AE2S Cоnstruction, LLC, Plaintiff and Appellee v. Hellervik Oilfield Technologies LLC d/b/a Hellervik RDO, Defendant and Appellant and Whiting Oil and Gas, Corporation, Defendant
No. 20200180
IN THE SUPREME COURT STATE OF NORTH DAKOTA
FEBRUARY 18, 2021
2021 ND 35
Appeal from the District Court of Williams County, Northwest Judicial District, the Honorable Jоshua B. Rustad, Judge.
AFFIRMED.
Opinion of the Court by VandeWalle, Justice.
Nicholas C. Grant, Dickinson, ND, for plaintiff and appellee.
Kasey D. McNary, Fargo, ND, for defendant and appellant.
AE2S Construction v. Hellervik Oilfield Technologies, et al.
VandeWalle, Justice.
[¶1] Hellervik Oilfield Technologies LLC (“Hellervik“) appealed from an order denying its motion to vacate thе default judgment. Hellervik argues the district court erred by concluding it did not make an appearance for purposes of
I
[¶2] AE2S Construction, LLC (“AE2S“) sued Hellervik and Whiting Oil and Gas, Corporation, for nonpayment of its labor, materials, and services in the construction of a mobile gas capture plant in western North Dakota. Hellervik‘s registered agent, Gary Minard, received the summons and complaint on September 9, 2019. Hellervik concedes it was propеrly served. Hellervik did not answer or otherwise respond to the complaint within twenty-one days, as required by
[¶3] In November 2019, Hellervik moved to vacate the judgment, arguing, in part, AE2S was required to serve notice of the application for default judgment on it beсause it made an appearance through counsel. Prior to suit, in June and July 2019, AE2S‘s attorney corresponded with Hellervik‘s attorney via email. Hellervik argued this correspondence constituted an appearance. After a hearing, the district court denied Hellervik‘s motion to vacate the default judgment.
II
[¶4] Hellervik argues the district court erred by concluding it did not make an appearance for purposes of
[¶5]
[¶6] Hellervik contends it appeared through its pre-suit attorney Michael Raum in either June or July of 2019, when Raum corresponded with AE2S‘s attorney Randall Sickler. For support, Hellervik relies on an email chain between Raum аnd Sickler. That email chain shows that in June 2019, Sickler, following up on a prior conversation, emailed Raum two lien statements, which Hellervik alleges included a copy of AE2S‘s well construction lien that it recorded against the well site. On July 11, 2019, Sickler emailed Raum requesting “an update on this matter,” as he was receiving “pressure to commence a foreclosure action.” Raum replied the next day, July 12, 2019, stating: “We will not be handling this. We had a conflict we missed
[¶7] The corresрondence between Raum and Sickler occurred approximately two months before commencement of the lawsuit. Hellervik has not cited any North Dakota case law where the alleged appeаrance occurred prior to the commencement of the lawsuit. See $33,000.00 U.S. Currency, 2008 ND 96, ¶ 10 (“Case law in North Dakota defines appearance broadly, but even so, the appearance must take place in the context of the proceeding at issue[.]“).
[¶8] Hellervik cites a case from the Court of Appeals of Washington for the proposition that an informal appearance may occur prior to suit and still require notice of a request for default judgment. See Ellison v. Process Sys. Inc. Const. Co., 50 P.3d 658 (Wash. Ct. App. 2002). The court noted, “the issue should not turn on when the acts occurred, but on whether the acts sufficiently communicated [the defendant‘s] intention to defend the lawsuit.” Id. at 661. The Court of Appeals of Washington affirmed the lower court‘s vacation of the default judgment, and held it did not abuse its discretion in concluding the defendant‘s two pre-suit letters sufficiently communicated its intent to defend the plaintiff‘s claim, constituting an informal appearance. Id. at 661-62.
