Case Title: 1ST NAT BANK v SECURITY BANK

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Docket Number: 

State: montana

Court: Montana Supreme Court

Date: 1982-07-12T00:00:00Z

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No. 81-301 IN THE SUPREME COURT OF THE STATE OF P4ONTANA 1982 FIRST NATIONAL BANK & TRUST OF WIBAUX, et al., Plaintiffs and Respondents, SECURITY BANK, N. A. AMBROSE H. HEIMER, et al., Defendants and Appellants. Ay2eal from: District Court of the Thirteenth Judicial District, In and for the County of Yellowstone, The Honorable, M. James Sorte, Judge presiding. Counsel of Record: For Appellants : Ralph L. Herriott, Billings, Montana Joseph F. Meglen, Billings, Montana For Respondents: Towe, Ball, Enright and Mackey, Billings, Montana Submitted on Briefs: March 5, 1982 Decided: July 12, 1982 Filed: JUL 12 1 9 8 2 Mr. J u s t i c e John Conway H a r r i s o n d e l i v e r e d t h e Opinion o f t h e C o u r t . T h i s a p p e a l a r i s e s from a n a c t i o n f o r r e c o v e r y on f o u r p r o m i s s o r y n o t e s , t h r e e of which were s i g n e d and exe- c u t e d by a p p e l l a n t , Ambrose Heimer, and t h e f o u r t h o f which was s i g n e d and e x e c u t e d by J o s e p h Heimer and g u a r a n t e e d by Ambrose Heimer . ?'he o r i g i n a l c o m p l a i n t was f i l e d J u n e 9 , 1978, by F i r s t N a t i o n a l Bank and T r u s t o f Wibaux. The r e m a i n i n g p l a i n t i f f s w e r e a d d e d s u b s e q u e n t l y . A f t e r p r e l i m i n a r y p l e a d i n g s t r i a l was s e t f o r May 1 4 , 1979. I n r e s p o n s e t o i n t e r r o g a t o r i e s o f F e b r u a r y 7 , 1979, Ambrose Heimer s t a t e d , " D e f e n d a n t Ambrose Heimer i n t e n d s t o make Edward Towe a d e f e n d a n t by way o f c r o s s - c l a i m t o a s s e r t t h i s . " The o r i g i n a l t r i a l d a t e was v a c a t e d i n May 1979 and l e a v e t o f i l e an amended c o m p l a i n t p u r s u a n t t o s t i p u l a t i o n o f t h e p a r t i e s was g r a n t e d September 4 , 1979. Edward Towe's d e p o s i t i o n was t a k e n J u l y 2, 1980. A t e n t a t i v e t r i a l d a t e i n O c t o b e r was v a c a t e d b e c a u s e o f i l l n e s s o f c o u n s e l , and i n August 1980 a new t r i a l d a t e was s e t f o r September 11. On September 4, Heimer f i l e d a m o t i o n f o r c o n t i n u a n c e s u p p o r t e d by an a f f i d a v i t o f Ralph H e r r i o t t , a p p e l l a n t s ' c o u n s e l , c l a i m i n g G r a n t I n v e s t m e n t Funds is a p a r t n e r s h i p and n o t a l l p a r t n e r s had been j o i n e d i n t h e l a w s u i t and a l s o clainning n o t a l l o f t h e r e a l p a r t i e s i n i n t e r e s t had been made p a r t y t o t h e l a w s u i t . The m o t i o n was g r a n t e d , and a new t r i a l d a t e s e t f o r September 30. T h a t t r i a l d a t e was v a c a t e d on September 1 0 and r e s e t f o r November 24, and t h e p a r t i e s were o r d e r e d t o c o m p l e t e d i s c o v e r y by November 1 0 , 1980. On November 1 0 , 1980, d e f e n d a n t s Ambrose and J o s e p h Heimer f i l e d an amended a n s w e r , which i n c l u d e d a c o u n t e r - c l a i m , c r o s s - c o m p l a i n t and two t h i r d p a r t y c o m p l a i n t s . The D i s t r i c t C o u r t g r a n