No. 12461 

IN THE SUPREME COURT OF THE STATE OF MONTANA 

CHARLES G. JOHNSON and GUNNAR E. JOHNSON, 

a partnership d/b/a Park Motors Company, 

Plaintiffs and Respondents, 

LOUIS B. MATELICH, individually, MATELICH 

TRAILER SALES & SERVICE, a Montana corporation, 

and ASSOCIATES FINANCIAL SERVICES, a Montana 

corporation, 

Defendants and Appellants. 

Appeal from: District Court of the Third Judicial District, 

Honorable Sid G. Stewart, Judge presiding. 

Counsel of Record: 

For Appellants : 

John N. Radonich argued, Anaconda, Montana 

For Respondents : 

Knight, Dahood, Mackay and McLean, Anaconda, Montana 

Wade J. Dahood and David M. McLean argued, Anaconda, 

Montana 

Submitted : November 27, 1973 

Filed : &.c 1 9 

Clerk 
Mr. Chief Justice James T. Harrison delivered the Opinion 

of the Court. 

This is an appeal by defendant, Louis Matelich, from 

an order denying his motion to set aside entry of defaults 

and an order granting plaintiffs' motion for entry of default 

judgments. 

Plaintiffs brought two separate actions in the district 

court of the third judicial district. The cases are consolidated for the purpose of this appeal because the issues raised 

are the same in both cases. 

The first claim for relief filed by plaintiffs was for 

the purpose of collecting insufficient funds checks due and owing 

to them in the sum of $3,948.04, plus reasonable attorney's fee. 

Plaintiffs' complaint was filed on January 27, 1971. A motion 

to dismiss was filed on behalf of defendant on February 5, 1971, 

by the law firm of Garlington, Lohn and Robinson, Missoula, Montana, and on February 17, 1971, the motion was denied, with defendant being granted 30 days within which to further plead. No 

further pleadings were filed but on March 9, 1971, a substitution of attorneys was filed showing the substitution of the law 

firm of Murray & Holt, Missoula, Montana, as attorneys for defendant. 

On August 26, 1971, an amended complaint was served on 

Murray & Holt, who moved to dismiss the same on September 7, 

1971. The motion was denied on September 15, 1971, with defendant being granted 30 days within which to further plead. 

 he second claim for relief was brought by plaintiffs in 

the sum of $52,595.53 for the purpose of foreclosing liens. The 

complaint was filed on February 11, 1971. A motion to dismiss 

was filed by Murray & Holt on May 25, 1971. On June 9, 1971, 

the motion was denied and defendant was granted 30 days within 
which to further plead. In this cause Associates Financial 

Services was a party defendant, and by stipulation filed on 

September 14, 1972, the cause was dismissed as against Associates 

Financial Services. 

The following facts are the same as to both claims for 

relief: On September 16, 1971, notice of taking the deposition 

of defendant was filed. A consent to withdrawal of the law firm 

of Murray & Holt as attorneys for defendant was signed by defendant on December 9, 1971. The consent indicated that the defendant would continue to appear in person until further notification 

was given to plaintiffs. On the same day, the deposition of defendant was taken. Defendant stated under oath that he was 

represented by Mr. "Ty" Robinson, Missoula, Montana, but that Mr. 

Robinson could not be present. The deposition was continued. 

In the foreclosure case application was made to the clerk 

of the district court for entry of default of defendant on February 16, 1972. On the same day, defendant's default was entered 

by the clerk of the district court. In the insufficient funds 

case application to the clerk for entry of default was made on 

September 20, 1972, and on the same day, defendant's default was 

entered. 

On October 11, 1972, affidavits by plaintiffs1 attorney 

and motions for judgment by default by the court were filed in 

both causes, and judgments by default by the court were signed 

and filed. 

On December 4, 1972, the firm of Boyd & Radonich, Anaconda, 

Montana, filed motions to set aside the default and judgment in 

the insufficient funds case. Affidavit of defendant was filed 

on December 7, 1972. On December 13, 1972, the hearing on the 

motion was held. At the hearing plaintiffs agreed to setting aside 

the judgment and noticed a hearing on the motion for entry of default 
judgment for December 20, 1972. On the same day, counsel for 

defendant inoved the court to set aside the default judgment 

in the foreclosure case and noticed a hearing on the motion for 

entry of default judgment for December 20, 1972. 

On December 15, 1972, the district court granted the 

motions to set aside the default judgments entered on October 

11, 1972 for the reason that no notice of application for entry 

of default judgments was sent to the defendant. The motion to 

set aside entry of defaults was denied and December 20, 1972 

was set for hearing plaintiffs' motions for entry of default 

judgments . a 

On December 19, 1972,/consolidated motion by defendant 

to set aside entry of defaults, memorandum in support thereof, 

and the answers of defendant were filed. On December 20, 1972, 

hearing was held on plaintiffs1 motion for entry of default 

judgments and on defendant's motion to set aside entry of defaults. 

The matter was submitted to the district court on briefs, and 

on December 28, 1972, Judge Sid Stewart, presiding, denied defendant's motion to set aside entry of default and granted plaintiffs' motion for entry of default judgment. 

Judgment was thereupon entered in the sum of $32,237.73 

in the foreclosure action and in the sum of $5,699.46 in the 

insufficient funds checks case. 

Defendant presents two issues on appeal: (1) Whether 

the district court erred in denying defendant's motion to set 

aside the entry of defaults, and (2) whether the district court 

erred in granting plaintiffs1 motion for entry of default judgments. 

