Mary Brown, Appellant,

This opinion will be unpublished and
may not be cited except as provided by
Minn. Stat. § 480A.08, subd. 3 (2018).

STATE OF MINNESOTA
IN COURT OF APPEALS
A18-0892

Mary Brown,
Appellant,

vs.

MSP Services LLC, d/b/a MSP Home Rental,
Respondent.

Filed April 22, 2019
Reversed
Cochran, Judge

Dakota County District Court
File No. 19HA-CV-17-1384

Colin J. Pasterski, Christopher J. Moreland, Halunen Law, Minne apolis, Minnesota (for
appellant)

Daniel R. Spicer, Thomas M. Fafi nski, Nathan W. Nelson, Steven V. Rose, Virtus Law,
PLLC, Brooklyn Park, Minnesota (for respondent)

Considered and decided by Hooten , Presiding Judge; Reyes, Judg e; and Cochran,
Judge.
U N P U B L I S H E D O P I N I O N
COCHRAN, Judge
Appellant Mary Brown challenges the district court’s order gran ting respondent
MSP Services LLC’s motion to vacate a default judgment in favor of Brown. The district
court granted the motion under Minn. R. Civ. P. 60.02 based on its determination that all

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four Finden factors were met. Because the third Finden factor was not met, the district
court abused its discretion when it vacated the default judgment. We reverse.
FACTS
I n A p r i l 2 0 1 7 , M a r y B r o w n s u e d M S P S e r v i c e s L L C ’ s ( M S P ) f o r d i sability
discrimination in violation of the Minnesota Human Rights Act ( MHRA), Minn.
Stat. §§ 363A.01-.44 (2018). Brown claimed that MSP terminated h e r e m p l o y m e n t i n
violation of the MHRA after she told her manager, Michael T. Sc haeffer (also the chief
executive officer of MSP), that she would require a third surge ry and other treatment
related to a medical diagnosis.
On April 21, 2017, Brown serve d a summons and complaint on MSP by handing
them to Schaeffer. The summons read, in part:
YOU MUST REPLY WITHIN 20 DAYS TO
PROTECT YOUR RIGHTS. You must give or mail to the
person who signed this Summons a written response called an
Answer within 20 days of the date on which you received this
Summons.

The summons also provided that if MSP did not answer within 20 days it would “lose this
case.” Further, the summons indi cated in bold print that even if MSP did not retain the
assistance of a lawyer, it must p rovide a written answer to the complaint. May 11, 2017
was the 20th day after service on April 21, 2017.
MSP did not answer the complaint . On June 7, 2017, 47 days aft er service of the
summons and complaint, Brown filed a notice of motion and motion for default judgment.
On June 9, 2017, she served MSP b y sending the notice of the mo tion by U.S. mail and
email to Schaeffer. The notice of motion indicated that the motion would be heard by the

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district court on July 12, 2017, at 9:00 a.m. On June 9, 2017, after receiving the email,
Schaeffer sent an email response that read, “It was my understa nding that my attorney
reached out to you and never heard back from you. We assumed after all this time that you
dropped this matter. I will talk with him on Monday and figure out what happened.” There
is no other evidence in the record that MSP was represented at this time.
On June 13, 2017, the district court entered a scheduling order that set several
deadlines. The first deadline was September 29, 2017—the deadline to join parties and to
complete discovery. Trial was scheduled for January 29, 2018. The scheduling order did
not refer to the default-judgment hearing that was scheduled for July 12, 2017.
MSP did not appear at the July 1 2, 2017 default-judgment motio n hearing. In an
order dated July 12, 2017, the district court granted Brown’s m otion for default judgment
against MSP. The order did not determine Brown’s damages. The district court scheduled
a hearing to determine damages for August 17, 2017. On July 13 , 2017, Brown served
MSP by mail and email with the order granting entry of default judgment and notice of the
August 17 hearing. The notice stated, “You are expected to appear fully prepared.”
MSP did not appear at the August 17 hearing. In an August 23, 2017 order, the
district court awarded Brown $915,330.65 in damages. Judgment was entered on
August 23, 2017. On August 24, 2017, Brown served a copy of the order for judgment on
MSP by mail and email.
In an effort to collect the judgment, Brown asked for an order for disclosure of
MSP’s financial information. The district court directed MSP t o disclose financial
information in an order filed on September 25, 2017. The order was mailed to MSP, but

