Court Opinion

ID: 2800097
Source: CourtListenerOpinion
Date Created: 2015-05-12 15:12:26.791508+00
Date Added: 2024-06-11T12:20:50.234361
License: Public Domain

MAINE SUPREME JUDICIAL COURT                                                      Reporter of Decisions
Decision:    2015 ME 60
Docket:      Yor-14-397
Submitted
  On Briefs: April 23, 2015
Decided:     May 12, 2015

Panel:       SAUFLEY, C.J., and ALEXANDER, MEAD, GORMAN, and JABAR JJ.

                                     SHIRLEY GAUTHIER

                                                  v.

                              JACQUELINE E. GERRISH et al.

GORMAN, J.

         [¶1] Jacqueline E. Gerrish, Gerrish Corporation, and Julie B. Gerrish appeal

from (1) the Superior Court’s denial of their motion to set aside the defaults

(York County, Fritzsche, J.) entered against Jacqueline and the Corporation as a

sanction for their failure to comply with a court order, and (2) the judgment by

default entered for Shirley Gauthier1 against Jacqueline and the Corporation.

Jacqueline, the Corporation, and Julie argue that the court erred in failing to set

aside the defaults pursuant to M.R. Civ. P. 55(c), in concluding that all necessary

parties were joined pursuant to M.R. Civ. P. 19, and in failing to hold an

   1
      On February 27, 2015, Jacqueline E. Gerrish, Gerrish Corporation, and Julie B. Gerrish filed a
suggestion of death of Shirley Gauthier and, on March 3, 2015, we ordered that the appeal proceed in the
usual course without a change in the caption.
2

evidentiary hearing before issuing the default judgment. We agree with the second

and third contentions and vacate the judgment.

                                        I. BACKGROUND

        [¶2] In 1953, Roland E. Gerrish and Jacqueline, a married couple, acquired

a property located in Alfred, Maine. On March 3, 2008, Roland created the

Roland E. Gerrish East Side Trust. The Trust property consisted of his undivided

one-half interest in the Alfred property, which contains five rent-producing

single-family residential units and one rent-producing residential duplex.                           The

Trust instrument provided that Roland would be the income beneficiary for his

lifetime, and Julie and Shirley2 would be the remainder beneficiaries in equal

shares upon his death. Roland died on May 9, 2011.

        [¶3] The Trustee, Shirley, and Jacqueline were thereafter unable to agree on

the use, maintenance, and upkeep of the property. Shirley offered to sell her

interest to the Trustee and Jacqueline, but both rejected her offer.

        [¶4] On September 9, 2013, Shirley filed a complaint for equitable partition

against Joseph V. Lenkowski, Esq., in his capacity as Trustee; Jacqueline; and the

Corporation.3 All of the defendants were properly served. Jacqueline and the

    2
      According to the parties’ filings to us, Julie is Roland’s daughter-in-law, and Shirley was Roland’s
friend.
    3
     It appears from the complaint that Gerrish Corporation may own some of the improvements on the
property.
                                                                                  3

Corporation filed a timely answer to the complaint, but the Trustee never filed an

answer. On October 24, 2013, Shirley requested that the clerk enter a default

pursuant to M.R. Civ. P. 55(a) against the Trustee, which the clerk entered on

October 31, 2013.

      [¶5] In December of 2013 and early January of 2014, Shirley’s counsel

wrote letters to the court to inform it that repeated efforts to contact counsel

representing Jacqueline and the Corporation had been unsuccessful.              On

January 17, 2014, Shirley’s attorney again wrote a letter to the court to inform it

that the attorney representing Jacqueline and the Corporation had advised him of

his intent to withdraw. In response to that letter, the court entered an order dated

January 24, 2014, that stayed all deadlines for twenty-one days to allow Jacqueline

and the Corporation to “schedule mediation or have new counsel enter an

appearance.” On February 19, 2014, after the twenty-one days had passed, the

attorney for Jacqueline and the Corporation filed a motion to withdraw.         On

February 26, 2014, the court granted the motion, and included in that order

language creating another twenty-one-day stay but also providing that “[f]ailure to

indicate whether there will be new counsel or self-representation will result in a

default.” The order did not require the attorney who had just been relieved of his

obligations to Jacqueline and the Corporation to notify them of that order, and
4

there is no indication in the docket that the court directed that the order be sent

directly to Jacqueline and the Corporation.

