Title: MULTIPLE RESORT OWNERSHIP PLAN, INC. v. DESIGN-BUILD-MANAGE, INC.

State: wyoming

Issuer: Wyoming Supreme Court

Document:

MULTIPLE RESORT OWNERSHIP PLAN, INC. v. DESIGN-BUILD-MANAGE, INC.2002 WY 6745 P.3d 647Case Number: 01-157Decided: 05/02/2002

APRIL TERM, A.D. 2002

                                                                                                
         

MULTIPLE 
RESORT OWNERSHIP PLAN, INC.,

and 
OWNERS' RESORTS & EXCHANGE, INC., 

Appellants(Defendants),

v.

DESIGN-BUILD-MANAGE, 
INC., 

Appellee(Plaintiff).

Appeal 
from the District Court of Teton County

The 
Honorable D. Terry Rogers, Judge

Representing 
Appellants:

Deborah 
Ford Mincer of Murane & Bostwick, LLC, Cheyenne, Wyoming.  Argument by Ms. 
Mincer.

Representing 
Appellee:

Gregory 
C. Dyekman of Dray, Thomson & Dyekman, P.C., Cheyenne, Wyoming.  Argument by Mr. 
Dyekman.

Before 
LEHMAN, C.J., and GOLDEN, HILL, KITE, and VOIGT, JJ.

 

            
HILL, Justice. 

[¶1]      Multiple Resort 
Ownership Plan, Inc. (MROP) and Owners' Resorts & Exchange, Inc. (ORE) 
(collectively Appellants) appeal the denial of a motion to set aside an entry of 
default and a default judgment.  We 
affirm the entry of default but reverse and remand the default 
judgment.

ISSUES

[¶2]      Appellants 
present four issues for review:

1.                  
Whether the 
trial court abused its discretion by refusing to set aside the entries of 
default and default judgments after specifically finding that the lawyer for the 
Appellants had the impression that he had an extension of time in which to 
respond to the complaint?

2.                  
Whether 
the trial court abused its discretion by refusing to set aside the entries of 
default and default judgments where no notice was given to the Appellants of the 
applications for judgments?

3.                  
Whether 
the underlying judgments are void as a matter of law, because they awarded 
relief for unliquidated damages and foreclosure without a 
hearing?

4.                  
Whether 
the trial court's refusal to set aside the entries of default and default 
judgment violated judicial policy regarding default judgments when no finality 
and no judicial efficiency was promoted by the denial of the 
motion?

Design-Build-Manage, 
Inc. (DBM) condenses the matter to a single issue:

Whether 
the trial court abused its discretion in denying Appellants' Motion to Set Aside 
the Entries of Default and Default Judgments.

FACTS

[¶3]      MROP and ORE are 
nonprofit Utah corporations. MROP owns timeshare resorts, and ORE manages the 
properties.  ORE, as the agent of 
MROP, entered into a contract with Jackson, Wyoming based contractor DBM to 
refurbish an old motel.  Pursuant to 
the contract, ORE was to pay DBM "a total to be determined through cost plus' 
based on original bid [with] changes to be approved."  Appellants approved various changes, so 
the cost of the project escalated as the work progressed.  When the project was completed, 
Appellants expected a final bill for around $15,000.  Instead, DBM presented a final bill for 
about $300,000, which Appellants refused to pay.  As a consequence of the dispute with 
Appellants, DBM found itself unable to pay its materialmen and suppliers for 
their work.  One of the materialmen 
on the project, Jackson Lumber, ultimately filed suit against Appellants and 
DBM.

[¶4]      Between October 
2000 and December 2000, Appellants canceled several meetings scheduled to 
discuss possible settlements.  In 
early January 2001, DBM sent a notice of intent to file a lien.  Appellants' Utah attorney, Joseph Hatch 
(Hatch), contacted DBM's attorney, David DeFazio (DeFazio), and suggested the 
parties could work out their differences.  
The parties finally met in Salt Lake City on January 17, 2001, but were 
unable to bridge the substantial gap between their positions.  Consequently, DBM filed a claim for a 
contractor's lien against Appellants' Jackson property.  Shortly thereafter, DBM filed an action 
against Appellants alleging breach of contract, quantum meruit/unjust 
enrichment, and seeking foreclosure of the lien.  The Complaint sought total damages of 
$299,836.19.

