Sikorski Sons v. Sikorski

No. 12442
I N THE SUPREME COURT O T)IE STATE OF MONTANA
F
1973
SIKORSKI & SONS, I N C . ,
P l a i n t i f f and A p p e l l a n t ,
-VS -
ED R. SIKORSKI,
Defendant and Respondent.
Appeal from: District Court of t h e S i x t e e n t h J u d i c i a l D i s t r i c t ,
Honorable M. James S o r t e , Judge p r e s i d i n g .
Counsel of Record:
For Appellant :
Gene Hunt l e y a r g u e d , Baker, Montana
For Respondent :
Lucas, J a r d i n e & Monaghan, Miles C i t y , Montana
Thomas M. Monaghan a r g u e d , Miles C i t y , Montana
John R. P r a t e r a p p e a r e d , Ronan, Montana
R . W. Heineman, Wibaux, Montana
Submitted: June 20, 1973
Decided : JUL 2 4 1973
Filed : JUL 2 4 1973
erk
Mr. C h i e f J u s t i c e James T. Harrison delivered the Opinion of the Court.
This i s an appeal by p l a i n t i f f corporation from an order s e t t i n g
aside and vacating a d e f a u l t judgment.
This case concerns a family farming corporation, Sikoriski &
Sons, Inc. S u i t was i n s t i t u t e d in the d i s t r i c t court of the sixteenth
judicial d i s t r i c t , Fallon County, by p l a i n t i f f corporation against one of
i t s stockholders, E R . Sikorski, t o enjoin him from coming on corporate
d
property and from harassing corporation o f f i c e r s and employees and t o re-
quire h i m t o surrender c e r t a i n corporate property which he had secreted.
Complaint was f i l e d February 3 , 1968. An order t o show cause was issued
on the same day, returnable February 9, 1968, requiring defendant t o show
cause why p l a i n t i f f should not have i t s injunction pendente l i t e .
The complaint described the ownership of each corporate stock-
holder, and a l s o alleged t h a t since May 1960, E R. Sikorski had owned 364
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shares w i t h h i s f i r s t wife, Frances F. Sikorski, a s j o i n t tenants, and one
share individually. S p e c i f i c a l l y , the complaint a1 leged t h a t E R. Si korski
d
in about 1960 o r 1961, secured from the family corporation records about
eleven stock c e r t i f i c a t e s .
Summons, complaint and order t o show cause were served February 5,
1968. After being served E R. Si korski consulted with counsel
d . B informal
y
agreement between his counsel and counsel f o r t h e corporation, t h e hearing
on t h e order t o show cause of February 9, 1968, was continued. Nothing f u r -
t h e r happened u n t i l April 12, 1968, a t which time counsel f o r E R. Sikorski
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formally withdrew. E R. Sikorski consented, in writing, t o this withdrawal.
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On April 17, 1968, p l a i n t i f f corporation asked t h a t t h e d e f a u l t of
defendant, Ed R. Sikorski, be entered. On May 13, 1968, judgment was taken.
In i t s findings of f a c t , the d i s t r i c t court found t h a t E R. Sikorski owned
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364 shares of stock a s tenant i n common with Frances F. Sikorski , and one share
individually. Among other things, the d i s t r i c t court a l s o found t h a t E R.
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Si korski i n about 1960 o r 1961 secured from the corporation records of the
p l a i n t i f f stock c e r t i f i c a t e s numbered 3 , 4, 5, 7 , 8 , 9, 10, 11, 12 and 13
which belonged t o other members of the corporation and had refused t o d e l i v e r
them upon demand.
The d i s t r i c t court concluded t h a t E R. S i k o r s k i ' s i n t e r e s t in
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the corporation was t h a t of a stockholder and his ownership was 183 shares
out of a t o t a l 1,003 issued. Judgment was entered f o r the r e l i e f sought.
Certified copies of the findings of f a c t , conclusions of law and
judgment were served on defendant, E R . Sikorski, on June 14, 1968.
d Ed
R . Sikorski died on June 28, 1969. From the time t h e complaint was served
on February 5 , 1968, defendant E R . Sikorski did nothing w i t h respect t o
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the action, except have the hearing of February 9, 1968, continued.
On October 31, 1969 Veronica Si korski , the second wife of Ed R .
Sikorski and the administratrix of his e s t a t e , f i l e d a complaint against
p l a i n t i f f corporation t o have a receiver appointed, t o liquidate t h e cor-
poration, and f o r other r e l i e f ,
On December 9, 1969, Veronica Sikorski in the i n s t a n t action pe-
t i t i o n e d the court t o s e t aside, vacate, and modify the judgment, asking
f o r equitable r e l i e f under Rule 60(5), M.R.Civ.P. The petition was never
ruled upon.