t e d r e s p o n d e n t s ' m o t i o n t o s t r i k e t h e amended answer, c r o s s - c o m p l a i n t and t h i r d p a r t y c o m p l a i n t s by o r d e r o f November 24. T r i a l was h e l d on November 2 4 , 1980, and judgment e n t e r e d i n f a v o r o f r e s p o n d e n t s on March 3 , 1981. A p p e l l a n t s s e t o u t t h r e e i s s u e s f o r r e v i e w by t h i s C o u r t : (1) Whether t h e D i s t r i c t C o u r t e r r e d i n f a i l i n g t o a l l o w Ambrose Heimer t o j o i n Edward Towe and James Updike a s t h i r d p a r t y d e f e n d a n t s ; ( 2 ) w h e t h e r t h e named p l a i n t i f f s a r e r e a l p a r t i e s i n i n t e r e s t ; and ( 3 ) w h e t h e r a t t o r n e y f e e s o f 18% of t h e amount d u e on t h e p r o m i s s o r y n o t e s were p r o p e r l y a s s e s s e d . The s o u r c e o f t h e f i r s t i s s u e is a p p e l l a n t s ' amended answer which i n c l u d e d a c o u n t e r c l a i m , c r o s s - c o m p l a i n t and two t h i r d p a r t y c o m p l a i n t s . The amended a n s w e r , d a t e d November 1 0 , 1980, i n c l u d e d t h i r d p a r t y c o ~ n p l a i n t s a g a i n s t Edward Towe and l a t e r James Updike. I n g r a n t i n g r e s p o n d e n t s ' m o t i o n t o s t r i k e t h e a p p e l - l a n t s ' amended a n s w e r , i n c l u d i n g t h e two t h i r d p a r t y com- p l a i n t s , t h e D i s t r i c t C o u r t d e t e r m i n e d t h a t t h e c o n t e n t i o n s p r o p o s e d by t h e a p p e l l a n t s c o n s t i t u t e d , " a t b e s t , " a permis- s i v e p l e a d i n g " t h e s u b s t a n c e of which would n o t be e f f e c t e d by n o t i n c l u d i n g it i n t h e p r e s e n t t r i a l . " R e s p o n d e n t s a r g u e t h a t s i n c e t h e amended answer was f i l e d more t h a n t w e n t y d a y s a f t e r i t was s e r v e d and w i t h o u t l e a v e of t h e c o u r t o r w r i t t e n c o n s e n t of t h e a d v e r s e p a r t y , i t was n o t p r o p e r l y b e f o r e t h e c o u r t . R u l e 1 5 ( a ) , M.R.Civ.P. R e s p o n d e n t s a l s o a r g u e t h e a t t e m p t t o add a d d i t i o n a l p a r t i e s was d e f e c t i v e f o r t h e same r e a s o n s under R u l e 21, M.R.Civ.P. Even i f t h e a p p e l l a n t s had moved t h e c o u r t p r o p e r l y t o amend t h e p l e a d i n g s and add a d d i t i o n a l p a r t i e s , respon- d e n t s c l a i m , t h e D i s t r i c t C o u r t p r o p e r l y e x e r c i s e d its d i s - c r e t i o n i n g r a n t i n g t h e motion t o s t r i k e i n t h a t t h e amendment was u n t i m e l y . A s p r e v i o u s l y n o t e d , t h e a p p e l l a n t s ' amended answer i n c l u d e d a c r o s s - c o m p l a i n t , c o u n t e r c o m p l a i n t , and two t h i r d p a r t y c o m p l a i n t s . S i n c e t h e s e v a r i o u s c o m p l a i n t s were n o t s e v e r e d from one a n o t h e r and were i n c l u d e d a s p a r t o f t h e amended answer R u l e 1 5 ( a ) , M.R.Civ .P., g o v e r n s . A p p e l l a n t s f i l e d t h e i r amended answer on November 1 0 , 1980. R e s p o n d e n t s s u b s e q u e n t l y f i l e d a m o t i o n t o s t r i k e which is t h e o n l y method o f d e t e r m i n i n g w h e t h e r a n amended p l e a d i n g h a s been i m p r o p e r l y f