No. 94-628

IN THE SUPREME COURT OF THE STATE OF MONTANA

1995

HAMILTON G. KENNER and ERNO, INC

a Delaware Corporation,

Appellant & Plaintiff,

v.

LARRY W. MORAN,

Respondent & Defendant. WEC 19 1995

APPEAL FROM: District Court of the Fifth Judicial District,

In and for the County of Madison,

The Honorable Frank M. Davis, Judge presiding.

COUNSEL OF RECORD:

For Appellant:

Hamilton G. Kenner, The Tipler Law Offices,

Andalusia, Alabama

For Respondent:

Michael P. Sand, Sand Law Offices, Bozeman, Montana

Filed:

Submitted on Briefs: July 13, 1995

Decided: December 19, 1995
Justice William E. Hunt, Sr. delivered the Opinion of the Court.

Pursuant to Section I, Paragraph 3(c), Montana Supreme Court

1995 Internal Operating Rules, the following decision shall not be

cited as precedent and shall be published by its filing as a public

document with the Clerk of this Court and by a report of its result

to State Reporter Publishing Company and West Publishing Company.

Plaintiff and appellant, Hamilton G. Kenner, appeals the

denial of his motion for leave to file an amendment to his

complaint in the Fifth Judicial District Court of Madison County.

We affirm.

ISSUE

Did the District Court abuse its discretion in refusing to

allow the appellant to amend his complaint?

FACTS

In October 1980, Larry Moran (Moran) and Central States

Investment Company (CSI) entered an Agreement for Sale and Purchase

of property in Madison County. Hamilton G. Kenner (Kenner), signed

on as a guarantor of performance on behalf of CSI. Kenner and CSI

made payments up until November 1, 1984, at which time Kenner

defaulted. In January 1985, Moran and Kenner entered into a

modification of the agreement that would permit Kenner to cure the

default.

In June 1985, Kenner requested a release of 280 acres of

river front property in consideration of payments already made on

the contract. Kenner represented at the time that all of the

2
property taxes and lease payments to the Bureau of Land Management

were current and would continue to be made in a timely fashion

along with future contract payments. On this representation, Moran

quit claimed the river front property to Kenner as a partial

release on July 2, 1985.

Again Kenner defaulted on payments. A provision in the

Modified Sale and Purchase agreement provided that releases of

acreage were conditional upon Kenner's remaining current on all

principal and interest due. Because Kenner failed to remain

current, Moran instituted an action to quiet title to the property.

In December 1986, Kenner filed a motion to dismiss. At the

time, Kenner was granted twenty days in which to plead further.

However, before the twenty days expired, Kenner requested Moran

take a default against other defendants associated to the property

to clear the title, so the parties could negotiate a settlement

agreement. In June 1987, Moran offered Kenner a settlement

agreement which would allow Kenner to reinstate their contract.

In a letter sent to Moran by Kenner's attorney, Kenner

accepted the terms of the settlement proposal contingent on the

defaults being taken against the other defendants. Relying on

Kenner's acceptance of the settlement agreement and his promise to

remain current on annual payments, Moran quieted title against the

other defendants. On August 4, 1987, Moran's counsel sent a copy

of the quiet-title decree to all of the defendants but Kenner.

In October 1987, Moran sent a letter to Kenner's attorney

requesting action on the settlement contract, and gave "informal

3
notice" that no further delay would be tolerated. This was

followed by another letter in January 1988, requesting Kenner act

on the settlement agreement within thirty days or Moran would

proceed with the quiet-title action against Kenner. In May 1988,

Moran served notice on Kenner's attorney to depose Kenner, but the

notice was ignored. On March 7, 1989, Moran sent notice that if

Kenner did not take action on the settlement agreement within ten

days, Moran would proceed with the quiet title.

Kenner's attorney then informed Moran that he had been unable

to proceed because he had been unable to communicate with Kenner.

Moran again began proceedings against Kenner to quiet title to the

property. On February 9, 1990, the Clerk of Court, at Moran's

request, entered a default judgment quieting title against Kenner

for failure to "plead or otherwise defend." No formal notice was

served on Kenner or his attorney of record prior to the application

for the default or after its entry. All of the above legal action

took place under District Court cause no. 7603.

