and by stipulation filed on September 14, 1972, the cause was dismissed as against Associates Financial Services. The following facts are the same as to both claims for relief: On September 16, 1971, notice of taking the deposition of defendant was filed. of Murray & A consent to withdrawal of the law firm Holt as attorneys for defendant was signed by defend- ant on December 9, 1971. The consent indicated that the defend- ant would continue to appear in person until further notification was given to plaintiffs. fendant was taken. On the same day, the deposition of de- Defendant stated under oath that he was represented by Mr. "Ty" Robinson, Missoula, Montana, but that Mr. Robinson could not be present. The deposition was continued. In the foreclosure case application was made to the clerk of the district court for entry of default of defendant on February 16, 1972. On the same day, defendant's default was entered by the clerk of the district court. In the insufficient funds case application to the clerk for entry of default was made on September 20, 1972, and on the same day, defendant's default was entered. On October 11, 1972, affidavits by plaintiffs1 attorney and motions for judgment by default by the court were filed in both causes, and judgments by default by the court were signed and filed. On December 4, 1972, the firm of Boyd & Radonich, Anaconda, Montana, filed motions to set aside the default and judgment in the insufficient funds case. on December 7, 1972. motion was held. Affidavit of defendant was filed On December 13, 1972, the hearing on the At the hearing plaintiffs agreed to setting aside the judgment and noticed a hearing on the motion for entry of default judgment for December 20, 1972. On the same day, counsel for defendant inoved the court to set aside the default judgment in the foreclosure case and noticed a hearing on the motion for entry of default judgment for December 20, 1972. On December 15, 1972, the district court granted the motions to set aside the default judgments entered on October 11, 1972 for the reason that no notice of application for entry of default judgments was sent to the defendant. The motion to set aside entry of defaults was denied and December 20, 1972 was set for hearing plaintiffs' motions for entry of default judgments . a On December 19, 1972,/consolidated motion by defendant to set aside entry of defaults, memorandum in support thereof, and the answers of defendant were filed. On December 20, 1972, hearing was held on plaintiffs1 motion for entry of default judgments and on defendant's motion to set aside entry of defaults. The matter was submitted to the district court on briefs, and on December 28, 1972, Judge Sid Stewart, presiding, denied defendant's motion to set aside entry of default and granted plaintiffs' motion for entry of default judgment. Judgment was thereupon entered in the sum of $32,237.73 in the foreclosure action and in the sum of $5,699.46 in the insufficient funds checks case. Defendant presents two issues on appeal: (1) Whether the district court erred in denying defendant's motion to set aside the entry of defaults, and (2) whether the district court erred in granting plaintiffs1 motion for entry of default judgments. As to the first issue defendant contends that his affidavit filed on December 7, 1972, established good cause for setting aside the defaults pursuant to Rule 55(c), M.R.Civ.P., which provides: "For good c a u s e shown t h e c o u r t may s e t a s i d e a n e n t r y of d e f a u l t and, i f a judgment by def a u l t h a s been e n t e r e d , may l i k e w i s e set it a s i d e i n a c c o r d a n c e w i t h Rule 6 0 ( b ) . * * * " D e f e n d a n t ' s f i r s t motion t o s e t a s i d e t h e e n t r y of def a u l t , f i l e d on December 4 , 1972, had been d e n i e d f o r t h e r e a s o n t h a t under Rule 5 5 ( a ) , M.R.Civ.P. no n o t i c e of e n t r y of d e f a u l t t h e c l e r k of t h e d i s t r i c t c o u r t i s r e q u i r e d t o be g i v