Environmental Contractors, LLC v. Moon

• Decision Date: 27 July 1999
• Docket Number: No. 99-176.,99-176.
• Citation: 983 P.2d 390,1999 MT 178
• Parties: ENVIRONMENTAL CONTRACTORS, LLC, Plaintiff and Respondent, v. Winfield MOON, Sr., Defendant and Appellant.
• Court: Montana Supreme Court

983 P.2d 390

1999 MT 178

ENVIRONMENTAL CONTRACTORS, LLC, Plaintiff and Respondent, v. Winfield MOON, Sr., Defendant and Appellant.

No. 99-176.

Supreme Court of Montana.

Submitted on Briefs July 1, 1999.

Decided July 27, 1999.

M. Dayle Jeffs and Rodney W. Rivers, Jeffs & Jeffs, Provo, Utah, Kenneth D. Peterson, Peterson & Schofield, Billings, Montana, for Appellant.

Gerald B. Murphy and Christopher J. Flann, Moulton, Bellingham, Longo and Mather, Billings, Montana, for Respondent.

Chief Justice J.A. TURNAGE delivered the Opinion of the Court.

¶ 1 Winfield Moon, Sr. (Moon), appeals from the entry of summary judgment by the Thirteenth Judicial District Court, Yellowstone County, in favor of Environmental Contractors, LLC (Environmental), in an action to recover amounts due under two promissory notes. We affirm.

ISSUES

¶ 2 1. Is this appeal subject to dismissal for Moon's failure to comply with the mandatory mediation requirements of Rule 54(a), M.R.App.P.?

¶ 3 2. Did the District Court err when it ruled on the motion for summary judgment without allowing Moon the opportunity to conduct further discovery?

¶ 4 3. Did the District Court err in granting summary judgment in favor of Environmental?

¶ 5 4. Did the District Court err in denying Moon's motion to consolidate this matter with a separate action filed by Environmental for breach of contract?

BACKGROUND

¶ 6 On September 5, 1996, Moon entered into a contract with Environmental for the dismantling and salvage of the F.W. Bird Power Plant in Billings, Montana. As part of the agreement between the parties, Moon executed two promissory notes in favor of Environmental. The first note was made in the principal amount of $100,000, payable by an initial installment of $50,000 on or before January 1, 1997, and a final installment of $50,000 on or before June 1, 1997. Moon failed to pay either installment, and on March 11, 1997, the parties agreed to extend the payment date on the entire note to May 17, 1997.

¶ 7 The second note was made in the principal amount of $55,000, payable by cashier's check on or before May 13, 1997, and accruing interest at the rate of 10 percent per annum from September 5, 1996, until payment of the note. The note recites that the instrument was executed by Moon in exchange for Environmental's promise to forego immediate collection action on a dishonored check on which Moon had wrongfully stopped payment. Moon had issued the check to Environmental for the purpose of obtaining additional bonding on the salvage project.

¶ 8 Environmental filed the present action to collect the amounts due under the two promissory notes, along with a separate action alleging breach of contract on the salvage project. Moon acknowledged in his pleadings before the District Court that he executed the promissory notes, but asserted, among other things, that the amounts due on the notes had been paid from other sources, or in the alternative, that the notes were not enforceable for lack of consideration. Moon also filed a motion before the District Court requesting that this action be consolidated with Environmental's breach of contract claim. The District Court denied Moon's motion to consolidate.

¶ 9 Environmental filed a motion for summary judgment for the amounts of the promissory notes, along with supporting affidavits stating that both notes were in default. The District Court initially scheduled a hearing on the summary judgment motion for October 14, 1998, but subsequently moved the hearing back by one week due to a conflict in attorney schedules.

¶ 10 Moon filed a motion pursuant to Rule 55(f), M.R.Civ.P., seeking to have the summary judgment hearing further continued so that additional discovery could be performed. The District Court effectively denied this motion when it conducted the summary judgment hearing and granted summary judgment in favor of Environmental.

¶ 11 Moon appeals the denial of his motion to consolidate, the de facto denial of his motion to continue, and the grant of summary judgment in favor of Environmental. Environmental raises the additional issue of whether Moon's conduct during the mandatory mediation process of Rule 54, M.R.App.P., warrants the dismissal of Moon's appeal.

DISCUSSION

¶ 12 1. Is this appeal subject to dismissal for Moon's failure to comply with the mandatory mediation requirements of Rule 54, M.R.App.P.?

