No. 12469 

IN THE SUPREME COURT OF THE STATE OF MONTANA 

JOHN SLOVAK, MARY K. SKOVAK, 

PAUL SLOVAK et al., 

Plaintiffs and Appellants, 

KENTUCKY FRIED CHICKEN et al., 

Defendants and Respondents. 

Appeal from: District Court of the Thirteenth Judicial District, 

Honorable Na t Allen, Judge presiding. 

Counsel of Record: 

For Appellants : 

Crowley , Kilbourne, Haughey , Hanson and Gallagher, 

Billings, Montana 

Jack Ramirez argued, Billings, Montana 

For Respondents: 

Poore, McKenzie and Roth, Butte, Montana 

Allen R. McKenzie argued, Butte, Montana 

Submitted: November 30, 1973 

Decided 34 JAW 3 1g7q 
Mr. Justice Gene B. Daly delivered the Opinion of the Court. 

This is an action alleging claims couched in terms of a 

tort arising from a contract and for breach of that contract. 

Plaintiffs bring this appeal from an order of the district court 

of Yellowstone County granting defendants' motion for change of 

venue to Cascade County, Montana. 

The complaint was filed in Yellowstone County on April 

19, 1972. ~efendants' motion for change of venue was filed on 

June 2, 1972. On January 5, 1973, plaintiffs disqualified presiding Judge Robert H. Wilson and the cause was transferred to 

Judge C.B. Sande, who deemed himself disqualified. The cause 

was then transferred to Judge Charles Luedke on January 11, 1973. 

On January 12, 1973, Judge Luedke entered an order denying the 

motion for change of venue. Defendants then disqualified Judge 

Luedke by affidavit dated January 5, 1973. Judge Nat Allen 

assumed jurisdiction and, by order dated February 19, 1973, set 

aside Judge Luedke's order of January 12, 1973, and changed the 

venue to Cascade County. 

This action by Judge Allen would normally amount to circumvention of appeal by allowing collateral attack of an appealable order of a district court. However, as Judge Allen pointed 

out in his order setting aside Judge Luedke's order, there were 

special circumstances in this case. An affidavit filed by defendants' counsel stated that due to the various disqualifications 

of judges, he was unaware of who the presiding judge was on 

January 12, 1973, the date of Judge Luedke's order, and hence had 

no opportunity to file an affidavit of disqualification of Judge 

Luedke prior to entry of that order. On appeal no question is 

presented regarding the use of an affidavit of disqualification, 

however we call attention of counsel to,In the Matter of the 

Application of Jan S. Stewart for a Writ of Supervisory Control 

or Other Appropriate Writ, - Mon t *-9 P.2d , 31 St. 

Rep. 1. 
Plaintiffs are John Slovak, Mary K. Slovak, Paul Slovak, 

Mary J. Slovak, Andrew Slovak and Anne E. Slovak, hereinafter 

referred to as the Slovaks; defendants are Kentucky Fried Chicken 

of Montana, Montana Franchising, Inc., Gerald Leavitt, Fred C. 

Haas,Jr., Raymond C. Whitaker; and all persons whose names are 

unknown who are now or who have been stockholders of the abovenamed corporation, hereinafter referred to as Kentucky Fried 

Chicken of Montana, 

The ~lovaks' complaint in contract and in tort are related 

to a contract of sale of a Kentucky Fried Chicken franchise. 

The record indicates that, at the time the contract was made, the 

Slovaks were residents of Yellowstone County, and Kentucky Fried 

Chicken Montana had its principal place of business in Silver 

Bow County, At the time of the commencement of the action Slovaks 

were residents of Yellowstone County; Kentucky Fried Chicken of 

Montana and Montana Franchising, Inc,, had their principal place 

of business in Cascade County, and Gerald Leavitt, the only other 

defendant served was a resident of Cascade County. 

The third paragraph of the contract between the parties 

states: 

"3. Contemporaneously with the execution of this 

agreement, Slovak shall execute and deliver to 

Kentucky Fried Chicken of Montana, at Billings, 

Montana, a good and sufficient assignment and conveyance to Corporation of ~lovak's right, title and 

interest in and to the July 16, 1956 Franchise Agreement, which A.ssignment and conveyance shall be held 

by the Midland Bank and Trust Company of Billings, 

Montana in escrow pending payment in full of the 

$35,000.00 by the Corporation. All escrow fees and 

collection charges shall be shared equally by the 

parties, and all payments made hereunder shall be 

unto said Bank." 

The sole issue before this Court is whether the district 

court erred in changing the venue of this action from Yellowstone 

County to Cascade County. 

Section 93-2904, R.C.M. 1947, the pertinent venue statute, 

provides : 
"In all other cases the action shall be tried 

in the county in which the defendants, or any 

of them, may reside at the commencement of the 

action, or where the plaintiff resides, and the 

defendants, or any of them, may be found; or, 

if none of the defendants reside in the state, or, 

if residing in the state, the county in which they 

so reside be unknown to the plaintiff, the same 

may be tried in any county which the plaintiff 

may designate in his complaint; and if any defendant or defendants may be about to depart from 

the state, such action may be tried in any county 

where either of the parties may reside, or service 

be had. Actions upon contracts may be tried in 

the county in which the contract was to be performed, and actions for torts in the county where 

the tort was committed; subject, however, to the 

power of the court to change the place of trial 

as provided in this code. 11 

According to the express terms of the contract, its 

place of performance was Billings, Yellowstone County, Montana. 

