Jerry Wayne COLE, Respondent, v. Alexander Allen WUTZKE, Appellant.
No. A15-0060.
Supreme Court of Minnesota.
Aug. 31, 2016.
884 N.W.2d 634
Paula Duggan Vraa, Stephanie L. Chandler, Larson • King, LLP, Saint Paul, MN, for appellant.
Charles F. Webber, Faegre Baker Daniels LLP, Minneapolis, MN; and Daniel J.
OPINION
GILDEA, Chief Justice.
The question presented in this case is whether counsel‘s mistake about the applicability of a procedural rule is sufficient, by itself, to dеny relief under
This case arises from an automobile collision that occurred on April 25, 2012, involving Cole and Wutzke. On June 5, 2013, Cole commenced the present suit against Wutzke by service of a summons and complaint. See
On July 23, 2014, Cole transmitted the summons, complaint, and affidavit of service to the district court. The court administrator accepted the filing on July 25, 2014. On August 13, 2014, Wutzke filed his answer and a motion to dismiss, citing Cole‘s failure to file by July 1, 2014, as required by Rule 5.04(a). On August 29, 2014, Cole countered with a Rule 60.02(a) motion to vacate, recognizing that Wutzke‘s motion “st[ood] to be automatically granted by the Court with no opportunity for Plaintiff to be heard.” The court scheduled a joint hearing on the motions for November 26, 2014.1
At the hearing, Cole argued that his counsel‘s neglect was “excusable” because the online versiоn of the rules, on which his counsel relied, did not state that Rule 5.04(a) applied to actions pending before its effective date. Cole contends that because the mistake was solely counsel‘s, Cole should not be made to suffer thе ultimate consequence of dismissal, especially because the case was progressing.
The district court dismissed the action and denied Cole‘s motion to vacate. The court concluded that Rule 5.04(a) mandat-
The court of appeals reversed and remanded, concluding that thе district court abused its discretion by denying Cole‘s motion to vacate. Cole, 868 N.W.2d at 930. Specifically, the court of appeals rejected the district court‘s excusable-neglect analysis, reasoning that Minnesota courts have long relievеd unwitting clients, such as Cole, of the consequences of their attorney‘s unilateral errors. Id. at 929. Accordingly, the court of appeals held that Cole was entitled to relief under Rule 60.02 and remanded for further proceedings on the merits of the claims Cole alleged in his complaint. Id. at 930. We granted Wutzke‘s petition for review.
I.
Wutzke argues on appeal that the district court did not abuse its discretion in concluding that “ignorance of the law” cannot constitute “excusable neglect” under Rule 60.02(a). The decision whether relief is warranted under Rule 60.02 is committed to the sound discretion of the district court and is based upon all the surrounding circumstances of each case. Gams, 884 N.W.2d at 619-20. We will reverse the decision of a district court only when there has been a clеar abuse of discretion. Id.
Rule 60.02(a) provides relief from a “final judgment ..., order, or proceeding” for, among other reasons, “excusable neglect.”2 We have long stated that relief should be granted where the movant affirmatively satisfies four requirements: (1) a “reasonable defense on the merits” or, as relevant here, a “debatably meritorious claim“; (2) a reasonable excuse for his or her failure or neglect to act; (3) that he or she “‘acted with due diligencе‘” after learning of the error or omission; and (4) that “‘no substantial prejudice will result to the other party.‘” Charson v. Temple Israel, 419 N.W.2d 488, 491-92 (Minn. 1988) (quoting Finden, 268 Minn. at 271, 128 N.W.2d at 750). Although some showings may be stronger than others, see Taylor v. Steinke, 295 Minn. 244, 246, 203 N.W.2d 859, 860 (1973), the moving party must establish all four requirements for relief to be warranted. Gams, 884 N.W.2d at 619-20. If the district court, in its sound discretion, determines that the movant has satisfiеd these four requirements, relief should be granted. Finden, 268 Minn. at 271, 128 N.W.2d at 750; see also Charson, 419 N.W.2d at 492 (holding that the district court abused its discretion by denying relief under Rule 60.02(a) when a movant had “met the burden of clearly demonstrating the existence of the four elements of the Finden analysis“).
At the threshold, Wutzke asserts thаt Rule 5.04(a) is akin to a statute of limitations, and that we should alter our consideration of the Finden requirements accordingly for this appeal. Specifically, Wutzke argues that we should narrowly construe the factors with his expectation of “finality” in mind. We disagree.
