Title: SIKORSKI SONS v SIKORSKI

State: montana

Issuer: Montana Supreme Court

Document:

No. 12442 I N THE SUPREME COURT O F T)IE STATE O F MONTANA 1973 SIKORSKI & SONS, INC., P l a i n t i f f and Appellant, -VS - ED R. SIKORSKI, Defendant and Respondent. Appeal from: District Court of the Sixteenth J u d i c i a l D i s t r i c t , Honorable M. James Sorte, Judge presiding. Counsel of Record: For Appellant : Gene Hunt ley argued, Baker, Montana For Respondent : Lucas, Jardine & Monaghan, Miles City, Montana Thomas M. Monaghan argued, Miles City, Montana John R. P r a t e r appeared, Ronan, Montana R. W. Heineman, Wibaux, Montana Submitted: June 20, 1973 Decided : JUL 2 4 1973 Filed : JUL 2 4 1973 erk Mr. Chief Justice James T. Harrison delivered the Opinion of the Court. This is an appeal by plaintiff corporation from an order setting aside and vacating a default judgment. This case concerns a family farming corporation, Sikoriski & Sons, Inc. Suit was instituted in the d i s t r i c t court of the sixteenth judicial d i s t r i c t , Fallon County, by plaintiff corporation against one of i t s stockholders, E d R . Sikorski, to enjoin him from coming on corporate property and from harassing corporation officers and employees and t o re- quire him t o surrender certain corporate property which he had secreted. Complaint was filed February 3, 1968. An order t o show cause was issued on the same day, returnable February 9, 1968, requiring defendant t o show cause why plaintiff should not have i t s injunction pendente l i t e . The complaint described the ownership of each corporate stock- holder, and also alleged that since M a y 1960, E d R. Sikorski had owned 364 shares w i t h his f i r s t wife, Frances F. Sikorski, as joint tenants, and one share individually. Specifically, the complaint a1 leged that E d R. Si korski in about 1960 or 1961, secured from the family corporation records about eleven stock certificates. Summons, complaint and order to show cause were served February 5, 1968. After being served E d R. Si korski consulted with counsel . B y informal agreement between his counsel and counsel for the corporation, the hearing on the order to show cause of February 9, 1968, was continued. Nothing fur- ther happened until April 12, 1968, a t which time counsel for E d R. Sikorski formally withdrew. E d R. Sikorski consented, in writing, to this withdrawal. On April 17, 1968, plaintiff corporation asked that the default of defendant, Ed R. Sikorski, be entered. On M a y 13, 1968, judgment was taken. In i t s findings of fact, the d i s t r i c t court found that E d R. Sikorski owned 364 shares of stock as tenant i n common with Frances F. Sikorski , and one share individually. Among other things, the d i s t r i c t court also found that E d R. Si korski in about 1960 or 1961 secured from the corporation records of the plaintiff stock certificates numbered 3 , 4, 5, 7 , 8 , 9, 10, 11, 12 and 13 which belonged t o other members of the corporation and had refused t o deliver them upon demand. The d i s t r i c t court concluded that E d R. Sikorski's interest in the corporation was that of a stockholder and his ownership was 183 shares out of a total 1,003 issued. Judgment was entered for the relief sought. Certified copies of the findings of f a c t , conclusions of law and judgment were served on defendant, E d R . Sikorski, on June 14, 1968. E d R . Sikorski died on June 28, 1969. From the time the complaint was served on February 5, 1968, defendant E d R . Sikorski did nothing w i t h respect t o the action, except have the hearing of February 9, 1968, continued. On October 31, 1969 Veronica Si korski , the second wife of E d R. Sikorski and the administratrix of his estate, filed a complaint against plaintiff corporation t o have a receiver appointed, t o liquidate the cor- poration, and for other r e l i e f , On December 9, 1969, Veronica Sikorski in the instant action pe- titioned the court t o s e t aside, vacate, and modify the judgment, asking for equitable relief under Rule 60(5), M.R.Civ.P. The petition was never ruled upon. On March 29, 1972, plaintiff corporation was served by Veronica Sikorski with a motion for order setting aside and vacating judgment. The basis for t h i s motion was that E d R. Sikorski should have been served w i t h notice t o appoint another attorney before being defaulted and plaintiff should have served a notice of application for default judgment because E d R. Sikorski had appeared in the action against him. The motion was s e t