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Monster Heavy Haulers, LLC v. Goliath Energy Services, LLC

Supreme Court of North Dakota

September 2, 2016

Monster Heavy Haulers, LLC, Plaintiff and Appellee
v.
Goliath Energy Services, LLC, Karl Troestler, and George Satterfield, Defendants Goliath Energy Services, LLC, and George Satterfield, Appellants Rossco Crane and Rigging, Inc., Plaintiff and Appellee
v.
Goliath Energy Services, LLC, Karl Troestler, and George Satterfield, Defendants Goliath Energy Services, LLC, and George Satterfield, Appellants

         Appeals from the District Court of McKenzie County, Northwest Judicial District, the Honorable Robin Ann Schmidt, Judge.

          John E. Ward (argued) and Lawrence E. King (appeared), for plaintiffs and appellees.

          Justin J. Hagel (argued) and Monte L. Rogneby (appeared), for defendants and appellants Goliath Energy Services, LLC, and George Satterfield.

          OPINION

          McEvers, Justice.

         [¶ 1] In these consolidated appeals, Goliath Energy Services, LLC, and George Satterfield challenge orders denying their N.D.R.Civ.P. 60(b) motions to vacate default judgments entered against them in favor of Monster Heavy Haulers, LLC, and Rossco Crane and Rigging, Inc. We conclude the district court acquired personal jurisdiction over the defendants in the underlying actions and did not abuse its discretion in denying the motions for relief from judgment. We affirm.

         I

         [¶ 2] Monster is in the oil field construction, trucking, and rigging business. Rossco is in the business of providing various crane and rigging services. Goliath is a limited liability company with its principal place of business located in Grand Junction, Colorado, and it conducted business in North Dakota. Satterfield is Goliath's president and Karl Troestler was its chief financial officer. Both Rossco and later Monster sued Goliath, Troestler, and Satterfield to collect payment of outstanding balances owed for services provided to Goliath. Rossco sought $95, 243.80 plus interest, and Monster sought $226, 431.35 plus interest.

         [¶ 3] Rossco commenced its action by service of the summons and complaint through certified mail in November 2014. The affidavit of service indicates that Goliath, Satterfield, and Troestler were each served at three different addresses, two in Grand Junction and one in Alexander, North Dakota. The three return receipts from Alexander were signed by "Larry Adams" and "J. Leigh, " who marked the "Agent" boxes on the receipts. The six return receipts from the two Grand Junction addresses were signed by "Sherry Bley, " who did not mark either the "Agent" or "Addressee" boxes. The defendants did not file answers to the complaint.

         [¶ 4] After Rossco filed a motion for default judgment on January 6, 2015, Satterfield phoned Rossco's attorney on January 16, 2015, and requested that copies of the summons and complaint and default judgment motion be emailed to him. Rossco's attorney sent Satterfield a "test email" to confirm his email address, and Satterfield requested that the documents also be emailed to a Colorado attorney. On January 16, 2015, Rossco's attorney emailed the documents to Satterfield and copied them to the Colorado attorney. On January 20, 2015, Satterfield sent an email to Rossco's attorney, the Colorado attorney, and the North Dakota attorney representing Goliath and Satterfield in these appeals stating he had talked to Rossco's manager and "they have agreed to stand down and work with me." On January 21, 2015, Rossco's attorney emailed Satterfield and copied it to the Colorado attorney and the North Dakota attorney informing Satterfield that the judge had signed the order for default judgment, but that Rossco's attorney would "not prepare a judgment at this time, in light of the apparent discussions/negotiations between the parties."

         [¶ 5] On January 29, 2015, Rossco's attorney sent an email to Satterfield informing him that he also represented Monster and that Monster had filed a well and pipeline lien in Billings County for a debt owed by Goliath. Satterfield asked Monster's attorney to share this information with the North Dakota attorney, but the North Dakota attorney told Monster's attorney "[a]t this time you can communicate directly with Goliath. I will let you know if that changes." On February 23, 2015, Satterfield emailed Monster's attorney to ask if Monster's position had changed following Satterfield's direct communications with Monster's general manager. However, the parties' negotiations ultimately failed.

         [¶ 6] Monster commenced its action by service of the summons and complaint through certified mail in March 2015. The affidavit of service indicates Goliath, Satterfield, and Troestler were each served at the same address in Grand Junction. Two return receipts for Satterfield and Troestler were signed by "Sherry Bley, " who indicated actual delivery occurred at a different Grand Junction address. Neither the "Agent" nor "Addressee" boxes were marked. The defendants did not file answers to the compliant.

         [¶ 7] On May 7, 2015, Monster moved for a default judgment. The defendants did not respond, and a default judgment in favor of Monster for $240, 107.23 was entered on June 9, 2015. On July 29, 2015, Rossco advised its attorney that negotiations had also failed with the defendants. Rossco's attorney filed the closing papers with the clerk of court, and a default judgment was entered against the defendants in favor of Rossco for $97, 233.04 on August 3, 2015.

         [¶ 8] After Monster moved to compel answers to interrogatories in aid of judgment and execution, the North Dakota attorney filed a notice of appearance on behalf of Goliath and Satterfield. On November 23, 2015, Goliath and Satterfield filed N.D.R.Civ.P. 60(b) motions to vacate the default judgments obtained by both Monster and Rossco. Goliath and Satterfield argued that service of process was insufficient and that Monster and Rossco had failed to present adequate proof to pierce Goliath's corporate veil and hold Satterfield personally liable for the debts of Goliath. The district court denied both motions for relief from the default judgments:

The above-entitled matter having come before the Court on hearing on February 2, 2016 at 2:30 pm in the Courthouse of the above-named Court on the Defendants' Motion to Vacate the Default Judgment[s] entered June 9, 2015 [and August 3, 2015] and the Plaintiff's Motion to Compel Answers to interrogatories, and it appearing that service was effectuated upon the Defendants, that the Defendants were aware of the summons, complaint, motion[s] for default judgment, and the default judgment[s], and that the defendants failed to interpose an answer or other timely response that the Defendants' Motion to Vacate Default Judgment is not timely based on the facts presented and that Defendants have not met their burden of proof as to the defense of insufficiency of service of process and, furthermore, the defense of insufficiency of service of process was effectively waived by the Defendants' deliberate failure to timely raise it[.]

         Goliath and Satterfield appealed, and the appeals were consolidated for consideration by this Court.

         II

         [¶ 9] Goliath and Satterfield argue the district court erred in denying their motions to vacate the default judgments under N.D.R.Civ.P. 60(b).

         [¶ 10] In Shull v. Walcker, 2009 ND 142, ¶¶ 13-14, 770 N.W.2d 274, this Court explained:

On appeal, to establish a basis for relief under N.D.R.Civ.P. 60(b) from a district court's denial of a motion for relief from a default judgment, a party must show the district court abused its discretion. US Bank Nat'l Ass'n v. Arnold, 2001 ND 130, ¶ 21, 631 N.W.2d 150. A trial court abuses its discretion when it acts in an arbitrary, unreasonable, or unconscionable manner, or when it misinterprets or misapplies the law. Id. An abuse of discretion by the trial court is never assumed and must be affirmatively established, and this Court will not overturn a court's decision merely because ...

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