Warnke v. Warnke , 2011 N.D. LEXIS 209 ( 2011 )

KAPSNER, Justice.

[¶ 1] David Brian Warnke appealed the district court order denying his motion to vacate a default divorce judgment from Joan Marie Warnke. On appeal, David Warnke argued the district court abused its discretion in denying his motion to vacate the default judgment, because he appeared in the district court but did not receive adequate notice of the second hearing. David Warnke also argued the district court failed to obtain evidence a default judgment was appropriate and failed to equitably distribute the marital property. The district court did not abuse its discretion in denying David Warnke’s motion to vacate the default judgment, and we affirm.

I

[¶ 2] Joan Warnke filed a summons and complaint for divorce from David Warnke. David Warnke admitted personal service of the summons and complaint. David Warnke did not file an answer to Joan Warnke’s complaint, and Joan moved for a default judgment. David Warnke appeared in the district court for the first hearing on the motion for default. The district court told the parties to continue to work toward a settlement, and if they could not reach one, the court told David Warnke he would need to file an answer or face a default judgment. Joan Warnke proposed a stipulated judgment, but according to her affidavit, David Warnke did not agree with the stipulation because he wanted to submit a new pay stub for the purpose of calculating child support. David Warnke never signed the stipulation and did not submit a new pay stub. A month after the first default hearing, Joan Warnke sent David Warnke a notice for a second default hearing. David Warnke did not appear at the second default hearing. Joan Warnke testified at the hearing, and the district court entered a default divorce judgment. The district court awarded Joan Warnke primary residential responsibility of the parties’ children, set David Warnke’s child support obligation, and divided the marital property and debts. David Warnke subsequently filed a motion to vacate the default divorce judgment, stating he had believed the parties were still working toward a settlement, and he never received the notice for the second hearing. The district court denied the motion to vacate, finding David Warnke received notice of the second default hearing, and there were no grounds to vacate the default judgment.

II

[¶ 3] David Warnke argues the district court abused its discretion in denying his N.D.R.Civ.P. 60(b) motion to vacate the default divorce judgment, because he appeared in the district court but did not receive adequate notice under N.D.R.CivJP. 55(a)(3).

[¶ 4] “A district court’s decision on a Rule 60(b) motion to vacate a default judgment is reviewed under an abuse of discretion standard.” Luger v. Luger, 2009 ND 84, ¶ 6, 765 N.W.2d 523 (citing State v. $33,000.00 United States Currency, 2008 ND 96, ¶ 6, 748 N.W.2d 420). “A district court abuses its discretion when it acts arbitrarily, unreasonably, or unconscionably, or when it misinterprets or misapplies the law.” Id.

[¶ 5] The district court found David Warnke had appeared in the case. “If the party against whom a default judgment is sought has appeared personally or by a representative, that party or its representative must be served with a motion for judgment. Notice must be served with the motion and must comply with N.D.R.Ct. 3.2(a).” N.D.R.CivJP. 55(a)(3). A default judgment entered in violation of Rule 55 is voidable by the defaulting party. State ex rel. N.D. Dep’t of Labor v. Riemers, 2008 ND 191, ¶ 17, 757 N.W.2d 50 (citing Federal Land Bank of St. Paul v. Lillehaugen, 370 N.W.2d 517, 519 (N.D.1985)). David Warnke argued he did not receive notice of the hearing because the notice of default was sent to the wrong address.

[¶ 6] David Warnke attended the first default hearing. The district court told the parties they would have an additional month to attempt to reach a stipulation, and if they did not, Joan Warnke could send another notice for a second default hearing. The district court told David Warnke there would probably be a default judgment unless the parties reached an agreement, or unless he filed an answer to Joan Warnke’s complaint. A month later, Joan Warnke mailed David Warnke a notice for a second default hearing to the same address all other mailings had been sent. The record shows David Warnke’s mail was addressed to “Campbell Avenue,” but David Warnke said his address was actually on “Campbell Drive.” David Warnke admitted in his affidavit in support of his motion to vacate judgment: “That I received a motion for default judgment and notice of hearing scheduled for June 28, 2010[.]” The affidavit of service of that notice shows that it was mailed to the same Campbell Avenue address as the later hearing notice.

[¶ 7] In the district court’s Order Denying Defendant’s Motion To Vacate Default Judgment, the court stated:

[Tjhis Court finds the evidence establishes that Defendant actually received all documents sent to him by mail despite the fact the notices were sent to Campbell Avenue rather than Campbell Drive. Defendant appeared at the scheduling conference even though the notice was mailed to Campbell Avenue. He acknowledged in his letter to the Court of September 20, 2010, that he received the notice of the August 16, 2010, hearing that was mailed to him at an address on Campbell Avenue. Further, none of the notices sent by either the Court or by Mr. Omdahl were ever returned to the sender by the United States Post Office as undeliverable. This Court concludes that the evidence establishes Defendant was properly served with notice of the default hearing held on August 16, 2010.

