No. 05-253

IN THE SUPREME COURT OF THE STATE OF MONTANA

2006 MT 161N

_______________________________________ SAMUEL W. ANTONICK and KIM M. JOHNSON, Plaintiffs and Respondents,

v. THE ESTATE OF THEODORE LUTGEN, deceased, MARY LUTGEN, personal representative of the Estate of Theodore Lutgen; LUCAS PADILLA, RUTHIE PADILLA and JEFF STEWART, Defendants, LUCAS and RUTHIE PADILLA, Defendants and Appellants.

______________________________________ APPEAL FROM: District Court of the First Judicial District, In and for the County of Lewi s and Clark, Cause No. ADV 2003-551 The Honorable Dorothy McCarter, Judge presiding.

COUNSEL OF RECORD: For Appellants Lucas and Ruthie Padilla: Alan L. Joscelyn and KD Feeback, Gough, Shanahan, Johnson & Waterman, Helena, Montana For Respondents: Thomas A. Budewitz, Attorn ey at Law, Helena, Montana

____________________________________ Submitted on Briefs: December 21, 2005 Decided: July 17, 2006 Filed:

______________________________________ Clerk2 Justice John Warner delivered the Opinion of the Court. ¶1 Pursuant to Section I, Paragraph 3(c ), Montana Supreme Court 1996 Internal Operating Rules, the following decision shall not be cited as precedent. It shall be filed as a public document with the Clerk of the Su preme Court and shall be reported by case title, Supreme Court cause number and result to the State Reporter Publishing Company and to West Group in the quarterly table of noncitable cases issued by this Court. ¶2 Lucas and Ruthie Padilla (Pad illas) appeal an Order of th e First Judicial District Court, Lewis and Clark County, denying their motion to se t aside a default judgment entered against them in favo r of Samuel W. Antonick a nd Kim M. Johnson (Antonick & Johnson). We affirm. ¶3 According to the allegations of the par ties, both Padillas and Antonick & Johnson purchased property from the Estate of Th eodore Lutgen (Estat e), acting through its personal representative, Mary Lutgen. Antoni ck & Johnson entered on to Padillas’ land to remove some farming equipment they clai med they had purchased from the Estate.

Padillas accused Antonick & Johnson of tres passing and refused to allow them to move the farming equipment. Padillas claimed to own the equipment and told Antonick & Johnson they planned to se ll it and keep the proceeds. ¶4 Antonick & Johnson filed a complaint against Padilla s and others on September 23, 2003, alleging, inter alia , that Padillas converted the farm equipment. Padillas were served with summons on September 23, 2003 . Antonick & Johnson then filed an amended complaint on October 14, 2003, and served a copy of th e amended complaint on Padillas on October 23, 2003. Padillas did not at first retain the servic es of an attorney. There is a dispute as to the actions take n by Padillas in resp onse to the summons.3 ¶5 On November 19, 2003, An tonick & Johnson moved fo r an entry of default against Padillas, and the District Court entered their default that same day. Padillas claim they did not learn of the de fault until over two months la ter, after the District Court entered a default judgment against them on January 29, 2004. Pa dillas retained legal counsel on February 3, 2004. ¶6 On February 6, 2004, Pad illas, through counsel, moved the District Court to set aside the default judgmen t pursuant to Rule 60(b), M.R.Ci v.P. Along with the motion to set aside the default judgment, Ru thie Padilla filed an affidavit. In her affidavit she says

that before the default wa s entered she prepared a pro se answer and mailed it to Antonick & Johnson’s counsel. She also says in her affidavit that she was not aware that

the answer had to be filed with the District Court. The record show s that no answer or other appearance was filed by Padillas before their default was entered. ¶7 According to an affidavit filed by counsel for Antonick & Johnson in response to

