No. 14638 

IN THE SUPREME COUKC OF THE STATE OF FXXTANA 

1979 

STATE EX RET;. CITY OF HAW, 

Relator, 

THE DIrnCT aluRT OF THE TwEuTH 

JUDICIAL DISTRICT OF THE STATE OF !QTL'ANA, 

IN AND FOR THE COUNTY OF HILL, and the HONORABLE 

EEHNARD W. THOMAS, Judge thereof, 

Respondents. 

Counsel of Record: 

For Relator: 

Jardine, Stephenson, Blewett & Weaver, Great Falls, Pbntana 

Jack Lewis argued, Great Falls, Pbntana 

George mabe appeared, Great Falls, Pbntana 

ma, Wenz, Iwen and Johnson, Great Falls, Pbntana 

Joseph mra argued, Great Falls, Pbntana 

For Respondents: 

Frank bbrrison, Jr., argued, Missoula, Pbntana 

Larry Elison argued, Missoula, Pbntana 

Submitted: March 13, 1979 

mided: MAR 25 lga F - 

Filed: !Y!~kl i -k 
Mr. Justice Gene B. Daly delivered the Opinion of the Court. 

This is an original proceeding in which the City of Havre 

and the County of Hill have filed petitions for writs of supervisory control. The dispositive issue is whether a stipulation 

for dismissal with prejudice, entered into between plaintiff 

Boucher and defendant police officer Dramstad, bars the plaintiff 

from proceeding with his claim against the City of Havre and 

Hill County. 

On September 24, 1974, the Havre Police Department received a call advising them that a burglary was in progress at 

a grocery store in North Havre, Montana. Officers Rex Dramstad 

and Kenneth Kooch were dispatched to the store to investigate. 

Upon their arrival at the scene, defendant Dramstad observed a 

suspect inside the store and ordered the suspect to come out. 

Once outside the store, the suspect began to run away from Officer 

Dramstad. In an attempt to apprehend the suspect, defendant Dramstad fired a shot which struck the suspect, plaintiff Ronald 

Boucher, in the back. This injury is the basis of the two civil 

actions initiated by the plaintiff against the City of Havre and 

County of Hill. 

On September 27, 1976, plaintiff Boucher filed a complaint 

in Hill County District Court alleging that Officer Dramstad, the 

City of Havre and Hill County were liable for his injuries and 

and all damages resulting from those injuries. Following extensive discovery, the case was set for trial on December 11, 

1978. A pretrial conference was held December 11, 1978, where 

plaintiff Boucher and defendant Dramstad entered into a stipulation for dismissal with prejudice of the claim against Officer 

Dramstad. The District Court, on the basis of the stipulation 

for dismissal, entered an order dismissing with prejudice the 

action against defendant Dramstad. 

The remaining defendants, the City of Havre and Hill County, 
moved for summary judgment on the grounds that the dismissal 

with prejudice of their agent, Officer Dramstad, exonerated not 

only defendant Dramstad, but also the City and County as well 

since their liability could only be vicarious or derivative. 

The remaining defendants argued that they were entitled to a 

dismissal with prejudice. The remaining defendants' motions 

were denied by the District Court; and they now petition this 

Court for a writ of supervisory control contending the District 

Court erred in denying their motions for summary judgment. 

The plaintiff's complaint stated that the relationship 

of respondeat superior existed between the City of Havre, the 

County of Hill, the State of Montana and defendant Dramstad. In 

State v. District Court of Thirteenth Jud. Dist. (1976), 170 Mont. 

15, 550 P.2d 382, we held that by reason of the 1972 Montana 

Constitution, Article 11, section 18, and the State Tort Claims 

Act, section 2-9-102, MCA, et seq., a municipality and other 

political subdivisions are liable under the doctrine of respondeat 

superior for the negligence of an employee acting within the scope 

of his employment. 

The City of Havre and Hill County contend that defendant 

Dramstad's dismissal with prejudice operates exactly the same as 

a jury verdict, and it therefore conclusively established that 

defendant Dramstad did not negligently or intentionally cause 

plaintiff's injuries. The City of Havre and Hill County further 

contend that the dismissal with prejudice of their eixployee collaieually estops the plaintiff from pursuing any claim against 

them as defendant Dramstad's employer, based upon the doctrine of 

respondeat superior. 