In July of 1991, Kenner and EFWO Co. entered into a buy-sell

agreement for a portion of the property that is the subject of this

dispute. At this time Kenner discovered the default judgment

against him and filed an action to set it aside. In this action,

cause no. 8115, Kenner requested that the default be set aside and

that he be allowed to further plead and defend in cause no. 7603.

Kenner moved the court for summary judgment in January 1993,

and a hearing on the matter was set for February. On the day of

the hearing Moran filed a counterclaim in cause no. 8115, asking

4
the court to compel Kenner to specifically perform the settlement

agreement. The District Court denied Kenner's motion for summary

judgment, finding he had failed to meet his burden of proof. The

order then required Kenner to specifically perform the settlement

agreement he had entered into with Moran in July 1987.

Kenner appealed this decision and we reversed. We held that

Kenner had not received appropriate notice of Moran's intent to

enter a default against him, and that he had not been provided

opportunity to defend on Moran's counterclaim regarding specific

performance. Therefore, the default judgment entered against

Kenner in the quiet-title action, cause no. 7603, was set aside.

Kenner v. Moran (19941, 263 Mont. 368, 868 P.2d 620.

After our decision the only viable issue remaining in cause

no. 8115 was Moran's counterclaim, which we remanded. Moran

subsequently dismissed his counterclaim on the ground that all of

the issues raised in it were more appropriately addressed in cause

no. 7603, which had been revived when the default judgment against

Kenner was set aside. Moran then amended his original complaint in

cause no. 7603.

Kenner answered Moran's amended complaint on August 15, 1994.

Kenner then filed a motion to permit an amendment to his original

complaint filed in cause no. 8115. The District Court heard oral

argument and denied the motion in October 1994. Kenner appeals.

ISSUE

Did the District Court abuse its discretion in refusing to

allow the appellant to amend his complaint?

5
The standard of review when considering a district court

denial of a motion to amend a pleading is whether the district

court abused its discretion. Gursky v. Parkside Professional

Village (1993), 258 Mont. 148, 152, 852 P.2d 569, 571.

A party may amend his or her pleading "only by leave of the

court" or if the opposing side gives written consent. Rule 15(a)

Amendments reads as follows:

A party may amend the party's pleading once as a matter

of course at any time before a responsive pleading is

served, or if the pleading is one to which no responsive

pleading is permitted and the action has not been placed

upon the trial calendar,the party may so amend it at any

time within 20 days after it is served. Otherwise a

party may amend the party's pleading only by leave of

court or by written consent of the adverse party; and

leave shall be freely given when justice so requires. A

party shall plead in response to an amended pleading

within the time remaining for response to the original

pleading or within 10 days after service of the amended

pleading, which ever period may be the longer, unless the

court otherwise orders.

Kenner in this case wishes to amend his complaint to include

additional allegations of fraud, a request for punitive damages and

a demand for a jury trial.

The dispositive issue in this procedural quagmire is that

cause no. 8115 is closed. As the District Court found, all matters

contained in cause no. 8115 have been adjudicated. The default

judgment has been set aside pursuant to remand by this Court in

cause no. 8115 and Kenner was given the opportunity to further

plead in cause no. 7603. Accordingly, the order issued by the

District Court declared cause no. 8115 closed.

If Kenner wished to raise allegations of fraud against Moran,

he should have done so in his answer to Moran's amended complaint

6
in cause no. 7603. Neither Kenner's answer on August 15, 1994, nor

his amended answer of October 3, 1994, allege fraud as a defense.

The court recognizes the importance of allowing parties the

opportunity to amend pleadings but the court must also recognize

that equal attention should be given to the proposition that there

must be an end finally to a particular litigation. Stanford v.

Rosebud County (1992), 254 Mont. 474, 476, 839 P.2d 93, 95-96.

The District Court pointed out to the parties that trial in

cause no. 7603 was imminent. Kenner filed his motion to amend his

original complaint in August 1994, with trial scheduled for October

20, 1994. Up to this point, there had been several opportunities

for Kenner to amend his answer in cause no. 7603 to conform with

fraud allegations. Instead, when Kenner did move to amend, he

sought to amend his complaint, and failed to provide the court with

any explanation or basis for the filing of his proposed amended

complaint.

We hold the District Court did not abuse its discretion when

it denied Kenner's motion to amend his complaint.

Affirmed

We Concur: I

Justice