Becky v. Norwest Bank Dillon, N.A.

• Decision Date: 20 September 1990
• Docket Number: No. 89-583,89-583
• Citation: 47 St.Rep. 1795,798 P.2d 1011,245 Mont. 1
• Parties: Raymond G. BECKY and Margaret K. Becky, husband and wife, individually; and David Glaus and Ramona Glaus, husband and wife; and Warren G. Glaus and Rosamond F. Glaus, husband and wife; individually and d/b/a/ 76 RANCHES, an Idaho partnership, Plaintiffs and Appellants, v. The NORWEST BANK DILLON, N.A., formerly the First Northwestern National Bank of Dillon, Robert Mountain and Ronald Johnson, individually and in their capacities as agents or officers of Northwest Bank Dillon, N.A., Defendants and Respondents.
• Court: Montana Supreme Court

Page 1011

798 P.2d 1011

245 Mont. 1

Raymond G. BECKY and Margaret K. Becky, husband and wife individually; and David Glaus and Ramona Glaus, husband and wife; and Warren G. Glaus and Rosamond F. Glaus, husband and wife; individually and d/b/a/ 76 RANCHES, an Idaho partnership, Plaintiffs and Appellants, v. The NORWEST BANK DILLON, N.A., formerly the First Northwestern National Bank of Dillon, Robert Mountain and Ronald Johnson, individually and in their capacities as agents or officers of Northwest Bank Dillon, N.A. Defendants and Respondents.

No. 89-583.

Supreme Court of Montana.

Submitted March 16, 1990.

Decided Sept. 20, 1990.

James E. Purcell, Henningsen, Purcell, Vucurovich & Richardson, P.C., Butte, Phillip D. Tawney, Mullendore and Tawney, Missoula, and Peter M. Meloy, Meloy Law Firm, Helena, for plaintiffs-appellants.

Donald C. Robinson, Poore, Roth & Robinson, Butte, for Norwest Bank Dillon.

Gregory C. Black, Corette, Smith, Pohlman & Allen, Butte, for Mountain and Johnson.

HUNT, Justice.

Plaintiffs and appellants, Raymond and Margaret Becky, David and Ramona Glaus, and Warren and Rosamond Glaus, partners in the 76 Ranches, appeal from an order of the Fifth Judicial District Court, Beaverhead County, dismissing their claims against defendants, Norwest Bank Dillon, Robert Mountain and Ronald Johnson. We reverse.

The sole issue raised on appeal is whether the District Court abused its discretion by dismissing plaintiffs' lawsuit for failure to prosecute.

On July 12, 1984, plaintiffs filed this action against Norwest Bank Dillon and its officers, Mountain and Johnson, individually and as agents for the bank, as well as against William Ballard, another of the bank's officers, and Norwest Corporation, the principal shareholder of the bank. The complaint alleged bad faith, fraud, commercially unreasonable sale of collateral, conversion, tortious interference with contract, breach of fiduciary duty, deceit, negligent misrepresentation and constructive fraud, all arising from loan transactions made from 1980 through 1982.

Defendants responded with pro forma motions to dismiss. When the motions were denied, they filed their answers and counterclaims. The bank and Ballard counterclaimed for breach of promissory notes, monies due and owing on a foreign judgment, bad faith, malicious prosecution and abuse of process. In addition, Ballard alleged intentional or negligent infliction of emotional distress. Mountain and Johnson obtained separate counsel and filed their own counterclaims, alleging malicious prosecution as well as intentional or negligent infliction of emotional distress.

Plaintiffs had employed a Boise, Idaho, law firm as lead counsel and Henningson & Purcell of Butte as local Montana counsel. In October, 1984, the Boise firm withdrew from the suit because of the difficulty of conducting the case from Idaho. On December 6, 1984, Thomas A. Budewitz of the firm of Hooks & Budewitz in Townsend replaced the Boise firm as lead counsel.

In December, 1984, plaintiffs moved to amend their complaint to consolidate the counts against the defendants, add a claim for emotional distress and drop Norwest Corporation and Ballard as party defendants. After briefing, the District Court granted the motion. Defendants answered the amended complaint, reasserting their previous counterclaims.

On May 2, 1985, plaintiffs moved to dismiss the counterclaims alleged by defendants. The question was briefed by both sides but was never ruled upon by the District Court.

In the meantime, both sides had commenced discovery. From October, 1984, through December, 1986, all parties served and answered requests for production. They also engaged in extensive oral discovery, deposing a large number of parties and witnesses. During this time, some depositions were interrupted or discontinued for various reasons, several were postponed because of scheduling difficulties, and at least one was unable to take place because the witness failed to appear. It does not appear that the blame for these inconveniences can be laid at the feet of one side or the other, both were responsible for the delays, cancellations and postponements.

