09/28/2021
DA 20-0611
Case Number: DA 20-0611
IN THE SUPREME COURT OF THE STATE OF MONTANA
2021 MT 252N
TERRY WALLACE,
Plaintiff and Appellant,
v.
LAW OFFICES OF BRUCE M. SPENCER, PLLC,
LPH, INC., a Montana Corporation, GEISZLER
STEELE, PC, and John Does 1-5,
Defendants and Appellees.
APPEAL FROM: District Court of the First Judicial District,
In and For the County of Lewis and Clark, Cause No. ADV 2020-245
Honorable Mike Menahan, Presiding Judge
COUNSEL OF RECORD:
For Appellant:
Terry A. Wallace, Self-represented, Missoula, Montana
For Appellees:
Mikel L. Moore, Moore, Cockrell, Goicoechea & Johnson, P.C., Kalispell,
Montana (for Law Office of Bruce M. Spencer, PLLC)
Jon A. Wilson, Brown Law Firm, P.C., Billings, Montana (for LPH, Inc.)
David J. Steele, II, Timothy D. Geiszler, Geiszler Steele, PC, Missoula,
Montana (for Geiszler Steele, PC)
Submitted on Briefs: August 11, 2021
Decided: September 28, 2021
Filed:
c ir-641.—if
__________________________________________
Clerk
Justice Jim Rice delivered the Opinion of the Court.
¶1 Pursuant to Section I, Paragraph 3(c), Montana Supreme Court Internal Operating
Rules, this case is decided by memorandum opinion and shall not be cited and does not
serve as precedent. Its case title, cause number, and disposition shall be included in this
Court’s quarterly list of non-citable cases published in the Pacific Reporter and Montana
Reports.
¶2 Terry Wallace (Wallace) appeals the order entered by the First Judicial District
Court, granting summary judgment on Wallace’s claims in favor of Law Offices of Bruce
M. Spencer, PLLC, LPH, Inc., and Geiszler Steele, PC (Appellees), and granting
Appellees’ joint motion to declare Wallace a vexatious litigant. We affirm.
¶3 Discovery Dental Group (DDG) contracted with LPH, Inc., a debt collection
agency, to collect an unpaid $1,112.13 bill from Karrie Serrania, who had signed a contract
as responsible party for dental services rendered by DDG to Serrania, her then-husband,
and her son. Serrania did not pay the debt, and LPH brought action in Justice Court. But
after Wallace became Serrania’s counsel and filed counterclaims that exceeded the Justice
Court’s jurisdiction, Serrania initiated suit against DDG and LPH in the District Court.
Serrania asserted violations of the Fair Debt Collection Practices Act (FDCPA) and the
Montana Consumer Protection Act and sought damages of approximately $650,000. The
District Court granted summary judgment to DDG and LPH; and in January 2014, after
concluding Serrania and Wallace had violated M. R. Civ. P. 11 by their vexatious actions,
ultimately imposed sanctions in the amount of $42,113.32 to be paid to LPH and
$32,647.94 to be paid to DDG. The court also sanctioned Wallace an additional $1,000
2
each to counsel for LPH and DDG for failing to appear at a scheduled hearing and $10,000
for “his blatant lack of candor and his disrespectful conduct toward the Court and the legal
process and his egregious abuses of the legal rights of the Defendants.” Serrania v. LPH,
Inc., 2015 MT 113, ¶ 10, 379 Mont. 17, 347 P.3d 1237 (Serrania I). Serrania filed for
bankruptcy and discharged her debts. Serrania I, ¶ 11. On appeal, we affirmed the
summary judgment and determined that the District Court did not abuse its discretion by
imposing the $1,000 and $10,000 sanctions. Serrania I, ¶¶ 32, 36. After determining
Serrania’s FDCPA claim “had some grounding in the law—albeit not enough to withstand
summary judgment”—i.e., it was not entirely frivolous, Serrania I, ¶ 37, we remanded the
other sanctions to be recalculated without regard to the filing of the FDCPA claim.