      [¶6] In a document filed April 18, 2014, Shirley requested an entry of

default against Jacqueline and the Corporation for their failure to comply with the

court’s February 2014 order. That request was not captioned as a motion, did not

contain the notice to other parties mandated by M.R. Civ. P. 7(b)(1)(A), and was

not sent to Jacqueline and the Corporation. Without waiting for a response, the

court signed a proposed order stating: “Upon request of the Plaintiff default is

entered against Defendant Jacqueline E. Gerrish and Defendant Gerrish Corp.”

Although the order was signed on April 25, 2014, it was not entered into the docket

until April 30, 2014.

      [¶7] On April 30, 2014, an attorney filed a notice of appearance on behalf of

Jacqueline and the Corporation and, on their behalf, filed an objection to the

request for default. Shirley filed an opposition to that objection stating that a

default had already been entered. Then, on May 22, 2014, Jacqueline and the

Corporation filed a verified motion to set aside the default, explaining that their

former counsel had failed to advise them of the deadline for obtaining new counsel

or the consequences for failing to do so. Shirley filed an opposition to that motion

and, on June 9, 2014, filed a request for default judgment pursuant to M.R.

Civ. P. 55(b)(2). In her request, Shirley asked that the default judgment order “the
                                                                                                    5

appointment of a Receiver, sale of the Premises together with the five mobile

homes, stick-built house, and any other improvements situated thereon, [and]

division of the proceeds of sale.”              Jacqueline and the Corporation filed an

opposition to Shirley’s request for a default judgment and, on the same day, filed a

motion to join Julie as a necessary party pursuant to M.R. Civ. P. 19(a). Shirley

filed an opposition to the motion to join Julie.

         [¶8] On August 20, 2014, the court held an unrecorded hearing on the

motions and, on August 25, 2014, entered two orders. The first was an order

denying the motions to set aside the default and to join Julie.                         That order

concluded, inter alia, that “[a]ll necessary parties were joined.” The second was a

judgment by default that granted the precise relief requested by Shirley.

Jacqueline, the Corporation, and Julie4 filed timely notices of appeal pursuant to

14 M.R.S. § 1851 (2014) and M.R. App. P. 2.

                                       II. DISCUSSION

A.       Motion for Joinder

         [¶9]   We review “a court’s interpretation of the Maine Rules of Civil

Procedure de novo and look to the plain language of the rules to determine their

     4
      Shirley moved to dismiss Julie’s appeal based on lack of standing. We ordered that the motion be
considered with the merits of the appeal and, because we disagree with the contention that Julie lacks
standing to appeal, we now deny the motion. See 14 M.R.S. § 1851 (2014); Jamison v. Shepard,
270 A.2d 861, 862-63 (Me. 1970).
6

meaning.”5       Town of Poland v. T & M Mortg. Solutions, Inc., 2010 ME 2, ¶ 6,

987 A.2d 524.

        [¶10] Maine Rule of Civil Procedure 19(a) requires that

        [a] person who is subject to service of process shall be joined as a
        party in the action if (1) in the person’s absence complete relief cannot
        be accorded among those already parties, or (2) the person claims an
        interest relating to the subject of the action and is so situated that the
        disposition of the action in the person’s absence may (i) as a practical
        matter impair or impede the person’s ability to protect that interest or
        (ii) leave any of the persons already parties subject to a substantial
        risk of incurring double, multiple, or otherwise inconsistent
        obligations by reason of the claimed interest. If the person has not
        been so joined, the court shall order that the person be made a party. If
        the person should join as a plaintiff but refuses to do so, the person
        may be made a defendant.

See also Larrabee v. Town of Knox, 2000 ME 15, ¶ 10, 744 A.2d 544 (“Although

dismissal may be appropriate when a necessary party cannot be joined, if joinder

of a party is possible, then it is mandatory: If the person [i.e., the necessary party]

has not been joined, the court shall order that the person be made a party.”

(quotation marks omitted)).

        [¶11] We have interpreted Rule 19(a) to require the joinder of a party

holding a property interest that will be affected by the litigation.                                 In

    5
     We have never specified the appropriate standard of review to be applied to orders denying a motion
pursuant to M.R. Civ. P. 19(a) to join a necessary party. Nevertheless, in multiple cases, we have
implicitly applied a de novo standard. See, e.g., Ocwen Fed. Bank, FSB v. Gile, 2001 ME 120, ¶ 14,
777 A.2d 275; Larrabee v. Town of Knox, 2000 ME 15, ¶¶ 9-11, 744 A.2d 544; Centamore v. Comm’r,
Dep’t of Human Servs., 634 A.2d 950, 951-52 (Me. 1993).
                                                                                     7

Efstathiou v. Payeur, we concluded that the Town of Ogunquit was a necessary

party when “the Referee intended to define the boundaries of a public way”

because “[h]is determination . . . could not completely adjudicate the dispute

between the parties because it left the Town of Ogunquit free to relitigate the

way’s boundaries.” 456 A.2d 891, 893 (Me. 1983); see also 7 C. Wright et al.,

Federal Practice and Procedure § 1621, at 326-27 (3d ed. 2001) (“[I]n order to

sue for damages for injury to the land or to sue for partition, all cotenants must be

before the court in order that each may claim his share. Otherwise a multiplicity of

suits or inconsistent determinations may result.”).

