TO: Joint Procedure Committee
FROM: Tom Tudor
RE: Rule 55(a)(3), N.D.R.Civ.P.
The attached letter from Attorney John J. Petrik to Chris Hogan, suggesting that paragraph (a)(3) of Rule 55 is not in conformity with Workers Comp. Bureau v. Kostka Food Services, 516 N.W.2d 278 (N.D. 1994), has been forwarded to the Committee for its consideration.
Paragraph (a)(3) reads, in part, as follows:
If the party against whom judgment by default is sought has appeared in the action, the party (or if appearing by representative, the party's representative) must be served with written notice of the application for judgment at least 8 days before the hearing on the application.
This provision is taken verbatim from Fed.R.App.P. 55(b)(2).
Petrik recommends that this sentence either be deleted or amended to include language similar to the notice and service language of N.D.R.Ct. 3.2(a), Motions.
Rule 3.2(a) requires that notice must be served and filed with a motion and that the moving party must serve and file a brief upon serving and filing a motion. The notice must include the time of oral argument, or must state that the motion will be heard on briefs unless oral argument is requested. The adverse party has 10 days after service of the brief to file an answer and other papers. The moving party then has 5 days to serve and file a reply brief. Upon filing of the briefs or expiration of the time for filing briefs, the motion is deemed submitted to the court unless oral argument has been requested. Requests for oral argument must be made not later than 5 days after expiration of the time for filing the answer brief. A timely request for oral argument must be granted. The party requesting oral argument must secure a time for the argument and serve notice of the time upon all other parties.
This memo will first discuss Kostka and other applicable rules, and will then turn to Petrik's comments.
Kostka was served by the Workers Compensation Bureau with a notice of intent to take a default judgment. The Bureau did not serve an application for judgment, an affidavit of proof, or any other motion document with its notice of intent. Kostka did not respond and the Bureau filed an Affidavit of Default and an Affidavit of Proof seven weeks later. (On appeal, the Bureau's attorney identified these documents as its application for default judgment.) Kostka was not served with these documents either. The district court granted a default judgment and Kostka moved to have the judgment set aside, claiming that the notice was inadequate and that a hearing was required.
The Court stated that a party who has appeared is entitled to written notice of the application for a default judgment, and 8 days notice of a default hearing, before a default judgment may be entered. Id. at 280. In addition, the Court explained that any motion can be heard by the Court on briefs without oral argument under Rule 3.2(a) provided that proper notice of the motion is given. Id. at 280.
The Court cited with approval Breyfogle v. Braun, 460 N.W.2d 689, 692-693 (N.D. 1990):
[S]ome notice should accompany a motion. "A written motion ...and notice of the hearing thereof shall be served...." [N.D.R.Civ.P.] 6(d) (with emphasis added).
Id. at 280. See also Gerhardt v. Robinson, 449 N.W.2d 802, 804 (N.D. 1989):
An application for a judicial order must be in writing ([N.D.R.Civ.P.] 7(b)(1)), and, together with a notice of hearing, it must be timely served upon each adverse party. [N.D.R.Civ.P.] 5(a) and 6(d).
Rule 5(a) requires service of certain orders, pleadings, motions, and other papers, and also provides that service need not be made on a party in default for failure to appear. Rule 6(d) requires service of a written motion and notice of the motion at least 18 days before the motion may be heard, unless a different period is fixed by rule or order.
The Court held in Kostka that "when a defendant has made an appearance, a party seeking default judgement must give notice to the defendant either that a hearing will be held or that the motion for judgment will be submitted on briefs." In the latter case, the notice to the defendant must state that the application for judgment will be considered on the briefs and affidavits under Rule 3.2(a) unless a hearing is timely requested and scheduled. Id. at 281.
Referring to Rule 3.2(a), the Court stated that the motion for default judgment, including the affidavits, "should be attached to the notice, included with it as part of the application, or served 'within 5 days thereafter'." The phrase "within 5 days thereafter" was taken from Rule 3.2. However, that phrase was deleted from Rule 3.2 effective January 1, 1995, and the current rule requires service of a motion with the notice. Therefore, service of the motion must be made with the notice. The Court also cited to Rule 5(a). Id. at 281.
Presumably, an application for judgment under Rule 55(a)(3) would be deemed to constitute a motion within Rule 3.2 and Rules 5(a) and 6(d), if there is no separate motion for default judgment. Rule 7(b)(1), which requires that an application to the court for an order must be by motion, unless made during a hearing or at trial, is also applicable.
Rule 55(a)(3), when read together with Rules 5(a), 6(d), and 7(b)(1), requires that an application for judgment and notice of the application be served upon the party against whom the judgment is sought. This requirement applies independently of the holding in Kostka. The Court has added the Rule 3.2(a) requirement that the application be served with the notice: "the motion for default . . . should be attached to the notice [or] included with [the notice] as part of the application [ and] served. . . ." Id. at 281.
There is no reference under Rule 55(a)(3) to a document titled "notice of intent to enter default judgment," the document referred to by Petrik. Petrik may be correct when he asserts that "the notice of intent is a useless step," if that is the only document served upon the party against whom judgment is sought and no reference is made in the document to a scheduled hearing. However, a notice of intent to enter default judgment would presumably be treated as an application for judgment under Rule 55(a)(3) if the document includes the time scheduled for the hearing and is served upon the party against whom the judgment is sought at least 8 days before the time set for the hearing. The notice of intent would also have to "state with particularity the grounds [for the application], and . . . set forth the . . . order sought," as required by paragraph (b)(1) of Rule 7.
Further, Kostka does not, as Petrik suggests, require that a Rule 3.2(a) motion be attached to the notice of intent. This requirement is applicable only if the notice provides that the matter will be submitted on briefs. In that event, the Court did state in Kostka that the moving party must notify the party against whom the judgment is sought that the application will be considered on briefs and any supporting affidavits under Rule 3.2, unless a hearing is requested. Id. at 281.
Regardless of the foregoing, Petrik suggests either removing the sentence in Rule 55(a)(3) first set out above, requiring a party seeking a default judgment under that paragraph to proceed under Rule 3.2(a), or amending the sentence to require that notice of a motion for default judgment be given, with the party against whom the judgment is sought allowed 10 days to respond.
If the Committee is in agreement with the above discussion, no change to paragraph (a)(3) is needed. However, it may be helpful to make a few minor changes, regardless of whether they are necessary, similar to the amendment suggested by Petrik. One possible change is to insert the term "motion" in place of the term "application," even though Rule 7(b)(1) requires an application to be made by motion. This change would clarify that the rules pertaining to motions are applicable and might possibly eliminate an unnecessary document--the application--if a party is preparing both an application and a motion. Another change would be to add language requiring notice of the motion to be served with the motion and to include the time of the hearing on the motion.
A proposal to amend Rule 55(a)(3) in this manner is attached to this memo.