Court Opinion

ID: 890356
Source: CourtListenerOpinion
Date Created: 2013-06-05 06:38:20.32858+00
Date Added: 2024-06-11T12:42:09.122936
License: Public Domain

February 12 2013

                                           DA 12-0054

                  IN THE SUPREME COURT OF THE STATE OF MONTANA

                                           2013 MT 35

LINDA GREEN,

              Plaintiff, Appellant, and
              Cross Appellee,

         v.

RONALD RAY GERBER and
STOCKTON OIL COMPANY,

              Defendant, Appellee, and
              Cross Appellant.

APPEAL FROM:            District Court of the Fourteenth Judicial District,
                        In and For the County of Musselshell, Cause No. DV-11-06
                        Honorable Randal I. Spaulding, Presiding Judge

COUNSEL OF RECORD:

                For Appellant:

                        Patricia D. Peterman, Patten, Peterman, Bekkedahl & Green, PLLC,
                        Billings, Montana

                For Appellee:

                        Perry J. Schneider, Tim E. Dailey, Milodragovich, Dale,
                        & Steinbrenner, P.C., Missoula, Montana

                                                     Submitted on Briefs: November 7, 2012

                                                                Decided: February 12, 2013

Filed:

                        __________________________________________
                                          Clerk
Justice Patricia O. Cotter delivered the Opinion of the Court.

¶1     In December 2008, Linda Green was driving her vehicle southbound on Highway

87 North in Musselshell County, Montana, when she was struck by a truck owned by

Stockton Oil Company (Stockton Oil or Stockton) and driven by Ronald Ray Gerber.

Green suffered bodily injuries as a result of the accident as well as property damage to

her vehicle. On January 7, 2011, Green filed a Complaint in the Fourteenth Judicial

District Court against Stockton Oil and Gerber seeking damages. Stockton Oil was

served but Gerber was not. Stockton did not respond to the Complaint and a default was

entered against the company in February 2011. A damages hearing was subsequently

conducted and a judgment for damages totaling $308,200 was entered in April 2011. In

October 2011, Stockton moved to set aside the default judgment. Sixty-eight days later,

the District Court granted Stockton’s motion.

¶2     Green appeals, contending the District Court lacked jurisdiction to set aside the

default judgment once 60 days expired, citing M. R. Civ. P. 60(c)(1). She also opines

that Stockton failed to satisfy the elements of a successful Rule 60(b) motion. Stockton

urges us to uphold the District Court order setting aside the default judgment. In the

event we conclude the motion was deemed denied by operation of Rule 60(c)(1) and the

District Court’s order must therefore be vacated, it cross-appeals, arguing that the deemed

denial constituted a slight abuse of discretion. We reverse and remand.

                                         ISSUES

¶3     Direct appeal: Did the District Court err in granting Stockton Oil’s Motion to Set

Aside Default Judgment 68 days after it was filed?

                                             2
¶4     Cross-appeal: Did the District Court slightly abuse its discretion in deeming

denied Stockton’s motion to set aside the default judgment?

                  FACTUAL AND PROCEDURAL BACKGROUND

¶5     On December 2, 2008, Green’s vehicle was struck by a Stockton Oil Company

truck driven by Ronald Gerber. Green was injured and her car was damaged. Following

the accident, Green and Stockton Oil’s insurer, EMC, worked together for a period of

time during which EMC paid $139,246.80 toward Green’s medical bills and resolution of

the claim. However, in late December 2010 discussions broke down and on January 7,

2011, Green filed a Complaint and Demand for Jury Trial (Complaint) against Stockton

Oil and Gerber seeking damages. On January 10, 2011, summonses were prepared for

both Stockton Oil and Gerber, and on January 27, Stockton Oil was served with the

Complaint and Summons.1

¶6     On February 22, 2011, a default was entered against Stockton after the company

failed to answer the Complaint. On March 31, 2011, the District Court held a hearing to

determine Green’s damages. Green did not disclose to the court receipt of funds from

EMC. On April 5, 2011, the District Court entered a Judgment by Default against

Stockton Oil ordering the company to pay Green $308,200 in damages plus 10% interest

per annum. These damages included claims for past and future medical bills, emotional

distress, loss of enjoyment of life, and pain and suffering.

1
  It is undisputed that Gerber was never served with the Complaint or the Summons and,
therefore, is not a party to this appeal. The default judgment was entered solely against Stockton
Oil.
                                                3
¶7    On September 26, 2011, a Writ of Execution for Green’s judgment was issued. It

was served on Stockman Bank on October 11, 2011. The record reveals that $138,273.15

was collected from both Gerber’s and Stockton Oil’s Stockman Bank accounts on behalf

of Green and placed in trust with Green’s attorney. However, these levied funds were

subsequently returned to Gerber and Stockton.2

¶8    On October 19, 2011, citing M. R. Civ. P. 60(b)(6), Stockton Oil filed a Motion to

Set Aside Default Judgment. Stockton Oil primarily argued that Green had failed to

disclose to the District Court that she had received payments totaling $139,246.80 from

Stockton Oil’s insurer, EMC. Stockton maintained that the Default Judgment in the

amount of $308,200 should be set aside as it represented excessive damages in light of

the undisclosed insurance payments.

¶9    On October 31, 2011, Green filed her brief in opposition to Stockton Oil’s motion.

