Title: BEACH v DESTINATION ENTERPRISES
Citation: N/A
Docket Number: 12637
State: Montana
Issuer: Montana Supreme Court
Date: October 4, 1974

No. 12637 I N THE SUPREME COURT O F T H E STATE OF M O N T A N A REX BEACH, P l a i n t i f f and Appellant -vs- DESTINATION ENTERPRISES, I N C . , Defendant and Respondent APPELLANT'S BRIEF On Appeal from t h e D i s t r i c t Court of t h e Eighteenth J u d i c i a l D i s t r i c t of t h e S t a t e of Montana, i n and f o r t h e County of G a l l a t i n APPEARANCES : ALLEN L. McALEAR #3 S t o r y Block Bozeman, Montana APR 16 1974 GLERK QF SUPREME COURT STATE OF MONTANA Attorney f o r P l a i n t i f f and Appellant BROWN & GILBERT G a l l a t i n Block S u i t e 5 40 E a s t Main Bozeman, Montana Attorneys f o r Defendant and Respondent INDEX TABLE O F CONTENTS PAGE STATEMENT O F ISSUES PRESENTED F O R REVIEW........ 1 STATEMENT O F T H E CASE........................... 2 1. STATEMENT O F THE FACTS.................... 2 ARGUMENT........................................ 3 SUMMARY...................................... 8 CERTIFICATE O F MAILING.......................... 10 TABLE O F CASES Alamance Industiries, Inc. v. F i l e n e 1 s (CAlst, 1961) 291 F2d 142, 145, 4 FR Serv2d 41a.24, Case l . . . . . . . . . . . . . . . . . . . . . . . . . 8 Anderson Nat. Bank v Luckett, 321 U S 233, 246, 88 L ed 692, 705, 64 S C t 599, 151 A L R 824. ............................. 4 Cremer vs. Braaten, 151 Mont. 18 438 P. 2d. 553. 7 Eldridge v. Idaho S t a t e P e n i t e n t i a r y 54 Idaho 213, 30 Pac. ( 2 d ) , 781, 784.. ........ 6 Federal Deposit Ins. Corp. vs Lotsch, 3 F R D 464. .................................... 8 Harnmond Packing Co. v. Arkansas, 212 U S 322, 53 L ed 530, 29 S C t 370, 15 Ann Cas 645. 4 Hoveg v E l l i o t t , 167 U S 409, 42 L ed 215, 17 S C t 841 ................................... Huffmaster v. United S t a t e s . C i t e a s 186 F.Supp. 120 (1960)..... ......,............ Jangula vs. United S t a t e s Rubber Co., 149 Mont. 241, 425 P.2d 319................... INDEX CASES CITED (CONT.) PAGE Jarva vs US. 280 F 2 892 ....................... 5. 8 Kujich vs . Lillie. 127 Mont . 125. 260 P2d 383 ................................. 6 Link v . Wabash R . Co., 370 US 626. .... 8 L ed 2d 734. 82 S Ct 1386 .............. 3 Smotherman vs . Christianson 59 Mont . ........................... 212. 195 Pac. 1106 4 Societe Internationale v . Brownell. . ........ 78 S ct 1078. 357 US 197 2 L Ed 1255 4 State ex rel. Johnstone v . District Court. . 132 Mont 377. 319 P.28 957 .................. 7 State Savings Bank v . Albertson et al., . . 39 Mont 414. 102 Pac 6 9 2 , , . , , . . . . . . . . . . . . . . 5 . 6 . 7 . Sykes vs U S . 290 F 2 555 ...................... 5 . 8 Wright v . Howe. 46 Utah 588. 150 Pac . ...................... 956. L . R . A . 1916B. 1104 7 STATUTES CITED Court Rules of District Eighteen. Rule 7 ....................................... 7 Montana Rules of Civil Procedure. Rule 37 ... ................................... 4 Rule 41(b) ...................................1.3.5. 6 TEXTS AND AUTHORITIES ............. . 2B Barron Holtzoff. Rule 41 $917 5 . 2B Barron & Holtzoff. 144 5918 ..............,. 5 ................. 31 Federal Rules Decisions 619 4 Moore on Federal Procedure. Rule 4 1 ( b ) . 1118(c) . 