NO. 82-297 

IN THE SUPREME COURT OF THE STATE OF MONTANA 

1983 

JOHN C. HUGHES, in his capacity as 

Adminstrative Manager of Western 

Conference of Teamsters Pension Trust Fund, 

Plaintiff and Appellant, 

VS. 

G. K. SALO, Individually, and d/b/a 

G. K. SALO TEXACO, 

Defendant and Respondent. 

Appeal from: District Court of the Second Judicial District, 

In and for the County of Silver Bow 

Honorable Arnold Olsen, Judge presiding. 

Counsel of Record: 

For Appellant: 

Berg, Coil, Stokes, & Tollefsen, Bozeman, Montana 

Michael C. Coil argued and Don Hayes argued, Bozeman, 

Montana 

For Respondent : 

Corette, Smith, Pohlman & Allen, Butte, Montana 

Gregory C. Black argued, Butte, Montana 

Filed: 

Submitted: January 14, 1983 

~~~ided: February 24, 1983 

FEB 2 4 I983 

- - 

Clerk 
Mr. Justice Fred J. Weber delivered the Opinion of the Court. 

Plaintiff appeals from an adverse judgment in the Second 

Judicial District Court, Silver Bow County, in this action to 

collect allegedly delinquent pension fund contributions from 

defendant. The District Court held that this action was 

barred by the doctrine of merger, the rule against splitting 

causes of action, and by this Court's holding in an earlier 

case, as well as by a previous stipulated dismissal with 

prejudice of plaintiff's attempt to enforce a Colorado 

judgment involving the same alleged delinquency. We reverse 

the District Court and remand this cause, for consideration 

on the merits, with such further proceedings as the District 

Court shall find to be necessary. 

In 1973, defendant Salo, owner of G. K. Salo Texaco, in 

Butte, Montana, entered into a labor agreement with the 

Teamsters Union, agreeing to make certain pension fund 

contributions for the period from May 1, 1973 to April 30, 

1976. He signed a second similar agreement in June of 1976 

for the period from May 1, 1976 to April 30, 1979. Monthly 

payments of pension fund contributions were to be mailed to 

Colorado. Defendant was domiciled in Montana, and had no 

other connection with Colorado. 

In October of 1978, the Teamsters Pension Fund filed a 

complaint in District Court in Denver, Colorado, alleging 

that Salo was delinquent in making the agreed upon 

contributions for the period between January 1, 1974 and July 

31, 1977. Summons was served on Salo in Butte, Montana on 

October 13, 1978. Salo neither answered nor appeared in 

court. He did not challenge the jurisdiction of the Colorado 

court, which, on May 18, 1979, entered a default judgment 

against him, nunc pro tunc, January 12, 1979. 
On May 25, 1979, the Teamsters Union Pension Fund filed 

an amended complaint in the District Court of Silver Bow 

County, seeking enforcement of the Colorado judgment. (Cause 

64227). Defendant answered, admitting that the default 

judgment had been obtained, but denying the authority of the 

Colorado court to render its judgment, for reasons 

unconnected with the issues discussed herein. 

On March 31, 1980, defendant moved the District Court 

for summary judgment, pointing out that this Court's justreleased decision in May v. Figgins (1980) Mont . I 

607 P.2d 1132, 37 St.Rep. 493, governed the enforcement 

action against Salo. The motion was accompanied by an 

affidavit from Salo to the effect that, except for sending 

the monthly checks to Colorado, he had no contact with the 

state, and had "never waived his rights as to Colorado 

jurisdiction." On April 23, 1980, the parties stipulated 

that the District Court might dismiss the enforcement action 

with prejudice and award defendant's attorney fees of $800. 

This was done. No explanation is included in the stipulation 

or the order of dismissal; and counsel now disaqree in their 

recollection whether the dismissal was specifically intended 

to prevent or permit a subsequent action on the underlying 

alleged obligation. 

On July 18, 1980, plaintiff filed the present action in 

the District Court, seeking payment of allegedly delinquent 

pension fund contributions for the period covered by the 