[¶5]      The Complaint was 
served upon Appellants on March 1, 2001, at their offices in Salt Lake 
City.  Upon receipt of the 
Complaint, Hatch contacted DeFazio and requested an open extension of time to 
file an answer.1  The parties' recollections of their 
conversation differ substantially.  
Hatch testified that when he requested the extension, DeFazio's response 
was, "We'll certainly work with you on this." Hatch took this to mean that his 
request was granted.  DeFazio, on 
the other hand, insisted no request for an open extension of time was made.  He indicated that Hatch did mention the 
possibility of getting an extension for some period of time in order to work on 
a settlement.  DeFazio testified 
that he was not open to an extension based upon his perception that Appellants 
were employing stalling tactics.  He 
stated that his comment on working with Appellants related to the possibility of 
settlement and not to an open extension on a filing date for an 
answer.

[¶6]      Over the next few 
weeks, DBM sent two letters to Appellants, through their attorney.  On March 9, 2001, DeFazio mailed an 
"Acceptance of Service" to Hatch with a request that he sign and return it.  Later, Hatch admitted that he simply put 
the letter and "Acceptance of Service" in a file and did not respond.  DeFazio sent the second letter on March 
21, 2001, which informed Hatch that interrogatories and a request for production 
of documents would be sent within the next week and requested a detailed 
enumeration of Appellants' objections to DBM's billing.  The letter also included an offer to 
listen to any suggestions that Hatch might have on a potential settlement.  Again, DeFazio did not receive a reply 
to his letter from either Hatch or Appellants.

[¶7]      It perhaps was 
inevitable then that Appellants did not file an answer prior to the expiration 
of the thirty-day limit.  On April 
3, 2001, DBM filed a request to enter default pursuant to W.R.C.P. 55, which the 
clerk of the district court duly entered on the same day.  Contemporaneously with its request for 
an entry of default, DBM filed an application for default judgment.  In an attached affidavit by its 
attorney, DBM reiterated the amount of damages set forth in the complaint at 
$299,836.19 and also requested relief in the form of a lien foreclosure.  After considering the application and 
the filings in the record, the district court granted default judgment in the 
amount of damages requested and authorized foreclosure against 
Appellants.

[¶8]      Appellants moved 
to set aside the entry of default and default judgment.  Appellants argued that Hatch's belief 
that he had obtained an open extension from DeFazio constituted a "mistake, 
inadvertence, surprise, or excusable neglect" pursuant to W.R.C.P. 60(b)(1) 
justifying relief from the entry of default.  Appellants also contended they had made 
an appearance in the proceedings pursuant to W.R.C.P. 55(b)(2) and, accordingly, 
were entitled to three days' notice of the application for entry of 
default.  Finally, Appellants 
attacked the default judgment by claiming that any monetary damages were 
unliquidated, necessitating a hearing, and that the lien was void for DBM's 
failure to comply with statutory requirements.  After a hearing, the district court 
denied Appellants' motions.  The 
court concluded that Appellants had failed to provide sufficient grounds for 
setting aside the entry of default and had not made an appearance in the 
case.  The court also found the 
damages claimed to be liquidated in nature.  Appellants now bring their claims before 
this Court.

DISCUSSION

[¶9]      Entry of default 
is a clerical act performed by the clerk of court and is not a judgment.  W.R.C.P. 55(a).  The entry of default forecloses the 
defaulting party from making any further defense or assertion with respect to 
liability or any asserted claim. Vanasse v. Ramsay, 847 P.2d 993, 996-97 
(Wyo. 1993) (quoting Spitzer v. Spitzer, 777 P.2d 587, 592 (Wyo. 
1989)).  "Although the entry of 
default generally establishes the fact of liability according to the complaint, 
it does not establish either the amount or the degree of relief."  Id.

[¶10]   The procedure for setting aside an 
entry of default is set forth W.R.C.P. 55(c):

For good cause shown the court may 
set aside an entry of default and, if a judgment by default has been entered, 
may likewise set it aside in accordance with Rule 60(b).