e n t o t h e defendant. T h i s i s one of t h e r e a s o n s g i v e n by t h e d i s t r i c t c o u r t f o r d e n y i n g d e f e n d a n t ' s motion of December 1 9 , 1972. The d i s t r i c t c o u r t was c o r r e c t , f o r no n o t i c e of e n t r y of d e f a u l t by t h e c l e r k of t h e d i s t r i c t c o u r t i s r e q u i r e d . Sealey v. Majerus, 149 Mont. 268, 271, 425 P.2d 70. I n i t s o r d e r o f December 28, 1972 denying d e f e n d a n t ' s motion t o s e t a s i d e t h e e n t r y of d e f a u l t , t h e d i s t r i c t c o u r t d e c r e e d t h a t d e f e n d a n t f a i l e d t o show any m i s t a k e , i n a d v e r t e n c e o r e x c u s a b l e n e g l e c t t o j u s t i f y t h e f a i l u r e t o f i l e a n answer w i t h i n t h e t i m e g r a n t e d by t h e c o u r t a f t e r d e n y i n g t h e motions t o dismiss. I n t h e a f f i d a v i t r e l i e d upon by d e f e n d a n t , d e f e n d a n t s t a t e s t h a t from t h e t i m e of t h e w i t h d r a w a l of t h e f i r m o f Murray & H o l t on December 9 , 1971, t o t h e t i m e of h i s a f f i d a v i t , t h a t h e had n o t been informed of any p r o c e e d i n g s b e i n g t a k e n a g a i n s t him. The a f f i d a v i t i n d i c a t e s t h a t by r e a s o n of a c r i m i n a l a c t i o n pending a g a i n s t him t h a t d e f e n d a n t was l e d t o b e l i e v e t h a t no f u r t h e r c i v i l p r o c e e d i n g s were b e i n g had on b e h a l f of p l a i n t i f f s . I n a d d i t i o n , d e f e n d a n t s t a t e s t h a t b e c a u s e of ill h e a l t h he w a s p r o h i b i t e d from l e a v i n g h i s home t o a t t e n d t o t h e s e m a t t e r s and h e was u n a b l e t o p e r s o n a l l y l o o k a f t e r h i s b u s i n e s s a f f a i r s . I n h i s b r i e f d e f e n d a n t c i t e s 6 Moore's F e d e r a l P r a c t i c e , 1 55.05 ( 2 ) where i t i s s t a t e d : 1 "The g r a n t o r d e n i a l o f a motion f o r t h e e n t r y by t h e c o u r t of a d e f a u l t judgment l i e s w i t h i n the sound discretion of the trial court. This proposition is supported by good sense. And its soundness is also demonstrable by reference to Rule 55(c), which authorizes the trial court to set aside an entry of default on a showing of good cause. 'The court, in exercising its discretion may properly consider such factors as the following: whether the defendant's failure to plead or otherwise defend is largely technical; whether the plaintiff will be prejudiced, and if so, the extent thereof; whether entry of the default judgment would result in injustice." This Court has often stated that an application to set aside a default is addressed to the sound discretion of the trial court and its action will not be disturbed on appeal unless it is manifest that its discretion has been abused. Ferguson v. Parrott, 36 Mont. 352, 92 P. 965; Robinson v. Petersun, 63 Mont. 247, 206 P. 1092; Pacific Acceptance Corp. v. McCue, 71 Mont. 99, 103, 228 P. 761; Holen v. Phelps, 131 Mont. 146, 150, 308 :r P. 2d 62& Williams v. Superior Homes, Inc., 148 Mont. 38, 417 We point out that defendant's affidavit was filed in the insufficient funds case. Defendant has argued here as he did in the district court that the facts in the affidavit show good cause as to both cases. From our review of the record we con- clude that the district court did not err in denying defendant's motion. Defendant was well aware of the fact that he was the defendant in the lawsuit, that a summons and complaint had been duly served upon him, and that motions to dismiss had been filed upon his behalf. The record clearly indicates that the defend- ant was aware that an answer was to be filed within 30 days from the denial of his two motions to dismiss. Defendant makes the argument that his failure to further plead was technical because he was not represented by counsel at t h e e n t r y of t h e d e f a u l t s . The r e c o r d shows t h e