Colorado judgment (Jan. 1, 1974 through July 31, 1977) as 

well as for the period from August 1, 1977 through April. 

1978. Defendant in his answer, asserted that this action was 

precluded by the stipulated dismissal of the enforcement 

action. Defendant's subsequent motion for summary judgment, 

based upon his assertion that this action is barred by the 
doctrine of merger and the rule against splitting causes of 

action, was denied on the grounds that "the plaintiff's cause 

was not heretofor heard nor decided upon the merits." 

The case was heard by the District Court, sitting 

without a jury, on December 2, 1981. Judgment was entered 

for defendant May 11, 1982. The District Court concluded 

that this action was barred by: 1) the laws set forth in the 

May v. Figqins decision in this Court, under which the 

Colorado judgment pertinent to this action was "void and 

ineffective"; 2) the doctrine of merger; 3) the rule against 

splitting causes of action; and 4) the stipulated dismissal 

with prejudice of the original action to enforce the Colorado 

judgment. Attorney's fees in the amount of $4,500 were 

awarded defendant. Plaintiff appeals. 

Plaintiff raises a number of issues, but we find the 

following to be dispositive: 

1. Whether, under May v. Fiqgins, the Colorado judgment 

was void, or merely unenforceable. 

2. Whether the stipulated dismissal with prejudice of 

the action to enforce the Co1ora.d.o judgment amounted to a 

judgment on the merits of the underlying obligation. 

3. Whether the doctrine of merger and the rule against 

splitting causes of action bar this action. 

I. 

In May v. Figgins, the Western Conference of Teamsters 

Pension Fund, through its Deputy Administrator, Robert May, 

sued in Montana to enforce a Colorado default judgment 

against a Montana road contractor, Willie Figgins. Fiqgins' 

only contact with Colorado was the deposit by mail of 35 

checks containing pension fund contributions, in the 

Teamsters' Denver bank. The Montana court denied Figgins' 

motion for summary judgment, which was based on Figgins' 
assertion that Colorado lacked personal jurisdiction over 

him. The District Court held for the plaintiff, and Figgins 

appealed. This Court reversed, holding that, under Colorado 

law and the due process clause of the fourteenth amendment of 

the United States Constitution, Figgins did not have the 

"minimum contacts" with Colorado required under International 

Shoe Co. v. State of Washington (1945) 326 U.S. 310, 66 S.Ct. 

154, 90 L.Ed. 95, to give the forum state personal 

jurisdiction over a nonresident. This Court also noted: 

I1 1 . . . where defendant's contacts with the state 

are not sufficient to satisfy traditional notions 

of fair play and substantial justice, in personam 

jurisdiction may not be secured over him through 

long-arm service.' 2 Moore's Federal Practice 

84.41-1[1] at 4-414, citing Hanson v. Denckla 

(1958) 357 U.S. 235, 78 S.Ct. 1228, 2 L.Ed.2d 

1283." May v. Figgins, Mont. at , 607 P.2d 

at 1136, 37 St.Rep. at 497. 

Finally, May v. Figgins held that the contractual provisions 

purporting to waive in personam jurisdiction were 

unreasonable and unenforceable, and concluded that Figgins' 

had not clearly and knowingly waived his due process rights, 

and so was not subject to the jurisdiction of the Colorado 

courts. Mont. at , 607 P.2d at 1138-39, 37 St.Rep. 

at 501. 

In the present case, Salo's contacts with Colorado were 

no greater than Figgins': Salo did not reside or do business 

or advertise or solicit business in Colorado; his only 

contact with that forum was mailing checks to a Colorado 

bank. Moreover, Salo, like Figgins, did not appear in the 

Colorado action to contest either jurisdiction or the alleged 

obligation; judgment was entered against him by default. The 

contracts, and the agreements incorporated by reference in 

the contracts, are the same as those this Court found 

insufficient to waive due process rights in - v. Figgins. 

There can be no doubt that, under the rule established in 
