Cheryl Orcutt, Respondent,

This opinion is nonprecedential except as provided by
Minn. R. Civ. App. P. 136.01, subd. 1(c).

STATE OF MINNESOTA
IN COURT OF APPEALS
A20-0823

Cheryl Orcutt,
Respondent,

vs.

Jon Crews, et al.,
Appellants.

Filed March 1, 2021
Affirmed in part, reversed in part, and remanded
Connolly, Judge

Olmsted County District Court
File No. 55-CV-19-1135

Andrew L. Davick, Meshbesher & Spence, Rochester, Minnesota; and

Gregory J. Johnson, G. Johnson Law, PLLC, Apple Valley, Minnesota (for respondent)

Ken D. Schueler, John T. Giesen, Dunlap & Seeger, P.A., Rochester, Minnesota (for
appellants)

Considered and decided by Ross, Presiding Judge; Connolly, Judge; and Smith,
Tracy M., Judge.
NONPRECEDENTIAL OPINION
CONNOLLY, Judge
Appellants, the owner and the driver of a vehicle that injured re spondent in a 2012
accident, challenge the default judgment entered against them after they failed to answer

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respondent’s complaint, arguing both that they have at least a weak reasonable excuse for
failing to answer because their insurer was partly to bla me and that the damages awarded
in the default judgment were speculative. Because there is no evidence of a reasonable
excuse in the record, we affirm the grant of the default judgment; because there are no
findings to explain the amount awarded for future medical expenses, we reverse that award
and remand it for explanatory findings.
FACTS
On October 25, 2012, respondent Cheryl Orcutt was injured by a pickup truck driven
by appellant Jon Crews and owned by appellant David Gosch. In 2016, respondent notified
her insurer that she had agreed to settle the liability aspect of the case for $100,000 and
intended to pursue an underinsured motorist (UIM) claim. The UIM claim was settled in
2018 for $55,000, after respondent brought a declaratory-judgment action.
Respondent had entered into a Drake-Ryan settlement agreement with appellant
Gosch’s primary insurer. 1 It provided that the insurer would pay the policy limit of
$100,000, and respondent would (1) release the insurer, (2) collect any future judg ments
against appellants only from insurance proceeds, and (3) after all proceedings against any
other insurer were concluded, discharge appellants from liability under any judgment she
might have against them.

1 See Drake v. Ryan , 514 N.W.2d 785 , 786 (Minn. 1994) (concerning an arrangement in
which “plaintiffs have fully released the defendant and his primary liability insurer up to
the limits of the primary liability coverage but have expressly retained the right to pursue
their claims against the defendant for additional damages up to the limits of the defendant’s
excess liability insurance coverage”).

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Respondent then served the complai nt in this action on appellants. They tendered
it to the insurer who had also handled respondent’s UIM claim. The insurer told appellants
that: (1) it was denying coverage, (2) it would not defend the action, (3) appellants needed
to hire counsel at their own expense, and (4) if appellants failed to respond to the complaint,
a default judgment would result. Appellants did not respond to the complaint. In February
2019, respondent filed the complaint in district court, and in April 2019, she moved for a
default judgment.
Appellants did not receive notice of the hearing on the default-judgment motion and
were neither present nor represented at it. Respondent testified about the five surgeries on
her knee and two on her shoulder, as well as the possibility of fu ture surgery on her hip;
she also submitted a letter from her surgeon , R.K. Respondent’s attorney provided the
district court with special -verdict claim s of $1 87,100.01 in past medical expenses,
$275,000 in probable future medical expenses, and $300,000 each for past and future pain,
disability, and emotional distress, totaling $1,062,100.01. The district court accepted these
figures and awarded respondent a default judgment against appellants in that amount.
Appellants moved to vacate the default judgment under Minn. R. Civ. P. 60.02,
arguing that they had at least a weak reasonable excuse for their failure to answer the
complaint and that the damages award was speculative. Their motion was denied, and they
reiterate these arguments in challenging the denial.

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DECISION
1. Reasonable Excuse
Appellate courts “review a district court’s decision under [Minn. R. Civ. P.] 60.02
for an abuse of discretion.” Safeco Ins. Co. v. Holmgren Building Repair, Inc., 946 N.W.2d
638, 644 (Minn. App. 2020), review denied (Minn. Sept. 15, 2020). “The decision whether
to grant rule 60.02 relief is based on all the surrounding facts of each specific case, and is
committed to the sound discretion of the district court.” Gams v. Houghton, 884 N.W.2d
611, 620 (Minn. 2016).
A party may seek relief from a default or any other final judgment for:
(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
. . . ;
(c) Fraud . . . , misrepresentation, or other misconduct
of an adverse party;
(d) The judgment is void;
(e) The judgment has been satisfied, released, or
discharged[,] . . . or
(f) Any other reason justifying relief from the operation
of the judgment.