W.R.C.P. 
60(b) sets forth the grounds constituting good cause for setting aside an entry 
of default:

On motion, and upon such terms as 
are just, the court may relieve a party or a party's legal representative from a 
final judgment, order, or proceeding for the following reasons: (1) mistake, 
inadvertence, surprise, or excusable neglect; (2) newly discovered evidence 
which by due diligence could not have been discovered in time to move for a new 
trial under Rule 59(b); (3) fraud (whether heretofore denominated intrinsic or 
extrinsic), misrepresentation, or other misconduct of an adverse party; (4) the 
judgment is void; (5) the judgment has been satisfied, released, or discharged, 
or a prior judgment upon which it is based has been reversed or otherwise 
vacated, or it is no longer equitable that the judgment should have prospective 
application; or (6) any other reason justifying relief from the operation of the 
judgment.

The 
decision on whether good cause exists under Rule 60(b) to set aside an entry of 
default is consigned to the discretion of the district court.  Fluor Daniel (NPOSR), Inc. v. 
Seward, 956 P.2d 1131, 1134 (Wyo. 1998), cert. denied, 525 U.S. 983, 
119 S. Ct. 507, 142 L. Ed. 2d 402 (1988); Whitney v. McDonough, 892 P.2d 791, 794 (Wyo. 1995).  "Judicial 
discretion is a composite of many things, among which are conclusions drawn from 
objective criteria; it means exercising sound judgment with regard to what is 
right under the circumstances and without doing so arbitrarily or 
capriciously."  Erhart v. 
Evans, 2001 WY 79, ¶11, 30 P.3d 542, ¶11 (Wyo. 2001) (quoting Belless v. 
Belless, 2001 WY 41, ¶6, 21 P.3d 749, ¶6 (Wyo. 2001)); see also, 
Vaughn v. State, 962 P.2d 149, 151 (Wyo. 1998).

[¶11]   We have set out the analytical 
process to be applied by the district court in exercising its discretion whether 
to set aside an entry of default:

The 
court first must consider whether the filed motion articulates a reason for 
relief under WYO. R. CIV. P. 60, and that is a question of law to be reviewed 
for correctness.  
. . .  When an 
appropriate reason is set forth, the exercise of discretion in granting or 
denying relief depends upon the facts of the case.  In making that decision, the trial court 
is to consider whether the moving party established the articulated grounds for 
relief and demonstrated a meritorious defense.  Even if these conclusions are in the 
affirmative, the trial court still must determine whether the plaintiff will be 
prejudiced and whether culpable conduct on the part of the defendant resulted in 
the default.  Our review of this 
sequence of determinations by the trial court is limited to a determination of 
whether in resolving these questions the trial court abused its discretion.  Carlson v. Carlson, 836 P.2d 297, 
301 (Wyo. 1992); followed in Whitney, 892 P.2d  at 794; Vanasse, 
847 P.2d  at 996.

Fluor 
Daniel, 956 P.2d  at 1134.

[¶12]   Appellants argue that the district 
court abused its discretion when it did not find good cause for setting aside 
the entry of default under either Rule 60(b)(1) or (6).  Appellants contend that the failure to 
file an answer was done on the basis of mistake, inadvertence, or excusable 
neglect because of Hatch's reasonable belief that he had been granted an 
extension.  Failing a finding under 
Rule 60(b)(1), Appellants urge us to consider the circumstances of this case as 
a reason for justifying relief under the catchall provision of 
60(b)(6).

[¶13]   Assuming Hatch believed that he had 
an extension; the question is whether that belief is sufficient to constitute a 
mistake, inadvertence, or excusable neglect pursuant to Rule 60(b).  We conclude that it is not, because 
Hatch's actions under the circumstances were not reasonable.  An out-of-state defendant must serve an 
answer within thirty days after the service of the summons and complaint.  W.R.C.P. 12(a).  The Uniform Rules for District Courts 
specifically delineate the circumstances when time limits may be extended or 
modified:

                        
Rule 202. Time limits.

Except 
as may be permitted by the Wyoming Rules of Civil Procedure and the Wyoming 
Rules of Criminal Procedure, time limits permitted or required by rules or court 
order may not be extended or modified by agreement of counsel, but only by 
order.