May v. Figgins, the Colorado court lacked personal 

jurisdiction over defendant Salo. 

Plaintiff in this action has never disputed the 

application of May v. Figgins to the Colorado judgment 

against Salo. Defendant's motion for summary judgment of the 

enforcement action was based upon May v. Figgins, and was 

accompanied by an affidavit from Salo establishing that the 

payments made by check were Salo's sole contact with 

Colorado. During the present action, defendant a,nd plaintiff 

both stated that the dismissal with prejudice of the 

enforcement action was brought about because of the parties' 

recognition that the Colorado judgment was invalid and 

unenforceable. Plaintiff also brought the record of the 

enforcement action to the attention of the District Court. 

Defendant proposed that the District Court find the Colorado 

judgment to be "void and ineffective" under May - v. Figgins, 

which it did. 

Defendant now argues that, because neither the pleadings 

as defined in Rule 7(a), M.R.Civ.P., nor the stipulated 

dismissal, explicitly indicated that the Colorado judgment 

was unenforceable for lack of personal jurisdiction, it was 

still a "valid judgment" at the time the present action was 

filed, for purposes of barring this action under the doctrine 

or merger and the rule against splitting causes of action. 

(See below) We disagree. 

Plaintiff disregards the hoary but still viable decision 

of the United States Supreme Court in Pennoyer v. Neff (1878) 

95 1J.S. 714, 24 L.Ed. 565. Although the rigid conclusion in 

Pennoyer v. Neff, that a tribunal's authority is restricted 

to its territorial limits, has yielded to the more flexible 

due process requirements set forth in International Shoe, 

supra, the effect of rendering a personal judgment without - in 
personam jurisdiction remains the same. In the recent case 

of World-Wide Volkswagen Corp. v. Woodson (1980) 444 U.S. 

286, 291, 100 S.Ct. 559, 564, 62 L.Ed.2d 490, 497, the 

Supreme Court stated: 

"The Due Process Clause of the Fourteenth Amendment 

limits the power of a state court to render a valid 

personal judgment against a nonresident defendant. 

Kulko v. ~alifornia Superior Court, 436 U.S. 84, 

91, 98S.ct. 1-690. 1696, 56 L.Ed.2d 132 (1978) , - - - A 

'udgment rendered' in violation -- of due process is 

--- loid in the renderlYg State --- and is not entitled 

full faith and credit elsewhere. Pennoyer -- v. Neff, 

95 U.S. 714732-33, 24 L.Ed. 565 (1878). (Emphasis 

added) . 

~, - - judgment rendered' - in violation -- of due process - is 

- r\ 

--- - -- - - - I, - - - --- - - --'- - '--- -- - - -- -u 

full faith and credit elsewhere. Pennoyer v. Neff, 

95 U.S. 714732-33, 24 L.Ed. 565 (1878). (Emphasis 

See also Scoles and Hay, Conflict of Laws 937 (1982); 

Goodrich, Handbook of the Conflict of Laws 

Restatement (Second) of Conflict of Laws S24 (e) (1971) . 

Russell Weintraub, in his Commentary on the Conflict -- of Laws 

(2d ed. 1980) , states at pp. 95-96: 

"If a court acts beyond the scope of its 

constitutiona.lly circumscribed jurisdiction, its 

adjudication is a violation of due process. The 

judgment is invalid in the state in which rendered 

and no court sitting in a sister state is either 

required or permitted to give the invalid judgment 

full faith and credit. If a court purports, for 

example, to make a judgment personally binding on a 

defendant over whom it does not have constitutional 

judicial jurisdiction, the defendant may ignore the 

proceedings, even if he has notice of them, and 

then step in to make a collateral attack on the 

judgment as a violation of due process if an 

attempt is made to enforce the judgement against 

him. This attack may be made either in the state 

in which the judgment has been rendered or in a 

sister state." 

In the present case, defendant was served with a summons 

in Butte, Montana; upon his failure to appear, the Colorado 

court entered a default judgment against him. When plaintiff 

attempted to enforce the judgment in Montana, defendant 

