Gosbee v. Martinson

Citations: 701 N.W.2d 411; 2005 ND App 10; 2005 N.D. App. LEXIS 8; 2005 WL 1565689Docket: No. 20050056CA

Court: North Dakota Court of Appeals; July 6, 2005; North Dakota; State Appellate Court

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John Gosbee's RICO action against Rob Martinson and three companies was dismissed by the trial court, which granted Martinson's motion for dismissal under N.D.R.Civ. P. 12(b)(6) based on the claim that the alleged hijacking of Gosbee's computers was due to an affiliate's actions for which he was not responsible. Gosbee traced the spyware issues to Martinson and alleged intentional fraud to promote a 'Spy Wiper' program. After the dismissal, Gosbee filed objections to the award of costs and a motion for reconsideration and to amend his complaint, both of which were summarily denied by the court without a hearing. On appeal, the key issue was the trial court's failure to conduct a hearing on Gosbee's objections to costs and his motion for reconsideration, as mandated by Rule 54(e)(1) of the North Dakota Rules of Civil Procedure, which requires a hearing if objections are filed unless waived. The appellate court reversed the dismissal and remanded for further proceedings, emphasizing the trial court's error in not holding the required hearing.

Gosbee's motion for reconsideration and to amend the judgment, filed under N.D.R.Ct. 3.2, included a request for a hearing, which is mandatory under the rule if properly requested. The Supreme Court has consistently held that trial courts must grant such requests, as seen in several precedential cases. Martinson argues that Gosbee's request was incomplete because he did not secure a specific time for the hearing. However, the rule places the obligation on the moving party to obtain a hearing date and notify opposing parties, and Gosbee made efforts to schedule a hearing by contacting the clerk's office. Despite being informed that the judge was reviewing the case, he did not receive further communication. The trial court denied Gosbee's motion without a hearing, which constitutes an error since Gosbee fulfilled his obligations under Rule 3.2. Martinson's assertion that the error was harmless under N.D.R.Civ.P. 61, which allows courts to disregard errors not affecting substantial rights, does not negate the trial court's obligation to hold a hearing.

The trial court's failure to conduct a mandatory hearing on Gosbee's objections to costs and disbursements, as well as his motion for reconsideration and to amend his pleadings, was determined to have adversely affected his substantial rights and constituted a significant error. The potential impact of oral argument on the court's discretion regarding costs, reconsideration, or amendment was deemed indeterminate. The ruling emphasizes the Supreme Court's stance that merits-based determinations are preferable to dismissals under N.D.R.Civ. P. 12(b)(6), advocating for a deferential review of complaints and favoring amendments when claims may exist, even if pleadings are poorly drafted. The appropriate remedy for the trial court's failure to provide a hearing is a remand for such a hearing. Consequently, the judgment dismissing Gosbee's complaint is reversed, and the case is remanded for a hearing addressing the objections and motions. The trial court's dismissal is treated as one under N.D.R.Civ. P. 12(b)(6) based on its memorandum opinion, which focused on the pleadings' failure to state a claim.