[¶14]   In this case, Hatch assumed from 
his conversation with DeFazio that he had an open extension of time for filing 
an answer.  Hatch made this 
assumption absent an unequivocal verbal or written confirmation from DeFazio and 
in the face of the explicit requirements of the Wyoming Rules of Civil Procedure 
and the Uniform Rules for District Courts.  
Ignorance of the law or rules of procedure does not justify relief from 
an entry of default.  Edward H. 
Bohlin Company, Inc. v. Banning Company, Inc., 6 F.3d 350, 357 
(5th Cir. 1993) ("Gross carelessness, ignorance of the rules, or 
ignorance of the law are insufficient bases for 60(b)(1) relief."); see also, 
11 Charles Alan Wright, Arthur R. Miller, and Mary Kay Kane, Federal 
Practice and Procedure: Civil 2d § 2858 at 280 (1995); 12 Moore's Federal 
Practice § 60.41[1][c][iii] (Matthew Bender 3rd ed. 1999). Appellants have 
failed to direct us to any extenuating circumstances, such as fraud or 
inducement by DeFazio, that would justify Hatch's actions.  The concept of time limitations for 
filing pleadings with the court is a fairly basic one of legal practice. Hatch's 
reliance on his belief in an open-ended extension was simply not 
reasonable.  See, e.g., 
United States v. Proceeds of Sale of 3,888 Pounds Atlantic Sea Scallops, 
857 F.2d 46, 49 (1st Cir. 1988) (district court did not abuse 
discretion in not setting aside a default judgment because counsel's reliance on 
local attorney's advice that there was no specific date for filing answer was 
unreasonable).

[¶15]   Appellants also raise a claim that 
the circumstances of this case justify relief under Rule 60(b)(6).  We have described the circumstances when 
relief may be justified under this provision:

Considering 
the "catch all" clause of Rule 60(b)(6) that a judgment may be set aside for 
"any other reason justifying relief," we note that this means shall be utilized 
"only if extraordinary circumstances are present." Bailey v. Ryan Stevedoring 
Co., 894 F.2d 157, 160 (5th Cir. 1990); See also, Picco v. 
Global Marine Drilling Co., 900 F.2d 846, 851 (5th Cir. 1990). In 
analysis of this clause, we have held that where an attorney was grossly 
negligent in his representation, the litigant was not necessarily entitled to 
relief under 60(b)(6). [Hochhalter v. Great Western Enterprises, Inc., 
708 P.2d 666, 669-670 (Wyo. 1985).]

Vanasse, 847 P.2d  at 998.  In Hochhalter, 
the defendants' attorney represented that he was actively representing their 
interests.  In truth, however, the 
attorney was lying to his clients and had failed to file an answer.  We held that "[A] litigant is not 
necessarily entitled to relief under Rule 60(b)(6) solely because his counsel 
was grossly negligent. To hold otherwise would be inconsistent with holding each 
party bound by the acts of his lawyer-agent.'"  708 P.2d  at 670.  Here, Appellants have failed to 
demonstrate any extraordinary circumstances justifying relief under Rule 
60(b)(6).  In Hochhalter, we 
suggested that proof that an attorney's gross negligence was the product of 
personal or psychological problems could constitute an extraordinary 
circumstance.  Absent such a 
demonstration, a district court does not abuse its discretion in denying a 
request for relief under Rule 60(b)(6).  
708 P.2d  at 670.  There 
certainly was no such allegation or demonstration in this case and, accordingly, 
we do not find an abuse of discretion in the district court's denial of relief 
under Rule 60(b)(6).

[¶16]   Failing a justification for relief 
under Rule 60(b), Appellants argue that they were, nevertheless, entitled to 
notice of DBM's motion for default under W.R.C.P. 55(b)(2). That rule requires 
notice when a party has appeared in a proceeding:

If the 
party against whom a judgment by default is sought has appeared in the action 
the party (or, if appearing by representative, the party's representative) shall 
be served with written notice of the application for judgment at least three 
days prior to the hearing on such application.

Appellants claim that they 
"appeared" in this action by evidencing an intent to defend through two 
ways:  (1) Hatch's conversation with 
DeFazio regarding a possible extension of time to file an answer; and (2) its 
appearance and participation in the related proceedings brought by Jackson 
Lumber.