attacked the Colorado judgment by motion for summary 

judgment. That the stipulated dismissal with prejudice of 

the enforcement action was the result of both parties' 

awareness of the unenforceability of the Colorado judgment is 
crystal-clear; indeed both parties admit it. Yet defendant 

now argues, in effect, that because plaintiff failed, in its 

own enforcement action, to obtain a judicial decree that 

Colorado lacked jurisdiction over defendant and the Colorado 

judgment was therefore invalid, that judgment remained 

"valid". This conclusion is simply not consistent with the 

law, or, indeed, with any reasonable procedural requirement. 

Montana has long recognized that the judgment of a court 

acting without jurisdiction is invalid from its inception. 

In Barnes v. Montana Lumber and Hardware, Co. (1923) 67 Mont. 

481, 487, 216 P. 335, 337, we stated: 

"Where a court has jurisdiction, it has a right to 

decide every question which occurs in the cause; 

and whether its decision be correct or otherwise 

its judgment, until reversed, is regarded as 

binding in every other court. But, if it act 

without authority, its judgments and orders are 

regarded as nullities. They are not voidable, but 

simply void; and form no bar to a recovery sou ht --%I even prior to a reversal, in opposition to them. 

(Emphasis added). 

See also World-Wide Volkswagen Corp., supra. 

We hold that the Colorado judgment was void from its 

inception, as violative of defendant's due process rights; it 

was rendered by a court without personal jurisdiction over 

defendant. Despite the fact that its invalidity was not 

explicitly recognized until the judgment herein appealed, the 

Colorado judgment was a nullity and could not serve as a bar 

to the present action. 

Defendant argues that the stipulated dismissal with 

prejudice of the enforcement action amounted to a judgment on 

the merits of the underlying alleged obligation. We do not 

agree. In State ex rel. City of Havre v. District Court 

(1980) Mont . , 609 P.2d 275, 278, 37 St.Rep. 552, 555, 

we stated: 
II I . . . [A] judgment or decree of dismissal with 

prejudice is as conclusive of the rights of the 

parties as if the suit had been prosecuted to a 

final adjudication adverse to the plaintiff.' 

"Therefore, a stipulation of dismissal with 

prejudice of a defendant is tantamount to a 

judgment on the merits; and accordingly, -- such a 

dismissal with prejudice is res judicata as - to 

every issue reasonably raised by the pleadings. . . . This Court will look at the dismissal with 

prejudice on its face, and will not look behind the 

words 'with prejudice.'" (Emphasis added. ) 

In the case at bar, neither the pleadings as defined in 

Rule 7 (a) , M.R.Civ.P., nor the stipulations and accompanying 

dismissal with prejudice, made reference to or "reasonably 

raised" any issue regarding the merits of the underlying 

obligation. Nor is it the function of a court, when 

considering an action to enforce a judgment rendered in a 

sister state, to reconsider the merits of the original 

action; that is a matter for direct appeal from the original 

forum. See Restatement (Second) Conflict of Laws S106 

comment (a) (1971). 

The record here discloses that Cause 64227 was purely an 

action to enforce; the stipulated dismissal with prejudice 

was not a judgment on the merits of the underlying 

obligation, and hence, does not bar the present action. 

The District Court concluded that the present action was 

barred by the doctrine of merger, i .e. , that I' [t] he alleged 

debt for said time period was reduced to judgment in 

Colorado, and the debt for that time period is merged in said 

Judgment." The court further concluded that, since the cause 

of action for the second time period (August 1, 1977 through 

April, 1978 - raised only in the present action) had accrued 

prior to the time the original action was filed in Colorado 

and reduced to judgment, plaintiff was barred, by the rule 

against splitting causes of action, from maintaining the 