As to the first issue defendant contends that his affidavit 

filed on December 7, 1972, established good cause for setting aside 

the defaults pursuant to Rule 55(c), M.R.Civ.P., which provides: 
"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). * * *" 

Defendant's first motion to set aside the entry of default, filed on December 4, 1972, had been denied for the reason 

that under Rule 55(a), M.R.Civ.P. no notice of entry of default 

the clerk of the district court is required to be given to the 

defendant. This is one of the reasons given by the district 

court for denying defendant's motion of December 19, 1972. The 

district court was correct, for no notice of entry of default 

by the clerk of the district court is required. Sealey v. 

Majerus, 149 Mont. 268, 271, 425 P.2d 70. 

In its order of December 28, 1972 denying defendant's 

motion to set aside the entry of default, the district court 

decreed that defendant failed to show any mistake, inadvertence 

or excusable neglect to justify the failure to file an answer 

within the time granted by the court after denying the motions 

to dismiss. 

In the affidavit relied upon by defendant, defendant 

states that from the time of the withdrawal of the firm of Murray 

& Holt on December 9, 1971, to the time of his affidavit,that he 

had not been informed of any proceedings being taken against him. 

The affidavit indicates that by reason of a criminal action 

pending against him that defendant was led to believe that no 

further civil proceedings were being had on behalf of plaintiffs. 

In addition, defendant states that because of ill health he was 

prohibited from leaving his home to attend to these matters and 

he was unable to personally look after his business affairs. 

In his brief defendant cites 6 Moore's Federal Practice, 

11 55.05 (2) where it is stated: 

"The grant or denial of a motion for the entry 

by the court of a default judgment lies within 
the sound discretion of the trial court. This 

proposition is supported by good sense. And 

its soundness is also demonstrable by reference 

to Rule 55(c), which authorizes the trial court 

to set aside an entry of default on a showing of 

good cause. 

'The court, in exercising its discretion may 

properly consider such factors as the following: 

whether the defendant's failure to plead or 

otherwise defend is largely technical; whether 

the plaintiff will be prejudiced, and if so, the 

extent thereof; whether entry of the default judgment would result in injustice." 

This Court has often stated that an application to set 

aside a default is addressed to the sound discretion of the trial 

court and its action will not be disturbed on appeal unless it 

is manifest that its discretion has been abused. Ferguson v. 

Parrott, 36 Mont. 352, 92 P. 965; Robinson v. Petersun, 63 Mont. 

247, 206 P. 1092; Pacific Acceptance Corp. v. McCue, 71 Mont. 

99, 103, 228 P. 761; Holen v. Phelps, 131 Mont. 146, 150, 308 : r 

P. 2d 62& Williams v. Superior Homes, Inc., 148 Mont. 38, 417 

We point out that defendant's affidavit was filed in the 

insufficient funds case. Defendant has argued here as he did 

in the district court that the facts in the affidavit show good 

cause as to both cases. From our review of the record we conclude that the district court did not err in denying defendant's 

motion. 

Defendant was well aware of the fact that he was the defendant in the lawsuit, that a summons and complaint had been 

duly served upon him, and that motions to dismiss had been filed 

upon his behalf. The record clearly indicates that the defendant was aware that an answer was to be filed within 30 days from 

the denial of his two motions to dismiss. 

Defendant makes the argument that his failure to further 

plead was technical because he was not represented by counsel at 
the entry of the defaults. The record shows the opposite. Defendant was represented by counsel at the time the motions to 

dismiss were denied and for at least six months thereafter. 

When defendant appeared at the deposition, he stated that he had 

replaced his counsel, Murray & Holt, with Mr. "Ty" Robinson. 

There is no notice in the record that Boyd & Radonich had assumed 

the role of defendant's attorney. 

The fact is regrettable that defendant suffered ill health, 

yet this does not excuse his failure to plead, especially considering the fact that he was represented by attorneys throughout. 

The record further indicates that the criminal proceedings were not filed until September, 1972. Defendant, however, 

does not attempt to explain why no answers were filed prior to 

that time. 

Defendant has made no showing of why he failed to file 

an answer within the time granted by the district court. Defendant now asserts that he will be prejudiced because he has a 

good defense to the claims and now will be unable to assert the 

defense. If defendant is in any way prejudiced, the record 

clearly shows that it is by his own failure and disregard to 

assert his rights when available to him. 

Defendant's second issue is that the district court erred 

in granting plaintiffs' motion for entry of default judgments. 

The district court ordered plaintiffs' motion granted 

for the reason that defendant failed to comply with the orders 

of the district court regarding filing of any answer until after 

plaintiffshad filed a motion for entry of default judgment and 

had noticed the motion for hearing. 

The district court's reasoning is consistent with our 

holding in Sealey, where at page 271 we said: 
" * * * Defendants1 contention 2 is likewise without merit. Their answers were not filed until 

they had received notice of plaintiffls motion for 

default judgment. The provisions of Rule 55(b) (2) 

would be useless if defendants could remain in 

default as long as they desired and then prevent 

the judgment by default by merely filing the proper 

pleading in the period between the notice and the 

hearing on the motion for default judgment. 

"Defendants were given the opportunity to appear 

at the hearing on the motion for judgment by 

default and to resist such motion. Under Rule 

55(c) defendants were entitled to move to set 

aside the entry of default for 'good cause shown' 

and to move to set aside the judgment by default 

under Rule 60 (b) . " 

In the instant case defendant's answers were not filed 

until the day before the hearing on the motions. This procedure 

is clearly inconsistent with our decision in Sealey. 

For the reason that the district court did not find good 

cause for defendant's failure to file his answer within the time 

required and for the reason that defendant cannot correct his 

default by filing his answer between the time of notice and the 

hearing on the motion, the district court was not in error. There 

has been no showing that the district court abused its discretion. 

The orders of the 

Chief Justice