5 No. 12637 I N T H E SUPREME C O U R T OF T H E STATE OF M O N T A N A REX BEACH, P l a i n t i f f and Appellant DESTINATION ENTERPRISES, I N C . , Defendant and Respondent APPELLANT'S BRIEF STATEMENT OF ISSUES PRESENTED F O R REVIEW The questions presented a r e : A. Can a D i s t r i c t Court dismiss an a c t i o n f o r f a i l u r e t o prosecute under 41(b) M R C P without n o t i c e t o t h e p l a i n t i f f ? B. Can t h e D i s t r i c t Court dismiss a complaint f o r f a i l u r e t o prosecute under 41(b) M R C P without a showing of prejudice t o t h e defendant? C. Should t h e p l a i n t i f f and defendant's a c t i o n s both be reviewed i n determining whether t h e a c t i o n should be dismissed? D. Can t h e court v i o l a t e i t s own r u l e s as t o dismissal f o r f a i l u r e t o prosecute? STATEMENT O F THE CASE 1. STATEMENT O F T H E FACTS : Complaint was f i l e d August 10, 1970 i n t h e Eight- eenth J u d i c i a l D i s t r i c t f o r G a l l a t i n County. The firm of S t . C l a i r , S t . C l a i r , Hiller & Benjamin of Idaho F a l l s , Idaho were a t t o r n e y s f o r t h e p l a i n t i f f j o i n i n g t h e f i r m of Berg, Angel, Andriolo & Morgan a s l o c a l counsel. Summons was issued and was served on t h e defen- dants' corporation s e c r e t a r y on August 11, 1970. The defendant s corporation appeared by Its a t t o r n e y f i l i n g a Motion t o D i s m i s s on September 23, 1970. O n October 5, 1970 t h e defendants1 Motion t o D i s - m i s s was overruled and t h e defendant was allowed twenty (20) days w i t h i n which t o answer o r f u r t h e r plea. The defendant was i n d e f a u l t f o r nearly seventeen (17) months and t h e n on March 17, 1972 i n a q u i e t t i t l e a c t i o n a g a i n s t t h e same defendant t h e p l a i n t i f f w a s present b u t represented by o t h e r attorneys. The de- fendant'$ a t t o r n e y i n open court moved t h e court t o dismiss t h e i n s t a n t a c t i o n f o r f a i l u r e t o prosecute which was allowed by t h e court and noted by minute entry. After change of counsel t h i s p l a i n t i f f 's a t - torney moved t h e court f o r reinstatement of t h e cause on August 21, 1973. It was denied on September 6 , 1973 and t h i s appeal follows from t h a t order. It may a l s o appear t h a t t h e corporation f i l e d a Chapter X I reorganization i n bankruptcy on November 2, 1972 A R G U M E N T A. CAN A DISTRICT C O U R T DISMISS AN ACTION F O R FAILURE T O PROSECUTE U N D E R 41(b) M R C P WITHOUT NOTICE T O T H E PLAINTIFF? Involuntary dismissal is governed by Rule 41(b) M R C P which is t h e same as t h e Federal r u l e s and which provides : "(b) Involuntary Dismissal: Effect thereof. For f a i l u r e of t h e p l a i n t i f f t o prosecute o r t o comply with these r u l e s o r any order of court, a defendant may move f o r dismissal of an a c t i o n o r of any claim against him." Link v. Wabash R. Co., 370 U S 626, 8 L ed 2d 734, 82 S C t 1386. This case had been on appeal and a dismissal was delivered and it was t h e o l d e s t case on t h e t r i a l cal- endar. The p l a i n t i f f ' s attorney telephoned and s a i d he could not a t t e n d a p r e t r i a l conference and t h e court held t h a t no f u r t h e r n o t i c e would b e required t o dismiss t h e a c t i o n but even t h a t case noted t h a t due process must be afforded t h e p l a i n t i f f . "Nor does t h e absence of notice as t o t h e p o s s i b i l i t y of dismissal o r t h e f a i l u r e t o hold an adversary hearing necessarily render such a dismissal void. It i s t r u e , of course, that 'the fundamental requirement of due pro- cess i s an opportunity t o be heard upon such notice and proceedings as a r e adequate t o safe- guard the r i g h t f o r which the c o n s t i t u t i o n a l protection is invoked.' Anderson Nat. Bank v Luckett, 321 U S 233, 246, 88 L ed 692, 705, 64 S C t 599, 151 ALR 824." That case has been c r i t c i z e d however and i n 31 F R D 619 J u s t i c e Black and J u s t i c e Douglas recommended an amendment t o require notice t