3 MILR 34

IN THE SUPREME COURT
REPUBLIC OF THE MARSHALL ISLANDS

S.CT. CASE NO. 06-07
(High Ct. Civil No. 2005-056)

PACIFIC BASIN, INC.,
Plaintiff-Appellant,

-v-

MAMA STORE,
Defendant-Appellant.

APPEAL FROM THE HIGH COURT

MAY 17, 2007

CADRA, C.J.
GOODWIN, A.J. pro tem, and KURREN, A.J. pro tem

Argued and Submitted March 14, 2007 

SUMMARY:

On the date set for trial, Defendant failed to appear, and default judgment was entered for Plaintiff. Defendant filed a timely motion for relief from default judgment and for a new trial, but the motion was denied. Defendant appealed. The Supreme Court found the trial court had not abused its discretion in granting default judgment and denying relief from that judgment because Defendant’s counsel’s neglect to appear at trial was not excusable, and thus an insufficient justification. The dismissal was affirmed. 

DIGEST: 

1. CONSTITUTIONAL LAW – Due Process – Procedural: Procedural "due process" only requires adequate notice and an opportunity to be heard. 

2. JUDGMENTS – Grounds to Vacate – MIRCP Rule 60(b): A trial court has the discretion to deny a Rule 60(b) motion to vacate a default judgment if (1) the plaintiff would be prejudiced if the judgment is set aside, (2) defendant has no meritorious defense, or (3) the defendant’s culpable conduct led to the default. This tripartite test is disjunctive. 

3. APPEAL AND ERROR – Review – Discretionary Matters – Motion to Vacate Judgment: The reviewing court reviews the denial of a Rule 60(b) motion for an abuse of discretion. 

4. APPEAL AND ERROR – Review – Discretionary Matters: Under the abuse of discretion standard, the reviewing court will reverse only where no reasonable person would have acted as the trial court did. 

5. APPEAL AND ERROR – Review – Discretionary Matters – Motion to Vacate Judgment: Because review of the denial of Rule 60(b) relief is deferential, the reviewing court must affirm if the trial court adequately considered the reasons for neglect and the reasons did not compel a finding of excusable neglect. 

OPINION OF THE COURT BY CADRA, C.J.

Plaintiff, claiming to be an unpaid seller of goods, sued Mama Store/Litokwa Tomeing to collect $12,012.71, the agreed price of the goods. Defendant filed an answer, claiming "no knowledge" of the debt, and the parties undertook to bring the case to trial. After numerous continuances granted by the High Court upon the applications of each of the parties and on one occasion for the convenience of the court, a trial was set for September 14, 2005. The Defendant failed to appear, in person or by counsel, and a default judgment was entered for the Plaintiff. 

The Defendant filed a timely motion for relief from default judgment and for a new trial under Rules 52, 59, 60 and 62. The trial court denied defendant’s motion finding the Defendant’s counsel admitted to neglecting to appear for trial as scheduled and further finding the Defendant had not stated any meritorious defense. The Defendant has appealed. 

On appeal, Defendant/Appellant contends the entry of default judgment upon failure to appear at trial was (1) a denial of the right to "due process" guaranteed by the RMI Constitution, Article II, Section 4(1) and (2) that the trial court abused its discretion in denying Defendant’s motion for relief from judgment. 

[1] Defendant/Appellant’s "due process" argument can be summarily disposed of. Procedural "due process" only requires adequate notice and an opportunity to be heard. Reid v. Engan, 765 F.2d 1457, 1463 (9th Cir. 1985); see, generally, Board of Regents v. Roth, 408 U.S. 564, 569-70 & n. 7, 33 L.Ed.2d 548, 92 S.Ct. 2701 (1972). It is undisputed that Defendant’s counsel had written notice of the trial date and thus had an opportunity to be heard on its alleged defense(s) at trial prior to entry of any judgment. Defendant and Defendant’s counsel failed to appear for trial despite actual notice. There was no denial of due process under the circumstances presented by this case. Rather, the issue properly presented by this appeal is whether the trial court erred in denying relief from the default judgment. 

