No. 82-204 

IN THE SUPREME COURT OF THE STATE OF MONTANA 

1982 

0. A. LIEN and BLUE OX 

CORPORATION, a Corporation, 

Plaintiffs and Appellants, 

MURPHY CORPORATION, a 

Corporation, 

Defendant and Respondent. 

Appeal from: District Court of the Fifteenth Judicial District, 

In and for the County of Roosevelt 

Honorable M. James Sorte, Judge presiding. 

Counsel of Record: 

For Appellants: 

Goetz, Madden & Dunn, Bozeman, Montana 

James Goetz argued, ~ozeiaan., Montana 

For Respondent: 

Robert J. Emmons argued, Great Falls, Montana 

Submitted: November 16, 1982 

Decided: December 16, 1982 

Filed: El; j. 6 1982 
Mr. Justice Frank B. Morrison, Jr., delivered the Opinion of 

the Court. 

Defendant, Murphy Corporation (Murphy) filed a Rule 

41(b), M.R.Civ.P., motion for summary judgment January 11, 

1952, in the Fifteenth Judicial District Court. The court 

granted defendant's motion April 27, 1982. Plaintiffs (Blue 

Ox) now appeal the summary judgment. 

In August 1952, Murphy began hydrocarbon exploration 

and production activities on land, a portion of which was 

later purchased by Blue Ox for farming purposes. Pipes used 

in Murphy's operations began leaking oil and other products, 

thus increasing the salinity level of the ground water and 

damaging Blue Ox's property. Settlements for the damage 

were made in 1961 and 1963; however, the damage is alleged 

to have continued. 

On October 25, 1971, Blue Ox filed a complaint alleging 

negligence and lease violations by Murphy, resulting in 

damage to Blue Ox's land. Murphy submitted interrogatories 

on January 3, 1972, which Blue Ox answered May 9, 1972. 

Supplementary interrogatories of February 1, 1972, have 

never been answered by Blue Ox. Interrogatories were submitted 

to Murphy in April of 1973. Pursuant to an agreement between 

counsel and the District Court of the Fifteenth Judicial 

District, those interrogatories were not answered until July 

27, 1978. 

On January 20, 1978, the District Court filed an order 

to show cause why the case should not be dismissed for 

failure to prosecute. That order was vacated by agreement 

of the parties. Then Murphy moved on December 24, 1979, to 

have the cause dismissed for the same reason. 
Blue Ox's original attorney and attorney of record was 

Mr. Gorham Swanberg. Due to Swanberg's dissatisfaction with 

his role, attempts were made to hire another attorney. 

Mr. Peter Maltese retained the file from spring 1977 until 

August 1978, when he declined to represent Blue Ox. Mr. 

James Lucas took from August 1978 until January 1980 to 

reach the same conclusion. Mr. Raymond Peete successfully 

defended Blue Ox against Murphy's motion to dismiss for 

failure to prosecute, but refused to further act as Blue 

Ox's attorney. 

On May 30, 1980, Blue Ox's new attorney and present 

counsel, Mr. James Goetz, moved the court for permission to 

amend the 1971 complaint to include further damage which had 

occurred to the land. The motion was denied August 20, 

1980, for the following reasons: 

1. The new motion changed the theory of the case from 

negligence and breach of lease to seven different theories 

of liability: (a) breach of contract; (b) negligence; (c) 

negligence alleging -- res ipsa loquitor; (d) nuisance; (e) 

trespass; (f) strict liability; and (g) breach of lease. 

2. The new motion asked for punitive damages in the 

amount of $100,000 and total damages of $650,000. The 

original complaint asked for damages of $15,000. 

3. The changes in the theories, the additional damages 

prayed for and the lapse of nine years between the original 

and the amended complaint were grossly inequitable to Murphy. 

Blue Ox then, on September 30, 1980, filed for a writ 

of supervisory control to review those orders. This Court 

denied the writ November 20, 1980, stating: 

"The application for supervisory control 

or other appropriate writ is denied 

on the grounds that there is an adequate 
remedy by appeal, that no energency situation is shown, and that petitioners 

themselves have been guilty of laches, a 

delay, and have failed to prosecute their 

action diligently." 

On December 14, 1980, Blue Ox filed a separate action 

based upon the denied amended complaint. Murphy attempted 

to move that action to Federal District Court on March 18, 

1980, but that court remanded the cause to the Montana 

District Court October 2, 1981, with a recommendation for 

consolidation of the 1971 and the 1980 causes. Blue Ox 

subsequently moved for such a consolidation. It was denied 

January 26, 1982. 

On February 24, 1982, Blue Ox filed a motion for reconsideration of the motion to amend the original complaint. 

That motion cited Blasdel v. Montana Power Co. (1982) , 

Mont. , 640 P.2d 889, 39 St.Rep. 219, as authority for 

granting the motion to amend. The motion was again denied 

and Blue Ox fined $100. 

Meanwhile, Murphy filed a motion January 11, 1982, 

for summary judgment based on Rule 41(b), M.R.Civ.P., failure 

to prosecute. That motion was granted April 27, 1982, with 

the District Court stating: 

"The reasons the Court has for granting 

Summary Judgment are set forth in detail in 

Document Number 66, the Brief of the Defendant 

Murphy Corporation, and the Court will not 

prepare a separate opinion." 

