Wittich Law v. O Connell ( 2014 )


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  •                                                                                              January 28 2014
    DA 13-0580
    IN THE SUPREME COURT OF THE STATE OF MONTANA
    
    2014 MT 23N
    WITTICH LAW FIRM, P.C.,
    Plaintiff and Appellee,
    v.
    VALERY ANN O’CONNELL AND
    DANIEL O’CONNELL,
    Defendants and Appellants.
    APPEAL FROM:            District Court of the Sixth Judicial District,
    In and For the County of Park, Cause No. DV-10-198
    Honorable Brenda Gilbert, Presiding Judge
    COUNSEL OF RECORD:
    For Appellant:
    Daniel O’Connell, Valery O’Connell, self-represented; Emigrant, Montana
    For Appellee:
    Arthur V. Wittich, Carrie R. Wasserburger, Wittich Ogburn, P.C.; Bozeman,
    Montana
    Submitted on Briefs: January 15, 2014
    Decided: January 28, 2014
    Filed:
    __________________________________________
    Clerk
    Justice Michael E Wheat delivered the Opinion of the Court.
    ¶1     Pursuant to Section I, Paragraph 3(d), Montana Supreme Court Internal Operating
    Rules, this case is decided by memorandum opinion and shall not be cited and does not serve
    as precedent. Its case title, cause number, and disposition shall be included in this Court’s
    quarterly list of noncitable cases published in the Pacific Reporter and Montana Reports.
    ¶2     Valery Ann O’Connell and Daniel O’Connell (the O’Connells) appeal from the Order
    of Montana Sixth Judicial District Court, Park County, denying their Motion to Vacate
    Default Judgment and Orders. We affirm.
    ¶3     This controversy stems from $93.99 in legal fees the O’Connells failed to pay Wittich
    Law Firm (WLF). In 2011, a default judgment was entered against the O’Connells,
    requiring them to pay $93.99 in unpaid legal fees, as well as interest and costs involved in
    recovering those fees, for a total of $902.79. Roughly nine months after the entry of default
    judgment, the O’Connells, proceeding pro se, moved to vacate the judgment pursuant to M.
    R. Civ. P. 60(b). The District Court denied the motion in 2012 and ordered the O’Connells
    to pay WLF’s attorney fees and costs in the amount of $2,860.00. The O’Connells did not
    object to the accounting of these costs and attorney fees, but later moved to alter or amend
    the judgment and requested a stay of the judgment. The District Court denied those motions.
    The O’Connells appealed to this Court and we affirmed the District Court’s disposition of
    their motions and award of fees and costs. Wittich Law Firm, P.C. v. O’Connell, 
    2013 MT 122
    , 
    370 Mont. 103
    , 
    304 P.3d 375
    .
    ¶4     On the heels of that decision, the O’Connells filed a motion in District Court, pursuant
    to M. R. Civ. P. 60(d)(3), to again try to vacate the default judgment and orders on the basis
    2
    that WLF had committed “fraud on the court.” The District Court denied that motion, citing
    the doctrines of res judicata, law of the case, and waiver—and observing that the O’Connells
    had failed to establish fraud on the court, in any event. The O’Connells again appeal to this
    Court. In its answer brief, WLF requests attorneys’ fees and costs incurred in responding to
    this appeal.
    ¶5     The standard of review in deciding whether a district court properly denied a motion
    to set aside judgment on the grounds of fraud depends upon the issues involved. See In re
    Marriage of Hopper, 
    1999 MT 310
    , ¶ 19, 
    297 Mont. 225
    , 
    991 P.2d 960
    . Where, as here, a
    district court’s discretionary ruling is premised on a legal conclusion, our review is plenary.
    Jacobsen v. Allstate Ins. Co., 
    2009 MT 248
    , ¶ 17, 
    351 Mont. 464
    , 
    215 P.3d 649
    .
    ¶6     Montana Rule of Civil Procedure 60(d)(3) provides that the rules governing relief
    from a judgment or order do not limit a court’s power to “set aside a judgment for fraud on
    the court.” As the District Court correctly determined, however, the O’Connells have failed
    to show fraud on the court. Thus, the instant motion is barred by the doctrines of res
    judicata, law of the case, and waiver.
    ¶7     The District Court correctly concluded that the O’Connells failed to establish fraud on
    the court. “Only the most egregious conduct will rise to the level of fraud upon the court.”
    Falcon v. Faulkner, 
    273 Mont. 327
    , 332, 
    903 P.2d 197
    , 200 (1995). Intrinsic fraud—
    fraudulent representations or concealments made during the court proceedings—is not
    grounds for reopening a decree or judgment. 
    Falcon, 273 Mont. at 332
    , 903 P.2d at 200.
    The power of a court to set aside a judgment on the basis of fraud upon the court must
    ultimately depend upon equitable principles and the sound discretion of the court. In re Bad
    3
    Yellow Hair, 
    162 Mont. 107
    , 111, 
    509 P.2d 9
    , 12 (1973) (overruled on other grounds by In re
    Marriage of Miller, 
    273 Mont. 286
    , 293, 
    902 P.2d 1019
    , 1023 (1995)). To the extent that the
    O’Connells have alleged fraud on the court, it is only intrinsic fraud and is not grounds for
    reopening a case we have already resolved. The District Court correctly declined to exercise
    its discretion to reopen this case.
    ¶8     Since the O’Connells have failed to establish fraud upon the court, the District Court
    correctly held that the instant motion is precluded by the doctrines of res judicata, law of the
    case, and waiver. Res judicata precludes parties from re-litigating claims they have already
    had an opportunity to litigate. Kullick v. Skyline Homeowners Ass’n, 
    2003 MT 137
    , ¶ 17,
    