She argued that she had not yet recovered monies pursuant to the Judgment, and she

acknowledged that the $308,200 judgment would be reduced by the amount of funds

previously received from Stockton’s insurer. She also argued that Stockton’s motion

should not be granted because Stockton could not satisfy the elements of a successful

Rule 60(b) motion.

¶10   Pursuant to Rule 60(c), the District Court had 60 days within which to rule on

Stockton’s Rule 60(b) motion to set aside the default judgment. The failure to rule within

those 60 days resulted in the motion being “deemed denied.”         Rule 60(c)(1).    The

2
  As noted above, no judgment was entered against Gerber so the levy upon his account was
executed in error.
                                            4
deadline for the District Court’s ruling was December 19, 2011. In a two-line order dated

December 27, 2011, the District Court, without explanation or rationale, granted

Stockton’s motion to set aside the default judgment.

¶11    On January 17, 2012, Stockton Oil filed an answer to Green’s Complaint on behalf

of itself and Gerber.     Green appeals the District Court’s order granting Stockton’s

motion, asserting in part that upon expiration of the 60 days allocated for a ruling under

Rule 60(c), the District Court lost jurisdiction over the matter and could no longer issue

any rulings in the case. In the alternative, she argues that Stockton failed to establish that

it was entitled under Rule 60(b) to have the default judgment set aside. Stockton argues

the court’s order setting aside the default judgment was correct, and that the order should

stand in light of the misconduct of Green’s counsel in the manner in which she obtained

the default judgment.

                               STANDARD OF REVIEW

¶12    Whether a district court has jurisdiction to rule on a matter is a question of law

which we review to determine whether the district court had authority to act. A court

exceeds jurisdiction through acts which exceed the defined power of a court, whether that

power be defined by constitutional provisions, express statutes or rules developed by the

courts. In re Marriage of Richards, 2001 MT 183, ¶ 5, 306 Mont. 212, 31 P.3d 1002.

¶13    We review the deemed denial of a motion to set aside a default judgment for a

slight abuse of discretion. Ford Motor Credit Co. v. Wellnitz, 2008 MT 314, ¶ 11, 346

Mont. 61, 194 P.3d 630.

                                      DISCUSSION

                                              5
¶14    Did the District Court err in granting Stockton Oil’s Motion to Set Aside Default
       Judgment 68 days after it was filed?

¶15    M. R. Civ. P. 55(c) permits a court to set aside a default judgment in accordance

with Rule 60(b). Rule 60(b)(1)-(5) allows a party to file a motion with the district court

to relieve the party from a final judgment, order or proceeding for several specific

reasons, including but not limited to, a mistake, newly discovered evidence, fraud, and a

void or satisfied judgment. Rule 60(b)(1)-(5). Rule 60(b)(6) allows a party to seek relief

from a final judgment for “any other reason that justifies relief.” A party seeking relief

under Rule 60(b) must file its motion “within a reasonable time.”3 Rule 60(c)(1)(2011).

Rule 60(c)(1) further provides that if the court fails to rule on the 60(b) motion within 60

days after the motion is filed, “the motion must be deemed denied.”

¶16    For many years, district courts and this Court have stated that once a motion has

been deemed denied, the district court loses jurisdiction to act further. See e.g. State ex

rel. Sinko v. District Court, 64 Mont. 181, 187-88, 208 P. 952, 955 (1922); Johnson v.

Eagles Lodge Aerie 3913, 284 Mont. 474, 478, 945 P.2d 62, 64 (1997); Wellnitz, ¶ 17;

Mobley & Sons, Inc. v. Weaver, 2009 MT 312, ¶ 17, 352 Mont. 396, 218 P.3d 472. For

the reasons set forth below, these cases as well as those cited in footnote 4 are to a limited

extent overruled.

¶17    In Miller v. Eighteenth Jud. Dist. Court, 2007 MT 149, 337 Mont. 488, 162 P.3d

121, we acknowledged our confusing and often “confounding” use of the term

“jurisdiction.” In Miller, we were asked to determine the consequences of a prosecutor’s

3
 Prior to October 1, 2011, the effective date of the current Montana Rules of Civil Procedure,
motions filed under Rule 60(b)(1)-(3) had to be filed within 60 days of entry of the judgment.
                                              6
failure to file a notice of intent to seek the death penalty within 60 days of criminal

arraignment. Standard 1.1a of the Montana Supreme Court Standards for Competency of

Counsel for Indigent Persons in Death Penalty Cases (Standard) obligates a prosecutor to

file in the district court and serve upon counsel of record within 60 days after arraignment

a notice stating whether the prosecutor intends to seek the death penalty upon a

conviction.     The prosecutor in Miller let the 60 days following arraignment expire

without filing the notice. Miller, ¶ 6. Upon expiration of the 60-day notice of intent

period, Miller and his co-defendant LeBrum filed separate motions to preclude the State

from seeking the death penalty and preclude imposition of the death penalty as a

sentence. Miller, ¶ 7. The State subsequently filed its notice of intent arguing that the

defendants were not prejudiced by its delinquent filing. Miller, ¶ 8. The district court

agreed and denied Miller’s and LeBrum’s motions. Miller, ¶ 12. Miller and LeBrum

sought supervisory control from this Court. Miller, ¶ 14.

¶18    Miller and LeBrum argued that the 60-day deadline created “a jurisdictional

defect” precluding the State from seeking the death penalty and imposing it as a sentence.