Serrania I, ¶ 38. On remand, the District Court withdrew the $10,000 sanction against
Wallace and ordered him to pay LPH $30,847.68 for fees unrelated to the FDCPA claim,
a decision which we affirmed on appeal. Serrania v. LPH, Inc., No. DA 17-0221, 2018
MT 3N, ¶¶ 4, 6, 2018 Mont. LEXIS 2. (Serrania II).
¶4 On October 30, 2018, following a complaint filed by the Office of Disciplinary
Counsel and a hearing before the Commission on Practice (COP), this Court issued an
Order of Discipline, affirming the COP’s Findings of Fact and Conclusions of Law, and
adopting its Recommendation to suspend Wallace from the practice of law for seven
months, with readmittance subject to reapplication. See In the Matter of Terry A. Wallace,
PR 17-0245, Order of Discipline (Mont. Oct. 30, 2018). We noted therein that “[t]he
records related to this proceeding are replete with incidents of professional misconduct” by
Wallace.
3
¶5 In November 2018, Wallace filed a complaint in the United States District Court for
the District of Montana, naming as defendants the State of Montana, District Judges Ed
McLean and Leslie Halligan, who presided over the respective Serrania I and II trial
proceedings, and the Justices of this Court. See Wallace v. Montana, No. CV-18-103 RJB,
2019 LEXIS 60606 (D. Mont. Apr. 8, 2019). In April 2019, Wallace’s case was dismissed
for failure to state a claim for which relief can be granted, pursuant to Rule 12(b)(6) of the
Federal Rules of Civil Procedure. Wallace, 2019 LEXIS 60606, at *15.1
¶6 Following the entry of judgment against Wallace for the sanctions we affirmed in
Serrania II, LPH retained attorney Bruce Spencer to collect it. Spencer obtained issuance
of a writ of execution, but was unable to locate Wallace or his assets, despite searching
credit records, postal records, and Motor Vehicle Division records. The address given by
Wallace to the U.S. Post Office belonged to the First Presbyterian Church of Missoula.
Spencer had a subpoena issued for Wallace, which was returned after the process server
was unable to locate him. Ultimately, Spencer served two subpoena duces tecum upon
Dr. Sam Wallace, son of Wallace, seeking to depose Dr. Wallace regarding the location of
his father and his father’s assets. The first deposition was cancelled after Wallace
communicated to Spencer that the subpoena lacked language required under M. R. Civ. P.
45. Spencer corrected the language and served a second subpoena for a deposition, which
1
During the pendency of this matter, Wallace moved to disqualify this Court en banc, citing this
federal litigation and many other grounds, including “widespread unethical conduct by this court.”
Appellant’s Consolidated Motions, 2, May 24, 2021, DA 20-0611. We denied the motion in what
Wallace describes as “a snarky little order.” Appellant’s Reply and Oral Arg. Demand, 2, July 7,
2021, DA 20-0611.
4
had to be cancelled by Spencer because of an unrelated emergency. The first deposition
had been designated to occur at a hotel in Missoula, while the second was scheduled for a
conference room at the Missoula office of Geiszler Steele, PC.2 At this time, Spencer
advised Wallace and his son that if Wallace would accept service of the writ, the need to
subpoena Dr. Wallace could be avoided. Wallace declined and, after the deposition
subpoenas were again served on his son, Wallace filed this lawsuit, alleging claims against
LPH, Spencer, and Geiszler Steele, PC for abuse of process, intentional infliction of
emotional distress (IIED), and civil conspiracy.
¶7 Appellees filed motions for summary judgment and also filed a joint motion
requesting an order declaring Wallace to be a vexatious litigant, requiring anything he
sought to file be pre-approved by the District Court. In an October 20, 2020 Order,
discussed further below, the District Court granted Appellees’ motions for summary
judgment and their joint motion declaring Wallace to be a vexatious litigant. Wallace
appeals, challenging the entry of summary judgment on his claims and the entry of the
Order declaring him to be a vexatious litigant.
