This opinion will be unpublished and
may not be cited except as provided by
Minn. Stat. § 480A.08, subd. 3 (1994).
James Martyn Andrews,
Daryl Shiber, et al.,
National Pawn Brokers, Inc.,
Minnesota Court of Appeals # C1-95-1890
Hennepin County District Court # 959196
May 7, 1996
James Martyn Andrews (Pro Se), 4932 W. 82nd Street, Bloomington, MN 55437 (respondent)
Stuart E. Gale, 210 Valley Office Park, 10800 Lyndale Avenue South
Bloomington, MN 55420 (for appellant)
Considered and decided by Amundson, Presiding Judge, Crippen, Judge, and Willis, Judge.
U N P U B L I S H E D O P I N I O N
Appellant challenges a district court order denying relief from a default judgment of the conciliation court. Because the record makes it evident that appellant was not entitled to a vacation of the default judgment, we affirm.
F A C T S
Respondent James Andrews commenced this action in Hennepin County Conciliation Court, claiming that appellant National Pawn Brokers and others owed him $3,750 in wages. None of the defendants appeared before the conciliation court on the date set for trial, and the court ordered a default judgment against appellant.
Appellant subsequently moved to vacate the default judgment pursuant to Minn. R. Gen. Pract. 520(a) (1995). The conciliation court denied the motion in June 1995.
More than 23 days after the conciliation court's denial of the motion to vacate, appellant attempted to file a limited removal motion in the district court, calling for de novo review of the motion to vacate.  The district court refused to accept the motion for filing, apparently because the motion was not made within 23 days after the prior conciliation court order.  Appellant restated its vacation request, asking the court to extend the time for requesting this relief. The court held a hearing on the matter, but issued an order in August 1995 that denied relief "for the reasons stated on the record at the hearing" and because of the court's conclusion that it had no jurisdiction to grant this relief.
D E C I S I O N
Although the district court based its August 1995 order, in part, on "the reasons stated on the record at the hearing," appellant has failed to provide this court with a transcript of that hearing. The parties have briefed arguments for and against the vacation of the default judgment of the conciliation court. This combination of circumstances compels us to examine the merits of appellant's vacation proposal. See Brecht v. Schramm, 266 N.W.2d 514, 520 (Minn. 1978) (calling for affirmance where the trial court arrives at a correct decision, regardless of the theory advanced for its action); see also Myers v. Price, 463 N.W.2d 773, 775 (Minn. App. 1990) (announcing that appellate court will affirm the judgment if it can be sustained on any grounds), review denied (Minn. Feb. 4, 1991).
Absent an abuse of its discretion in refusing to vacate a default judgment, we must affirm the district court's decision. Foerster v. Folland, 498 N.W.2d 459, 460 (Minn. 1993). In deciding whether to grant the motion, a court should consider whether the defaulting party (1) has a reasonable defense on the merits, (2) has a reasonable excuse for his failure or neglect to answer, (3) has acted with due diligence after notice of entry of judgment, and (4) has demonstrated that no substantial prejudice will result to either party. Hinz v. Northland Milk & Ice Cream Co., 237 Minn. 28, 30, 53 N.W.2d 454, 455-56 (1952).
In a motion filed prior to the conciliation court's hearing on June 8, 1995, appellant asserted the defenses that it was "not indebted" to the respondent and that the respondent either was "not an employee" of the appellant or was "an at-will employee." At the initial limited removal hearing, appellant stated that if any of the defendants owed the respondent money, it would be one of the defendants that was dismissed from the action, Tried 'N True, Inc. That corporation appears now to be defunct.
Respondent maintains that these defenses are not "reasonable," pointing out that all three corporate defendants were owned solely by Daryl Shiber, another defendant, and that respondent has submitted evidence of commingling of funds of the several corporations as well as documentation of income respondent received from National Pawn Brokers. Because of the absence of evidence to support appellant's assertion that it has satisfied all outstanding debts with respondent, the alleged defenses here are weak. It would not have been an abuse of discretion for the district court to find the appellant's defenses unreasonable.