The plaintiff contends that the dismissal with prejudice 

was only a trial tactic and it should not be given any collateral 

estoppel effect. The plaintiff also contends that this Court 

should look behind the words "with prejudice" in order to determine 
the true intent of the parties. The plaintiff further contends 

that by looking behind the words "with prejudice," it is clear 

that the stipulation for dismissal with prejudice did not constitute a final adjudication on the merits; therefore, the plaintiff's 

claim against the City of Havre and Hill County should not be 

barred. 

The issue in the instant case has resulted in a split of 

authority in other jurisdictions. Some courts have held that 

a consent dismissal with prejudice is tantamount to a judgment 

on the merits; and, accordingly, such a dismissal is res judicata 

as to every issue reasonably raised by the pleadings. See Barnes 

v. McGee (1974), 21 N.C.App. 287, 204 S.E.2d 203; DeGraff v. Smith 

(1945), 62 Ariz. 261, 157 P.2d 342. Other courts will look behind 

the words "with prejudice" and determine the intent of the parties. 

If it is determined that the parties did not intend the consent 

dismissal to resolve all of the issues raised by the pleadings, 

then the principles of collateral estoppel will not be applied. 

See Denny v. Mathieu (1970), (Mo. 1970), 452 S.W.2d 114. 

~lthough the facts of the instant case are unique, we find 

guidance from the prior decisions of this Court involving the effect 

of the release of one joint tortfeasor by the plaintiff. In 

Beedle v. Carolan, (1944), 115 Mont. 587, 148 P.2d 559, plaintiff 

Beedle was put in jail by the Rosebud County Sheriff at the insistence of the Rosebud County Attorney. The plaintiff was later released and thereafter brought suit against the Sheriff for false 

imprisonment. The suit was settled by the Sheriff, and a written 

release was executed by the plaintiff. Subsequently, the plaintiff 

attempted to sue the County Attorney for damages for the imprisonment. The District Court found that the release of the Sheriff 

served as a bar to the action against the County Attorney. This 

Court affirmed and said: 

"The words . . . mean that plaintiff has been 

fully compensated for any injuries arising out 
of the transaction; having been fully compensated he has no further cause of action. 

Nothing in the release in any way hints at a 

reservation of the right to sue the county 

attorney or anyone else because of the false 

arrest and, as we have said, that reservation 

must appear on the face of the instrument." 

115 Mont. at 590. 

In McCloskey v. Porter (1973), 161 Mont. 307, 506 P.2d 

845, the plaintiff's deceased husband had been injured in an automobile accident wher. his car had collided with a car driven by the 

defendant, a minor. A Montana statute provided that a person who 

signs a minor's application for a driver's license was jointly 

and severally liable for any damages caused by the minor. In 

McCloskey the minor defendant's father had signed her driver's 

license application. The plaintiff and the father entered into and 

signed a written release. The plaintiff then attempted to proceed 

against the minor defendant, and the District Court granted the 

defendant's motion for a directed verdict. This Court affirmed 

and said: 

"In Montana, the rule has long been established 

that the release of one joint tortfeasor releases the others, unless there are clear provisions in the release to the contrary." 161 

Mont. at 311-312. 

The stipulation for dismissal with prejudice in the instant 

case operates the same as does the release of one joint tortfeasor. 

Nothing in the stipulation for dismissal with prejudice in any way 

hints at a reservation of the right to sue the City of Havre and 

one 

Hill County. As in the cases involving the release of/joint tortfeasor, that reservation must appear on the face of the instrument. 

The stipulation for dismissal in the instant case was one 

"with prejudice." In Schuster v. Northern Co. (1953), 127 Mont. 

39, 45, 257 P.2d 249, 252, we stated that: 

"The term 'with prejudice' as used in a judgment 

of dismissal has a well-recognized legal import. 

It is the converse of the term 'without prejudice', 

and a judgment or decree of dismissal with prejudice is asconclusive 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. Under the doctrine 

of respondeat superior, an employer defendant's liability is 

vicarious or derivative and does not arise until an employee 

acts negligently within the scope of his employment. A dismissal 

of a claim with prejudice of an employee is equivalent to a finding that the employee was not negligent. Under the doctrine of 

respondeat superior, such a dismissal of an employee operates to 

exonerate the employer. This Court will look at the dismissal with 

prejudice on its face, and will not look behind the words "with 

prejudice. " 

The two judgments denying the motions for summary judgment 

by the City of Havre and the County of Hill are vacated and set 

aside. The two causes are remanded to District Court with directions to enter judgment with prejudice for both of the remaining 

defendants. 