[¶17]   We have defined what Rule 55(b)(2) 
means by "appearance" in broad terms:

On the 
issue of what constitutes an appearance, we have said, "An appearance in an 
action involves some submission or presentation to the court by which a party 
shows his intention to submit himself to the jurisdiction of the court." 
Hochhalter, 708 P.2d  at 671 (quoting U.S. Aviation, 664 P.2d at 
124). A party "will be deemed to have appeared * * * when contacts between the 
parties clearly demonstrate an intent to defend." Hochhalter, 708 P.2d  at 
672. See also, Sanford v. Arjay Oil Co., 686 P.2d 566, 571 (Wyo. 
1984).

Vanasse, 847 P.2d  at 1001.  Accordingly, a party 
has appeared in an action when they have made some submittal or presentation to 
the court.  We have also recognized 
what is essentially a constructive appearance when the contacts between the 
parties clearly evidence an intent to defend.  Such an approach is consistent with the 
majority of jurisdictions, which have adopted a broad definition of appearance 
under Rule 55(b)(2). See 10 Moore's Federal Practice § 55.21[2][b][i] 
(Matthew Bender 3rd ed. 1999); and 46 Am.Jur.2d Judgments § 300 at 
614-616 (1994); but see Zuelzke Tool & Engineering Company, Inc. v. 
Anderson Die Casting, Inc., 925 F.2d 226, 230-231 (7th Cir. 1991) 
(specifically rejecting a broad definition of "appearance" under Rule 55(b)(2) 
in favor of a strict definition requiring an actual submission or presentation 
to the district court).

[¶18]   There is no question here that 
Appellants did not make any submittal or presentation to the district 
court.  The issue before us then is 
whether the contacts between Appellants and DBM clearly evidenced an intent by 
Appellants to defend.  What 
constitutes a constructive appearance under Rule 55(b)(2) is dependent upon the 
circumstances of each case.  In this 
case, Appellants' counsel made a single phone call to DBM's attorney requesting 
an extension of time.  There is no 
other activity attributable to Appellants or their counsel in this action that 
could be deemed evidence of an intent to defend.  To the contrary, Appellants failed to 
respond to the complaint in any manner.  
Appellants did not respond to the correspondence from DBM by either 
signing and returning the acceptance of service or providing an enumeration of 
their objections to the billing.  We 
hold that a party does not appear in a case when it does no more than make a 
telephone call requesting an extension of time to file an answer.  Simply making a phone call requesting an 
extension of the answer time without taking any other action is more indicative 
of a desire to delay or obfuscate than it is to defend.

[¶19]   Appellants also argue that their 
appearance and participation in the related proceedings initiated by Jackson 
Lumber is evidence of an intent to defend this action. Appellants cite Press 
v. Forest Laboratories, Inc., 45 F.R.D. 354 (S.D.N.Y. 1968) in support of 
their argument.  In that case, the 
plaintiff unsuccessfully sought to amend his complaint to add other defendants. 
The plaintiff then filed a second action while the first was still pending.  The second complaint was identical to 
the first except that it added the defendant's attorney as a party and raised 
additional allegations of unethical conduct and libel against the attorney.  Defendant's attorney, who had responded 
to the first complaint, did not respond to the second complaint; instead, he 
commenced a proceeding against plaintiff's attorney before the state bar 
association.  A default judgment was 
ultimately entered against the defendants for their failure to respond to the 
second complaint.  On the 
defendant's motion, the district court set aside the default judgment.  The court held that the two actions were 
essentially one and the same because the dispute in the second arose out of the 
activities surrounding the first.  
Therefore, the court held that the contacts in the first action 
constituted an appearance in the second action.  45 F.R.D.  at 356-57.  Appellants claim that an almost 
identical circumstance exists in this case.  Appellants point out that they served an 
answer on DBM in the Jackson Lumber proceeding three days before DBM moved for 
an entry of default in this case.  
They also note it is undisputed that phone conversations and 
correspondence took place in this case in the time period before an answer was 
due.  In addition, Appellants allege 
that Hatch mentioned possible consolidation of the two actions.  According to Appellants, these facts and 
circumstances indicate an intent to defend and the right to notice under Rule 
55(b)(2).