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MSP did not comply. In an order filed on October 16, 2017, the district court ordered MSP
to appear on November 16, 2017 to show cause why it should not be held in contempt for
failure to provide the financial information as ordered.
On or around November 8, 2017, MSP retained counsel for the first time to represent
it in the matter involving Brown. On November 10, 2017, MSP’s counsel provided Brown
with a completed financial disclosure form. The show-cause hearing was canceled.
On December 22, 2017, MSP filed a motion to vacate the August 23, 2017 default
judgment under Minn. R. Civ. P. 60.02.1 In support of the motion, MSP filed an affidavit
from Schaeffer stating that MSP was not aware that a judgment h ad been entered until
September 25, 2017, when it received the demand for financial disclosure. Schaeffer stated
in his affidavit that when he re ceived the court’s scheduling o rder in June 2017, it
“appeared that the deadline for actions to be taken started on September 29, 2017 and ended
on January 29, 2018—the date the jury trial was scheduled to oc cur.” Schaeffer further
asserted that MSP “believed the process was similar to concilia tion court and housing
court, where no written response to the claim is necessary, and believed it could explain its
position regarding [Brown’s] clai ms with the [c]ourt at one of the stated times between
September 29, 2017 and January 29, 2018.” MSP also filed other documents to support its
assertion that it had a reasonable defense on the merits of the claim.

1 MSP brought the motion under Minn. R. Civ. P. 60.02(a), (f). Along with the motion,
counsel for MSP filed a certificate of representation. This wa s the first time a certificate
of representation was filed on behalf of MSP in the matter.

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Over Brown’s objection, the district court granted MSP’s motio n to vacate the
default judgment. This appeal follows.
D E C I S I O N
Brown argues that the district court abused its discretion when it granted MSP’s
motion to vacate the default judgment. Minn. R. Civ. P. 60.02 provides that the court may
relieve a party from a final judgment and order a new trial or grant other relief in the event
of mistake, inadvertence, surprise, or excusable neglect, or for any other reason justifying
relief from the operation of the judgment. Whether relief unde r this rule is appropriate is
“committed to the sound discretion of the district court and is based upon all the
surrounding circumstances of each case.” Cole v. Wutzke, 884 N.W.2d 634, 637 (Minn.
2016). Minnesota courts are to be liberal in vacating default judgments because the goal
of all litigation is to bring about judgments after trials on the merits. Taylor v. Steinke, 203
N.W.2d 859, 860 (Minn. 1973). This court reverses the district court only when there has
been a clear abuse of discretion. Cole, 884 N.W.2d at 637. A court abuses its discretion if
it misapplies the law or if its factual findings are clearly er roneous. Gams v. Houghton,
884 N.W.2d 611, 620 (Minn. 2016).
The Minnesota supreme court has “long stated” that a motion to vacate:
should be granted where the movant affirmatively satisfies four
requirements: (1) a reasonable defense on the merits . . . ; (2) a
reasonable excuse for his or her failure or neglect to act;
(3) that he or she acted with due diligence after learning of the
error or omission; and (4) that no substantial prejudice will
result to the other party.

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Cole, 884 N.W.2d at 637 (quotations omitted). These factors are kn own as the Finden
factors, based on the opinion in Finden v. Klaas, 128 N.W.2d 748 (Minn. 1964). In Finden,
the appellant’s attorney failed to answer the respondent’s complaint and a default judgment
was entered against the appellant. 128 N.W.2d at 749-50. The district court denied the
appellant’s motion to vacate the default judgment. Id. at 750. The supreme court reversed
and remanded, holding that a court should “relieve a defendant from the consequences of
his attorney’s neglect” in cases where a defendant seeking to v acate a default judgment
makes an affirmative showing of all four Finden factors. Id.
While Finden involved the negligence of an attorney, the factors have been applied
consistently to evaluate whether a default judgment should be vacated in cases involving a
pro se defendant. See, e.g., Black v. Rimmer, 700 N.W.2d 521 (Minn. App. 2005).
A party seeking relief under Minn. R. Civ. P. 60.02 must establ ish all four Finden
factors. Cole, 884 N.W.2d at 637; see also Gams, 884 N.W.2d at 620 (rejecting the notion
that a party seeking relief under Minn. R. Civ. P. 60.02 need n ot “categorically establish
all four” of the Finden factors (quotation omitted)).
Brown argues, inter alia, that the district court abused its di scretion when it found
all four Finden factors were met and granted MSP’s motion to vacate the default judgment
under rule 60.02.2 She contends that the third Finden factor—that the movant acted with

2 In its order, the district court granted MSP’s motion under rule 60.02. The district court
did not specify whether it was granting the motion under rule 6 0.02(a) or (f). The only
issue on appeal is whether the district court properly applied the four part Finden test in
granting the motion.

