No. 96-125 

IN THE SUPREME COURT OF THE STATE OF MONTANA 

1996 

FIRST CONTINENTAL CORPORATION, 

a Montana Corporation, 

Plaintiff and Respondent, 

JOHN B. PARKER, KOLEEN FELDMAN 

PARKER, JULIE L. PARKER and JAMES 

0. PARKER, 

Defendants and Appellants. 

APPEAL FROM: District Court of the Tenth Judicial District, 

In and for the County of Ferqus, 

The Honorable John Christensen, Judge presiding 

COUNSEL OF RECORD: 

For Appellants: 

Allen Beck, Attorney at Law, Billings, Montana 

John B. Parker, Pro Se, Billings, Montana 

For Respondent: 

Norman L. Newhall; Linnell, Newhall, Martin & 

Schulke, Great Falls, Montana 

Filed: 

Submitted on Briefs: November 21, 1996 

Decided: December 31, 1996 
Justice W. William Leaphart delivered the Opinion of the Court. 

Pursuant to Section I, Paragraph 3 (c), Montana Supreme Court 

1995 Internal Operating Rules, the following decision shall not be 

cited as precedent and shall be published by its filing as a public 

document with the Clerk of the Supreme Court and by a report of its 

result to State Reporter Publishing Company and West Publishing 

Company. 

Appellant John B. Parker, appearing pro se, appeals the 

February 1, 1996 Order of the Tenth Judicial ~istrict Court, Fergus 

County, denying his motion for change of venue, Julie L. Parker 

appeals the February 1, 1996 Order granting default judgment 

against her. Appellants John B. Parker, and James 0. Parker appeal 

the February 1, 1996 Order granting First Continental Corporation's 

(FCC) motion for summary judgment. We aff inn. We consider the 

following issues on appeal: 

1. Did the District Court err when it denied John B. 

Parker's motion for change of venue? 

2. Did the District Court err when it granted default 

judgment against Julie L. Parker? 

3. Did the District Court err when it granted summary 

judgment against John 3. Parker and James 0. Parker? 

4. Is it proper for this Court to reopen the previous 

litigation in this matter on the basis of extrinsic fraud? 
Factual and Procedural Historv 

This appeal arises from a deficiency judgment in the amount of 

$153,632 ordered against the appellants as general partners in 

Fergus Farming Partnership (FFP). FCC won a judgment against FFP 

which was affirmed by this Court on July 8, 1995. The facts 

leading up to that judgment will only be repeated as necessary to 

the resolution of the present dispute. 

FFP was formed as a general partnership in 1987 to farm real 

property located in Fergus County, Montana. The property was being 

purchased by FCC pursuant to a Contract For Deed with Fox Grain and 

Cattle Co. (Fox). FFP took possession of the property as lessee 

and hired Top Gun, Inc., to perform custom farming services. FCC 

defaulted on the Contract For Deed and Fox instituted default 

proceedings and eventually litigation against FCC, FFP, and other 

farming partnerships in the Tenth Judicial District Court, Fergus 

County, Montana. The original complaint was filed on July 20, 

1988. On January 16, 1990, FCC filed a cross-complaint against FFP 

based on an account receivable owed by FFP to Top Gun, Inc., which 

Top Gun assigned to FCC. The case was tried before the court on 

March 21, 1994 and the court entered its Findings of Fact and 

Conclusions of Law on June 21, 1994. After a hearing regarding 

attorney's fees, the court entered judgment in favor of FCC and 

against FFP on October 14, 1994. 

FFP filed post-trial motions which were denied by the District 

Court. Thereafter, FFP timely filed an appeal to this Court which 
affirmed the District Court. FFP's petition for rehearing was 

denied and a Remittitur issued July 27, 1995. 

In the meantime, while the appeal to this Court was pending, 

FCC issued a Writ of Execution on FFP funds held in trust by the 

Fergus County Clerk of Court's office. The Writ was partially 

satisfied by payment of $69,190. FCC issued additional Writs of 

Execution for the balance of the judgment which were served in 

Fergus and Yellowstone Counties. They were returned unsatisfied. 

Thereafter, FCC instituted the present action in the Tenth 

Judicial District Court filing a complaint on August 17, 1995. 

