Court Opinion

ID: 882866
Source: CourtListenerOpinion
Date Created: 2013-06-05 01:52:40.992701+00
Date Added: 2024-06-11T15:35:39.779724
License: Public Domain

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,
     -vs-
BARBARA WIEDRICH,
            Defendant and Appellant.

APPEAL FROM:     District Court of the Thirteenth Judicial 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
                Laurence R. Martin, Randall G. Nelson; Felt, Martin
                Frazier & Lovas, Billings, Montana
                John L. Pratt; Ask & Pratt, Roundup, Montana

                                Submitted on Briefs:     June 17, 1993
                                              Decided:    JULY   1 3 , 1993
Filed:
Justice 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 under month-to-month employment arrangements. Thus, Rainbow
and Galles could not guarantee that the employees would sttransfer"
to Cook Travel after Teal's purchase of Rainbow; it was Fink's
understanding, however, that those employees would 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
                                 2
December 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
accumulated by Rainbow, and advising that she would "call you after
the 1st of January." The letter was 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. (doing business 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,
Teal dismissed defendant Goffena without prejudice pursuant to Rule
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 dismiss Wiedrich without
prejudice pursuant to Rule 41(a)(2), M.R.Civ.P.; it later converted
the motion to one for dismissal with prejudice. Wiedrich objected
to dismissal unless "curative conditions," including her attorney'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 discretion when, 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
award Wiedrich 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 save upon 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 "is vested with wide discretion in determining what
conditions may attach to the dismissal[:]"   a court may 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 in
reviewing discretionary trial court rulings is whether the court
abused its discretion. Steer, Inc. v. Depttof Revenue (1990), 245
Mont. 470, 475, 803 P.2d 601, 604.
      Here, the District Court dismissed with prejudice and required
Teal to pay Wiedrichls costs.      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
interpreting Rule 41(a) (2) of the Federal Rules 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 "abusive practices whereby defendants were put to
expense by plaintiffs who had no real object in mind other than              .
. .   harassment."   a, F.R.D.
                      14                at 176.       Stated differently, a
purpose 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 this determination; moreover, the record contains sufficient
evidence to support a determination that at least an arguable case
could be made that Wiedrich interfered with Teal's contractual
relationship and 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 those where 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 so
-
that 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 -,
the action was dismissed without prejudice.       Nothing in
                                                               however,
                                                                  pro-
vides authority for Wiedrich's claim of entitlement to attorney's
fees here, particularly in light of the broad 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 without prejudice on the day before trial, some
twenty months after the complaint was filed and after extensive
pretrial discovery and trial preparation by the defense. The court
ordered the dismissal without prejudice.     We determined, "in view
of the lateness of plaintiff's motion for dismissal, and the
extensive preparation on the part of the defense" that the district
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, discovery was 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 action
six 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

                             CERTIFICATE OF SERVICE

I hereby certify that the following order was sent by United States mail, prepaid, to the
following named:

Donna K. Davis
MATOVICH, ADDY & KELLER, P.C.
Suite 225, Petroleum Building
2812 First Ave. North
Billings, MT 59101

Earl J. Hanson
W S O N & TODD
Suites 214-215
Transwestern I
404 North 31st Street
Billings, MT 59101

Richard S. Mandelson
BAKER & HOSTETLER
Suite 1100
303 East 17th Ave.
Denver, CO 80203

Laurence R. Martin
Randall G. Nelson
FELT, MARTIN, FRAZIER & LOVAS
450 Hart-Albin Building
208 North 28th Street
Billings, MT 59101

John L. Pratt
ASK & PRATT
226 Main
Roundup, MT 59072

                                                ED SMITH
CLERK OF THE SUPREME COURT
STATE q F MOPJT4NA