Justice f 

We concur: 

Chief ~ustice 

Mr. Justice ~aniel J. Shea dissents and will file a written 

dissent later. 

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DISSENT OF JUSTICE DANIEL J. SHEA 

No. 14638 and 14645 

STATE EX REL. CITY OF HAVRE 

DISTRICT COURT TWELFTH JUDICIAL 

DISTRICT, et al. 

STATE EX REL COUNTY OF HILL 

DISTRICT COURT TWELFTH JUDICIAL 

DISTRICT, et al. 

March 31, 1980 
Mr. Justice Daniel J. Shea dissenting: 

I would affirm the order of the District Court. It is 

clear beyond question that the plaintiff did not intend to 

dismiss either the City or County. In this respect I cannot 

understand the failure of this Court to consider the impact of 

our recent case of Kussler v. Burlington Northern, Inc. and 

State of Montana (1980), - Mont . -I - P.2d , 37 St-Rep. 

240. 

The essential issue involves the effect given to a 

stipulation to dismiss with prejudice, entered into between 

plaintiff and police officer Rex Dramstad, and an order 

putting this agreement into effect by dismissing with 

prejudice. The agreement to dismiss, and order to dismiss, 

are silent as to whether plaintiff intended also to dismiss 

the City or County as defendants. The City and County do 

not seriously contend that plaintiff intended to release them, 

but contend that the dismissal must have that effect, because 

any liability of the City or County can only be vicarious 

or derivative. 

The essence of defendants' argument is that, regardless 

of plaintiff's intent, his release of Officer Dramstad, had 

the effect, by operation of law, of also releasing the City 

and the County. As inviting as this argument may appear, 

it ignores the realities of the situation. The intent of 

plaintiff in releasing only Officer Dramstad, is at the 

core of whether the City and County are entitled to receive 

the benefits of this dismissal. 

The majority relies upon a definition of "with prejudice" 

in Schuster v. Northern Co. (1953), 127 Mont. 39, 257 P.2d 

249; and cites DeGraff v. Smith (Ariz. 1945), 157 P.2d 342; 

and Barnes v. McGee (N.C. 1974), 204 S.E.2d 203. In DeGraff 

and Barnes, the courts held that the employer was dismissed 
as a result of the plaintiff's dismissal of the defendant 

employee who was alleged to have been the actively negligent 

party. In both DeGraff and Barnes, it was the clear intent 

of the plaintiff not to dismiss against the defendant employer 

even though the defendant employee was dismissed. 

In Schuster, supra, the plaintiff's case was dismissed 

"with prejudice" by the trial court, after a three year 

delay, and when, during trial, plaintiff announced he could 

not proceed with his proof because of an absence of witnesses. 

In affirming the dismissal, this Court simply defined the 

legal effect of a dismissal "with prejudice." This case has 

no bearing on the issue before this Court for plaintiff does 

not contend that he can still proceed to prosecute his 

action directly against Officer Dramstad. 

Factually, neither DeGraff nor Barnes are similar to 

the present case. These cases are not persuasive because in 

each situation the court ignored the uncontradicted intent 

of the plaintiff to dismiss only the defendant employee and 

to proceed against the defendant employer. The effect was 

that a benefit was conferred upon the defendant employer 

which was clearly not intended by the plaintiff and clearly 

not warranted by the facts. 

Defendants contend that the dismissal of Officer 

Dramstad operates exactly as though a jury had ruled in 

favor of Officer Dramstad, and thus that the City and the 

County, by the same verdict, because of their derivative 

status, would also have been absolved of legal responsibility 

for plaintiff's injuries. This analysis was effectively 

rejected in Denny v. Mathiew (Mo. 1970), 452 S.W.2d 114, 

where the court held that a dismissal with prejudice does 

not operate in precisely the same manner as a jury verdict. 

Rather, the court held that, under its own practice rule 

relating to dismissals, that a "dismissal with prejudice 
actually adjudicates nothing" but only "serves as a mechanism 

for the termination of litigation rather than adjudication 

of the issues therein involved." In so holding, the court 

reasoned that it was proper to go behind the words "with 

prejudice" to determine what was intended in light of the 

facts of the particular case. The court ruled that the 

intent of the plaintiff in agreeing to a dismissal, must be 

considered. If justice is one of the objectives of the law, 

this clearly is the proper rule. 

