Opinion
No. C2-96-1097.
Filed January 7, 1997.
Appeal from the District Court, Hennepin County, File No. 948724.
Gary G. Van Winkle, Jr., Legal Aid Society of Minneapolis, (for respondents).
Kenneth R. Hertz, Hertz Associates, (for appellant).
This opinion will be unpublished and may not be cited except as provided by Minn. Stat. § 480A.08, subd. 3 (1996).
UNPUBLISHED OPINION
Respondents, Rochelle Rogers and Amos Magee brought a claim against Steven Meldahl, d/b/a Preferred Property Investments, Inc. (PPII), for breach of a lease agreement, breach of express or implied warranties, and deceptive trade practices. Meldahl owned certain residential property and entered into a twelve-month lease of the premises to respondents. Subsequently, the mortgagee on this property, Oldstone Credit Corporation, foreclosed on the mortgage and directed respondents to vacate the premises. Respondents then brought these claims against Meldahl.
While this case was pending before the district court, Meldahl represented himself and changed addresses a number of times. The district court sent notices to the parties of an arbitration hearing and ultimately a trial date to addresses listed by the parties. Because Meldahl failed to attend the arbitration hearing and subsequent trial, a default award and judgment was issued against Meldahl.
Pursuant to Minn.R.Civ.P. 60.02, Meldahl brought a motion to vacate the default judgment arguing that he never received notice of the arbitration hearing or trial date and thereby was precluded from raising meritorious defenses. The district court denied Meldahl's motion to vacate, finding that (1) Meldahl provided no reasonable excuse for his failure or neglect to attend court proceedings, (2) Meldahl failed to provide sufficient evidence of a reasonable defense on the merits, and (3) respondents would be substantially prejudiced. See Hinz v. Northland Milk Ice Cream Co. , 237 Minn. 28, 30, 53 N.W.2d 454, 456 (1952) (establishing four requirements moving party must establish to vacate judgment).
Meldahl challenges the denial of his motion to vacate a default judgment. Because we conclude the district court did not abuse its discretion in denying the motion to vacate, we affirm as modified.
DECISION
Meldahl claims the (1) district court abused its discretion in denying his motion to vacate a default judgment and (2) district court's findings of fact were unsupported by the record and clearly erroneous. The decision to vacate a default judgment, based on a motion pursuant to Minn.R.Civ.P. 60.02, is a matter committed to the discretion of the district court. Kosloski v. Jones , 295 Minn. 177, 180, 203 N.W.2d 401, 403 (1973). An appellate court will not reverse the denial of a motion to vacate unless the district court abused its discretion. Id. Moreover, on appeal we review the district court's findings of fact under the "clearly erroneous" standard. First Trust Co. v. Union Depot Place , 476 N.W.2d 178, 181 (Minn.App. 1991) review denied (Minn. Dec. 13, 1991).
Meldahl contends the district court abused its discretion by denying his motion to vacate the default judgment. And claims he established (1) a reasonable defense on the merits, (2) a reasonable excuse for his failure or neglect to answer, (3) that he acted with due diligence after notice of the entry of judgment, and (4) that no substantial prejudice would result to the other party. Kosloski , 295 Minn. at 180, 203 N.W.2d at 403; Hinz , 237 Minn. at 30, 53 N.W.2d at 456.
First, Meldahl asserts he presented a reasonable defense. He argues PPII is the proper party to the respondents' suit, not himself as an individual. The district court, however, rejected this argument because Meldahl admitted he treated PPII as his alter ego and did not distinguish its affairs from his own. Meldahl also contends the respondents' claims for breach of quiet enjoyment and failure to return the security deposit were not pleaded in their complaint. Respondents' complaint and reply to Meldahl's counterclaim, however, reveals these issues were referenced specifically, including a citation to the statute governing failure to return a security deposit.
Second, Meldahl argues he presented a reasonable excuse for his failure to appear before the district court. The district court mailed its order setting the trial date to two of Meldahl's several addresses (a P.O. Box in Minneapolis, MN and an address on Minnehaha Parkway, Minneapolis, MN), he claimed he never received notice of the trial date because he had moved to Browndale Avenue, Edina, MN. Meldahl also claims he notified the district court of his Browndale address in a letter submitted to the court just three days before it issued its order setting the trial date.
In its order, however, the district court explained it did not find the purported letter in the case file. Moreover, the handwritten letter, which Meldahl claimed informed the district court of his address change, did not bear a stamp indicating the letter had been filed with the court administrator. Accordingly, the district court stated the letter had never been filed. Given the district court's opportunity and ability to judge the credibility of the evidence before it we cannot say an abuse of discretion occurred.
Finally, although the district court found that the respondents would be substantially prejudiced, the court determined its two previous findings (i.e., no reasonable defense and reasonable excuse) were conclusive and did not necessitate further consideration of Meldahl's motion. Previously, we have affirmed the denial of a motion to vacate on only two of the four Hinz requirements. See Gelco Corp. v. Crystal Leasing, Inc. , 396 N.W.2d 672, 675 (Minn.App. 1986) (stating lack of reasonable defense on merits leaves little logical reason to compel vacation of the default judgment.) Because we agree that Meldahl did not have a reasonable defense on the merits, this obviates any need for further consideration of the remaining requirements. We conclude the district court acted within its discretion when denying Meldahl's motion to vacate.
Respondents concede that Meldahl is correct that their judgment should be reduced by $350 because there is no support for this finding in the record. Meldahl argues the district court miscalculated the respondents' damages for his failure to return the security deposit pursuant to Minn. Stat. § 504.20 (1994). The respondents agree their damages for the security deposit plus interest should be reduced by $47.66 (from $1,503.66 to $1,456.00). Accordingly, the respondents' judgment should be reduced by a total amount of $397.66.
Further, Meldahl challenges the finding that he entered into a twelve month lease with the respondents and the value of the lease. Magee's testimony was credited by the district court both as to the length and value of the lease. Our review of the record, however, reveals these findings are supported by the evidence and are not clearly erroneous.
Finally, Meldahl claims the district court erred when it adopted verbatim the respondents' proposed findings of fact. Meldahl relies on Bliss v. Bliss , 493 N.W.2d 583, 590 (Minn.App. 1992) (cautioning that wholesale adoption of one party's findings raises question of whether district court independently evaluated each party's testimony and evidence), review denied (Minn. Feb. 12, 1993). A review of the findings indicates an independent consideration and examination of the evidence. We conclude the district court did not err. We affirm the district court's findings of fact and order for judgment with a reduction in the judgment of $397.66.