¶8 We review a district court’s grant of summary judgment de novo, applying the same
M. R. Civ. P. 56 criteria as applied by the lower court. Serrania I, ¶ 12. Summary judgment
is appropriate if the movant successfully carries the burden to establish that there is no
2
David J. Steele II had previously represented LPH through the completion of the Serrania
proceedings, but as the District Court noted, “[a]llowing Spencer to use a Geiszler Steele, PC
conference room for a deposition appears to be the only connection Geiszler Steele, PC has to the
events of this case.”
5
genuine issue of material fact and that the movant is entitled to judgment as a matter of law
as confirmed by a review of “the pleadings, the discovery and disclosure materials on file,
and any affidavits[.]” M. R. Civ. P. 56(c)(3). If the movant satisfies the burden, the burden
shifts to the nonmovant, who is tasked with setting forth particularized facts—not merely
“rely[ing] upon their pleadings, nor upon speculative, fanciful, or conclusory
statements”—in opposition of summary judgment. Thomas v. Hale, 246 Mont. 64, 67, 802
P.2d 1255, 1257 (1990) (citation omitted).
¶9 “Essential to proof of [the claim of] abuse of process is (1) an ulterior purpose and
(2) a willful act in the use of the process not proper in the regular conduct of the
proceeding.” Hughes v. Lynch, 2007 MT 177, ¶ 21, 338 Mont. 214, 164 P.3d 913 (quoting
Brault v. Smith, 209 Mont. 21, 28, 679 P.2d 236, 240 (1984)) (internal quotation omitted).
“‘Some definite act or threat not authorized by the process, or aimed at an object not
legitimate in the use of the process, is required; and there is no liability where the defendant
has done nothing more than carry out the process to its authorized conclusion, even though
with bad intentions.’” Hughes, ¶ 21 (quoting Prosser, The Law of Torts § 121, at 857 (4th
ed., West 1971)). Wallace contends that summary judgment is improper because there
exist genuine issues of material fact regarding whether Spencer’s efforts to collect the
judgment were undertaken with an “ulterior motive” and “not in the regular conduct of”
proceedings in aid of execution of the judgment, arguing “[w]hat we have here is Spencer
and Steele, who, because of their over the top animosity towards Wallace, are doing
everything they can to get their ad hominem claims about Wallace before the court, and
6
who, without a writ of execution, tried to illegally subpoena Wallace’s son in direct
violations of the law.”
¶10 From the undisputed facts, the District Court determined that the Appellees “did not
abuse process” when they “lawfully sought to depose [Wallace’s son] regarding his father’s
whereabouts and assets,” noting this procedure was authorized under a plain reading of
M. R. Civ. P. 69. The court noted that none of Wallace’s accusations rose “to a level
beyond mere speculation that Spencer or LPH has done anything beyond carrying out the
process of collecting a judgment to its authorized conclusion,” or that Appellees “sought a
‘collateral advantage’ by filing the subpoenas,” or “sought to threaten or coerce Wallace
into any act by filing the subpoenas.” The District Court reasoned that Spencer’s “simple
(and accurate) statement that Wallace’s consenting to service would obviate the need to
depose [his son]” could not be inferred to be coercion.
¶11 It is clear from Wallace’s briefs that it is not abuse of process to which Wallace
objects, but simply “the process” legally proscribed for executions of judgments. An
execution of judgment is a civil proceeding governed both by statute and the Montana
Rules of Civil Procedure. See § 25-14-101, et seq., MCA. Rule 69 provides that, to aid in
execution or collection of a judgment, a judgment creditor “may examine any person,
including the judgment debtor, in the manner provided in these rules for taking
depositions.” M. R. Civ. P. 69 (emphasis added). We note, in answer to another of
Wallace’s arguments, that these provisions do not limit the place of depositions to a
courtroom or before a judge or referee. Section 25-14-105, MCA; see also M. R. Civ. P.
30.
7
¶12 Even if Appellees were operating under a personal vendetta against Wallace or with
ulterior purposes, there can be no liability absent “[s]ome definite act or threat not
authorized by the process, or aimed at an object not legitimate in the use of the process[.]”