i l e d . W e s t l a k e v. D i s t r i c t C o u r t ( 1 9 4 6 ) , 1 1 8 Mont. 414, 167 P.2d 588; Paramount P u b l i x Corp. v. Boucher ( 1 9 3 3 ) , 93 Mont. 348, 1 9 P.2d 223. A f t e r a r e s p o n s i v e p l e a d i n g is s e r v e d o r t w e n t y d a y s a f t e r an o r i g i n a l p l e a d i n g is s e r v e d , a p a r t y may amend h i s p l e a d i n g o n l y by l e a v e o f c o u r t o r by w r i t t e n c o n s e n t o f t h e a d v e r s e p a r t y . Rule 1 5 ( a ) , M.R.Civ.P. A p p e l l a n t s h e r e d i d n o t h a v e w r i t t e n c o n s e n t o f r e - s p o n d e n t s and f i l e d t h e i r amendment w i t h o u t l e a v e o f c o u r t . T h e r e f o r e , t h e D i s t r i c t C o u r t d i d n o t err i n g r a n t i n g t h e m o t i o n t o s t r i k e t h e amended a n s w e r . The second i s s u e t o be c o n s i d e r e d is w h e t h e r t h e named p l a i n t i f f s , F i r s t N a t i o n a l Bank and T r u s t o f Wibaux ( h e r e i n a f t e r F i r s t N a t i o n a l ) , R i c h e y N a t i o n a l Bank, Towe F o u n d a t i o n and G r a n t I n v e s t m e n t Fund, a r e r e a l p a r t i e s i n t h i s a c t i o n . The D i s t r i c t C o u r t ' s f i n d i n g s of f a c t w i l l n o t be d i s t u r b e d by t h i s C o u r t i f t h e y a r e s u p p o r t e d by t h e e v i d e n c e . Washington Water and Power v . Morgan E l e c t r i c Co. ( 1 9 6 8 ) , 1 5 2 Mont. 1 2 6 , 448 P.2d 683; R u l e 5 2 ( a ) , M.R.Civ.P. The D i s t r i c t C o u r t found t h a t F i r s t N a t i o n a l was t h e h o l d e r of l e g a l t i t l e t o e a c h o f t h e p r o m i s s o r y n o t e s i n q u e s t i o n and t h a t it h o l d s t r u s t a u t h o r i t y and powers r e g a r d i n g e a c h n o t e . The c o u r t c o n c l u d e d t h a t F i r s t N a t i o n a l was t h e r e a l p a r t y i n i n t e r e s t and was e n t i t l e d t o r e c e i v e t h e monies owed under e a c h p r o m i s s o r y n o t e . W e f i n d s u b s t a n t i a l e v i d e n c e b o t h i n t h e t r a n s c r i p t and t h e e x h i b i t s s u p p o r t i n g t h e D i s t r i c t C o u r t and t h e r e f o r e a f f i r m its f i n d i n g . A p p e l l a n t s a l s o c l a i m a s e r r o r t h e D i s t r i c t C o u r t ' s award of a t t o r n e y f e e s . The D i s t r i c t C o u r t awarded a t t o r n e y f e e s o f 1 0 % of t h e u n p a i d p r i n c i p a l and i n t e r e s t o f e a c h n o t e . T h i s was t h e minimum amount a g r e e d upon i n e a c h o f t h e n o t e s and was a l s o s u p p o r t e d by a n h o u r l y d o c u m e n t a t i o n of a t t o r n e y time by r e s p o n d e n t s ' c o u n s e l . The d e t e r m i n a t i o n o f r e a s o n a b l e a t t o r n e y f e e s is w i t h i n t h e d i s c r e t i o n of t h e D i s t r i c t C o u r t and w i l l n o t b e changed u n l e s s a b u s e o f d i s c r e t i o n is shown. K a d i l l a k v. Montarla Dept. of S t a t e Lands ( 1 9 8 2 ) , - Mont. - , 643 P.2d 1178, 39 St.Rep. 773; G l i c k v. S t a t e o f Montana ( 1 9 7 4 ) , 1 6 5 Mont. 307, 528 P.2d 686; Luebben v . M e t l e n ( 1 9 4 0 ) , 110 Mont. 350, 100 P.2d 935. W e f i n d no a b u s e o f d i s c r e t i o n h e r e . A£ f i rmed . We concur: x&P,w6.d& Chief Justice Mr. Justice Gene B. Daly dissenting: I would reverse. Justice //