Ptarmigan Owners’ Assoc. v. Alton

Ptarmigan Owners’ Assoc. v. Alton, 2013 MT 69 (March 20, 2013) (5-0) (Morris J.)

Issue: Whether the district court slightly abused its discretion by denying Alton’s motion to set aside the default judgment.

Short Answer: No.

Affirmed

Facts: Alton purchased a home in Ptarmigan Village in Whitefish, which he used as a vacation home. The homeowners’ association collected fees and dues from owners, and managed the maintenance of Ptarmigan Village. Alton stopped paying fees and dues to Ptarmigan. Ptarmigan filed a lien on Alton’s house in November 2010, at which time Alton owed about $5,000. Alton gave Ptarmigan a Postal Plus mailbox as his address rather than the address of his primary residence. Ptarmigan sent all of Alton’s bills and notices to this mailbox, including notice of the lien by certified mail. Ptarmigan received the certified mail confirmation receipt. Ptarmigan filed a complaint to foreclose the lien on Jan. 20, 2011. The district court issued a summons the same day, and Ptarmigan mailed the complaint and summons to Alton’s mailbox. Alton did not respond. Ptarmigan contacted an Arizona constable to serve Alton in Arizona, but the constable returned the summons because he could not locate Alton through the Postal Plus mailbox. Ptarmigan filed an affidavit in support of service by publication on April 18, 2011, and the clerk of court issued the order. Ptarmigan published the complaint and summons, and mailed a second copy to the mailbox. Ptarmigan requested entry of default judgment 20 days after the final publication. The district court granted default judgment on June 13, 2011, and Ptarmigan mailed a copy of the judgment to the mailbox.

Procedural Posture & Holding: On Oct. 26, 2011, Ptarmigan moved for a writ of execution and order of sale. The court issued the order on Oct. 31, 2011, and Ptarmigan mailed them to the Postal Plus mailbox. Ptarmigan sent a courtesy copy of the documents to Alton via email on Nov. 11, 2011. The sheriff posted notice of the sale on Alton’s property on Nov. 29, 2011, and scheduled the sale for Dec. 27, 2011. Alton moved to postpone the sale on Dec. 27, 2011, ad the court granted the motion. However, Alton’s lender then foreclosed on the Ptarmigan house, rendering the sheriff’s sale moot. Alton also moved on Dec. 27, 2011 to set aside the default judgment, claiming he had not received any litigation documents and had been unaware of the default judgment until the sheriff posted notice on his property. He claimed Ptarmigan had his email and telephone but failed to contact him. Alton’s motion to set aside the judgment was deemed denied when the district court failed to rule on it within 60 days. Alton appeals, and the Supreme Court affirms.

Reasoning: Alton first argues the default judgment should be set aside because service by publication should not have been allowed due to Ptarmigan’s lack of diligence. Alton was in Arizona when Ptarmigan attempted to serve him. M.R. Civ. P. 4D(5). The plaintiff’s affidavit need only recite that a diligent inquiry was made; it does not have to detail the facts constituting the inquiry. Id. These facts are sufficient to support service by publication. Alton next claims Ptarmigan acted in bad faith and deliberately concealed the lawsuit from him, and that the court should have set aside the default judgment for misrepresentation or misconduct under M.R. Civ.P. 60(b)(3). Nothing in the record indicates that Ptarmigan acted in bad faith or sandbagged Alton. Alton and Ptarmigan were in communication via email, but those emails belie Alton’s claim that he had no knowledge of the lawsuit before Nov. 29, 2011. Alton called Ptarmigan on Aug. 3, 2011 to ask about the notice of entry of judgment he had received at his Arizona mailbox, and whether a date for the sheriff’s sale had been set. Alton had notice, and Ptarmigan did not act in bad faith.