STATE OF MINNESOTA
IN COURT OF APPEALS
Horizon Development Group, L.L.C.,
Cavalier Condominium Association,
Filed October 5, 1999
Olmsted County District Court
File No. CX-96-2441
Michael A. Mochinski, P. Arthur Moe, 3300 County Road 10, Suite 514, Brooklyn Center, MN 55429 (for appellant)
Considered and decided by Klaphake, Presiding Judge, Anderson, Judge, and Halbrooks, Judge.
After appellant Cavalier Condominium Association (Cavalier), a corporation, appeared at trial without counsel, the district court denied its motion for a continuance, entered default judgment against it, and granted permanent injunctive relief and monetary damages to respondent Horizon Development Group, L.L.C. (Horizon). Because (1) the trial court had discretion to grant a continuance, (2) corporations, such as Cavalier, cannot appear without an attorney, and (3) any other result effectively would have forced the trial court to grant an unwarranted continuance, we affirm.
In May 1998, a trial date of September 28, 1998 was set. On September 22, six days before trial, Cavalier fired the attorney who had represented it for over two years. By affidavit, Cavalier's president explained that he had fired the attorney because he was dissatisfied with the attorney's representation in another, unrelated case. On the same day, the attorney sent a notice of withdrawal to opposing counsel and to the court; the attorney also requested a continuance. Cavalier's president similarly sent a letter to the court requesting a one-month delay to obtain new counsel. By letter dated September 23 and addressed to the court, Horizon's attorney objected to Cavalier's request for a continuance, noting that the case had been pending for two years and that further delay would harm Horizon by forcing it to deal with another winter season of accumulated ice in its parking lot. A few days later, the court's secretary contacted Cavalier's president by telephone to confirm that the matter would be tried on September 28.
On September 28, Horizon appeared ready for trial with witnesses and an expert. Cavalier's president, who is not an attorney, appeared and informed the trial court that he had not attempted to secure replacement counsel.
The trial court determined Horizon would be harmed if a continuance were granted because, due to the court's busy calendar, trial could not be rescheduled for several months. The court further determined that Cavalier had to be represented by an attorney under Nicollet Restoration, Inc. v. Turnham, 486 N.W.2d 753 (Minn. 1992) (corporation must be represented by licensed attorney when appearing in district court). The court thereafter struck Cavalier's answer and took testimony from Horizon's property manager regarding damages.
Cavalier appeals from the judgment awarding Horizon damages of $39,322 and granting Horizon a permanent injunction.
A client may discharge its attorney at any time, with or without cause. Nordling v. Northern States Power Co., 478 N.W.2d 498, 501 (Minn. 1991). An attorney seeking to withdraw from representing a client in a civil action in district court need not obtain prior court permission. Minn. R. Gen. Pract. 105. However, "[w]ithdrawal of counsel does not create any right to continuance of any scheduled trial or hearing." Id. The comment to rule 105 recognizes that the primary concern upon withdrawal is the continuity of the litigation and that withdrawal should not impose additional burdens on opposing parties. Id., advisory comm. cmt. - 1997 amendment. In this case, those concerns outweighed Cavalier's right to fire its former attorney and its attorney's right to withdraw without first securing substitute counsel or obtaining a continuance to do so.
Under the facts presented here, the trial court did not abuse its discretion by denying Cavalier's motion for a continuance. Those facts show: (1) only six days prior to trial, Cavalier fired its attorney, who had been representing it for two years; (2) Cavalier's president admitted at trial that he had made no effort to obtain new counsel prior to the trial date, despite contact from court personnel that the matter would be tried as scheduled; and (3) given the trial court's calendar, trial could not be rescheduled for several months, during which Horizon would have had to experience yet another winter season of accumulated water and ice in its parking lot, incur additional damages, and possibly endanger its residents and other members of the public.
Cavalier argues that its president assumed that he could appear at trial and represent the corporation pro se and that no one advised him otherwise. A corporation must be represented by a licensed attorney when appearing in district court. Nicollet Restoration, Inc. v. Turnham, 486 N.W.2d 753, 756 (Minn. 1992). As the trial court reasoned, Cavalier's president made the decision to appear pro se and should not be relieved of the consequences of that decision. See Gruenhagen v. Larson, 310 Minn. 454, 460, 246 N.W.2d 565, 569 (1976).
Cavalier nevertheless argues Nicollet Restoration does not hold that default judgment is the proper remedy when a corporation appears without counsel. We disagree. In Nicollet Restoration, 486 N.W.2d at 756, the district court dismissed the corporation's action with prejudice. Here, a default judgment was entered against the corporation, a party defendant. The result in either case is the same: relief was granted to the non-defaulting party and denied to the defaulting party.
Cavalier further argues the default judgment was erroneously granted because it did not receive three-days' notice, as required by Minn. R. Civ. P. 55.01(b). Again, we disagree. The three-day notice is required only when the defaulting party has filed a responsive pleading or otherwise made an appearance. Howard v. Frondell, 387 N.W.2d 205, 208-09 (Minn. App. 1986), review denied (Minn. July 31, 1986). In this case, once Cavalier's attorney withdrew, it was within the trial court's discretion to strike the answer and other papers that its attorney had submitted and treat Cavalier as not having made an appearance. As the trial court noted, Cavalier's decision to fire its attorney six days before trial created a "very difficult situation" in which the court was forced to either grant Cavalier a continuance or severely prejudice Horizon by delaying the trial. Under these circumstances, the trial court did not abuse its discretion by granting a default judgment against Cavalier. See Scandia Down Corp. v. Euroquilt, Inc., 772 F.2d 1423, 1427 (7th Cir. 1985) (corporation may not grant itself continuance by manipulating proceedings so that it has no counsel; district court has discretion to dismiss or grant default judgment in such a case).
In this case, the trial court properly addressed and balanced these factors. Without the injunction, Horizon would continue to be irreparably injured by water problems in its parking lot. Although Horizon earlier had presented Cavalier with a proposal to correct the problem at a cost of $5,000, Cavalier refused to participate or contribute half of that cost to build a proper drain system for the water. The court evidence further recognized that the water poses a danger to people who use Horizon's parking lot and that this harm is only exacerbated when the water freezes with the onset of winter. After balancing all the relevant factors, the trial court properly exercised its discretion and imposed a permanent injunction that required Cavalier to remove the wall and prohibited Cavalier from obstructing the drainage of water in the future. Ostlund v. Stearns County, 221 Minn. 329, 332, 22 N.W.2d 173, 174 (1946) (landowner may be entitled to injunction and damages where adjoining landowner collects and gathers surface water, and causes that water to flow onto adjoining land in increased and injurious quantities).
The trial court did not abuse its discretion by entering a default judgment against Cavalier, granting permanent injunctive relief to Horizon, and awarding damages of $39,322 to Horizon.
 The trial court, however, still had jurisdiction over Cavalier because Horizon's complaint was properly served on one of Cavalier's officers. See Minn. R. Civ. P. 4.03(c).