o p p o s i t e . De- f e n d a n t w a s r e p r e s e n t e d by c o u n s e l a t the t i m e t h e m o t i o n s t o d i s m i s s w e r e d e n i e d and f o r a t l e a s t s i x months t h e r e a f t e r . When d e f e n d a n t a p p e a r e d a t t h e d e p o s i t i o n , h e s t a t e d t h a t h e had r e p l a c e d h i s c o u n s e l , Murray & Holt, with M r . There i s no n o t i c e i n t h e r e c o r d t h a t Boyd "Ty" Robinson. Radonich had assumed & t h e r o l e of d e f e n d a n t ' s a t t o r n e y . The f a c t i s r e g r e t t a b l e t h a t d e f e n d a n t s u f f e r e d ill h e a l t h , y e t t h i s d o e s n o t e x c u s e h i s f a i l u r e t o p l e a d , e s p e c i a l l y cons i d e r i n g t h e f a c t t h a t he was r e p r e s e n t e d by a t t o r n e y s t h r o u g h o u t . The r e c o r d f u r t h e r i n d i c a t e s t h a t t h e c r i m i n a l proceedi n g s were n o t f i l e d u n t i l September, 1972. Defendant, however, does n o t a t t e m p t t o e x p l a i n why no answers were f i l e d p r i o r t o that time. Defendant h a s made no showing of why h e f a i l e d t o f i l e a n answer w i t h i n t h e t i m e g r a n t e d by t h e d i s t r i c t c o u r t . De- f e n d a n t now a s s e r t s t h a t he w i l l be p r e j u d i c e d b e c a u s e h e h a s a good d e f e n s e t o t h e c l a i m s and now w i l l be u n a b l e t o a s s e r t t h e defense. I f d e f e n d a n t i s i n any way p r e j u d i c e d , t h e r e c o r d c l e a r l y shows t h a t i t i s by h i s own f a i l u r e and d i s r e g a r d t o a s s e r t h i s r i g h t s when a v a i l a b l e t o him. D e f e n d a n t ' s second i s s u e i s t h a t t h e d i s t r i c t c o u r t e r r e d i n g r a n t i n g p l a i n t i f f s ' motion f o r e n t r y of d e f a u l t judgments. The d i s t r i c t c o u r t o r d e r e d p l a i n t i f f s ' motion g r a n t e d f o r t h e r e a s o n t h a t d e f e n d a n t f a i l e d t o comply w i t h t h e o r d e r s o f t h e d i s t r i c t c o u r t r e g a r d i n g f i l i n g of any answer u n t i l a f t e r p l a i n t i f f s h a d f i l e d a motion f o r e n t r y of d e f a u l t judgment and had n o t i c e d t h e motion f o r h e a r i n g . The d i s t r i c t c o u r t ' s r e a s o n i n g i s c o n s i s t e n t w i t h o u r h o l d i n g i n S e a l e y , where a t page 271 w e s a i d : " * * * Defendants1 contention 2 is likewise without merit. Their answers were not filed until they had received notice of plaintiffls motion for default judgment. The provisions of Rule 55(b) (2) would be useless if defendants could remain in default as long as they desired and then prevent the judgment by default by merely filing the proper pleading in the period between the notice and the hearing on the motion for default judgment. "Defendants were given the opportunity to appear at the hearing on the motion for judgment by default and to resist such motion. Under Rule 55(c) defendants were entitled to move to set aside the entry of default for 'good cause shown' and to move to set aside the judgment by default under Rule 60 (b) " . In the instant case defendant's answers were not filed until the day before the hearing on the motions. This procedure is clearly inconsistent with our decision in Sealey. For the reason that the district court did not find good cause for defendant's failure to file his answer within the time required and for the reason that defendant cannot correct his default by filing his answer between the time of notice and the hearing on the motion, the district court was not in error. There has been no showing that the district court abused its discretion. The orders of the Chief Justice
Some case metadata and case summaries were written with the help of AI, which can produce inaccuracies. You should read the full case before relying on it for legal research purposes.
This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.