the motion to set aside the de fault judgment, Ruthie Padilla telephoned him on November 24, 2003, and told him that Padillas had filed an answer with the Di strict Court and that she had sent him a copy. Antonick & Johnson’ s counsel also says he told Ruthie Padilla during the same telephone call that he had not received anything. Sh e responded that she would send him another copy of the answer. Antonick & Johnson’s counsel denies ever receiving a copy of an answer from Padillas. ¶8 The District Court denied Padillas’ moti on to set aside the default judgment by an order entered on February 24, 2004. No hearing was held on the motion, and the District Court made no findings of fact. The only re asoning given by the District Court for its

decision was that after a review of the briefs and affidavits filed, Padillas’ motion did not4 satisfy any of the criteria to set aside a default judgment. ¶9 Padillas appealed. Because there were ot her claims that had not been resolved, this Court dismissed the appeal without prejudice. The Dist rict Court deni ed Padillas’ motion to certify the default judgment against them as final and ripe for appeal pursuant to Rule 54(b), M.R.Civ.P., and stayed exec ution on the judgment pending the completion of the remainder of the lawsuit. A final judg ment on all claims was eventually entered in

the District Court. Padillas no w appeal the District Court’s denial of their motion to set aside the default judgment in favor of Antonick & Johnson. ¶10 When reviewing the denial of a motion to set aside a default judgment, this Court is guided by the principle that every case sh ould be decided on its merits, and judgments by default are not favored. Matthews v. Don K Chevrolet , 2005 MT 164, ¶ 9, 327 Mont. 456, ¶ 9, 115 P.3d 201, ¶ 9. Ou r standard of review when an appeal is from a denial of a motion to set aside a default j udgment is that only a slight abuse of discretion need be

shown to warrant reversal. Th e burden of proof is on the pa rty seeking to set aside the default judgment. Matthews , ¶ 9. ¶11 Padillas contend that the District Court sh ould have set aside the default judgment against them because they satis fy the good cause criteria of Rule 55(c), M.R.Civ.P., as well as the excusable neglect st andard in Rule 60(b)(1), M.R.Ci v.P. Padillas also contend

that the facts of this case ar e extraordinary and require th at the default judgment be vacated pursuant to Rule 60(b)(6), M.R.Civ.P. ¶12 In Essex Ins. Co. v. Jaycie, Inc. , 2004 MT 278, 323 Mont. 231, 99 P.3d 651, this Court established criteria to set aside a default judgment:5 (1) the defaulting party proceeded with diligence; (2) the defaulting party’s neglect was excusable; (3) the defaultin g party has a meritorious defense to the claim; and (4) the j udgment, if permitted to stand, will affect the defaulting party injuriously.

Essex , ¶ 11. ¶13 In this instance, after reviewing the record and considering the factors stated above, we conclude that the District Cour t did not abuse its disc retion when it denied

Padillas’ motion to set aside th e default judgment. Padillas’ claim on appeal is that their neglect to file an answer is excusable b ecause they sent an an swer to Antonick & Johnson’s counsel, and the su mmons was so worded that th ey did not know that they were required to also file an an swer with the District Court. ¶14 This Court’s precedent makes it clear that “mistake,” “inadvertence,” and “excusable neglect” generally require some justification for an error beyond mere carelessness or ignora nce of the law. In re Marriage of McDonald (1993), 261 Mont. 466, 469, 863 P. 2d 401, 403; In re Marriage of Castor (1991), 249 Mont. 495, 499, 817 P.2d 665, 667. ¶15 While it would be desirable to have findings of fact co ncerning the credibility of the differing stories contained in the affidavits of Ruthie Padilla a nd counsel for Antonick & Johnson, the record is clear th at Padillas did not file an app earance in the District Court within the time allowed, and th e entry of their default as we ll as the default judgment was proper under Rule 55(a), (b)(2 ), M.R.Civ.P. The summons se rved on Padillas states the name of the court where the suit is pending and that an answer must be filed in order to forestall a default judgment. Ruthie Padilla’s simple statement in her affidavit that she was not aware that filing with the court was requi red, if it were to be found credible as a6 matter of fact, would not be sufficien t to constitute excusable neglect. ¶16 The record does not show ex traordinary circumstances which would justify setting aside the default judgment under Rule 60(b)(6), M.R.Civ. P. We have previously explained that Rule 60(b)(6), M.R.Civ.P., on ly applies in “situati ons other than those

