Insulation Distributors, Inc. v. William J. Bourque, Jr.

• Court: Court of Appeals of Minnesota
• Decided: January 5, 2015
• Docket: A14-547
• Status: Unpublished

Opinion

This opinion will be unpublished and may not be cited except as provided by Minn. Stat. § 480A.08, subd. 3 (2012).

STATE OF MINNESOTA IN COURT OF APPEALS A14-0547

Insulation Distributors, Inc., Appellant,

vs.

William J. Bourque, Jr., et al., Respondents.

Filed January 5, 2014 Reversed and remanded Stauber, Judge

Scott County District Court File No. 70-CV-12-18960

Michael J. Weidner, Law Offices of Michael J. Weidner, Eagan, Minnesota (for appellant)

James T. Keig, Stephenson, Sanford, Pierson & Thone, PLC, Wayzata, Minnesota (for respondents)

Considered and decided by Stauber, Presiding Judge; Cleary, Chief Judge; and

Chutich, Judge.

UNPUBLISHED OPINION

STAUBER, Judge

Appellant challenges the district court’s order granting a motion to vacate a

judgment under Minn. R. Civ. P. 60.02, arguing that the motion was untimely and

procedurally defective. Because it is unclear from the district court’s findings whether the motion to vacate on the ground of a void judgment was timely and whether the

district court waived procedural requirements regarding that motion, we reverse and

remand.

FACTS

Appellant Insulation Distributors, Inc. provides insulation, materials, and other

goods and services to individuals and companies. Respondent William J. Bourque, Jr. is

the sole shareholder of respondent MacGyver Services, Inc. (collectively “respondents”),

a business that sells spray foam insulation products and repairs applicator equipment.

In July 2012, appellant sued respondents, alleging that they owed approximately

$28,594.57, plus interest, costs, and fees for products purchased from appellant. In

September 2012, appellant filed in district court the summons and complaint, and a

motion for default judgment based on respondents’ failure to answer. On October 17,

2012, the district court entered default judgment against respondents, awarding appellant

$32,131.97.

On October 15, 2013, respondents filed a motion to vacate the judgment under

Minn. R. Civ. P. 60.02, arguing that they were never served with the complaint, appellant

fabricated a credit application, and the amount they owed to appellant was substantially

less than represented in appellant’s pleadings. Respondents served appellant with the

motion by mail on October 18, 2013.

In February 2014, the district court issued an order vacating the judgment. The

district court analyzed the issue under the four-factor test set forth in Hinz v. Northland

2 Milk & Ice Cream Co., 237 Minn. 28, 30 53 N.W.2d 454, 456 (1952), found that all four

factors were met, and granted the motion. This appeal followed.

DECISION

I.

Appellant argues that the motion to vacate was untimely because it was not made

within one year of the entry of judgment as required by rule 60.02 for motions based on

surprise and fraud. Respondents argue that the motion was not limited to surprise and

fraud but also included an argument that the judgment was void, and therefore the motion

was not subject to the rule 60.02 one-year time limit.1

Minn. R. Civ. P. 60.02 states:

On motion and upon such terms as are just, the court may relieve a party or the party’s legal representatives from a final judgment (other than a marriage dissolution decree), order, or proceeding and may order a new trial or grant such other relief as may be just for the following reasons: (a) Mistake, inadvertence, surprise, or excusable neglect; .... (c) Fraud (whether heretofore denominated intrinsic or extrinsic), misrepresentation, or other misconduct of an adverse party; (d) The judgment is void[.]

Whether to vacate a judgment under rule 60.02 is largely within the discretion of

the district court. Palladium Holdings, LLC v. Zuni Mortg. Loan Trust 2006-OA1, 775

1 Respondents also argue that the motion was considered under rule 60.02(f). This clause applies only if the basis for relief is not addressed by any other provisions. See City of Barnum v. Sabri, 657 N.W.2d 201, 207 (Minn. App. 2003). The reasons set forth by respondents fall within clauses (a), (c), and (d), and therefore relief is unavailable under clause (f).

3 N.W.2d 168, 173 (Minn. App. 2009), review denied (Minn. Jan. 27, 2010). But the

district court’s discretion is limited by the Hinz factors, which permit the district court to

vacate a judgment if the defendant: “(1) has a reasonable defense on the merits; (2) has a

reasonable excuse for his failure or neglect to answer; (3) has acted with due diligence

after notice of the entry of the judgment; and (4) shows that no substantial prejudice will

result to the other party.” Id. at 173-74.

Appellant argues that respondents’ motion to vacate based on surprise and fraud

was untimely because although respondents filed their motion within one year, they did

not serve it until after one year of the entry of judgment. We agree.

Rule 60.02 states that if a motion to vacate a judgment is made due to surprise or

fraud, “[t]he motion shall be made . . . not more than 1 year after the judgment, order, or

proceeding was entered or taken.” Minn. R. Civ. P. 60.02. When the motion is not made

within one year, no relief under rule 60.02 is available. Gould v. Johnson, 379 N.W.2d

643, 647 (Minn. App. 1986), review denied (Minn. Mar. 14, 1986).

The district court found that the judgment was entered on October 17, 2012, and

the motion to vacate was filed on October 15, 2013, apparently analyzing the issue as if

the motion were made within one year. But appellant argues that the motion was not

served until October 18, 2013, and did not comply with the rule. This argument requires

us to interpret the meaning of the word “made” in rule 60.02, which is a question of law

subject to de novo review. See Leiendecker v. Asian Women United of Minn., 731

N.W.2d 836, 839 (Minn. App. 2007), review denied (Minn. Aug. 7, 2007).