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due diligence after learning of the error or omission—was not met, noting that the district
court itself found that MSP was not diligent. We agree.
Minn. R. Civ. P. 60.02 requires that a motion to vacate be brou ght within a
“reasonable time.” What constit utes a reasonable time is deter mined on a case-by-case
basis. Sommers v. Thomas , 88 N.W.2d 191, 195-96 (Mi nn. 1958). Due diligence in
bringing a motion to vacate is measured from the time that the movant learned of his error
or omission. Cole, 884 N.W.2d at 639. A party’s conduct during the pendency of the
lawsuit, including its knowledge and awareness of the suit and its failure to respond to
notices, may be considered by a court in determining whether th e due-diligence factor is
met. Hovelson v. U.S. Swim & Fitness, Inc. , 450 N.W.2d 137, 14 2 (Minn. App. 1990),
review denied (Minn. Mar. 16, 1990).
Here, the district court expressly found that MSP “was not dili gent [itself] after
receiving notice of judgment in August.” Yet, the district cou rt went on to conclude that
the due-diligence Finden factor was met because MSP “retained counsel in November and
the motion [to vacate] was filed in December.”3 The district court based its determination
on its finding that MSP’s attorney was diligent after he was re tained, not that MSP was
diligent. But the Finden factors, established in part to relieve a movant from his attorney’s

3 The district court measured due diligence from August 24, 2017 and found that MSP was
not diligent. We believe that the appropriate time from which the district court should have
measured due diligence is July 13, 2017, when MSP was served wi th notice of the order
granting entry of default judgment. See Cole, 884 N.W.2d at 639 (indicating that due
diligence is measured from the ti me that the party seeking to v acate the default judgment
learns of his error or omission ). Considering MSP’s conduct, w e agree with the district
court that MSP was not diligent even assuming that it learned of its error in August.

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neglect, ask whether the movant was diligent after learning of his error or omission.4 Cole,
884 N.W.2d at 639; Finden, 128 N.W.2d at 750. The district court’s express factual finding
that MSP was not diligent precludes a determination that the due-diligence factor was met.
The district court’s finding that MSP was not diligent is suppo rted by the record.
MSP was aware of the lawsuit once the summons and complaint wer e served on it in
April 2017. MSP received multiple notices of motions and hearings but consistently failed
to respond to the motions or app ear at hearings. The only time over the course of the
litigation that MSP did respond wa s on June 9, 2017, when Schae ffer sent an email to
B r o w n s u g g e s t i n g t h a t M S P w a s r e p r e s e n t e d b y a n a t t o r n e y . M S P f a i l e d t o a c t a f t e r
receiving notice of the default judgment entered in July 2017. MSP did not retain an
attorney until November 2017 and did not seek to vacate the def ault judgment until late
December 2017. MSP ignored the proceedings until it was ordere d to appear in court to
show cause as to why it should not be held in contempt.
The district court’s conclusion that the due-diligence factor was met is inconsistent
with the facts in the record and its own finding that MSP was “ not diligent.” As a result,
the district court erred in ruling that this Finden factor was met. Because one of the Finden
factors was not met, the district court abused its discretion i n granting MSP’s motion to

4 To determine that an attorney’s diligence alone can remedy a movant’s lack of diligence
is inconsistent with the purpose of the Finden factors.

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vacate under Minn. R. Civ. P. 60.02. See Gams, 884 N.W.2d at 620 (noting that a party
seeking relief from a default judgment must establish all four Finden factors).5
Reversed.

5 Because we find that the district court abused its discretion by granting the motion to
vacate despite finding that MSP was not diligent, we do not reach Brown’s other arguments
concerning the other Finden factors and the strength of MSP’s showing on each factor.