Northwest Truck & Trailer Sales, Inc. v. Dvorak

NO. 94-044
IN THE SUPREME COURT OF THE STATE OF MONTANA
1994
NORTHWEST TRUCK & TRAILER SALES,
INC., a Montana corporation,
Plaintiff and Appellant,
-v-
ROGER W. DVORAK and PATRICIA J.
DVORAK,
Defendants and Respondents.
APPEAL FROM: District Court of the Thirteenth Judicial District,
In and for the county of Yellowstone,
The Honorable Maurice Colberg, Jr., Judge presiding.
COUNSEL OF RECORD:
For Appellant:
Clifton W. Hayden, Stewart R. Kirkpatrick, Murphy &
Kirkpatrick, Billings, Montana
For Respondent:
Jack E. Sands, Billings, Montana
Submitted on Briefs: April 28, 1994
Decided: June 28, 1994
Filed:
Justice Fred J. Weber delivered the Opinion of the Court.
Plaintiff Northwest Truck & Trailer Sales, Inc. (Northwest)
appeals the order of the District Court of the Thirteenth Judicial
District, Yellowstone County, granting the motion of defendants
Roger W. Dvorak and Patricia J. Dvorak (the Woraks) for an
extension of time to file their notice of appeal. We affirm.
The sole issue for review is restated as follows:
Did the District Court err by granting the Woraks' motion to
extend the time for filing their appeal?
This appeal arises from the Woraks' failure to file their
notice of appeal from a judgment within the thirty days prescribed
by Rule 5(a)(l), M.R.App.P. Northwest sued for a deficiency
judgment stemming from the Woraks' breach of a contract to
purchase a 1987 Peterbilt truck. Judgment reflecting the jury
verdict and awarding the sum of $31,663.52 was entered in favor of
Northwest on October 20, 1993.
On November 22, 1993, a Monday, the Woraks filed their Notice
of Appeal appealing the judgment and hand-delivered the same to
Northwest's counsel. Unquestionably, this Notice of Appeal was
filed and served beyond the initial thirty-day period allowed by
Rule 5(a)(l), M.R.App.P. The thirty-day period for appeal ended on
the previous Friday, November 19, 1993. On November 23, 1993, the
Woraks' counsel filed a motion to extend the time to file their
notice of appeal, along with their counsel's affidavit stating the
reasons for late filing. Counsel for the Woraks further stated in
his affidavit that this constituted neglect and asked that it be
2
deemed excusable neglect.
After a hearing on the motion to extend the time for filing
the appeal, the District Court granted the Woraks' counsel's
motion on the basis of both good cause and excusable neglect. The
court noted that the question whether this constituted excusable
neglect was very close in this case, nonetheless concluding that
miscalendaring the appeal time constituted excusable neglect as
well as good cause, a lesser showing than excusable neglect.
Did the District Court err by granting the Woraks' motion to
extend the time for filing their appeal?
As a preliminary matter, the Woraks contend that this is not
an appealable order because it is not specifically set forth in
Rule 1, M.R.App.P. They have attempted to insert this as an issue
for the Court to consider, but have failed to properly raise the
issue in a cross-appeal. However, in Sadowsky v. City of Glendive
(1993) I 259 Mont. 419, 856 P.2d 556, we noted that a denial of a
motion for extension of time to file an appeal is also not listed
as an appealable order and, therefore, Rule 1, M.R.App.P., on its
face prohibited the appeal in that case, which we then proceeded to
address on the merits, stating as follows:
Because the denial of an extension of time to file a
notice of appeal is not simply a ministerial act, but is
a decision within the discretion of the district court,
we conclude that it would be unjust to deny the right of
appeal from such a decision. We therefore hold that the
denial of a . . . motion for an extension of the time
allowed for filing a notice of appeal is an appealable
order.
Sadowskv, 856 P.2d at 558. Rule 1, M.R.App.P., allows appeal "from
any special order made after final judgment." We conclude this is
3
such an order as was the order in Sadowskv.
