No. 12442
I N THE SUPREME COURT O T)IE STATE OF MONTANA F
— 1973 —
SIKORSKI & SONS, I N C . ,
P l a i n t i f f and A p p e l l a n t ,
-VS - ED R. SIKORSKI,
Defendant and Respondent.
Appeal from: District Court of t h e S i x t e e n t h J u d i c i a l D i s t r i c t , Honorable M. James S o r t e , Judge p r e s i d i n g .
Counsel of Record:
For Appellant :
Gene Hunt l e y a r g u e d , Baker, Montana
For Respondent :
Lucas, J a r d i n e & Monaghan, Miles C i t y , Montana Thomas M. Monaghan a r g u e d , Miles C i t y , Montana John R. P r a t e r a p p e a r e d , Ronan, Montana R . W. Heineman, Wibaux, Montana
Submitted: June 20, 1973
Decided : JUL 2 4 1973 Filed : JUL 2 4 1973
erk Mr. C h i e f J u s t i c e James T. Harrison delivered the Opinion of the Court.
This i s an appeal by p l a i n t i f f corporation from an order s e t t i n g aside and vacating a d e f a u l t judgment. This case concerns a family farming corporation, Sikoriski & Sons, Inc. S u i t was i n s t i t u t e d in the d i s t r i c t court of the sixteenth judicial d i s t r i c t , Fallon County, by p l a i n t i f f corporation against one of i t s stockholders, E R . Sikorski, t o enjoin him from coming on corporate d property and from harassing corporation o f f i c e r s and employees and t o re- quire h i m t o surrender c e r t a i n corporate property which he had secreted. Complaint was f i l e d February 3 , 1968. An order t o show cause was issued on the same day, returnable February 9, 1968, requiring defendant t o show cause why p l a i n t i f f should not have i t s injunction pendente l i t e . The complaint described the ownership of each corporate stock- holder, and a l s o alleged t h a t since May 1960, E R. Sikorski had owned 364 d shares w i t h h i s f i r s t wife, Frances F. Sikorski, a s j o i n t tenants, and one share individually. S p e c i f i c a l l y , the complaint a1 leged t h a t E R. Si korski d in about 1960 o r 1961, secured from the family corporation records about eleven stock c e r t i f i c a t e s . Summons, complaint and order t o show cause were served February 5, 1968. After being served E R. Si korski consulted with counsel d . B informal y
agreement between his counsel and counsel f o r t h e corporation, t h e hearing on t h e order t o show cause of February 9, 1968, was continued. Nothing f u r - t h e r happened u n t i l April 12, 1968, a t which time counsel f o r E R. Sikorski d formally withdrew. E R. Sikorski consented, in writing, t o this withdrawal. d On April 17, 1968, p l a i n t i f f corporation asked t h a t t h e d e f a u l t of defendant, Ed R. Sikorski, be entered. On May 13, 1968, judgment was taken. In i t s findings of f a c t , the d i s t r i c t court found t h a t E R. Sikorski owned d 364 shares of stock a s tenant i n common with Frances F. Sikorski , and one share individually. Among other things, the d i s t r i c t court a l s o found t h a t E R. d Si korski i n about 1960 o r 1961 secured from the corporation records of the p l a i n t i f f stock c e r t i f i c a t e s numbered 3 , 4, 5, 7 , 8 , 9, 10, 11, 12 and 13 which belonged t o other members of the corporation and had refused t o d e l i v e r
them upon demand. The d i s t r i c t court concluded t h a t E R. S i k o r s k i ' s i n t e r e s t in d the corporation was t h a t of a stockholder and his ownership was 183 shares out of a t o t a l 1,003 issued. Judgment was entered f o r the r e l i e f sought. Certified copies of the findings of f a c t , conclusions of law and judgment were served on defendant, E R . Sikorski, on June 14, 1968. d Ed R . Sikorski died on June 28, 1969. From the time t h e complaint was served on February 5 , 1968, defendant E R . Sikorski did nothing w i t h respect t o d the action, except have the hearing of February 9, 1968, continued. On October 31, 1969 Veronica Si korski , the second wife of Ed R . Sikorski and the administratrix of his e s t a t e , f i l e d a complaint against p l a i n t i f f corporation t o have a receiver appointed, t o liquidate t h e cor- poration, and f o r other r e l i e f , On December 9, 1969, Veronica Sikorski in the i n s t a n t action pe- t i t i o n e d the court t o s e t aside, vacate, and modify the judgment, asking f o r equitable r e l i e f under Rule 60(5), M.R.Civ.P. The petition was never ruled upon. On March 29, 1972, p l a i n t i f f corporation was served by Veronica Sikorski with a motion f o r order s e t t i n g aside and vacating judgment. The
basis f o r t h i s motion was t h a t E R. Sikorski should have been served w i t h d notice t o appoint another attorney before being defaulted and p l a i n t i f f should have served a notice of application f o r d e f a u l t judgment because Ed R. Sikorski had appeared in the action against h i m . The motion was s e t f o r