Miller, ¶ 42.     We responded that “[i]t is important not to confuse categorical time

prescriptions with jurisdictional provisions.”      Miller, ¶ 43.      We explained that

subject-matter jurisdiction “involves the fundamental power and authority of a court to

determine and hear an issue.         Hence, a provision is properly characterized as

‘jurisdictional’ if it ‘delineates the classes of cases . . . falling within a court’s

adjudicatory authority.’ ” Miller, ¶ 43 (citation omitted). While disagreeing with Miller

and LeBrum’s jurisdictional argument, we determined that the prosecutor failed to timely

                                             7
file the requisite notice, and that the Standard did not contain an exception that would

allow a late filing.   We observed that the Standard constituted “a categorical time

prescription and not a jurisdictional provision,” and that it is “ ‘unalterable’ on a

defendant’s motion but can be forfeited if the defendant ‘waits too long to raise the

point.’ ” Miller, ¶ 46. We therefore reversed the district court’s order allowing the late

notice of intent.

¶19    In Davis v. State, 2008 MT 226, 344 Mont. 300, 187 P.3d 654, we revisited this

issue as it applied to the one-year period within which a criminal defendant may

challenge the validity of his or her sentence. Section 46-21-102, MCA. In Davis, Davis

agreed to plead guilty to attempted deliberate homicide, assault on a peace officer, and

criminal endangerment. He also waived his right to withdraw his guilty plea or to

challenge his sentence by direct appeal, habeas corpus, or post-conviction relief. Davis,

¶ 5.

¶20    Subsequently, Davis moved for appointment of counsel for post-conviction

proceedings.    The district court issued a minute entry indicating that Davis’ earlier

counsel remained as appointed counsel for post-conviction; however, neither Davis nor

his counsel received notice of the continuation of representation. By the time it was

discovered, the one-year post-conviction time bar in § 46-21-102, MCA, had run. Davis,

¶ 7. Davis moved to have the one-year time bar tolled. The State did not respond to

Davis’ motion and the district court, sua sponte, questioned whether it had jurisdiction

over this motion. It ultimately concluded that the one-year time bar was “jurisdictional”

                                            8
and could not be tolled absent new evidence of a constitutional violation. Davis, ¶ 8.

Davis appealed. Davis, ¶ 9.

¶21    Citing extra-jurisdictional cases concluding that statutorily-prescribed time periods

are “rigid time prescriptions for constitutionally significant purposes, but . . . do not

define or limit subject-matter jurisdiction,” (In re Civil Commitment of Giem, 727

N.W.2d 198, 203 (Minn. App. 2007)), we determined that the one-year time bar in

§ 46-21-102, MCA, was not jurisdictional. Davis, ¶¶ 15, 25. We therefore remanded the

matter to the district court with specific instructions to consider Davis’ motion on

equitable grounds. Davis, ¶ 25.

¶22    More recently in BNSF Ry. Co. v. Cringle, 2010 MT 290, 359 Mont. 20, 247 P.3d

706, we were asked to determine whether BNSF’s failure to satisfy the 14-day filing

deadline contained in § 49-2-505(3)(c), MCA, deprived the district court of

subject-matter jurisdiction. Relying on Davis and Miller, among others, we noted in

Cringle that “[t]he [L]egislature does not deprive the courts of subject matter jurisdiction

when it enacts filing or notice deadlines. . . . We have emphasized the importance of not

confusing the situation of a claimant’s untimely filing with the district court’s subject

matter jurisdiction.” Cringle, ¶ 13. We continued that “categorical time prescriptions”

do not “withdraw” or “circumscribe” the district courts’ subject matter jurisdiction.

Cringle, ¶ 14. Accordingly, we remanded Cringle to the district court with instructions

that the court hear BNSF’s “alleged good cause that would justify its motion for an

extension of time” to file its appeal of the Department of Labor’s ruling under

§ 49-2-505(3)(c) and (4), MCA. Cringle, ¶ 28.

                                             9
¶23    The foregoing cases are not completely apposite because they address situations in

which a party has failed to comply with a rule-based or statutory deadline. Here, it is the

court which failed to comply with a rule-based deadline. Nonetheless, we conclude that

the analyses in these cases of whether a court has jurisdiction to act once a deadline has

expired have application in both contexts. In other words, the legal concepts to be

considered vis-à-vis a court’s jurisdiction to further act once a court misses a rule-based

or statutory deadline are the same as those applied when a party misses such a deadline.

¶24    As the foregoing cases illustrate and for good reason, we have moved away from

past pronouncements that statutory or rule-based time bars constitute jurisdictional

impediments upon the district courts’ authority to act. Quite simply, unless a statute,

rule, or constitutional provision expressly imposes jurisdictional limitations, the

expiration of a time bar does not deprive a district court of the jurisdiction to further act

in the matter before it.4       Therefore, we conclude the District Court did not lose

jurisdiction of this matter upon expiration of the 60-day time period.

