Court Opinion

ID: 883848
Source: CourtListenerOpinion
Date Created: 2013-06-05 02:41:42.835561+00
Date Added: 2024-06-11T11:17:26.423466
License: Public Domain

No.      96-326
               IN THE SUPREMECOURT OF THE STATE OF MONTANA
                                          1996

BLAZE CONSTRUCTION, INC.,
              Plaintiff     and Appellant,
         v.
GLACIER ELECTRIC COOPERATIVE, INC.,                         Nr)V 2 6 19%

APPEAL FROM:         District  Court of the Ninth Judicial District,
                     In and for the County of Glacier,
                     The Honorable Marc G. Buyske, Judge presiding.

COUNSEL OF RECORD:
              For Appellant:
                     Robert G. Olson; Frisbee,           Moore & Olson,
                     Cut Bank, Montana
              For Respondent:
                      Larry Epstein; Werner,          Epstein    & Johnson,
                      Cut Bank, Montana
              For Amicus:
                     Kathleen Fleury, Blackfeet  Legal             Department,
                     Browning, Montana (for Blackfeet              Tribe)
                     Jeanne S. Whiteing;  Whiteing & Smith,              Boulder
                     Colorado (for Blackfeet   Tribe)

                                   Submitted       on Briefs:      November 14, 1996
                                                      Decided:     November 26, 1996
Filed:

                                          Clerk/
Justice       W. William              Leaphart         delivered            the Opinion                of the Court.

        Appellant,               Blaze      Construction                    (Blaze)       filed          suit        against
Glacier       Electric           Cooperative               (Glacier)         alleging        breach          of contract
for     the    failure           to    pay Blaze              the      sum of         $36,000           on a contract
concerning            the        construction                 of       24       homes        on        the        Blackfeet
Reservation.                Glacier         moved to               dismiss        for     failure            to     join      an
indispensable              party       and for          lack        of jurisdiction                of     the parties.
The Blackfeet              Tribe,        which        is       litigating          breach          of contract              and
recoupment        claims         against         Blaze in federal                 district             court,      moved to
intervene       for        the purpose           of contesting               jurisdiction.                The District
Court     granted          Glacier's         motion           to dismiss           for    failure            to join        the
Blackfeet       Tribe        as an indispensable                       party.         Blaze       appeals          from the
order     of dismissal.                 We affirm.
                                                      Background
        Blaze         is     a     corporation                existing           under        the        laws        of     the
Blackfeet        Tribe           and authorized                 to     do business                in     the      State       of
Montana.           Glacier             is    a        rural         electric          cooperative                 with      its
principal        office          in Cut Bank, Montana.
        In     conjunction               with         the      Bonneville             Power        Administration,
Glacier       administers             a conservation                 incentive          program known as Super
Good Cents.           Under this            program,           homes built              to meet certain               energy
conservation           specifications                  qualify         the builder            or the owner to a
payment of reimbursement                        for     additional             weatherization                costs        of up
to    $1,500      per       home.           Depending              upon the           circumstances                 and the
agreement       between            the parties,               Glacier          has in the past                  made these
payments       to the owner of,a                  new home, or,                 in the alternative,                      to the
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builder.             Usually,         the builder            or contractor              and the owner of the
residence            reach      agreement           whereby           the owner receives                  some form of
credit         for    the Super Good Cents expense incurred                                    by the builder              in
new construction.
         In June of 1994, Blaze contracted                                 with     Glacier         to construct           25
homes in             conformance            with     Super Goods Cents                   standards.              All      the
homes constructed                   pursuant        to this           contract      were constructed                on the
Blackfeet            Reservation             and are         owned by the               Tribe.            Glacier         and
Blaze      are       the only         signatories             to this           contract.           Both Blaze,            as
the builder,               and the Tribe            as the owner,                 of 24 of the 25 certified
new homes, claim                   reimbursement            of the funds due under the incentive
program.
         Glacier           does not dispute                 that       Blaze      completed         its    obligation
to     build         the     homes nor             does      it       dispute        that      it    has     not         paid
incentive            money to         Blaze.             Rather,         Glacier        moved to dismiss                  the
suit     arguing           that,      since        the Tribe           had made a demand upon Glacier
for     the incentive               monies,        the Tribe,           as the owner of the homes, was
an indispensable                    party      to     the         litigation.            The Tribe           moved to
intervene            for    the sole         purpose         of having            the matter         dismissed            for
lack     of jurisdiction                   over     the Tribe.               Blaze      concedes          that      if    the
Tribe      is an indispensable                     party,         the complaint             has to be dismissed
since      the court          has no jurisdiction                      over the Tribe.              Blaze contends
that     the Tribe            is     not     an indispensable                   party       since    the Tribe            was
not a party            to the Blaze/Glacier                       contract.          Blaze argues            that        only
those          entities             which          are       in         privity         can         be      considered
indispensable.

