No. 87-213 

IN THE SUPREME COURT OF THE STATE OF MONTANA 

1987 

STATE OF MONTANA, ex rel., 

BOYNE USA, INC., 

Relator, 

-vsTHE DISTRICT COURT OF THE FIFTH 

JUDICIAL DISTRICT OF THE STATE 

OF MONTANA, in and for the COUNTY 

OF MADISON, and THE HON. JUDGE 

THEREOF, FRANK M. DAVIS, 

Respondents. 

ORIGINAL PROCEEDING: 

COUNSEL OF RECORD: 

For Relator: 

Worden, Thane & Haines; Patrick G. Frank, Missoula, 

Montana 

For Respondent : 

Wellcome, Frost & Bartlett; Page Wellcome, Bozeman, 

Montana 

Schulz, Davis & Warren; John S. Warren, Dillon, Montana 

Keller, Reynolds, Drake, Sternhagen & Johnson; Thomas 

Q. Johnson, Helena, Montana 

Boone, Karlberg & Haddon; Sam E. Haddon, Missoula 

Montana 

~i led : SEP 1 0 1987 

Submitted: August 18, 1987 

Decided: September 10, 1987 

22ixLL *,4& 

Clerk 
Mr. Justice Fred J. Weber delivered the Opinion of the Court. 

Boyne USA, Inc. (Boyne), has filed its application for a 

writ of supervisory control in a civil action currently 

pending in the District Court of Madison County, Cause No. 

7457, entitled The Association of Unit Owners of the Deer 

Lodge Condominium, Inc., et al., v. Big Sky of Montana Realty, Inc., et al. The action relates to the construction of 

the Deer Lodge Condominium located at Big Sky, Montana. We 

grant the application for supervisory control as to certification of the underlying suit as a class action. 

The issue is whether supervisory control is both necessary and appropriate. 

While we do not have an official record before us, the 

facts as contained in the various briefs and memoranda are 

not in dispute. Boyne is a Michigan corporation which owns 

and operates Big Sky Resort at Big Sky, Montana. Boyne is 

one of the defendants in Cause No. 7457 brought by the The 

Association of Unit Owners of the Deer Lodge Condominium, 

Inc. (Association). The plaintiffs in that cause are the 

Association and the Board of Directors of the Association. 

The case arose out of the construction and reconstruction of 

two buildings called Deer Lodge Condominium, located at Big 

Sky Resort. The buildings were completed in 1975 by Inland 

Construction Company. Defendant Lloyd W. Darg and Associates 

was construction engineer, and defendant Douglas A. Moe, 

Architects, Inc., was the architect. Big Sky of Montana, 

Inc. (Big Sky) sold units in the buildings during 1974 and 

1975. Big Sky itself was owned by Chrysler Realty Corporation (Chrysler) and a number of other shareholders. In May 

1976, the shareholders of Big Sky formed Big Sky of Montana 

Realty, Inc. (Realty), as a subsidiary of Big Sky. In June 

1976, the shareholders sold the resort operations to Boyne. 
Prior to closing that sale, Big Sky transferred the operating 

assets, including various real estate condominiums and developments, to Realty, whose shares were then distributed to the 

shareholders who in turn transferred the shares of Big Sky to 

Boyne. After the sale, Realty owned the unsold interest in 

the Deer Lodge Condominium and was the only entity that sold 

inventory after that date. 

In the summer of 1976, significant structural defects 

were discovered in the buildings and Big Sky retained defendants Morrison-Maierle, Inc., and Martell Construction to 

repair them. In December 1976, after the repairs had been 

completed, Boyne purchased 34 out of the 126 units in Deer 

Lodge Condominium. In July 1978, Big Sky merged into Royne 

and the surviving corporation was Boyne. The present lawsuit 

was initiated in 1984. We are advised by the Association 

that only Big Sky-Boyne, Chrysler, Realty, and 

Morrison-Maierle, Inc., remain as defendants. 

The amended complaint is very long. In pertinent part 

it alleges that on or about April 1, 1976, Realty and Big Sky 

informed the Association there were significant structural 

and safety deficiencies in the Deer Lodge Condominium and 

thereafter attempted to make the necessary corrections and 

repairs. The complaint contains extensive general allegations of defects in framing, supports, foundations, and other 

essential elements of construction. The complaint alleges 

that the engineer and architect for the Association determined that the condominium buildings were unsafe for habitation. The buildings have been vacated and the Association 

has been advised that the cost of making the buildings habitable would be $6,318,000 and alternatively that the reduction 

in value is $10,000,000. They allege that the value of the 

loss of use of the buildings was $3,500,000; the cost of 

storage of various furnishings and equipment was $150,000; 
and that emergency repairs of $50,000 were required. The 

complaint then further alleges the right of recovery under 

various theories. The theories include express warranty, 

implied warranty, breach of contract, negligence, strict 

liability, fraud and violation of the breach of the implied 

covenant of good faith and fair dealing, deceptive business 

practices, promissory estoppel, negligent supervision, breach 

of the implied warranty of habitability, and a separate claim 

against Morrision-Maierle, Inc. The damages sought are the 

above described amounts together with punitive damages in the 

amount of $25,000,000 and treble damages under 5 30-14-133, 

MCA, together with reasonable attorney fees. 