hearing on April 18, 1972, which was continued f o r the convenience of counsel i nvol ved. After three d i s t r i c t judges had disqualified themselves, D i s t r i c t Judge Sorte assumed j u r i s d i c t i o n on May 26, 1972. On July 28, 1972, i t was ordered t h a t the hearing on the motion f o r order s e t t i n g aside and vaca- ting judgment be s e t f o r September 8 , 1972. B agreement of counsel f o r a l l y
p a r t i e s , the order s e t t i n g the hearing on September 8 , 1972 was vacated. Counsel agreed t o submit the matter on written b r i e f s . Counsel f o r p l a i n t i f f
was given until October 15, 1972 to f i l e a brief. The d i s t r i c t court took the motion under advisement and on November 29, 1972, ruled that the judgment be s e t aside. The d i s t r i c t court concluded: that i t had been without jurisdiction t o proceed against Ed R . Sikorski be- cause p l a i n t i f f did not serve upon defendant notice to appoint another law- yer; t h a t i t was without jurisdiction because p l a i n t i f f did not give notice t o defendant of application f o r judgment as required under Rule 5 5 ( b ) ( 2 ) , M.R.Civ.P.; and, that the "JUDGMENT exceeds the prayer of p l a i n t i f f Is com- plaint in that i t designates specific c e r t i f i c a t e s of stock t o be returned to p l a i n t i f f by defendant when the prayer of the complaint only generally refers to c e r t i f i c a t e s of stock * * *". On December 5, 1972, p l a i n t i f f f i l e d i t s exceptions to the findings of f a c t , conclusions of law, and order setting aside and vacating the judgment. On December 11, 1972, the d i s t r i c t court i n denying the exceptions said: " I t i s clear that f a i l u r e t o give notice of entry of judgment i s not a jurisdictional defect. However, the Court feels t h a t there are general equity powers t o s e t aside the judgment so the matter can be t r i e d on the merits and before a jury." Plaintiff presents seven issues on appeal. Two are: (1) Whether under section 93-2104, R.C.M. 1947, an adverse party i s required t o advise the opposite party to appoint another lawyer or appear for himself when the opposite party's lawyer, with the consent of t h a t party, withdraws from the case; and ( 2 ) whether the judgment can be s e t aside because p l a i n t i f f failed to serve notice of application f o r default judgment on Ed R . Sikorski. The remaining f i v e issues r a i s e questions concerning the Montana Rules of Civil Procedure and can be consolidated i n t o one general issue: whether the Montana Rules of Civil Procedure have been followed in setting aside the judgment? Section 93-2104, R.C.M. 1947, provides: "When an attorney dies, or i s removed or suspended, o r ceases to a c t as such, a party t o an action, f o r whom he was acting as attorney must, before any further proceed- ings are had against him, be required by the adverse
party, by written notice, t o appoint another attorney or appear in person." There has been no case decided by t h i s Court interpreting the re- quirement of section 93-2104, R.C.M. 1947, involving a s i t u a t i o n where an attorney withdraws from a case w i t h the consent of his c l i e n t . Counsel f o r p l a i n t i f f argues t h a t because there was no alleged appearance by Ed R . Sikorski, notice t o appoint another attorney was not required. While we agree w i t h p l a i n t i f f ' s conclusion t h a t notice i s not required under the circumstances of t h i s case, we do so f o r d i f f e r e n t reasons. 13 California Code of Civil Procedure, 5 286, i s identical t o Montana's s t a t u t e section 93-2104, R.C.M. 1947. The Cal i f o r n i a court i n Gion v. Stroud, 191 C.A.2d 277, 12 Cal.Rptr. 540, 542, said: " * * * f o r there i s California law d i r e c t l y on the point t h a t Code of C i v . Proc. 5 286 applies only when an a t t o r - ney has died o r ceased t o be an attorney and not when he ceased t o a c t f o r his c l i e n t in a p a r t i c u l a r case." See also: California Water Serv. Co. v . Edward Sidebotham & Son, Inc. 224
This r u l e of law i s not a l l - i n c l u s i v e , b u t i s applicable here. No appearance had ever been made by Ed R . Sikorski. Edward R. Si korski ' s attorney withdrew from t h e case and ceased t o a c t f o r his c l i e n t . Therefore, the notice provided f o r in section 93-2104, R.C.M. 1947, was not required t o be given before any f u r t h e r proceedings could be i n s t i t u t e d against Ed R. Sikorski. For t h i s reason t h e d i s t r i c t court was not without j u r i s d i c t i o n when i t entered t h e d e f a u l t judgment. The d i s t r i c t court a l s o concluded t h a t i t was without j u r i s d i c t i o n t o proceed against Ed R . Sikorski because t h e p l a i n t i f f f a i l e d t o serve upon him the written notice of application f o r judgment as required by Rule 5 5 ( b ) ( 2 ) , M.R.Civ.P. Counsel f o r p l a i n t i f f argues since there was no alleged appearance by Ed R. Sikorski t h a t notice of the application was not required under the r u l e . The pertinent provision of Rule 5 5 ( b ) ( 2 ) , M.R.Civ.P. is: " I f the party against whom judgment by d e f a u l t i s sought has appeared i n the action, he ( o r , if appearing by representative, his representative) s h a l l be served