Hughes, ¶ 21. Appellees’ personal attitudes toward Wallace are of no consequence here
as service of process upon Wallace and his son is not outside of the execution process
provided by statute and the Rules. Nor is it consequential here that Spencer may have
made the mistake of serving a subpoena after the writ of execution had expired. Such an
error could have been lawfully repaired, and, regardless of the truth of this allegation, the
notion that Spencer improperly leveraged or coerced Wallace by deposing his son is
unsupported speculation. Wallace failed to raise genuine issues of material fact that rose
beyond fanciful speculation. “Evidence sufficient to raise a genuine issue of material fact
‘must be in proper form and conclusions of law will not suffice; the proffered evidence
must be material and of a substantial nature, not fanciful, frivolous, gauzy or merely
suspicious.’” Moore v. Goran, LLC, 2017 MT 208, ¶ 24, 388 Mont. 340, 400 P.3d 729
(internal citation omitted).
¶13 The District Court further reasoned that, “because Wallace’s claims for [IIED], civil
conspiracy, and punitive damages are premised on the abuse of process claims, those
claims also fail,” noting “it is axiomatic that civil conspiracy requires an underlying bad
act.” See, e.g., Hughes v. Pullman, 2001 MT 216, ¶ 26, 306 Mont. 420, 36 P.3d 339.
Regarding IIED, an “actor is never liable [where] he has done no more than to insist upon
his legal rights in a permissible way, even though he is well aware that such insistence is
certain to cause emotional distress.” Judd v. Burlington Northern & Santa Fe Ry., 2008
8
MT 181, ¶ 30, 343 Mont. 416, 186 P.3d 214 (citation and quotation omitted). Spencer was
exercising his client’s rights as judgment collector and acting within the applicable statutes.
Therefore, as a matter of law, there can be no cause of action for civil conspiracy or IIED.
¶14 Finally, Wallace argues for reversal on the ground that the District Court denied his
request for a hearing, which he contends violated his right to due process. Wallace
correctly cites the general rule that, upon request, a party may have a summary judgment
hearing. M. R. Civ. P. 56(c)(2)(A). However, there are limits to this general rule, as
applied to these circumstances. See Richards v. County of Missoula, 2009 MT 453, ¶ 17,
354 Mont. 334, 223 P.3d 878 (“[A] hearing may not be necessary in ‘extraordinary
circumstances’ before an order granting summary judgment.”) Pursuant to § 3-1-111,
MCA, Montana courts have the inherent power to take necessary measures to maintain the
integrity of the legal process. As the United States Supreme Court has noted:
It is essential to the proper administration of criminal justice that dignity,
order, and decorum be the hallmarks of all court proceedings in our country.
The flagrant disregard in the courtroom of elementary standards of proper
conduct should not and cannot be tolerated. We believe trial judges
confronted with disruptive, contumacious, stubbornly defiant defendants
must be given sufficient discretion to meet the circumstances of each case.
Illinois v. Allen, 397 U.S. 337, 343, 90 S. Ct. 1057, 1061 (1970); accord State v. Hartsoe,
2011 MT 188, ¶ 25, 361 Mont. 305, 258 P.3d 428 (determining that courtroom decorum
constituted a “compelling circumstance” in satisfaction of the first prong of the test outlined
in State v. Herrick, 2004 MT 323, ¶¶ 14-15, 324 Mont. 76, 101 P.3d 755). Wallace has a
recorded history of not showing up to hearings, Serrania I, ¶ 7, and engaging in
unprofessional and inappropriate actions when he does. See In the Matter of Terry A.