Plaintiffs did not take any action to certify the claim 

as a class action suit under Rule 23, M.R.Civ.P. The Association, which owns one of the 126 units, asserts the claims on 

its own behalf and on the behalf of the owners of the remaining 125 units. The Association contends that it has the 

right to present the claims on behalf of the individual unit 

owners, including Boyne. Boyne moved to segregate its claim 

and align itself as a party plaintiff so it could prosecute 

its claim in its own name. Boyne's motion was denied. All 

of the defendants moved for summary judgment based in part 

upon statutes of limitation. The motions of defendants Lloyd 

W. Darg and Associates and Douglas A. Moe, Architects, Inc., 

were granted. The District Court ruled that the plaintiffs 

had knowledge of the claims no later than September 1976. 

Boyne sought to be dismissed on the same basis but that 

motion was denied. Chrysler moved to dismiss for failure to 

join necessary parties and lack of a real party in interest 

and that motion was denied. 

In its petition for supervisory control, Boyne requests 

that its motion to segregate and align be granted. It also 
asks that its motion for summary judgment be granted based 

upon non-disparate application of the statute of limitations. 

Is supervisory control both necessary and appropriate in 

the underlying case? 

This Court has stated that supervisory control is appropriate where there are procedural entanglements that may 

prolong the litigation and appeal is an inadequate remedy, or 

where it is apparent from the record that relator will be 

deprived of a fundamental right unless supervisory control is 

granted. State v. District Court of Eighth Jud. Dist. (Mont. 

1985), 703 P.2d 148, 153-54, 42 St.Rep. 1061, 1065-66. In 

the underlying case, there have been many depositions taken 

as well as interrogatories and other types of discovery. As 

pointed out by the District Court and the Association, the 

litigation has been dragging on and it is essential for the 

protection of all parties that the litigation move forward as 

rapidly as is reasonably possible. Yet Boyne1s claim is that 

it is being denied its right to an attorney by being forced 

to accept the Association as its representative. 

We note that the complaint seeks to recover damages 

suffered by the Association itself as well as damages which 

can be classed as personal to the individual unit owners. 

The Association's claims cover repair and replacement of the 

common elements. The individual owners1 claims include 

expenses of moving and storage of personal property, loss of 

use, diminution in value of units, loss of rent, and claims 

for breach of the covenant of good faith resulting in punitive damages. 

As pointed out by the parties, Rule 17(a), M.R.Civ.P., 

provides that every action shall be prosecuted in the name of 

the real party in interest. In addition, that Rule provides 

that a party authorized by statute may sue in his own name 
without joining the party for whose benefit the action is 

brought. The Association was formed under the Unit Ownership 

Act, S§ 70-23-101 to 70-23-1002, MCA. The Association in 

acting as plaintiff relied upon S 70-23-901, MCA, which in 

pertinent part provides: 

(1) Actions may be brought on behalf of two or 

more of the unit owners, as their respective interests may appear, by the manager with respect to any 

cause of action relating to the common elements or 

more than one unit. 

The Association contends that this statute is broad enough to 

give it standing as the manager of the Association to bring 

this action which concerns the common elements of the condominium units and is brought on behalf of more than two of the 

unit owners. 

The Association relies upon Brickyard Homeowners' Ass'n. 

v. Gibbons Realty (Utah 1983), 668 P.2d 535, in which the 

Supreme Court of Utah applied a statute similar to our 

5 70-23-901, MCA. The Utah Court concluded that the 

statute-authorized management committee could bring suit on 

behalf of unit owners without making it a class action or 

joining the unit owners as necessary parties. While the Utah 

statute was not identical to the Montana statute, it is 

definitely comparable. The Utah case involved questions with 

regard to fresh water ponds and glass installation in common 

areas, and other negligent design and workmanship. The 

defects were not alleged to have been sufficient to render 

the Utah condominiums unusable. In holding that the management committee could represent all of the unit owners, the 

Utah Court also concluded that the holdings would be binding 

upon the unit owners as a matter of res judicata. ~owerhill 

Condo. Assoc. v. American Condo. (Ct.App.Ore. 1983), 675 P.2d 

1051, was decided in a similar way although the Oregon 
statute clearly gave the right to the Association to institute, defend, or intervene in behalf of two or more unit 

owners. 

We distinguish the present case from the cases cited. 

The following significant factors present in this case were 

not present in the Utah and Oregon cases. Twenty-seven 

percent of the condominium units are owned by Boyne, a party 

which does not wish to have the Association represent it. 