We are presented with an issue of law which this Court has not
specifically addressed concerning the June 16, 1986 amendment to
Rule 5(a)(l), M.R.App.P. (1985). That amendment added the
additional standard of "good cause" for extending time for filing
a notice of appeal by an additional thirty days beyond the original
thirty-day limit. See Rule 5(c), M.R.App.P. Prior,to January 19,
1987, the effective date of that amendment, only a showing of
excusable neglect would permit an extension of time for filing an
appeal.
The 1986 amendment was patterned after similar changes in 1979
to Rule 4 of the Federal Rules of Appellate Procedure. Northwest
contends that this Court should follow the lead of the majority of
the federal circuit courts of appeal and interpret the rule to mean
that "good cause" only applies to motions made prior to the
expiration of the initial thirty-day period for filing a notice of
appeal. Northwest further argues that the "excusable neglect"
standard--a higher standard than good cause--applies to all motions
to extend the time for filing a notice of appeal which are filed
after the expiration of the initial thirty-day period.
Northwest relies on the Ninth Circuit decision in State of
Oregon v. Champion Int'l Corp. (9th Cir. 1982), 680 F.2d 1300,
1301, (quoting Advisory Committee Notes to 1979 Amendment to Rule
4(a) (5), Fed.R.App.P.), which states:
The good cause language was added to the Rule by a 1979
amendment because the excusable neglect standard "never
fit exactly the situation in which the appellant seeks an
extension before expiration of the initial time."
4
In oreson, the court applied the good cause standard only to
motions made during the initial thirty-day appeal period and the
excusable neglect standard only to motions filed after the initial
thirty-day period for appeal. We do not agree with the Ninth
Circuit that these motions are so limited in application.
Further, the Ninth Circuit decided another case within days of
the Oreo-on case which stated that a motion for an extension of
time, filed after the expiration of the original appeal time, could
be granted "only upon a showing of excusable neglect or good
cause," citing the same Rule 4(a)(5), Fed.R.App.P. & Sprout v.
Farmers Ins. Exch. (9th Cir. 1982), 681 F.2d 587, 588. Both cases
were decided by three-judge panels and Chief Judge Browning sided
with the majority in both cases, with no mention made of the Svrout
decision in Oreqon. See 16 Wright, Miller, Cooper & Gressman,
Federal Practice and Procedure: Jurisdiction 5 3950 (1977 and 1994
SuPPa) *
Not all federal circuit courts have agreed with the Oreoon
principle. In Scarpa v. Murphy (1st Cir. 1986), 782 F.2d 300, 301,
the court stated:
. . . We regard the Orecron court's statement that the
phrase "good cause" is applicable only when the motion is
filed before the time for filing the appeal has expired,
680 F.2d at 1310, as an unwarranted maiminc of the rule.
Plaintiff mistook the ground for his motion. The rule
expressly recognizes "good cause" as a basis for
extension both before and after the expiration of the
appeal time. There was no mistake by counsel, excusable
or otherwise. Rather, there was inexcusable neglect by
the Post Office to take more than five days . . . to
transmit an adequately addressed letter three miles, and
no basis for charging counsel for failing to think that
more might be needed. The court should have given the
motion a practical meaning, cf. Foman v. Davis, 371 U.S.
5178, 83 S. Ct. 227, 9 L. Ed. 2d 222 (1962), as including
VBgood cause," and should have found such.
Like the federal rule, the plain language of Rule 5(c), M.R.App.P.,
does not support Northwest's argument that we should adopt the
reasoning of the majority of federal courts which require a
separate standard before and after the expiration of the initial
thirty-day time for filing an appeal. We therefore decline to
adopt the rationale of those courts which restrict the application
of the good cause standard. We emphasize that Rule 5(c),
M.R.App.P., is clear on its face, providing that "The district
court, upon a showing of excusable neglect or good cause, may
extend the time for filing a notice of appeal upon motion filed not
later than the 30 days after the expiration of the time prescribed
by Rule 5(a)."
Moreover, this Court's former decisions have not so limited
the excusable neglect standard to motions filed after the initial
thirty-day period. In In Re the Marriage of Bahm (1987), 225 Mont.