Minn. R. Civ. P. 60.02. Those seeking relief under (a ), (b), (d) or (e) must show that:
(1) they have a reasonable claim on the merits, (2) they have a reasonable excuse for failure
or neglect to act, (3) they acted with due diligence af ter learning of the error or omission,
and (4) their relief will not cause substantial prejudice to their opponent (the Finden
factors). Finden v. Klaas, 128 N.W.2d 748, 750 (Minn. 1964). “[T]he district court must
consider, and expressly find that a party satisfied all four of the Finden factors in order to

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grant relief . . . . [The] holding that a party seeking relief from a judgment need not
categorically establish all four of the [Finden] factors is not consistent with our precedent.”
Gams, 884 N.W.2d at 619 -20 (citation and quotations omitted) . However, “[t]he relative
weakness of one factor should be balanced against a strong showing on the other three.”
Valley View, Inc. v. Schutte , 399 N.W.2d 182, 185 (Minn. App. 1987), review denied
(Minn. Mar. 18, 1987) ; see also Cole v. Wutzke , 884 N.W.2d 634, 637 (Minn. 2016)
(“Although some showings may be stronger than others, the moving party must establish
all four requirements for relief to be warranted.” (citations omitted)).
Appellants argue that, because the district court found “that a reasonable claim on
the merits exists,” that appellants “acted with due diligence following the second order of
judgment,” and that “[s]ubstantial prejud ice cannot be inferred merely from the fact of
delay without any additional facts ,” the first, third, and fourth factors were satisfied and
should balance their “weak showing” on the second.
But the district court found no showing, not even a weak showing, of any reasonable
excuse for appellants’ failure to answer the complaint , as was stated in the memorandum
accompanying the denial of the motion to vacate.
[Appellants] argue that the [default] judgment is a
surprise because [respondent] settled her bodily injury claims
and pursued a UIM claim. [But appellants] had ample
opportunity to respond to the complaint in this matter. . . . Only
after a second order for judgment was entered, nearly five
months after the initial filing [of the complaint], did
[appellants] finally appear.2

2 Because “[a] party need only be served with written notice of the application for a default
judgment if it has appeared in the action,” Howard v. Frondell , 387 N.W.2d 205, 208

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A favorable outcome for [respondent] should not come
as a surprise. [Appellants] were served with the complaint, and
therefore had notice of the action. . . . [Appellants’] apathy will
not be construed against [respondent, who] gave notice of the
lawsuit as required. [Appellants’] failure to respond because
they mistakenly believed there was no need to, is not a
reasonable excuse.
Based on the arguments and the record, the Court finds
that the default judgment was not a surprise, and there is no
reasonable excuse for [appellants’] failure to act. . . . [T]he
second Finden factor is not satisfied.

This court has reversed the denial of a motion to vacate a default judgment because
it concluded that the defaulting party’s “weak showing on the reasonable excuse factor
[was] outweighed by the other three factors and thus he ha[d] met the four part [ Finden]
test.” Valley View, 399 N.W.2d at 186. But in Valley View, the defaulting party claimed
he “had a reasonable excuse for failing to answer” because he “believed that settlement
negotiations extended his time to answer and that [the opposing party] had expressly
waived demand for a written answer.” Id. at 185. He supported this with two letters from
the opposing party’s co unsel, one saying that counsel had indicated he “was much more
interested in a payment schedule than in obtaining a formal written answer” and the other
asking the defaulting party’s attorney, “Please advise if you are representing [the opposing
party] with regard to the claim of my client.” Id. Here, no evidence was presented before
or at the hearing on the motion to vacate to indicate that appellants had a reasonable excuse,
and they were not present to provide any evidence.3

(Minn. App. 1986), the fact that appellants were not noti fied of the motion for default
judgment did not mitigate their failure to attend the hearing on that motion.
3 Their counsel’s offer at the conclusion of the hearing “to go get some affidavits from my
clients to let the Court know what it is that they were thinking” was too little, too late.