o t h e p l a i n t i f f . "As pointed out i n the dissent, p l a i n t i f f had been severely injured, and a f a i r system of j u s t i c e should not have penalized him because h i s lawyer, through neglect o r any other reason, f a i l e d t o appear when ordered." Societe Internationale v. Brownell, 78 S C t 1078, 357 U S 197 2 L Ed. 1255. Power t o dismiss under Rule 37 (Discovery ~ e f u s a l ) has been held t o require notice and a hearing. "The provisions of Rule 37 which a r e here involved must be read i n l i g h t of t h e pro- visions of t h e F i f t h Amendment t h a t no per- son s h a l l be deprived of property without due process of law, and more p a r t i c u l a r l y against the opinions of t h i s Court i n Hovey v E l l i o t t , 167 U S 409, 42 L ed 215, 17 S C t 841, and Hammond Packing Co. v. Arkansas, 212 US 322, 53 L ed 530, 29 S C t 370, 15 Ann Cas 645. These decisions es- t a b l i s h t h a t t h e r e a r e constitutional l i m i t a t i o n s upon t h e power of courts, even i n a i d of t h e i r own v a l i d processes, t o dismiss an action without affording a party t h e opportunity f o r a hearing on t h e merits of h i s cause." Smotherman vs. Christianson, 59 Mont. 212, 195 Pac. 1106. "It may o r may not be t r u e that p l a i n t i f f , without s u f f i c i e n t cause, f a i l e d t o pro- secute t h i s action with reasonable diligence. The record does not contain anything which r e f l e c t s upon t h e s u b j e c t . I f he d i d s o f a i l , then a p p l i c a t i o n t o dismiss f o r t h a t reason would have been proper, b u t such a p p l i c a t i o n would not be grounded upon sec- t i o n 6714, above. ( S t a t e Savings Bank v. Albertson, 39 Mont. 4 1 4 , 102 Pac. 692.)" 2B Barron & Holtzoff, Rule 4 1 $917. "Indeed t h e r e a r e c o n s t i t u t i o n a l limita- t i o n s upon t h e power of a c o u r t , even i n a i d of i t s own v a l i d processes, t o dismiss an a c t i o n without a f f o r d i n g a p a r t y t h e opportunity f o r a hearing on t h e merits of h i s cause." Moore on Federal Procedure, Rule 41(b), 118(c). 2B Barron & Holtzoff, 1 4 4 $918. "It has been s a i d on t h e one hand t h a t dismissal w i l l not be ordered unless t h e r e has been prejudice t o t h e defendant, and on t h e o t h e r t h a t i f t h e delay i s unreasonable, p r e j u d i c e w i l l b e presumed. Probably t h e sound answer i s t h a t t h e defendant need not show prejudice, b u t t h a t t h e court w i l l con- s i d e r t h e prejudice, i f any t o t h e defendant i n determining whether t o excuse p l a i n t i f f ' s f a i l u r e . " B. CAN THE DISTRICT COURT DISMISS A COMPLAINT F O R FAILURE T O PROSECUTE UNDER 41(b) MRCP WITHOUT A SHOWING O F PREJUDICE TO THE DEFENDANT? J a r v a vs. US, 280 F 2 892. "Of course, t h e case may be d i f f e r e n t i f t h e government s u f f e r e d some p a r t i c u l a r prejudice i n t h e period June 29, t o August 13, 1959. If such prejudice i s claimed, some proof should be offered." Sykes vs. US, 290 F 2 555. "The excuses of counsel f o r not p r e s s i n g t h e case a r e not too good, b u t t h e r e is no evidence of i n t e n t t o abandon t h e case. And t h e policy of t h e law i s t o t r y cases on t h e i r merits. Dismissal i s what counsel deserves. The c l i e n t deserves a l i t t l e b e t t e r . . . if t h e government can show some p a r t i c u l a r prejudice suffered i n t h e s i x months and 28 days i n question, then t h e d i s t r i c t court is at l i b e r t y t o again consider whether t h e a c t i o n should be dismissed." C . S H O U L D T H E PLAINTIFF AND DEFENDANTS1 ACTIONS B O T H BE REVIEWED I N DETERMINING W H E T