No. 12442 INTHE SUPREME COURT OF T)IE STATE OF MONTANA 1973

SIKORSKI & SONS, INC., Plaintiff and Appellant,

-VS

# - ED R. SIKORSKI, Defendant and Respondent.

Appeal from: District Court of the Sixteenth Judicial District, Honorable M. James Sorte, Judge presiding. Counsel of Record: For Appellant: Gene Huntley argued, Baker, Montana 

### For Respondent: Lucas, Jardine & Monaghan, Miles City, Montana Thomas M. Monaghan argued, Miles City, Montana John R. Prater appeared, Ronan, Montana R. W. Heineman, Wibaux, Montana

Submitted: June 20, 1973 Decided : 

### JUL2

## 41973 Filed: 

### JUL

## 2

## 41973

erkMr. Chief JusticeJames T. Harrison delivered the Opinion of the Court.

This 

### is an appeal by plaintiff corporation from an order setting aside and vacating a defaultjudgment. This case concerns a family farming corporation, Sikoriski & Sons, Inc. Suitwas instituted in the district court of the sixteenth judicial district, Fallon County, by plaintiff corporation against one of its stockholders, Ed R. Sikorski, to enjoin him from coming on corporate property and from harassing corporation officers and employees and torequire him to surrender certain corporate property which he had secreted. Complaint was filed February 3, 1968. 

### An order to show cause was issued

on the same day, returnable February 9, 1968, requiring defendant toshow

cause why plaintiff should not have itsinjunction pendente lite. The complaint described the ownership of each corporate stockholder, and alsoalleged that sinceMay 1960, Ed R. Sikorski had owned 364 shares withhis firstwife, Frances 

### F. Sikorski, asjoint tenants, and one share individually. Specifically, the complaint a1leged that Ed R. Sikorski in about 1960or 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 Ed R. Sikorski consulted with counsel

# . By informal agreement between 

### his counsel and counsel forthe corporation, the hearing

on the order to show cause of February 9, 1968, was continued. Nothing further happened until April 12, 1968, atwhich time counsel for Ed R. Sikorski formally withdrew. Ed 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 May 13, 1968, judgment was taken. In itsfindings of fact, the district court found that Ed R. Sikorski owned 364 shares of stock as tenant incommon with Frances F. Sikorski

### ,and one share individually. Among other things, the district court also found that Ed 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 toother members of the corporation and had refused todeliverthem upon demand. The districtcourt concluded that Ed 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 fact, conclusions of law and judgment were served on defendant, Ed R. Sikorski, on June 14, 1968. Ed R. Sikorski died on June 28, 1969. From the time the complaint was served

on February 

### 5, 1968, defendant Ed R. Sikorski did nothing withrespect to the action, except have the hearing of February 9, 1968, continued. 

### On October 31, 1969Veronica Sikorski

## ,the second wife of Ed R. Sikorski and the administratrix of his estate, filed a complaint against plaintiff corporation tohave a receiver appointed, to liquidate thecorporation, and for other relief, 

### On December 9, 1969, Veronica Sikorski in the instant action petitioned the court to set aside, vacate, and modify thejudgment, 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 settingaside and vacatingjudgment. The basis for thismotion was that Ed R. Sikorski should have been served with notice to appoint another attorney before being defaulted and plaintiff should have served a notice of application for defaultjudgment because Ed R. Sikorski had appeared in the action against him. The motion was setfor hearing on April 18, 1972, which was continued forthe convenience of counsel involved.After three districtjudges had disqualified themselves, District Judge Sorte assumed jurisdiction on May 26, 1972. On July 28, 1972, it

was ordered that the hearing on themotion for order setting aside and vacatingjudgment be set for September 8, 1972. By agreement of counsel for all parties, the order setting the hearing on September 8, 1972 was vacated. Counsel agreed to submit thematter on written briefs. Counsel forplaintiff

### was given until October 15, 1972 to filea 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 ithad been without jurisdiction to proceed against Ed R. 

### Sikorski because plaintiff did not serve upon defendant notice to appoint another lawyer; that itwas withoutjurisdiction because plaintiff did not give notice todefendant of application forjudgment as required under Rule 55(b)(2), M.R.Civ.P.; and, that the "JUDGMENT exceeds the prayer of plaintiffIs complaint in that itdesignates specificcertificates 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 itsexceptions to the findings of fact, conclusions of law, and order setting aside and vacating thejudgment. On 

### December 11, 1972, the district court in

### denying the exceptions said: "Itisclear that failure togive notice of entry of judgment isnot a jurisdictional defect. However, the Court feels that there aregeneral equity powers 

### toset aside thejudgment so the matter can be tried on the merits and before ajury." Plaintiff presents seven issues on appeal. Two are: (1) Whether under section 93-2104, R.C.M. 

