Shannon Fogarty v. Ciao Bella

• Court: Court of Appeals of Minnesota
• Decided: January 25, 2016
• Docket: A15-1030
• Status: Unpublished

Opinion

This opinion will be unpublished and may not be cited except as provided by Minn. Stat. § 480A.08, subd. 3 (2014).

STATE OF MINNESOTA IN COURT OF APPEALS A15-1030

Shannon Fogarty, Appellant,

vs.

Ciao Bella, Respondent.

Filed January 25, 2016 Reversed Kalitowski, Judge

Hennepin County District Court File No. 27-CV-14-20905

Steve G. Heikens, Heikens Law Firm, Minneapolis, Minnesota (for appellant)

Stacey L. Sever, Louise A. Behrendt, Stich, Angell, Kreidler, Unke & Scattergood, P.A., Minneapolis, Minnesota (for respondent)

Considered and decided by Kirk, Presiding Judge; Stauber, Judge; and Kalitowski,

Judge.

 Retired judge of the Minnesota Court of Appeals, serving by appointment pursuant to Minn. Const. art. VI, § 10. UNPUBLISHED OPINION

KALITOWSKI, Judge

Following the dismissal of her lawsuit with prejudice for failure to comply with the

one-year filing requirement in Minn. R. Civ. P. 5.04(a), appellant Shannon Fogarty argues

that the district court abused its discretion by denying her motion for relief from the

judgment under Minn. R. Civ. P. 60.02. We reverse.

DECISION

The district court has broad discretion to grant or deny a rule-60.02 motion.

Northland Temporaries, Inc. v. Turpin, 744 N.W.2d 398, 402 (Minn. App. 2008), review

denied (Minn. Apr. 29, 2008). We therefore review the district court’s decision to grant or

deny a rule-60.02 motion for an abuse of discretion. Meyer v. Best W. Seville Plaza Hotel,

562 N.W.2d 690, 694 (Minn. App. 1997), review denied (Minn. June 26, 1997). But we

will reverse if the district court’s decision is based on a misapprehension of law or fact.

Northland Temporaries, 744 N.W.2d at 402-03.

As amended in July 2013, Minn. R. Civ. P. 5.04(a) requires all nonfamily civil

actions to be “filed with the court within one year of commencement” or be “deemed

dismissed with prejudice,” unless the parties agree to extend the filing period. Appellant

failed to file her suit within one year of serving her summons and complaint on respondent

Ciao Bella because her attorney was not aware of the recent amendment of rule 5.04(a) to

require filing within one year. In January 2015, the district court dismissed appellant’s suit

with prejudice under rule 5.04(a) effective August 14, 2014, one day after the expiration

of appellant’s one-year filing deadline.

2 Appellant then moved to vacate the final judgment under Minn. R. Civ. P. 60.02.

Under rule 60.02, a district court may relieve a party from a final judgment for “[m]istake,

inadvertence, surprise, or excusable neglect,” or for “[a]ny other reason justifying relief

from the operation of the judgment.” Because the parties do not dispute that rule 60.02

applies to a judgment under rule 5.04(a), we assume that rule 60.02 applies for purposes of

this appeal. See Gams v. Houghton, 869 N.W.2d 60, 61 (Minn. App. 2015) (holding that

“rule 60.02 applies to [a judgment] entered under rule 5.04(a)”), review granted (Minn.

Nov. 17, 2015); Recommendations of the Minnesota Supreme Court Civil Justice Reform

Task Force, No. ADM10-8051 at 23 n.9 (Final Report Dec. 27, 2011) (noting when

discussing the dismissal-with-prejudice consequence that “Minn. R. Civ. P. 60 allows

parties to seek relief from a dismissal order”).

When deciding whether to grant or deny a rule-60.02 motion, the district court must

apply four rule-60.02 factors and determine whether the party seeking relief has (1) a

reasonable claim on the merits; (2) a reasonable excuse for the neglect; (3) “acted diligently

after notice of entry of the judgment”; and (4) shown that no prejudice will occur to the

opposing party. Northland Temporaries, 744 N.W.2d at 402. Because the district court

balances the four rule-60.02 factors, the party seeking relief need not establish all four

factors and the district court may grant relief when three strong factors outweigh one weak

factor. Riemer v. Zahn, 420 N.W.2d 659, 662 (Minn. App. 1988). But if the party seeking

relief establishes all four factors, the district court must grant the party relief and reopen

the judgment. Northland Temporaries, 744 N.W.2d at 406.

