No. 86-39 IN THE SUPREME COURT OF THE STATEOF MONTANA 1986

HOLMES & TURNER,a Montana partnership, Plaintiffand Respondent,

STEER-IN, aMontana corporation, Defendant and Appellant.

APPEAL FROM: District Court of the Eighteenth JudicialDistrict, Inand for the County ofGallatin, TheHonorableRobert Boyd,Judgepresiding.

COUNSEL OF RECORD:

ForAppellant: Philip P. McGimpsey,Billings,Montana PierreL. Bacheller,Billings,Montana

ForRespondent: Kirwan & Barrett; StephenM. Barrett, Bozeman, Montana

Submitted onBriefs: May 30, 1986 Decided: July 17,1986

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# *,L ClerkMr. Chief Justice J. A. Turnage delivered the Opinion of the Court.Respondent, Holmes & Turner, filed suit in the District Court of the Eighteenth Judicial District, Gallatin County, to collect from appellant, Steer-In, for services rendered. This is an appeal from an order granting summary judgment in favor of respondent issued after appellant failed to answer appellant's requests foradmission. Steer-In seeks to have this Court relieve it of the effect of Rule 36, M.R.Civ.P., which deems matters in requests for admission that are not responded to as admitted and conclusively established. Steer-In argues that it had already denied the matter in question in its answer to the complaint so that it should not be required to deny the matter again. We affirm. Steer-In is a Montana corporation which operates a restaurant and lounge near Three Forks, Montana. Holmes & Turner is a Bozeman accounting firm. Steer-Inhired Holmes & Turner for services in 1980 and 1981. Steer-In did not pay Holmes & Turner forthe services. On January 19, 1982,Holmes & Turner filed suitagainst Steer-In to collect $6,335 for the accounting services. he sole factual allegation in the complaint is as follows: Defendants,and each of them,oweplaintiff SIX THOUSAND THREE HUNDRED THIRTYFIVE DOLLARS ($6,335.00) for accounting services renderedby plaintiff todefendants, and each of them, between July 15, 1980, and January 5, 1981, with interest at the rate of eighteenpercent (18%) per annum. Steer-Indenied this allegationand presented the affirmative defense of failure of consideration in its answer to the complaint. The answer also raised three counterclaimsalleging that Holmes & Turner negligently designed, implemented and maintained the Steer-In's accounting system. Steer-In requested $210,000 in compensatory damages and $500,000 in punitive damages. On April 16, 1984, the new

owner of Steer-in signed a stipulation of dismissal of the counterclaims,and a court order dismissing the counterclaims with prejudicewas issued on February 26, 1985. Discovery lasted for an extended period. Finally, on February 6, 1985, the parties stipulated to a termination of interrogatories by which interrogatoriesprior to that date could go unanswered without penalty. Then, on February 7, 1985, Holmes & Turner made a request for admission as follows: Admit that the Defendant Steer-In owes Plaintiff the sum of $6,335 plus interest at the rate of 18% per annum for accounting services rendered by Plaintiff to Defendant between July 15, 1980 and January 5, 1981. Holmes & Turner also made another request contingent on Steer-In's denial of the admission. That request was as follows: If the answer to the preceding request for admission was negative please state the basis for the denial, what elements of the request for admission are specifically denied, what fees are owed from the Defendant to the Plaintiff for accounting services, and what basis exists in the form of affirmative defenses, offenses, or other charges that are alleged to reduce the accounting services set forth in the preceding interrogatory. No further requestsweremade. On May 16, 1985, Holmes & Turner's counsel wrote to counsel for Steer-In requestinga response to the request for admission and warning that a motion for summary judgment would follow if Steer-In did not respond. Steer-In did notrespond. On July 19, 1985,Holmes & Turnermoved for summary judgment. On October 29, 1985, the DistrictCourt issued an order that deemed Holmes and Turner's request for admission as admitted by Steer-In's failure to respond. With the matter in the admission deemed admitted, no issue of fact remained, so the order also granted summary judgment. Steer-In appeals. Steer-In's main argument has to do with the fact that Holmes and Turner's request for admission matches the sole factual allegation in its complaint. Steer-In argues that since it already denied that allegation in its answer to the complaint, it should not be required to answer the same allegation in the request for admission. It would be, Steer-In argues, an exaltationofprocedure over substanceto order summary judgment where the pleadings clearly show an issueof fact. Steer-In'sbrief also emphasizes theunnecessary increased burden and cost to clients created by procedural rules which require redundantpleadings. Rule 36,M.R.Civ.P., andprecedent are such that summary judgment was appropriate. Rule 36(a) provides that a request for admission is deemed admitted unless answered or objected to within thirty days after service of the request. Rule 36(a), M.R.Civ.P., provides inpart:



# ... The matter is admitted unless, within 30 days after service of the request, or within such shorter or longer time as the court may allow, the party to whom the request is directed serves upon the party requesting admission a written answer or objection addressed to the matter,

# .

# .. Then, Rule 36(b)

## , M.R.Civ.P., provides in pertinent part: Any matter admitted under this rule is conclusively established unless the court on motion permits withdrawal or amendment of the admission.

# . . .Thus, by Rule 36(a)

## , Steer-In had thirty days after it was served with Holmes & Turner's request to answer or object to the request before the request was deemed admitted. After thirty days,Steer-Inhad the option ofmoving towithdraw or amend the admission under Rule 36(b). Over eight months passed between the time Steer-Inwas servedwith the request andwhen the courtdeemed the request admitted. In this period, Steer-In did not even attempt to exercise any of its options under Rule 36. The court therefore followed the mandate in Rule 36 and deemed the request admitted. Once the request was admitted, there could no longer be any issues of fact, and the court ordered summary judgmentpursuant to Rule 56,M.R.Civ.P. We have previously addressed the issueof thepropriety of summary judgment where the basis is a failure to respond to requests for admissions. See Morast v. Auble (1974), 164 Mont. 100, 519 P.2d 157. InMorast, 519 P.2d at 160we followed 8 Wright & Miller, Federal Practice and Procedure: Civil § 2264,which states: Admissions obtained by use of Rule 36 may show that there is no genuine issue as to any material fact and justify the entry of summary judgment under Rule 56. This rule statesprecisely what happened in the case at bar. As in Morast, we will follow that rule here. We hold that the District Court properly issued summary judgment based on

a fact deemed established by the operation of Rule 36, M.R.Civ.P. We will further comment that thevery purpose of Rule 36 is to lessen the time of trial and ultimately to set the stage for summary judgment.Steer-In argues that it should not be required to respond to the request because its answer to the complaint contains a denial of an identical allegation. We disagree. Holmes & Turner made its request for admission on February 7, 1985. Steer-In's answer to the complaint is dated March 24, 1983. In this period of nearly two years, Steer-In acquired a new owner and all three of its counterclaims were dismissed with prejudice. Under these circumstances, Holmes & Turner could suspect that Steer-In had changed its position on the factual allegation or the theory of itsdefense. A Rule 36,M.R.Civ.P., request for admission

was the idealand proper way forHolmes & Turner to determine if Steer-In was holding to its original position. Steer-In could have easily handled thematter by reaffirming itsprior positions. We do not believe Holmes & Turnerwasplaying a "procedural chess game" with Steer-In as Steer-In alleges. Moreover, if Steer-In thought Holmes & Turnerwas "playinggames" with its request, it could have objected to the request. If the prior answer did in fact answer the request for admission, the objection would have satisifed Steer-In's responsibility under Rule 36. Instead,Steer-In made no response at all. Whether or not Steer-In agrees with the effect of Rule 36, it isbound by it. Steer-In calls the effect of Rule 36 in this case an "exaltationofprocedure over substance." We think that it is Steer-In thatdid the "exalting"by ignoring the rule. If Steer-Inhad responded as required by Rule 36, the substanceof the case couldhavebeen preserved. Steer-In complains about the cost and burden of redundantpleadings. We can see little costorburden to Steer-Inin responding to Holmes & Turner's request. Steer-In could have simply referred Holmes & Turner to the denial and affirmative defense in the original answer,or as stated earlier, it could have objected to the request as redundant. This minor burden is insufficient reason for us to undermine the operation and purpose of Rule 36. The District Court's order granting summary judgment is affirmed.

We concur: /'