### NO. 96-287 IN THE SUPREME COURT OF THE STATE OF MONTANA 1996 

# 2 DIME INSURANCEAGENCY, THOMAS D. BERRY,

... .' .i" .f



### Defendants and Appellants

APPEAL FROM: District Court of the Eighteenth JudicialDistrict, In 

### and for the County of Gallatin, The Honorable Thomas A. Olson, Judge presiding.

COUNSEL OF RECORD: For Appellants: Thane P. Jc)hnson, Werner, Epstein & 

### Cut Bank,Montana For Respondents: Johnson,

Joseph T. Swindlehurst,Huppert & 

### Swindlehurst, Livingston,Montana

Filed: Submitted on Briefs: August 22, 1996 Decided: November 7, 

### 1996Justice Terry N. Trieweiler delivered the opinion of the Court. On January 23,1996,the Gallatin County JusticeCourt entered judgment in the amount of $2809 in favor of the plaintiff, Dime Insurance Agency, against the defendant, ISC Distributors. ISC filed a notice of appeal to the District Court. However, Dime Insurance moved to dismiss the appeal because the undertaking on appeal was not filed within thirty days of the date on which judgment was rendered in Justice Court. The District Court granted Dime Insurance'smotion. ISC appeals the order of the District Court which dismissed its appeal. We reverse the order of the District Court and remand to that court for consideration of the merits of ISC's appeal. The issue on appeal is whether the District Court erred when it dismissed ISC'sappeal for failure to file an undertakingwithin thirty days of the date on which judgment was rendered 

### in Justice Court. FACTUAL BACKGROUND In 1995, Dime Insurance Agency brought suit against ISC Distributors in Justice Court in Gallatin County to recover insurance premiums due for a business insurancepolicy. Following

a hearing on January 19,1996,the Justice Court entered a judgment in favor of Dime Insurance Company in the amount of $2809. On February 1, 1996, ISC filed a notice of appeal in Justice Court. Within one week, the Justice Court transmitted its record to the District Court for the Eighteenth Judicial District in

### Gallatin County. On March 7,1996,ISC deposited anundertaking on appeal in the amount of $2809with the Clerk of the District 

### Court. On March 14, 1996, Dime Insurance moved to dismiss ISC's appeal. Dime Insurance maintained that ISC's appeal was not properly perfected because, pursuant to 5 

### 25-33-201,MCA, ISC had not filed anundertaking on appeal within thirtydays from the date

on which judgment was rendered in Justice Court. On March 29, 1996, the District Court granted Dime Insurance's motion and dismissed ISC'sappeal. DISCUSSION Did the District Court err when it dismissed ISC'sappeal for failure to file an undertaking within thirty days of the date on which judgment was rendered in Justice Court? We review a district court'sgrant or denial of a motion to dismiss to determinewhether the courtwas correct. Boreenv.Christensen



### (1994),267 Mont. 405, 408, 884 P.2d 

### 761, 762. A partymay appeal from a civil action in justice court at any time within thirty days after the judgment is rendered. Section 25-33-102,MCA. The procedure for appealing a justice court judgment is set forth in § 

### 25-33-103,MCA, which provides: The appeal is takenby serving a copy of the notice of appeal on the adverse party or his attorney and by filing the original notice of appeal with the justice or judge. The order of serving and filing is immaterial. Inaddition,when the aggrieved party appeals amoney judgment from the justice court,thatparty must file anundertaking, with two or

more sureties, in a sum equal to twice the amount of the judgment,or a deposit of money in the sum of the judgment plus $300. Sections 25-33-201(1)and -205,MCA. The undertaking ensures that the appellant will pay the amount of the judgment appealed from togetherwith all costs if the appeal iswithdrawn or dismissed,or the amount of any judgment and all costs that may be recovered against him in the district court. Section 25-33-201(1), MCA. See 