[¶9] We need not decide whether pre-suit communications may qualify as an appearance, because the emails here were not sufficient to give Sickler or AE2S notice of Hellervik‘s intent tо contest AE2S‘s claims. See $33,000.00 U.S. Currency, 2008 ND 96, ¶ 9. Raum‘s July 12, 2019 email informed Sickler that his law firm had a conflict of interest and he had referred Hellervik to another attorney or firm. Raum also offered to keep an open line of communicatiоn between Hellervik and AE2S. The email does not inform AE2S that Hellervik intended to contest the claims, or potential claims, against it. Thus, the district court did not err in concluding Hellervik did not appear for purposes of
III
[¶10] Hellervik arguеs the district court erred by denying its
reasonable determination. Id. An abuse of discretion is never assumed and must be affirmatively established, and this Court will not overturn a court‘s decision merely because it is not the one it would have made had it been deciding the motion. Bickler, at ¶ 12.
A
[¶11] Hellervik contends the district court abused its discretion in denying its motion to vacate under
[¶12] In $33,000.00 U.S. Currency, the State brought a civil forfeiture action arising out of law enforcement‘s seizure of cash in a criminal matter. 2008 ND 96, ¶ 2. The summons and complaint were properly served upon the owner of the currency. Id. The State did not serve the summons and complaint upon the attorney the State knew to be representing the owner in the criminal matter. Id. The owner did not respond to the complaint, and the State applied for default judgment. Id. Neither the owner nor his criminal defense attorney were served with the State‘s affidavit alleging default. Id. The district court granted the application, and default judgment was entered. Id. The owner moved to vacate the default judgment, and the court denied the motion. Id. at ¶¶ 3-4. On appeal, the owner argued “because he is only semi-literate and he had retained and was relying upon his counsel for the underlying criminal matter, his failure to read and respond to the complaint constitutes excusable neglect, inadvertence, or mistake.” Id. at ¶ 13. The owner “assumed if any papers were served involving [him] then his attorney would receive them and take care of all matters.” Id. This Court affirmed the district court, concluding, “The fact that [the owner] ignored the summons and complaint, properly served upon him, does not constitute excusable neglect, inadvertence, mistаke, or surprise under
[¶13] In July 2019, Raum emailed Sickler that his law firm, Fredrikson & Byron, had a conflict of interest and he “referred the client [Hellervik] out.” Hellervik‘s registered agent, Gary Minard, acknowledged in an affidavit that “[a]t some point [he] was informed Fredrikson & Byron had a conflict of interest for representation of Hellervik against AE2S.” In September 2019, Hellervik was served the summоns and complaint, but it did not answer or otherwise respond to the complaint. Hellervik argues it mistakenly believed Raum would respond to the complaint on its behalf. Specifically, Minard testified that he “believed such matters would be handled by counsel.” The relevant facts in this case are substantially similar to $33,000.00 U.S. Currency, and the issue is the same. Thus, we conclude Hellervik‘s disregard of service of process does not constitute mistake, inadvertence, or excusable neglect under
[¶14] Hellervik asserts $33,000.00 U.S. Currency is different because in that case counsel was retained solely for representation in the criminal matter, not the civil forfeiture, and there was no indication of a long-standing attorney-client relationship, which Hellervik alleges existed here. These distinctions are immaterial to our analysis. In $33,000.00 U.S. Currency, the Court‘s discussion focused on the owner‘s inaction, namely the owner disregarding service of process, but also his failure to rеview the summons and complaint, immediately seek the advice of counsel, and timely submit the documents to his attorney for review. 2008 ND 96, ¶ 14. The case the Court relied upon for support in $33,000.00 U.S. Currency similarly analyzed the defaulting party‘s failure to act. See id. (citing Royal Indus., Inc. v. Haugen, 409 N.W.2d 636, 638 (N.D. 1987)) (stating the defaulting party “completely disregarded service of process, without seeking legal advice, based upon a mere assumption that the matter would be handled in bankruptcy court and that the court would not allow entry of judgment against him personally“).
[¶15] Accordingly, the district court did not abuse its discretion in denying Hellervik‘s motion to vacate under
B
[¶16] Hellervik also moved to vacate the judgment under
[¶17] Hellervik argues that under the liberal construction and application of
[¶18] As discussed above, because neither Hellervik nor its counsel made an appearance, Hellervik was not entitled to notice of AE2S‘s application for default judgment. See
IV
[¶19] We affirm the district court‘s order denying Hellervik‘s motion to vacate the default judgment.
[¶20] Jon J. Jensen, C.J.
Gerald W. VandeWalle
Daniel J. Crothers
Lisa Fair McEvers
Jerod E. Tufte