       [¶12] Here, Julie has a one-quarter interest in the land that Shirley seeks to

have partitioned. Complete relief cannot be accorded among those already parties

to the action because the relief that Shirley requested was a sale of the entire

property, not a sale of the three-quarters undivided interest that the parties held. In

addition, a sale of the entire property and division of proceeds could, in Julie’s

absence, impair Julie’s ability to protect her interest or subject the parties to a

substantial risk of future litigation.

       [¶13] Furthermore, unless Julie is joined, it is almost certain that the

resulting title will not be marketable. See 7 C. Wright et al., Federal Practice and

Procedure § 1621, at 326 n.12 (3d ed. 2001) (“All owners of land are required to

join in an action for partition in order that the resulting title be marketable.”); see
8

also Lowe v. Loftus, 314 F. Supp. 620, 623 (S.D. Ga. 1970) (“I doubt whether any

experienced real estate lawyer would approve a title created under a judgment

based on a default and under the facts I have recited.”); Depositors Trust

Co. v. Bruneau, 144 Me. 142, 146-47, 66 A.2d 86 (1949) (“Every vendor in the

absence of provision otherwise in the contract, impliedly contracts to tender a

marketable title.”). Therefore, Julie is a necessary party to the partition action and

her joinder was mandatory. The court erred in concluding otherwise.

B.    Default Judgment

      [¶14] “We review an alleged error in the court’s entry of a default judgment

for an abuse of discretion.” Richter v. Ercolini, 2010 ME 38, ¶ 18, 994 A.2d 404.

Maine Rule of Civil Procedure 55(b)(2) governs evidentiary hearings preceding the

entry of a default judgment by stating

      [i]f, in order to enable the court to enter judgment or to carry it into
      effect, it is necessary to take an account or to determine the amount of
      damages or to establish the truth of any averment by evidence or to
      make an investigation of any other matter, the court may conduct such
      hearings or order such references as it deems necessary and proper
      and shall in the Superior Court accord a right of trial by jury to the
      plaintiff if the plaintiff so requests.

      [¶15] We have held that, although parties may not challenge the underlying

cause of action for which they have been defaulted, an evidentiary hearing may be

necessary to craft a specific, enforceable remedy after the entry of a default. See

Ireland v. Carpenter, 2005 ME 98, ¶ 20, 879 A.2d 35 (holding that the court was
                                                                                                           9

required to hold an evidentiary hearing on the scope, nature, and location of an

easement); cf. Richter, 2010 ME 38, ¶ 19, 994 A.2d 404 (holding that the court was

not required to hold an evidentiary hearing when the parties stipulated as to the

amount of the damages). Here, the unique facts of the case, namely the existence

of multiple rent-producing buildings on the property and, presumably, tenants,

along with the particular need to add Julie as a party to ensure that a partition

action results in marketable title, necessitate a hearing as to the most appropriate

method of partition.6

        The entry is:

                         Default judgment vacated. Remanded for further
                         proceedings consistent with this opinion.

   6
      The court entered default against Jacqueline and the Corporation as a sanction imposed pursuant to
M.R. Civ. P. 16(d) for their failure to obtain new counsel as required by its February order. In light of our
decision vacating the judgment, the need to join Julie as a party, and the need to allow all of the parties
that hold an interest in the property to participate in the litigation, the defendants may wish to ask the
court to reconsider that sanction. In particular, without full participation by the Corporation, the issues
relating to the improvements on the properties, including potential issues with tenants, may prove difficult
to fully resolve.
10

On the briefs:

        Pamela S. Holmes, Esq., Holmes Legal Group, LLC, Wells, for
        appellants Jacqueline E. Gerrish, Gerrish Corporation, and
        Julie B. Gerrish

        James J. Shirley, Esq., and Kenneth D. Keating, Esq., Roberts
        & Shirley Law Offices, Springvale, for appellee Shirley
        Gauthier

York County Superior Court docket number RE-2013-133
FOR CLERK REFERENCE ONLY