No. 13592
I N THE SUPREME COURT O F THE S T A T E O F MONTANA
1977
S T A T E O F MONTANA, on t h e r e l a t i o n
of GERALD N . L E A V I T T , and ELEANORA E .
LEAVITT ,
Relators,
THE D I S T R I C T COURT O F THE T H I R T E E N T H J U D I C I A L
D I S T R I C T OF THE S T A T E O F MONTANA, I N AND F O R THE
COUNTY O F YELLOWSTONE, and THE HON. NAT A L L E N ,
Judge t h e r e o f ,
Respondents.
O R I G I N A L PROCEEDING:
C o u n s e l of R e c o r d :
For R e l a t o r s :
Poore, M c K e n z i e , R o t h , R o b i s c h o n & Robinson,
Butte, Montana
A l l e n M c K e n z i e argued, B u t t e , Montana
For R e s p o n d e n t s :
Crowley, Haughey, Hanson, G a l l a g h e r and T o o l e ,
B i l l i n g s , Montana
Stephen F o s t e r argued and R o b e r t E d d L e e a r g u e d ,
B i l l i n g s , Montana
Submitted: January 25, 1 9 7 7
=-.,
Filed: F??E ? ? ?.gn
Mr. Justice Frank I. Haswell delivered the Opinion of the Court.
Relators Gerald N. Leavitt and Eleanora E. Leavitt seek
a writ of supervisory control from this Court: (1) To require
the presiding judge in civil cause No. 59760 in the district
court of Yellowstone County to surrender jurisdiction, and (2) to
annul all orders made by the presiding judge in that case on
November 15, 1976.
The civil case in the district court to which this
application is directed is complex, voluminous, and long stand-
ing. Plaintiffs in the district court are John Slovak, Mary K.
Slovak, Paul Slovak, Mary J. Slovak, Andrew Slovak, and Ann E.
Slovak. Defendants are the relators here, Gerald N. Leavitt
and Eleanora E. Leavitt, husband and wife; Kentucky Fried Chicken
of Montana, a corporation; Montana Franchising, Inc., a corpor-
ation; Fred C. Haas, Jr.; and Raymond C. Whitaker.
The action in district court essentially involves an
alleged breach of contract and fraud arising out of the sale of
the Kentucky Fried Chicken franchise for Montana by the Slovaks
to Kentucky Fried Chicken of Montana, a corporation (KFCM).
The case commenced with the filing of the original com-
plaint by the Slovaks on April 19, 1972. Thereafter for more
than four years there ensued various pleadings, motions, nego-
tiations, pretrial discovery, disqualification of judges, an
appeal to this Court on the question of venue, removal and re-
mand to and from the federal court, and miscellaneous matters
unnecessary to detail in this opinion.
On June 3, 1976, the district court set the case for
trial on September 22. An informal conference between counsel
and the presiding judge was held on August 27 at which time the
following events transpired: (1) Slovaks' attorney gave notice
of h i s i n t e n t i o n t o f i l e a n amended c o m p l a i n t , ( 2 ) counsel f o r
G e r a l d L e a v i t t , K C and Montana F r a n c h i s i n g , I n c . ,
FM a corpor-
a t i o n ( M F I ) i n d i c a t e d he d i d n o t i n t e n d t o d i s q u a l i f y t h e
p r e s i d i n g judge, and ( 3 ) r u l i n g s w e r e made on v a r i o u s m a t t e r s
pertaining t o p r e t r i a l discovery.
On September 8 t h e d i s t r i c t c o u r t e n t e r e d a n o r d e r :
(1) V a c a t i n g t h e t r i a l s e t t i n g of September 22 and r e s e t t i n g
t r i a l f o r November 3 , and ( 2 ) s e t t i n g a p r e t r i a l c o n f e r e n c e f o r
October 22.
On September 29 t h e S l o v a k s s e r v e d a copy o f t h e i r amended
c o m p l a i n t on t h e a t t o r n e y o f r e c o r d f o r G e r a l d L e a v i t t , KFCM,
and MFI. On October 5 t h e amended c o m p l a i n t w a s p e r s o n a l l y s e r v e d
on b o t h L e a v i t t s i n Las Vegas, Nevada by a d e p u t y s h e r i f f . The
p r i n c i p a l d i f f e r e n c e between t h e o r i g i n a l c o m p l a i n t and t h e amended
c o m p l a i n t was: (1) The amended c o m p l a i n t added E l e a n o r a E . L e a v i t t ,
w i f e of G e r a l d N. L e a v i t t , a s a p a r t y , and ( 2 ) t h e amended com-
p l a i n t p l e a d damages more s p e c i f i c a l l y and w i t h p a r t i c u l a r i t y .