We find that venue was proper in Yellowstone County concerning 

the claim ex contractu. Hartford Accident and Indemnity Co. v. 

Viken, 157 Mont. 93, 483 P.2d 266. 

Concerning the claim ex delicto, Slovaks' complaint 

alleges that under the contract's terms they were to receive six 

percent of the gross receipts of Kentucky Fried Chicken of Montana. 

They further allege that Montana Franchising, Inc., was created 

as a sub-franchising entity by the three individually named defendants for the purpose of reducing the gross income of Kentucky 

Fried Chicken of Montana and thus reducing the Slovaks' six percent 

royalty payments. 

There is a dispute concerning where, for the purposes of 

venue under section 93-2904, R.C.M. 1947, the commission of the 

alleged tort occurred. In this connection it has been suggested 

that residence of the individual and corporate defendants control 

and the alleged tort was conceived in or committed at a situs 

different from Yellowstone County, therefore the proper place of 

trial would be Silver Bow or Cascade County. In support defendants 

cite,with considerable emphasis, the recent decision of this Court 

in Foley v. General Motors Corp., 159 Mont. 469, 499 P.2d 774. 
A careful analysis of Foley discloses that it could not be 

determined from the facts where the tort occurred. Consequently, 

that issue was not controlling nor discussed. The issue involved 

in Foley was the residence of the foreign corporation, General 

Motors Corporation, and therefore offers no support in the solution of the instant problem. 

An analogous issue was resolved in Brown v. First Federa.1 

Savings & Loan Assn., 144 Mont. 149, 156, 394 P.2d 1017. Brown 

involved a construction loan agreement between borrowers in Lewis 

and Clark County and lenders in Cascade County. The borrowers 

filed a complaint in Lewis and Clark County sounding in contract 

and tort, and the lenders moved for change of venue to Cascade 

County. In affirming denial of the motion, this Court stated: 

11 While we may not know where the tort was committed, 

we do know that the defendant has not sustained 

the burden of proof necessary to overturn the prima 

facie case of proper venue. 

"A finance company which extends itself to contract 

in several counties in this state cannot be said to 

be contracting to perform at its principal place of 

business. If a savings and loan association serves 

as the financial shadow behind a home builder, it 

is reasonable to hold that the place of performance 

is where the home is built and the negligence in the 

management of the financing, if any, is committed 

there also. I I 

Here, plaintiffs were accorded the option by section 93- 

2904, R.C.M. 1947, to file either in the county of defendants' 

residence or in the county where the tort was committed. Seifert 

v. Gehle, 133 Mont. 320, 323 P.2d 269. 

Section 93-2906, R.C.M. 1947, provides a defendant the 

right to change venue only in the following limited instances: 

11 The court or judge must, on motion, change 

the place of trial in the following cases: 

"1. When the county designated in the 

complaint is not the proper county. 

"2. When there is reason to believe that 

an impartial trial cannot be had therein. 

"3. Idhen the convenience of witnesses and 

the ends of justice would be promoted by the 

change. 

"4. When the judge is disqualified from acting 

for any cause; but no change of the place of trial 

shall be made if: 
"(a) the parties agree in writing upon 

another district judge, or member of the bar 

as judge pro tempore, or 

"(b) any qualified district judge is 

called in, and within thirty (30) days after 

the motion is made, appears and assumes jurisdiction of the cause and of all matters and 

proceedings therein. 

"If the judge so appears he shall be vested with, 

and shall exercise, all the authority of the judge 

of the district in which the action or proceeding 

may be pending, I I 

Here, defendants' motion for change of venue contained 

these grounds: 

"A. That the County of Yellowstone is not the 

proper County for the trial of said action. 

"B. That it appears from Plaintiffs' complaint 

and from the Affidavit of Defendants1 counsel, 

Allen R. McKenzie, filed herein in support of 

~efendants' Motion for change of place of trial 

to Cascade County, Montana, or in the alternative 

to Silver Bow County, Montana, that the acts 

complained of occurred in Butte and Great Falls, 

Montana, and that the County where the tort complained of in Count I1 of Plaintiffs' complatnt 

was committed in Butte, Montana and that the 

principal place of business of the Defendants, 

KENTUCKY FRIED CHICKEN and MONTANA FRANCHISING, 

INC., was in Great Falls, Montana at the time 

of the commencement of the action and the residence of the Defendant, Gerald Leavitt, is Great 

Falls, Montana. I I 

~efendants' Ground A merely states a legal conclusion. 

Ground B contends that the acts constituting the alleged tort were 

committed in Butte or Great Falls. We cannot agree with defendants' 

contention, in light of the ruling in Brown. In actions, such as 

this, where a complaint states a claim for breach of contract and 

an interrelated and dependent claim in tort, the county of performance of the contract and the resulting damages to the plaintiff 

must necessarily be the county where the interrelated fraud, 

negligence, conspiracy, deceit, or whatever tort, if any, was 

committed for purposes of section 93-2904, R.C.M, 1947, in determining venue. 

The order appealed from is reversed and cause remanded 

to the district court of Yellowstone County