White v. Lobdell

Decision Date01 March 1984
Docket NumberNo. 83-135,83-135
Citation41 St.Rep. 346,208 Mont. 295,678 P.2d 637
PartiesRoger WHITE and Karen White, Plaintiffs and Appellants, v. Frank LOBDELL and Kathryn Lobdell, Ponderosa Real Estate and Fidelity Real Estate, Defendants and Respondents.
CourtMontana Supreme Court

Datsopoulos, MacDonald & Lind, Christopher B. Swartley argued, Missoula, for plaintiffs and appellants.

Baldassin, Connell & Beers, William R. Baldassin, Missoula, argued for James and Robert Payne.

WEBER, Justice.

Plaintiffs Roger and Karen White appeal from the order of the Fourth Judicial District Court, Missoula County, denying their motion under Rule 21, M.R.Civ.P. to join Robert and James Payne as defendants. We reverse the order of the District Court.

The issues are:

1. Is an order denying a motion for joinder a final judgment or order which must be appealed within 30 days pursuant to Rule 5, M.R.App.Civ.P.?

2. Did the District Court err in denying plaintiff's motion to join defendants under Rule 21, M.R.Civ.P.?

3. Does the statute of limitations bar plaintiffs from pursuing this action against the Paynes?

4. Does res judicata or collateral estoppel preclude Paynes from denying liability?

In 1979, Roger and Karen White filed suit against Frank and Kathryn Lobdell, Robert and James Payne, Ponderosa Realty Company (Ponderosa) and Fidelity Real Estate (Fidelity). The Whites were purchasers and the Lobdells were sellers of real estate in Missoula, Montana. Ponderosa was the listing office from which Fidelity received the listing as a participant in the Missoula Multiple Listing Service. Robert Payne was the broker, officer and majority stockholder of Ponderosa. Robert's son James was a real estate salesman for the company.

On June 24, 1980, the Paynes were, according to the District Court, "dismissed with prejudice." The conversation that occurred between the Court and counsel regarding dismissal of the Paynes was as follows:

"THE COURT: Do the Defendants Lobdells and Payne have any objection?

"MR. MILODRAGOVICH: None, Your Honor. One question I have for purposes of clarity of the record, when the caption was originally established on this the Defendants were Robert and Jim Payne; I think since then it's been stipulated that Ponderosa Real Estate, which was the organization that they were working for, was the actual party in interest and that Paynes were taken out of it. I don't know what the status of that is as far as at the present time. I know we show it as Ponderosa Realty in the pretrial order.

"MR. SWARTLEY: For the record, Your Honor, the complaint was originally drawn reflecting Ponderosa Realty as a partnership or sole proprietorship; we later learned it was a corporation, and I believe still has corporate existence.

"MR. BALDASSIN: That is correct.

"MR. SWARTLEY: And if that is the case, then the individual Defendants Robert and James Payne were--as I am sure that the evidence will develop, were acting merely as either officers, agents, or employees of the corporation, and we would be willing to stipulate to that fact.

"THE COURT: Robert Payne and James Payne will be stricken as parties Defendant. It will be Frank Lobdell and Kathryn Lobdell, Ponderosa Realty Company and Fidelity Real Estate?

"MR. SWARTLEY: Correct.

"THE COURT: Very well." (emphasis added)

Following a recess, the subject was brought up again in chambers:

"MR. BALDASSIN: I have two requests. First one is, at an earlier conference in chambers the Defendants, Robert Payne and James Payne, were dismissed as parties Defendant; in discussing the matter with them, they were a little unsure as to the legal implications of that so I have asked counsel whether we could go on the record and formally stipulate that the Defendants, Robert Payne and James Payne, are hereafter dismissed or hereby dismissed with prejudice.

"MR. MILODRAGOVICH: We have no objection.

"MR. SWARTLEY: I will stipulate to that.

"THE COURT: Very well, the names of Robert and James Payne will be dismissed with prejudice."

Later, upon motion by Ponderosa, the District Court dismissed Ponderosa as a party defendant on the basis of our decision in State ex rel. City of Havre v. District Court (Mont.1980), 609 P.2d 275, 37 St.Rep. 552. In dismissing Ponderosa, the Court reasoned that Ponderosa's liability derived solely from the negligent acts of its agents, the Paynes; since the Paynes had been dismissed with prejudice, no basis remained for finding Ponderosa liable.

The jury found the Lobdells not liable but found Fidelity liable for fraud and negligence and awarded $10,255 in damages to the Whites. The jury found Fidelity 40% negligent and "other parties" 60% negligent.