H E R T H E ACTION S H O U L D BE DISMISSED? Huffmaster v. United S t a t e s . C i t e as 186 F.Supp. 120 (1960). "On appeal, Judge Medina s a i d , i n a cogent presentation of t h e law, t h a t t h e c r u c i a l t e s t under Rule 41(b) i s whether t h e r e has been reasonable diligence i n t h e prosecution of t h e action, but t h a t lack of prejudice t o defendant may be considered i n cases of moder- a t e o r excusable neglect. The application of Rule 41(b) i s discretionary with t h e Court, and t h e r e a r e no r i g i d time l i m i t s which e s t a b l i s h lack of due diligence when they a r e exceeded." Kujich vs. L i l l i e , 127 Mont. 125, 260 P 2d 383. "It would appear t h a t t h e f a c t s s o s e t f o r t h i n p l a i n t i f f l s counter a f f i d a v i t s , standing uncontroverted, amply r e f u t e any showing of prejudice claimed t o have been suffered by t h e defendant by reason of not having disposed of h i s demurrers more ex- peditiously and f o r not having required defendant ta answer t h e c o m p 2 a i n t s ' ~ o t h a t the actions would sooner become a t i s s u e and ready f o r trial. Mere lapse of t i m e i s not s u f f i c i e n t i n i t s e l f t o j u s t i f y dismissal of t h e a c t i o n s , S t a t e Savings Bank v. Albertson, 39 Mont. 4 1 4 , 102 Pac. 692; Eldridge v. Idaho S t a t e Penitentiary, 54 Idaho 213, 30 Pac. (2d), 781, 784... Defendant was privileged t o notice h i s demurrers f o r hearing but t h i s he did not do notwithstanding t h a t he had the same r i g h t t o press t h e actions f o r t r i a l a s had t h e p l a i n t i f f s . Wright v. Howe, 46 Utah 588, 150 Pac. 956, L.R.A. 1916B, 1104." S t a t e Savings Bank v. Albertson e t al., 39 Mont. 414, 102 Pac. 692. "Evidently counsel r e l i e d s o l e l y upon t h e f a c t , apparent from t h e f i l e s and records of t h e d i s t r i c t court and within t h e know- ledge of t h e court, t h a t t h e a c t i o n had been pending since t h e f i l i n g of t h e complaint on J u l y 31, 1903, and deemed t h e lapse of time s u f f i c i e n t t o move t h e court's d i s c r e t i o n . Mere lapse of time i s not s u f f i c i e n t i n i t s e l f t o j u s t i f y a dismissal." Cremer vs. Braaten, 151 Mont. 18, 438 P. 2d 553. " P l a i n t i f f argues t h a t t h e a c t i o n could not be dismissed as defendant has shown no i n j u r y by t h e delay. When a p l a i n t i f f has s l e p t on h i s cause f o r over twelve years t h e law presumes i n j u r y and places t h e burden on t h e p l a i n t i f f t o show good cause f o r t h e delay. S t a t e ex r e l . Johnstone v. D i s t r i c t Court, 132 Mont. 377, 319 P. 2d 957." Jangula vs. United S t a t e s Rubber Co., 149 Mont. 241, 425 P. 2d 319. "There i s s t r e n g t h i n appellee's argument t h a t it might be prejudiced by t h e passage of time; but t h i s argument i s not s u f f i c i e n t l y supported f a c t u a l l y t o overbalance t h e cer- tainty of prejudice t o appellant i f deprived e n t i r e l y of a r e t r i a l as authorized by our previous decision." D. CAN THE C O U R T VIOLATE ITS OWN RULES A S TO DISMISSAL FOR FAILURE TO PROSECUTE? I w i l l ask t h i s court t o take j u d i c i a l n o t i c e of D i s t r i c t Eighteen Rule 7 of Court Rules which provides: "Any case passed twice on jury o r judge s e t t i n g w i l l be dismissed by t h e Judge f o r want of prosecution. There w i l l be no for- ma1 dismissal calendar. Any lawyer wishing t o 'save' such a case passed twice must f i l e within f i v e ( 5 ) days a motion f o r good cause t o t h a t e f f e c t and s e t it f o r hearing before t h i s Court ." The Court Rules have formed t