¶ 13 In its appellate brief, Environmental urges this Court to sanction Moon for his uncooperative behavior during the appellate mediation process mandated by Rule 54, M.R.App.P., by dismissing this appeal. In particular, Environmental argues that Rule 54(e)(3), M.R.App.P, requires the mediation conference to be held in person except where impractical due to time, distance or other considerations, and that Moon's failure to appear in person at the mediation conference constitutes grounds for sanctions under the Rule. As support for its request for sanctions, Environmental relies on a letter by the mediator in which Moon's participation in the mediation is summarized as follows:

At the appointed time for mediation, namely, 9:00 a.m., May 3, 1999, Mr. Moon did not appear. Mr. Frank Kolendick, on behalf of Respondent, did appear in person. Mr. Jeffs, counsel for Mr. Moon, did appear and indicated that Mr. Moon was unable to obtain a plane from Salt Lake City Sunday afternoon and evening or early Monday morning. He explained that he was on the waiting list for three planes on Sunday and one Monday morning but that he was not able to get on any of the airplanes. At my suggestion, we made phone contact with Mr. Moon and asked him to explain further. At that time, and in front of the other persons at the mediation, he indicated that he did not obtain a reservation in advance and made no effort to do so.

Notwithstanding his absence, at my request we made some effort to determine the position of the parties and to engage in some meaningful mediation with Mr. Moon participating by phone. The mediation was not successful.

¶ 14 Moon responds that his failure to personally attend the mediation conference did not violate Rule 54, because the Rule expressly provides that a party may participate in a mediation conference via a representative, provided that representative has full authority to engage in settlement negotiations. Although Moon was unable to attend the conference, his counsel, Mr. Jeffs, was in attendance and had full authority to negotiate on Moon's behalf. Moreover, Moon argues, Rule 54 makes no provision for the imposition of sanctions against a party who declines to participate in mediation.

¶ 15 Although Environmental is correct that under Rule 54(e)(3), M.R.App.P., in-person meetings are the preferred medium of communication for mediation conferences, this Rule addresses only the means by which the conference may be conducted, not who is required to attend. That requirement is addressed in Rule 54(e)(8), M.R.App.P., which expressly provides that "[e]ach party, or a representative of each party with authority to participate in settlement negotiations and effect a complete compromise of the case, shall be required to participate in the mediation conference." Based on the record before us, we hold that Moon's participation in the mediation process was within the bounds permitted by Rule 54, M.R.App.P., notwithstanding his failure to appear in person at the mediation conference.

¶ 16 Because we hold that Moon's conduct during the settlement negotiations did not violate the parameters of Rule 54, M.R.App.P., we decline at this time to address whether a party may be sanctioned under Rule 54 for failure to participate in mandatory alternative dispute resolution on appeal.

¶ 17 2. Did the District Court err when it ruled on the motion for summary judgment without allowing Moon the opportunity to conduct further discovery?

¶ 18 Moon contends that Environmental's motion for summary judgment was premature because of an inadequate opportunity to depose various persons or obtain documents which might demonstrate whether payment on the notes was made, and if so, in what manner.

¶ 19 Rule 56(f), M.R.Civ.P., provides that:

Should it appear from the affidavits of a party opposing the motion that the party cannot for reasons stated present by affidavit facts essential to justify the party's opposition, the court may refuse the application for judgment or may order a continuance to permit affidavits to be obtained or depositions to be taken or discovery to be had or may make such other order as is just.

District courts have inherent discretionary power to control discovery. J.L. v. Kienenberger (1993), 257 Mont. 113, 119, 848 P.2d 472, 476. This discretionary power extends to deciding whether to deny or to continue a motion for summary judgment pursuant to Rule 56(f), M.R.Civ.P. Howell v. Glacier General Assur. Co. (1989), 240 Mont. 383, 386, 785 P.2d 1018, 1019. A district court does not abuse its discretion in denying a Rule 56(f), M.R.Civ.P., motion where the party opposing a motion for summary judgment does not establish how the proposed discovery could preclude summary judgment. Howell, 240 Mont. at 386,785 P.2d at 1020.

¶ 20 In his Memorandum of Points and Authorities In Support of Defendant's Motion for Rule 56(f) Continuance, Moon listed the names of a number of persons whom he wished to depose prior to the summary judgment hearing. These depositions were necessary, Moon asserted, because "[e]ach of these parties have knowledge or information which are relevant to the allegations set forth by the Plaintiffs in the Complaint as well as the defenses and allegations set forth by the Defendant in his Answer and Counterclaim." Moon also submitted the affidavit of his counsel, in which counsel again states that the deposition of these persons is necessary in order for Moon to properly respond to Environmental's motion for summary judgment because these parties "have knowledge of the facts...