Rule 60(b) is the procedural mechanism for obtaining relief from a judgment or order on grounds of "mistake, inadvertence, surprise or excusable neglect" (Rule 60(b)(1)) or for "any other reason justifying relief from the operation of the judgment" (Rule 60(b)(6)). Defendant’s reasons for seeking relief from default judgment fall within the purview of Rule 60(b) and a discussion of the other Rules relied upon by defendant is unnecessary to the disposition of this appeal. 

[2] "[A] trial court has the discretion to deny a Rule 60(b) motion to vacate a default judgment if (1) the plaintiff would be prejudiced if the judgment is set aside, (2) defendant has no meritorious defense, or (3) the defendant’s culpable conduct led to the default. This tripartite test is disjunctive." Hammer v. Drago (In re Hammer), 940 F.2d 524, 525-26 (9th Cir. 1991) (internal citations omitted). This means that the trial court may deny the motion if any of the three factors are true. American Ass’n of Naturopathic Physicians v. Hayhurst, 227 F.3d 1104, 1108 (9th Cir. 2000).

[3,4,5] We review the denial of a Rule 60(b) motion for an abuse of discretion. Casey v.Albertson’s, Inc., 362 F.3d 1254, 1257 (9th Cir. 2004) (citing SEC v. Coldicutt, 258 F.3d 939, 941 (9th Cir. 2001). Under the abuse of discretion standard, we will reverse only where no reasonable person would have acted as the trial court did. See, e.g., Castro v. Board of Education of Chicago, 214 F.3d 932, 934-35 (7th Cir. 2000). Because review of the denial of Rule 60(b) relief is deferential, we must affirm if the trial court adequately considered the reasons for neglect and the reasons did not compel a finding of excusable neglect. See, e.g., FEC v. Al Salvi, 205 F.3d 1015, 1020 (7th Cir. 2000). 

The trial court found that Defendant’s counsel admitted to neglecting to appear at the scheduled hearing. There was no error in this finding. Below and on appeal, the Defendant’s attorney admitted that the failure to appear on the date set for trial was caused by counsel’s failure to enter the date on her office appointment calendar. The Defendant’s attorney also claimed that "for some mistaken reason," she believed that the trial had been or would be moved to October because an important defense witness had to travel from the United States to Majuro. There is, however, no reason apparent in the record which would support a reasonable belief that the September 14, 2005 trial had been taken off-calendar or that trial had been continued to October or some other date. There is no evidence of a request for continuance, either orally or by written motion, having been made by Defendant or Defendant’s counsel to continue the scheduled trial date. We find that excusable neglect has not been demonstrated sufficient to justify setting aside the default judgment. 

In denying relief from judgment, the trial court found that the Defendant had not stated any meritorious defense and "to set aside the judgment would be simply denying the inevitable and exposing the Plaintiff to further costs and expenses." The only defense urged by Defendant is that the Defendant has no knowledge of incurring the debt. The Defendant, however, has not tendered any evidence that the debt has been paid or that the goods were not sold and delivered. We find no abuse of discretion by the trial court in denying relief from judgment on this ground. 

Defendant’s counsel cites the Court to Karlen v. Evans, 915 P.2d 232 (Mont. 1996), apparently, for the proposition that only a "slight abuse of discretion" need be shown to warrant reversal of a trial court’s refusal to grant Rule 60(b) relief. Id. at 185. Even if this lower standard of review were accepted, we do not find an abuse of discretion by the trial court sufficient to justify reversal. In Karlen, supra, the Karlens’ attorney intentionally misled his clients into believing that their case was progressing and concealed the fact their case had actually been dismissed. Given the "egregious conduct" of the attorney the court held the trial court did not err in granting relief. Id. at 190-91. This case does not present such "egregious" misconduct on behalf of Defendant’s attorney. 

Counsel has cited no authority, and we have found none, for the proposition that garden variety malpractice by an attorney is a valid reason to require a court to aside its judgment entered after notice to appear, and a default thereof, in the absence of some showing of manifest injustice, overreaching or negligence by the court or by its officers and assistants. In this case, the Defendant has tendered no evidence that the debt has been paid or that the goods were not sold and delivered. We find no abuse of discretion, slight or otherwise, by the trial court in denying the requested relief. 

Accordingly, the judgment of the trial court is AFFIRMED and this appeal is DISMISSED.