No. 82-42 

IN THE SUPREME COURT OF THE STATE OF MONTANA 

1982 

INTERMOUNTAIN TELEPHONE AND 

POWE9 COMPANY, 

Plaintiff/Applicant and Appellant, 

MID-RIVERS TELEPHONE COOPERATIVE, INC., 

Defendant and Respondent. 

Appeal from: District Court of the Thirteenth Judicial District, 

In and for the County of Yellowstone 

Honorable Diane G. Barz, Judge presidina. 

Counsel of Record: 

For Appellant: 

Peterson, Schofield & Leckie, Billings, Montana 

Kenneth D. Peterson argued, Billings, Montana 

For Respondent: 

Crowley, Haughey, Hanson, Toole & Dietrich, Billings, 

Montana 

T. G. Spear argued, Billinqs, Montana 

Submitted: September 10, 1982 

Decided: December 16, 1982 

Filed: ,--,- gt~ i 6 1982 
Mr. Justice John C. Sheehy delivered the Opinion of the 

Court. 

Intermountain Telephone and Power Company (Intermountain) 

appeals from an order and judgment of the District Court, 

Thirteenth Judicial District Court, Yellowstone County, 

dismissing its complaint for a permanent injunction against 

Mid-Rivers Telephone Cooperative, Inc. (Mid-Rivers). 

After Intermountain had appealed from the order aforesaid 

Intermountain moved in the District Court, under Rule 62(c), 

l4.R.Civ.P. and Rule 7, M.R.App.Civ.P., for an injunction 

against Mid-Rivers pending the appeal. This motion was 

denied by the District Court. Intermountain also appeals 

from a denial of its Rule 62(c) motion for injunction. 

The District Court case number which is assigned to the 

cause here under appeal is DV 81-1996. Earlier the same 

District Court, but a different district judge, had before 

it District Court case no. DV 50-2414, entitled "Intermountain 

Telephone and Power Company, Petitioner, versus Department 

of Public Service Regulation, Montana Public Service Commission, 

Respondents." The District Court held against Intermountain 

in that case, and it became the subject of an appeal to this 

Court. Our opinion in that case sustaining the position of 

the District Court, and against Intermountain, was handed 

down October 7, 1982, as our cause no. 81-512 reported 

in 651 P.2d 1015, 39 St.Rep. 1962, et seq. 

The pertinent facts in this appeal are somewhat parallel 

to those stated in the other appeal, where the Department of 

Public Service Regulation was the respondent. We will 

hereafter restate some of those facts and such additional 

facts as may aid the reader in following this decision. 

First, however, the issues raised in this case are 

essentially two-fold: 
1. Was this action, where Intermountain is seeking a 

permanent injunction against Mid-Rivers, a collateral attack 

against the judgment adverse to Intermountain which had been 

handed down in the case involving the Department of Public 

Service Regulation? 

2. Should the District Court in this case have allowed 

the Rule 62(c) motion and issued the requested injunction 

pending the appeal of the other cause? 

Intermountain provided telephone service to consumers 

in the Custer-Yellowstone County, Montana area. After a 

number of complaints over a period of years, the Public 

Service Commission (the PSC) following a hearing determined 

that Intermountain was not providing "reasonably adequate 

service" to its customers. PSC concluded in its order that 

because of the difficulties it had with Intermountain over 

the past three years, it could not depend upon Intermountain 

to provide adequate telephone service to the people of the 

Custer area and by its order invited other private telephone 

companies to come in to Intermountain's service area, and 

indicated that a cooperative telephone system, though not 

subject to regulation by the PSC would also be welcome. 

Following the PSC order, Mi<-Rivers, a co-operative, 

moved into the area, then being served by Intermountain, and 

began the construction of telephone lines and equipment to 

serve customers there. 

Intermountain appealed from the PSC order to the District 

Court in Yellowstone County. There the PSC order was affirmed. 

Appeal was taken to this Court from that ruling of the 

District Court, and that became the subject of the appeal 

which we handed down on October 7, 1982, as above reported. 

While the appeal from the PSC order was pending, 

Intermountain filed this action in the Yellowstone County 
District Court, on September 30, 1981, seeking a permanent 

injunction to be issued against Mid-Rivers, alleging that 

the telephone cooperative was duplicating the lines, facilities, 

and systems of Intermountain, and that such actions were 

unlawful because, as Intermountain alleged, Intermountain 

was providing "reasonably adequate service" to the area. 

Mid-Rivers moved in the District Court to dismiss the 

complaint for a permanent injunction upon the grounds mainly 

that the new action was a collateral attack upon a judgment 

of the same issue which had been entered in the same District 

Court through another presiding district judge. 

On November 17, 1981, the District Court dismissed 

Intermountain's action for a permanent injunction against 

Mid-Rivers. In a memorandun-, explaining its action, the 

District Court determined that the issue in the case was 

whether Intermountain was providing "reasonably adequate 

service" to the area. It held that the specific issue had 

previously been decided by the PSC, affirmed by the District 

Court on review, and that by its new action, Intermountain 

was attempting to relitigate the central issue, thus mounting 

a collateral attack upon the prior proceeding. 

INTERMOUNTAIN'S ACTION IN THIS CASE IS A COLLATERAL ATTACK 

Courts will reject a collateral attack in "every proceeding 

in which the integrity of a judgment is challenged, except 

those made in the action where the judgment is rendered or 

by appeal, and except suits brought to obtain decrees 

declaring judgments to be void ab initio." Phillips v. 