    316 Mont. 146
    , 
    69 P.3d 225
    . The doctrine applies if four factors are satisfied: (1) the parties
    or their privies are the same; (2) the subject matter of the present and past actions is the
    same; (3) the issues are the same and relate to the same subject matter; and (4) the capacities
    of the persons are the same in reference to the subject matter and to the issues between them.
    Kullick, ¶ 17. The doctrine of law of the case also precludes parties from re-litigating issues
    that this Court has already resolved. In re Estate of Snyder, 
    2009 MT 291
    , ¶ 6, 
    352 Mont. 264
    , 
    217 P.3d 1027
    . Although the O’Connells claim they did not discover until after the first
    appeal that WLF had premised its pleadings upon the existence of a written contract, the
    O’Connells presumably read the pleadings and were aware of whether or not they had signed
    the contract. If the O’Connells wished us to set aside the default judgment pursuant to M. R.
    Civ. P. 60(d)(3), they should properly have raised that argument in the previous action. The
    District Court correctly concluded that both res judicata and the law of the case doctrine
    apply to preclude the O’Connells’ motion.
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    ¶9     Even if res judicata and the law of the case doctrine did not apply, the District Court
    correctly determined that the doctrine of waiver would bar the O’Connells’ motion. The
    O’Connells’ allegation of fraud is operatively an affirmative defense. The same failure to
    appear that resulted in entry of the default judgment effectively waived the O’Connells’ right
    to raise fraud on the court as an affirmative defense. See Loney v. Milodragovich, Dale &
    Dye, P.C., 
    273 Mont. 506
    , 511, 
    905 P.2d 158
    , 161 (1995) (affirmative defenses are generally
    waived if not plead, pursuant to M. R. Civ. P. 8(c)).
    ¶10    Justice Baker, in her concurring opinion to our original resolution of this controversy,
    wrote of her regret that the time and costs involved with recovering this originally
    insignificant bill had “mushroomed” over years of litigation. Wittich Law Firm, P.C., ¶ 33
    (Baker, J. concurring). The current appeal, unfortunately, exacerbates this problem. We
    exercise our discretion pursuant to M. R. App. P. 19(3)(a), to decline WLF’s request that we
    grant WLF “reasonable” attorneys’ fees and costs. The O’Connells have already been held
    accountable for “reasonable” attorneys’ fees in the amount of at least $5,019.79, see Wittich
    Law Firm, P.C., ¶ 36 (Cotter, J. dissenting), related to WLF’s efforts to recover the $93.99
    the O’Connells originally owed WLF.
    ¶11    We have determined to decide this case pursuant to Section I, Paragraph 3(d) of our
    Internal Operating Rules, which provides for noncitable memorandum opinions. The issues
    in this case are controlled by the statutes and precedent, which the District Court correctly
    interpreted and applied.
    ¶12    Affirmed.
    /S/ MICHAEL E WHEAT
    5
    We Concur:
    /S/ JIM RICE
    /S/ PATRICIA COTTER
    /S/ BETH BAKER
    /S/ LAURIE McKINNON
    6