In a somewhat different context, the question of intent 

was discussed recently in Brackenbrough v. MacCloskey (Or. 

19791, 600 P.2d 481, where the appeals court ruled that 

parol evidence was admissible to establish whether the 

parties to a release with an integration clause, intended 

also to release a nonparty. In discussing previous Oregon 

cases involving similar issues, the court ruled that parol 

evidence was admissible to show the true intent of agreements 

whereby a person was seeking benefits conferred by an agreement 

to which he was not a party. 

The issue in Brackenbrough was whether a doctor sued 

for malpractice, should be able to avail himself of a release 

agreement between plaintiff and a party who was the active 

cause of the initial need of plaintiff to seek medical 

attention. Although the issue is not precisely the same 

here as it was in Brackenbrough, it is appropriate to compare 

the cases in terms of the parties who are seeking the benefits 

of an agreement to which they were not a party. In ~rackenbrough, 

the court ruled that plaintiff could present parol evidence 

to show that he did not intend to confer release benefits 

upon the doctor. Here, it is effectively conceded that 

plaintiff did not intend to dismiss as against the City or 

the County. I can see no policy reasons why the city or the 

County should receive the benefit of a dismissal to which 

they were not a party, and for whom it was clearly not 

intended. 

-9- 
The majority here relies upon Beedle v. Carolan, Co. 

Attorney (1944), 115 Mont. 587, 148 P.2d 559, and McClosky 

v. Porter (1973), 161 Mont. 307, 506 P.2d 845, as authority 

for the proposition that the release of one joint tortfeasor 

releases the others, unless there are clear provisions in 

the release to the contrary. With these cases serving as 

the essential underpinnings for its rationale, the majority 

concludes here that the stipulation for dismissal with 

prejudice contained nothing which in any way hinted at a 

reservation of the right to sue the City of Havre or Hill 

County, and that such a reservation must appear on the face 

of the instrument if the plaintiff is to proceed with his 

case. 

What the majority fails to consider is that in Kussler 

(less than two months ago) we specifically overruled Beedle 

and McCloskey. Indeed, Kussler overruled the legal proposition, 

relied upon by the majority here, that the release of one 

joint tortfeasor releases the others, unless there are clear 

provisions in the release to the contrary. Kussler, supra, 

37 St.Rep. at 244-245. 

In Kussler, we adopted the approach taken by the Arizona 

Supreme Court in Adams v. Dion (1973), 109 Ariz. 308, 509 

P.2d 201. In Adams, the plaintiff was injured in a car wreck 

which involved joint tortfeasors. One of the tortfeasors was 

released. The other was the defendant in the case. The law 

in Arizona had been that a release of one released all. The 

court listed several reasons for rejecting the common law 

rule: the rule is a trip for the unwary; it stifles the desire 

of the victim to compromise; and it leads to results not intended 

by the parties. As a result, the court adopted the rule "that 

the release of one joint tortfeasor is not a release of any 

other joint tortfeasor unless the document is intended to 

release the other tortfeasors, or the payment is full compensation, 

-10- 
or the release expressly so provides." 509 P.2d at 203. As 

we noted in Kussler, this rule was adopted from the Restatement 

(Second) of Torts S885. The United States Supreme Court also 

adopted the rule to apply to antitrust litigation. Zenith 

Radio Corp. v. Hazeltine Research (1971), 401 U.S. 321, 344, 

91 S.Ct. 795, 809, 28 L.Ed.2d 77, 95. 

In accordance with the spirit of the rule announced in 

Kussler, consideration should be given to the intent of the 

parties who executed the stipulation for dismissal. There 

can be no question here that the plaintiff did not intend that 

the City or County receive the benefit of the dismissal. 

Nor does the City or County have the temerity to make this 

assertion. 

Neither the City nor the County will incur any 

prejudice because the police officer was dismissed from the 

lawsuit. Plaintiff must still prove his cause of action 

against the police officer before the City or County is 

compelled, under the doctrine of respondeat superior, to 

respond by the payment of damages. 

The order of the District Court permitting the case 

to proceed to trial on the merits should be affirmed. 

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