3 Here, the district court determined that (1) appellant has a reasonable claim on the

merits; (2) her attorney’s failure to be aware of the amendment to rule 5.04 is not a

“reasonable excuse for the failure to timely file the action and is not excusable neglect”;

(3) appellant was not diligent in seeking relief after dismissal of her suit; and (4) no

prejudice would occur to respondent if relief was granted. Because only two of the four

rule-60.02 factors weighed in favor of reopening the judgment, the district court denied

appellant’s rule-60.02 motion. On appeal, neither party contests the district court’s

findings on the first and fourth rule-60.02 factors. We therefore assume that these factors

weigh in favor of reopening the judgment and analyze only the second and third factors.

Reasonable Excuse for the Neglect

The second rule-60.02 factor analyzes whether the party seeking relief has a

reasonable excuse for the neglect. Id. at 402. The district court concluded that appellant’s

attorney’s “failure to remain apprised of developments in the court rules governing civil

actions is not reasonable excuse for the failure to timely file the action and is not excusable

neglect.” But when analyzing the second rule-60.02 factor, a district court must

“scrutinize[] the client’s action apart from [the] attorney’s omissions.” Charson v. Temple

Israel, 419 N.W.2d 488, 491 (Minn. 1988). “[E]ven in those cases where a court has held

the neglect of a client’s attorney to be inexcusable, if such neglect has been purely that of

counsel, ordinarily courts are loath to ‘punish’ the innocent client for the counsel’s

neglect.” Id. Thus, the district court improperly focused on the attorney’s ignorance of the

amended rule rather than on appellant’s behavior.

4 The district court noted its concern that appellant did not submit her own affidavit,

and determined that her attorney’s affidavits were not reliable in explaining what appellant

“knew or expected in relation to the pursuit of the litigation.” But in the absence of

conflicting evidence, an attorney’s affidavit regarding a client’s behavior should be

accepted as true. See Thomas v. Ross, 412 N.W.2d 358, 360 (Minn. App. 1987); see also

Kurak v. Control Data Corp., 410 N.W.2d 34, 36 (Minn. App. 1987) (discussing an

attorney’s affidavit when analyzing the rule-60.02 factors). Appellant’s attorney submitted

two affidavits in which he stated that appellant was not aware of the one-year filing rule

and that appellant “entrusted the decision to file and when to file” to him. Because the

record contains no conflicting evidence, the district court should have considered the

attorney’s affidavits as true. See Thomas, 412 N.W.2d at 360. And considering the

affidavits as true, there is no evidence that appellant’s behavior contributed to the failure

to comply with rule 5.04(a).

Respondent cites only one case in which we have found inexcusable neglect in the

absence of party culpability. See Ayers v. Rudolph’s, Inc., 392 N.W.2d 647, 650 (Minn.

App. 1986). In Ayers, the appellant attempted to argue that the attorney’s failure to raise a

certain defense was excusable neglect. Id. We disagreed because, unlike cases in which

the attorney failed to file any response to motions and the client was entitled to relief under

rule 60.02, the appellant was simply trying to relitigate the case on a different legal theory.

Id. The “attorney’s failure to defend a motion on all possible theories” did not support

relief under rule 60.02. Id. Thus, we conclude that Ayers is not applicable here.

5 The district court noted its concern that “adopting [appellant’s] position would

essentially render the very specific filing requirement in [r]ule 5.04 meaningless” because

attorneys could always avoid the requirement by claiming ignorance of the rules. But when

deciding whether to reopen a judgment, a district court must balance all four rule-60.02

factors. See Northland Temporaries, 744 N.W.2d at 402. Although a district court can

grant relief if a “weak excuse” is “outweighed by a strong showing on the three remaining

factors,” Riemer, 420 N.W.2d at 662, it cannot grant relief if the claim is not reasonable on

the merits, Northland Temporaries, 744 N.W.2d at 402. Thus, a finding as to excusable

neglect is not determinative.

Respondent seeks to distinguish a recent decision from this court in which we

analyzed a similar mistake regarding rule 5.04(a) and determined that the second rule-60.02

factor favored relief. See Cole v. Wutzke, 868 N.W.2d 925, 929 (Minn. App. 2015), review

granted (Minn. Nov. 17, 2015). Specifically, respondent argues that the attorney’s mistake

was worse here because unlike the attorney in Cole who was mistaken about the application

of the amended rule 5.04(a) to pending actions, appellant’s attorney had no knowledge of

the amended rule. See id. at 927. We reject respondent’s distinction. “Minnesota courts

have consistently held that default caused by a party’s attorney rather than by the party

himself should be excused.” Coller v. Guardian Angels Roman Catholic Church, 294

N.W.2d 712, 715 (Minn. 1980). Rather than analyzing the magnitude of attorneys’

mistakes and granting relief only to those clients whose attorneys made less serious

mistakes, Minnesota courts relieve all innocent clients from the consequences of their

attorneys’ mistakes. See Conley v. Downing, 321 N.W.2d 36, 40-41 (Minn. 1982)