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                                                   Discussion
       In     considering           a motion           to       dismiss     on the                ground    that   an
indispensable           party       is    absent,       "the       court        is    given        discretion      to
determine        whether         the action          will       proceed         or will           be dismissed."
Mohl v. Johnson               (1996),       275 Mont. 167, 169, 911 P.2d 217,                     219.   In
reviewing         such         discretionary            rulings            we        apply         an    "abuse    of
discretion        standard."             Montana Rail            Link v. Byard               (1993),       260 Mont.
331,   337,      860 P.2d 121,              125.
       Resolution             of this       appeal    hinges        upon application                    of Rule 19,
M.R.Civ.P.,        which        states:
              Rule 19(a).          Persons     to be joined         if feasible.        A
       person who is subject              to service         of process        shall   be
       joined as a party in the action if (1) in the person's
       absence complete relief              cannot be accorded among those
       already     parties,       or (2) the person claims an interest
       relating     to the subject of the action and is so situated
       that     the disposition          of the action            in the person's
       absence may (i) as a practical                 matter      impair or impede
       the person's        ability     to protect        that interest          or (ii)
       leave any of the persons already parties                          subject     to a
       substantial        risk     of incurring          double,        multiple,      or
       otherwise      inconsistent          obligations         by reason of the
       claimed interest.            If the person has not been so joined,
       the court shall order that the person be made a party.
       If the person should join as a plaintiff                       but refuses to
       do so, the person may be made a defendant,                             or, in a
       proper case, an involuntary                plaintiff.           If the joined
       party objects         to venue and joinder             of that party would
       render the venue of the action improper,                    that party shall
       be dismissed from the action.
                 Rule     19 (b).           Determination            by     court            of    whenever
       joinder          not     feasible.   If a person as described             in
       subdivision        (a) (1) - (2) hereof cannot be made a party,         the
       court     shall       determine     whether    in equity      and good
       conscience       the action      should proceed among the parties
       before     it,    or should be dismissed,          the absent person
       being thus regarded as indispensable.                The factors     to be
       considered       by the court include:      first,    to what extent a
       judgment       rendered       in the person's       absence might         be
       prejudicial         to the person or those already              parties;
       second, the extent to which, by protective               provisions       in
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          the judgment,     by the shaping     of relief,     or other
          measures,    the prejudice   can be lessened     or avoided;
          third,    whether  a judgment   rendered   in the person's
          absence will be adequate; fourth,     whether the plaintiff
          will have an adequate remedy if the action      is dismissed
          for nonjoinder.
          In     interpreting                     Rule        19,          this          Court      has held               that,         in     the
interests          of judicial                    economy,             all        parties           claiming           an interest                in
the subject                 of the suit                 should             be joined.               Dagel v.               City        of Great
Falls         (19911,          250 Mont. 224,         239,         819 P.2d 186,                 195.
          Under Rule 19, M.R.Civ.P.,                                       a court             must first            determine                under
Rule      19(a)         whether                 the    absent              party          is     necessary            to     the        action,
that      is,    whether              complete              relief          can be accorded                    without            the absent
party's         participation                     and, second,                    if     the absent party                   is necessary
but       joinder              is          not        possible,                   whether           the         absent             party          is
indispensable                  under             Rule       19(b),           that          is,      whether           in     "equity            and
