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:

# &.c19

ClerkMr. Chief Justice James T. Harrison delivered the Opinion of the Court. This is an appeal by defendant, Louis Matelich, from

an order denying hismotion to

### set aside entry of defaults and an order granting plaintiffs' motion for entry of default judgments. Plaintiffsbrought two separate actions inthe district court of the third judicial district. The cases areconsolidated for the purpose of this appeal because the issues raised

are the same 

### inboth cases. The firstclaim for relief filed by plaintiffs was for the purpose of collecting insufficient funds checks due and owing tothem inthe sum of $3,948.04, plus reasonable attorney's fee. Plaintiffs' complaint was filed on January 27, 1971. A motion todismiss 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, themotion was denied, with defendant being granted 30 days within which tofurther plead. No furtherpleadings 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, asattorneys fordefendant.On August 26, 1971, an amended complaint was served on Murray & Holt, who moved todismiss the same on September 7, 1971. The motion was denied on September 15, 1971, with defendant being granted 30 days within which tofurther 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 todismiss

was filed by Murray & Holt on May 25, 1971. On June 9, 1971, themotion was denied and defendant was granted 30 days within

### which to further plead. In this causeAssociates Financial Services was a party defendant, and by stipulation filed on September 14, 1972, the cause was dismissed as againstAssociates 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 depositionwas 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'sdefault 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,affidavitsby plaintiffs1attorney 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 themotion 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 foreclosurecase 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 judgmentswas sent to the defendant. Themotion 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 defendantwere filed. On December 20, 1972, hearing was held on plaintiffs1motion for entry of default judgments and on defendant'smotion 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'smotion to set aside entry of default and granted plaintiffs' motion for entry of default judgment. Judgmentwas 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 plaintiffs1motion 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 thecourtmay set aside an entry of default and, if a judgment by defaulthas been entered, may likewise 

### set it aside inaccordancewith Rule 60(b). 

## * * *"

Defendant's firstmotion to setaside the entryof default, filed on December 4, 1972, had been denied for thereason that under Rule 55(a),M.R.Civ.P. no notice of entry of default the clerk of the districtcourt 

### isrequired tobe given tothe defendant. This is one of thereasons given by the district court fordenying defendant's motion of December 19, 1972. The districtcourt was correct, for no notice of entry of default by the clerk of thedistrictcourt isrequired. Sealey v. Majerus, 149Mont. 268, 271, 425 P.2d 70. In itsorder of December 28, 1972 denying defendant's motion to set aside the entry of default, the district court decreed thatdefendant failed to show any mistake, inadvertence

or excusable neglect tojustify the failureto filean answer within the time granted by the court afterdenying the motions todismiss. In the affidavit relied upon by defendant, defendant statesthat from thetimeof the withdrawal of the firm of Murray & Holt on December 9, 1971, tothe 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 tobelieve that no further civilproceedings were being had on behalf of plaintiffs. In addition, defendant states thatbecause of ill health he was prohibited from leaving hishome toattend tothese matters and he was unable topersonally look after his business affairs. In hisbrief defendant cites 6Moore's Federal Practice, 11 55.05(2) where it 

### is stated: "The grant ordenial of a motion for theentry by thecourt of a defaultjudgment 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 discretionmay properly consider such factors as the following: whether the defendant's failure to plead or otherwisedefend 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 ismanifest 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, 71Mont. 99, 103, 228 P. 761;Holen

### v. Phelps, 131Mont. 146, 150, 308
: r 

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

We point out that defendant's affidavitwas filed in the insufficient funds case. Defendant has argued here as he did in 

### the district court that the facts in the affidavit showgood

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. Defendantwas 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. Defendantmakes the argument that his failure to further plead was technical because he was not represented by counsel atthe entry of the defaults. The record shows the opposite. Defendant was represented by counsel atthe timethemotions to dismiss

### weredenied and for atleast sixmonths thereafter. When defendant appeared atthedeposition, he stated that he had replaced his counsel, Murray & Holt, with Mr. "Ty" Robinson. There isno notice inthe record thatBoyd & Radonich had assumed the role of defendant's attorney. The fact isregrettable that defendant suffered ill health, yet thisdoes not excuse his failure toplead, 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 toexplain why no answers were filedprior to thattime. Defendant has made no showing of why he failed tofile

an answer within the time granted by the districtcourt. Defendant now asserts that he willbe prejudiced because he has a good defense tothe claims and now 

### willbe unable toassert the defense. If defendant 

### isinany way prejudiced, the record clearly shows that it isby his own failure and disregard to assert his rights when available tohim. Defendant's second issue 

### is that the districtcourt erred ingranting plaintiffs' motion for entry of defaultjudgments. The district court ordered plaintiffs' motion granted for the reason thatdefendant failed tocomply with the orders of the districtcourt regarding filingof any answer until after plaintiffshad filed a motion for entry of default judgment and had noticed themotion for hearing. The districtcourt's reasoning is consistent with our holding inSealey, where atpage 271

### we said:

# " * 

## * * Defendants1contention 2 is likewise withoutmerit. Their answers were not filed until they had received notice of plaintifflsmotion for default judgment. Theprovisions 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 themotion for default judgment. "Defendantswere given the opportunity to appear at the hearing on themotion for judgment by default and to resist suchmotion. Under Rule 55(c) defendants were entitled to move to set aside the entry of default for 'good cause shown' and tomove 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 inconsistentwith 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 courtwas not in error. There has been no showing that the district court abused its discretion. The orders of the

Chief Justice