Wallace v. Hayes, No. DA 06-0572 (Mont. 8/14/2007)
| Decision Date | 14 August 2007 |
| Docket Number | No. DA 06-0572,DA 06-0572 |
| Parties | LEN WALLACE, Plaintiff and Appellant, v. NORMAN HAYES, MAGTRAC BOLUS PARTNERSHIP, LLC GERALD HILL, LUCILLE HILL, JACK HEYNEMAN, JOHN HEYNEMAN and RODNEY J. HAYES, Defendants, Respondents and Cross-Appellants. |
| Court | Montana Supreme Court |
Appeal from: District Court of the Thirteenth Judicial District, In and For the County of Yellowstone, Cause No. DV 01-0882, Honorable Gregory R. Todd, Presiding Judge.
For Appellant: Bruce F. Fain; Murphy, Kirkpatrick & Fain, Billings, Montana.
For Respondents: Christopher M. Brown; Darrah, Darrah & Brown, Powell, Wyoming (for MagTrac Bolus, LLC).
Tom Singer; Axilon Law Group, PLLC, Billings, Montana (for Norman J. Hayes and Rodney J. Hayes).
¶1 Pursuant to Section I, Paragraph 3(d)(v), Montana Supreme Court 1996 Internal Operating Rules, as amended in 2003, the following memorandum decision shall not be cited as precedent. It shall be filed as a public document with the Clerk of the Supreme Court and its case title, Supreme Court cause number and disposition shall be included in this Court's quarterly list of noncitable cases published in the Pacific Reporter and Montana Reports.
¶2 Appellant Len Wallace (Wallace) appeals from the District Court's order denying Wallace's motion under M. R. Civ. P. 60(b) for relief from judgment, striking a satisfaction of judgment entered by Wallace, enjoining further litigation in this matter, and appointing a receiver. We affirm the District Court's order.
¶3 The present controversy follows our decision in Wallace v. Hayes, 2005 MT 253, 329 Mont. 23, 124 P.3d 110, in which we affirmed a judgment of $2.5 million against Wallace. Wallace then filed satisfactions of judgment, ostensibly on behalf of MagTrac Bolus, LLC (LLC), to stop execution of the judgment. Wallace's action precipitated a flurry of motions and hearings in several states, including California, Montana, South Dakota, and Wyoming.
¶4 Wallace filed his original action in 2001 in District Court naming the LLC and its other members as defendants. The District Court directed the parties to arbitrate the dispute pursuant to the LLC's operating agreement and the arbitrator entered a $2.5 million judgment against Wallace. The District Court affirmed the judgment. Wallace appealed and requested a stay of execution. The District Court granted the stay on the condition that Wallace post a $3 million bond. Wallace failed to post the bond, however, and the District Court lifted the stay.
¶5 Norman Hayes (Hayes), a member of the LLC, retained counsel for the LLC in California. The LLC's California counsel perfected the judgment and proceeded to execute against Wallace's assets there. The LLC had recovered approximately $150,000 by January 2006. At that point, Wallace hired counsel admitted in Montana to appear for the LLC. Wallace's retained counsel file a satisfaction of judgment in the District Court. Wallace also managed to file a satisfaction of judgment in California to end efforts to execute the judgment there.
¶6 Hayes and the other Respondents then filed a motion in District Court to strike the satisfactions of judgment, to require Wallace's Wyoming counsel to prove his authority to represent the LLC, for injunctive relief against further litigation in this matter, and for the appointment of a receiver. Wallace moved to disqualify Montana counsel for Hayes and the other Respondents and argued that the District Court lacked jurisdiction over Hayes' motion to strike the satisfaction of judgment because Hayes had failed to file a separate action. Wallace filed a separate motion for relief from judgment under M. R. Civ. P 60(b).
¶7 The District Court held two hearings after full briefing. The first hearing addressed the issue of the court's jurisdiction to hear the present controversy. The second hearing reached the merits of the motions. No party requested an evidentiary hearing or an opportunity to present additional evidence. The District Court denied the motion to disqualify Hayes' counsel, denied Wallace's motion for relief from the judgment, determined that it had jurisdiction to strike the satisfaction of judgment, struck the satisfaction of judgment, enjoined the parties from pursuing other litigation, and it appointed a receiver to enforce the judgment. Wallace appealed. The LLC did not.
¶8 Wallace argues on appeal that the District Court abused its discretion in denying his motion under M. R. Civ. P. 60(b)(5) for relief from the judgment. Wallace contends the District Court discounted Wallace's right to act as the majority owner of the LLC in having the satisfaction of judgment filed. Wallace further contends that the District Court erred in refusing to relieve him of the monetary portion of the judgment because a decision of the Circuit Court in South Dakota effectively had reversed any determination that the LLC, owned, or had any rights, in what was known as the Linseth Patent. Wallace further contends that it would be inequitable to apply the judgment because the basis of the dispute, the basis of the accounting, and the basis for the conditional award, all hinged upon the LLC's ownership of the Linseth Patent.
¶9 Wallace next contends that the District Court abused its discretion in denying him relief from the judgment under the provisions of M. R. Civ. P. 60(b)(6). Wallace argues that Hayes prevented the full presentation of the cause, or an inaccurate determination on the merits, by concealing the existence of the South Dakota court proceedings regarding the ownership of the Linseth Patent until after the Montana arbitration proceedings had concluded. Wallace argues that the arbitrator failed to consider the Linseth Patent litigation in South Dakota and its proper consideration would have changed the outcome, thereby justifying Wallace receiving relief...
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