4
  Accordingly, we hereby overrule the cases set forth in ¶ 16 of this Opinion to the limited extent
that they stand for the proposition that a court loses jurisdiction to act upon the expiration a
statutory or rule-based time bar. We also overrule in the same limited manner State ex rel. King
v. District Court,107 Mont. 476, 86 P.2d 755 (1939); State ex rel. Green v. District Court, 126
Mont. 176, 178, 246 P.2d 813, 814 (1952); State ex rel. Gilreath v. District Court, 127 Mont.
431, 265 P.2d 651 (1954); Leitheiser v. Montana State Prison, 161 Mont. 343, 347, 505 P.2d
1203, 1206 (1973); Cain v. Harrington, 161 Mont. 401, 506 P.2d 1375 (1973); Oster v. Oster,
186 Mont. 160, 606 P.2d 1075 (1980); Wallinder v. Lagerquist, 201 Mont. 212, 653 P.2d 840
(1982); Winn v. Winn, 200 Mont. 402, 651 P.2d 51 (1982); Marriage of Miller, 238 Mont. 108,
112, 776 P.2d 1218, 1220 (1989); Bechhold v. Chacon, 248 Mont. 111, 809 P.2d 586 (1991);
Marriage of McKinnon, 251 Mont. 347, 825 P.2d 551 (1992); Maulding v. Hardman, 257 Mont.
18, 22, 847 P.2d 292, 295 (1993); Wippert v. Blackfeet Tribe, 260 Mont. 93, 102, 859 P.2d 420,
425 (1993); Marriage of Richards, 2001 MT 183, 306 Mont. 212, 31 P.3d 1002; and Forsythe v.
Leydon, 2004 MT 327, 324 Mont. 121, 102 P.3d 25.
                                                10
¶25    Having concluded the court did not lose jurisdiction of the case once the 60-day

time period expired, we must next determine whether the District Court erred in entering

its untimely order setting aside the default judgment. We conclude that it did. While

many of the cases cited herein erroneously conclude that the district court lost jurisdiction

after failing to meet a time bar, these cases also stand for the proposition that the time

limits set forth in Rules 59 and 60 are mandatory and should be strictly enforced. For

example, in Wellnitz we stated “Rule 60(c) incorporates the strict 60 day time limit for a

district court to rule on a motion for relief from a judgment under Rule 60(b). We have

consistently enforced this deadline.      The time limits provided in these rules are

mandatory and are strictly enforced.” Wellnitz, ¶ 13.

¶26    In Forsythe, we rejected Forsythe’s argument that the temporal limitations

contained in Rule 59(d) (the “deemed denied” provision similar to that contained in

Rule 60, are unconstitutional because they deprive her of procedural due process).

Forsythe, ¶ 10. We cited Kelly v. Sell & Sell Paint Contractors, 175 Mont. 440, 443, 574

P.2d 1002, 1003 (1978), for the proposition that while Rule 59(d) “may in some cases,

work harsh results . . . it is perhaps more important that the public have the expectation

and right to finality of judgments. This can only be accomplished when there is a cut-off

time for a District Court to rule.” We further observed that “just because a rule is

arbitrary does not mean it should not be favored.” Forsythe, ¶ 9.

¶27    Statutory and rule-based deadlines are important and must be strictly enforced.

Thus, though the District Court had jurisdiction to act after the 60-day “deemed denied”

deadline had passed, it erred in categorically ignoring the expiration of the deadline and

                                             11
granting the motion to set aside the default judgment. Once the motion to set aside the

judgment was deemed denied by operation of law, Stockton’s recourse was “to appeal the

denial in order to preserve the issue as to whether the default judgment should be set

aside.” Johnson, 284 Mont. at 479, 945 P.2d at 65.

¶28    The foregoing rule that rule-based and statutory deadlines must be strictly

enforced carries with it a caveat. As we noted in Miller, ¶ 46, a time prescription is

“unalterable” but can be forfeited if a party “waits too long to raise the point.” By way of

illustration, had Green failed to promptly challenge the District Court’s untimely granting

of Stockton’s motion to set aside the default judgment, and instead proceeded to trial on

the merits of the action, a belated appeal challenging the court’s earlier untimely ruling

would be too late. As we noted in State v. Malloy, 2004 MT 377, ¶ 11, 325 Mont. 86,

103 P.3d 1064, quoting § 1-3-207, MCA, “it is a well-established maxim of law that

‘acquiescence in error takes away the right of objecting to it.5’ ” Because Green timely

appealed the District Court’s order, this caveat does not come into play here.

¶29    The practical effect of our ruling that the District Court erred in setting aside the

default judgment is that the motion to set aside the default judgment was “deemed

denied” at the expiration of 60 days.          This being so, we now address Stockton’s

cross-appeal issue and Green’s argument that Stockton failed to satisfy the elements of a

successful Rule 60(b) motion.

5
  By contrast, the existence of subject-matter jurisdiction can be raised at any time by any party
or by the court. Big Spring v. Conway (In re Estate of Big Spring), 2011 MT 109, ¶ 23, 360
Mont. 370, 255 P.3d 121.
                                               12
¶30    Did the District Court slightly abuse its discretion in deeming denied Stockton’s
       motion to set aside the default judgment?

¶31    Stockton argued to the District Court that it was seeking relief from the default

judgment under Rule 60(b)(6). Relying on Maulding v. Hardman, 257 Mont. 18, 847

P.2d 292 (1993), the company asserted that to be successful under Maulding, it was

required to show (1) good cause and (2) a meritorious defense to the underlying claim.

Stockton proclaimed that its “good cause” was Green’s failure to share adverse

information with the District Court which, in turn, led the court to award excessive

damages. Similarly, Stockton’s claimed meritorious defense was that the “judgment

clearly [had] excessive damages.”

¶32    Green countered that Maulding was inapposite and, therefore, the two-prong

standard in Maulding was not applicable to this case. She asserted that the proper

standard for setting aside a default judgment under Rule 60(b)(6) was set forth in Essex

Ins. Co. v. Moose’s Saloon, Inc., 2007 MT 202, ¶ 25, 338 Mont. 423, 166 P.3d 451.

