Dodds v. Tierney

• Docket Number: DA 23-0319
• Decision Date: 12 March 2024
• Citation: 544 P.3d 857
• Parties: Janice M. DODDS, Plaintiff and Appellant, v. Gregory S. TIERNEY, M.D., Benefis Health System, and John and Jane Does I-IV, Defendants and Appellees.
• Court: Montana Supreme Court

544 P.3d 857

2024 MT 48

Janice M. DODDS, Plaintiff and Appellant,

v.Gregory S. TIERNEY, M.D., Benefis Health System, and John and Jane Does I-IV, Defendants and Appellees.

DA 23-0319

Supreme Court of Montana.

Submitted on Briefs: December 20, 2023

Decided: March 12, 2024

APPEAL FROM: District Court of the Eighth Judicial District, In and For the County of Cascade, CauseNo. CDV-13-364, Honorable John A. Kutzman, Presiding Judge

For Appellant: John E. Seidlitz, Jr., Seidlitz Law Office, Great Falls, Montana

For Appellee: Gary Kalkstein, Joe Newman, Hall Booth Smith, P.C., Missoula, Montana (for Gregory S. Tierney, M.D.)

For Appellee: Julie A. Lichte, Crowley Fleck, PLLP, Bozeman, Montana (for Benefis Health System) Justice Ingrid Gustafson delivered the Opinion of the Court.

¶1Plaintiff and AppellantJanice M. Dodds(Dodds) appeals from the deemed denial of her Rule 59Motion to Alter or Amend Judgment or, in the Alternative, Rule 60Motion for Relief of Order by the Eighth Judicial District Court, Cascade County.Dodds’ motion for relief followed the District Court’s February 14, 2023 Order Granting Defendants’ Motions, which, as relevant to this appeal, (1) denied Dodds’ motion to join the malpractice insurance company of DefendantGregory S. Tierney, M.D.(Dr. Tierney), as real party in interest and (2) granted Dr. Tierney’s motion to dismiss for insufficient service of process.

¶2We address the following restated issues on appeal:

1.Whether the District Court abused its discretion by not granting Dodds’ motion to alter or mend judgment.

2.Whether the District Count erred by granting Dr. Tierney’s motion to dismiss for insufficient service of process.

¶3We affirm.

FACTUAL AND PROCEDURAL BACKGROUND

¶4 In 2009, Dr. Tierney, while employed by Great Falls Orthopedic Associates, performed a total left knee replacement on Dodds.On May 7, 2013, Dodds filed a Complaint against Dr. Tierney and Benefis Health System (Benefis) alleging medical malpractice related to the knee replacement surgery.Dodds did not serve process on Dr. Tierney and Benefis at this time.In 2014, Dr. Tierney became a Benefis employee.

¶5 Dr. Tierney filed for bankruptcy in the United States Bankruptcy Court, District of Montana, on February 5, 2016.Upon filing for bankruptcy, Dr. Tierney became subject to the Bankruptcy Code’s automatic stay, which prohibits, among other things, "the commencement or continuation, including the issuance or employment of process, of a judicial, administrative, or other action or proceeding against the debtor that was or could have been commenced before the commencement of the" bankruptcy case.11 U.S.C. § 362(a)(1).Dodds thereafter served process on Dr. Tierney on May 2, 2016, and Benefis on May 3, 2016.On August 3, 2016, the Bankruptcy Court issued an Order of Discharge, granting Dr. Tierney his requested Chapter 7 discharge.Dodds did not attempt to serve Dr. Tierney with the Complaint after his discharge.

¶6 In November 2016, Dodds filed a Motion to Pursue Claim Covered by Insurance in the Bankruptcy Court.After briefing and a hearing, the Bankruptcy Court denied the motion without prejudice on December 9, 2016.Dodds again filed a Motion to Pursue Claim Covered by Insurance in the Bankruptcy Court on September 24, 2018.Dr. Tierney again opposed the motion.On February 25, 2019, the Bankruptcy Court granted Dodds’ motion and issued an order which stated:

Dodds may pursue her claim against Debtor in the Montana Eighth Judicial District Court, Cascade County CauseNo. CDV 13-364("CDV 13-364") only to the extent necessary to establish liability, if any, against a third party.

IT IS FURTHER ORDERED that:

(A) Debtor shall only be a nominal party in CDV-13-364; provided that Debtor shall have full right to defend any claims against him and Dodds may obtain a judgment against Debtor solely to the extent necessary to obtain insurance coverage.Debtor shall have no economic interest or liability in the ultimate outcome of CDV 13-364.

(B) Dodds may not execute and no writ of execution shall issue against Debtor either personally or against his assets on any judgment that Dodds may obtain in CDV 13-364.

(C) No costs or expenses of CDV 13-364 shall be borne by Debtor.

(D)This Court makes no ruling on the allegations of the Dodds complaint in CDV 13-364 and this Order shall not in any way affect either the substantive or procedural claims or defenses of any party, including Dodds or Debtor, in CDV 13-364.

(E) In the event Debtor’s insurance carrier denies coverage of the claims in CDV 13-364, Dodds shall reimburse and indemnify Debtor for any and all actual costs and fees, including attorney fees, incurred by him personally in defending claims against him in CDV 13-364 or in establishing the availability, or lack of, insurance coverage for Dodds’ claims in CDV 13-364.Debtor will promptly notify Dodds of his intent to hire personal counsel that would be subject to this paragraph.

