Ferdinand Leo GAMS, Jr., Respondent/Cross-Appellant, v. Steven Ronald HOUGHTON, Appellant/Cross-Respondent.
No. A14-1747.
Supreme Court of Minnesota.
Aug. 31, 2016.
884 N.W.2d 611
III.
For the foregoing reasons, we affirm the decision of the court of appeals.
Affirmed as modified.
CHUTICH, J., not having been a member of this court at the time of submission, took no part in the consideration or decision of this case.
Jerome D. Feriancek, Ryan C. Stutzman, Thibodeau, Johnson & Feriancek, PLLP, Duluth, MN, for appellant/cross-respondent.
OPINION
GILDEA, Chief Justice.
In this case, we are asked to decide whether
On February 4, 2013, we filed an order adopting amendments to Rule 5.04, inсluding Rule 5.04(a), the amendment now at issue.2 Order Adopting Amendments to the Rules of Civil Procedure and General Rules of Practice Relating to the Civil Justice Reform Task Force, Nos. ADM10-8051, ADM09-8009, ADM04-8001 (Minn. filed Feb. 4, 2013) (“Order Adopting Amendments“). This amendment altered a long-standing Minnesota practice that permitted a party to commence an action simply by service of the summons upon the defendant. Filing the case with the district court was not required. Rule 5.04(a) amended this practice by requiring that all non-family cаses be filed with the district court, or a stipulation obtained extending the time for filing, within 1 year from the commencement of the action. Rule 5.04(a) was effective as of July 1, 2013 and applies to “all actions or proceedings pending on or commenced on or after the effective date.” Id. But for actions pending when the amendment became effective, we provided a 1-year grace period. In other words, parties with pending actions had 1 year to filе such actions in district court. Our Order makes this grace period clear: “(a) No action shall be involuntarily dismissed pursuant to
This case was pending when Rule 5.04(a) went into effect. The case arises from a physical altercation that occurred on January 14, 2012, between Gams and appellant Steven Ronald Houghton, who are brothers-in-law. On March 22, 2013, Gams commenced the present action against Houghton by service of a summons and complaint. See
From April 2013 through February 2014, the parties actively litigated this casе, exchanging various discovery requests and responses. In May 2014, Gams and Houghton discussed the possibility of mediation or arbitration of liability, and reached a tentative stipulation on damages in the amount of $85,000. On July 17, 2014, Gams‘s counsel sent a follow-up letter asking whether Houghton had made any further decisions regarding resolution of the matter. A short time later, Gams‘s counsel received a letter dated July 15, 2014, stating: “The new Rule 5.04 took effect July 1, 2014. Therefore, the case is deemed to be dismissed with prejudice, and we consider the matter closed.” Gams‘s counsel stated that he was “unaware” of the amendment.
On August 6, 2014, Gams mailed the summons, complaint, and affidavit of service to the district court. The court accepted the filing on August 7. That same day, the court sua sponte ordered the dismissal of the action with prejudice pursuant to Rule 5.04(a). The court administrator entered the judgment of dismissal the following day.
On August 27, 2014, Gams moved to vacate the judgment, contending that Rule 5.04(a) violated his right to procedural due process and, in the alternative, that relief was warranted under Rule 60.02(a) due to “excusable neglect.” More specifically, Gams argued that his neglect in failing to comply with Rule 5.04(a) was excusable because he reasonably relied on his attorney, and in addition the parties were actively litigating the case and were rapidly moving toward a possible settlement.
The district court denied Gams‘s motion to vacate, concluding that ”
The court of appeals reversed and remanded. Gams, 869 N.W.2d at 61. Specifically, the court of appeals concluded that Rule 60.02 applies to dismissals under Rule 5.04(a), reasoning that “[n]othing in the plain language of either rule precludes a party from seeking relief.” Id. at 63. Having concluded that Rule 60.02 applies, the court of appeals remanded. Id. at 65-66. According to the cоurt of appeals, the district court operated under the erroneous assumption that a party seeking relief under Rule 60.02 must satisfy all four Finden requirements and, because the district court failed to make express findings on each of the requirements, further consideration under the appropriate test was necessary. Id. at 64-66.
We granted Houghton‘s petition for review to address whether Rule 60.02 is applicable to a dismissal under Rule 5.04(a) and, if so, whether the district court abused its discretion in denying relief. We additionally granted Gams‘s request for conditional cross-review regarding the constitutionality of Rule 5.04(a).
I.
We turn first to Houghton‘s assertion that Rule 60.02 is inapplicable to a
Gams subsequently moved for relief under
Houghton argues on appeal that the plain language of Rule 5.04(a) precludes a district cоurt from granting relief under Rule 60.02. The interpretation of the Minnesota Rules of Civil Procedure is a question of law that we review de novo. Madson v. Minn. Mining & Mfg. Co., 612 N.W.2d 168, 170 (Minn.2000). When interpreting court rules, we look “first to the plain language.” Walsh v. U.S. Bank, N.A., 851 N.W.2d 598, 601 (Minn.2014). We interpret the words of a court rule “‘in the sense in which they were understood and intended at the time the rule was promulgated.‘” Nguyen v. State Farm Mut. Auto. Ins. Co., 558 N.W.2d 487, 490 (Minn.1997) (quoting House v. Hanson, 245 Minn. 466, 473, 72 N.W.2d 874, 878 (1955)). If the language of a rule is plain and unambiguous, we follow the rule‘s plain language. Walsh, 851 N.W.2d at 601. A rule is ambiguous only if the language of the rule is subject to more than one reasonаble interpretation. Id.