Appellant Julie Parker was originally served on August 27, 1995 and 

re-served on October 3, 1995. Appellant John Parker was served on 

October 1, 1995 and Appellant James Parker was served on October 

18, 1995. All three appellants were served with an Amended 

Summons, a copy of the Complaint and the Plaintiff's First 

Discovery Requests (including requests for admissions). None of 

the appellants responded to the discovery requests. 

On October 19, 1995, John Parker, appearing pro se, filed a 

Motion to Dismiss without a brief. On November 6, 1995 John Parker 

filed his answer and a Motion for Change of Venue. 

On November 24, 1995, the Fergus County Clerk of Court entered 

the Defaults of Julie Parker and James Parker for failure to 

appear. On the same date FCC moved for summary judgment against 

John Parker and for entry of a Default Judgment against Julie 

Parker and James Parker pursuant to Rule 56, M.R.Civ.P. 
On January 12, 1996, James Parker and Julie Parker through 

counsel, moved to set aside the default by the Clerk of Court. On 

the same date, James Parker and Julie Parker, through counsel, and 

John Parker, appearing pro se, filed an additional Answer, Third 

Party Complaint and Counterclaim against FCC and against John J. 

Greytak individually. 

Hearing on all motions was conducted on January 16, 1996. The 

court issued its Order on February 1, 1996, and its Memorandum on 

February 2, 1996, granting summary judgment to FCC and judgment 

against John Parker, James Parker, and Julie Parker. 

Standard of Review 

Our standard of review of a district court's denial of a 

motion to change venue is a legal conclusion which we review to 

determine whether the district court correctly applied the law. 

Carter v. Nye (1994), 266 Mont. 226, 228, 879 P.2d 729, 730; 

Barthule v. Kaman (1994), 268 Mont. 477, 482, 886 P.2d 971, 

974. Our standard of review in appeals from a district court's 

denial of a motion to set aside an entry of default is "that no 

great abuse of discretion need be shown to warrant reversal." 

Lords v. Newman (1984), 212 Mont. 359, 364, 688 P.2d 290, 293. 

Our standard of review in appeals from summary judgment 

rulings is de novo. Motaire v. Northern Montana Joint Refuse 

Disposal Dist. (1995), 274 Mont. 239, 242, 907 P.2d 154, 156; Mead 

v. M.S.B., Inc. (1994), 264 Mont. 465, 470, 872 P.2d 782, 785. 

When we review a district court's grant of summary judgment, we 

apply the same evaluation as the district court based on Rule 56, 
M.R.Civ.P. Bruner v. Yellowstone County (1995), 272 Mont. 261, 

264, 900 P.2d 901, 903. In Bruner, we set forth our inquiry: 

The movant must demonstrate that no genuine issues of 

material fact exist. Once this has been accomplished, 

the burden then shifts to the non-moving party to prove, 

by more than mere denial and speculation, that a genuine 

issue does exist. Having determined that genuine issues 

of fact do not exist, the court must then determine 

whether the moving party is entitled to judgment as a 

matter of law. We review the legal determinations made 

by a district court as to whether the court erred. 

Bruner, 900 P.2d at 903 (citations omitted) 

Issues 

1. Did the District Court err when it denied John 

Parker's motion for change of venue? 

John Parker and James Parker filed separate motions for change 

of venue. Both motions were denied. Only John Parker appeals from 

the denial. On October 19, 1995, John Parker, appearing pro se, 

filed a motion to dismiss. On November 6, 1995, John Parker filed 

his answer and a motion for change of venue. John Parker alleged 

that venue was proper in Yellowstone County, as that was the county 

of his residence. He further alleged that, even if the choice of 

venue were to be determined based upon the underlying contract, 

Yellowstone County, rather than Fergus County, was proper because 

Yellowstone County was FFP's principal place of business. Both of 

these allegations are incorrect. 

FCC objected to the motion on the basis that John Parker did 

not move for change of venue in his first pleading pursuant to Rule 

12 (b) , M. R. Civ. P. A defendant waives the right to change venue 

when he fails to raise the issue at the time of his first 

appearance. Rule 12 (b) , M.R.Civ.P. ; Hoyt v. Hoyt (l985), 215 Mont. 

6 
449, 456, 698 P.2d 418, 422. An "appearance is the first act of 

the defendant in court." Johnson v. Clark (19571, 131 Mont. 454, 

459, 311 P.2d 772, 775. John Parker waived his right to change 

venue by failing to raise the issue when he first appeared and 

moved the court to dismiss the action against him. 