Document 66 sets forth at least five reasons why summary 

judgment should be granted: 

1. For a period of eleven months, from November 20, 

1980, to October 27, 1981, Blue Ox did absolutely nothing to 

advance the progress of the original cause. 

2. From April 2, 1980, until the present time, Blue Ox 

has taken no actions which would result in the trial of the 

original cause. Rather, all actions have been of a 'lateral" 

nature. 
3. Blue Ox last conducted discovery in this cause July 

27, 1978. 

4. Blue Ox's activities have been with respect to the 

1980 cause rather than the 1971 cause. 

5. The issue of "failure to prosecute" is res judicata. 

One reason stated by the Supreme Court for its denial of 

Blue Ox's request for the writ of supervisory control over 

the motion to amend was that plaintiffs (Blue Ox) ". . . have 

failed to prosecute their action diligently." 

In this appeal of the order granting Murphy summary 

judgment, the following issues are raised by Blue Ox: 

I. Whether, on the facts of this case, the District 

Court properly granted Murphy's motion for summary judgment 

for Blue Ox's failure to prosecute, pursuant to Rule 41(b), 

M.R.Civ.P? 

2. Whether the District Court properly refused to 

allow Blue Ox to amend the original complaint? 

3. Whether, after denying leave to amend the complaint, 

the District Court properly denied Blue Ox's motion to 

consolidate this cause with cause no. 9317, the 1980 action 

against Murphy which addresses the continuing damage by 

Murphy to Blue Ox's property? 

We find issue number two to be dispositive. 

Rule 15(a), M.R.Civ.P., provides that even after a 

responsive pleading has been served, the trial court shall 

freely grant plaintiff leave to amend the original complaint 

"when justice so requires." This rule has been construed 

broadly. In Union Interchange, Inc. v. Parker (1960), 138 

Mont. 348, 354, 357 P.2d 339, 342, we stated, ". . . it is 

the rule to allow amendments and the exception to deny 

them. I' 
The Supreme Court of the United States has held that 

the policy in favor of allowing amended complaints is offset 

by such things as "undue delay, bad faith or dilatory motive 

on the part of the movant. . .'I Foman v. Davis (1962), 371 

U.S. 178, 182, 83 S.Ct. 227, 230, 9 L.Ed.2d 222, 226. Murphy 

contends undue delay exists here. Further, Murphy contends 

that because of our November 20, 1980, order denying Blue 

Ox's request for a writ of supervisory control, the issue of 

"undue delay" is res judicata. We do not agree. 

We gave as one reason for our denial of the writ, the 

fact that Blue Ox had been guilty of laches and had failed 

to prosecute their action diligently. Another reason was 

the fact that Blue Ox had a right to appeal the District 

Court's denial of their motion to amend. To hold the "laches" 

finding res judicata with respect to whether Blue Ox unduly 

delayed prosecution of the cause would effectively deny 

their right to appeal. 

Furthermore, the order denying the writ of supervisory 

control was interlocutory in nature and therefore not res 

judicata. State ex rel. Davis v. District Court (1977), 172 

Plont. 139, 561 P.2d 912. Only final judgments and orders 

intended to be final in nature are res judicata. 1B Moore's 

Federal Practice §0.409[1], at 1002 (1980). 

Prosecution of this case has been delayed. However, 

we do not find unreasonable delay warranting denial of Blue Ox's 

right to a trial upon the merits. There has been no bad 

faith or dilatory motive on the part of Blue Ox. Murphy has 

continuously been kept informed of the new and recurring 

damages to Blue Ox's land caused by Murphy's operations. 

Prejudice to defendant has been minimal due to those updates. 

The new damages and theories of liability set forth in 

Blue Ox's amended complaint stem from the same occurrence as 
the first complaint. Though the evidence shows additional 

leaks. since the first filing, the occurrence is oil pollution 

of the underground water supply. New causes of action 

arising out of the same transaction, occurrence or event may 

be set forth in an amended pleading. 3 Moore's Federal 

Practice, S15.08 [2], at 15-70, (1978) . 

For these reasons, justice requires Blue Ox be allowed 

to amend their original complaint to reflect the new and 

recurring damages to the land, as well as the additional 

theories of liability. 

Our decision to allow Blue Ox to amend the original 

complaint renders issue three re consolidation moot. It 

also eliminates any reason for dismissing this action for 

failure to prosecute. 

In Brymerski v. City of Great Falls (1981) , Mont. 

, 636 P.2d 846, 38 St.Rep. 2001, we stated: 

"We adopt the rule that a motion to dismiss 

for failure to prosecute will not be granted 

if the plaintiff is diligently prosecuting 

his claim at the time the motion is filed, 

even if at some earlier time the plaintiff may 

have failed to act with due diligence." 

Brymerski v. City of Great Falls, Mont. at 

, 636 P.2d at 848-849, 38 St.Rep. at 2004. 

Discovery was conducted by Blue Ox in the spring and 

summer of 1982. Pleadings were made in an effort to place 

the action in the most procedurally proper position. Appellants 

were diligently prosecuting the amended complaint at the 

time Murphy filed the Rule 41(b), M.R.Civ.P., motion. 

The District Court's orders denying Blue Ox's leave to 

amend their complaint and dismissing Blue Ox's action for 

failure to prosecute are both reversed. This action is 

remanded to the Fifteenth Judicial District Court for trial 

on the merits of Blue Ox's ame 
We Concur: