911 N.W.2d 319
N.D.2018Background
- Key Energy Services, LLC sued Ewing Construction Co., Inc. and others in North Dakota in January 2015 to invalidate construction liens and recover unpaid subcontractor amounts related to a Williston project.
- Ewing, a Texas corporation whose CEO is Bill Ewing, Jr., did not answer the complaint.
- The district court entered a default judgment against Ewing on June 24, 2016 for $951,191.62; Key served notice of entry of judgment on June 27, 2016.
- After attempts to enforce the judgment in Texas, Ewing moved under N.D.R.Civ.P. 60(b) (May 12, 2017) to vacate the default judgment, arguing insufficient service of process and excusable neglect.
- Key filed a corrected, notarized return of service identifying the documents served; the district court accepted the corrected return, found service sufficient, and denied the Rule 60(b) motion as untimely and failing to show excusable neglect.
- Ewing appealed; the North Dakota Supreme Court affirmed, holding service was proper (or properly amended) and the court did not abuse its discretion in denying relief from judgment.
Issues
| Issue | Plaintiff's Argument (Key) | Defendant's Argument (Ewing) | Held |
|---|---|---|---|
| Whether service of process was sufficient to confer personal jurisdiction | Service (as shown by the sheriff/constable return) was sufficient; corrected return should be considered | Original return was defective (not notarized, did not ID documents, illegible signature); thus service was improper | Court allowed/considered corrected return under rule permitting amendment and found service sufficient; jurisdiction proper |
| Whether the district court abused discretion in allowing amendment/consideration of corrected proof of service | Acceptance of corrected return was proper under N.D.R.Civ.P. 4(h) and precedent allowing amendment to reflect truth | Argued original defects barred jurisdiction and amendment should not be allowed | Court concluded amendment was permitted; district court did not abuse discretion in accepting corrected return |
| Whether Ewing established "mistake, inadvertence, surprise, or excusable neglect" to vacate default under N.D.R.Civ.P. 60(b)(1) | N/A (Key opposed relief) | Ewing submitted CEO affidavit claiming lost paperwork, mistaken belief no answer required until formal scheduling, expectation of bankruptcy stay, and reliance on other non-answering defendants | Court found affidavit insufficient, delay/timeliness problematic, and neglect not excusable; denied Rule 60(b) relief |
| Whether denial of Rule 60(b) motion was an abuse of discretion | Denial was proper; finality of judgment should stand absent exceptional circumstances | Denial was erroneous given potential defects in service and hardship of large judgment | Court held no abuse of discretion; affirmed denial and judgment |
Key Cases Cited
- Monster Heavy Haulers, LLC v. Goliath Energy Servs., LLC, 883 N.W.2d 917 (N.D. 2016) (sheriff’s return creates rebuttable presumption of proper service; standards for Rule 60(b) review)
- Mills v. Howland, 49 N.W. 413 (N.D. 1891) (courts should allow amendment of returns of service to make record reflect jurisdictional facts)
- Cahoon v. N.D. Workers Comp. Bureau, 482 N.W.2d 865 (N.D. 1992) (North Dakota follows and is guided by federal rules’ interpretations)
- US Bank Nat’l Ass’n v. Arnold, 631 N.W.2d 150 (N.D. 2001) (appellate standard: review for abuse of discretion on Rule 60(b) denials)
- Jongewaard v. Gesquire, 199 N.W. 585 (N.D. 1924) (amendment of sheriff’s return in interest of justice; make record speak the truth)