6 (reversing denial of relief from summary judgment when client “relied on her attorney’s

representation” that he would answer motion but he failed to do so); Coller, 294 N.W.2d

at 715 (affirming denial of default judgment when the defendants’ failure to answer “was

occasioned solely by the inadvertence of their attorney”); Lysholm v. Karlos, 414 N.W.2d

773, 775-76 (Minn. App. 1987) (determining that the attorney’s mistake about a procedural

rule was reasonable so the second factor supported vacation of the dismissal).

Besides Cole, this case is most similar to Kurak, in which an attorney was aware of

a district court rule that would result in the dismissal of the lawsuit on a certain date but

inadvertently failed to file the required certification to avoid dismissal. 410 N.W.2d at 35.

In Kurak we explained that the client was not involved in procedural aspects of the case

and “could justifiably rely on his attorney to . . . comply with local procedural rules

affecting his case.” Id. at 36. Therefore, the client “presented a reasonable excuse” under

the second rule-60.02 factor. Id. As in Kurak, there is no evidence that appellant was

involved in the procedural aspects of her case and appellant’s reliance on her attorney’s

expertise about case filing was reasonable. See id. The second rule-60.02 factor therefore

favors granting relief to appellant.

Diligence After Entry of the Judgment

The third rule-60.02 factor analyzes whether the party seeking relief “acted

diligently after notice of entry of the judgment.” Northland Temporaries, 744 N.W.2d at

402. The district court determined that appellant “acted with due diligence to bring this

motion under [r]ule 60.02” after the district court granted respondent’s motion to dismiss.

But the court went on to conclude that because appellant’s case was deemed dismissed

7 under rule 5.04(a) on August 14, 2014, and appellant filed her rule-60.02 motion six

months after this deemed dismissal, appellant failed to act with due diligence.

Appellant argues that the district court erred by measuring her due diligence from

the expiration of the one-year filing deadline, rather than from the entry of judgment. We

agree. In Thomas, we rejected the argument that “the date of automatic dismissal controls”

in an analysis of the third rule-60.02 factor. 412 N.W.2d at 360. We instead determined

that the movants “acted diligently upon discovery of the dismissal” because they moved to

vacate approximately one month after learning of the dismissal. Id. The fact that the suit

was deemed dismissed over four months earlier was irrelevant. See id. at 359-60 (showing

that the case was subject to dismissal on July 1, the parties learned of the dismissal on

October 21, and the appellants filed a motion to vacate the dismissal on November 25).

Moreover, the third factor specifically references the party’s diligence “after notice of the

entry of the judgment.” Northland Temporaries, 744 N.W.2d at 402.

Respondent argues that Hellerstedt v. MacGibbon, 489 N.W.2d 247 (Minn. App.

1992), supports the district court’s conclusion that appellant failed to act with due

diligence. In Hellerstedt, the appellant learned that his case would be dismissed with

prejudice under a district court rule unless he filed a certification of readiness for trial. 489

N.W.2d at 248. The appellant requested and was granted a six-month extension. Id. But

the appellant failed to file a certificate during that time and later moved the district court

to allow a late filing. Id. We concluded that the “date from which to measure appellant’s

diligence” was the extension deadline and that the appellant’s attorney failed to account

for a portion of the extension time period. Id. at 251. Therefore, the “appellant’s diligence

8 argument fail[ed].” Id. Respondent is correct that, in Hallerstedt, we measured diligence

from a date other than the date of the entry of judgment. See id. But Hallerstedt is

distinguishable because judgment had not yet been entered. See id.

We conclude that the date of the judgment of dismissal, rather than the date of the

deemed dismissal under rule 5.04(a), controls the analysis under the third rule-60.02 factor.

See Thomas, 412 N.W.2d at 360. The district court dismissed appellant’s suit with

prejudice on January 30, 2015, and appellant moved to vacate the judgment under rule

60.02 on February 14. Because appellant filed her motion soon after the judgment of

dismissal and sooner than the movants in Thomas, the record supports the district court’s

finding that appellant acted with due diligence after entry of the judgment. See id. Thus,

the third factor favors granting relief to appellant.

Because all four rule-60.02 factors favor granting relief to appellant, the district

court abused its discretion by not granting appellant’s motion to reopen the judgment under

rule 60.02. See Northland Temporaries, 744 N.W.2d at 406.

Reversed.