On March 29, 1972, p l a i n t i f f corporation was served by Veronica
Sikorski with a motion f o r order s e t t i n g aside and vacating judgment. The
basis f o r t h i s motion was t h a t E R. Sikorski should have been served w i t h
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notice t o appoint another attorney before being defaulted and p l a i n t i f f
should have served a notice of application f o r d e f a u l t judgment because Ed
R. Sikorski had appeared in the action against h i m . The motion was s e t f o r
hearing on April 18, 1972, which was continued f o r the convenience of counsel
i nvol ved.
After three d i s t r i c t judges had disqualified themselves, D i s t r i c t
Judge Sorte assumed j u r i s d i c t i o n on May 26, 1972. On July 28, 1972, i t
was ordered t h a t the hearing on the motion f o r order s e t t i n g aside and vaca-
ting judgment be s e t f o r September 8 , 1972. B agreement of counsel f o r a l l
y
p a r t i e s , the order s e t t i n g the hearing on September 8 , 1972 was vacated.
Counsel agreed t o submit the matter on written b r i e f s . Counsel f o r p l a i n t i f f
was given until October 15, 1972 to f i l e a brief.
The d i s t r i c t court took the motion under advisement and on November
29, 1972, ruled that the judgment be s e t aside. The d i s t r i c t court concluded:
that i t had been without jurisdiction t o proceed against Ed R . Sikorski be-
cause p l a i n t i f f did not serve upon defendant notice to appoint another law-
yer; t h a t i t was without jurisdiction because p l a i n t i f f did not give notice
t o defendant of application f o r judgment as required under Rule 5 5 ( b ) ( 2 ) ,
M.R.Civ.P.; and, that the "JUDGMENT exceeds the prayer of p l a i n t i f f Is com-
plaint in that i t designates specific c e r t i f i c a t e s of stock t o be returned
to p l a i n t i f f by defendant when the prayer of the complaint only generally
refers to c e r t i f i c a t e s of stock * * *". On December 5, 1972, p l a i n t i f f
f i l e d i t s exceptions to the findings of f a c t , conclusions of law, and order
setting aside and vacating the judgment.
On December 11, 1972, the d i s t r i c t court i n denying the exceptions
said:
" I t i s clear that f a i l u r e t o give notice of entry of
judgment i s not a jurisdictional defect. However, the
Court feels t h a t there are general equity powers t o s e t
aside the judgment so the matter can be t r i e d on the
merits and before a jury."
Plaintiff presents seven issues on appeal. Two are: (1) Whether
under section 93-2104, R.C.M. 1947, an adverse party i s required t o advise
the opposite party to appoint another lawyer or appear for himself when the
opposite party's lawyer, with the consent of t h a t party, withdraws from the
case; and ( 2 ) whether the judgment can be s e t aside because p l a i n t i f f failed
to serve notice of application f o r default judgment on Ed R . Sikorski. The
remaining f i v e issues r a i s e questions concerning the Montana Rules of Civil
Procedure and can be consolidated i n t o one general issue: whether the
Montana Rules of Civil Procedure have been followed in setting aside the
judgment?
Section 93-2104, R.C.M. 1947, provides:
"When an attorney dies, or i s removed or suspended, o r
ceases to a c t as such, a party t o an action, f o r whom he
was acting as attorney must, before any further proceed-
ings are had against him, be required by the adverse
party, by written notice, t o appoint another attorney or
appear in person."
There has been no case decided by t h i s Court interpreting the re-
quirement of section 93-2104, R.C.M. 1947, involving a s i t u a t i o n where an
attorney withdraws from a case w i t h the consent of his c l i e n t . Counsel
f o r p l a i n t i f f argues t h a t because there was no alleged appearance by Ed
R . Sikorski, notice t o appoint another attorney was not required. While
we agree w i t h p l a i n t i f f ' s conclusion t h a t notice i s not required under
the circumstances of t h i s case, we do so f o r d i f f e r e n t reasons.
13 California Code of Civil Procedure, 5 286, i s identical t o
Montana's s t a t u t e section 93-2104, R.C.M. 1947. The Cal i f o r n i a court i n
Gion v. Stroud, 191 C.A.2d 277, 12 Cal. Rptr. 540, 542, said:
" * * * f o r there i s California law d i r e c t l y on the point
t h a t Code of C i v . Proc. 5 286 applies only when an a t t o r -
ney has died o r ceased t o be an attorney and not when he
ceased t o a c t f o r his c l i e n t in a p a r t i c u l a r case."
See also: California Water Serv. Co. v . Edward Sidebotham & Son, Inc. 224
This r u l e of law i s not a l l - i n c l u s i v e , b u t i s applicable here. No
appearance had ever been made by Ed R . Sikorski.
Edward R. Si korski ' s attorney withdrew from t h e case and ceased t o
a c t f o r his c l i e n t . Therefore, the notice provided f o r in section 93-2104,
R.C.M. 1947, was not required t o be given before any f u r t h e r proceedings
could be i n s t i t u t e d against Ed R. Sikorski. For t h i s reason t h e d i s t r i c t
court was not without j u r i s d i c t i o n when i t entered t h e d e f a u l t judgment.
