Stafford v. Fockaert

Stafford v. Fockaert, 2016 MT 28 (Feb. 9, 2016) (McKinnon, J.) (5-0, aff’d)

Issue: (1) Whether the district court abused its discretion by entering default judgment for Stafford as a sanction for Fockaert’s failure to comply with the court’s order requiring mediation, and (2) whether the district court properly awarded prejudgment interest.

Short Answer: (1) No, and (2) yes.

Affirmed

Facts: Stafford sued Fockaert in 2012, alleging he defrauded her of $100,000. The parties agree that Stafford transferred $100,000 to Fockaert in July 2010 for him to invest, and that he refused to return the money when she asked him to a month later.

Stafford’s complaint alleged unjust enrichment, constructive trust, and fraud. After Stafford moved for judgment on the pleadings, Fockaert moved to amend his answer. The district court denied the motion to amend and granted judgment to Stafford. Fockaert appealed and this Court reversed. 2014 MT 51N.

On remand, Fockaert filed an amended answer and the district court entered a scheduling order that required the parties to attend mandatory mediation at least 45 days before trial. After Stafford emailed Fockaert to suggest a non-profit mediator in Missoula, Fockaert responded by saying he would not comply with the court’s order. Stafford moved for sanctions, and the district court held a hearing. Fockaert indicated he understood the court’s order, and Stafford withdrew her motion on the condition that if Fockaert refused to participate, Stafford would refile.

The parties eventually agreed on a date for the mediation, and scheduled with the mediators. On the day of the mediation, the mediator told Stafford that Fockaert had called him to say he would not attend, and the mediation was cancelled. By the time Stafford learned of this, she had already driven from Butte to Missoula.

The following day, the mediator emailed Stafford to say that Fockaert had shown up for the mediation, although he did not intend to negotiate. Fockaert gave the mediator a letter for Stafford saying, “There are no issues to mediate.”

Procedural Posture & Holding: Stafford renewed her motion for sanctions, asking the court to enter default judgment against Fockaert. After a hearing, the district court entered a default judgment for Stafford, and awarded Stafford prejudgment interest from the sate Stafford transferred the funds to Fockaert. Fockaert appeals, and the Supreme Court affirms.

Reasoning: (1) Fockaert argues that the district court lacked authority to impose sanctions rather than arguing that the sanction was overly severe. He contends he complied by showing up for the mediation, and contends the mediator misunderstood his comments. The district court held a lengthy hearing, and reviewed several exhibits including emails, the mediator’s affidavit, Fockaert’s letter to Stafford. On the basis of this evidence the court concluded Fockaert failed to participate in good faith in the mediation, which was not an abuse of discretion.

(2) If the three elements of § 27-1-211, MCA, are met, prejudgment interest is mandatory. Finding all three elements, the Supreme Court affirms the award of prejudgment interest.

The Court notes that neither party argued § 27-1-210, MCA, which provides for interest on torts. “We have not previously discussed, at any length, the interplay between the two prejudgment interest statutes and decline to do so today. We merely highlight that there are these two separate prejudgment interest statutes and leave it to future parties to brief the relationship between the statutes as well as the applicability of § 27–1–210, MCA.”