Green argued that for Stockton’s Rule 60(b)(6) motion to prevail, Stockton must

establish: (1) extraordinary circumstances; (2) that it moved to set aside the judgment

within a reasonable period of time, and (3) that it was blameless. Green maintained that

Stockton did not establish that it was blameless for the entry of a default judgment

against it. She also argued that under Essex, Stockton had to show that none of the

specific reasons set forth in Rule 60(b)(1)-(5) applied to this case, and that the company

failed to address this requirement.     Therefore, Green argued, Stockton’s failure to

establish blamelessness; extraordinary circumstances; and that it did not qualify for relief

                                            13
under Rule 60(b)(1)-(5) precluded the District Court from granting the motion to set aside

the default judgment.

¶33    On appeal, Green claims Stockton did not meet its burden of establishing any of

the three Essex requirements needed to prevail under Rule 60(b)(6). She argues that

Stockton did not establish extraordinary circumstances that prevented the company from

properly filing an answer to the Complaint or that the company was blameless for failing

to answer. She contends that Mykel Stockton’s affidavit to the effect he could not recall

being served was insufficient to establish that he had not been served, in light of the

process server’s affirmative affidavit to the contrary. She further states that Stockton’s

motion to set aside the default judgment, filed six months after entry of the judgment,

was not filed within a reasonable time.

¶34    As in the District Court, Stockton maintains on appeal that Maulding provides the

appropriate legal standard here because cases involving “an analysis of the counsel’s

misconduct in obtaining the default judgment and not that of the party moving to set

aside the default judgment” are “different from the run-of-the-mill Rule 60(b)(6) case.”

As such, Stockton urges us to not rely on “the more recent Rule 60(b)(6) cases,” such as

Essex, but return to our Maulding analysis. Stockton opines that a review of “the entire

Rule 60(b)(6) case law” reveals there are two categories of cases: (1) cases involving

extraordinary situations that go beyond those covered in the first five subsections of Rule

60(b); and (2) cases in which the party in whose favor judgment was entered has acted

improperly. The company asserts the Essex standard applies to cases in category 1 and

the Maulding standard applies to cases in category 2. Additionally, Stockton maintains

                                            14
that “this case and Maulding fit hand in glove,” and therefore we should affirm the

District Court’s ruling setting aside the default judgment. For the reasons set forth below,

we disagree.

¶35    Because Stockton brought its motion to set aside the default judgment under Rule

60(b)(6), and the District Court granted the motion based upon such argument, we

analyze the case under that provision of Rule 60(b) and do not analyze whether the

motion should have been brought under Rule 60(b)(1)–(5).            However, we take this

opportunity to reiterate the general rule that where the circumstances underlying a default

judgment raise grounds that are covered by Rule 60(b)(1)-(5), Rule 60(b)6 is not

available for application. Mont. Prof’l Sports, LLC v. Nat’l Indoor Football League,

LLC, 2008 MT 98, ¶ 54, 342 Mont. 292, 180 P.3d 1142. See also Bartell v. Zabawa,

2009 MT 204, 351 Mont. 211, 214 P.3d 735 (Cotter, J., dissenting). We now turn to the

question of whether to apply the Maulding test or the Essex test.

¶36    In Maulding, Maulding claimed to have been injured when he was a passenger in a

car driven by Hardman and the car slid off the road and into a ditch. With Maulding then

taking the wheel, Hardman and the two other passengers pushed the car out of the ditch.

No one appeared injured and everyone went home. However, Maulding later went to the

hospital claiming injuries. Maulding, 257 Mont. at 21, 847 P.2d at 294.

¶37    In his complaint, Maulding alleged Hardman was drinking and driving recklessly.

Although served, Hardman failed to answer Maulding’s complaint and the district court

entered a default judgment against him. Maulding, 257 Mont. at 21, 847 P.2d at 295. He

moved to have it set aside and the district court scheduled a hearing on the motion. The

                                            15
hearing, however, was conducted after the “deemed denied” deadline and Maulding

argued at the hearing that the district court no longer had jurisdiction over the matter.

The district court took the issue of jurisdiction under advisement but conducted the

hearing. Maulding, 257 Mont. at 22, 847 P.2d at 295. At the hearing, Hardman testified

that he was not reckless and that loose gravel caused the car to slide off the road as they

rounded a curve. He also stated that another passenger in the car was a corroborating

witness who would testify in support of Hardman’s defense. Maulding, 257 Mont. at

23-24, 847 P.2d at 296. In other words, Hardman presented a meritorious defense to the

underlying claim. Hardman also presented evidence of gross misconduct on the part of

Maulding’s attorney in obtaining the default judgment. Subsequently, however, the court

concluded it was without jurisdiction to set aside the default judgment and Hardman

appealed.

