NO. 88-375 

IN THE SUPREME COURT OF THE STATE OF MONTANA 

1988 

ROBERT A. MYERS, 

Plaintiff and Respondent, 

-vsALL WEST TRANSPORT, 

Defendant and Appellant. 

APPEAL FROM: District Court of the Twentieth Judicial District, 

In and for the County of Lake, 

The Honorable C.R. McNeil, Judge presiding. 

COUNSEL OF RECORD: 

For Appellant: 

Stewart A. Pearce, TI, Missoula, Montana 

For Respondent : 

Don Vernay, Rigfork, Montana 

. a Submitted on Briefs: Nov. 17, 1988 

Decided: December 22, 1988 

Clerk 
Mr. Justice Fred J. Weber delivered the Opinion of the Court. 

All West Transport (All West) appeals from an order 

refusing to set aside a default judgment against it. The 

District Court for the Twentieth Judicial District, Lake 

County, ruled that All West had failed to satisfy any of the 

requirements of Rule 60(b), M.R.Civ.P. We affirm. 

The issue is whether the District Court abused its 

discretion in refusing to set aside the default judgment. 

On January 14, 1988, plaintiff Mr. Myers filed his 

complaint against All West for wrongful delivery of lumber to 

a consignee in Denver, Colorado. The complaint alleges that 

while the shipment was in transit Mr. Myers contacted All 

West to order that the shipment be stopped and rerouted, but 

that All West intentionally and wrongfully delivered the 

lumber as originally instructed. Damages of $6,800, for the 

value of the lumber, plus interest, attorney fees, and costs, 

were claimed. All West was served with the complaint on 

January 15, 1988. On February 9, 1988, the clerk of court 

entered default judgment against All West. 

On March 14, 1988, All West filed its affidavit and 

motion to set aside the default judgment. The motion was 

orally argued and on May 2, 1988, the court entered its order 

refusing to set aside the default iudgment. 

Did the District Court abuse its discretion in refusing 

to set aside the default judgment? 

Rule 60(b), M.R.c~~.P., allows a court to relieve a 

party from a final judgment if, within a reasonable time, not 

more than 60 days after the judgment was entered, a showing 

is made of mistake, inadvertence, surprise, or excusable 

neglect.. All West argues that it has made such a showing. 

This Court has stated that if a district court s3.ightly 
abused its discretion in refusing to set aside a default 

judgment, its refusal is reversible. Griffin v. Scott (Mont. 

1985), 710 P.2d 1337, 1338, 42 St.Rep. 1695, 1697. The partv 

seeking to set aside the default has the burden of proof. 

Siewing v. Pearson Co. (Mont. 1987), 736 P.2d 120, 122, 44 

St.Rep. 800, 802. 

The affidavit submitted with the motion to set aside the 

default sets forth the following statement of facts. The 

complaint was served upon Betty Edwards at the offices of A1.l 

West. (Betty Edwards and her husband do business as AI.1 

West.) She delivered the complaint and summons to the office 

of All West's attorney about two weeks later, on January 29, 

1988. The attorney was out of town at that time and did not 

return until February 3, 1988. On that date, the attorney 

phoned Betty Edwards and told her that, to represent All 

West, he would require all supporting documentation underlying this claim, a retainer fee, and filing fees. On February 

8, 1988, All West's truck suffered transmission failure, 

requiring immediate repair. That depleted All West's cash 

reserves, and All West was unable to forward the required 

money to the attorney. The default judgment was entered with 

no further notice to All West and the judgment was executed 

upon on February 23, 1988. All West then filed its notice to 

set aside the default. 

In its brief, All West argues that its motion to set 

aside the default judgment should have been granted. It 

stated that the motion was filed promptly, there is a good 

possibility that a trial on the merits would have produced a 

different result, and any reasonable doubt as to whether to 

set aside a default judgment is to be resolved by setting 

aside the default. This Court stated the standard of review 

to which All West refers in Kootenai Carp. v. Dayton (1979), 

184 Mont. 19, 26, 601 P.2d 47, 51: the party moving to set 
aside the default must show that it proceeded with diligence, 

that its excusable neglect caused the default to be entered 

against it, and that there is evidence of a meritorious 

defense. 

In discussing the arguments of All West for setting 

aside the default, the District Court stated: 

The affidavit of Mrs. Edwards and her testimony introduced at oral argument upon Defendant's 

motion establish a factual situation of financial 

hardship on the part of the Defendant. As a practical matter, Defendant applied its limited funds 

to the unexpected repairs needed for one of its 

trucks rather than pay the costs and fee retainer 

requested by its counsel. 

Failure by a client to pay its attorney does 

not constitute excusable neglect by a party within 

the meaning of Rule 60(b). Neither does failure of 

an attorney to file an appearance because he has 

not been paid constitute excusable neglect by an 

attorney within said rule if, in fact, the attorney 

agreed to timely file an appearance. 

In either event, the Defendant has presented 

the Court no authority to support a finding of 

excusable neglect sufficient to set aside the 

Default Judgment merely because the Defendant 

failed to pay the advance costs and fee retainer 

requested by the attorney as a consequence of which 

no appearance was filed before default was entered. 

The Court suggests that the Defendant has not 

cited any such authority in support of its motion 

because there is no such authority nor should there 

be any. The Defendant has wholly failed to satisfy 

any of the requirements of Rule 60(b), and its 

motion to set aside the Default Judgment of February 9, 1988 is denied. 

