Opinion
No. C6-00-1819
Filed May 8, 2001
Appeal from the District Court, Scott County, File No. 9922165.
Sidney L. Brennan, Jr., (for respondent)
S. John Roach, S. John Roach and Associates, (for appellant)
Considered and decided by Harten, Presiding Judge, Crippen, Judge, and Hanson, Judge.
This opinion will be unpublished and may not be cited except as provided by Minn. Stat. § 480A.08, subd. 3 (2000).
UNPUBLISHED OPINION
Because the trial court found that appellant Steven Allie had no reasonable excuse for failing to defend respondent Sergio Frias's suit and that he failed to act diligently after entry of the default judgment, the court found no lawful basis for vacating respondent's judgment. There is no merit to appellant's dispute of the trial court's reasoning, and we affirm.
FACTS
In September 1999, appellant Allie, a roofing contractor, hired respondent Frias to install new roofs on apartments located in Minnesota. When appellant failed to pay respondent, respondent brought an action to recover the amount due, plus costs and interest.
On December 1, 1999, appellant was served with a summons and complaint. Appellant contacted respondent's attorney and discussed the matter "in great detail," including money and equipment that appellant believed respondent owed him. Without filing a written answer to the complaint, appellant returned to his home state of Texas for the winter. On December 30, 1999, respondent obtained a default judgment against appellant and sent him a notice of entry of judgment four days later. Respondent immediately served post-judgment interrogatories on appellant.
In April 2000, respondent served a garnishment summons on Norwest Contractors, Inc., a third party who disclosed owing money to appellant, and in June 2000, respondent obtained a writ of execution and levied upon Norwest's debt, partially satisfying the default judgment.
In July 2000, the trial court ordered appellant to answer the post-judgment interrogatories. In August 2000, appellant filed a motion to set aside the default judgment, which the trial court denied.
DECISION
Default judgments are "liberally" reopened to promote resolution of cases on the merits. Galatovich v. Watson, 412 N.W.2d 758, 760 (Minn.App. 1987). But the decision to open a default judgment rests within the trial court's discretion. Kosloski v. Jones, 295 Minn. 177, 180, 203 N.W.2d 401, 403 (1973). "The record is viewed in the light most favorable to the trial court's order * * *." Bentonize, Inc. v. Green, 431 N.W.2d 579, 582 (Minn.App. 1988) (quotation omitted).
The trial court may set aside a judgment for multiple reasons, including mistake, inadvertence, surprise, or excusable neglect. Minn.R.Civ.P. 60.02. Because appellant claims excusable neglect, he must show (1) a reasonable case on the merits; (2) a reasonable excuse for failure to act; (3) he acted with due diligence after notice of the entry of judgment; and (4) no substantial prejudice to the opposing party if the motion to vacate is granted. Finden v. Klaas, 268 Minn. 268, 271, 128 N.W.2d 748, 750 (1964). All four factors must be present for the court to properly vacate judgment. Pedersen v. Daly, 307 Minn. 163, 165, 238 N.W.2d 620, 622 (1976).
In this case, the trial court found that appellant failed to prove "at least two" of the factors — appellant had no reasonable excuse for failure to answer the complaint and he did not act with due diligence after receiving notice of the entry of judgment.
a. Reasonable excuse
Appellant asserts that he had a reasonable excuse for not answering respondent's complaint because Texas law does not require a response to a complaint unless the document contains a court date or file number. But appellant's ignorance of the law, if it existed, is not a valid excuse. Alderman's Inc. v. Shanks, 515 N.W.2d 97, 102 (Minn.App. 1994) ("[I]n Minnesota, ignorance of a law is no excuse for failure to observe it." (citation omitted)), rev'd on other grounds, 536 N.W.2d 4 (Minn. 1995). And if appellant had such knowledge of Texas law, as he claims, and was influenced by it, his claim is offset by the fact that he maintains a residence and operates a business in Minnesota. Moreover, appellant was personally served with process that specifically stated he needed to serve an answer to the complaint within 20 days or risk a default judgment against him.
Appellant then contends that he established a reasonable excuse because he contacted respondent's attorney by telephone after receiving the complaint. But appellant shows no basis for why his contact with the attorney would substitute for an answer, particularly in circumstances where appellant does not dispute counsel's insistence that he told appellant he needed to contact counsel and provide a written answer to the complaint.
Appellant also claims that the summons was not clear on its face. But the circumstances of this case, where appellant has also failed to show diligence in seeking relief, do not suggest that this is the occasion to further explore this broad attack on settled matters of civil procedure.
Finally, appellant argues that even if he failed to present a reasonable excuse for failure to answer the complaint, the court may still vacate the default judgment if he makes a strong showing on the other factors. In making this argument, appellant compares the circumstances of his case to two other cases where the court concluded that the judgments should have been vacated despite a weak showing on the reasonable-excuse factor. See Taylor v. Steinke, 295 Minn. 244, 245-46, 203 N.W.2d 859, 860 (1973) (stating defendant acted "promptly" in trying to reopen the judgment against him and, although he did not answer the summons, he did submit a proposed answer and counterclaim setting forth his defenses); Galatovich, 412 N.W.2d at 761 (emphasizing defendant's due diligence in trying to vacate the default judgment). But see Nguyen v. State Farm Mut. Auto Ins. Co., 558 N.W.2d 487, 490 (Minn. 1997) ("All four of the Finden factors must be satisfied in order to justify relief under the rule" (citation omitted)).
In both of the cases cited by appellant, opposing counsel led the defendants to believe they had properly answered the complaints, and, more importantly, the defendants made strong showings on the other factors. Taylor, 295 Minn. at 245, 203 N.W.2d at 860; Galatovich, 412 N.W.2d at 760. In contrast, appellant was unable to present a strong showing on the other factors, particularly due diligence, and has made no like showing of significance in his contact with opposing counsel. See Wiethoff v. Williams, 413 N.W.3d 533, 536 (Minn.App. 1987) ("Although one weak factor may be overcome by three strong factors, there is no authority by which we can conclude that two weak factors are overcome by two strong factors" (citations omitted)).
b. Due Diligence
Appellant contends that he acted with due diligence "once he gained a clear understanding of the ramifications" of entry of the judgment. But the record does not support appellant's claim. After receiving notice of the default judgment on January 3, 2000, appellant waited until August 24, 2000, to bring his motion to vacate the judgment. Even assuming appellant did not at first appreciate the implications of the default judgment, appellant would be hard pressed to deny that respondent's subsequent request for post-judgment written interrogatories and notice of the garnishment against Norwest Contractor did not alert him to the consequences of the judgment.
Appellant suggests that his duty to act with due diligence did not begin until the July 2000 hearing, when the trial court advised him to consult with an attorney. But the trial court's invitation for appellant to seek counsel was not judicial recognition of cause for vacation of the judgment.
Finally, appellant has failed to show a lack of prejudice to respondent if the judgment was vacated. Appellant suggests that the burden of proving this element is on respondent, but that is not the case; the moving party bears the burden of proving all four elements, including lack of prejudice. Nelson v. Siebert, 428 N.W.2d 394, 395 (Minn. 1988).