¶38    On appeal, we reversed the district court and set aside the default judgment under

Rule 60(b)(6). Citing First Nat’l Bank v. Springs, 225 Mont. 62, 67, 731 P.2d 332, 335

(1987),6 we applied a two-prong test of “good cause” and a “meritorious defense to the

action.” Maulding, 257 Mont. at 23, 847 P.2d at 296. We acknowledged Hardman’s

meritorious defense and concluded that “good cause” for setting aside the default

judgment existed, in large part, based upon plaintiff’s counsel’s conduct. Maulding, 257

Mont. at 25, 847 P.2d at 297. Among other things, plaintiff’s counsel had initially

worked with Hardman’s insurer and then refused to return any calls from the insurer or

6
  In First Nat’l Bank, we stated “the party seeking to set aside an entry of default [judgment]
must establish good cause for his failure to appear and the existence of a meritorious defense to
the action.”
                                               16
provide documentation of the claim. Instead, plaintiff sought and obtained a default

judgment against Hardman for special and punitive damages, and then delayed giving

notice of the judgment to the insurer until after the 60 days within which Hardman could

have filed a Rule 60(b)(1)-(3) motion had expired. We further observed that plaintiff’s

counsel failed to disclose certain facts to the court in the ex parte default proceedings that

were material to the propriety of default judgment and the award of punitive damages.

Based upon this conduct and the questionable manner in which plaintiff’s damages were

established in the district court, we concluded that Hardman was entitled to relief under

Rule 60(b)(6). Maulding, 257 Mont. at 25, 847 P.2d at 298.

¶39    Stockton maintains that the conduct of Green’s counsel compels the same result,

arguing that Green’s failure to advise the District Court at the time of entry of the default

judgment that Stockton’s insurer had already paid her the sum of $139,246.80, justified

the order setting aside the default judgment. We disagree. Although the sums previously

paid by the insurer were not disclosed at the time of entry of judgment, Green has

consistently conceded the propriety of a set-off for these amounts against the judgment

amount. Moreover, Maulding obtained an award of compensatory damages without

presenting expert testimony on plaintiff’s medical condition and an award of punitive

damages by arguably misrepresenting the facts underlying the accident to the district

court. Here, there was no similar level of misconduct. While we do not condone her lack

of candor with the District Court at the time of the default judgment hearing on damages,

the actions of Green’s counsel do not present the level of improper conduct that we found

in Maulding to constitute good cause for setting aside the default judgment.            In re

                                             17
Marriage of Castor, 249 Mont. 495, 500, 817 P.2d 665, 668 (1991). We therefore

conclude that Maulding is inapposite.       Moreover, because this Court in Maulding

erroneously applied the two-part test to be applied when considering a motion to set aside

a default—as opposed to a default judgment—we are constrained to overturn it to a

limited extent so as to eliminate competing lines of authority in our Rule 60(b)(6) case

law.

¶40    It is important to maintain the distinction between setting aside a default and

setting aside a default judgment. Rule 55(c) provides that “[t]he court may set aside an

entry of default for good cause, and it may set aside a default judgment under Rule

60(b).” We have repeatedly held that a party seeking to set aside the entry of default

must establish good cause for doing so, and the existence of a meritorious defense to the

action. McClurg v. Flathead County Comm’rs, 188 Mont. 20, 610 P.2d 1153 (1980).

However, we subsequently—and erroneously—relied upon a “good cause” analysis when

addressing the propriety of setting aside a default judgment in First Nat’l Bank. First

Nat’l Bank, 225 Mont. at 67, 731 P.2d at 335. In turn, we relied upon First Nat’l Bank in

Maulding, quoting it for the proposition that “a party seeking to set aside a default

judgment must show both a good cause for doing so under Rule 60(b) and the existence

of a meritorious defense.” Maulding, 257 Mont. at 23, 847 P.2d at 296. Thus, Maulding

perpetuated the erroneous importation of the “good cause” standard for setting aside a

default, into cases concerned with setting aside a default judgment.

¶41    A default is accomplished at the request of the moving party by mere clerical entry

at the expiration of the time allotted for a responsive pleading; a default judgment, on the

                                            18
other hand, is the final decision of a court of law. While the terms we use when

addressing the burden on a movant seeking to set aside a default versus a default

judgment are somewhat amorphous, it should be more difficult to achieve the latter than

the former. We therefore deem it necessary to reassert the distinction between the burden

imposed on a party seeking to set aside a default (good cause and a meritorious defense),

versus that imposed in setting aside a default judgment. More particularly, we reassert

that the burden on a person seeking to set aside a default judgment under Rule 60(b)(6)

shall be that set forth in Essex. To the extent that the test applied in First Nat’l Bank and

Maulding imposed a lesser burden on the party moving to set aside a default judgment

under Rule 60(b)(6), these cases are overturned.

¶42    In Essex, we stated:

             A successful Rule 60(b)(6) motion requires that the movant
       demonstrate each of the following elements:           (1) extraordinary
       circumstances; (2) the movant acted to set aside the judgment within a
       reasonable period of time; and (3) the movant was blameless. (Emphasis
       added.)

Essex, ¶ 25 (citations omitted). This well-established three-prong test requires that all

three prongs be met. In Orcutt v. Orcutt, 2011 MT 107, 360 Mont. 353, 253 P.3d 884, a

dissolution matter, we reviewed the wife’s request to set aside a final judgment under

Rule 60(b)(6).      Applying the Essex test, and addressing the “extraordinary

circumstances” prong, we stated that “extraordinary circumstances” include gross neglect

or actual misconduct by an attorney. Orcutt, ¶ 12. We further noted that “Rule 60(b)(6) .

