No. 92-613 IN THE SUPREME COURT OF THE STATE OF MONTANA 1993

TEAL, INC., a corporation d/b/a COOK TRAVEL, Plaintiff and Respondent,

-vsBARBARA WIEDRICH, Defendant and Appellant.

APPEAL FROM: District Court of the ThirteenthJudicial District, In and for the County of Yellowstone, The Honorable Maurice R. Colberg, Judge presiding.

COUNSEL OF RECORD: For Appellant: Donna 

### K. Davis;Matovich, Addy & Keller, Billings Montana For Respondent: Earl J. Hanson; Hanson & Todd, Billings, Montana Richard S. Mandelson; Baker & Hostetler, Denver, Colorado LaurenceR. Martin, Randall G. Nelson; Felt,Martin Frazier & Lovas, Billings,Montana John L. Pratt;Ask & Pratt, Roundup, Montana

Filed: Submitted on Briefs: June 17, 1993 Decided: JULY 13, 1993Justice Karla M. Gray delivered the Opinion of the Court.

Barbara Wiedrich appeals from an order entered by the Thirteenth Judicial District Court, Yellowstone County,dismissing the action against her with prejudice but awarding no attorney's fees. We affirm. The issue on appeal is whether the District Court abused its discretion when, in dismissing the action against defendant, it refused to award her attorney's fees. Defendant/appellant Barbara Wiedrich was a travel agent and officer manager at Rainbow Travel, Inc. (Rainbow), a travel agency in Billings,Montana. Dale and Joan Galles (collectively,Galles)

were the sole stockholders of Rainbow. Late in 1991, Teal, Inc.

(Teal), doing business as Cook Travel, entered into negotiations with Galles to purchase all of Rainbow's issued and outstanding stock; Ted Fink negotiated on behalf of Teal. The parties met several times and exchanged draft buy-sell agreements. Rainbow's employees did not have employment contracts and, essentially, worked undermonth-to-month employment arrangements. Thus,Rainbow and Galles could not guarantee that the employeeswould sttransfer" to Cook Travel after Teal's purchase of Rainbow; it was Fink's understanding, however, that those employeeswould move to the Cook Travel offices. On the morning of January 2, 1992, the proposed closing date for the stock sale, both Dale Galles and Fink discovered for the first time that Wiedrich and another employee, Mary Goffena, had resigned their employment with Rainbow pursuant to letters dated 2December 27, 1991. It was later ascertained that Wiedrich had accepted employment with a competitor travel agency, Boardwalk Travel, on December 27, to begin on January 2, 1992. Fink and Galles also discovered that on December 30, subsequent to her resignation letter but while still employed by Rainbow, Wiedrich had mailed a letter to Rainbow's customers informing them of the sale, enclosing each customer's frequent flyer information accumulatedby Rainbow, and advising that shewould "callyou after the 1st of January." The letterwas not authorized by Galles and, given Wiedrich's resignation from Rainbow, it was clear that any follow-up calls by Wiedrich would not be made from either Rainbow

or Cook. Teal refused to close on the purchase of the Rainbow stock. On February 4, 1992, Teal filed suit against The Travel Company of Montana, Inc. (doingbusiness as Boardwalk Travel) and its manager M. Kathleen Rice, Mary Goffena and Barbara Wiedrich. The complaint alleged intentional interference with business relationships and tortious interference with the proposed sale and purchase of Rainbow by virtue of specified acts and misconduct, including Wiedrich's letter to Rainbow's customers. On May 15, Tealdismissed defendant Goffena without prejudice pursuant toRule 41(a)(l), M.R.Civ.P. On July 10, Teal and defendants The Travel Company and M. Kathleen Rice stipulated to dismissal with prejudice, stating that the action between those parties was fully and finally settled; the court ordered the dismissal. On September 10, 1992, Teal moved to dismissWiedrich withoutprejudice pursuant toRule 41(a)(2), M.R.Civ.P.; it later converted themotion to one for dismissal with prejudice. Wiedrich objected todismissal unless "curativeconditions," includingherattorney's fees, were imposed. The District Court dismissed the action against Wiedrich with prejudice, but awarded no attorney's fees. This appeal followed.

Did the District Court abuse its discretionwhen, in dismissing the action against defendant, it refused to award her attorney's fees? The District Court dismissed the action against Wiedrich with prejudice pursuant to Rule 41(a) (2)

## , M.R.Civ.P.

## , but refused to awardWiedrich attorney's fees. Wiedrich asserts error, relying on Petritz v. Albertsons, Inc. (1980), 187 Mont. 102, 608 P.2d 1089, and federal cases interpreting the identical Federal Rule of Civil Procedure. Rule 41(a)(2), M.R.Civ.P., provides in pertinent part:

[A]n action shall not be dismissed at the plaintiff's instance saveupon order of the court and upon such terms and conditions as the court deems proper. 