for hearing on April 18, 1972, which was continued for the convenience of counsel i nvol ved. After three d i s t r i c t judges had disqualified themselves, District Judge Sorte assumed jurisdiction on M a y 26, 1972. On July 28, 1972, i t was ordered that the hearing on the motion for order setting aside and vaca- ting judgment be set for September 8, 1972. B y agreement of counsel for a l l parties, the order setting the hearing on September 8 , 1972 was vacated. Counsel agreed to submit the matter on written briefs. Counsel for plaintiff was given until October 15, 1972 to f i l e a brief. The district court took the motion under advisement and on November 29, 1972, ruled that the judgment be set aside. The district court concluded: that i t had been without jurisdiction to proceed against Ed R . Sikorski be- cause plaintiff did not serve upon defendant notice to appoint another law- yer; that i t was without jurisdiction because plaintiff did not give notice to defendant of application for judgment as required under Rule 55(b)(2), M.R.Civ.P.; and, that the " J U D G M E N T exceeds the prayer of plaintiff Is com- plaint in that i t designates specific certificates of stock to be returned to plaintiff by defendant when the prayer of the complaint only generally refers to certificates of stock * * *". On December 5, 1972, plaintiff filed i t s exceptions to the findings of fact, conclusions of law, and order setting aside and vacating the judgment. On December 11, 1972, the district court i n denying the exceptions said: " I t i s clear that failure to give notice of entry of judgment i s not a jurisdictional defect. However, the Court feels that there are general equity powers t o set aside the judgment so the matter can be tried on the merits and before a jury." Plaintiff presents seven issues on appeal. T w o are: (1) Whether under section 93-2104, R.C.M. 1947, an adverse party i s required to advise the opposite party to appoint another lawyer or appear for himself when the opposite party's lawyer, with the consent of that party, withdraws from the case; and (2) whether the judgment can be set aside because plaintiff failed to serve notice of application for default judgment on Ed R. Sikorski. The remaining five issues raise questions concerning the Montana Rules of Civil Procedure and can be consolidated i n t o one general issue: whether the Montana Rules of Civil Procedure have been followed in setting aside the judgment? Section 93-2104, R.C.M. 1947, provides: "When an attorney dies, or i s removed or suspended, or ceases to act as such, a party to an action, for w h o m he was acting as attorney must, before any further proceed- ings are had against him, be required by the adverse party, by written notice, to appoint another attorney or appear in person." There has been no case decided by this Court interpreting the re- quirement of section 93-2104, R.C.M. 1947, involving a situation where an attorney withdraws from a case w i t h the consent of his client. Counsel for plaintiff argues that because there was no alleged appearance by E d R . Sikorski, notice to appoint another attorney was not required. While w e agree w i t h plaintiff's conclusion that notice i s not required under the circumstances of this case, w e do so for different reasons. 13 California Code of Civil Procedure, 5 286, i s identical t o Montana's statute section 93-2104, R.C.M. 1947. The Cal ifornia court i n Gion v. Stroud, 191 C.A.2d 277, 12 Cal.Rptr. 540, 542, said: " * * * for there i s California law directly on the point that Code of Civ. Proc. 5 286 applies only when an attor- ney has died or ceased t o be an attorney and not when he ceased to act for his client in a particular case." See also: California Water Serv. Co. v. Edward Sidebotham & Son, Inc. 224 This rule of law is not all-inclusive, b u t i s applicable here. N o appearance had ever been made by Ed R. Sikorski. Edward R. Si korski ' s attorney withdrew from the case and ceased to act for his client. Therefore, the notice provided for in section 93-2104, R.C.M. 1947, was not required t o be given before any further proceedings could be instituted against Ed R. Sikorski. For this reason the d i s t r i c t court was not without jurisdiction when i t entered the default judgment. The d i s t r i c t court also concluded that i t was without jurisdiction t o proceed against E d R. Sikorski because the plaintiff failed t o serve upon him the written notice of application for judgment as required by Rule 55(b)(2), M.R.Civ.P. Counsel for plaintiff argues since there was no alleged appearance by Ed R. Sikorski that notice of the application was not required under the rule. The pertinent provision of Rule 55(b)(2), M.R.Civ.P. is: "If the party against whom judgment by default i s sought has appeared i n the action, he (or, if appearing by representative, his representative) shall be served with written notice of the application for judgment a t least three days prior to the hearing on such application." This Court in W i 11 iams v. Superior Homes, Inc. , 148 Mont . 