State Dept. of Lab. Ind. v. Hul ( 1987 )

No. 86-418
I N THE SUPREME COURT OF THE STATE OF MONTANA
1987
STATE O F MONTANA, DEPARTMENT OF LABOR
a n d INDUSTRY, LABOR STANDARDS D I V I S I O N ,
ex r e l . , L O U I S P . VETCH and DAR-LA KILLHAM,
P l a i n t i f f s and R e s p o n d e n t s ,
-vs-
DAVID A. HULMAN a / k / a DAVE HULMAN and
PRUDENCE HULMAN, husband and w i f e , and
p a r t n e r s d / b / a BRONZE BOOT,
D e f e n d a n t s and A p p e l l a n t s .
APPEAL FROM: D i s t r i c t C o u r t of t h e F i r s t J u d i c i a l D i s t r i c t ,
I n and f o r t h e C o u n t y of L e w i s & C l a r k ,
T h e H o n o r a b l e T h o m a s H o n z e l , Judge p r e s i d i n g .
COUNSEL OF RECORD:
For A p p e l l a n t :
John H o u t z , F o r s y t h , M o n t a n a
For R e s p o n d e n t :
M a r y A n n e S i m p s o n , L a b o r Standards D i v i s i o n , H e l e n a ,
Montana
S u b m i t t e d on B r i e f s : Dec. 18, 1986
Filed: FEB I 3 1989'
Clerk
Mr. Justice Frank P. Morrison, Jr. delivered the Opinion of
the Court.
This is an appeal from the First Judicial District
Court's denial of a motion to set aside a default judgment
entered against Dave and Prudence Hulman, d/b/a Bronze Boot
.
(Hulmans)
Dar-La Killham and Louis Vetch filed wage claims with
Montana's Commissioner of Labor for wages owed them by their
former employers, the Hulmans. Killham's claim was for $500,
while Vetch requested $2,625. Hulmans were served April 10,
1986, with a notice of opportunity for hearing which
explained the wage claims, the applicable statutes and their
right to file a written request for a hearing. Copies of the
wage claims were attached. Hulmans allege that they
contacted the Department of Labor and Industry by telephone
regarding the wage claims. Hulmans failed to file a written
request for a hearing.
On May 7, 1986, an order of default was executed by the
Department of Labor and Industry. The order set forth the
amount of the claims owed, $3,125, and the penalty assessed
under $ 39-3-206, MCA, $3,125. The order also explained
Hulmans' right to judicial review of the proceedings. No
review was requested. On June 20, 1986, upon the application
of the Department, a final order of judgment was entered
finding the Hulmans' indebted to the Commissioner of the
Department of Labor in the amount of $6,250, in unpaid wages
and penalties. Notice of entry of judgment was filed and
served on the Hulmans July 2, 1986. On July 18, 1986, the
Hulmans filed a motion to set aside the default. It was
denied August 27, 1986.
Meanwhile, the Custer County Attorney's office recovered
bad check restitution from Hulmans as follows:
July 9, 1986 $210.54 to Killham
July 11, 1986 $708.26 to Vetch
Also, Vetch agreed to accept $831 in equipment from Hulmans
in lieu of part of the wages owed him. The Department
acknowledged these payments and credited the $6,250 judgment
accordingly.
Hulmans present one issue for our review. Did the
District Court abuse its discretion by denying their motion
to set aside the default judgment?
A trial judge's determination that a default judgment
should not be set aside may be overturned upon a showing of
"slight abuse" of discretion. Lords v. Newman (Mont. 1984) ,
688 P.2d 290, 41 St.Rep. 1793. The trial judge did not abuse
his discretion, even slightly, in this case.
Montana's Rules of Civil Procedure provide for the
setting aside of default judgments under certain
circumstances. "Good cause1' to set aside the default
judgment must be shown. Rule 55(c), M.R.Civ.P. ~ulmans
contend that good cause to set aside the default judgment
exists in this instance for two reasons: first, the
pursuance by the State of both administrative and criminal
proceedings against Hulmans for the same offense; and
second, Killham's wage claim for an amount greater than what
she is owed.
The State is permitted to proceed with both an
administrative process and a criminal prosecution against
Hulmans. Section 39-3-215, MCA, states:
Authority of county attorney. Nothing...
contained [in the Wages and Wage Protection Act]
shall be construed to limit the authority of the
county attorney of any county of the state to
prosecute actions, both civil and criminal, for
such violations of this part as may come to his
knowledge or to enforce the provisions hereof
independently and without specific direction of the
commissioner of labor.
Further, the State has not obtained double recovery from
Hulmans. The sums obtained as a result of the criminal
prosecution have been credited against the $6,250 judgment.
Any factual dispute with respect to monies owed Killham
and Vetch should have been resolved at a hearing before the
Commissioner of Labor. Hulmans were given adequate notice of
the claims against them and of their right to a hearing on
those claims. By failing to request a hearing, Hulmans
waived their right to contest the amount of the wage claims.
Rule 55 (c), M.R.Civ.P. further provides that a default
judgment may be set aside for the same reasons a judgment
following trial on the merits may be vacated. Kootenai Corp.
v. Dayton (1979), 184 Mont. 19, 26, 601 P.2d 47, 50. Rule
60(b), M.R.Civ.P., sets forth the reasons for setting aside a
final judgment, three of which are relied on by Hulmans:
fraud; satisfaction of judgment; and "any other reason
justifying relief from the operation of the judgment." Rule
60 (b)(31, ( 5 ) and (61, MCA.
The basis for Hulmans' allegation of fraud is the
State's pursuance of both administrative and criminal
proceedings against them. We have already addressed this
contention. The State properly pursued both avenues of
recovery. The State has not attempted to achieve double
recovery from the Hulmans. The State has not attempted to
intentionally deceive the Hulmans, nor to deprive them of
their day in court. There is no fraud warranting the
setting aside of the default judgment. See Miller v. Miller
(1980), 189 Mont. 356, 364-366, 616 P.2d 313, 318-319.
Hulmans' contention that the judgment has been satisfied
is based on allegations of error in the determination of the
amounts due and owing. Hulmans waived their opportunity to
contest the amounts when they chose not to request an
administrative hearing. The $3,125 penalty is mandated by
statute. Section 39-3-206, MCA. The initial judgment
entered against Hulmans in the amount of $6,250 was proper.
The lower court, relying on the Department's brief, found
that $1739.80 of the judgment had been satisfied. The actual
amount to be credited is $1749.80 ($210.54 + $708.26 +
$831.00). We therefore amend the final order to reflect the
true amount due and owing, $4500.20.
The order is affirmed in all other aspects.
We concur:
/
- .hief Justice &
,- (T A
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Justic s
7
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