# . . . Unless otherwise specified in the order, a dismissal under this paragraph is without prejudice. The wording of the rule is clear that appropriate terms and conditions on dismissal by order of the court are matters within the court's discretion. Indeed, we have determined that, in granting a motion for voluntary dismissal under Rule 41(a) (2), a district court "isvested with wide discretion in determining what conditionsmay attach to the dismissal[:]" a courtmay require the payment of costs and attorney's fees or it may choose to impose no conditions at all. Petritz, 608 P.2d at 1092. Our standard inreviewing discretionary trial court rulings is whether the court abused itsdiscretion. Steer, Inc. v. Depttof Revenue (1990), 245 Mont. 470, 475, 803 P.2d 601, 604. Here, the DistrictCourt dismissedwith prejudice and required Teal to pay Wiedrichlscosts. Under the facts and record before us, we cannot conclude that the court abused its discretion in refusing to award attorney's fees. The District Court's refusal to award attorney's fees was based in large part on its determination that Teal had at least a colorable claim against Wiedrich and, thus, that the litigation could not be deemed frivolous. Wiedrich challenges a number of the allegations contained in Teal's complaint against her as either known misrepresentations or so lacking in foundation that reasonable investigation prior to filing the complaint would have indicated that they were baseless. On this basis, she strenuously asserts that Teal's complaint constituted abusive and harassing litigation for which she was entitled to attorney's fees upon voluntary dismissal, relying primarily on federal cases interpretingRule 41(a) (2) of the FederalRules of Civil Procedure. See, e.g., Klar v. Firestone Tire & Rubber Co. (1953), 14 F.R.D. 176; Bishop v. West American Ins. Co. (1982), 95 F.R.D. 494. We agree with Wiedrich that the "upon such terms and conditions as the court deems proper" language in Rule 41(a)(2) is intended to end "abusivepractices whereby defendants were put to expense by plaintiffs who had no real object in mind other than 

# .

. . harassment." 

# a, 14 F.R.D. at 176. Stated differently, apurpose of awarding curative relief under the rule is "to deter vexatious litigation." Bishop, 95 F.R.D. at 495. The flaw in Wiedrich's argument is that it ignores the District Court's determination that Teal had at least a colorable claim against her and, therefore, that the litigation could not be deemed frivolous. Wiedrich does not specifically challenge or attack thisdetermination;moreover, therecord contains sufficient evidence to support a determination that at least an arguable case could be made that Wiedrich interfered with Teal's contractual relationshipand prospective business advantage with regard to the purchase of Rainbow's stock when she wrote the letter to Rainbow customers stating that she would contact them after January 1, 1992. The District Court's determination, together with its corresponding determination that the claim could not be deemed frivolous, in essence constitutes a determination that the litigation was not harassing or vexatious and removes this case from the ambit of thosewhere attorney's fees were properly awarded for harassing or vexatious litigation. Bishoo and 

## , relied on by Wiedrich, are appropriate authority for the salutary purposes of Rule 41(a) (2). However, they do not support Wiedrich's position that she is entitled to attorney's fees here. The issue in Bishoo was whether "costs" under the rule were limited to statutory taxable costs or included removal costs; thus, Bishop is inapposite on the facts. In

### -, the trial court determined that "[nlo such abusive intent appears in the instant case," dismissed the action without prejudice sothat plaintiff could commence a new action in Ohio, and awarded costs and a minimal attorney's fee. 

### -, 14 F.R.D. at 176-77. 

# -bears some similarity to the case before us in that neither involved abusive intent or vexatious litigation; in

### -, however, the action was dismissed without prejudice. Nothing in provides authority for Wiedrich's claim of entitlement to attorney's feeshere,particularly in light of thebroad discretion vested in trial courts under Rule 41(a)(2), M.R.Civ.P., and Petritz. Nor does Petritz, the leading Rule 41(a)(2) case in Montana, support Wiedrich's position. In Petritz, the plaintiff moved for voluntary dismissal withoutprejudice on theday before trial,some twenty months after the complaint was filed and after extensive pretrial discovery and trial preparationby thedefense. The court ordered the dismissal without prejudice. We determined, "inview of the lateness of plaintiff's motion for dismissal, and the extensive preparation on the part of thedefense" that thedistrict court should have attached a more reasonable award of attorney's fees as a condition to the dismissal. Eetritz, 608 P.2d at 1094. The facts now before us differ significantly from those in Petritz. Here, Teal moved for dismissal seven months after filing the complaint and eight and one-half months before the case was scheduled for trial. In addition,discoverywas relatively limited here as compared to the extensive discovery and pretrial motions, hearings and trial preparation undertaken by the defendant in Petritz. We also note that the Petritz action was dismissed without prejudice and the plaintiff therein filed another actionsix weeks later. We hold that the District Court did not abuse its discretion when, in dismissing the action against defendant, it refused to award her attorney's fees. Affirmed

# .

we concur: ---,July 13, 1993 CERTIFICATEOFSERVICE I hereby certifythat the followingorderwas sent by United Statesmail,prepaid, to the followingnamed:

DonnaK.Davis MATOVICH, ADDY &KELLER,P.C. Suite225,PetroleumBuilding 2812FirstAve.North Billings,MT 59101 EarlJ.Hanson WSON &TODD Suites214-215 Transwestern 

### I 404North31stStreet Billings, MT 59101 RichardS.Mandelson BAKER &HOSTETLER Suite 1100 303East 17thAve. Denver,CO 80203 LaurenceR.Martin RandallG.Nelson FELT,MARTIN,FRAZIER &LOVAS 450Hart-AlbinBuilding 208North28thStreet Billings,MT 59101 JohnL. Pratt ASK&PRATT 226Main Roundup, MT 59072

EDSMITH

### CLERKOFTHE

### SUPREMECOURT STATE

### qFMOPJT4NA