955 N.W.2d 82
N.D.2021Background
- AE2S Construction sued Hellervik Oilfield Technologies and Whiting for nonpayment related to construction of a mobile gas capture plant.
- Hellervik’s registered agent was served with the summons and complaint on September 9, 2019; Hellervik did not answer within the 21-day period.
- AE2S applied for and obtained a default judgment against Hellervik without serving Hellervik notice of the application for default judgment.
- Hellervik moved to vacate, arguing (1) pre-suit emails from its prior counsel to AE2S’s counsel constituted an appearance requiring notice under N.D.R.Civ.P. 55(a)(3), and (2) relief was warranted under N.D.R.Civ.P. 60(b)(1) and 60(b)(6).
- The district court denied the motion to vacate; Hellervik appealed and the Supreme Court affirmed the denial.
Issues
| Issue | Plaintiff's Argument (AE2S) | Defendant's Argument (Hellervik) | Held |
|---|---|---|---|
| Whether pre-suit communications by defendant’s counsel constituted an "appearance" under N.D.R.Civ.P. 55(a)(3) | No appearance occurred; no notice required for default application | Pre-suit emails from defendant’s counsel showed intent to contest and thus were an appearance requiring notice | Court held no appearance — emails did not show intent to contest the claims |
| Whether Rule 60(b)(1) excusable neglect (mistake/inadvertence) justified vacating default | Disregard of service is not excusable; defendant received proper service and failed to act | Defendant believed prior counsel would respond, so failure to answer was excusable neglect | Court held no abuse of discretion — belief counsel would respond is not excusable neglect |
| Whether Rule 60(b)(6) "any other reason" warrants relief (exceptional circumstances) | No exceptional circumstances; finality should stand | Informal appearance by counsel, lack of notice of default application, diligence in seeking relief justify vacatur | Court held no abuse of discretion — no appearance and no exceptional circumstances to disturb judgment |
Key Cases Cited
- State v. $33,000.00 U.S. Currency, 748 N.W.2d 420 (N.D. 2008) (an appearance must give notice of intent to contest and disregard of service is not excusable neglect)
- US Bank Nat’l Ass’n v. Arnold, 631 N.W.2d 150 (N.D. 2001) (party must factually demonstrate an appearance to obtain relief)
- Hatch v. Hatch, 484 N.W.2d 283 (N.D. 1992) (whether an appearance has been made is a question of law)
- Beaudoin v. South Texas Blood & Tissue Ctr., 699 N.W.2d 421 (N.D. 2005) (abuse of discretion standard and factors for Rule 60 analysis)
- Royal Indus., Inc. v. Haugen, 409 N.W.2d 636 (N.D. 1987) (failure to act after service does not constitute excusable neglect)