[¶20]   The Press case is clearly 
distinguishable on its facts from the situation before us in this case.  The Tenth Circuit has described the 
holding in Press:

That 
case stands for the proposition that where two actions have been filed and 
plaintiff knows that counsel who appeared for the defendants in the first action 
also represents the same defendants in the second action where no formal 
appearance is made, by legal construction, there is a technical appearance under 
Rule 55(b)(2) requiring notice.

Gomes v. 
Williams, 420 F.2d 1364, 1367-68 (10th Cir. 1970). The distinguishable element 
between this case and Press is that Appellants were not represented by 
the same counsel in both actions at the time the motion for entry of default was 
filed.  In the Jackson Lumber 
action, Appellants had retained local counsel after their request for an 
extension was rejected.  In this 
case, Appellants did not hire local counsel after the complaint was filed.  Instead, Hatch represented Appellants' 
interest.  Eventually, Appellants 
hired the same local law firm to represent them in this case after the 
entry of default and the default judgment had been entered.  Simply appearing in a related action is 
not necessarily an indication of an intent to defend.  A defendant must take some steps to 
defend itself.  Here, Appellants did 
not hire a local firm to represent themselves in this case although they knew 
Hatch was not licensed to practice in this state.  Appellants' actions in this case and in 
the companion case are not sufficient to constitute an appearance under Rule 
55(b)(2).

[¶21]   Finally, Appellants raise a public 
policy argument.  There are two 
competing policy considerations that guide a decision to set aside a default 
judgment.  Vanasse, 847 P.2d  
at 997.  "The justice system and 
litigants have an interest in the finality of judgment and efficiency in 
litigation.  However, this Court has 
long recognized that "default judgments are not favored in the law" and "[i]t is 
preferable that cases be tried on their merits."  Id. (quoting Carlson v. 
Carlson, 836 P.2d 297, 301 (Wyo. 1992)).  Appellants contend that the policy 
consideration favoring the determination of cases on their merits should prevail 
here because the related controversy filed by Jackson Lumber is still 
pending.  Appellants argue that 
deciding both of these cases together would be more likely to promote judicial 
efficiency and finality of judgments than would affirming the entry of default 
and default judgment.

[¶22]   In addressing the policy 
considerations underlying entries of default and default judgments we have 
said:

Traditionally, 
default judgments were strongly disfavored; however, this court has moved away 
from the traditional position * * *.'  
The old formulas  a harsh sanction, drastic, should be imposed only as a 
last resort, for example when other, less drastic remedies prove unavailing, 
etc.  are still at times intoned.  
The new practice, however, is different. The entry of a default judgment 
is becoming * * * a common sanction for late filings by defendants * * 
*.

Vanasse, 847 P.2d  at 1000 (quoting Matter of State Exchange Finance Company, 896 F.2d 1104, 1106 (7th Cir. 1990)).  
In regard to a parties' failure to answer, we have 
said:

[A] workable system of justice 
requires that litigants not be free to appear at their pleasure.  We therefore must hold parties and their 
attorneys to a reasonably high standard of diligence in observing the courts' 
rules of procedure.  The threat of 
judgment by default serves as an incentive to meet this 
standard.

Vanasse, 847 P.2d  at 1000 (quoting Cessna Finance Corporation v. Bielenberg Masonry 
Contracting, Inc., 715 F.2d 1442, 1444-45 (10th Cir. 1983)) (citations omitted).  With that background, we answer 
Appellants argument by quoting the Supreme Court of Ohio:

A 
defendant's right to force a plaintiff to prove his or her claim depends upon 
the defendant's compliance with the Civil Rules and the timely filing of an 
answer to the complaint.  Otherwise, 
the sanctions for noncompliance would lose their deterrent effect.  Even though we recognize that it is 
preferable to hear a case upon its merits, the rules of procedure must be 
applied consistently, and [Appellants'] noncompliance cannot be overlooked. * * 
* However hurried a court may be in its efforts to reach the merits of a 
controversy, the integrity of procedural rules is dependent upon consistent 
enforcement because the only fair and reasonable alternative thereto is complete 
abandonment.