[¶ 8] There is a rebuttable presumption that “a letter duly directed and mailed was received in the regular course of the mail.” N.D.C.C. § 31-11-03(24). When the presumption has been contradicted by other evidence, the issue of actual notice is for the trier of fact to decide. Rojas v. Workforce Safety & Ins., 2005 ND 147, ¶ 13, 703 N.W.2d 299 (citing State v. Tininenko, 371 N.W.2d 762, 766 (N.D.1985) (Meschke, J., specially concurring)). The notice of the second hearing was not “duly directed” in the sense that the address referred to “Avenue” rather than “Drive,” but otherwise was correctly addressed and sent to the same address at which David Warnke had been notified of a previous hearing at which he appeared. The court considered evidence of receipt. The district court did not err in finding David Warnke actually received notice of the hearing for default, and the court did not abuse its discretion in refusing to vacate the default judgment.

Ill

[¶ 9] David Warnke argued the district court failed to obtain evidence Joan Warnke was entitled to the default divorce judgment.

[¶ 10] The court may direct entry of default judgment against a party who has failed to plead or otherwise appear. N.D.R.Civ.P. 55(a). “[T]he court, before directing the entry of judgment, must require the necessary proof to enable it to determine and grant any relief to the plaintiff.” N.D.R.Civ.P. 55(a)(2). “The trial court has broad discretion in determining the quality of proof necessary to support granting a default judgment.” Bell v. State, 1998 ND 35, ¶ 11, 575 N.W.2d 211 (citing Overboe v. Odegaard, 496 N.W.2d 574, 578 (N.D.1993)).

[¶ 11] Joan Warnke’s attorney told the district court at the second hearing for default that he made changes to the proposed stipulated judgment after the first hearing for default, but David Warnke did not contact him to sign the stipulated judgment. In his motion to vacate the default judgment, David Warnke stated he did not agree with the stipulated judgment and was waiting for new terms when the district court entered the default judgment. Joan Warnke and her attorney stated in affidavits in response to the motion to vacate the default judgment that David Warnke disagreed only with the child support obligation amount and wanted to submit a new pay stub to calculate his support obligation. The record shows David Warnke did not take any action after the first hearing for default where the district court told him he needed to work out a stipulation with Joan Warnke or submit an answer to her complaint. At the second hearing for default, the district court heard testimony from Joan Warnke on the terms of the proposed stipulation and her understanding of the parties’ agreement on the terms. Joan Warnke testified about some of the facts of the parties’ marriage to support the divorce judgment. Joan Warnke testified about the length of the parties’ marriage, the reasons she sought divorce, the parties’ property and debt, the parties’ employment, how many children the parties had and their ages, and the parenting time schedule the parties had been using. Joan Warnke submitted the parties’ property and debt listing to the district court, which had been signed by both pai'ties. Joan Warnke testified the child support obligation she requested was based upon David Warnke’s income from the prior year according to his W-2 form, but he never submitted a new pay stub as requested. The district court did not abuse its discretion in determining there was sufficient proof to grant the relief requested by Joan Warnke.

IV

[¶ 12] David Warnke argued the district court erred by failing to equitably distribute the marital property. Deciding this issue would require us to review the underlying judgment. The dissent also invites this Court to review the underlying judgment under Dethloff v. Dethloff, 1998 ND 45, 574 N.W.2d 867, but Dethloff is procedurally different and does not control this case. In Dethloff, default judgment was entered as a sanction for a party’s misconduct which is described as “extreme, persistent, and willful.” Id. at ¶ 14. Because of the party’s conduct, the court in the Dethloff divorce held it could proceed under N.D.R.Civ.P. 55(a)(1): “I also believe that Rule 55 allows for a default judgment in this case under subsection (a)(1) of the Rule rather than requiring the Court to take proof to determine relief.” Id. at ¶ 12. Our opinion in Dethloff acknowledged the authority of the trial court to impose default as a sanction, but remanded the case to conduct a hearing under Rule 55(a)(2). In this case, a hearing was conducted under N.D.R.Civ.P. 55(a)(2).

[¶ 13] We have said:

In reviewing a trial court’s denial of a motion under N.D.R.Civ.P. 60(b) to set aside a regularly entered judgment, we do not determine whether the trial court was substantively correct in entering the judgment from which relief is sought, but determine only if the trial court abused its discretion in ruling that sufficient grounds for disturbing the finality of the judgment were not established. Clooten v. Clooten, 520 N.W.2d 843, 845 (N.D.1994). The trial court abuses its discretion when it acts in an arbitrary, unreasonable, or unconscionable manner. Crawford v. Crawford, 524 N.W.2d 833, 835 (N.D.1994). A trial court acts in an arbitrary, unreasonable, or unconscionable manner when its decision is not the product of a rational mental process by which the facts and law relied on are stated and considered together for the purpose of achieving a reasoned and reasonable determination. Peterson v. Peterson, 555 N.W.2d 359, 361 (N.D.1996).

Terry v. Terry, 2002 ND 2, ¶ 4, 638 N.W.2d 11. Accord. Manning v. Manning, 2006 ND 67, ¶ 15, 711 N.W.2d 149; Gonzalez v. Tounjian, 2004 ND 156, ¶ 9, 684 N.W.2d 653; US Bank Nat'l Ass’n v. Arnold, 2001 ND 130, ¶ 23, 631 N.W.2d 150.

[¶ 14] The district court did not abuse its discretion in refusing to vacate the default judgment, and we will not address the issue of property division in an appeal from the district court’s refusal to vacate the default judgment. We affirm.

[¶ 15] GERALD W. VANDE WALLE, C.J., MARY MUEHLEN MARING, and DANIEL J. CROTHERS, JJ., concur.