Appeal from the District Court of Stark County, Southwest Judicial District, the Honorable William A. Herauf, Judge.
The opinion of the court was delivered by: Crothers, Justice.
[¶1] Citifinancial, Inc., appeals from an order denying its motion to vacate a default judgment in American Bank Center's ("American") action to foreclose mortgages covering real estate located in Stark County. We conclude the district court did not abuse its discretion in denying the motion because Citifinancial failed to establish mistake, inadvertence, surprise, or excusable neglect to support its N.D.R.Civ.P. 60(b) motion for relief from the default judgment. We affirm.
[¶2] Between 2003 and 2007, American loaned Sandy and Teri Schuh money on several occasions, and those loans were secured by mortgages the Schuhs gave American covering various parcels of Stark County land. During the same time period, the Schuhs received loans from Citifinancial which were secured by mortgages covering parcels of their property. In addition, the Schuhs conveyed a parcel of property to their daughter, who obtained a loan from Citifinancial secured by a mortgage on this parcel. The Schuhs became delinquent in their mortgage payments, and in April 2009, American brought a mortgage foreclosure action against them. American served the summons and complaint in the foreclosure action on Citifinancial through its registered agent in North Dakota. After the defendants failed to answer the foreclosure complaint, American moved for a default judgment. Citifinancial was served with the motion through its registered agent as well as through its local Dickinson office. Citifinancial did not respond, and on June 9, 2009, the district court granted American a default judgment and scheduled a sheriff's sale of the mortgaged property for August 19, 2009.
[¶3] Two months later, on August 10, 2009, Citifinancial moved to vacate the default judgment under N.D.R.Civ.P. 60(b). Citifinancial's attorney, Robert L. Stroup II, filed an affidavit in support of the motion, stating:
"On November 4, 2008, I was contacted to deal with a claim that Citifinancial was in subordinate lien position on land owned by Sandy Schuh and Teri Schuh (and also on a mortgage on property owned by their daughter Cassandra) as claimed by American Bank Center, Dickinson, North Dakota. On November 11, 2008, I called American Bank Center and spoke to Scott Tschetter, the loan officer handling the Schuh files and requested to borrow the abstract to the property.
"I received the abstract from the Bank and examined it on November 17, 2008 after which it was returned to the Bank. During that time I also had emails and phone conversations with Tyla Wilson at Citifinancial and Scott Tschetter. I had talked to both of them about looking at their files relating [to] this matter.
"In anticipation of the Bank's position regarding privacy, I obtained consent from all of the Schuhs authorizing me to see the Bank files regarding their transactions. I also talked to the Bank's general counsel, Gerald Galloway, when he was in Fargo about looking at the Bank's files.
"On December 8, 2008, I traveled to Dickinson and reviewed the Citifinancial files and talked to Tyla Wilson about the matter. I indicated surprise that neither the Bank nor Citifinancial had commenced a foreclosure action, considering the length of time the Schuhs had been in default. I met with Tyla and again looked at the files on December 9, 2009 [sic] and told her to contact me as soon as she [was] served in any foreclosure action by the Bank.
"I also went to the Bank on December 9, 2008 to look at the Bank's files. I was told Scott Tschetter was out and wouldn't be back until later that afternoon. I then met with Gerald Galloway and was told the Bank's attorney had advised against letting me see the files until the foreclosure was started and that the files had been delivered to [the] Bank's attorney at the Mackoff, Kellogg firm.
"I did no[t] learn of the foreclosure action which had been commenced on April 7, 2009, until I received notice from another attorney who had been contacted by Citifinancial that judgment had been entered and that there was a sheriff's sale scheduled for August 19, 2009."
[¶4] Citifinancial also claimed in its brief to the district court that "Citifinancial is a large national corporation with a large corporate law department. The fact that Citifinancial was already being represented was not discovered and the matter was referred to another attorney in North Dakota. That attorney was not familiar with the potential issues in this case and assumed it to be a normal foreclosure in which Citifinancial had a subordinate claim." Citifinancial argued that Stroup should have been served with the documents in the foreclosure action and the motion for default judgment because American knew he was ...