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Katai-Idin Trust Co. v. Magnus

Superior Court of Maine, Aroostook

March 31, 2017




          Pending before the court is Defendant Bertram Magnus' Motion To Set Aside Default and Default Judgment brought pursuant to M.R.Civ. P. 55(c). For the reasons set forth herein, the court denies this motion.


         The court conducted a hearing of this matter on January 31, 2017. The Plaintiff appeared through counsel, Richard L. Currier Esq. The Defendant Bertram Magnus appeared representing himself. The Defendant Danielle L'Heureux did not appear. Although both parties presented argument, neither presented any evidence. The court has taken judicial notice of the contents of the file. The file reflects that on or about February 22, 2014 the Defendants entered into a retail installment sales contract pursuant to which they purchased a used 2011 Chevrolet Aveo motor vehicle from Griffeth Ford Lincoln, a motor vehicle dealership located in Caribou, Maine. The Plaintiff loaned the purchase price to the Defendants, each of whom contracted to repay the amount of the loan in its entirety. There is no dispute that the Plaintiff is the holder in due course of the Consumer Credit Contract upon which this action is based. There is also no dispute that the Defendants failed to make the required payments and were in default of their agreement at the time the Plaintiff commenced this action. There is no dispute that the Plaintiff provided to the Defendants a Notice of Default and a Notice of Right to Cure. Finally, there is no dispute that the Defendants did not cure their default. The Plaintiff then repossessed the vehicle and sold it at a public sale for $100. The resulting deficiency on the contract was $7012.57.

         On September 14, 2016, the Plaintiff served the Defendant Bertram Magnus with a copy of the complaint and summons underlying this action. On September 22, 2016, the Plaintiff served the Defendant Danielle LTIeureux with a copy of the complaint and summons. The complaint demanded judgment against the Defendants, jointly and severally in the amount of the deficiency plus interest and costs.

         The summons clearly directed each defendant to file their answer with the Superior Court located at 144 Sweden Street in Caribou, Maine within 20 days of service upon them. The summons also clearly warned that a failure to file the required answer could result in the entry of a default judgment against them.

         Neither defendant filed an answer with the Superior Court. As appears from the "affidavit'[1] of Richard L. Rhoda, Esq., the Defendant Magnus went to his law office after being served with the summons and complaint. Although Attorney Rhoda has not appeared as counsel for the Defendant, his office secretary apparently assisted the Defendant with the preparation of an answer and provided a transmittal letter and envelope addressed to the Houlton District Court and not the Aroostook County Superior Court as required by the summons. Additionally, it appears that a copy of that responsive pleading was mistakenly addressed to Attorney Richard L. Rhoda rather than Plaintiffs attorney Richard L. Currier. Consequently, neither the Superior Court nor Attorney Currier received the Defendant's response. On October 27, 2016, the Plaintiff requested that the Defendants be defaulted and that a default judgment be entered against each. The clerk entered the defaults and the default judgments against the defendants .The amount of the default judgment was $7012.57 plus interest and costs, [2]


         The pending motion is governed by the provisions of M.R.Civ.P. 55 (c) and applicable case law. The rule provides that "For good cause shown the court may set aside an entry of default and, if a judgment by default has been entered may likewise set it aside in accordance with Rule 60(b)." The Law Court has indicated that

"To establish good cause, a party must show a good excuse for his or her untimeliness and a meritorious defense. The good excuse and the meritorious defense requirements are "two distinct components", both of which must be satisfied in order to prevail on a Rule 55(c) motion. Levine v. KeyBank Nat'l Ass'n. 2004 ME 131, ¶20, 861 A.2d 678, 684 (internal citations omitted).

As indicated above, neither party submitted any evidence and the court has before it, only the submissions found within the file. As the moving party, the Defendant has the burden of proof and must show both a good excuse for not properly filing his answer and in addition, must demonstrate a meritorious defense. For argument's sake and without making any specific finding that Defendant Magnus' inadvertent filing of his response in the wrong court constitutes a "good excuse", the court will nonetheless consider this honest mistake to be a "good excuse" in the absence of any objection from the Plaintiff. This still leaves the question of whether the Defendant has demonstrated a meritorious defense.

         The Defendant has indicated that he became involved in the underlying transaction as an act of charity towards the Defendant L'Heureux and that it was she who actually enjoyed the use of the vehicle until it was repossessed. While the court may be sympathetic to Defendant Magnus' circumstances, the fact remains that the dealer sold the car and the Plaintiff financed the sale upon the strength of two promises of repayment, one by Defendant L'Heureux and the other by the Defendant Magnus. No one has made the payments to which the Plaintiff was clearly entitled. Notwithstanding the Defendant's charitable inclinations towards Ms. L'Heureux, the court's ruling cannot be governed by sympathy.

         The Defendant also points to the fact that the purchase price of the car in February of 2014 was $11, 969.90 and it was sold on June 3, 2016 for $100. The Defendant argues that such a large disparity in values indicates that the vehicle was not sold in a "commercially reasonable manner" as required. The Defendant also argues that "If this Court does not vacate the default it will "work(s) a plain and unmistakable injustice against the Defendant. Cutillo v. Gerstel, 477 A.2d750, 752(Me 1984), ""[3]

         A court does have the authority to grant relief, including relief from a default judgment (See Roussel v. Ashby, 2015 ME 43, ¶ 12, 114 A.3d 670, 674) in circumstances where a denial of relief would work a plain and unmistakable injustice. A plain and unmistakable injustice is one that is instantly visible without argument. Sullivan v. Rockwood, 20 ...

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