Montane Resource Associates v. Greene

974 P.2d 510, 132 Idaho 458, 1999 Ida. LEXIS 18
CourtIdaho Supreme Court
DecidedMarch 10, 1999
Docket24799
StatusPublished
Cited by4 cases

This text of 974 P.2d 510 (Montane Resource Associates v. Greene) is published on Counsel Stack Legal Research, covering Idaho Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Montane Resource Associates v. Greene, 974 P.2d 510, 132 Idaho 458, 1999 Ida. LEXIS 18 (Idaho 1999).

Opinions

SCHROEDER, Justice

This is an appeal from a district court’s order denying a motion to set aside a default judgment under Rule 60(b)(1) of the Idaho Rules of Civil Procedure (I.R.C.P.). The defendant — appellant, Heber Jacobsen (Jacob-sen), claims excusable neglect for not responding to the summons and complaint served on him by plaintiff-respondent, Montane Resource Associates (Montane). The Court reversed the district court by a majority concurring in the result without a majority agreeing as to the rationale.

I.

BACKGROUND AND PROCEEDINGS

Jacobsen purchased a parcel of wooded land in Power County, Idaho (the land), from Richard and Linda Greene (Greenes) in January 1995. Jacobsen leased the land back to the Greenes, giving them an option to repurchase at a later date. It appears that the Greenes contracted with Montane to perform logging services on the land during periods before and after the sale of the land to Jacobsen. On September 1, 1995, Montane recorded a loggers’ lien on the land under sections 45-401 through 45-417 of the Idaho Code (I.C.) to secure its claim for payment for services rendered between June 1, 1994, and July 3, 1995. According to the record, Jacobsen did not employ Montane and did not authorize any agreement with Montane to perform services on the land. Jacobsen sold his interest in the land to Mr. and Mrs. Ivan Bingham (Binghams) in the Spring of 1996, expressly subject to Montane’s lien.

Montane made a demand on Jacobsen for payment of the amount secured by the loggers’ lien. Jacobsen consulted with an attorney who informed Montane’s attorney that Jacobsen contested the claim. On February 14, 1996, Montane filed a complaint naming both the Greenes and Jacobsen, seeking foreclosure of the loggers’ lien and personal judgment. Jacobsen was personally served with the summons and complaint on April 21, 1996. Although he had an attorney, Jacob-sen did not consult his attorney and did not file an appearance or an answer to the complaint. On July 15, 1996, the district court entered a default judgment against Jacobsen in the amount of $15,897.05.1 Jacobsen filed a motion to set aside the default judgment. The district court denied the motion and Jacobsen appealed.

Jacobsen’s appeal was originally heard by the Court of Appeals which in a 2-1 decision [461]*461concluded that the district court did not abuse its discretion in denying the motion to set aside the default judgment. Montane Resource Assoc. v. Jacobsen, Docket No. 23744, 1998 WL 214582 (Ct.App. May 4, 1998). Jacobsen filed a timely petition for review under Rule 118 of the Idaho Appellate Rules (I.A.R.), and this Court granted review.

II.

STANDARD OF REVIEW

“When considering a case on review from the Court of Appeals, this Court gives serious consideration to the Court of Appeals; however, this Court reviews the trial decision directly. This Court is not merely reviewing the correctness of the Court of Appeals’ decision; rather, this Court is hearing the matter as if the case were on direct appeal from the district judge’s decision.” Northland Ins. Co. v. Boise’s Best Autos & Repairs, 131 Idaho 432, 433, 958 P.2d 589, 590 (1998) (citations omitted).

A motion to set aside a default judgment under I.R.C.P. 60(b)(1) “initially presents questions of fact to be determined by the trial court.” Hearst Corp. v. Keller, 100 Idaho 10, 11, 592 P.2d 66, 67 (1979). In general, the motion is committed to the sound discretion of the trial court. Clear Springs Trout Co. v. Anthony, 123 Idaho 141, 143, 845 P.2d 559, 561 (1992).

Absent clear abuse of that discretion, [this Court] will not overturn the trial court’s decision. The trial court will be considered to have acted within its sound discretion on a motion to set aside a default judgment if
(a) the trial court makes findings of fact which are not clearly erroneous, (b) the court applies to those facts the proper criteria under Rule 60(b)(1) (tempered by the policy favoring relief in doubtful eases), and (e) the trial court’s decision follows logically from application of such criteria to the facts found.

Id. (quoting Shelton v. Diamond Int’l Corp., 108 Idaho 935, 938, 703 P.2d 699, 702 (1985) (quoting Avondale on Hayden, Inc. v. Hall, 104 Idaho 321, 326, 658 P.2d 992, 997 (Ct. App.1983))).

III.

THE DEFAULT JUDGMENT SHOULD BE SET ASIDE TO THE EXTENT IT INCLUDES PERSONAL LIABILITY BECAUSE JACOBSEN ESTABLISHED A MERITORIOUS DEFENSE AND EXCUSABLE NEGLECT.

Jacobsen asserts that the district court abused its discretion when it denied his motion to set aside the default judgment under I.R.C.P. 60(b)(1). Under this rule a party may request relief from a default judgment on the grounds of mistake, inadvertence, surprise, or as Jacobsen claims — excusable neglect. Additionally, the moving party must plead facts which would constitute a meritorious defense to the entry of default. Hearst Corp., 100 Idaho at 12, 592 P.2d at 68.

A. Meritorious Defense

Jacobsen has asserted a meritorious defense to the claim for personal liability, and Montane has not disputed the asserted defense. Normally, little more need be said about this prong, but the nature of the defense bears upon the question of excusable neglect.

From the record it does not appear that Montane had a reasonable basis to seek a personal judgment against Jacobsen. It also appears that Montane’s sole cause of action was for the payment of logging-related work performed between June 1, 1994, and July 3,1995, secured by a loggers’ lien. The Idaho loggers’ lien statutes under Title 45, Chapter 4 of the Idaho Code make no provision for personal liability. Foreclosure of a loggérs’ lien is an in rem action under I.C. § 45-412. In the analogous case of Pierson v. Sewell, 97 Idaho 38, 539 P.2d 590 (1975), this Court held that a foreclosure of a mechanics’ lien was strictly an action in rem and not an in personam proceeding. Id. at 44, 539 P.2d at 596. A lien claimant is not [462]*462entitled to personal judgment against a party for any deficiency which might remain after a foreclosure sale if there is no direct contractual relationship between the parties. Id. at 44-45, 539 P.2d at 596-97.

Montane did not dispute the existence of a meritorious defense. Instead, it focused on Jacobsen’s non-responsiveness to the service of the summons and complaint. Counsel for Montane made this statement in the proceedings before the district court:

I have no idea what the legal merits are at this point, because I haven’t been able to do any discovery or anything, but that is absolutely immaterial until they first convince this Court that they somehow have some excusable neglect, mistake, surprise, inadvertence.

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Related

John W. Brown Properties v. Blaine County
59 P.3d 976 (Idaho Supreme Court, 2002)
Bingham v. Montane Resource Associates
987 P.2d 1035 (Idaho Supreme Court, 1999)
Montane Resource Associates v. Greene
974 P.2d 510 (Idaho Supreme Court, 1999)

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Bluebook (online)
974 P.2d 510, 132 Idaho 458, 1999 Ida. LEXIS 18, Counsel Stack Legal Research, https://law.counselstack.com/opinion/montane-resource-associates-v-greene-idaho-1999.