We have recognized that there is a meaningful distinction “between non-jurisdictional procedural rules designed for the orderly transaction of business and juris-
Under the Finden analysis, a debatably meritorious claim is one that, if established at trial, prеsents a cognizable claim for relief. See Finden, 268 Minn. at 271, 128 N.W.2d at 750 (explaining that self-defense is a “reasonable defense” because, “if it is established,” it is a complete defense on the merits). To satisfy this factor, the movant generally must provide “specific information” that clearly demonstrates the existence of the debatably meritorious claim.3 Charson, 419 N.W.2d at 492. Conclusory allegations in moving papers are ordinarily insufficient. Id. at 491; In re Welfare of Children of Coats, 633 N.W.2d 505, 511 (Minn.2001) (reasoning that the district court properly concluded thаt the movant‘s proffered defense was deficient because it was supported “by no more than conclusory statements“).
As to “reasonable excuse,” we have long said that mistakes of law, as well as mistakes of fact, “may afford ground[s] for relief.” E.g., Baxter v. Chute, 50 Minn. 164, 166, 52 N.W. 379, 380 (1892). Additionally, our case law generally “reflects a strong policy favoring the granting of relief when judgment is entered through no fault of the client.” Nguyen v. State Farm Mut. Auto. Ins. Co., 558 N.W.2d 487, 491 (Minn.1997). More specifically, we have held that “even in those cases where a court has held the neglect of a client‘s attorney to be inexcusable, if such neglect has been purely that of counsel, ordinarily courts are loath to ‘punish’ the innocent client for the counsel‘s neglect.” Charson, 419 N.W.2d at 491.4
We have cautioned, however, that not “all mistakes, whether of fact or of law, and whether committed by a party to an action or by his attorney, are ... subject to relief.” Baxter, 50 Minn. at 167, 52 N.W. at 380. Indeed, the right to vacatur is “not absolute“; rather, it is a matter “largely within the discretion of the trial court.” E.g., Kosloski v. Jones, 295 Minn. 177, 180, 203 N.W.2d 401, 403 (1973). As
Next, “due diligence” is assessed from the time that the movant learns of his or her error or omission. See, e.g., Nguyen, 558 N.W.2d at 491 (“Defendant acted with diligence upon learning of the oversight.“); Charson moved with ‘due diligence’ after receiving notice of the dismissal.”; Conley v. Downing, 321 N.W.2d 36, 41 (Minn. 1982) (“[Client] hired another attorney a short time after discovering that nothing had been done and that judgment had been entered against her.“); Coller v. Guardian Angels Roman Catholic Church of Chaska, 294 N.W.2d 712, 715 (Minn. 1980) (“[D]efendants’ attorney acted with due diligence once he became aware of his failure to serve an answer.“).
Finally, we have stated that prejudice to the other party “‘should not be presumed nor inferred from the mere fact оf delay‘“; instead, there must be some “‘particular prejudice of such a character that some substantial right or advantage will be lost or endangered‘” if relief is granted. Beal v. Reinertson, 298 Minn. 542, 544, 215 N.W.2d 57, 58 (1974) (quoting Firoved v. Gen. Motors Corp., 277 Minn. 278, 283-84, 152 N.W.2d 364, 368 (1967)); see also Finden, 268 Minn. at 272, 128 N.W.2d at 751 (noting that mere delay and added expense do not constitutе substantial prejudice). Accordingly, the movant bears the burden of demonstrating that the delay resulting from his or her error or omission has not resulted in a real and particular harm to the other party, such as the loss of witnesses or evidence, and that the other party has not otherwise detrimentally relied on the resulting dismissal or judgment. Nelson v. Siebert, 428 N.W.2d 394, 395 (Minn.1988) (reiterating that the burden remains on the movant to establish that no substantial prejudice will result to the other party if relief is granted).
Based on the foregoing, we conclude that the district court abused its discretion by failing to properly apply the Finden test in this case. In its order, the district court made findings only on the reasonable-excuse requirement, concluding that it could not “find that ignorance of the law constitutes excusable neglect.” The district court‘s apparent reliance on this per se rule, in conjunction with its failure to consider the other factors in light of the particular facts of the case, was an abuse оf discretion. See Charson, 419 N.W.2d at 491 (concluding that the district court failed to properly employ the Finden analysis because its ruling considered only the reasonableness of Charson‘s excuse). Accordingly, we hold that the district court abused its discretion in fаiling to consider all four Finden requirements, in light of the surrounding circumstances of the case, and remand for reconsideration of its Rule 60.02(a) ruling in light of this opinion.
Affirmed as modified.