The plain language of the rules confirms that Rule 60.02 applies to dismissals under Rule 5.04(a). Rule 60.02 is broad, stating that it applies to “final judgment[s] . . . order[s] [and] proceeding[s],” except for “marriage dissolution decree[s].” That the rule contains only one exception—for marriage dissolution decrees—confirms that the rule otherwise applies. In other words, because Rule 60.02 expressly excludes “marriage dissolution decree[s],” but not dismissals under Rule 5.04(a), Rule 60.02 applies to Rule 5.04(a) dismissals. See City of Saint Paul v. Eldredge, 800 N.W.2d 643, 648 (Minn.2011) (noting that this court has long applied the maxim that when there is an express enumeration of the persons or things to be affected by a particular provision, “there is an implied exclusion of others” (quoting Maytag Co. v. Comm‘r of Taxation, 218 Minn. 460, 463, 17 N.W.2d 37, 40 (1944))).
Gams sought relief from an “order” that the district court entered on August 8, 2014. In particular, following Gams‘s untimely filing of the action, the district court sua sponte ordered dismissal of the action with prejudice and, the next day, the court administrator entered a judgment of dis-
Houghton contends, however, that the plain language of Rule 5.04(a) supports the conclusion that Rule 60.02 is inapplicable to dismissаls under Rule 5.04(a). Specifically, he argues that the use of the word “deemed” was intended by our court to dismiss the late-filed action “by operation of law,” foreclosing the need—and possibility—for the district court to take any action that is amenable to Rule 60.02 relief. Put another way, Houghton contends that a “deemed” dismissal is not and cannot be a “final judgment, order, or proceeding” from which relief can be granted under Rule 60.02.
We agree that the defendant does not nеed to take any action for Rule 5.04(a) to operate and that a case is automatically “deemed”4 dismissed with prejudice upon failure to file, or obtain a stipulation, within the 1-year deadline in the rule. We do not agree, however, that Rule 5.04(a) thereafter precludes the district court from taking action, such as the action that occurred here, in the event a party files a case with the court after the deadline has expired. In this case, the district court entered an order dismissing the action, which as noted above, falls within the scope of Rule 60.02. But even in the absence of an order, a dismissal by operation of law under Rule 5.04(a) would still be a “proceeding” and so would fall within the coverage of Rule 60.02. See State v. Hohenwald, 815 N.W.2d 823, 830 (Minn.2012) (“The word ‘proceedings’ generally refers to ‘the course of procedure in a judicial action or in a suit in litigation‘“). In short, although judicial action is not needed for the dismissal in Rule 5.04(a) to occur, the rule does not foreclose judicial action following a belated filing and the absence of judicial action does not make Rule 60.02 inapplicable.5
Based on the plain language of the rules, we hold that Rule 60.02 is applicable to a
II.
We turn next to Gams‘s contention, raised in his petition for cross-review, that Rule 5.04(a) violates his right to proсedural due process. Whether procedural due process has been violated is a question of law that we review de novo. Rew v. Bergstrom, 845 N.W.2d 764, 785 (Minn.2014).
Both the United States and the Minnesota Constitutions provide that no person shall be deprived of life, liberty, or property without due process of law.
We traditionally conduct a two-step analysis to determine whether the government has violated an individual‘s procedural due process rights. Rew, 845 N.W.2d at 785. We first consider whether the government has deprived an individual of life, liberty, or property. Id. If no such interest is at stake, then no process is requirеd. Id. If such an interest is at stake, we then assess whether the process afforded by the government was constitutionally sufficient. Id.
As for the first step in the analysis, there is no question that Gams had a well-established property interest in his cause of action. E.g., Logan v. Zimmerman Brush Co., 455 U.S. 422, 428, 102 S.Ct. 1148, 71 L.Ed.2d 265 (1982). Turning to the second step, we conclude that Gams received notice and process sufficient to satisfy constitutional requirements. He received constitutionally sufficient notice of the potential for dismissal under Rule 5.04(a), wеll in advance of any consequences. This case, therefore, is similar to Texaco, Inc. v. Short, 454 U.S. 516, 102 S.Ct. 781, 70 L.Ed.2d 738 (1982). In that case, the Supreme Court considered whether the legislation at issue—which, by operation of law, automatically reverted mineral rights back to the surface-rights owners in the event the mineral owner failed to file a timely claim—comported with the notice requirements of due process. Id. at 531, 102 S.Ct. 781. The plaintiffs argued that the Indiana Legislature failed to provide them adequate notice of the new law because they had not been specifically notified of the change. Id. at 519, 531, 102 S.Ct. 781. The Court disagreed, explaining that “a legislature need do nothing more than enact and publish the law, and afford the citizenry a reasonable opportunity to familiarize itself with its terms and to comply.” Id. at 532, 102 S.Ct. 781. According to the Court, the 2-year grace period provided by the Indiana Legislature “foreclose[d] any argument” regarding the adequacy of the opportunity to leаrn of the statute. Id.