present action insofar as it relates to that time period. 

Plaintiff maintains that because the Colorado judgment is 

invalid, neither rule can be applied as a bar to this action. 

Both the rule against splitting causes of action and the 

doctrine of merger are inextricably related to the principles 

of res judicata; and the application of either to bar a 

subsequent action depends upon the existence of a "valid and 

final" prior judgment. As was stated in ~ervin V. F.T.C. (D. 

C. Cir. 1978), 591 F.2d 821, 830: 

"Principles of res judicata prevent relitigation 

not only on the grounds or theories actually 

advanced, but also on those which could have been 

advanced in the prior litigation. Restatement of 

Judgments §§ 62, 63 (1942); Restatement (Second) of 

Judgments SS 61, 61.1 (Tent.Draft No. 1, 1973;) 1B 

Moore's Federal Practice ¶0.405[1] at 621-22 (2d 

ed. 1974)." 

In Montana v. United States (1979) 440 U.S. 147, 153, 99 

S.Ct. 970, 973, 59 L.Ed.2d 210, 216-17, the United States 

Supreme Court said: 

"A fundamental precept of common-law adjudication, 

embodied in [the doctrine of] . . . res judicata, 

is that a 'right, question or fact distinctly put 

in issue and directly determined by a court of 

competent jurisdiction . . . cannot be disputed in 

a subsequent suit between the same parties or their 

privies . . . ' Southern Pacific R. Co. v. United 

States, 168 U.S. 1, 48-49 (1897). Under res 

judicata, a final judgment on the merits bars 

further claims by parties or their privies based on 

the same cause of action. Cromwell v. Countv * of 

Sac, 94 U.S. 351, 352 (1877); Lawlor v. National 

Screen Service Corp., 349 U.S. 322, 326 (1955); 1B 

J. Moore, Federal Practice ¶0.405[11, pp. 621-624 

(2d ed. 1974) (hereinafter 1B Moore) ; Restatement 

(Second) of Judgments S 47 (Tent. Draft No. 1, Mar. 

28, 1973) (merger) ; id., S 48 (bar) ." (emphasis 

added) 

See also Gallagher v. Frye (9th Cir. 1980), 631 F.2d 127, 

129, wherein the Court of Appeals recognized and discussed: 

It . the general Restatement principles 

prohibiting the splitting of causes of action and 

barring subsequent suits based on the same 

transaction or series of transactions previously 

litigated. Restatement of Judgments SS61-62 

(1942) ; Restatement (Second) of Judgments SS 

61-61.1 (Tent.Draft No. 5, 1978)." 
The Tentative Draft of the Restatement (Second) of 

Judgments, referred to in the above cases, was made official 

in 1980, and the pertinent section, Section 24 provides, as 

did the Tentative Draft: 

"(1) When a valid and final judgment rendered in 

an action extinguishes the plaintiff's claim 

pursuant to the rules of merger or bar (see 55 18, 

19), the claim extinguished includes all rights of 

the plaintiff to remedies against the defendant 

with respect to all or any part of the transaction, 

or series of connected transactions, out of which 

the action arose. 

11 ... I' (Emphasis added. ) Restatement (Second) 

of Judgments S24 (1980). 

Clearly this provision covers both the doctrine of merger and 

the rule against splitting causes of action. Likewise 518 of 

the Second Restatement of Judgments (1980) requires a "valid 

and final" judgment before the general rule of merger can be 

applied to bar a subsequent action. 

We have held that the Colorado judgment against Salo was 

void from its inception, under the due process clause, for 

lack of - in personam jurisdiction over defendant Salo. We now 

hold that because no valid and final judgment existed, the 

cause of action was not res judicata, and the District Court 

improperly applied the doctrine of merger and the rule 

against splitting causes of action to bar the present action. 

Reversed, and remanded to the District Court for 

consideration on the merits, and for such further proceedings 

as the District Court shall find to be necessary. 

We concur: w- Justic 

A L. 9- 

Chief Just$cer 
Mr. Justice Frank B, Morrison, Jr,, deeming himself 

disqualified, did not participate in this decision.