### 1947, an adverse party isrequired 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 thejudgment can be setasidebecause plaintiff failed to serve notice of application for defaultjudgment on Ed R. 

### Sikorski. The remaining five issues raise questions concerning the Montana Rules of Civil Procedure and can be consolidated into

### 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 isremoved or suspended, or ceases to act as such, a party to an action, forwhom he was acting as attorneymust, before any further proceedings arehad against him, be required by the adverse

### party, by written notice, toappoint another attorney or appear in person." There has been no case decided by this Court interpreting the requirement of section 93-2104, R.C.M. 

### 1947, involving a situation where an attorneywithdraws from a case with 

### the consent of his 

### client. Counsel forplaintiff argues thatbecause therewas no alleged appearance by Ed R. 

### Sikorski, notice toappoint another attorney was not required. While

we agree with 

### plaintiff's conclusion that notice isnot required under the circumstances of this case, we do so fordifferent reasons. 13California Code of Civil Procedure, 

### 5 286, isidentical to Montana's statutesection 93-2104, R.C.M. 

### 1947. The California court in 

### Gion 

### v. Stroud, 191 C.A.2d 277, 12 Cal.Rptr. 540, 542, said: 

### " 

## ** * forthere isCalifornia law directlyon the point thatCode of Civ. 

### Proc. 

### 5 286 

### applies only when an attorney has died orceased tobe an attorneyand not when he ceased to actforhis 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, but 

### isapplicable here. No appearance had ever been made by Ed R. 

### Sikorski. Edward R. 

### Si korski'sattorneywithdrew 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 tobe given before any further proceedings could be instituted against Ed R. 

### Sikorski. For this reason the district court was not withoutjurisdiction when it

### entered the defaultjudgment. The districtcourt alsoconcluded that it

### was withoutjurisdiction toproceed against Ed R. 

### Sikorski because the plaintiff failed to serve upon him the written noticeof application forjudgment as required by Rule 55(b)(2),M.R.Civ.P. 

### Counsel forplaintiff argues since therewas 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 againstwhomjudgment by default is sought has appeared in

### the action, he (or, if 

### appearing by representative, his representative) shall be servedwith written notice of the application forjudgment at least three days prior to the hearing on such application." This Court in Wi11iams 

### v. Superior Homes, Inc.

## , 148Mont

# . 38, 42, 417 P.2d 92, ruled the failure to give a three-day notice was not necessarilyajurisdictional 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 defaultjudgment had been entered until his death, a period of approximately thirteen months. The judgment was attacked for the firsttime 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 setaside and vacate judgment was filed. In Williams we held that a failure to give the three-day notice did not prejudice the defendant in that case because of defendant's own disregard for the rules in applying forrelief. Likewise, we cannot say in the instant case that the failure to give the three-day notice was ajurisdictional defect. Ed 

### R. Sikorski's apparent lack of interest in the judgment against him and his obvious disregard for the rules leads us to this conclusion. 

### Our review of the question of whether the Montana Rules of Civil Procedure were followed in setting aside thejudgment requires an examination 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 thejudgment." 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 ithas been served

## ** * except 

### thatatanytime 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 iscontinued by the court, itshall be the duty of the court to hear the same atthe earliestpracticable date thereafter, and the court shall ruleupon and decide the motion within 15 days after the same issubmitted. If the court shall fail to rule upon themotion within said time, the motion shall, atthe expiration of said period, be deemed denied.

## " Here, the motion was served and notice given on March 29, 1972. The hearing was set forApril 18, 1972. This hearing was continued for the convenience of counsel involved. There isno indication from the record that the hearing was continued for "not toexceed 30 days." 

### On May 26, 1972, Judge Sorte assumed jurisdiction but itwas not until July 28, 1972, that he setthe motion forhearing on September 8, 1972. From the time the motion was served until the motion was setfor hearing on September 8, 1972, 163days had elapsed. The order setting the hearing datewas vacated, and the matter was submitted on written briefs. 

### On November 29, 1972 when thejudgment was ordered setaside, 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 itwas 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 dateof 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: "We believe the purpose of the rule [Rule 59(d),

### M.R.Civ.P.1 should be adhered toand while we do not wish to be technical, atthe same time we cannot permit deviations." Itis not necessary todiscuss atthis time other provisions of the rulewhich have been set out inthe briefs. The order of the district court vacating thejudgment of 1968 is reversed and the matter remanded tothe district court for the purpose of dismissing the petition of VeronicWe concur:

..t ,



### Justices I