Zempel v. Liberty
| Decision Date | 06 September 2006 |
| Docket Number | No. 04-595.,04-595. |
| Citation | 2006 MT 220,143 P.3d 123,333 Mont. 417 |
| Parties | Darwin Cloverton ZEMPEL, Plaintiff and Appellant, v. Lenora Linda LIBERTY, John Herak, and Tiny's Tavern of Charlo, Inc., Defendants and Respondents. |
| Court | Montana Supreme Court |
For Appellant: William L. Managhan, Managhan Law Firm, PLLC, Kalispell, Montana.
For Respondents: Kati G. Kintli, Browning, Kaleczyc, Berry & Hoven, P.C., Helena, Montana.
John Herek, pro se, Dixon, Montana.
¶ 1 Darwin Cloverton Zempel ("Zempel") appeals from the orders of the District Court of the Twentieth Judicial District, Lake County, which dismissed his negligence claim against Lenora Linda Liberty ("Liberty"), John Herak ("Herak"), and Tiny's Tavern of Charlo, Inc. ("TTC"). We affirm in part, reverse in part, and remand.
¶ 2 In this appeal, we address the issue of tribal jurisdiction over a suit to which a non-tribal member is a party. We receive this appeal pursuant to the District Court's decision to dismiss the suit on jurisdictional grounds. Thus, we must determine whether the court erred in this regard.
¶ 3 The Flathead Indian Reservation is located in northwestern Montana and is home to the Confederated Salish and Kootenai Tribes ("CSKT"). TTC, a Montana corporation, operates a bar in the town of Charlo, which is located within the exterior boundaries of the Reservation. TTC's sole shareholder, Liberty, is a tribal member.
¶ 4 Zempel, who is not a tribal member, spent the evening of July 4, 2003, at TTC. Although he was not yet twenty-one years old, he was repeatedly served alcoholic beverages by one or more bartenders. In the early morning hours of July 5, another patron, Brandy Jo Moore ("Moore"), attempted to drive Zempel home in a car registered to one Tina Zempel. Proceeding south on Montana State Highway 212, Moore lost control of the vehicle, causing it to roll at least twice. Zempel was seriously injured in the accident. Moore sustained fatal injuries and was pronounced dead at the scene.
¶ 5 In January of 2004, Zempel filed a negligence claim against Liberty, Herak, and TTC. The Complaint alleged that: (1) Liberty and Herak were the owners and operators of TTC; (2) TTC's bartenders served Zempel numerous alcoholic beverages even though they knew he was not of legal drinking age; (3) the bartenders continued to serve Zempel after he became visibly intoxicated; (4) Zempel eventually vomited and lost consciousness as a result of the alcohol; (5) Zempel was then placed in the passenger seat of his car; (6) TTC's bartenders continued to serve Moore after she became visibly intoxicated; (7) the bartenders drank alcoholic beverages that evening, while on duty, with Zempel and Moore; (8) the bartenders knew that Zempel was incapacitated, that Moore was intoxicated, and that Moore intended to drive Zempel home; and (9) the bartenders made no effort to stop Moore from attempting to drive Zempel home. Upon these allegations, inter alia, Zempel claimed that the Defendants had acted negligently and violated Montana statutory law.1
¶ 6 Liberty filed a Motion seeking dismissal of both herself and TTC. In doing so, Liberty acted on her own behalf and purported to act on behalf of TTC. With this Motion, Liberty argued that the District Court lacked jurisdiction to adjudicate the dispute because of her status as a CSKT member and TTC's status as an "Indian-owned business." In support of her arguments, she attached a certificate from the CSKT Enrollment Office, verifying her membership with the Tribe. She also attached a certificate, ostensibly issued by CSKT, which classified TTC as a "Certified Indian Preference Business" and identified Liberty as TTC's owner. The District Court dismissed Liberty, stating "this Court lacks jurisdiction over Plaintiff's complaint against a tribal member." The court declined to dismiss TTC, however, noting its status as a Montana corporation.
¶ 7 Herak also filed a pro se Motion to Dismiss wherein he argued that he was not properly named as a defendant. In support of this contention, Herak claimed that he had no ownership interest in TTC. The District Court denied this request without addressing Herak's argument.
¶ 8 Thereafter, Liberty took a novel approach; she filed a document on behalf of TTC which she identified as a "Response" to the court's Order declining to dismiss the corporation. She also filed another Motion to Dismiss on behalf of TTC. In doing so, Liberty maintained that TTC "is an Indian-owned business and is entitled to Tribal Jurisdiction." To support this contention, Liberty attached copies of a number of business documents, including, inter alia: (1) TTC's Articles of Incorporation, showing the business to have been formed pursuant to the Montana Business Corporation Act; (2) TTC's liquor license, issued by the State of Montana, permitting TTC to sell alcoholic beverages in accordance with Montana law; (3) TTC's gambling operator license, issued by the State of Montana, permitting TTC to operate nine video gaming machines; and (4) a tax assessment for the premises which TTC occupied, issued by the Lake County Treasurer, assessing both state and county taxes.