The b a s i c t h e o r y o f t h e c a s e remained unchanged.
O October 19 t h e L e a v i t t s f i l e d a removal p e t i t i o n w i t h
n
t h e United S t a t e s D i s t r i c t C o u r t i n B i l l i n g s , Montana, s e e k i n g
removal of t h e a c t i o n t o f e d e r a l c o u r t on t h e ground o f d i v e r s i t y
of c i t i z e n s h i p . On November 1, United S t a t e s D i s t r i c t Judge
James F. B a t t i n remanded t h e c a s e back t o t h e s t a t e d i s t r i c t c o u r t
and s u b s e q u e n t l y a s s e s s e d a t t o r n e y s ' f e e s a g a i n s t t h e L e a v i t t s f o r
wrongful removal.
On t h e same d a t e , November 1, t h e p r e s i d i n g judge i n t h e
Yellowstone County d i s t r i c t c o u r t e n t e r e d a n o r d e r : (1) Denying
t h e pending motion t o d i s m i s s p r e v i o u s l y f i l e d by t h e L e a v i t t s ,
( 2 ) d i r e c t e d t h e d e f e n d a n t s t o answer p l a i n t i f f s ' amended com-
p l a i n t by 9:00 a.m. on November 3 , and ( 3 ) d i r e c t e d t h e t r i a l t o
commence a t 10:OO a.m. on November 3 a s p r e v i o u s l y o r d e r e d . Accord-
i n g t o c o u n s e l f o r L e a v i t t s , n o t i c e of e n t r y of t h i s o r d e r was
communicated to them by telephone at about 4:50 p.m. on November
1. The following day, November 2, was a legal holiday.
On November 3 the following occurred, not necessarily
in this order: (1) The Leavitts filed an affidavit of disquali-
fication against the presiding judge, (2) the presiding judge
struck the affidavit of disqualification because it was filed
less than 15 days prior to trial, (3) the clerk entered the de-
fault of KFCM and MFI for failure to answer or otherwise plead
to the amended complaint, as ordered by the court, and (4) the
Leavitts filed an application for supervisory control with this
Court seeking to have the order of the district court of Novem-
ber 3 vacated. We heard the Leavitts' application, stayed
proceedings in the district court, and granted Leavitts five days
in which to apply to the district court for the relief sought.
On November 5 the Slovaks filed a motion for partial
summary judgment against both Leavitts and prayed that any judg-
ment against KFCM and MFI be likewise entered against Leavitts.
On November 8 Leavitts filed: (1) A second affidavit of
disqualification against the presiding judge, and (2) a separate
motion to vacate the default against KFCM and MFI and to dismiss
the amended complaint against KFCM and MFI for insufficiency of
service of process and failure to state a claim.
A hearing was held on these pending matters on November
15. Thereafter the district court entered its order on the same
date which, insofar as is pertinent to this proceeding, provided:
(1) The motion to set aside all orders of November 3 by the
district court was denied, (2) the motion to set aside the dis-
trict court's orders striking the affidavit of disqualification
was denied, and (3) Slovaks' motion for partial summary judgment
was granted. Additionally the recess in the trial was extended,
the Leavitts were ordered to answer the amended complaint by
November 19, and a conference between court and counsel was set
for November 19.
Thereupon Leavitts filed the instant application for a
writ of supervisory control with this Court to test the validity
of the district court's orders of November 15. An adversary
hearing was held and the matter submitted for our decision.
Three issues are presented for decision:
(1) Is supervisory control a proper remedy?
(2) Should the presiding judge be required to relinquish
jurisdiction?
(3) Should the district court's orders of November 15
be annulled?
We hold that supervisory control is a proper and avail-
able remedy to determine the relief sought by Leavitts. We have
previously held that supervisory control is a proper remedy to
review an order striking two defenses and granting plaintiff
summary judgment on the issue of liability because the hardship
on relator in defending the remaining issue of damages rendered
the remedy by appeal wholly inadequate. State ex rel. Great Falls
National Bank v. District Court, 154 Mont. 336, 463 P.2d 326,
and cases cited therein. We have also held that supervisory
control was a proper remedy to cut through a procedural morass
and enable prompt litigation of the substantive rights of the
parties on the merits. State ex rel. Amsterdam Lbr. Co. v. Dist.
