JAS, inc
v
INDYMAC BANK, F.S.B.; CHARLES J. PETERSON,
ESQ.; COUNTRYWIDE HOME LOANS, INC.; LSI
RECORDING DEPARTMENT; NATIONAL TITLE
CLEARING; ONEWEST BANK, FSB; FIRST AMERICAN
TITLE COMPANY OF MONTANA, INC.; MACKOFF
KELLOGG LAW FIRM; MORTGAGE ELECTRONIC
REGISTRATION SYSTEMS, INC.; et al
... ruled that MERS and Bank of America, and Countrywide, who had no real excuse for not making the required deadlines in the foreclosure and quiet title action, were somehow excused for being tardy, and the default judgment against them was dismissed. Yes, I am saying that the banksters got more than a second bite of the apple, they were given the Golden Ticket that the rest of us warriors only dream of.
MERS argument was that ' Oh gosh, we didn't know we didn't have a lawyer, so gosh we missed this case,' - they were too busy with the other million foreclosure cases.
Oh what a tangled web MERS did weave, and this case explores another angle of who owns the debt, wheres the note, who's on first?
Do you think that would work for the rest of us homeowners? Whoops, I missed the notice in the paper, and then six months later- you get the house back? No, of course not. In my opinion, this case is a disgrace to homeowners and foreclosure fighters around the country.
DA 13-0458
IN THE SUPREME COURT OF THE STATE OF MONTANA
2014 MT 77
JAS, INC.,
Plaintiff and Appellant,
v.
RICHARD D. EISELE; LAURIE EISELE; INDYMAC
BANK, F.S.B./DOCUMENT MANAGEMENT;
INDYMAC BANK, F.S.B.; CHARLES J. PETERSON,
ESQ.; COUNTRYWIDE HOME LOANS, INC.; LSI
RECORDING DEPARTMENT; NATIONAL TITLE
CLEARING; ONEWEST BANK, FSB; FIRST AMERICAN
TITLE COMPANY OF MONTANA, INC.; MACKOFF
KELLOGG LAW FIRM; MORTGAGE ELECTRONIC
REGISTRATION SYSTEMS, INC.; CITY FINANCE
DEPARTMENT; YELLOWSTONE COUNTY TREASURER;
MONTANA DEPARTMENT OF REVENUE; and all other
persons, unknown, claiming or who might claim any
right, title, estate, or interest in or lien or encumbrance
upon the real property described in the complaint
adverse to plaintiff’s ownership or any cloud upon
plaintiff’s title thereto, whether such claim or possible
claim be present or contingent,
Defendants and Appellees.
APPEAL FROM: District Court of the Thirteenth Judicial District,
In and For the County of Yellowstone, Cause No. DV 12-0173
Honorable Mary Jane Knisely, Presiding Judge
March 25 2014
...to continue the hearing, and as a result the hearing was set over until October, past the
60-day deadline. MERS did not raise any concern about this delay, and notably, neither
did JAS. Further, JAS did not argue at the hearing that the court was then precluded by
the passage of time from ruling on the pending motions. Thus, it acquiesced in the delay
and “wait[ed] too long to raise the point.” Green, ¶ 28. We therefore conclude that JAS
forfeited the benefit of the 60-day time prescription, and proceed to address the merits of
the District Court’s order setting aside the default judgment.
¶33 MERS was named as a defendant and personally served with the complaint
through its registered agent on April 23, 2012. On June 28, 2012, the clerk of court
entered default against MERS based upon MERS’s failure to file an answer to the
complaint. On July 10, 2012, the District Court entered final judgment in the case,
resulting in a default judgment against those parties against whom a default had
previously been entered. On July 17, 2012, before learning that a default judgment had
been entered against it, MERS filed a motion to set aside the entry of default by the clerk
of court, arguing that it had “good cause” under M. R. Civ. P. 55(c) (Rule 55) to have the
default set aside. In response to MERS’s motion to set aside the default, JAS pointed out
that a default judgment had been entered by the District Court. Acknowledging as much
in its reply, MERS argued that its neglect in failing to timely respond to the complaint
was excusable, and that it should be relieved of the default judgment pursuant to Rule
60(b)(1).