. . is designed primarily for situations where a party is wronged through no fault of its

own.” Orcutt, ¶ 15. We determined that wife’s attorney “grossly neglected” her case,

                                             19
resulting in a flagrantly inequitable distribution of the marital estate. Orcutt, ¶ 17. This

constituted extraordinary circumstances.      Further, it was undisputed that the wife

promptly moved to set aside the final judgment, and it was apparent that she was

blameless. We therefore concluded that the district court had abused its discretion in

denying her motion. See also Bartell, ¶ 25; Wellnitz, ¶ 18; C.T.E.-H. v. T.M.E., 2004 MT

307, ¶ 45, 323 Mont. 498, 101 P.3d 254; Bahm v. Southworth, 2000 MT 244, ¶ 14, 301

Mont. 434, 10 P.3d 99; Karlen v. Evans, 276 Mont. 181, 190, 915 P.2d 232, 238 (1996).

¶43    In the case before us, Stockton has not met its burden of establishing extraordinary

circumstances or blamelessness. Given the fact that Green has always conceded the

propriety of a full offset against the judgment of the amounts she received from the

insurance company, her conduct does not present the type of “gross neglect or actual

misconduct” that existed in Orcutt as an extraordinary circumstance. Further, in light of

proof from the process server that Stockton was served with the Complaint and

Summons, the affidavit assertion of registered agent Mykel Stockton that he cannot recall

seeing the Complaint does not established blamelessness. As we are here analyzing the

propriety of the deemed denial, we therefore conclude that the District Court did not

slightly abuse its discretion in deeming denied Stockton’s motion to set aside the default

judgment.

                                     CONCLUSION

¶44    For the foregoing reasons, we reverse the District Court’s order granting

Stockton’s motion to set aside the default judgment, and direct the District Court to

                                            20
withdraw its December 27, 2011 order, reinstate the default judgment, and enter a

corrected judgment reflecting the remaining amounts owed to Green by Stockton.

                                                        /S/ Patricia Cotter

We Concur:

/S/ Beth Baker
/S/ Michael E Wheat
/S/ Brian Morris
/S/ Jim Rice
/S/ Laurie McKinnon

Chief Justice Mike McGrath concurs and dissents.

¶45    While I concur with the majority opinion, I write separately on the narrow issue

addressing the standard to be used to set aside a default judgment raised by the cross-

appeal. I concur with the Court’s determination that the trial court did not abuse its

discretion, but I dissent from the majority’s application of the three-part test used in

Essex Ins. Co. v. Moose’s Saloon, Inc., 2007 MT 202, ¶ 16, 338 Mont. 423, 166 P.3d 451,

and other opinions.

¶46    The majority opinion makes clear that our case law is confusing, convoluted, and

far too complex. It does not need to be. I agree with the Court’s decision to overrule

Maulding v. Hardman, 257 Mont. 18, 847 P.2d 292 (1993). I would additionally cease

stating the M. R. Civ. P. 60(b)(6) standard as a three-part test as we have done in the past

                                            21
and as the Court does here. See ¶¶ 41-42. Instead, I would simply instruct the district

courts to apply the plain language of Rule 60(b)(6) and to consider whether

circumstances other than those listed in the first five subsections justify setting aside the

judgment.

¶47    As an initial matter, our interpretations correctly incorporate a judicial policy that

protracted and needless litigation is not favored. The process needs to come to a final

resolution. “There must be some point at which litigation ends and the respective rights

between the parties are forever established.” In re Marriage of Weber, 2004 MT 211,

¶ 26, 322 Mont. 341, 96 P.3d 716. Setting aside a judgment is not a matter to be

considered lightly. That principle should be incorporated in the criteria to be reviewed,

and I agree with the Court in that regard.

¶48    My concern with the Court’s approach is the use of the “three-part test.” I do not

suggest that a Rule 60(b)(6) movant does not have to demonstrate extraordinary

circumstances to be entitled to relief. Requiring extraordinary circumstances is simply

another way of saying that there must be some “other reason that justifies relief.” In fact,

demonstrating circumstances that justify relief should be the sole focus of Rule 60(b)(6)

analysis. I also do not suggest that a Rule 60(b)(6) motion does not have to be filed

within a reasonable time; subsection (c)(1) tells us that it must. It is not necessary,

however, that a district court always require a movant to demonstrate “blamelessness.”

Its inclusion as an essential element muddles our analysis and detracts from what should

be the court’s focus—whether justice requires relief from the judgment.

                                             22
¶49    The language of Rule 60(b)(6) is purposely broad. It is a catch-all provision to

cover unforeseen situations not addressed by the first five clauses of Rule 60(b). In re

Marriage of Tesch, 199 Mont. 240, 245, 648 P.2d 293, 196 (1982) (citing Charles Alan

Wright, Arthur Raphael Miller, & Edward H. Cooper, Federal Practice and Procedure

vol. 11, § 2864, 211-12 (1st ed., West 1973)). As the United States Supreme Court

noted, “the language of the ‘other reason’ clause, for all reasons except the five

particularly specified, vests power in courts adequate to enable them to vacate judgments

whenever such action is appropriate to accomplish justice.”1 Klapprott v. United States,

335 U.S. 601, 614-15, 69 S. Ct. 384, 390 (1949).

¶50    As the majority opinion notes, we have long held that relief under subsection (6) is

only available in extraordinary situations not covered by the first five subsections. Tesch,

199 Mont. at 245, 648 P.2d at 293; In re Marriage of Castor, 249 Mont. 495, 500, 817

P.2d 665, 668 (1991); Karlen v. Evans, 276 Mont. 181, 190, 915 P.2d 232, 238 (1996).

That limitation derives from the language of the Rule itself. Rule 60(b)(6) permits a

court to grant relief from a judgment for “any other reason that justifies relief.”

(Emphasis added).

¶51    In Karlen, we considered whether a judgment could be set aside under subsection

(6) for an attorney’s mistake, inadvertence, misconduct, or neglect in representing a

client, or whether relief in those circumstances must be obtained under subsection (1).

Subsection (1) provides that a judgment can be set aside for “mistake, inadvertence,

1
 We purportedly adopted this interpretation of subsection (6) in Bartell v. Zabawa, 2009
MT 204, 351 Mont. 211, 214 P.3d 735, yet in that case we nevertheless applied the three-
part test as the Court does here.
                                            23
surprise, or excusable neglect.”    We held that subsection (1) will be applicable in

ordinary circumstances of attorney error, but that,

       where the moving party can meet the higher burden of demonstrating
       extraordinary circumstances, gross neglect or actual misconduct, that the
       client was blameless and he or she acted to set aside the default within a
       reasonable period of time, then, under our case law, subsection (6) of Rule
       60(b) is available.

Karlen, 276 Mont. at 190, 915 P.2d at 238. Importantly, we did not hold that was the

exclusive method of satisfying the requirement of subsection (6).

¶52    In Bahm v. Southworth, 2000 MT 244, 301 Mont. 434, 10 P.3d 99, another case

involving attorney error, we restated our Karlen holding in unqualified terms as a three-

part test. We held that “Rule 60(b)(6) applies when the movant demonstrates each of the

following elements: 1) extraordinary circumstances including gross neglect or actual

misconduct by an attorney; 2) the movant acted to set aside the judgment within a

reasonable time period; and 3) the movant was blameless.” Bahm, ¶ 14. We concluded

that the district court properly denied the Rule 60(b)(6) motion because the movant had

failed to demonstrate each of the three “required elements.” Bahm, ¶ 14. In doing so, we

laid the groundwork for our current confusion.

¶53    As the Court does here, we have since frequently cited the three-part test as the

standard to be applied to all Rule 60(b)(6) motions. See Essex Ins. Co., ¶ 25; In re

Paternity of C.T.E.-H., 2004 MT 307, ¶ 45, 323 Mont. 498, 101 P.3d 254; In re Marriage

of Orcutt, 2011 MT 107, ¶ 12, 360 Mont. 353, 253 P.3d 884. This three-part test

needlessly confuses Rule 60(b)(6) analysis and distracts from what the trial court should

be focusing on; whether the circumstances justify relief. By using the three-part test, we

                                            24
have needlessly narrowed the application of a rule that was intended to address a wide

range of unknown circumstances.

¶54    Our holding in Karlen did not set forth the exclusive path for relief under Rule

60(b)(6). Yet our repeated recitation of the three-part test has made it so. As noted

above, I believe that the sole focus should be on whether the circumstances justify relief.

Other “elements” are unnecessary when considering the merits of a Rule 60(b)(6)motion.

The requirement that a Rule 60(b)(6) motion must be filed within a reasonable time used

to be mandated by Rule 60(b)(6) itself. That requirement is now set forth as Rule

60(c)(1). Thus its inclusion in the analysis of the merits of a Rule 60(b)(6) motion is

redundant and unnecessary.

¶55    Additionally, requiring a movant to prove “blamelessness” should be limited to

cases in which the circumstances that allegedly justify relief are an attorney’s mistake,

inadvertence, misconduct, or neglect in the representation of a client. In those cases, like

in Karlen, the movant must demonstrate blamelessness because otherwise subsection (1)

would be applicable. However, the “blameless” component unnecessarily constricts our

review in other cases. While a party’s fault or lack of good faith can certainly be a factor

in the court’s consideration of whether the circumstances justify relief, the wide array of

“other circumstances” that could conceivably justify relief under Rule 60(b)(6) will not

always require the movant to demonstrate “blamelessness.”

¶56    This approach accurately reflects our holdings before the three-part test led us

astray. It is also consistent with the approach taken by the federal courts, which do not

use a three-part test when considering the analogous federal rule. See Klapprott, 335

                                            25
U.S. at 614-15, 69 S. Ct. at 390; Ackermann v. United States, 340 U.S. 193, 197-200, 71

S. Ct. 209, 211-12 (1950); Liljeberg v. Health Servs. Acquisition Corp., 486 U.S. 847,

863-64, 108 S. Ct. 2194, 2204-05 (1988); Gonzalez v. Crosby, 545 U.S. 524, 534-35, 125

S. Ct. 2641, 2649-50 (2005); Mackey v. Hoffman, 682 F.3d 1247, 1250-51 (9th Cir.

2012).

¶57      Rule 60(b)(6) was meant to be flexible and malleable to accommodate

unforeseeable situations. A catch-all provision, by its very nature, is not meant to be

limited. The three-part test attempts to inject certainty into a rule that was meant to

address uncertain circumstances. I would not apply the three-part test and would instead

instruct the trial courts to apply the plain language of the Rule. Most situations will be

covered by the first five subsections of the Rule. In extraordinary cases that are not

covered by the first five subsections, however, the trial court should be given the

discretion to consider all of the relevant factors and not just those that we have previously

identified as pertinent.   Our prior cases serve as guidance to help identify relevant

considerations in different circumstances. The trial courts’ analysis should focus simply

on whether the circumstances justify relief. While this standard is somewhat vague, it is

purposely and necessarily so. Consequently, I dissent from the application of the three-

part test first articulated in Bahm and adopted in subsequent opinions.

                                                  /S/ Mike McGrath

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