The d i s t r i c t court a l s o concluded t h a t i t was without j u r i s d i c t i o n
t o proceed against Ed R . Sikorski because t h e p l a i n t i f f f a i l e d t o serve
upon him the written notice of application f o r judgment as required by Rule
5 5 ( b ) ( 2 ) , M.R.Civ.P. Counsel f o r p l a i n t i f f argues since there was no
alleged appearance by Ed R. Sikorski t h a t notice of the application was not
required under the r u l e .
The pertinent provision of Rule 5 5 ( b ) ( 2 ) , M.R.Civ.P. is:
" I f the party against whom judgment by d e f a u l t i s
sought has appeared i n the action, he ( o r , if appearing
by representative, his representative) s h a l l be served
with written notice of the application f o r judgment a t
l e a s t three days prior to the hearing on such application."
This Court in W 11iams v. Superior Homes, Inc.
i , 148 Mont . 38, 42,
417 P.2d 92, ruled the f a i l u r e t o give a three-day notice was not neces-
sari l y a jurisdictional defect and that the irregularity had been waived
by f a i l i n g f o r three months t o apply for r e l i e f .
In the instant case Ed R. Sikorski took no action from the time
the default judgment had been entered until his death, a period of approx-
imately thirteen months. The judgment was attacked f o r the f i r s t time on
December 9 , 1969, when Veronica Sikorski petitioned t o s e t aside and vacate
the judgment. Approximately one year and seven months had elapsed. Almost
four years had passed when the motion t o s e t aside and vacate judgment was
filed.
In Williams w held that a f a i l u r e t o give the three-day notice
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did not prejudice the defendant in that case because of defendant's own dis-
regard f o r the rules in applying f o r r e l i e f .
Likewise, w cannot say in the instant case that the f a i l u r e t o
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give the three-day notice was a jurisdictional defect. Ed R . Sikorski ' s
apparent lack of i n t e r e s t in the judgment against him and his obvious dis-
regard for the rules leads us to t h i s conclusion.
Our review of the question of whether the Montana Rules of Civil
Procedure were followed in setting aside the judgment requires an examin-
ation of those rules.
Rule 60(b), M.R.Civ.P., gives the d i s t r i c t court, on motion, the
discretion t o s e t aside a final judgment under certain circumstances or for:
"(6) any other reason justifying r e l i e f from the operation
of the judgment."
Rule 60(c), M.R.Civ.P. provides:
"Motions provided by subdivisions ( a ) and (b) of t h i s
rule shall be heard and determined within the times
provided by Rule 59 in the case of motions f o r new t r i a l s
and amendment of judgment. "
Rule 59(d), M.R.Civ.P., provides:
"Hearing on the motion shall be had within 10 days
a f t e r i t has been served * * * except t h a t a t any
time a f t e r the notice of hearing on the motion has been
served the court may issue an order continuing the
hearing f o r not t o exceed 30 days. In case the hearing
i s continued by the c o u r t , i t s h a l l be the duty of the
court t o hear the same a t the e a r l i e s t practicable date
t h e r e a f t e r , and the court shall r u l e upon and decide
the motion within 15 days a f t e r the same i s submitted.
I f the court s h a l l f a i l t o r u l e upon t h e motion within
s a i d time, the motion s h a l l , a t the expiration of said
period, be deemed denied. "
Here, the motion was served and notice given on March 29, 1972.
The hearing was s e t f o r April 18, 1972. This hearing was continued f o r
the convenience of counsel involved. There i s no indication from the
record t h a t the hearing was continued f o r "not t o exceed 30 days."
On May 26, 1972, Judge Sorte assumed j u r i s d i c t i o n b u t i t was not
u n t i l July 28, 1972, t h a t he s e t the motion f o r hearing on September 8 , 1972.
From the time the motion was served u n t i l the motion was s e t f o r
hearing on September 8 , 1972, 163 days had elapsed. The order s e t t i n g the
hearing d a t e was vacated, and the matter was submitted on written b r i e f s .
On November 29, 1972 when the judgment was ordered s e t aside, 82 days had
passed from September 8 , 1972. A t o t a l of 245 days had elapsed from the
d a t e of the service of the motion u n t i l i t was ruled upon.
Under Rule 59(d), M.R.Civ.P., the maximum amount of time by which
the case could have been extended would have been 55 days from the d a t e of
the service of the motion.
In the recent decision of Cain v . Harrington, Mont. - 506
, P.2d
1375, 30 St.Rep. 245, 247, this Court s a i d :
"We believe t h e purpose of the r u l e [Rule 59(d), M.R.Civ.P.1
should be adhered t o and while we do not wish t o be tech-
n i c a l , a t t h e same time we cannot permit deviations."
I t i s not necessary t o discuss a t this time other provisions of
the r u l e which have been s e t out i n the b r i e f s .
The order of the d i s t r i c t court vacating t h e judgment of 1968 i s
reversed and the matter remanded t o the d i s t r i c t court f o r t h e purpose of
dismissing the p e t i t i o n of Veronic
W concur:
e
.
t ,
Justices
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