¶ 9 Herak also filed a "Response" to the court's denial of his Motion to Dismiss, as well as another Motion to Dismiss. Once again, Herak claimed that he had no ownership interest in TTC. While making the same argument which he had advanced in his first Motion to Dismiss, Herak also referred the court to the documents which Liberty filed with TTC's second Motion to Dismiss.
¶ 10 The District Court then entered an Order dismissing Herak and TTC and, consequently, dismissing Zempel's Complaint in its entirety. As for Herak's Motion, the Court stated: "Herak has no ownership interest in [TTC or its] liquor license and his motion to dismiss must be granted for the failure of Plaintiff's complaint to state a claim entitling Plaintiff to relief from said Defendant." As for TTC's Motion, the court concluded that it lacked jurisdiction over the corporation, stating: "Liberty is the sole owner and stockholder of said Defendant corporation and its State of Montana liquor license and, therefore, said corporation Defendant is an Indian owned business." Zempel then appealed to this Court.
¶ 11 When a party seeks dismissal of a suit based on the claim that jurisdiction properly lies in a tribal court, the trial judge must determine whether the complaint states facts which, if true, would vest the district court with subject matter jurisdiction. See General Constructors, Inc., v. Chewculator, Inc., 2001 MT 54, ¶¶ 13, 16, 304 Mont. 319, ¶¶ 13, 16, 21 P.3d 604, ¶¶ 13, 16 (citing Liberty Northwest Ins. Corp. v. State Compensation Ins. Fund, 1998 MT 169, ¶ 7, 289 Mont. 475, ¶ 7, 962 P.2d 1167, ¶ 7). A district court's determination that it lacks subject matter jurisdiction is a conclusion of law which we review to ascertain whether the court's interpretation of the law is correct. General Constructors, ¶ 16 (citing In re McGurran, 1999 MT 192, ¶ 7, 295 Mont. 357, ¶ 7, 983 P.2d 968, ¶ 7).
¶ 12 Before commencing our jurisdictional analysis we address Herak's dismissal and two issues regarding Liberty's status as an individual defendant in this suit.
¶ 13 Zempel purports to appeal from the District Court's Order dismissing Herak. However, Zempel has not properly raised Herak's dismissal as an issue in this appeal. As noted above, while the District Court dismissed TTC and Liberty on jurisdictional grounds, it dismissed Herak for a different reason — i.e., because he had no ownership interest in TTC. In his initial brief on appeal, Zempel only presents arguments challenging the District Court's conclusions regarding the issue of jurisdiction. Then, in his reply brief, Zempel presents a short argument challenging the District Court's decision to dismiss Herak. Essentially, Zempel seeks an opportunity to conduct discovery regarding Herak's ties to TTC. We will not address this argument because, as our well-settled precedent dictates, this Court does not consider issues raised for the first time in a reply brief. Pengra v. State, 2000 MT 291, ¶ 13, 302 Mont. 276, ¶ 13, 14 P.3d 499, ¶ 13 (citing Loney v. Milodragovich, Dale & Dye, P. C., 273 Mont. 506, 512, 905 P.2d 158, 162 (1995)). Accordingly, the District Court's dismissal of Herak is affirmed.
¶ 14 As for Liberty's status in this suit, the record does not reveal why Zempel named her, TTC's sole shareholder, as an individual defendant. "Under Montana law, it is well settled that a corporation has a separate and distinct identity from its stockholders." Moats Trucking Co., Inc. v. Gallatin Dairies, Inc., 231 Mont. 474, 477, 753 P.2d 883, 885 (1988) (citations omitted). As such, shareholders are not personally liable for the acts of a corporation, § 35-1-534(2), MCA, unless the distinction between the corporation and the shareholder may be disregarded — i.e., unless the "corporate veil" is pierced, Peschel Family Trust v. Colonna, 2003 MT 216, ¶¶ 21-42, 317 Mont. 127, ¶¶ 21-42, 75 P.3d 793, ¶¶ 21-42.
¶ 15 Zempel's Complaint does not allege any acts attributable to Liberty individually. Thus, it would seem that he may have sought to hold her accountable by piercing the corporate veil which separates Liberty from TTC for liability purposes. Yet, the Complaint does not allege any facts even remotely suggesting that TTC's corporate veil should be pierced in this case. Of course, the fact that Liberty is TTC's sole shareholder "is not, by itself, enough to warrant piercing the corporate veil." Meridian Minerals Co. v. Nicor Minerals, Inc., 228 Mont. 274, 285, 742 P.2d 456, 462 (1987) (citation omitted).
¶ 16 We recognize that plaintiffs are generally not obligated to name a particular cause of...
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