good       conscience                     the     action             should             proceed          .           . or         should          be
dismissed.              .           .I'     m,              911 P.2d at 219.
          Blaze        relies              on our decision                      in Gambles v. Perdue                          (1977),           175
Mont. 112, 572 P.2d 1241,                           for      its     argument             that        a person            who is not
a party           to        a contract                 is     not          an indispensable                         party         to     a suit
involving          that        contract.                    In Gambles,                  a retail         carpeting               store        sued
John Perdue on contracts                                covering                the purchase                 and installation                     of
carpeting              in     Perdue's                residence.                       After      the        installation                of     the
carpeting,                  Perdue's             wife         obtained                  a divorce              in     which            she      was
awarded          the residence                        in question                 and was made solely                        responsible
for     all      indebtedness                    on the property.                              Gambles,         572 P.2d at 1242.
In response                 to Gambles'                 complaint,                     John Perdue contended                           that     all
proper          parties             were not                before           the         court;         that        his      ex-wife            was
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responsible                 because             she     had been               awarded          the      property             in     the
divorce         proceeding.                 Gambles,               572 P.2d at 1243.                    The court            entered
judgment            for     him on that               basis.          Gambles appealed.                        We vacated            the
dismissal             for        the     reason             that      a contracting                   obligee             cannot       be
deprived            of recourse             against           the contracting                   obligor             (John Perdue)
by     a substitution                     of      debtors            without            the     obligee's,                 (Gambles)
consent.             Thus John Perdue remained                                 liable         on his     contract            despite
the provisions                    of the divorce                   decree.              We held         that        Anna,      John's
ex-wife,            was not a proper                    party        because she was not a party                               to the
contract.                   Gambles,             572         P.2d         at     1243.              Gambles          is      clearly
distinguishable                    from the present                    case.          Gambles did not involve                          an
interpretation                    of    Rule          19.        Further,             the     present           case does            not
involve             a substitution                    of     an obligee.                      Rather,          it     involves             a
question            of whether             the obligor                 (Glacier)              may, in          the absence             of
joinder,            be subject            to multiple                 obligations.
          In        the     present             case,        the      District              Court       noted         that         Blaze
conceded             that        proceeding             to judgment               in        state      court         without         the
Tribe          as     a party            will         most         likely        subject            Glacier           to     further
litigation                with     the Tribe                over     the same monies                    in another             forum.
Rule      19(a),            M.R.Civ.P.,               specifically                requires           joinder          of persons
who claim             an interest                in     the action              and whose absence may "leave
any of the persons                      already            parties          subject         to a substantial                 risk      of
incurring             double,          multiple,             or otherwise                inconsistent                obligations
. . .           11         We agree            with        the     court's            conclusion          that,           given      the
Tribe's             claimed            interest,              Glacier            is      in     substantial                 risk       of
incurring                 multiple         and          inconsistent                   obligations.                   The          court