Ct., 163 Mont. 182, 516 P.2d 378. Here we have an order de-
faulting two defendants, an order granting partial summary judg-
ment against some of the defendants, and a procedural tangle
involving the attempted disqualification of the presiding judge,
removal and remand of the case to and from federal court, and
a number of orders whose validity is in controversy. Under these
circumstances, we do not consider the remedy of appeal following
trial as to some of the defendants an adequate remedy. Hence we
accept jurisdiction of relators' application for a writ of
supervisory control.
The attempted disqualification of the presiding judge
requires no extended discussion. The presiding judge has been
in jurisdiction since January 24, 1973. As late as August 27,
1976, counsel indicated he did not intend to disqualify the
presiding judge. The first affidavit of disqualification
against the presiding judge was filed on November 3, 1976, the
day of trial.
We have previously condemned such practice. State ex
rel. Kidder v. Dist. Ct., 155 Mont. 442, 472 P.2d 1008. Here
the Leavitts argue that the affidavit of disqualification was
timely filed because it was filed immediately after receiving
the district court's order of November 1, citing Wheeler v. Moe,
163 Mont. 154, 515 P.2d 679, in support. Leavitts also contend
that the presiding judge arranged the calendar to circumvent
the disqualification statute.
The controlling statute, section 93-901, R.C.M. 1947,
as amended, provides in pertinent part:
" * * * If there be more than one judge * * *
in any district in which said affidavit is
made and filed, upon the first disqualification
* * * another judge * * * residing in the dis-
trict * * * must be called in to preside * * *;
upon the second or any subsequent disqualifica-
tion, a judge * * * of another district of the
state must be called in to preside * * * when
another judge * * * has assumed jurisdiction * * *
the clerk of the court * * * shall at once notify
the parties or their attorneys of record * * * of
the name of the judge * * * called in * * *.
Such second or subsequent affidavit of disqual-
ification shall be filed with the clerk of the
court * * * within three days after the party or
his attorney * * * filing such affidavit, has
received notice as to the judge * * * assuming
jurisdiction * * *." (Emphasis added.)
Here all parties except Eleanora Leavitt had lost their
right to disqualify the presiding judge in January, 1973. At
the time Eleanora Leavitt was made a party by the filing and
service of the amended complaint, the trial date of November 3
had been set. She had the right to file a disqualifying
affidavit up to 15 days prior to trial. That time expired
on October 19, the fifteenth day prior to trial. The attempted
disqualification on November 3, the day of trial, came much
too late and was properly stricken by the presiding judge. The
disqualification statute was not intended as an instrument to
secure delays or postponements of trial. State ex rel. Jacobs
v. Dist. Ct., 48 Mont. 410, 138 P. 1091.
The same is true of the second affidavit of disqualifi-
cation filed on November 8. The right of disqualification once
lost cannot be revived by a continuation of the trial for the
benefit of relators as occurred here.
The final issue concerns the default of KFCM and MFI and
the partial summary against both Leavitts. Counsel for Leavitts
argues that he never agreed to accept service of the amended
complaint on behalf of KFCM and MFI, that the two corporations
were never served, and that entry of default against them deprived
them and Leavitts of their property without due process of law.
Counsel for Slovaks contend that the amended complaint was properly
served upon the two corporations by service on their counsel,
that no responsive pleading had been filed by the two corporations
within the time allowed by law, and the defaults against the two
corporations were properly entered for failure to file a respon-
sive pleading as well as failure to appear for trial.
We find that service of the amended complaint was properly
made on KFCM and MFI. The amended complaint was served on counsel
of record for the two corporations. Whether counsel agreed to
accept service on their behalf is immaterial. Service of the
amended complaint is required to be made by service on the attorney
in this case pursuant to Rule 5(b), M.R.Civ.P., which provides
in pertinent part:
"Whenever under t h e s e r u l e s s e r v i c e i s r e q u i r e d
o r p e r m i t t e d t o be made upon a p a r t y r e p r e s e n t e d
by a n a t t o r n e y t h e s e r v i c e s h a l l be made upon t h e
a t t o r n e y u n l e s s s e r v i c e upon t h e p a r t y h i m s e l f
i s o r d e r e d by t h e c o u r t . * * * "
The c o u r t d i d n o t o r d e r s e r v i c e upon t h e p a r t i e s t h e m s e l v e s ,
K C and MFI, i n t h i s c a s e .
FM Hence, t h e y were t e c h n i c a l l y i n
d e f a u l t f o r f a i l u r e t o f i l e a r e s p o n s i v e p l e a d i n g when t h e d i s -
t r i c t c o u r t e n t e r e d t h e i r d e f a u l t on November 3. Rule 1 5 ( a ) ,
M.R.Civ.P.
