Farmers Union Mut. Ins. Co. v. Bodell

• Decision Date: 29 October 2008
• Docket Number: No. DA 08-0326.,DA 08-0326.
• Citation: 197 P.3d 913,346 Mont. 414,2008 MT 363
• Parties: FARMERS UNION MUTUAL INSURANCE COMPANY, Plaintiff and Appellant, v. Brian L. BODELL, Sweetwater Ranch Company, and Kami L. Johnston, Personal Representative of the Estate of Luke S. Johnston, Defendants and Appellees.
• Court: Montana Supreme Court

197 P.3d 913

2008 MT 363

346 Mont. 414

FARMERS UNION MUTUAL INSURANCE COMPANY, Plaintiff and Appellant, v. Brian L. BODELL, Sweetwater Ranch Company, and Kami L. Johnston, Personal Representative of the Estate of Luke S. Johnston, Defendants and Appellees.

No. DA 08-0326.

Supreme Court of Montana.

October 29, 2008.

Rehearing Denied December 10, 2008.

OPINION AND ORDER

¶ 1 On August 6, 2008, Appellees Brian L. Bodell and Kami L. Johnston, personal representative of the Estate of Luke S. Johnston (the Estate), filed a Motion to Dismiss Appeal in the above captioned matter arguing that the appeal is untimely and seeks to appeal an interlocutory order. Appellees also represented that Sweetwater Ranch Company (Sweetwater) consented to the motion. On August 18, 2008, Farmers Union Mutual Insurance Company (Farmers) filed its response objecting to the motion.

¶ 2 Because the parties raised questions of first impression in Montana in their motion and subsequent response, we ordered them to prepare, file and serve simultaneous briefs addressing the following questions:

¶ 3 1. Is an order dismissing an action without prejudice a final, appealable order or is it interlocutory, and therefore not appealable?

¶ 4 2. If an order dismissing an action without prejudice is interlocutory, may it, nonetheless, be the subject of a motion under M.R. Civ. P. 60(b)?

Factual and Procedural Background

¶ 5 On December 24, 2004, Bodell and Luke Johnston were involved in a single-vehicle accident in Meagher County which resulted in Johnston's death. Bodell was driving the vehicle in which Johnston was a passenger. On November 14, 2006, the Estate filed a wrongful death and survivorship action against Bodell in the District Court for the Fourteenth Judicial District, Meagher County (Cause No. DV 06-22) alleging that Bodell negligently caused Johnston's death. The damages allegedly caused by Johnston's death greatly exceeded the limits of Bodell's auto liability policy.

¶ 6 Bodell filed suit in Meagher County District Court (Cause No. DV 06-23) on November 16, 2006, against his insurance agent, Art Hoffart; Hoffart's company, the Bissell Agency (Bissell); and Farmers, asserting that Hoffart agreed to procure from Farmers an umbrella policy over and above Bodell's farm, ranch and auto policies, but that Hoffart failed to do so and misled Bodell in the process. Bodell contended that this failure left him exposed to the very large damages inherent in the wrongful death action. Bodell sought, in part, indemnification for Hoffart's failure to procure proper insurance. Venue in this action was subsequently changed to the District Court for the Eighteenth Judicial District, Gallatin County (Cause No. DV-07-769-22) on October 31, 2007, since Hoffart resides in and does business in Gallatin County.

¶ 7 Farmers defended this action on the basis that there is no coverage. Bodell was the named insured under a Farmers' Farm Liability Insurance Policy with a general aggregate limit for bodily injury and property damage of $2,000,000. In addition, Sweetwater, which Bodell either worked for or owned a part of, was the named insured under a Farmers' Farm Liability Insurance Policy with a general aggregate limit for bodily injury and property damage also of $2,000,000. Farmers claimed that both policies specifically exclude coverage for "bodily injuries caused by the use, ownership, entrustment or maintenance of a motor vehicle." Thus, Farmers contends it has no duty to defend or indemnify such claims.

¶ 8 Bodell and the Estate eventually reached a settlement agreement in the wrongful death action, Cause No. DV 06-22. As part of the agreement, Bodell assigned to the Estate his claims against Hoffart, Bissell and Farmers in Cause No. DV-07-769-22. Consequently, the Estate moved for and was granted leave to intervene in that case.

¶ 9 Although the action in Gallatin County is still pending, Farmers filed a complaint in Meagher County District Court (Cause No. DV 08-01) on January 22, 2008, seeking a declaratory judgment that there is no liability coverage for motor vehicle accidents under Bodell's policies with Farmers. Both Bodell and the Estate moved the District Court for an order dismissing this action pursuant to M.R. Civ. P. 12(b), or, in the alternative, for an order changing venue to Gallatin County where the related action is pending. They contend that Farmers is engaging in piecemeal litigation and that its declaratory judgment action clearly arises from the same transactions and issues which are pending in Gallatin County, thus the outcome of these actions could result in conflicting decisions. They also contend that Farmers should have raised this as a compulsory counterclaim in the Gallatin County action. Because Sweetwater did not appear or otherwise defend in this action, default was entered against it on March 31, 2008.

