Plouffe v. DPHHS, 00-193.

Citation45 P.3d 10,2002 MT 64,309 Mont. 184
Decision Date02 April 2002
Docket NumberNo. 00-193.,00-193.
PartiesDouglas L. PLOUFFE and Roger F. Ereaux, Plaintiffs and Appellants, v. MONTANA DEPARTMENT OF PUBLIC HEALTH AND HUMAN SERVICES, Environmental Quality, and John Does 1 Through 20, Defendants and Respondents.
CourtUnited States State Supreme Court of Montana

James P. Molloy, Hunt & Molloy, Helena, Montana; Theodore K. Thompson, Havre, Montana, For Appellants.

Roger T. Witt, Ugrin, Alexander, Zadick & Higgins, Great Falls, Montana, For Respondents.

Justice JAMES C. NELSON delivered the Opinion of the Court.

¶ 1 Douglas L. Plouffe and Roger F. Ereaux appeal the dismissal by the Seventeenth Judicial District Court of their action for malicious prosecution regarding alleged violations of health and safety regulations at Sleeping Buffalo Hot Springs Resort by the Montana Department of Public Health and Human Services and Department of Environmental Quality. We remand for trial on the merits.

¶ 2 The two issues raised on appeal are:

¶ 3 1) Did the attorney representing Plouffe have authority to file a joint Notice of Appeal on behalf of Ereaux following judgment in the consolidated case?

¶ 4 2) Did the District Court err in dismissing the malicious prosecution claim of Plouffe and Ereaux as a matter of law?

PROCEDURAL BACKGROUND

¶ 5 Douglas L. Plouffe (Plouffe) became a major investor in the Sleeping Buffalo Hot Springs Resort (the Resort) in the late 1980s at the urging of shareholder and manager, Roger F. Ereaux (Ereaux). By 1992, Plouffe had purchased all stock of Sleeping Buffalo Management, Inc., and Ereaux remained involved as the Resort's on-site manager. The Resort, located near Saco, Montana, offers golf, dining, overnight accommodations and public bathing facilities supplied by a natural hot springs. The pools consist of an indoor spa, a large indoor pool, and two outdoor pools, one of which serves as a receiving pool for the water slides. Included among the Resort's facilities are a public water system and a sewerage collection, treatment and disposal system.

¶ 6 The Respondents (collectively referred to as "the State") include the Department of Public Health and Human Services (DPHHS), the Department of Environmental Quality (DEQ) and twenty unnamed defendants. Prior to a 1995 reorganization, the Montana Department of Health and Environmental Services (DHES) assumed the regulatory functions of the two named departments.

¶ 7 Numerous encounters between Plouffe, Ereaux and various State agency personnel occurred from 1989 to 1996 regarding compliance with health and safety regulations in the operation of the Resort. The civil proceedings underlying the malicious prosecution claim commenced with a Complaint against Sleeping Buffalo Management, Inc., filed by a DHES attorney on June 22, 1994. The Complaint alleged failure to submit all required drinking water samples to the State for bacteriological testing; inadequate safety measures, unlawful bacterial levels, low chlorine residuals and lack of water clarity in the swimming pools; and unpermitted discharge of water from the Resort's swimming pools and sewerage lagoon into "state waters." Prior to serving the Complaint, the State urged Plouffe and Ereaux to avoid litigation by signing a Consent Decree that detailed review and compliance procedures for the subsequent operation of the Resort. Over the next 16 months, the State presented three decrees for consideration. Each decree required Plouffe and Ereaux to admit to the allegations of the Complaint and stipulated penalties to be imposed by the State for future violations. The parties reached no agreement and the State served the Complaint in December 1995. On January 17, 1996, the Attorney General's office filed an Amended First Complaint, which added Plouffe and Ereaux, individually, as defendants.

¶ 8 By the Spring of 1996, Plouffe executed an agreement with Robert Flesche and a group of potential investors to assume management of the Resort, with a one-year option to purchase. In June 1997, one month after the option expired, Flesche signed a Corrective Action Agreement with the State, which purported to address the primary compliance issues raised in the First Amended Complaint. In July 1997, Plouffe and Ereaux resumed primary management of the Resort and the State reopened negotiations with a draft settlement agreement and proposed order for dismissal. Plouffe countered with an alternative agreement calling for the State to pay substantial damages to Sleeping Buffalo Management, Inc., for loss of business and business opportunities attributed to the State-instigated closure of the outdoor swimming pool in 1992 and the negative publicity surrounding the State's civil prosecution for alleged health and safety violations. The State rejected Plouffe's proposal. Plouffe and Ereaux objected to each of the State's proposed settlement agreements, Consent Decrees and corrective action plans because they required Plouffe and Ereaux to admit liability for past regulatory violations.