enumerated in the first five subsections of the rule” when the movant can demonstrate the following elements: 1) extraordinary circumstances in cluding gross neglect or actual misconduct by an attorney; 2) the mova nt acted to set aside the judgment within a reasonable time period; and 3) the movant was blameless. Peak Dev., LLP v. Juntunen , 2005 MT 82, ¶ 17, 326 Mont . 409, ¶ 17, 110 P.3d 13, ¶ 17 (quoting Bahm v. Southworth , 2000 MT 244, ¶ 14, 301 Mont. 434, ¶ 14, 10 P.3d 99, ¶ 14). The record does not suggest gross negl ect or actual misconduc t by an attorney, and

Padillas are not blameless in th eir failure to appear in resp onse to Antonick & Johnson’s complaint. Rule 60(b)(6), M.R.Civ. P., does not apply in this case. ¶17 We affirm the District Court’s denial of Padillas’ motion to set aside the default judgment against them.

/S/ JOHN WARNER

We Concur:

/S/ W. WILLIAM LEAPHART /S/ BRIAN MORRIS /S/ JIM RICE7 Justice James C. Nelson dissents. ¶18 I dissent from our Opinion. I would re verse and remand for further proceedings. ¶19 Since this Opinion is not go ing to be published, I am not going to engage in a lengthy analysis. Suffice it to say, however, we have case law that may dictate a possibly

different result here had the trial court done more than simply rule on the basis of the

affidavits. ¶20 In In re Marriage of Broere (1994), 263 Mont. 207, 86 7 P.2d 1092, a default judgment was entered against the pro se husband after he failed to file a copy of his

answer with the district court. We ruled that there was ex cusable neglect which justified reopening the proceedings beca use the husband was proceeding pro se; because he had mistakenly believed it was not necessary to file a copy of his answer with the court; because he had sent a copy of his answer to the attorney for the wife; and because the attorney misled the husband by sending him a note of issue. When he found out about the default judgment, the husband promp tly hired counsel to set it aside. Broere, 263 Mont. at 208-10, 867 P.2d at 1093-94. ¶21 Similarly, in Sun Mountain Sports, Inc. v. Gore , 2004 MT 56, 320 Mont. 196, 85 P.3d 1286, we reversed the trial court’s denial of a motion to set aside a default judgment. In that case, Gore did not pay the filing fee when she f iled her answer and special appearance because the summons provided no notice of the necessity to pay a filing fee.

The clerk of court refused to file Gore’s an swer and special appear ance, but Gore did not find that out until a default judgment had been entered against her. Gore had, nonetheless, sent the plaintiff’s attorney a copy of the answer. Sun Mountain, ¶¶ 5-6. Citing Broere, among other cases, we c oncluded that Gore ’s neglect was not willful and8 was excusable, and that the case should proceed to a trial on the merits. Sun Mountain, ¶¶ 21-22. ¶22 “[C]ases are to be tried on the merits and judgments by default are not favored.” Sun Mountain, ¶ 29 (citation omitted). In my view, Broere and Sun Mountain control here. Ruthie Padilla, acting pro se , swore that she prepared her answer and mailed a copy to plaintiff’s counsel; she swor e she was unaware that her answ er had to be filed with the

court. As did the husband in Broere , when Ruthie discovered that default judgment had been entered against her, she proceeded dilig ently and hired counsel to set aside the judgment. ¶23 As the majority concedes, the District C ourt conducted no fact-fi nding. Perhaps if it had held a hearing, entered findings and a pplied our precedent, as set out above, the

result here would have been different. ¶24 I would reverse and remand and order the trial court to condu ct an evidentiary hearing, enter findings of fact and conclusions of law and decide this case within the context of our jurisprudence. ¶25 I dissent.

/S/ JAMES C. NELSON