DEFAULT JUDGMENT/LACHES: Default judgment in quiet title action based on 1-day mistake in service of Answer properly denied… challenge to RFD’s title to property 27 years after donation by Plaintiff’s parents properly found barred by laches… Allison affirmed.

Mickale Carter sued 6/8/20 to quiet title to a 1.31-acre plot in Flathead Co. subdivided in 1992 out of 80 acres inherited from her parents and on which Badrock RFD has constructed a fire station. On 6/26/20 Badrock moved to require joinder of necessary parties and on 6/29 filed its Answer with a certificate of service noting that it had served its Answer on Carter via 1st class mail that day. As shown on the envelopes, Babcock did not mail its Answer until 6/30. On 7/14/20 Carter moved for summary judgment or default judgment. Badrock moved to hold the summary judgment motion in abeyance and for a scheduling order. After these motions were briefed Judge Allison denied Badrock’s motion to require joinder of necessary parties, granted its motion to hold Carter’s summary judgment motion in abeyance, ordered Badrock to file a response to the summary judgment motion within 14 days following close of discovery, and denied Carter’s motion for default. He issued his Rule 16 scheduling order 9/30/20. On 12/22/20 following close of discovery Badrock filed its supplemental response to Carter’s summary judgment motion and filed its own motion for summary judgment. After briefing, Allison on 5/3/21 denied Carter’s motion for summary judgment to quiet title and granted Badrock’s motion for summary judgment on its quiet title claim. He issued judgment 5/6/21 holding that Badrock held title to the property in fee simple. Carter appeals.

“A defendant must serve an answer within 21 days after being served with the summons and complaint.” Rule 12(a)(1)(A). As Badrock was served 6/8/20, its answer was due 6/29/20. While it filed its answer that date, it did not mail copies to Carter until 6/30. “A paper is served under [Rule 5] by mailing it to the person’s last known address — in which event service is complete upon mailing.” Rule 5(b)(2)(C). Because Badrock did not complete service by mailing its answer to Carter until 6/30, its answer was 1 day late. She asserted that she is entitled to default judgment due to the delay. We agree with Badrock that the 1-day delay should not overcome this Court’s principle that cases should be tried on the merits and default judgments are not favored.

In denying Carter’s motion for default, Allison held that “Badrock has filed its Answer, therefore, despite the fact that the filing was untimely, it is no longer in default.” Carter asserts that this is “contrary to the letter and to the spirit” of Rule 12 and that “if a defendant can cure a default by simply serving an answer, that would result in there being no time limit at all, making a mockery of Rule 12’s 21-day service requirement.” However, default was not requested or entered prior to Badrock filing its answer 6/29/20 or completing service 6/30. Even had a default been entered, the speed with which it served its answer after the due date — 1 day — did not prejudice Carter. Badrock argued below that — based on its calculation under Rule 6 — its answer was due 6/30 and was therefore not late. Its calculations were wrong but it appears that its “assumption of the date of service was an honest mistake — and not one dreamed up to excuse the neglect.” Worstell (Mont. 1959).

This Court has held since before statehood to its policy that cases are to be tried on the merits and default judgments are not favored. “As a general rule, in cases where, as here, the application [to set aside default] is made so immediately after default entered as that no considerable delay to the plaintiff is to be occasioned by permitting a defense on the merits, the court ought to incline to relieve.” Benedict (Mont. 1889). (quoting Watson (Cal. 1871). Allison did not manifestly abuse his discretion by denying Carter’s motion for default judgment.

Allison correctly granted summary judgment for Badrock as Carter’s claims are barred by laches. Carter was notified in 1993 that there “seems to be a problem” with the POAs used by her mother to transfer title of the property to Badrock and rather than signing a new POA to ensure that the donation was properly made or asserting that the transfer via warranty deed was defective, Carter, an attorney who was admitted to the Montana bar in 1984, did nothing for well over 20 years, allowing the transfer to occur and Badrock to move into the property, construct a fire station, and operate for 27 years before she filed the quiet title action. After improving and openly operating from the property for nearly 30 years, Badrock would be prejudiced by transferring it to Carter.

Carter asserts that Badrock cannot rely on laches due to unclean hands because it knew that title to the property was defective since 1993 and therefore it should have filed to quiet title. However, “persons in possession may wait until their possession is disturbed or until their title is attacked before taking steps to vindicate their right.” Peterson (Mont. 1984). Badrock has been in continuous possession of the property since 1993 and has made numerous open & notorious improvements. It simply received a donation of land which had been in the works for a year and there was no fraud or dishonesty in its acceptance. While there were, as Allison stated, some “technical difficulties” with the deed, Badrock did not take advantage of its own wrong by not doing more to clarify the title. It “was under no duty to seek a judicial determination of its right to title until that title was challenged.” Id.

Gustafson, McKinnon, Baker, Sandefur, Rice.

Carter v. Badrock RFD, DA 21-266, 11/2/21.

Mickale Carter, Columbia Falls, attorney pro se; Dep. Flathead Co. Atty. Caitlin Overland.