15
¶34 The District Court proceeded to analyze whether MERS had established “good
cause” to set aside the default judgment, in reliance upon our decision in Blume v.
Metropolitan Life Ins. Co., 242 Mont. 465, 791 P.2d 784 (1990). In Blume, Metropolitan
moved to have the default judgment entered against it set aside. The district court did not
rule on the motion within the time allowed under Rule 60(c), and it was deemed denied.
Metropolitan appealed, and we reversed and remanded. Blume, 242 Mont. at 466, 791
P.2d at 785. In analyzing the issue, we focused on Rule 55. The 1989 version of Rule
55(c) provided: “For good cause shown the court may set aside an entry of default and, if
a judgment of default has been entered, may likewise set it aside in accordance with Rule
60(b).” We stated in Blume that, “[a]s noted in Rule 55(c), a default judgment may only
be set aside ‘for good cause shown.’ ” Blume, 242 Mont. at 467, 791 P.2d at 786. We
then repeated and applied the four-prong “good cause” test first enunciated in Bowen v.
Webb, 34 Mont. 61, 85 P. 739 (1906). Under this test, a defaulting party shows “good
cause” when: (1) the defaulting party proceeded with diligence; (2) the defaulting party’s
neglect was excusable; (3) the judgment, if permitted to stand, will affect the defaulting
party injuriously, and (4) the defaulting party has a meritorious defense to plaintiff’s
cause of action. Bowen, 34 Mont. at 65, 85 P. at 740. While we agree with the district
court that the four-part test announced in Bowen is still good law with respect to the
consideration of Rule 60(b)(1) motions, the court in Blume erred to the extent that it
imported the Rule 55(c) “good cause” standard into its analysis of the default judgment.
See Green, ¶ 40 (It is error to import a “good cause” analysis “into cases concerned with
16
setting aside a default judgment.”). However, the District Court’s analysis of the case
under the four-prong test was appropriate.
¶35 MERS argued that it did not respond to the quiet title complaint because it
believed at the time that NTS had been engaged by BOA to protect MERS’s interest and
to represent MERS in JAS’s quiet title action. When MERS discovered NTS was not
representing it, MERS immediately retained counsel. By this time, however, final
judgment had been entered. Counsel for MERS filed its motion to set aside the entry of
default just five days after final judgment was entered. The District Court concluded that
MERS’s failure to file an answer under the stated circumstances constituted excusable
neglect, and that upon learning that it was not represented, MERS had proceeded with
diligence. The court further concluded that MERS would be injured if the default
judgment was left to stand because MERS would lose its interest in the property at issue.
Lastly, the District Court agreed that MERS had a meritorious defense to the quiet title
complaint because the Trustee’s Sale by which JAS acquired the property was defective,
there having been no Affidavit of Mailing recorded prior to the date of the sale, as
required under § 71-1-315(2), MCA. Having concluded that all four prongs of the test set
forth in Blume were satisfied, the District Court granted MERS’s motion to set aside the
default judgment.
¶36 On appeal, JAS claims that MERS has no meritorious defense, and that it would
be unduly prejudiced if we affirm the court’s decision to set aside the default judgment
against MERS. Clearly, the court found the defense regarding the defects in the Trustee’s
17
Sale meritorious. As to prejudice, we note that setting aside the default judgment is not a
fatal blow to JAS, as it will still be free to litigate the merits of its quiet title action on
remand.
¶37 As we held in Essex, this Court will reverse an order setting aside a default
judgment only “upon a showing of a manifest abuse of discretion.” Essex, ¶ 17. Under
the facts presented here, and in light of our stated preference that cases should be decided
on their merits as stated in Matthews, ¶ 9, we cannot conclude that the District Court
manifestly abused its discretion in setting aside the default judgment as to MERS. We
therefore affirm that order.
CONCLUSION
¶38 For the foregoing reasons, we conclude the District Court did not manifestly abuse
its discretion in granting MERS’s motion to set aside the default judgment, nor did it err
in granting BOA’s motion to intervene in this proceeding.
/S/ PATRICIA COTTER
We concur:
/S/ MIKE McGRATH
/S/ MICHAEL E WHEAT
/S/ LAURIE McKINNON
/S/ JIM RICE
http://goo.gl/5zWWTi
No comments:
Post a Comment