Boyne is also a party defendant, which raises a further 

difficulty. Next, the materials furnished to us demonstrate 

that some but not all of the other unit owners have executed 

postcard consents to be bound by the results of this litigation. Some of the postcards indicate that the unit owners 

reserve the right to take further action on their own. Me 

find a very confused position so far as individual unit 

owners are concerned which was not present in the Utah or 

Oregon cases. 

The Unit Ownership Act of Montana provides no procedure 

describing how a manager is to proceed where a difference of 

opinion is present as in this case. Without ruling on the 

obvious constitutional questions involved, we conclude that 

it would be inappropriate to allow the action to proceed in 

the absence of authority to represent so many of the unit 

owners. We grant the petition for supervisory control. 

Under Rule 19(a), M.R.Civ.P., a person who is subject to 

service of process must be joined as a party if he claims an 

interest relating to the subject of the action and is so 

situated that the disposition of the action in his absence 

may leave any of the persons already parties subject to 

substantial risk of incurring double, multiple or otherwise 

inconsistent obligations. Certainly that type of contention 

may be made in the present case. Several of the defendants 

have requested that this Court dismiss the action below for 
lack of a real party in interest. Yet clearly, various 

parties in the action are properly parties plaintiff. That, 

of course, includes the Association. We conclude that it 

would be inappropriate to dismiss the underlying action for 

lack of real parties in interest. 

On July 2, 1987, the District Court denied defendants' 

motion to designate this case as a class action. Defendants 

and the relator have asked this Court to direct that the 

action be maintained as a class action. Rule 23, M.R.Civ.P., 

sets forth the class action requirements in Montana. In 

substance, Rule 23(a) provides that parties may sue as a 

class if the class is so numerous that joining all members is 

impractical, there are questions of law or fact common to the 

class, claims are typical of the claims of the class, and 

representative parties will fairly and adequately protect the 

interest of the class. Rule 23(b) and (c) describe in detail 

when a class action may be maintained and the determinations 

which are normally required by the court. 

We note that in a class action maintained under Rule 

23 (b) (3) , M. R.Civ.P., the court shall direct to the members 

of the class the best notice practicable under the circumstances, including individual notice to all members who can 

be identified through reasonable effort. Rule 23 (c) (2) , 

M.R.Civ.P. The notice must advise each member that (A) the 

court will exclude that member from the class if so requested 

by a specified date; (B) the judgment, whether favorable or 

not, will include all members who do not request exclusion; 

and (C) any member who does not request exclusion may, if 

desired, enter an appearance through counsel. Under the 

facts of this case as presented to us, this type of procedure 

appears to be most fair as to all parties. It will allow 

Boyne to request exclusion and to appear through its own 

counsel. It will also allow others of the unit owners to be 
excluded if they choose to do so. Last, and important for 

the plaintiffs, if a unit owner does not request exclusion, 

then the judgment will be binding upon him. This appears to 

be the appropriate result in the present case. 

From the uncontradicted materials presented by both 

relator and respondents, we conclude that the requirements of 

Rule 23 (a) , M. R.Civ.P., are met. We conclude that the class 

of unit owners is so numerous that joinder of all members is 

impractical, and that there are questions of law and fact 

common to the class and that the claims of the plaintiffs are 

typical of the claims of the class. We further conclude that 

there is a sufficient identity to the types of claims made by 

the various unit owners that the representative parties will 

fairly and adequately protect the interests of the class. As 

a result, no further findings are required by the District 

Court on Rule 23 (a) . As we analyze Rule 23 (b) , M. R.Civ.P. , 

we conclude that the questions of law or fact common to the 

members of the plaintiff class predominate over any questions 

affecting only individual members and that a class action is 

superior to other available methods for the fair and efficient adjudication of the controversy. 

We hold that the underlying action shall proceed as a 

class action on the part of the unit owners as plaintiffs. 

In doing so, we recognize that the District Court will be 

required to make additional decisions and orders. In particular, the District Court shall order the unit owners be given 

the best notice practicable under the circumstances, including individual notice to all unit owners who can be identified through reasonable effort. The notice shall meet the 

requirements of Rule 23 (c) (2) , M. R.Civ. P. We specifically 

recognize the continuing jurisdiction on the part of the 

District Court under Rule 23(d), M.R.Civ.P., so that the 

power of the District Court to make appropriate orders in the 
course of this litigation is not in any way restricted, so 

long as such orders are consistent with this opinion. 

We decline to exercise supervisory control as to the 

orders and motions on statutes of limitation. In a similar 

manner, we do not address the other requests of the parties. 

We conclude it would be premature to rule on these until the 

final determination has been made as to the parties constituting both plaintiffs and defendants. All of such parties 

should be given the opportunity to present their contentions 

on such motions and requests. 

The matter is remanded to the District Court for further 

action consistent with this opinion. 

We Concur* 

V 

r