331, 333, 732 P.2d 846, 847 (citing Zell v. Zell (1977), 172 Mont.
496, 565 P.2d 311), the Court noted that a motion for extension
based on excusable neglect may be filed before or after expiration
of the first thirty days. Northwest has provided no persuasive
argument for treating the good cause standard differently. In
fact, this Court has already applied the good cause standard in
Kizer v. Semitool, Inc. (1991), 251Mont. 199, 824 P.2d 229, a case
where the motion to extend the time for filing a notice of appeal
was filed after the initial thirty days expired. See also First
- -
Security Bank of Havre v. Harmon (1992), 255 Mont. 168, 841 P.2d
6521.
In Kizer, Semitool similarly had filed a motion to extend the
time for filing the notice of appeal one day after the initial
thirty-day period expired. The district court applied the good
cause standard to extend the time for filing a notice of appeal
after the expiration of the initial thirty-day period. Without
discussion, this Court held that Semitool's notice of appeal was
timely filed. Kizer, 824 P.2d at 231. We conclude the District
Court correctly followed prior case law interpreting Rule 5(c),
M.R.App.P. We further conclude that -I
Bahm Zell
-, First Securitv
Bank of Havre and Kizer support the better-reasoned view and
decline to overrule them.
We next address the District Court's findings that both good
cause and excusable neglect were present in this case. Rule 5(c),
M.R.App.P., gives the district courts discretion to extend the time
for filing a notice of appeal upon a finding of good cause or
excusable neglect. We therefore review these findings of the
District Court to determine whether the court has abused its
discretion.
Good cause is a more liberal standard than excusable neglect
and the addition of that standard to Rule 5(c), M.R.App.P., in 1986
was intended to provide greater flexibility to the district courts
in reviewing motions for extending the time for filing a notice of
appeal. Counsel for Dvoraks' affidavit included the following as
reasons to support a finding of excusable neglect:
. . .
7
3. The Dvoraks expressed their interest in filing this
appeal ever since the verdict was rendered. We
agreed that the Dvoraks would provide the costs of
the appeal in advance and that the appeal would be
filed when arrangements for the payment of costs
were made. I understood that this might mean I
would not file the appeal until near the end of the
period to appeal. I always understood that the
Dvoraks intended that the appeal be filed in a
timely manner.
4. I was served with the notice of entry of judgment
in this case late in the day on October 20, 1993.
The service was by hand.
5. I was very busy that day and just accepted the
notice without calendaring it at that time. I
calendared it the next day.
6. I incorrectly calendared the deadline for filing
the notice of appeal for November 22, 1993, for the
following reasons:
a. One day delay in calendaring resulted from the fact
that the notice was received late in the day.
b. The notice was hand-delivered rather than the [sic]
served by mail, which would give an additional
three days in which to file the appeal. I usually
receive notices by mail rather than by hand.
C. I inadvertently viewed 30 days as a month, which
would allow until November 22, 1993 to file the
notice of appeal.
. .
The District Court concluded as follows:
Here the Court concludes that the showing made by
defendants would constitute good cause to extend the time
for filing notice of appeal. Whether such showing is
sufficient under the excusable neglect standard is more
difficult. The Court recognizes that the federal cases
have interpreted excusable neglect strictly. Extensions
for excusable neglect are normally only granted in
exceptional cases where injustice would otherwise result.
It may be found when unpredictable events affect the
delivery of a notice of appeal such as uncontrollable
delays in delivery of mail and illness of counsel.
However mere ignorance of the law or the rules is not
considered to be excusable unless the failure has been
8
caused by a plausible misconstruction of the rules. The
burden is on the party demonstrating excusability. In
the federal cases excusable neglect will not be found
"when the failure to timely file an appeal is caused by
palpable oversight, administrative or clerical~ errors by
the attorney or the attorney's staff, an attorney's busy
schedule, or deliberate strategic decisions. . .I'. 9
Moore's Federal Practice 1 204.13 [l.-31 p. 4-107.