Although the District Court could have denied John Parker's 

motion for change of venue on this procedural ground alone it chose 

to address the merits of the venue issue and denied the motion on 

that basis. 

The District Court found that Fergus County was the proper 

place for venue because, although the service contract with Top 

Gun, Inc., was executed in Yellowstone County, Montana, it was to 

be performed in Fergus County, Montana. 

The general rule governing venue of all civil actions is that 

the action shall be tried in the county in which the defendant 

resides. Section 25-2-118, MCA. However, 25-2-118, MCA, 

provides that the general rule applies only if venue is not 

otherwise provided for by statute. Section 25-2-121, MCA, governs 

venue in contract actions: 

(2) [Ilf . . . a contract belongs to one of the 

following classes, the proper county for such a contract . . . is . . . (b) contracts of employment or for the 

performance of services: the county where the labor or 

services are to be performed . . . . 

The judgment against FFP arose out of an alleged breach of 

payment for services rendered by Top Gun, Inc. in Fergus County, 

Montana. FCC partially satisfied the judgment out of partnership 

assets in Fergus County. Thereafter FCC commenced the above- 
entitled action under § 35-10-307, MCA, and § 35-10-312, MCA, to 

recover the balance fromthe individual partners. Contrary to John 

Parker's argument, FCC's attempt to recover the balance of the 

judgment against the individual partners is an ancillary and 

incidental action to the original proceeding against the 

partnership. 

The general rule is that when the determination of a 

matter is incident to a principal action, the court 

having jurisdiction of the principal action may determine 

the ancillary or incidental proceedings, notwithstanding 

the venue of an action as to such matter would, under 

other circumstances, be in another county. 

77 Am.Jur.2d Venue § 27 (1975) (citations omitted). Therefore 

venue is proper in Feryus County, the county in which the original 

service contract was to be performed. 

The District Court's holding as to venue comports with § 25-2- 

121, MCA, the statute governing venue in contract actions. The 

District Court correctly denied John Parker's motion for change of 

venue and we affirm the District Court on that issue. 

2. Did the District Court err when it granted default 

judgment against Julie Parker? 

Julie Parker was originally served with a copy of the Summons, 

Complaint and Plaintiff's First Discovery Requests on August 27, 

1995. Due to an error in the original Summons, Julie Parker was 

re-served with a copy of all the documents on October 3, 1995. The 

Default of Julie Parker was entered by the Clerk of the Court on 

November 24, 1995. Julie Parker failed to contact an attorney 

until just prior to oral arguments on FCC's motion for default 

judgment against her on January 16, 1996. Julie Parker's first 

8 
appearance was through counsel on January 12, 1996. This 

appearance was more than 90 days after the second service of the 

documents and more than 130 days after original service of the 

court documents. 

The District Court denied Julie Parker's Rule 55(c! motion to 

set aside the entry of default by the clerk and to deny FCC's 

motion for default judgment against her. Rule 55(c), M.R.Civ.P., 

provides that: 

For good cause shown the court may set aside an entry of 

default and, if a judgment by default has been entered, 

may likewise set it aside in accordance with Rule 60 (b) . 

The District Court found that there was no mistake, inadvertence, 

surprise, or excusable neglect which would allow the court to reach 

the "good cause" exception and denied the motion to set aside the 

entry of default on that basis. We find no abuse of discretion in 

the District Court's holding. Furthermore, in her brief to this 

Court, Julie Parker has failed to offer any reason why the default 

judgment against her should not have been granted. We therefore 

affirm the District Court's grant of default motion against Julie 

Parker. 

3. Did the District Court err when it granted summary 

judgment against John Parker and James Parker? 

On November 24, 1995, the Fergus County Clerk of Court entered 

the default of Julie Parker and James Parker for failure to appear. 

On the same date FCC moved for summary judgment against John Parker 

and for entry of a default judgment against Julie Parker and James 

Parker. 
On December 7, 1995, FCC filed an alternative motion for 

summary judgment against James Parker pursuant to Rule 56, 

James Parker subsequently moved to set aside the default 

judgment. The District Court granted James Parker's motion to set 

aside the default on the basis of a calendering mistake by counsel 

and so that the merits of tl-ie competing claims could be decided by 

the court. 

FCC's complaint against John Parker and James Parker was filed 

pursuant to § 35-10-312, MCA, and was based upon the joint and 

several liability of general partners for partnership obligations 

under 5 35-10-307, MCA. Section 35-10-312, MCA, reads in pertinent 

part : 

. . . . 

