No. 14638
IN THE SUPREME COUKC O THE STATE O FXXTANA
F F
1979
S A E EX RET;. CITY O H A W ,
T T F
Relator,
THE D I r n C T aluRT O THE T w E u T H
F
JUDICIAL DISTRICT O THE S A E O !QTL'ANA,
F T T F
IN AND FOR THE COUNTY O HILL, and the HONORABLE
F
EEHNARD W. THOMAS, Judge thereof,
Respondents.
Counsel of Record:
For Relator:
Jardine, Stephenson, B l e w e t t & Weaver, Great F a l l s , Pbntana
Jack L ws argued, Great F a l l s , Pbntana
e i
George m b appeared, Great F a l l s , Pbntana
ae
m a , Wenz, Iwen and Johnson, G r e a t F a l l s , Pbntana
Joseph m r a argued, Great F a l l s , Pbntana
For Respondents:
Frank bbrrison, Jr., argued, Missoula, Pbntana
Larry Elison argued, Missoula, Pbntana
Submitted: March 13, 1979
mided: MAR 2 5 la
g
F -
Filed: !Y!~kl i -k
Mr. Justice Gene B. Daly delivered the Opinion of the Court.
This is an original proceeding in which the City of Havre
and the County of Hill have filed petitions for writs of super-
visory control. The dispositive issue is whether a stipulation
for dismissal with prejudice, entered into between plaintiff
Boucher and defendant police officer Dramstad, bars the plaintiff
from proceeding with his claim against the City of Havre and
Hill County.
On September 24, 1974, the Havre Police Department re-
ceived a call advising them that a burglary was in progress at
a grocery store in North Havre, Montana. Officers Rex Dramstad
and Kenneth Kooch were dispatched to the store to investigate.
Upon their arrival at the scene, defendant Dramstad observed a
suspect inside the store and ordered the suspect to come out.
Once outside the store, the suspect began to run away from Officer
Dramstad. In an attempt to apprehend the suspect, defendant Dram-
stad fired a shot which struck the suspect, plaintiff Ronald
Boucher, in the back. This injury is the basis of the two civil
actions initiated by the plaintiff against the City of Havre and
County of Hill.
On September 27, 1976, plaintiff Boucher filed a complaint
in Hill County District Court alleging that Officer Dramstad, the
City of Havre and Hill County were liable for his injuries and
and all damages resulting from those injuries. Following ex-
tensive discovery, the case was set for trial on December 11,
1978. A pretrial conference was held December 11, 1978, where
plaintiff Boucher and defendant Dramstad entered into a stipula-
tion for dismissal with prejudice of the claim against Officer
Dramstad. The District Court, on the basis of the stipulation
for dismissal, entered an order dismissing with prejudice the
action against defendant Dramstad.
The remaining defendants, the City of Havre and Hill County,
moved for summary judgment on the grounds that the dismissal
with prejudice of their agent, Officer Dramstad, exonerated not
only defendant Dramstad, but also the City and County as well
since their liability could only be vicarious or derivative.
The remaining defendants argued that they were entitled to a
dismissal with prejudice. The remaining defendants' motions
were denied by the District Court; and they now petition this
Court for a writ of supervisory control contending the District
Court erred in denying their motions for summary judgment.
The plaintiff's complaint stated that the relationship
of respondeat superior existed between the City of Havre, the
County of Hill, the State of Montana and defendant Dramstad. In
State v. District Court of Thirteenth Jud. Dist. (1976), 170 Mont.
15, 550 P.2d 382, we held that by reason of the 1972 Montana
Constitution, Article 11, section 18, and the State Tort Claims
Act, section 2-9-102, MCA, et seq., a municipality and other
political subdivisions are liable under the doctrine of respondeat
superior for the negligence of an employee acting within the scope
of his employment.
The City of Havre and Hill County contend that defendant
Dramstad's dismissal with prejudice operates exactly the same as
a jury verdict, and it therefore conclusively established that
defendant Dramstad did not negligently or intentionally cause
plaintiff's injuries. The City of Havre and Hill County further
contend that the dismissal with prejudice of their eixployee col-
laieually estops the plaintiff from pursuing any claim against
them as defendant Dramstad's employer, based upon the doctrine of
respondeat superior.
The plaintiff contends that the dismissal with prejudice
was only a trial tactic and it should not be given any collateral
estoppel effect. The plaintiff also contends that this Court
should look behind the words "with prejudice" in order to determine
the true intent of the parties. The plaintiff further contends
that by looking behind the words "with prejudice," it is clear
that the stipulation for dismissal with prejudice did not consti-
tute a final adjudication on the merits; therefore, the plaintiff's
claim against the City of Havre and Hill County should not be
barred.
