Vacating (Re-Opening) a Default Judgment in Minnesota

LitigationThere are some circumstances in which a default judgment can be vacated (re-opened).

Applicable Statute

Minnesota Rule of Civil Procedure 60.02, Mistakes; Inadvertence; Excusable Neglect; Newly Discovered Evidence; Fraud; etc.

On motion and upon such terms as are just, the court may relieve a party or the party’s legal representatives from a final judgment (other than a marriage dissolution decree), order, or proceeding and may order a new trial or grant such other relief as may be just for the following reasons:

(a) Mistake, inadvertence, surprise, or excusable neglect;
(b) Newly discovered evidence which by due diligence could not have been discovered in time to move for a new trial pursuant to Rule 59.03;
(c) Fraud (whether heretofore denominated intrinsic or extrinsic), misrepresentation, or other misconduct of an adverse party;
(d) The judgment is void;
(e) The judgment has been satisfied, released, or discharged or prior judgment upon which it is based has been reversed or otherwise vacated, or it is no longer equitable that the judgment should have prospective application; or
(f) Any other reason justifying relief from the operation of the judgment.

The motion shall be made within a reasonable time, and for reasons (a), (b), (c) not more than 1 year after the judgment, order, or proceeding was entered or taken. A rule 60.02 motion does not affect the finality of a judgment of suspend its operation. This rule does not limit the power of a court to entertain an independent action to relieve a party from a judgment, order, or proceeding, or to grant relief to a defendant not actually personally notified as provided in Rule 4.043, or to set aside a judgment for fraud upon the court. Writs of coram nobis, coram vobis, audita querela, and bills of review and bills in the nature of a bill of review are abolished, and the procedure for obtaining any relief from a judgment shall be by motion as prescribed in these rules or by an independent action.

Case Law

The court in Grunke v. Kloskin 335 N.W.2d 207 (1984) held that the person that the default judgment was entered against was excusably negligent for purposes of vacating the default judgment because he was unaware of the need to file a timely answer, was out of town for three weeks after receiving the summons, and upon his return, took steps to immediately file an answer.

The Minnesota Court of Appeals in Galatovich v. Watson 412 N.W.2d 758 (1987) held that a default judgment must be vacated if the appellant shows reasonable defense on the merits; reasonable excuse for their failure to neglect to act; they acted with due diligence after notice of entry of default judgment; and no substantial prejudice to the opposing party will result.

Here, the defendant’s belief that his verbal response to plaintiff’s attorney was an adequate answer and that he would receive notice of trial date was a weak showing of a reasonable excuse for failure to answer, but strong showing of reasonable defense on the merits, due diligence and absence of substantial prejudice to plaintiff. The court, in this case, required that the default judgment be vacated.

Vacating a default judgment cases are very fact-centered. The particular facts in each case tend to determine whether or not the default judgment will be vacated or not.

Attorney’s Fees

Minnesota Rule of Civil Procedure 55.01

(a) When the plaintiff’s claim against a defendant is upon a contract for the payment of money only, or for the payment of taxes and penalties and interest thereon owing to the state, the court administrator, upon request of the plaintiff and upon affidavit of the amount due, which may not exceed the amount demanded in the complaint of in a written notice served on the defendant in accordance with Rule 4 if the complaint seeks an unspecified amount pursuant to Rule 8.01, shall enter judgment for the amount due and costs against the defendant.

(b) In all other cases, the party entitled to a judgment by default shall apply to the court therefor. If a party against whom judgment is sought has appeared in the action, that party shall be served with written notice of the application for judgment at least 3 days prior to the hearing on such application. If the action is one for the recovery of money only, the court shall ascertain, by a reference or otherwise, the amount to which the plaintiff is entitled and other judgment therefor.

(c) If relief other than the recovery of money is demanded and the taking of an account, or the proof of any fact, is necessary to enable the court to give judgment, it may take or hear the same or order a reference for that purpose, and order judgment accordingly.

(d) When service of the summons has been made by published notice, or by delivery of a copy outside the state, no judgment shall be entered on default until the plaintiff shall have filed a bond, approved by the court, conditioned to abide such order as the court may make concerning restitution of any property collected or obtained by virtue of the judgment in case a defense is thereafter permitted and sustained; provided, that in actions involving the title to real estate or to foreclose mortgages thereon such bond shall not be required.

(e) When judgment is entered in an action upon a promissory note, draft or bill of exchange under the provisions of this rule, such promissory note, draft or bill of exchange shall be filed with the court administrator and made a part of the files of the

Minn. R. Civ. P. 55.01

Case Law

The Minnesota Supreme Court in Finden v. Klaas 268 Minn. 268, 128 N.W.2d 748 held that the court vacating a default judgment may impose conditions requiring defendant to pay costs and disbursements including reasonable attorney’s fees and either to deposit security for payment of judgment or to effect restoration of financial ability to respond in damages.

It appears that you can ask the court to post a bond with the court, including reasonable attorney’s fees prior to having the court vacate the default judgment.