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Appellants also rely o n Wiethoff v. Williams , 413 N.W.2d 533, 536 (Mi nn. App.
1987) (holding that “[an] insurer’s negligence should not be imputed to the insured”) and
on the fact that both the district court and opposing counsel agreed that appellants’ insurer
was partly to blame: the district court stated in its memorandum that the insurer “may also
be partly responsible for the situation created by [appellants’] inaction as [it] had an
opportunity to disclose the additional insurance policy information to their client and failed
to do so,” and respondent, in her memorandum opposing the motion to vacate, said that
appellants’ insurer “held not ONE but TWO liability policies for the same event and did
not disclose them. . . . [and] misled everyone in this case.” But “if a party himself is guilty
of neglect, the neglect is inexcusable regardless of whether his [insurer] is also negligent.
[A defaulting party] cannot invoke [an insurer’s] negligence, if any, as an excuse because
he himself has provided no excuse for his failur e to respond to the complaint.” Wiethoff,
413 N.W.2d at 536 (citations omitted). Because appellants were also negligent, they cannot
use their insurer’s negligence as a “reasonable excuse.”
The district court did not abuse its discretion in denying appellants’ motion to vacate
the default judgment against them, and we affirm the denial.
2. Damages Award
The total limit of appellants’ policies was $ 1,050,000. At the conclusion of the
default judgment hearing, at which there was no financial discussion , the district court
asked respondent’s attorney to provide a special-verdict form. Respondent’s attorney did
so, stating in the special-verdict form he submitted after the hearing that: (1) in the years
following the accident, respondent’s medical expenses had been $187,100.01; (2) her pain,

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disability, and emotional distress during that period were $300,000; (3) her future pain,
disability, and emotional distress were also likely to be $300,000 ; and (4) her “reasonably
certain” future medical expenses wo uld be $275,000 . The district court accepted
respondent’s attorney’s estimates and , with no discussion or explanation, awarded
respondent the entire $1,062,100.01. We see no abuse of discretion in the awards for past
medical expenses or for pain, disability, and emotional distress.
“There are two requirements in the award of future medical expenses. The first is
whether future damages in the form of future medical treatments will be required. The
second requirement is that . . . ‘the plaintiff must prove the reasonable certainty of such
expenses by a fair preponderance of the evidence .’” Lind v. Slowinski , 450 N.W.2d 353,
358 (Minn. App. 1990) (quoting Kwapien v. Starr , 400 N.W.2d 179, 184 (Minn. App.
1987)), (citation omitted) , review denied (Minn. Feb. 21, 1990). Respondent’s attorney
based his calculation of her future medical treatments and expenses on a two-page narrative
report from her surgeon, R.K., an d on various other sources, none of them specific to
respondent. R.K., who has done mu ltiple surgeries on respondent’s knee and shoulder,
wrote that he was “unable to determine whether her current knee and shoulder difficulties
will persist permanently or lead to further surgery.”
Respondent’s attorney concluded from an article in Arthroplasty Today that
respondent would need two or three further total knee arthroplasties, each of which would
last 15 to 20 years. Respondent is now 52 years old; only two arthroplasties, each lasting
15 years, would take her to age 82, while three would take her to age 97. Her attorney gave

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no explanation for his view that “[a]t the likely cost and inflation over time,” medical
expenses for her knee will be between $50,000 and $75,000.
Although respondent’s attorney said that respondent had made an “OK” recovery in
her shoulder and that her future care “may not be surgical but may involve inje ction and
physical therapy,” respondent testified, “there’s a chance [she] may need” future shoulder
surgery. Her attorney did not mention the probable cost of her future shoulder treatment.
Respondent has recently begun to experience pain in her hip. She testified that
R.K. “doesn’t do hips” and referred her to another doctor, who did not recommend surgery
but gave her an injection. Respondent’s need for hip surgery is far from immediate; R.K.
predicted that “[a]ssuming the arthritis progresses as it usually does, [respondent] will
ultimately require hip replacement surgery, but not until the benefits of doing so outweigh
the risks in her mind.” Respondent’s attorney read an article about hip replacem ent costs
and concluded that respondent will require not only hip surgery but one or two “revisions
of the surgical site,” which will cost between $90,000 and $135,000.
As to the costs incurred from treatment of respondent’s knee and hip, the district
court adopted the maximum amounts in the ranges provided by her attorney , $75,000 and
$135,000. As to her shoulder treatment , the district court awarded her the $65,000
remaining in the $275,000 her attorney requested as future medical expenses. Absent any
explanation of how the preponderance of the evidence proved respondent’s future medical
costs to a reasonable certainty, see id., we cannot review this award. We therefore reverse

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the award for future medical expenses and remand for the district court to provide the
reasoning behind it.
Affirmed in part, reversed in part, and remanded.