h e b a s i s f o r dismissal. Jarva vs. U S (supra) and Sykes vs. U S (supra) However i n those cases and i n t h e following case mere v i o l a t i o n of a r u l e has not, p e r se, e n t i t l e d t h e court t o dismiss t h e law s u i t . Federal Deposit Ins. Corp. vs. Lotsch, 3 F R D 464. "There was over one year without proceed- ings i n v i o l a t i o n of Rule 24 of D i s t r i c t Court. A dismissal was reversed with defendantst r i g h t t o request a separate t r i a l and plain- t i f f time t o comply." Alamance I n d u s t r i e s , Inc. v. Filene1s ( C A l s t b 1961) 291 F2d 142, 145, 4 F R Serv2d 41a.24, Case 1. "Courts e x i s t t o serve t h e p a r t i e s , and not t o serve themselves, o r t o present a record with respect t o dispatch of business. Com- p l a i n t s heard as t o t h e law's delays a r i s e because t h e delay has injured l i t i g a n t s , not t h e courts. For the court t o consider expedition f o r i t s own sake 'regardless' of t h e l i t i g a n t s i s t o emphasize secondary considerations over primary." S U M M A R Y The p l a i n t i f f made a timely f i l i n g of h i s complaint and served t h e summons t h e next day. A l l delays a f t e r t h a t time were occasioned by the defendants1 f a i l u r e t o bring the matter t o issue. The p l a i n t i f f was in- volved i n other l i t i g a t i o n with t h e same defendant and h i s only a c t of ommission was h i s f a i l u r e t o d e f a u l t the defendant. A d i f f e r e n t attorney was handling a q u i e t t i t l e case against t h e defendant and t h e plain- t i f f ' s attorneys of record i n t h i s case were not noti- f i e d nor present i n the courtroom when t h e defendant's attorney vocally moved t o dismiss. The record shows no evidence of damage o r prejudice t o t h e defendant. Mere delay is not conclusive proof of lack of prosecu- t i o n unless t h e delay i s exceedingly long. I f t h e defendant desired t o terminate t h i s a c t i o n against him he was equally responsible f o r bringing t h e matter t o i s s u e and t r i a l and having t h e matter disposed o f . W e do not mean t o i n f e r t h a t t h e p l a i n t i f f ' s Idaho counsel o r l o c a l counsel i n any way were negli- gent i n t h e i r d u t i e s ; however t h e p l a i n t i f f c e r t a i n l y could not f i l e h i s own n o t i c e of i n t e n t i o n t o e n t e r d e f a u l t when he was represented by an attorney and t h e penalty of dismissing a $26,000. l a w s u i t i s a harsh one t o a p l a i n t i f f whose claim i s now barred by t h e f i v e year s t a t u t e of l i m i t a t i o n s f o r accounts. The court has an obligation and d e s i r e t o c l e a r i t s own docket but attorneys have a r i g h t t o r e l y on t h e l o c a l p r a c t i c e and r u l e s being followed. This matter was never s e t f o r t r i a l s o it never has been passed over twice as l o c a l r u l e s require before dis- missal. Respectfully submitted, ALLEN L. McALEAR #3 Story Block Bozeman, Montana / \ r Attorney f o r P l a i n t i f f and ~ p ~ e l l a n t CERTIFICATE OF MAILING I, ALLEN L. McALEAR, a t t o r n e y f o r t h e p l a i n t i f f and a p p e l l a n t i n t h e above e n t i t l e d matter, hereby c e r t i f y t h a t on t h i s 15th day of April, 1974, I served t h e foregoing APPELLANT'S BRIEF upon t h e defen- dant and respondent by d e p o s i t i n g a f u l l , t r u e and c o r r e c t copy t h e r e o f , i n t h e United S t a t e s mail, f i r s t c l a s s postage prepaid, addressed t o t h e i r a t t o r n e y s of record, p r o s e , a s follows: BROWN & GILBERT G a l l a t i n Block S u i t e 5 40 East Main Bozernan, Montana 59715