(F) Upon request of Debtor, Dodds or Dodds’ attorney shall provide a narrative explanation to any consumer credit reporting agencies that Debtor has no personal liability as a result of CDV 13-364 and is only named as a nominal party therein.

¶7 In the District Court case, Benefis filed a motion for summary judgment on October 24, 2018, asserting Dr. Tierney was not a Benefis employee at the time of the knee replacement surgery in 2009 and imposing liability on Benefis under an ostensible agency theory was prohibited by Montana law.After the Bankruptcy Court issued its order granting Dodds’ Motion to Pursue Claim Covered by Insurance, Dr. Tierney filed a Motion to Dismiss for Insufficient Service of Process under M. R. Civ. P. 12(b)(5).Dr. Tierney’s motion asserted Dodds failed to serve process upon him within the three-year timeframe required under M. R. Civ. P. 4(t)(1), because Dodds’ May 2, 2016 service was void due to the automatic bankruptcy stay and Dodds did not thereafter serve Dr. Tierney within 30 days of his Chapter 7 discharge as allowed by 11 U.S.C. 108.On March 28, 2019, Dodds filed a Rule 17 Motion to Join Real Party in Interest, seeking to join Dr. Tierney’s malpractice insurance company as the real party in interest.After these motions were fully briefed, the District Court held oral argument on August 18, 2021.According to the District Court’s minute entry, the court orally granted Benefis’ summary judgment motion and Dr. Tierney’s motion to dismiss at the close of the hearing.¹The court’s written Order Granting Defendants’ Motions followed on February 14, 2023.

¶8 On March 13, 2023, Dodds filed a Rule 59 Motion to Alter or Amend Judgment or, in the Alternative, Rule 60Motion for Relief of Order.In her motion, Dodds asserted the District Court"failed to note the effect of 11 U.S.C. § 524," which was referred to in the District Court’s February 14, 2023 Order, and "erroneously denied" Dodds’ motion to join Dr. Tierney’s malpractice insurance company as the real party in interest.Dodds’ motion made no mention of the applicable grounds for relief available under either Rule 59 or Rule 60, and also made no mention of the court’s ruling granting summary judgment to Benefis.Both Dr. Tierney and Benefis filed briefs opposing Dodds’ motion.In Dr. Tierney’s brief, he noted 11 U.S.C. § 524 was both referenced in the District Court’s order and in his previous briefing on the motion to dismiss and asserted it was "unreasonable and unlikely"the court failed to consider the statute.Benefis asserted Dodds’ motion made no reference to the portion of the court’s order granting summary judgment in favor of Benefis.The District Court did not rule upon Dodds’ motion (or issue an extension of time for ruling) and it was deemed denied by the operation of law after 60 days.M. R. Civ. P. 59(f), 60(c)(1).Dodds appeals.

STANDARD OF REVIEW

[1–3]¶9We review a district court’s denial of a motion for Rule 59(e) relief for an abuse of discretion.Folsom v. Mont., Pub. Emps. Ass’n,2017 MT 204, ¶ 59, 388 Mont. 307, 400 P.3d 706.A district court’s denial of relief pursuant to M. R. Civ. P. 60(b) is generally reviewed for an abuse of discretion.Young v. Hammer, Hewitt, Jacobs & Flock, PLLC,2021 MT 180, ¶ 14, 405 Mont. 65, 491 P.3d 725(citingEssex Ins., Co. v. Moose’s Saloon, Inc.,2007 MT 202, ¶ 16, 338 Mont. 423, 166 P.3d 451)."An abuse of discretion occurs if a lower court exercises granted discretion based on a clearly erroneous finding of fact, erroneous conclusion or application of law, or otherwise arbitrarily, without conscientious judgment or in excess of the bounds of reason, resulting in substantial injustice."Meine v. Hren Ranches, Inc.,2020 MT 284, ¶ 13, 402 Mont. 92, 475 P.3d 748.

[4]¶10We review a district court’s findings of fact and conclusions of law regarding personal jurisdiction to determine whether the findings are clearly erroneous and whether the conclusions are correct.Nolan v. RiverStone Health Care,2017 MT 63, ¶ 9, 387 Mont. 97, 391 P.3d 95(citingSemenza v. Kniss,2005 MT 268, ¶ 9, 329 Mont. 115, 122 P.3d 1203).

DISCUSSION

¶111.Whether the District Court abused its discretion by not granting Dodds’ motion to alter or amend judgment.

[5]¶12 As an initial matter, we must first consider what this Court is being asked to review in the present appeal.The District Court’s February 14, 2023 Order granted summary judgment in favor of Benefis, denied Dodds’ motion to add Dr. Tierney’s malpractice insurance company as the real party in interest, and granted Dr. Tierney’s motion to dismiss for insufficient service of process.Rather than appealing this order, Dodds instead filed her Rule 59Motion to Alter or Amend judgment or, in the Alternative, Rule 60Motion for Relief of Order, which, as we have noted, made no mention of the applicable grounds for relief available under either Rule 59 or Rule 60.Dr. Tierney and Benefis each filed briefs opposing the motion, which was deemed denied by the...