Davis v. 
Immediate Medical Services, Inc., 684 N.E.2d 292, 296-97 (Ohio 1997) (citations omitted).

Default 
Judgment

[¶23]   The district court entered a 
default judgment for $299,836.19, the amount requested for damages in DBM's 
complaint.  We conclude that the 
district court erred in finding the damages liquidated and reverse the default 
judgment.

[¶24]   W.R.C.P. 55(b)(2) provides, in 
part:

If, in order to enable the court to 
enter judgment or to carry it into effect, it is necessary to take an account or 
to determine the amount of damages or to establish the truth of any averment by 
evidence or to make an investigation of any other matter, the court may conduct 
such hearings or order such references as it deems necessary and proper and 
shall accord a right of trial by jury to the parties when and as required by 
statute.

The 
court's decision whether to hold a hearing is within its 
discretion:

The 
scope of discretion afforded the trial court under the rule, however, does not 
extend to the entry of a default judgment where the damages are not liquidated 
or articulated with certainty. In Adel [v. Parkhurst], 681 P.2d 
[886] at 892 [Wyo. 1984], we said:

The 
burden, however, is upon those seeking more than mere nominal damages to prove 
their damages. The requirement of Rule 55(b)(2), W.R.C.P., of a hearing with 
respect to damages which are not liquidated is consistent with the rule of those 
cases. The default permitted by a defendant does not concede the amount demanded 
for unliquidated damages.

(Citations 
omitted). See also Midway Oil Corporation v. Guess, 714 P.2d 339, 346 
(Wyo. 1986) (quoting in part and applying the above 
principle).

Halberstam 
v. Cokeley, 872 P.2d 109, 112-13 (Wyo. 1994).  
"Damages are liquidated when they are certain or, by computation, made 
certain." Id. It is an abuse of discretion for a court to enter a default 
judgment on damages that are unliquidated. Id.; see also, Midway Oil 
Corporation v. Guess, 714 P.2d 339, 345 (Wyo. 1986).

[¶25]   The burden to prove the amount of 
damages was on DBM. Damages may be established by affidavit or testimony.  Whitney, 892 P.2d  at 795; 
Midway Oil, 714 P.2d at 345-47; Halberstam, 872 P.2d  at 113.  In this case, DBM submitted an affidavit 
from its attorney, DeFazio.  With 
respect to damages, the affidavit states: "This complaint requested relief in a 
sum certain amount of $299,836.19 (Two Hundred Ninety-Nine Thousand, Eight 
Hundred Thirty-Six Dollars and 19/100)."  
DBM's president also filed an affidavit, which stated: "I provided Mr. 
DeFazio with invoices which justify my claim for $299,836.19."  Similarly, in his testimony, the 
president referenced the total amount of damages and indicated he had sent 
itemized invoices to Appellants.  
This is the only evidence produced by DBM in support of its damages 
claim.  DBM did not offer an 
itemization of the project costs, the invoices referenced by the president or 
any evidence of any kind to support the claim of damages.  A bald assertion of total damages 
without supporting evidence is insufficient to establish that damages were 
liquidated.  Halberstam, 872 P.2d  at 113.  Likewise, DBM's 
statement in the complaint and in their attorney's affidavit is insufficient to 
establish damages because they are merely unsupported declarations.  The default judgment and the lien 
foreclosure based on the monetary damage award are, therefore, reversed and the 
matter is remanded for further proceedings.

[¶26]   However, having upheld the default 
judgment, we note the only matter for consideration on remand is the actual cost 
of the work performed by DBM.  
Appellants are 
foreclosed from arguing any defenses to the claims of breach of contract, unjust 
enrichment, or lien 
foreclosure to defeat the claim for damages.

CONCLUSION

[¶27]           
The district court did not abuse its discretion when it declined to set 
aside the entry of default.  The 
default judgment, however, is reversed and remanded for further proceedings for 
DBM's failure to prove damages.

FOOTNOTES

  1In the Jackson 
Lumber case, Hatch made a similar request but was rebuffed by Jackson Lumber's 
counsel.  In response, Appellants 
hired a local Jackson law firm to represent them in that 
case.