Loberg (1980), - Mont . - , 607 P.2d 561, 563, 564, 37 St.Rep. 

401, 404. ' 

As to collateral attack, this case is controlled by our 

holding in Armstrong v. High Crest Oils, Inc. (1974), 164 
Mont. 187, 195, 520 P.2d 1081, 1086. There the landowners 

had brought an action to cancel oil and gas leases to High 

Crest upon the grounds that High Crest had breached the 

leases in applying for the wrongful creation of a gas field 

unit, coupled with the alleged wrongful act of including the 

landowner's leases within the unit. Earlier, however, the 

landowners had filed a petition for review, in another 

district court, of the order of the Montana Oil and Gas 

Commission creating the gas unit, alleging the same grounds 

for setting aside the order of the commission. This Court 

held that the order of the commission 'Yo create the . . . 

gas unit is res judicata except in the appropriate District 

Court in Montana on judicial review as provided in [the 

appeal provisions of our statutes] . . ." 164 Mont. at 195, 

520 P.2d at 1086. 

Armstrong involved the same parties and the same leases. 

Here Mid-Rivers was not a party to the PSC action which was 

under judicial review at the time this action was filed. It 

makes no difference in this case that identical parties are 

not involved in the two actions. The central issue in each 

case is whether Intermountain was providing "reasonably 

adequate service." Mid-Rivers, as a telephone cooperative, 

is prohibited from duplicating lines and facilities, of 

the systems of others, if the others are providing "reasonably 

adequate service. " Section 35-18-106 (13) (a) , MCA. The 

central issue to be litigated here was whether ~ntermountain 

was providing "reasonably adequate service." That had been 

decided adversely to Intermountain in the case involving the 

PSC. That decision was under judicial review when this case 

was filed. Intermountain's action in this case was a 

collateral attack seeking to relitigate the central issue 

decided in the case involving the PSC. 

- 5- 
Nor does it make any difference here that Intermountain, 

as it claims, may have improved its system following the 

date of the PSC order against it. The correct procedure for 

Intermountain to follow was not to file a collateral action, 

but to seek to have the District Court review the PSC order 

pursuant to section 2-4-703, MCA, in an attempt to have the 

order modified or rescinded. Jurisdiction of that issue lay 

with the courts involved with the review of the PSC order. 

There is no need to discuss the other reasons advanced 

by Mid-Rivers in support of the District Court dismissal. It 

is abundantly evident that the action against Mid-Rivers was 

a collateral attack on a prior administrative decision which 

was under judicial review and the District Court properly 

dismissed the collateral attack. 

THE DISTRICT COURT CORRECTLY DENIED THE RULE 62 MOTION 

After the judgment of dismissal was entered against it, 

Intermountain moved in this cause for an injunction during 

the pendency of the appeal, pursuant to Rule 62(c), 3I.R.Civ.P. 

In short, that rul~ provides that whenever an appeal is 

taken from a final judgment denying an injunction, the 

District Court in its discretion may grant an injunction 

during the pendency of the appeal upon such terms as it may 

consider necessary. 

This phase of the cause presents an unusual turn: The 

district judge in the PSC case, after affirming the order of 

the PSC, granted a stay of its judgment while Intermountain 

appealed. While that stay of judgment was in effect, MidRivers moved into the Custer area and began supplying telephone 

equipment and service to customers in that area. Intermountain 

brought this separate action to procure a permanent injunction 

against Mid-Rivers but ~7as dismissed in the same District 
Court, but by a different presiding judge. After entering 

the order of dismissal, in the new action, the District 

Court refused to grant an injunction pending appeal under 

Rule 62(c). Intermountain argues that to be consistent, the 

District Court in the new case shculd have granted the Rule 

62 injunction, which would have the sane effect as the stay 

of judgment in the prior case. 

Be that as it may, Intermountain laid no evidentiary or 

other basis in this record for a Rule 62(c) injunction. At 

the time that Intermountain noticed up its motion for such 

an injunction for hearing, Intermountain came to the hearing 

unprepared to present facts to the District Court upon which 

to predicate the issuance of such an injunction. Mid-Rivers, 

on the other hand, had many witnesses, including consumers 

in the Custer area, ready to testify that the service being 

provided to them by Intermountain was not "reasonably adequate." 

Intermountain's counsel informed the District Court that it 

was not prepared to present evidence at the hearing. On the 

other hand, counsel for Mid-Rivers pointed out to the court 

that it was ready to proceed with its witnesses, and asked 

for permission to proceed. The following colloquy then 

occurred: 

"THE COURT: The court will allow you to 

proceed Mr. Spear. 

"MR. PETERSON: Excuse me Your Honor, T 

would just prefer th? court would deny 

the motion and T will take it to the 

S~~preme Court. 

"THE COURT: Very well. The court 

hereby denies the plaintiff's motion to 

enter its order pursuant to Montana Rules 

of Civil Procedure, Rule 62(c), granting 

an injunction against the defendant for 

the purpose of maintaining the status quo 

in the Custer area during the pendency of 

the appeal." 
It is clear from that state of the record that Intermountain has no grounds upon which to appeal from the denial 

of the Rule 62(c) motion. 

The orders of the District Court are affirmed in all 

respects. 

We Concur: 

Mr. Justice ~aniel J. Shea deems himself disqualified and 

does not participate in this decision.