4 Throughout the rules of civil procedure, the terms “served” and “filed” are

assigned different meanings. Compare Minn. R. Civ. P. 5.01-.03 (setting forth service

requirements) with Minn. R. Civ. P. 5.04-.06 (outlining filing methods). But rule 60.02

uses neither “served” nor “filed;” it requires only that a motion shall be “made.” To

interpret the word “made,” “[w]e must presume that . . . no . . . language should be

deemed superfluous or insignificant.” Urban v. Am. Legion Dep’t of Minn., 723 N.W.2d

1, 5 (Minn. 2006); see Minn. Stat. § 645.001 (2012) (stating that statutory rules of

construction “govern all rules” “unless specifically provided to the contrary”). This court

also presumes that distinctions in language in the same context are intentional. In re

Stadsvold, 754 N.W.2d 323, 328-29 (Minn. 2008); see Johnson v. Paynesville Farmers

Union Coop. Oil. Co., 817 N.W.2d 693, 709 (Minn. 2012) (“The use of different words

in . . . two provisions supports the conclusion that the sections address different

behavior.”).

Applying these principles, the use of language requiring a motion to be “made”

rather than “served” or “filed” suggests that “made” requires a different meaning than the

meanings given to either “served” or “filed.” Further, the word “made” is the past tense

of “make,” which in this context means “[t]o carry out [or] perform.” The American

Heritage Dictionary 1078, 1085 (3d ed. 1992). The only reasonable interpretation of

“made” that both differentiates it from either “served” or “filed” and gives expression to

the finality suggested by its tense is that “made” means both “served” and “filed.” This

interpretation also comports with other rules of civil procedure, which ensure that parties

receive reasonable notice of motions. See, e.g., Minn. R. Civ. P. 5.02 (service

5 requirements); Minn. R. Civ. P. 5.04 (filing requirements). Based on this interpretation,

we conclude that the district court erred when it considered respondents’ motion to vacate

on the grounds of surprise and fraud because the motion was not served within one year

and thus was untimely.

II.

A party may be granted relief from a judgment if the judgment is void. Minn. R

Civ. P. 60.02(d). A judgment is void if the issuing court lacks personal jurisdiction over

the parties due to failure of service. Bode v. Minn. Dep’t of Natural Res., 594 N.W.2d

257, 261 (Minn. App. 1999), aff’d, 612 N.W.2d 862 (Minn. 2000). Unlike the other

provisions of rule 60.02, the question of whether to vacate a void judgment involves no

discretion on the part of the district court; a void judgment must be set aside. Hengel v.

Hyatt, 312 Minn. 317, 318, 252 N.W.2d 105, 106 (1977). Further, although there is no

time limit on when a district court may entertain such a motion, the motion to vacate a

void judgment must be made within a reasonable time. Minn. R. Civ. P. 60.02. The

duration of a “reasonable time” varies depending on the facts of each case. Palladium

Holdings, 775 N.W.2d at 177.

Respondents claim that the judgment is void for lack of personal jurisdiction

because of appellant’s alleged failure to serve respondents with the complaint as required

by Minn. R. Civ. P. 3.02.2 The district court’s order and memorandum include

contradictory language finding both that respondents were properly served and were not

2 The process server’s sworn affidavit states that respondents were served with a summons and complaint, but respondents deny this.

6 served with the complaint. On this record, we cannot determine if the judgment is void.

“[A] finding . . . determinative of the ultimate conclusion should . . . be express and not

implied. Findings of fact should include as much of the subsidiary facts as is necessary

to disclose to an appellate court the basis upon which the trial court reached its ultimate

conclusion.” Woodrich Constr. Co. v. State, 287 Minn. 260, 263, 177 N.W.2d 563, 565

(1970). We therefore reverse the district court’s order and remand for further findings on

the issue of whether the respondents were properly served with the complaint in this

matter.

III.

Appellant also argues that the district court erred in granting the motion to vacate

because it was not accompanied by a copy of the answer and an affidavit of merits as

required by Minn. Gen. R. Pract. 109.01. Respondents counter that they were not

required to comply with rule 109.01 because they were never served with the complaint.

The General Rules of Practice govern all district courts in this state, but may be

waived or modified in any given case. Minn. Stat. § 484.33 (2012). Enforcement of

these rules is left to the discretion of the district court. Pfeiffer ex rel. Pfeiffer v. Allina

Health Sys. 851 N.W.2d 626, 636 n.7 (Minn. App. 2014) (citing Hopkins by LaFontaine

v. Empire Fire & Marine Ins. Co., 474 N.W.2d 209, 212 (Minn. App. 1991)), review

denied (Minn. Oct. 14, 2014). “The district court also has the power to waive its own

rules.” Hopkins, 474 N.W.2d at 212.

Rule 109.01 states that “[a]ny application . . . to open a judgment and for leave to

answer and defend shall be accompanied by a copy of the answer or reply, and an

7 affidavit of merits and be served on the opposite party.” Minn. R. Gen. Pract. 109.01.

These requirements may be waived by the district court if a valid defense is presented in

the record. See Valley View, Inc. v. Schutte, 399 N.W.2d 182, 184 (Minn. App. 1987),

review denied (Minn. Mar. 18, 1987).

Respondents’ defense is evident from the record, and the district court may have

waived the requirements of rule 109.01. On remand, we direct the district court to state

on the record whether it waives compliance with this rule.

Reversed and remanded.