9
Wallace, PR 17-0245, Order of Discipline (Mont. Oct. 30, 2018) (adopting Commission
on Practice’s finding that Wallace’s “belief – expressed throughout the hearing – that he
knows more than other lawyers and judges” was likely to cause Wallace to continue his
destructive behavior). Given Wallace’s history of disruptive behaviors during litigation,
the District Court acted within its statutory and constitutional authority and did not abuse
its discretion when it determined to not hold a summary judgment hearing. Wallace had
ample opportunities over years of litigation, discussed herein, to present his arguments
against the sanctions included in the judgment, including the arguments repeated herein,
and has not been denied due process. The District Court correctly entered summary
judgment on Wallace’s claims in favor of the Appellees.
¶15 Turning to the District Court’s vexatious litigant order, our review here will be
summary, as we are entering a statewide vexatious litigant Order concurrently with this
Opinion. The District Court, citing McCann v. McCann, 2018 MT 207, ¶ 38, 392 Mont.
385, 425 P.3d 682, extensively reviewed the record and analyzed the five McCann factors3
3
The factors cited in McCann, ¶ 38 (citing Stokes v. First Am. Title Co. of Mont., Inc., 2017 MT
275, ¶ 4, 389 Mont. 245, 406 P.3d 439 and Motta v. Granite Cty. Comm’rs, 2013 MT 172, ¶ 20,
370 Mont. 469, 304 P.3d 720), for consideration of a vexatious litigant order are:
(1) the litigant’s history of litigation and, in particular, whether it has entailed
vexatious, harassing, or duplicative lawsuits; (2) the litigant’s motive in pursuing
the litigation; e.g., whether the litigant has an objective good faith expectation of
prevailing; (3) whether the litigant is represented by counsel; (4) whether the
litigant has caused needless expense to other parties or has posed an unnecessary
burden on the courts and court personnel; and (5) whether other sanctions would be
adequate to protect the courts and other parties.
10
in concluding that Wallace is a vexatious litigant and restricting his access to the courts of
the First Judicial District. Specifically, the District Court directed that Wallace:
is prohibited from filing any complaint, petition, or other pleading of his own
creation that purports to initiate a new cause of []action without the express
written permission of this Court. In the event Wallace attempts to do so, the
Clerk of District Court is directed to present the pleading to this Court for
review.
¶16 The District Court noted Wallace’s frivolous suits, harassing and abrasive conduct,
and inability to recognize his wrongdoing. The court delineated “Wallace’s history of
vexatious, harassing lawsuits” in support of satisfaction of factor one, and determined
factor two was satisfied because Wallace’s claims were not objectively “reasonably
calculated to succeed.” The court cited McCann, ¶ 42, for the proposition that Wallace’s
“egregious conduct should be considered even more egregious” given that it was
“perpetrated by an attorney[.]” The court noted Wallace’s unprofessional and unbecoming
actions, the culmination of which has “burdened other parties, burdened the courts, and
have caused needless expense” to the satisfaction of the fourth factor. Finally, noting that
Wallace’s failure to simply submit to the Serrania sanctions is what led to the current
litigation, the court determined that lesser sanctions would not adequately protect the courts
and other parties.
¶17 We conclude that the District Court properly weighed the relevant factors and did
not abuse its discretion in determining that Wallace is a vexatious litigant and sanctioning
him with the imposition of a pre-filing order. Given Wallace’s response to prior, lesser
sanctions, the District Court’s decision was appropriately tailored to address Wallace’s
documented penchant for disrespect toward litigants and tribunals. To the extent that
11
further review is necessary to consider constitutional issues raised by Wallace, this concern
is more fully addressed in the Opinion and Order issued in conjunction herewith. Wallace
v. Law Offices of Bruce M. Spencer, PLLC, 2021 MT __, __ Mont. __, __ P.3d __, 2021
Mont. LEXIS __, DA 20-0611.
¶18 We have determined to decide this case pursuant to Section I, Paragraph 3(c) of our
Internal Operating Rules, which provides for memorandum opinions. In the opinion of the
Court, the case presents a question controlled by settled law or by the clear application of
applicable standards of review.
¶19 Affirmed.
/S/ JIM RICE
We concur:
/S/ LAURIE McKINNON
/S/ BETH BAKER
/S/ INGRID GUSTAFSON
/S/ DIRK M. SANDEFUR
12