Appellant also has failed to present a reasonable excuse for the purposes of satisfying the second Hinz factor.  The record demonstrates that Shiber, appellant's sole shareholder, was personally served and that appellant was served by mail. Appellant argues that, because one of appellant's employees accepted service for appellant, Shiber did not know that a particular date had been set for a trial of respondent's case. The alleged misplacement of the documents served on appellant does not establish a reasonable excuse. See Hovelson v. U.S. Swim & Fitness, 450 N.W.2d 137, 142 (Minn. App. 1990) (appellant's alleged loss of summons and complaint did not constitute excusable neglect), review denied (Minn. Mar. 16, 1990). Moreover, even if Shiber had not known of the service on appellant, it was inexcusable for him to disregard the service that he personally received and then fail to appear in court on the original date scheduled for trial.
The third Hinz factor requires the defaulting party to act with due diligence after notice of entry of judgment. Hinz, 237 Minn. at 30, 53 N.W.2d at 456. Judgment for respondent was entered on May 8, 1995. Within 23 days of that date, appellant filed a motion in the conciliation court for a vacation of the default judgment. With respect to the filing of that initial motion, the appellant thus acted with due diligence. Appellant's subsequent actions, including prematurely attempting to file an appeal from the conciliation court's refusal to vacate its judgment, appear less than diligent, explaining the district court's concern about its jurisdiction.
Finally, under the fourth Hinz factor, the appellant must show that no substantial prejudice will result to the other party by vacating the default judgment. Id. Respondent claims that he will be harmed if the case is remanded for a trial on the merits, primarily because he will be unable to earn income during the time that he must appear again in court. Ordinarily, added expense and delay alone are insufficient to show prejudice. Hovelson, 450 N.W.2d at 142. However, if the facts suggest an "intentional ignoring of process, the additional expense must be viewed in a different light." Id. Respondent asserts that the appellant has demonstrated a lack of good faith. Respondent claims that one example of this lack of good faith is Shiber's affidavit of July 29, 1995, in which Shiber denies having received service of a summons and complaint for this action. Although the respondent may not have shown substantial prejudice, Shiber's conduct minimizes the importance of a finding of prejudice under the fourth Hinz factor. Id.
An analysis under Hinz requires a balancing of the four relevant factors. Guillaume & Assoc. v. Don-John Co., 371 N.W.2d 15, 19 (Minn. App. 1985). A strong showing on three of the factors may overcome the relative weakness of one factor. Id. Appellant has failed to make a convincing showing on most of the factors. Appellant was prompt in filing a motion to vacate in the conciliation court and there is little evident prejudice to the respondent if the judgment were reopened. But appellant has no reasonable excuse for not appearing in the conciliation court on the date originally set for trial and has presented no evidence to show the existence of a reasonable defense. For these reasons, we conclude the record justifies the district court's denial of appellant's vacation motion. Because we decide the case on this basis, we do not reach appellant's arguments regarding the timing of limited removal motions and the right of a party to seek extensions of filing time.
Dated April 29, 1996
If the district court grants the motion to vacate, the action is then transferred back to the conciliation court for a new trial. Minn. R. Gen. Pract. 521(e)(3) (1995).
See Minn. R. Gen. Pract. 521(b) (1995) (allowing 20 days for removal), 521(e) (incorporating same time requirements for limited removal); Wilkins v. City of Glencoe, 479 N.W.2d 430, 432 (Minn. App. 1992) (allowing an additional three-day period for removal following the mailing of the conciliation court's judgment).
We have observed before that a default judgment in conciliation court may be vacated upon a showing of excuse for non-appearance, even where a meritorious defense is not demonstrated. Miller v. Parent's Garage, Inc., 358 N.W.2d 114, 115 (Minn. App. 1984).