It would be difficult to excuse a mistake made by
reason of an addition of three days when service was not
accomplished by mailing but by personal service. Is it
an administrative or clerical error to count October as
a 31 day month instead of a 30 day month, and attempt to
excuse that neglect within the rules? Without question
it would be a very close case. The Court concludes in
this very close case that it will find such
miscalendaringto constitute excusable neglect as well as
good cause. The Court feels impelled to add that it is
difficult not to consider the fact that the notice of
appeal was only filed one business day late.
We agree with the District Court that this is a very close case.
In McCormick v. McCormick (1975), 168 Mont. 136, 139, 541 P.2d
765, 766, this Court discussed the excusable neglect standard,
noting that district courts should be permitted to extend time in
cases where injustice would otherwise result. In McCormick, the
Court restated the rule in Montana which is that each case must be
determined on its own facts and when the motion is promptly made
and is supported by a showing which leaves the court in doubt or on
which reasonable minds might reach differing conclusions, doubt
should be resolved in favor of the motion. McCormick, 541 P.2d at
767.
The Third Circuit in Consolidated Freightways Corp. of Del. v.
Larson (3rd Cir. 19871, 827 F.2d 916, 919, has stated that a
thoughtful analysis of the issue requires, at a minimum, that the
following factors be weighed and balanced: (1) whether the
9
inadvertence reflects professional incompetence such as ignorance
of the rules of procedure, (2) whether the asserted inadvertence
reflects an easily manufactured excuse incapable of verification by
the court, (3) whether the tardiness results from counsel's failure
to provide for a readily foreseeable consequence, (4) whether the
inadvertence reflects a complete lack of diligence, or (5) whether
the court is satisfied that the inadvertence resulted despite
counsel's substantial good faith efforts toward compliance.
A recent decision of the United States Supreme Court provides
further guidance concerning factors to consider in determining
excusable neglect. In Pioneer Inv. Services Co. v. Brunswick
Associates Ltd. Partnership (1993), _, U.S. -, 113 S. Ct. 1489,
1498, 123 L. Ed. 2d 74, 89-90, the Supreme Court stated that all
relevant factors should be considered, including the danger of
prejudice, length of delay and its potential impact on judicial
proceedings, reason for the delay and whether it was within the
reasonable control of the movant, and whether the movant acted in
good faith. Although Pioneer addressed excusable neglect in the
context of Rule 9006(b)(l), 11 U.S.C.A., of the Federal Rules of
Bankruptcy Procedure and not under the Federal Rules of Appellate
Procedure, the Supreme Court nonetheless granted certiorari based
on the conflict in the courts of appeals over the meaning of
excusable neglect in both bankruptcy cases and cases interpreting
Rule 4(a) (5) I Fed.R.App.P. Pioneer, 113 S.Ct. at 1494.
Accordingly, we conclude these are factors which may be properly
considered in assessing the facts on a case by case basis to
10
determine whether a motion for extension of time should be granted
to the movant.
The District Court was in a better position to assess the
credibility of the rationale provided by counsel for the Dvoraks in
support of the motion for extension of time to file the notice of
appeal, including the risk of prejudice, reason for and impact of
the delay, and the good faith of counsel for the Dvoraks. We
conclude the District Court did not abuse its discretion in finding
good cause and excusable neglect based on the unique facts of this
case.
We hold the District Court properly granted the Woraks'
motion to extend the time for filing their appeal based on good
cause and excusable neglect.
Affirmed.
We Concur: /
Justices
11
Justice James C. Nelson specially concurring:
I concur with the result reached by the Court in its opinion.
In doing so, I do not concur with all that is stated in the
opinion, however.
I would defer to the discretion exercised by the District
Court in its finding that Dvoraks' counsel demonstrated the lesser
standard of good cause under Rule 5(c), M.R.App.P. I submit,
however, that, as a practical matter and under the facts here, we
have now set the good cause standard so low as to nearly eliminate
the standard altogether.