The above discussion indicates that the District Court was 

not convinced that there was excusable neglect. 

The test to determine whether the neglect is 

excusable and sufficient to set aside a default is: 

. . . whether the reasons given for the neg;ect are such that reasonable minds might 

d~ffer in their conclusions concerning 
excusable neglect. If so, doubt should be 

resolved in favor of a trial on the merits. 

United States Rubber Co. v. Communitv Gas & oil Co. 

(1961), 139 Mont. 36, 39, 359 P.2d 375, 376. 

Griffin, 710 P.2d at 1338. 

Here, the actions of both Betty Edwards and her attorney 

may be said to have contributed to the entry of the default. 

All West's attorney should have been aware of the need to act 

quickly, as there were only a few days left to answer the 

complaint when he first saw it in his office. The general 

ru1.e is that neglect of an attorney is attributable to the 

client. Lords v. Newman (1984), 212 Mont. 359, 367-68, 688 

P. 2d 290, 295. In Lords, an exception to that general rule 

was recognized for cases in which the defaulting party experienced total abandonment by its attorney. That is not the 

case here. 

This Court has held that failure to appear to defend an 

action due to forgetfulness, the press of other business, or 

inattention to mail do not establish excusable neglect. 

Siewing, - 736 P.2d at 122. All West's reasons for failing to 

respond are similar to the reasons listed in Siewing. The 

situation in this case is a far cry from Kootenai, in which 

excusable neglect was found when there were six days between 

service of process and entry of the default judgment, and 

where the defaulting party submitted an affidavit stating 

that he mistakenly believed that he needn't appear in the 

action until another party was served. Here, 25 days elapsed 

between the time Betty Edwards was served with process and 

the entry of default judgment. The summons served upon her 

stated that if the complaint was not answered within 20 days, 

judgment would be taken against All West by default. All 

West chose to apply its limited funds to the repair of a 

truck rather than to the defense of this action. All West 
made no further attempt to get legal representation or otherwise respond to the summons. We conclude that the District 

Court did not abuse its discretion in refusing to find that 

the reasons given for All West's failure to act constituted 

excusable neglect. 

Affirmed.. 

We Concur: 

Thief Justice Y 

Justices 
Mr. Justice R. C. McDonough dissents as follows: 

I dissent. The majority cites the correct rules but 

fails to apply them. Generally, decisions denying motions to 

set aside default judgments under Rule 60(b), M.R.Civ.P., 

should be reversed on a showing of slight abuse of discretion, doubts should be resolved in favor of the moving party, 

and each decision should be reviewed on a case by case basis. 

The majority in applying these rules misreads -- Siewing and 

Lords to hold against All West. 

In Siewing, this Court affirmed the decision of the 

lower court to denv a metion to set aside a default iudqment 

hecause: 

a failure to appear caused by inattention to pertinent documents, the resignation of a company officer and the taking of a summer vacation by another 

officer do not establish excusable neglect. 

Siewing, 736 P.2d at 122. In this case the excuses discussed 

are financial hardship and neglect of counsel. These complaints differ from the unexplained neglect in Siewing, and 

they create doubts on whether to find excusable neglect. 

In Lords this Court stated that generallv, courts impute 

counsel's neglect to clients, hut went on to state: 

"'This court has been hesitant to impute the neglect of an attorney to his client; and has been 

loathe to permit this neglect to bar a hearing on 

the merits. Whether or not the varying shades of 

excusable neglect [neglect 'by counsel! previously 

remarked on can be distinguished, we choose to 

think that where reasonable minds might differ in 

their conclusions of excusable neglect, the doubt 

shou!d be resolved on the merits."" 
Lords, 688 P.2d at 295 (emphasis added). The exception, that 

is, finding excusable neglect for counsel's neglect, appears 

to have swallowed the general rule that courts impute to the 

client the neglect of counsel. See 6 J. Moore, 

Moores Federal Practice 55.10, at 55-66 (2d ed. 1988). And 

this Court has further recognized that under the principles 

governing the decision to set aside default iudgments, Montana has moved away from the rule that the client is "absolutely responsible for her attorney's neglect." Graham v. 

Mack (Mont. 1984), 699 P.2d 590, 594. The failure of counsel 

to act quickly here weighs for finding excusable neglect. 

The majority also holds that All West's temporary inability to provide a retainer for counsel provides no excuse 

for failing to respond. According to the majority, All West 

chose to apply its limited funds for truck repair rather than 

for defense of the action. This reasoning does not reflect 

resolution of doubt in favor of setting aside a default 

judgment. Choosing to provide funds for one's business 

instead of paying for a response to a complaint may constitute willful disregard for the legal process. However, where 

the repairs are essential to the day to day operations of the 

business, the failure to respond due to an unexpected happening may be reasonably excused. Roth the temporary lack of 

funds and counsel's neglect in acting quickly weiqh for 

granting the motion to set aside the default judgment. 

The majority and the District Court err in their reliance on distinguishable case law. The Court cites the rule 

that each case must be reviewed individual-ly, but the result 

arrived at here fails to judge the motion to set aside on the 

merits of the uniau-e facts presented. 

Justice 
Mr. Justice John C. Sheehy and Mr. Justice William E. Hunt, Sr.: 

We concur in the dissent of Mr. Justice McDonough. 

Justices