### alsoStateexrel.Gregoryv.DistrictCotrrt (1930),86 Mont. 396, 399, 284 

### P. 537, 538. Section 25-33-207,MCA,provides that an appeal shall not be dismissed for insufficiency of the undertaking thereon or for any defect or irregularity therein if a good and sufficient undertaking be filed in the district court at or before the hearing of the motion to dismiss the appeal, which undertaking must be approved by the district judge. In its order dismissing ISC's appeal, the District Court interpreted these statutes to require an appellant to file an undertaking within thirty days of the judgment rendered in justice court. In this case, the court held that since judgment was rendered in Justice Court on January 23, 1996, and the Clerk of Court deposited ISC'scheck for the undertaking on March 7, 1996, 

### " [ulnderno possible time calculations was the undertaking filed within 30 days of the justice court judgment.

### " The court therefore held that it did not have jurisdiction to hear the appeal and granted Dime Insurance'smotion to dismiss. The District Court's conclusion was based on Goldsmith

### v. Lane (1987),226 Mont. 341, 735 P.2d 306. In Goldsmith, this Court held that a party's failure to file an undertaking on appeal from ajustice court within thirty days of the justice court's judgment prevented the appeal frombeing perfected and deprived the district court of jurisdiction to entertain the appeal. 

### Goldsmith, 226 Mont. at 343-44,735 P.2d at 308. Specifically,this Court held that "an appeal is not effectuated for any purpose unless an undertaking is filed in accordance with the statutory requirements oC Section 25-33-201,MCA." 

### Goldsmith, 226 Mont. at 343, 735 P.2d at 308. Section 25-33-201,MCA, does not, however, require that an undertaking be filed within thirty days of the justice court's judgment in order to perfect the appeal. That section provides only that: (1)Except asprovided in subsection (4) , an auueal from a justice's or city court is not effectual for anv purpose unless an undertakinq be filed, with two ormore surec~es, ln a sum eqcal zc zwlce =he amour.= of c:?e iudamenc. ~nclcdinq coscs,wher. zhe ',~darnenc is for che pavment of monev. The undertaking must be conditioned, when the action is for the recovery of money, that the appellant will pay the amount of the judgment appealed from and all costs if the appeal be withdrawn or dismissed or the amount of any judgment and all costs that may be recovered against him in the action in the district court.



### . 

## . . . (4) When the appealing party is determined by the court to be indigent,the district court shall waive the undertaking requirements of this section. (Emphasisadded. ) Section 25-33-103,MCA, which sets forth the requirements for taking an appeal,requires only that an aggrieved party serve a copy of the notice of appeal on the adverse party or his attorney and file the original notice of appeal with the justice court within a period of thirty days. There is no requirement,pursuant to either § 25-33-103or § 25-33-201,MCA,that the undertaking be filed within that thirty-day period in order to preserve the parties' right to appeal. This Court has, in fact,held that notice of an appeal and the filingof anundertaking occur in two different stagesand that the filingof anundertaking need not occur within the statutoryperiod prescribed for taking an appeal. In Thienv. Wiltse (1914), 49 Mont. 189, 192-93, 141 P. 146, 147, we reviewed nearly identical statutory provisions, and stated: The Code provisions touching appeals from justices' courts are to the effect, that an appeal lies from a judgment,and froma judgment only; it is takenby filing a notice of appeal with the justice and serving a copy thereof on the adverse party or his attorney; it is not effectual for any purpose, unless an undertaking is filed;and it must be tried anew in the district court. It is not without significance that, under these provisions, an appeal from justices' courts presents three defined stages: (1)The taking which occurs when notice of the proper character is properly filed and served 

## . . 

## . . (2)The werfectinq or renderins effectual which occurs upon the filins of the undertakinq. That this isnowartof the takinqbut presuwooses thetakinq, and is a distinct step bevond it, is clear from the fact that the appeal mav be preserved, notwithstandinq the undertakins is defective or irreqular, if a qood one be substituted at or before the hearinq of the motion to dismiss