(2) An action may be brought against the 

partnership and any or all of the partners who are 

personally liable for obligations of the partnership 

under 35-10-307 or 35 10-629 in the same action or in 

separate actions. . . . . (4) A judgment creditor of a partner may not levy 

execution against the assets of the partner to satisfy a 

judgment based on a claim against the partnership unless: 

(a) the partner is personally liable for the 

liability of the partnership under 35-10-307 or 35-10- 

629; and 

(b) one of the following conditions is satisfied: 

(i) a judgment based on the same claim has been 

obtained against the partnership and a writ of execution 

on the judgment has been returned unsatisfied in whole or 

in part . . . . 

It is undisputed that James and John Parker were general 

partners of FFP. James and John Parker were served with requests 

for admissions seeking to establish their status as partners in FFP 

more than 45 days prior to oral arguments on the summary judgment 
motions. Neither James Parker nor John Parker responded to the 

requests within 45 days and therefore, under Rule 36, M.R.Civ.P., 

their status as partners is deemed admitted. 

FCC first attempted to satisfy its judgment against FFP 

through assets owned by FFP. After obtaining partial satisfaction 

of the judgment through execution on the Clerk of Court's trust 

account in which funds owned by FFP were deposited, FCC issued two 

additional writs of execution which were returned unsatisfied. 

Thus, FCC has complied with the 5 35-10-312, MCA, prerequisite to 

bringing an independent action on the judgment against the 

individual partners. 

James Parker asserts that because he was not named 

individually in the original proceedings that he is not liable for 

the debts of the FFP partnership. John Parker asserts that since 

he was dismissed from the underlying action as not being a "real 

party" in interest he is no longer liable for any judgment arising 

from the original action. 

Additionally, James and John Parker assert that the nature of 

a partner's liability under the applicable 1987 code, § 35-10-307, 

MCA, was "joint" liability and not "joint and several" liability 

and therefore the individual partners were not "jointly and 

severallyN liable with the partnership for the liabilities of the 

partnership. FCC correctly points out that in 1987, § 28-1-302, 

MCA, rendered all "joint" obligations "joint and several" 

obligations. In any case, the partners do not have joint liability 

with the partnership. Rather, the partnership has primary 
liability for its debts and if the partnership cannot satisfy its 

debts the partners become jointly and severally liable with each 

other for the unpaid balance of the debt. James and John Parker 

misconstrue the nature of partnership liability and ignore the fact 

that they are general partners in FFP, a partnership with an 

unsatisfied judgment against it. 

As general partners in the FFP partnership, John and James 

Parker are liable for the partnership debts and therefore the 

District Court properly granted summary judgment against them. 

4. Is it proper for this Court to reopen the previous 

litigation in this matter on the basis of extrinsic fraud? 

The Appellants argue that the judgment obtained by FCC should 

be set aside because the underlying agreement upon which FCC 

obtained the judgment was obtained by fraud of its officer, agent 

and shareholder, John Greytak. The allegations of fraud revolve 

around Greytak's failure to reveal the true source of funds used to 

originally capitalize FFP. Appellants allege that they did not 

learn of the fraud until trial of the underlying claim in March 

1994. 

Even if the Appellants did not or could not have learned of 

the fraud until the time of trial they had the opportunity to 

cross-examine Greytak and could have made a motion to set aside the 

judgment under Rule 60(b) (3), M.R.Civ.P. However, no such motion 

was made. Rule 60, M.R. Civ. P., provides a procedure by which a 

party may seek relief from a judgment. Rule 60 (b) , M.R.Civ.P., 

provides that: 
On motion and upon such terms as are just, the court may 

relieve a party or a party's legal representative from a 

final judgment, order, or proceeding for the following 

reasons : (1) mistake, inadvertence, surprise, or 

excusable neglect; (2) newly discovered evidence which 

by due diligence could not have been discovered in time 

to move for a new trial under Rule 59 (b) ; (3) fraud 

(whether heretofore denominated intrinsic or extrinsic), 

misrepresentation, or other misconduct of an adverse 

party . . . . 

Having failed to seek relief from a final judgment under the 

applicable subsections of Rule 60(b), M.R.Civ.P., the only 

remaining avenue to attack the validity of the judgment against FFP 

is under the residual clause of Rule 60(b), M.R.Civ.P., which 

permits an independent action to void a judgment under "very 

limited circumstances." Loney v. Milodragovich, Dale & Dye, P.C. 

