NO. 88-284

INTHE SUPREMECOURTOF THE STATE OF MONTANA 1988

VIOLETM. HANKINSON,and JOSEPH E. HAMKINSON,Mother and son, PlaintiffsandAppellants,-vsCARTER PICOTTE,JR., and GENEA. PICOTTE, P.C., a Montana Professional Corporation,
Defendantsand Respondents.

APPEAL FROM: District Courtof the Fifth JudicialDistrict, In and for the County ofJefferson, TheHonorable Mark Sullivan, Judgepresiding.
COUNSELOF RECORD:
ForAppellant: Larry Jent,Bozeman,Montana William

### A. Bartlett; Wellcome,Frost & Bartlett, Bozeman,Montana
For Respondent: William D. Jacobsen;Jardine,Stephenson,Blewett & Weaver, GreatFalls,Montana

c-2 Filed:L-J 

### a Submittedon Briefs: Sept. 9,1988 Decided: December 13, 1988Mr. Justice John C. Sheehy delivered the Opinion of the Court.

Violet 

### M. Hankinson and Joseph E. Hankinson, mother and son, appeal from a judgment of dismissal with prejudice of their complaint against Carter Picotte, Jr. and Gene A. Picotte, P.C., a Montana professional corporation. The judgment of dismissal was entered on March 30, 1988 in the District Court, Fifth Judicial District, Jefferson County. The decisive issue in the cause 

### is whether, when a district court orders a dismissal of a complaint for failure to state a claim, a notice of entry of judgment must be served to start the time running for appeal. We hold that such notice must be served under the facts of this case. Joseph Hankinson, a self-employed independent trucker,

was in a motor vehicle accident in November, 1984. Sincehe

was required to be on the road and was seldom at home, he gave the telephone number of his mother, Violet Hankinson, and her address to the police in case there was need for further contact with him. On the evening of December 

### 12, 1984, Violet Hankinson received a telephone call from a person who did not identify himself, who asked to speak to Joe Hankinson. When she informed him that Joewas not there, the caller responded by saying, "Tellhim to contactme within 24 hours or I'llhave the Chicagomob beathim up and killhim." Violet reported the telephone call to the police who came to her residenceto investigate. While theywere there, at about 9:30 p.m. on the same day, a second call came from the individual. He identified himself as Carter Picotte, repeated his threats, and left a phone number where he couldbe reached. The Belgrade police officers are reported to have taped the second telephone call. On July 26, 1985,Violet Hankinson and Josephbrought an action against Carter Picotte, singly,whereinJosephclaimed compensatory damages for lost earnings because he avoided several jobs out of fear of bodily injury; and Violet Hankinson claimed damages for invasion of privacy, and extreme emotional trauma. Hankinsons' actionwas ordered dismissed on a Rule 12(b) motion on December 30, 1986. Neither Carter Picottenor his attorney filed a notice of entry of judgment. The Hankinsons did not appeal the order of dismissal, but several months later hired new counsel who successfully moved the District Court for an order allowing an amendment of the complaint. The order of the District Court granting leave to file

an amended complaint was dated December 31, 1987. The amended complaint was based on four theories of liability: negligence, negligent supervision, outrageous conduct, and deceptionby an attorney underS 37-61-406,MCA. The amended complaint also brought into the action Gene

### A. Picotte,P.C.,
as an additional defendant on the grounds that when Carter Picotte made the telephone callhewas an employee ofGeneA. Picotte, P.C. The order of December 31, 1987 required that the professional corporation be served with a copy of the amended complaint andwith summons. The first amended complaint is not a part of the court record. Instead, a second amended complaintwas filedby the plaintiffs, and service of the second amended complaint and
summons was effectuated on the professional corporation, as far as the court records reveal,on February 17, 1988. Both Carter Picotte and the professional corporation made motions to dismiss the second amended complaint. Carter's motion was based on the grounds of res judicata,that the order of dismissal of the original complaint had become final by failure of the Hankinsons to appeal. The motion of the professional corporation to dismiss was grounded on collateral estoppel based on failure to appeal. Both parties contended thatbecause of the failure to appeal, the order of dismissal of the original complaint had become final and the District Court lacked subject matter jurisdiction once the orderbecame final. The District Court entered a judgment of dismissal with prejudice of all claims against the defendants Carter Picotte and the professional corporation on March 30, 1988. In entering judgment, the District Court held that the order of dismissal of December 30, 1986 was an appealable order, and the failure to make a timely appeal from the order of dismissal made the order final and operated as an adjudication upon the merits as far as Carter Picotte was concerned. The District Court further reasoned that the dismissal of claims against Carter Picotte collaterally estopped the Hankinsons from raising the same issues against the professional corporation. The Hankinsons have appealed from the judgment of dismissalofMarch 30, 1988. Under Rule 77(d)

### , Montana Rules of Civil Procedure, notice of entry of judgment must be served by the prevailing party upon all parties who have made the appearance in the

cause. It is the filingof the notice of entry of judgment that begins the running of the time limitations for filing a notice of appeal. Morrison v. Higbee (1983)

## , 204Mont. 501, 668 P.2d 1029. If no notice of entry of judgment had been served upon the losing party, the right to appeal has not expired. Haywood v. Sedillo (1975), 167 Mont. 101, 535 P.2d 1014.Unless post-trial motions are made by the losing party under Rule 52 or 59, Montana Rules of Civil Procedure, the losing party is not required to adhere to the 30 day period for filing a notice of appeal until proper service of notice of entry of judgment ismade. Pierce PackingCo. v. District Court (1978), 177 Mont. 50, 579 P.2d 760. And this rule applies to orders which may become final as we11 as to judgments. In the Matter ofHolmes' Estate (1979),183Mont. 290, 599 P.2d 344. In this case, with no notice of entry of judgment served under Rule 77, and no post-trial motions under Rules 52 or 59, the time for appeal did not begin to run, the order of dismissal of the original complaintdid notbecome final,and the District Court had jurisdiction on December 31, 1987, to grant leave to file an amended complaint. The District Court had not lost subject matter jurisdiction. The judgment of dismissal of the second amended complaint must therefore be reversed. There is however an additional fact to be considered by the District Court on remand regarding the claim against the professional corporation. The actions of Carter Picottegiving rise to the claimed liability occurred on December 12, 1984. The professional corporation was not servedwith summonsand complaint, as far

as the court records show, until February 17, 1988. In the

answer of the professional corporation to the second amended complaint, affirmative defenses based upon various statutes of limitations have been raised. The claim against the professional corporation may be barred by the limitations statutes, unless the amended complaint relates back to the date of the original pleading under Rule 15(c). When a pleading is amended, and an additional party brought in by the amendment, the amended pleading does not relate back tothe originalpleading as against the additional party unless he (1) has received such notice of the institution of the action that he will not be prejudiced in maintaining a defense of the merits, and (2) knew or should have known that,but for a mistake concerning the identityof theproper party, the action would have been brought againsthim. We therefore reverse the judgment of dismissal with prejudice against Carter Picotte and the professional corporation. The District Court is directed on remand to determine whether the amended pleading relates back to the original pleading as against the defendant professional corporation. Wemake no commentas to other issuesraised in the briefs or under the pleadings, leaving those to be handled if need be by the DistrictCourt.