### . . . . The distinction between the takinq and theperfectinsof anappeal under statutes similarto our own is clearlv recosnized bv the supreme court of California: "It is contended, however, that the appeal in this case was not taken within sixtv davs after the rendition of the iudsment, because no undertakinq on appeal was filed within that period of time. An appeal is taken when a notice of appeal is served and filed. The filinq of an undertakinq perfects an appeal, but it is not wart of the takins in the statutorv sense." (Perkinsv.Cooper, 3 Cal. Unrep. 279, 24 Pac. 377.) (3) The hearing which occurs when the trial denovo is had in the district court. (Emphasis added, citations omitted.)In Goldsmith

### v.Lane, this Court neither addressed nor overruled the language in Thien. Instead, the Court relied on an earlier Montana case, Pirriev.Mode (1905),33 Mont. 1, 81 P. 390, to reach its conclusion that an undertaking not filed within the statutory period for the taking of an appeal is void and divests a district court of jurisdiction. Specifically,the Court cited Pirrie for the proposition that iwlhen the undertaking is insufficient a new one may be filed,and the appeal,or appeals,be saved;but when the one filed is void, the court has not obtained jurisdiction and the appeal must fail. Goldsmith, 226 Mont. at 343, 735 P.2dat 308 (quotingPirrie, 33 Mont. at 6, 81 P. at 392). In Pirrie, however, the Court was asked to determinewhether an ambiguous undertakingwas void,not whether an untimely undertaking was void. Furthermore, had the Court been asked todetermine the latter question, it would have beenbound by § 1724 of the Montana Code of Civil Procedure (1895), which provided: An appeal is taken by filing with the clerk of the court in which the judgment or order appealed from is entered, a notice stating the appeal from the same, or some specificpart thereof,and serving a similar notice on the adverse party or his attorney. The order of service is immaterial,but the aupeal is ineffectual for anv uurpose unless within five davs after service of the notice of aupeal, an undertakinq be filed,or a deposit of monev be made with the clerk as herein provided, or the undertakinq be waived bv the adverse uartv in writinq. (Emphasisadded. ) Although the language of § 1724 didprovide that

an undertaking not filed within five days after service of thenotice was void, that language is not duplicated in either 5 25-33-103 or 5 25-33-201,MCA, on which this Court relied in Goldsmith. Therefore, this Court

### 's reliance in Goldsmith on Pirrie was misplaced. Because Pirrie is inapplicable, and because neither § 25-33-103nor § 25-33-201,MCA, mandates that an undertaking be filed within thirty days of the justice court's judgment,we hold that there is no such requirement, and on that basis, we reverse

our earlieropinion in Goldsmithv.

### Lane (1987),226 Mont. 341,735 P.2d 306.Although 55 25-33-103 and -201, MCA, do not set a period within which an undertaking must be filed, § 25-33-207, MCA, provides that an insufficient,defective,or irregular undertaking may be cured if a good and sufficient undertaking is filed in the district court "ator before the hearing of the motion to dismiss the appeal." On the basis of § 25-33-207,MCA, we hold that, in order to perfect an appeal from justice court,a valid undertaking need only be filed at or before the hearing on the motion to dismiss. Therefore,as long as an aggrieved party takes an appeal within thirty days of the justice court's judgment, pursuant to 5 25-33-102and -103,MCA, and filesanundertaking at orprior to

a hearing on a motion to dismiss for failure to file an undertaking,pursuant to 55 25-33-201and -207,MCA, that appeal is valid and the district court has jurisdiction to entertain the appeal.

### In this case, the Justice Court rendered its judgment on January 23, 1996. ISC filed a notice of appeal on February 1, 

### 1996,within thirty days of the judgment of the Justice Court. In addition, ISC deposited an undertaking on March 7, 

### 1996,prior to Dime InsuranceAgency'smotion to dismiss and prior to a hearing on that motion. Because ISC instituted its appeal with thirty days, pursuant to §§ 

### 25-33-102and -103,MCA, and filed its undertaking prior to the District Court

### 'shearing on Dime Insurance

### 'smotion to dismiss,we hold that ISC'sappeal was perfected and the District Court had jurisdiction to hear the appeal. We therefore hold that the District Court erred when it dismissed ISC's appeal on the ground that ISC had failed to 

### file its undertaking within thirty days of the Justice Court's judgment. We remand this case to the District Court for consideration of the merits of ISC'sappeal.