¶ 10 The Meagher County District Court dismissed Cause No. DV 08-01 without prejudice on April 3, 2008, on the basis that the factual and legal issues in this cause were already pending in the Gallatin County action. Thereafter, Farmers moved the court for relief from the order of dismissal pursuant to M.R. Civ. P. 60. The District Court did not rule on Farmers' motion within 60 days, thus it was deemed denied pursuant to M.R. Civ. P. 60(c).

¶ 11 On July 15, 2008, Farmers filed its Notice of Appeal wherein it appealed to this Court the Meagher County District Court's denial of its Rule 60 motion as well as that court's Order of Dismissal. Bodell and the Estate moved to dismiss the appeal on the bases that it is untimely and it seeks to appeal an interlocutory order in violation of M.R.App. P. 6.

¶ 12 Because the parties raised issues of first impression in Montana, we ordered them to provide supplemental briefing on those issues. The parties having now filed their supplemental briefs, we decide the issues presented as follows.

Issue 1.

¶ 13 Is an order dismissing an action without prejudice a final, appealable order or is it interlocutory, and therefore not appealable?

¶ 14 Appellees argue that the District Court's Order of Dismissal Without Prejudice in this case is not a final order and, therefore, not appealable because: (1) it does not determine the rights of the parties or the merits of the litigation; (2) it does not prevent Farmers from litigating the issue in Montana state courts; and (3) it does not prevent Farmers from transferring venue back to Meagher County. Farmers concedes that absent special circumstances which would prevent refiling the action, such as a statute of limitations issue, an order dismissing an action without prejudice is interlocutory and, therefore, not appealable.

¶ 15 M.R.App. P. 6(1) permits an appeal from a final judgment and from those final orders specified in M.R.App. P. 6(2), (3) and (4). Subsection (3) defines the final orders appealable in civil cases and it does not include an order dismissing an action without prejudice. M.R.App. P. 6(3). Moreover, M.R.App. P. 6(5)f. provides that an aggrieved party may not appeal from an "interlocutory judgment."

¶ 16 A final judgment "conclusively determines the rights of the parties and settles all claims in controversy in an action or proceeding, including any necessary determination of the amount of costs and attorney fees awarded or sanction imposed." M.R.App. P. 4(1)a. An interlocutory judgment "is an order or decree that determines a preliminary or subordinate question or issue and which enables the court to render a final judgment but does not finally decide the cause." M.R.App. P. 4(1)b.

¶ 17 Although this Court has not decided this issue directly, numerous other jurisdictions have held that, absent special circumstances, an order of dismissal without prejudice is not a final order, and thus, not appealable. See e.g. White v. Altru Health System, 746 N.W.2d 173 (N.D.2008) ("a dismissal without prejudice ... is ordinarily `not appealable because either side may commence another action.' ... However, `dismissal without prejudice may be final and appealable if it has the practical effect of terminating the litigation in the plaintiff's chosen forum'" such as when a statute of limitations has run.); Solberg v. Graven, 174 S.W.3d 695 (Mo.App.S.Dist. 2005) ("The general rule is that a dismissal without prejudice is not a final judgment and, therefore, is not appealable."); Cole v. Hoogendoorn, Talbot, Davids, 325 Ill. App.3d 1152, 259 Ill.Dec. 630, 759 N.E.2d 110 (1st Dist.2001) ("Normally an order striking or dismissing a complaint is not final and therefore not appealable unless its language indicates the litigation is terminated and the plaintiff will not be permitted to replead."); Golden Lodge No. 13, I.O.O.F. v. Easley, 916 P.2d 666 (Colo.App. 1996) ("The dismissal of a complaint without prejudice is generally not appealable unless such dismissal prohibits further proceedings, such as when the applicable statute of limitations would prevent the reinstitution of suit."); Howerton v. Grace Hosp., Inc., 124 N.C.App. 199, 476 S.E.2d 440 (1996) ("An order or judgment is interlocutory if it is made during the pendency of an action and does not dispose of the case but requires further action by the trial court in order to finally determine the entire controversy.... There is generally no right to appeal an interlocutory order.... The purpose of this rule is `to prevent fragmentary, premature and unnecessary appeals by permitting the trial court to bring the case to final judgment before it is presented to the appellate courts.'"); Phillips v. John Jochem Chevrolet, 379 So.2d 1042 (Fla. 4th Dist.App.1980) (holding that dismissal without prejudice for failure to prove jurisdictional amount was not a final judgment, thus court had no jurisdiction to entertain the appeal).

¶ 18 We find these decisions to be persuasive and in keeping with our own statutory scheme and Rules of Appellate Procedure. We agree with our sister...