with written notice of the application f o r judgment a t l e a s t three days prior to the hearing on such application." This Court in W 11iams v. Superior Homes, Inc. i , 148 Mont . 38, 42,
417 P.2d 92, ruled the f a i l u r e t o give a three-day notice was not neces- sari l y a jurisdictional defect and that the irregularity had been waived by f a i l i n g f o r three months t o apply for r e l i e f . In the instant case Ed R. Sikorski took no action from the time the default judgment had been entered until his death, a period of approx- imately thirteen months. The judgment was attacked f o r the f i r s t time on December 9 , 1969, when Veronica Sikorski petitioned t o s e t aside and vacate
the judgment. Approximately one year and seven months had elapsed. Almost four years had passed when the motion t o s e t aside and vacate judgment was filed. In Williams w held that a f a i l u r e t o give the three-day notice e did not prejudice the defendant in that case because of defendant's own dis- regard f o r the rules in applying f o r r e l i e f . Likewise, w cannot say in the instant case that the f a i l u r e t o e give the three-day notice was a jurisdictional defect. Ed R . Sikorski ' s
apparent lack of i n t e r e s t in the judgment against him and his obvious dis- regard for the rules leads us to t h i s conclusion. Our review of the question of whether the Montana Rules of Civil Procedure were followed in setting aside the judgment requires an examin- ation of those rules. Rule 60(b), M.R.Civ.P., gives the d i s t r i c t court, on motion, the discretion t o s e t aside a final judgment under certain circumstances or for: "(6) any other reason justifying r e l i e f from the operation of the judgment." Rule 60(c), M.R.Civ.P. provides: "Motions provided by subdivisions ( a ) and (b) of t h i s rule shall be heard and determined within the times provided by Rule 59 in the case of motions f o r new t r i a l s and amendment of judgment. " Rule 59(d), M.R.Civ.P., provides: "Hearing on the motion shall be had within 10 days a f t e r i t has been served * * * except t h a t a t any
time a f t e r the notice of hearing on the motion has been served the court may issue an order continuing the hearing f o r not t o exceed 30 days. In case the hearing i s continued by the c o u r t , i t s h a l l be the duty of the court t o hear the same a t the e a r l i e s t practicable date t h e r e a f t e r , and the court shall r u l e upon and decide the motion within 15 days a f t e r the same i s submitted. I f the court s h a l l f a i l t o r u l e upon t h e motion within s a i d time, the motion s h a l l , a t the expiration of said period, be deemed denied. " Here, the motion was served and notice given on March 29, 1972. The hearing was s e t f o r April 18, 1972. This hearing was continued f o r the convenience of counsel involved. There i s no indication from the record t h a t the hearing was continued f o r "not t o exceed 30 days." On May 26, 1972, Judge Sorte assumed j u r i s d i c t i o n b u t i t was not u n t i l July 28, 1972, t h a t he s e t the motion f o r hearing on September 8 , 1972. From the time the motion was served u n t i l the motion was s e t f o r hearing on September 8 , 1972, 163 days had elapsed. The order s e t t i n g the hearing d a t e was vacated, and the matter was submitted on written b r i e f s . On November 29, 1972 when the judgment was ordered s e t aside, 82 days had passed from September 8 , 1972. A t o t a l of 245 days had elapsed from the d a t e of the service of the motion u n t i l i t was ruled upon. Under Rule 59(d), M.R.Civ.P., the maximum amount of time by which the case could have been extended would have been 55 days from the d a t e of the service of the motion. In the recent decision of Cain v . Harrington, Mont. - 506 , P.2d 1375, 30 St.Rep. 245, 247, this Court s a i d : "We believe t h e purpose of the r u l e [Rule 59(d), M.R.Civ.P.1 should be adhered t o and while we do not wish t o be tech- n i c a l , a t t h e same time we cannot permit deviations." I t i s not necessary t o discuss a t this time other provisions of the r u l e which have been s e t out i n the b r i e f s . The order of the d i s t r i c t court vacating t h e judgment of 1968 i s reversed and the matter remanded t o the d i s t r i c t court f o r t h e purpose of dismissing the p e t i t i o n of Veronic
W concur: e . t ,
Justices I