Here, we provided a 1-year grace period for the bench and bar to learn of Rule
Not only was Gams on notice of the consequences for failing to file his complaint, but he also received post-deprivation process under Rule 60.02. That process is constitutionally sufficient here. See generally Rew, 845 N.W.2d at 786 (citing Mathews v. Eldridge, 424 U.S. 319, 335, 96 S.Ct. 893, 47 L.Ed.2d 18 (1976)) (setting out the balancing test used to assess a procedural due process claim). The Rule 5.04(a) dismissal unquestionably affected Gams‘s interest in a remedy against Houghton. But any risk of an “erroneous deprivation” of that interest can be assessed in the Rule 60.02 proceeding, when the district court can determine, for example, whether the dismissal resulted from a “[m]istake,”
In sum, bеcause Gams had notice of the consequences of his failure to adhere to Rule 5.04(a)‘s filing requirement and an opportunity to seek relief from the Rule 5.04(a) dismissal under Rule 60.02, we hold that Gams‘s due process argument fails.7
III.
We turn finally to Houghton‘s contention that we should reverse the court of appeals decision to remand and instead conclude, as a matter of law, that the district court did not abuse its discretion by denying relief under Rule 60.02. Specifically, Houghton contends that the district court properly concluded that Gams failed to establish “excusable neglect” under Rule 60.02(a), because Gams did not and cannot establish all four Finden requirements.
We agree with Houghton that the district court must consider, and expressly find that a party satisfied, “[a]ll four of the Finden factors . . . in order to” grant relief under Rule 60.02(a). Nguyen, 558 N.W.2d at 490; see also In re Welfare of Children of Coats, 633 N.W.2d 505, 510 (Minn.2001) (same); Pedersen v. Daly, 163 Minn. 163, 165, 238 N.W.2d 620, 622 (1976)
Notwithstanding this error, we nevertheless agree with the court of appeals’ determination thаt the district court fell short in its analysis. The decision whether to grant Rule 60.02 relief is based on all the surrounding facts of each specific case, and is committed to the sound discretion of the district court. E.g., Roehrdanz v. Brill, 682 N.W.2d 626, 632 (Minn.2004) (affirming the district court‘s denial of relief because the district court “made findings of fact based upon conflicting evidence [as to whether there was a reasonable excuse] and applied the correct Finden analysis to those findings“); Standard Oil Co. v. King, 238 Minn. 81, 83, 55 N.W.2d 710, 712 (1952) (explaining that it is for the district cоurt to determine if the movant‘s excuse was true and reasonable under the circumstances). As such, a district court “will not be reversed on appeal except for a clear abuse of discretion.” King, 238 Minn. at 82, 55 N.W.2d at 712; see also Nelson v. Siebert, 428 N.W.2d 394, 395 (Minn.1988) (explaining that “appellate inquiry is limited” to abuse of discretion review). This is so because the district court is in the best position to “evaluate the reasonableness of the excuse, the prejudice to the other party, and whether the party has a reаsonable” claim or defense. In re J.R., Jr., 655 N.W.2d 1, 4 n. 3 (Minn.2003); see also Flaherty v. Allstate Ins. Co., 822 A.2d 1159, 1163 (Me.2003) (“‘We give a trial court‘s determination of excusable neglect considerable deference because of its superior position to evaluate the credibility and good faith of the parties before it.‘” (citation omitted)). Accordingly, we have stated that a district court‘s discretion is “particularly broad” when its decision is based upon an evaluation of conflicting affidavits or other evidence. Roehrdanz, 682 N.W.2d at 631-32; see also King, 238 Minn. at 82, 55 N.W.2d at 712 (same). For these samе reasons, we have expressed “serious doubts” as to the utility of undertaking a Rule 60.02 analysis at the appellate level. In re J.R., Jr., 655 N.W.2d at 4 n. 3.
A district court‘s discretion under Rule 60.02, however, is not without limit. A district court abuses its discretion when it acts under a “misapprehension of the law,” Sommers v. Thomas, 251 Minn. 461, 469, 88 N.W.2d 191, 197 (1958), or when its factual findings are “clearly erroneous,” Roehrdanz, 682 N.W.2d at 631. Moreover, we have held that a district court abuses its discretion when a movant has met the burden of “clearly demonstrating the existence of the four elements of the Finden analysis,” and the court nevertheless denies relief. Charson, 419 N.W.2d at 492. In short, although the district court has broad discretion in assessing whether the four Finden requirements have been met under the particular facts and evidence presented, it does not have unfettered discretion to deny relief when the movant has met his burden of establishing all four Finden requirements.
With this in mind, we turn to the district court‘s analysis here. In this case, the
Affirmed as modified.