The last formal discovery effort engaged in by either side occurred on March 10, 1987, when Mountain and Johnson served plaintiffs with another round of interrogatories and requests for production. Although plaintiffs failed to respond, Mountain and Johnson did not follow up on the requests nor did they avail themselves of other formal remedies, such as moving to compel a response.

While discovery was taking place, the action was set for trial on two different occasions. The first trial date of January 5, 1987, was vacated upon stipulation of counsel and reset for April 6, 1987. Subsequently, the District Court vacated the April trial date because of scheduling conflicts of its own.

Other than the filing of depositions on July 15, 1987, and counsels' February 29, 1988, stipulation to a discovery deadline of November 1, 1988, no further action is recorded in the file until June 29, 1989, when the District Court ordered a case status conference for August 7, 1989. The attorneys for both sides stipulated to reset the conference for August 14, 1989.

On July 12, 1989, attorney Budewitz forwarded a consent to withdraw as attorney of record form to plaintiff Raymond Becky. Becky, in turn, forwarded the form to the Glauses, who resided in Oregon. The form had not been returned by the Glauses prior to the status conference.

The status conference was conducted by telephone on August 14, 1989. During the conference, Budewitz moved to withdraw as counsel for plaintiffs and defendants moved to dismiss plaintiffs' claims for failure to prosecute. The District Court granted Budewitz's motion to withdraw and relieved both Budewitz and James Purcell of the firm of Henningson & Purcell as counsel of record, even though Purcell, who did not participate in the conference, had made no such request of the court. The court also granted the motion to dismiss for failure to prosecute, even though plaintiffs had not been notified that such a motion would be presented at the conference. The court did, however, give plaintiffs 30 days to employ other counsel and have the case reinstated.

Upon learning of the withdrawal and dismissal orders, Purcell advised plaintiffs that he would stay on the case until the matter was resolved. He began looking for new counsel. On his recommendation, plaintiffs consulted with two other attorneys. One was unable to take the case, however, because of a conflict of interest. It is unclear why the other attorney declined the case.

In September, 1989, plaintiffs moved the court to reinstate their claims. Defendants objected to the reinstatement, alleging that the lengthy lawsuit had prejudiced them because they were forced to list the suit as a contingent liability on their financial statements.

The trial court set a hearing for October 2, 1989, ordering plaintiffs to show cause why the case should be reinstated. Plaintiffs personally attended and testified at the hearing. In addition, they presented to the court their new lead counsel, who assured the court that he would attempt to bring the case to trial in the spring of 1990.

During the reinstatement hearing, plaintiffs refuted the allegations made by Budewitz in his affidavit supporting his motion to withdraw as counsel of record. According to Budewitz, he delivered the complete case files to Raymond Becky in October, 1988, with the understanding that Becky would give the files to a Billings attorney, who would then be substituted for Budewitz as lead counsel. Becky acknowledged that he received the case files from Budewitz but stated that he delivered them to an agricultural financial consultant who was to analyze the transactions at issue in the case. He also acknowledged meeting the Billings attorney in the financial consultant's office. He understood, however, that the reason for consulting with another attorney was because Budewitz desired assistance from an additional law firm not because Budewitz had decided to withdraw from the case. Becky also understood that the Billings attorney declined the case because the attorney believed that the suit required two full-time lawyers, and Budewitz could no longer devote full time to the action.

After the Billings attorney declined his assistance, plaintiffs contacted a Great Falls attorney about becoming involved in the case, who in turn contacted Budewitz. The record does not disclose why the Great Falls attorney decided not to take the case.

Becky testified that he had been informed by Budewitz that discovery had been delayed because of the difficulty of getting three sets of attorneys together to attend depositions, many of which were to take place outside of Montana. As Becky had attended many of the depositions that had already taken place, he had personal knowledge of the difficulties the attorneys had encountered in attempting to conduct oral discovery.

Budewitz stated in his affidavit that he had not spoken to any of the plaintiffs since October 28, 1988, an assertion that Becky flatly denied during the reinstatement hearing. Warren Glaus also testified at the hearing that his wife had attempted to contact Budewitz after October, 1988, but that the attorney never returned her phone call.

In an order entered October 16, 1989, the trial court denied plaintiffs' motion to reinstate, finding a total absence of any cause for the requested reinstatement. Pursuant to Rule 54(b), M.R.Civ.P., the court entered final judgment, dismissing plaintiffs' complaint with prejudice and expressly preserving defendants' counterclaims. Plaintiffs subsequently filed this appeal.

The sole issue is whether the District Court abused its discretion in dismissing plaintiffs' complaint for failure to prosecute.

A party who has not exercised due diligence in bringing his case to a conclusion may...