I would not find that counsel's conduct met the higher
standard of excusable neglect. The Advisory Committee Notes to
Rule 5 indicate that the time for filing an appeal should be
extended for excusable neglect only I*. . . in extraordinary cases
where injustice would otherwise result." Advisory Committee Notes
to Original Rule 5, M.R.App.P., Annotations, MCA. This is simply
not such a case under any definition of that concept heretofore
utilized by this Court. In In Re the Marriage of Bahm (1987), 225
Mont. 331, 732 P.2d 846, we held that counsel's busy schedule did
not constitute excusable neglect: in McCormick v. McCormick (1975),
168 Mont. 136, 541 P.2d 765, we refused to find excusable neglect
because the appellant changed her mind about filing an appeal: in
Neuringer v. Wortman (1980) 186 Mont. 298, 607 P.2d 543, we did not
find excusable neglect justifying an extension of time in which to
file an appeal where the party knew that the case had been decided
against him and where he knew that he had thirty days in which to
wpeal, but failed to do so.
12
Without belaboring the point further, we have extensively
defined the parameters of excusable neglect in the context of
untimely motions under Rule 60(b) M.R.Civ.P. While this case does
not deal with a Rule 60(b) motion, the conduct on, which we have
found excusable neglect here is precisely the kind of conduct that
we have, for years, consistently rejected as not constituting
excusable neglect in other cases.
Given the nature of that conduct here, this case, apparently,
now stands for the proposition that there is really no difference
between the two standards of good cause and excusable neglect. It
begs the question of what, then, was accomplished by the addition
of the good cause standard to Rule 5(c) in 1986? Apparently, very
little.
Finally, I do not agree with the Court's discussion of
Sadowsky v. City of Glendive (1993), 259 Mont. 419, 856 P.2d 556.
In the first place, since there was no cross-appeal filed we should
not even consider or address the issue of whether the court's order
is appealable under Rule 1, M.R.App.P. See Silva v. City of
Columbia Falls (1993), 258 Mont. 329, 332-333, 852 P.2d 671, 674.
Worse, we then cite Sadowskv as authority for holding that the
court's order here is appealable. Sadowskv, involved the denial of
a motion for extension of time in which to file an appeal. In that
case we correctly held that the denial of a motion for extension of
time, while not an appealable order under Rule 1, M.R.App.P.,
nevertheless is appealable because such an order has the effect of
a final judgment and effectively and finally concludes the case and
13
the rights of the parties. Sadowskv, 856 P.2d at 558.
To the contrary, the order arantinq the extension of time in
this case does not have that effect. Such an order is
interlocutory, the case and rights of the parties are not finally
concluded and the appeal on the merits is preserved. If the party
against whom the order is issued so desires, he or she may cross-
appeal the granting of that order as a part of the appeal under
Rule 5(a)(3), M.R.App.P., (or, alternatively, the respondent may
file a motion to dismiss the appeal.) Rule 22, M.R.App.P. See,
also, 9 Moore's Federal Practice, § 204.12(4).
As we pointed out in Sadowskv,
. . . this court has reviewed instances in which district
courts have qranted extensions of time for filing a
notice of appeal. [case citations omitted]. In those
cases, however, the extensions of time were reviewable in
appeals of other, subseouent aunealable orders or
iudoments as "intermediate order[s] or decision[s]
excepted or objected to within the meaning of Rule 46 of
the Montana Rules of Civil Procedure, which involve the
merits, or necessarily affect the judgment[.]'* See Rule
2, M.R.App.P. (Emphasis added.)
Sadowskv, 856 P.2d at 558. That is not the situation here.
In gratuitously discussing Sadowsky and in ruling on an issue
on which we should not rule, we have ignored or misapplied
established precedent, and we have needlessly extended the right of
litigants to appeal interlocutory orders of the district court. I
cannot agree.
,.,. . .~ ,.,. _ . ~.~
J Jtistice
14
June 28, 1994
CERTIFICATE OF SERVICE
I hereby certify that the following certified order was sent by United States mail, prepaid, to the.
following named:
James P. Murphy & Stewart R. Kirkpatrick
MURPHY & KIRKPATRICK
2929 Third Avenue North
Billings, MT 59101
Jack E. Sands
Attorney at Law
100 North 27th St., #250
Billings, MT 59101
ED SMITH
CLERK OF THE SUPREME COURT
STATE OF MONTANA