¶ 9 In August 1997, the State filed a motion for voluntary dismissal of the First Amended Complaint. Plouffe objected on the grounds that he wanted to disprove the allegations in court. The District Court dismissed the State's action without prejudice on September 17, 1997.

¶ 10 Thereafter, Plouffe and Ereaux brought separate actions in the District Court against the State. Following summary judgment on some of the theories of relief, the court consolidated the plaintiffs' claims for malicious prosecution. The joined cases proceeded to a jury trial in Phillips County on December 13, 1999. At the close of plaintiffs' evidence, the court granted the State's motion for judgment as a matter of law, from which Plouffe and Ereaux appeal.

STANDARD OF REVIEW

¶ 11 The standard of review on appeal from a judgment as a matter of law, pursuant to Rule 50(a), M.R.Civ.P., is to determine whether the nonmoving party could prevail upon any view of the evidence including the legitimate inferences to be drawn therefrom. Anderson v. Werner Enterprises, Inc. 1998 MT 333, ¶ 30, 292 Mont. 284, ¶ 30, 972 P.2d 806, ¶ 30 (citing Cameron v. Mercer, 1998 MT 134, ¶ 8, 289 Mont. 172,

¶ 8, 960 P.2d 302, ¶ 8). Courts will exercise great self-restraint in interfering with the constitutional right of trial by jury. Anderson, ¶ 30. Unless there is a complete absence of any credible evidence in support of the verdict, judgment as a matter of law is improper. Anderson, ¶ 30. In reviewing a motion for judgment as a matter of law, we adhere to the following well-established principles:

We consider only the evidence introduced by the party against whom the directed verdict is granted. If that evidence, when viewed in a light most favorable to the party, tends to establish the case made by the party's pleading, we will reverse the directed verdict. The test commonly used to determine if the evidence is legally sufficient to withdraw cases and issues from the jury is whether reasonable persons could draw different conclusions from the evidence.

Anderson, ¶ 30 (citing Riley v. American Honda Motor Co. (1993), 259 Mont. 128, 131, 856 P.2d 196, 198

).

DISCUSSION

Issue 1. Did the attorney representing Plouffe have authority to file a joint Notice of Appeal on behalf of Ereaux following judgment in the consolidated case?

¶ 12 The District Court consolidated the separate malicious prosecution actions filed by Ereaux and Plouffe against the State by court order, but separate counsel represented the parties at trial. The State contends that Ereaux's appeal is defective and must be dismissed because no notice of substitution of counsel was entered before trial counsel for Plouffe, Theodore K. Thompson (Thompson), signed and filed a joint Notice of Appeal on behalf of both appellants. Attorney James P. Molloy subsequently entered a Notice of Appearance on behalf of both Plouffe and Ereaux. The State maintains it is entitled to relief from the appeal by Ereaux because Thompson lacked authority to file the appeal. ¶ 13 Section 37-61-402, MCA, provides that a court, on the motion of either party, may require an attorney of the adverse party to produce and prove the authority under which he appears. The motion must be made at the earliest practicable time, otherwise the right may be deemed to have been waived. Missoula Belt Line Ry. Co. v. Smith (1920), 58 Mont. 432, 442, 193 P. 529, 531. Although an attorney is presumed to have authority until the contrary is shown, the presumption is not conclusive. Missoula Belt Line Ry. Co., 58 Mont. at 442, 193 P. at 531. The challenging party has the burden to make a good faith showing of reasonable cause to doubt an attorney's authority. Union Bank & Trust Co. of Helena v. Penwell (1935), 99 Mont. 255, 263, 42 P.2d 457, 461.

¶ 14 The State did not challenge Thompson's authority to act on behalf of Ereaux when it received the joint Notice of Appeal filed in the District Court on January 26, 2000. The State first raised the issue in its brief on appeal, but neither alleges nor offers evidence of reasonable cause to question Ereaux's authorization of Thompson to file the Notice of Appeal on his behalf. Without a good faith showing to overcome the presumption that Thompson acted with Ereaux's authority, we conclude the State's contention is neither compelling nor timely.

¶ 15 The joinder of appeals is set forth in Rule 4(b), M.R.App.P., which states in pertinent part:

If two or more persons are entitled to appeal from a judgment or order of a district court and their interests are such as to make joinder practicable, they may file a joint notice of appeal or may join in appeal after filing separate timely notices of appeal, and they may thereafter proceed on appeal as a single appellant.

The District Court concluded the interests of Plouffe and Ereaux, expressed in separate malicious prosecution suits against the same defendants, were appropriately...

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