Sinclair v. Big Bud Mfg. Co.

• Decision Date: 14 December 1993
• Docket Number: No. 93-275,93-275
• Parties: Daniel G. SINCLAIR, Plaintiff and Appellant, and Cross-Respondent, v. BIG BUD MANUFACTURING COMPANY, Big Bud Industries, Inc., the Meissner Brothers Partnership, Meissner Tractors, Inc., Joe Meissner, Paul Meissner, Big Bud Tractors, Inc., and Ron Harmon, individually, Defendants, Respondents and Cross-Appellants.
• Court: Montana Supreme Court

Page 264

865 P.2d 264

262 Mont. 363

Daniel G. SINCLAIR, Plaintiff and Appellant, and Cross-Respondent, v. BIG BUD MANUFACTURING COMPANY, Big Bud Industries, Inc., the

Meissner Brothers Partnership, Meissner Tractors, Inc., Joe

Meissner, Paul Meissner, Big Bud Tractors, Inc., and Ron

Harmon, individually, Defendants, Respondents and Cross-Appellants.

No. 93-275.

Supreme Court of Montana.

Submitted on Briefs Oct. 5, 1993.

Decided Dec. 14, 1993.

Elizabeth A. Best, Best Law Offices, Great Falls, for appellant.

L.D. Nybo and Evan Danno, Conklin, Nybo, LeVeque & Murphy, George N. McCabe, Jardine, Stephenson, Blewett & Weaver, Great Falls, for Big Bud Industries, et al.

GRAY, Justice.

This case involves the application of Rule 41(e), M.R.Civ.P., which provides that an action shall not be further prosecuted unless summons is issued within one year of its commencement. We reverse the District Court's refusal to grant a motion to dismiss filed by Big Bud Industries, Inc., Meissner Brothers Partnership, Meissner Tractors, Inc., Joe Meissner, Paul Meissner, Big Bud Tractors, Inc., and Ron Harmon (collectively referred to as the non-BBMC defendants), holding that they were entitled to dismissal under Rule 41(e), M.R.Civ.P.

Daniel Sinclair (Sinclair) formed the first of many employment relationships with the various defendants in 1979. In that year, Ron Harmon, the owner of Big Bud Tractors, Inc. (BBTI), hired Sinclair as marketing manager and vice president. The corporation manufactured tractors in Havre, Montana.

In 1985, Joe and Paul Meissner, operating as Meissner Brothers Partnership, purchased the assets of BBTI. Meissner Brothers Partnership was subsequently incorporated as Meissner Tractors, Inc. (MTI). MTI hired Sinclair as vice president of operations in 1985. In 1986, MTI transferred its manufacturing operations to Big Bud Manufacturing, Inc. (later renamed Big Bud Industries, Inc.), but retained its sales and service activities. Sinclair subsequently became vice president of operations and marketing for Big Bud Manufacturing, Inc.

In 1986 and 1987, MTI initiated negotiations with the Chippewa-Cree Tribe of the Rocky Boy's Reservation and the Assiniboine-Gros Ventre Tribes of the Fort Belknap Reservation to form a joint partnership. The negotiations resulted in the incorporation of Big Bud Manufacturing Company (BBMC) in 1988. MTI owned one-third of the newly-formed corporation and elected John and Paul Meissner and Ron Harmon to serve on its board.

In June of 1989, Sinclair accepted employment with BBMC as vice president and general manager. He reported to John Jollie (Jollie), BBMC's president and chief executive officer. The two men disagreed about the management of the corporation and, on March 15, 1990, Jollie fired Sinclair.

On May 31, 1990, Sinclair filed a wrongful discharge action against BBMC. Discovery was marred by BBMC's dilatory tactics and the District Court levied sanctions accordingly. BBMC subsequently became insolvent and, in April of 1991, its shareholders voted to liquidate the corporation.

Sinclair filed an amended complaint in January of 1992. He joined the non-BBMC defendants, asserting that they were liable for his wrongful discharge under theories of "piercing the corporate veil." He also asserted claims of actual fraud, tortious interference with contract, misrepresentation, and race and age discrimination.

In February of 1992, the non-BBMC defendants moved for dismissal, asserting that Sinclair had failed to have summonses issued within one year of the commencement of the action as required by Rule 41(e), M.R.Civ.P. On that basis, the non-BBMC defendants argued that they were entitled to dismissal under Rule 12(b) for lack of jurisdiction, insufficiency of process and insufficiency of service of process. The District Court denied the motion. The non-BBMC defendants then answered Sinclair's complaint.

In March of 1993, the District Court granted summary judgment in favor of the non-BBMC defendants. It determined that Sinclair had failed to present sufficient evidence on any of his claims to withstand summary adjudication.

Sinclair appeals from the grant of summary judgment dismissing his claims, asserting that genuine issues of material fact exist. The non-BBMC defendants cross-appeal, challenging the court's refusal to dismiss the claims under Rule 41(e), M.R.Civ.P. Because the cross-appeal issue relating to Rule 41(e), M.R.Civ.P., is dispositive, we focus on the application of that rule.

The District Court declined to dismiss the non-BBMC defendants, concluding that the last sentence of Rule 41(e), M.R.Civ.P., gave it the discretion to allow an action to proceed against defendants who appeared within three years. Our standard in reviewing a district court's conclusion of law is to determine whether the interpretation of law is correct. Steer, Inc. v. Dep't of Revenue (1990), 245 Mont. 470, 474-5, 803 P.2d 601, 603.

Rule 41(e), M.R.Civ.P., provides as follows:

Failure to serve summons. No action heretofore or hereafter commenced shall be further prosecuted as to any defendant who has not appeared in the action or been served in the action as herein provided within 3 years after the action has been commenced, and no further proceedings shall be had therein, and all actions heretofore or hereafter commenced shall be dismissed by the court in which the same shall have been commenced, on its own motion, or on the motion of any party interested therein, whether named in the complaint as a party or not, unless summons shall have been issued within 1 year, or unless summons issued within one year shall have been served and filed with the clerk of the court within 3 years after the commencement of said action, or unless appearance has been made by the defendant or defendants therein within said 3 years. When more than one defendant has been named in an action, the action may within the discretion of the trial court be further prosecuted against any defendant who has appeared within 3 years, or upon whom summons which has been issued within 1 year has been served and filed with the clerk within 3 years as herein required. [Emphasis added.]

The purpose of Rule 41(e), M.R.Civ.P., is to ensure that actions are timely prosecuted. Livingston v. Treasure County (1989), 239 Mont. 511, 513, 781 P.2d 1129, 1130.

Rule 41(e), M.R.Civ.P., does not afford the District Court discretion to allow the further prosecution of Sinclair's action against the non-BBMC defendants. Phrased in mandatory language, the rule requires dismissal of an action where summons is not issued within one year of the commencement of the action. Indeed, we have previously stated that the failure to issue summons within that time frame entitles a defendant to dismissal. Sooy v. Petrolane Steel Gas, Inc. (1985), 218 Mont. 418, 424, 708 P.2d 1014, 1018.

In the case before us, Sinclair filed his original complaint against BBMC on May 31, 1990. The summonses naming the non-BBMC defendants as parties were not issued until January 22, 1992, after the amended complaint was filed. Thus, they were not issued within one year of the commencement of the action as required by Rule 41(e), M.R.Civ.P., entitling the non-BBMC defendants to dismissal of the claims against them.

Notwithstanding the failure to issue the summonses timely, the District Court determined that it could allow the action to proceed because the non-BBMC defendants had made an appearance. It is true that...