However, t h e r a p i d i t y o f e v e n t s on November 1 and Novem-
ber 3 j u s t i f y vacating t h e d e f a u l t s i n our opinion. Although
t h e t i m e f o r f i l i n g a r e s p o n s i v e p l e a d i n g had e x p i r e d b e f o r e
removal of t h e c a s e t o f e d e r a l c o u r t , no d e f a u l t a g a i n s t t h e two
c o r p o r a t i o n s had been e n t e r e d . None c o u l d be e n t e r e d between
October 1 9 and November 1 when t h e c a s e was remanded t o t h e d i s -
t r i c t c o u r t of Yellowstone County. Counsel f o r t h e two c o r p o r a -
t i o n s r e c e i v e d n o n o t i c e o f t h e remand u n t i l a b o u t 4:50 p.m. on
November 1 when t h e c l e r k o f t h e s t a t e d i s t r i c t c o u r t c a l l e d him
on t h e t e l e p h o n e and a d v i s e d him of t h e o r d e r of t h e c o u r t which
d i r e c t e d , among o t h e r t h i n g s , t h a t t h e d e f e n d a n t s answer t h e
amended c o m p l a i n t by 9 : 0 0 a.m. on November 3. Following t h e
e v e n t s of November 3 , d e f a u l t a g a i n s t t h e two c o r p o r a t i o n s was
e n t e r e d on November 5, p r i o r t o t h e t i m e we g r a n t e d t h e L e a v i t t s
i n which t o s e e k r e l i e f i n t h e d i s t r i c t c o u r t from t h e o r d e r s o f
November 3.
I n v a c a t i n g t h e d e f a u l t s of KFCM and MFI, w e have con-
s i d e r e d t h e f a c t t h a t L e a v i t t s a r e t h e a l t e r ego of t h e two c o r -
p o r a t i o n s and a r e p e r s o n a l l y l i a b l e f o r any judgments a g a i n s t
t h e two c o r p o r a t i o n s under t h e t e r m s o f a n a s s i g n m e n t d a t e d
March 31, 1972. Thus any d e f a u l t a g a i n s t t h e two c o r p o r a t i o n s
h a s t h e l e g a l e f f e c t o f a d e f a u l t a g a i n s t L e a v i t t s on a t l e a s t
p a r t of t h e S l o v a k s ' c l a i m s .
W c o n s i d e r t h e e n t r y o f t h e p a r t i a l summary judgment on
e
t h e same b a s i s . I t i s based on t h e p e r s o n a l l i a b i l i t y of
L e a v i t t s under t h e a s s i g n m e n t of March 31, 1972, and t h e d i s s o -
l u t i o n o f KFCM. I t i s based on t h e d e f a u l t o f KFCM. As we
have v a c a t e d t h e d e f a u l t of t h e two c o r p o r a t i o n s , t h e p a r t i a l
summary judgment a g a i n s t t h e L e a v i t t s based upon t h e d e r i v a t i v e
l i a b i l i t y o f t h e two c o r p o r a t i o n s must be v a c a t e d .
W e have c o n s i d e r e d t h e o t h e r arguments of t h e p a r t i e s
and s i n c e w e f i n d t h e y would n o t a l t e r o u r d e c i s i o n h e r e , we
f i n d it u n n e c e s s a r y t o d i s c u s s them p o i n t by p o i n t i n t h i s o p i n i o n .
For t h e r e a s o n s s e t f o r t h above, we h o l d t h a t t h e p r e -
s i d i n g judge r e t a i n s j u r i s d i c t i o n of t h i s c a s e ; we v a c a t e t h e
d e f a u l t t a k e n a g a i n s t K C and MFI and g r a n t them and L e a v i t t s
FM
1 0 d a y s i n which t o f i l e a r e s p o n s i v e p l e a d i n g t o t h e amended
c o m p l a i n t ; w e v a c a t e t h e p a r t i a l summary judgment h e r e t o f o r e
e n t e r e d w i t h o u t p r e j u d i c e t o renewal o f t h e motion t h e r e f o r ;
and w e remand t h e c a s e t o t h e d i s t r i c t c o u r t o f Yellowstone
County f o r f u r t h e r p r o c e e d i n g s n o t i n c o n s i s t e n t w i t h t h i s o p i n i o n .
Let r e m i t t i t u r i s s u e forthwith.
.*
Justice
W e con u r :
4 /