On appeal we vacated the District Court's order dismissing Ponderosa and remanded the cause for retrial. White v. Lobdell (Mont.1982), 638 P.2d 1057, 39 St.Rep. 1. We affirmed the judgment as to the Lobdells. In holding that the District Court improperly applied City of Havre, we stated:

"What occurred here was not a substantive dismissal with prejudice of an agent or employee, but rather the substitution of a proper party before the court. The District Court simply struck the entity of a copartnership and inserted the entity of a corporation. If the corporation had not been added, the action might be subject to a motion for misjoinder, but Rule 21, M.R.Civ.P. provides that a misjoinder of the parties is not a ground for dismissal and that parties may be dropped or added by order of the court on motion of any party or of its own initiative at any stage of the action and on such terms as are just. The court in this case simply added a party, the corporation, and dropped a party, the alleged copartnership." 638 P.2d at 1060, 39 St.Rep. at 5-6.

We reversed that portion of the District Court's decision that "dismissed with prejudice" the Paynes and noted that because "the Paynes had earlier been eliminated from the cause as party defendants by an order of the court," they were "not before the court for dismissal with prejudice." 638 P.2d at 1060-61, 39 St.Rep. at 6. Thus, we found that City of Havre was inapplicable.

The action now before us concerns the District Court's refusal to join the Paynes as defendants in the second trial. On February 16, 1982, before the second trial, Whites filed a motion to join Paynes as defendants under Rule 21, M.R.Civ.P. After oral argument and submission of briefs, the District Court denied Whites' motion for joinder, based upon the purported dismissal with prejudice and the failure of Whites to object to that dismissal.

Ponderosa failed to appear at the second trial and the District Court found it liable to the Whites for constructive fraud. At that time, Ponderosa was insolvent and shortly thereafter dissolved. Damages were not assessed against Fidelity.

The Whites appeal the District Court's judgment, challenging denial of their motion to join the Paynes pursuant to Rule 21, M.R.Civ.P.


Respondent Ponderosa argues that an order denying a motion for joinder is a final judgment or order which must be appealed within 30 days pursuant to Rule 5, M.R.App.Civ.P. Because the Whites did not appeal the order denying joinder within 30 days, Ponderosa argues the Whites are barred from challenging the order. The District Court entered its order denying the motion for joinder on July 29, 1982. Appellants filed notice of appeal on February 7, 1983, after completion of the trial on January 24, 1983.

Rule 5, M.R.App.Civ.P. provides that a judgment or order must be appealed from within 30 days of entry of the judgment or order. Ponderosa argues that the denial of joinder was a final judgment from which appeal may have been taken because it was a final determination of the rights of the parties and the issues between them. We disagree.

Under Rule 54(b), M.R.Civ.P., interlocutory judgments involving multiple claims or parties must be certified as final judgments in order to be appealable. Benders v. Stratton (Mont.1982), 655 P.2d 989, 991, 39 St.Rep. 2389, 2391. Rule 54(b) provides:

"When multiple claims for relief or multiple parties are involved in an action, the court may direct the entry of a final judgment as to one or more but fewer than all of the claims or parties only upon an express determination that there is no just reason for delay and upon an express direction for the entry of judgment. In the absence of such determination and direction, any order or other form of decision, however designated, which adjudicates less than all the claims or the rights and liabilities of less than all the parties shall not terminate the action as to any of the claims or parties, and the order or other form of decision is subject to revision at any time before the entry of judgment adjudicating all the claims and the rights and liabilities of all the parties."

We considered Rule 54(b) in conjunction with Rule 5 in the recent case of Granite Ditch Co. v. Anderson (Mont.1983), 662 P.2d 1312, 40 St.Rep. 630. As here, respondents in Granite Ditch Co. argued that appellants' notice of appeal was not timely because the District Court's order constituted a final order which had to be appealed within 30 days. We rejected that argument and held that absent an express determination that there is no just reason for delay and absent certification as a final judgment, an order adjudicating the rights and liabilities of less than all the parties is not appealable. 662 P.2d at 1314, 40 St.Rep. at 632.

Here, the order denying joinder did not adjudicate the claims, rights or liabilities of all parties nor was the order certified as a final judgment. Thus, the order was not a final judgment requiring appeal within 30 days.

Further, the order denying joinder is not one specifically denominated as appealable under Rule 1, M.R.App.Civ.P. Orders are not appealable unless specifically denominated as such in Rule 1. Shields v. Pirkle Refrigerated Freight Lines, Inc. (1979), 181 Mont. 37, 42, 591...

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