38, 42, 417 P.2d 92, ruled the failure to give a three-day notice was not neces- sari ly a jurisdictional defect and that the irregularity had been waived by failing for three months to apply for relief. In the instant case Ed R. Sikorski took no action from the time the default judgment had been entered until his death, a period of approx- imately thirteen months. The judgment was attacked for the f i r s t time on December 9, 1969, when Veronica Sikorski petitioned to set aside and vacate the judgment. Approximately one year and seven months had elapsed. Almost four years had passed when the motion to set aside and vacate judgment was filed. In Williams w e held that a failure to give the three-day notice did not prejudice the defendant in that case because of defendant's o w n dis- regard for the rules in applying for relief. Likewise, w e cannot say in the instant case that the failure to give the three-day notice was a jurisdictional defect. Ed R. Sikorski ' s apparent lack of interest in the judgment against him and his obvious dis- regard for the rules leads us to this conclusion. O u r review of the question of whether the Montana Rules of Civil Procedure were followed in setting aside the judgment requires an examin- ation of those rules. Rule 60(b), M.R.Civ.P., gives the district court, on motion, the discretion to set aside a final judgment under certain circumstances or for: "(6) any other reason justifying relief from the operation of the judgment." Rule 60(c), M.R.Civ.P. provides: "Motions provided by subdivisions (a) and (b) of this rule shall be heard and determined within the times provided by Rule 59 in the case of motions for new trials and amendment of judgment. " Rule 59(d), M.R.Civ.P., provides: "Hearing on the motion shall be had within 10 days after i t has been served * * * except t h a t a t any time after the notice of hearing on the motion has been served the court may issue an order continuing the hearing for not to exceed 30 days. In case the hearing i s continued by the court, i t shall be the duty of the court to hear the same a t the e a r l i e s t practicable date thereafter, and the court shall rule upon and decide the motion within 15 days after the same i s submitted. If the court shall f a i l to rule upon the motion within said time, the motion shall, a t the expiration of said period, be deemed denied. " Here, the motion was served and notice given on March 29, 1972. The hearing was set for April 18, 1972. This hearing was continued for the convenience of counsel involved. There i s no indication from the record that the hearing was continued for "not t o exceed 30 days." On M a y 26, 1972, Judge Sorte assumed jurisdiction b u t i t was not until July 28, 1972, that he s e t the motion f o r hearing on September 8, 1972. From the time the motion was served until the motion was s e t f o r hearing on September 8 , 1972, 163 days had elapsed. The order setting the hearing date was vacated, and the matter was submitted on written briefs. On November 29, 1972 when the judgment was ordered s e t aside, 82 days had passed from September 8, 1972. A total of 245 days had elapsed from the date of the service of the motion until i t was ruled upon. Under Rule 59(d), M.R.Civ.P., the maximum amount of time by which the case could have been extended would have been 55 days from the date of the service of the motion. Mont. In the recent decision of Cain v. Harrington, - , 506 P.2d 1375, 30 St.Rep. 245, 247, this Court said: " W e believe the purpose of the rule [Rule 59(d), M.R.Civ.P.1 should be adhered t o and while w e do not wish to be tech- nical, a t the same time w e cannot permit deviations." I t is not necessary t o discuss a t this time other provisions of the rule which have been s e t out i n the briefs. The order of the d i s t r i c t court vacating the judgment of 1968 i s reversed and the matter remanded t o the d i s t r i c t court for the purpose of dismissing the petition of Veronic W e concur: . . t , Justices I