(l995), 273 Mont. 506, 511, 905 P.2d 158, 162. The residual clause 

of Rule 60(b), M.R.Civ.P., provides: 

This rule does not limit the power of a court to 

entertain an independent action to relieve a party from 

a judgment, order or proceeding, or to grant relief to a 

defendant not actually personally notified as may be 

required by law, or to set aside a judgment for fraud 

upon the court. 

This residual clause allows for three separate avenues of relief 

including: lack of personal notification, fraud upon the court, and 

an independent action for extrinsic fraud. See Rule 60(b); In re 

Marriage of Miller (1996), 273 Mont. 286, 902 P.2d 1019, 1022 

(citing Salway v. Arkava (1985), 215 Mont. 135, 140, 695 P.2d 1302, 

Personal notification has not been asserted. Fraud upon the 

court embraces only the "most egregious conduct, such as bribery of 

a judge or member of the jury. . . . " Marriase of Miller, 902 P. 2d 
at 1022. This Court has repeatedly held that fraud between the 

parties is not fraud upon the court. Marriase of Miller, 902 at 

1022 (citation omitted). Appellants allege that Greytak committed 

fraud by not revealing to them the source of funding for the 

capitalization of FFP. Appellants have not asserted fraud upon the 

court. 

All that remains, therefore, is an independent action for 

"extrinsic fraud." This Court has defined extrinsic fraud as "some 

intentional act or conduct by which the prevailing party has 

prevented the unsuccessful party from having a fair submission of 

the controversy. " Marriase of Miller, at 1022 (citations omitted) . 

Throughout the underlying litigation, FFP did not depose 

Greytak nor did it send interrogatories to Greytak or FCC in order 

to determine the source of funds used to capitalize the 

partnership. Appellants could have cross-examined Greytak or made 

a Rule 60(b)(3), M.R.Civ.P., motion. They chose not to. FCC has 

not prevented Appellants from having a fair submission of the 

controversy. 

All of Appellants' allegations of fraud are based on the facts 

underlying the original litigation which was resolved by the 

District Court and affirmed by this Court on appeal. As such, the 

fraud asserted by the Appellants is intrinsic to the very cause of 

action that resulted in the judgment against FFP. Appellants' 

allegations of fraud are nothing more than an impermissible 

collateral attack on a final judgment. A judgment is not subject 

to collateral attack where the court has jurisdiction of the 
subject matter and the parties. Swift v. State Dept. Of Natural 

Resources & Conservation (1987), 226 Mont, 439, 442, 736 P.2d 117, 

119. Neither the District Court, in the original proceedings, nor 

this Court, in its July 8, 1995 decision on the appeal, lacked 

subject matter or personal jurisdiction. 

The District Court correctly determined that the matters 

asserted by the Appellants in their collateral attack on the 

judgment against FFP were intrinsic to the merits of the matters 

tried in the original proceedings and therefore the judgment should 

not be reopened on the basis of extrinsic fraud, or any other 

equitable basis. 

FCC seeks damages under Rule 32, M.R.App.P., for a frivolous 

appeal. If the Supreme Court is satisfied from the record and the 

presentation of the appeal in a civil case that the same was taken 

without substantial or reasonable grounds, such damages may be 

assessed "as the circumstances are deemed proper.'! Rule 32 

M.R.App.P. ; Sorenson v. Massey-Ferguson (Mont. 1996) , - P. 2d I 

, 53 St.Rep. 1269, 1270. This Court does not readily impose 

sanctions upon parties for filing frivolous appeals. Federated 

Mutual Ens. Co. v. Anderson (Mont. 1996) , 920 P. 2d 97, 102, 53 

St .Rep. 618, 621. Under the circumstances presented, we are not 

persuaded that this appeal was taken without substantial or 

reasonable grounds, thereby justifying the assessment of damages. 

The request for damages under Rule 32, M.R.App.P., is denied. 
Conclusion 

We affirm the District Court's Order denying John Parker's 

motion for change of venue, granting FCC's motion for a default 

judgment against Julie Parker, and granting summary judgment in 

favor of FCC against John and James Parker. Furthermore, there 

is no equitable basis for this court to reopen or set aside the 

judgment against FFP. Accordingly, we affirm FCC's judgment 

against the individual partners of FFP. FCC's motion for damages 

under Rule 32, M.R.App.P., is denied.