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correctly             concluded         that        the       Tribe       is     a necessary                 party         to        the
litigation.
         Having         concluded         that        the Tribe          is a necessary                    party,         the next
inquiry         is      whether,         "in        equity         and good conscience"                             the    matter
should         proceed        without      the Tribe               or should           be dismissed,                 the Tribe
being      thus        regarded         as indispensable.                       Rule 19(b),                M.R.Civ.P.                 In
making         this      determination,                the     court       is     directed             to consider               the
following             factors:
          1.          To what       extent            a judgment                rendered              in     the      person's
         absence might              be prejudicial                    to the person                   or those            already
        parties;
         2.           The extent          to     which,            by protective                 provisions                in    the
         judgment,            by the       shaping            of      relief,          or other             measures,            the
        prejudice             can be lessened                 or avoided;
         3.           Whether     a judgment              rendered         in the person's                    absence will
        be adequate;
         4.           Whether     the plaintiff                will      have an adequate                    remedy if           the
         action         is dismissed             for      nonjoinder.
Rule 19(b),             M.R.Civ.P.
        Blaze contends              that       if      this     matter          is dismissed                for     failure           to
join      the     Tribe,         Blaze      will        be denied               the     right         to proceed                in     a
state      court         forum.         In this           regard,         we note             that,        although           Blaze
filed      three        briefs     in this            appeal        and surprisingly                       did not rely               on
State      ex rel.            Drum v.      District             Court           (1976),         169 Mont. 494,       548
P.2d 1377,         the      holding         in       Drum merits                 some discussion.                          Drum
involved          a suit          against           David          Drum by            First       National                Bank        to
collect       on promissory                       notes.           Drum moved to dismiss                            on the ground
that      the suit             was not prosecuted                     in the name of the real                                party      in
interest          and for             failure         to join        an indispensable                       party        plaintiff,
i.e.,      Chase Manhattan                        Bank of New York;                      an entity            which         could      not
be sued in the courts                             of Montana under                      12 U.S.C.           § 94.           Drum
                                                                                                                            -I         548
P.2d at 1379.                       In refusing             to issue             a writ         of supervisory                control
to      dismiss          for         nonjoinder,              we noted             that         dismissal             would         leave
First      National                 with     no remedy in                  the         courts     of        its     own state           to
collect       the money it                   loaned          to the Drums.                  Drum
                                                                                            -,          548 P.2d at 1382.
          Although             it     would         appear         that         this      same concern                for     a state
court       forum         would            militate           against             dismissing            Blaze's             suit       for
nonjoinder               of     the        Tribe,          there      are         a number             of         aspects      of      the
present           suit         which         distinguish              it         from      the     Drum matter.                       Drum
sought       to dismiss                for        nonjoinder         of Chase Manhattan.                             Chase's          only
tie      to the          transaction                was that          it        had a participation                         agreement
with      First      National.                Chase's          absence from the litigation                                  would not
impair        its        ability             to     enforce          its         participation                    agreement           with
First      National.                  Furthermore,                 judgment             in the case would not have
subjected           Drum to the                    risk      of multiple                 or otherwise                inconsistent
obligations               since            Drum's         rights      and liabilities                       would        be finally
concluded           in the context                   of the Drum/First                     National               Bank promissory
note       agreements.                     We noted           that         it     was no concern                    of      Drum what
First      National             did with            the proceeds                 of the repaid                loan.         Drum
                                                                                                                            -,         548
P.2d at 1381.                       In contrast,             Glacier's                 rights     and obligations                     with
regard       to the incentive                       monies will                 not be finally               concluded             in the
context           of the Glacier/Blaze                         contract.                 Rather,        in the absence of

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joinder        of    the    Tribe,           Glacier            will         be at         risk     of      multiple         and
inconsistent          obligations.
          Recognizing              that      it     did        not     have any jurisdiction                        over     the
Tribe,     the      District              Court      concluded               that     it      would       be unable             to
fashion      any meaningful                relief         which would address                       the claims            of the
Tribe      and      avoid          the      risk          of     further            litigation               to      Glacier.
Furthermore,          the court             recognized               that     there        are two other              forums,
the Tribal          Court      and the United                    States       District             Court,         which    have
jurisdiction          over         all     three      entities.
         We hold       that         the     Blackfeet                Tribe     is     a necessary                 party     over
which     the District              Court         has no jurisdiction.                            Thus,     the District
Court     did not abuse its                  discretion                in dismissing               Blaze's         claim     for
nonjoinder          of an indispensable                        party.         Affirmed.

We concur:                     /