The issue in the instant case has resulted in a split of
authority in other jurisdictions. Some courts have held that
a consent dismissal with prejudice is tantamount to a judgment
on the merits; and, accordingly, such a dismissal is res judicata
as to every issue reasonably raised by the pleadings. See Barnes
v. McGee (1974), 21 N.C.App. 287, 204 S.E.2d 203; DeGraff v. Smith
(1945), 62 Ariz. 261, 157 P.2d 342. Other courts will look behind
the words "with prejudice" and determine the intent of the parties.
If it is determined that the parties did not intend the consent
dismissal to resolve all of the issues raised by the pleadings,
then the principles of collateral estoppel will not be applied.
See Denny v. Mathieu (1970), (Mo. 1970), 452 S.W.2d 114.
~lthoughthe facts of the instant case are unique, we find
guidance from the prior decisions of this Court involving the effect
of the release of one joint tortfeasor by the plaintiff. In
Beedle v. Carolan, (1944), 115 Mont. 587, 148 P.2d 559, plaintiff
Beedle was put in jail by the Rosebud County Sheriff at the insis-
tence of the Rosebud County Attorney. The plaintiff was later re-
leased and thereafter brought suit against the Sheriff for false
imprisonment. The suit was settled by the Sheriff, and a written
release was executed by the plaintiff. Subsequently, the plaintiff
attempted to sue the County Attorney for damages for the imprison-
ment. The District Court found that the release of the Sheriff
served as a bar to the action against the County Attorney. This
Court affirmed and said:
"The words ... mean that plaintiff has been
fully compensated for any injuries arising out
of the transaction; having been fully compen-
sated he has no further cause of action.
Nothing in the release in any way hints at a
reservation of the right to sue the county
attorney or anyone else because of the false
arrest and, as we have said, that reservation
must appear on the face of the instrument."
115 Mont. at 590.
In McCloskey v. Porter (1973), 161 Mont. 307, 506 P.2d
845, the plaintiff's deceased husband had been injured in an auto-
mobile accident wher. his car had collided with a car driven by the
defendant, a minor. A Montana statute provided that a person who
signs a minor's application for a driver's license was jointly
and severally liable for any damages caused by the minor. In
McCloskey the minor defendant's father had signed her driver's
license application. The plaintiff and the father entered into and
signed a written release. The plaintiff then attempted to proceed
against the minor defendant, and the District Court granted the
defendant's motion for a directed verdict. This Court affirmed
and said:
"In Montana, the rule has long been established
that the release of one joint tortfeasor re-
leases the others, unless there are clear pro-
visions in the release to the contrary." 161
Mont. at 311-312.
The stipulation for dismissal with prejudice in the instant
case operates the same as does the release of one joint tortfeasor.
Nothing in the stipulation for dismissal with prejudice in any way
hints at a reservation of the right to sue the City of Havre and
one
Hill County. As in the cases involving the release of/joint tort-
feasor, that reservation must appear on the face of the instrument.
The stipulation for dismissal in the instant case was one
"with prejudice." In Schuster v. Northern Co. (1953), 127 Mont.
39, 45, 257 P.2d 249, 252, we stated that:
"The term 'with prejudice' as used in a judgment
of dismissal has a well-recognized legal import.
It is the converse of the term 'without prejudice',
and a judgment or decree of dismissal with preju-
dice is asconclusive of the rights of the parties
as if the suit had been prosecuted to a final
adjudication adverse to the plaintiff."
Therefore, a stipulation of dismissal with prejudice of a defen-
dant is tantamount to a judgment on the merits; and accordingly,
such a dismissal with prejudice is res judicata as to every
issue reasonably raised by the pleadings. Under the doctrine
of respondeat superior, an employer defendant's liability is
vicarious or derivative and does not arise until an employee
acts negligently within the scope of his employment. A dismissal
of a claim with prejudice of an employee is equivalent to a find-
ing that the employee was not negligent. Under the doctrine of
respondeat superior, such a dismissal of an employee operates to
exonerate the employer. This Court will look at the dismissal with
prejudice on its face, and will not look behind the words "with
prejudice. "
The two judgments denying the motions for summary judgment
by the City of Havre and the County of Hill are vacated and set
aside. The two causes are remanded to District Court with direc-
tions to enter judgment with prejudice for both of the remaining
defendants.
Justice f
We concur:
Chief ~ustice
Mr. Justice ~ a n i e lJ. Shea dissents and will file a written
dissent later.
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DISSENT OF JUSTICE DANIEL J. SHEA
No. 14638 and 14645
STATE EX REL. CITY OF HAVRE
DISTRICT COURT TWELFTH JUDICIAL
DISTRICT, et al.
STATE EX REL COUNTY OF HILL
DISTRICT COURT TWELFTH JUDICIAL
DISTRICT, et al.
March 31, 1980
Mr. Justice Daniel J. Shea dissenting:
I would affirm the order of the District Court. It is
clear beyond question that the plaintiff did not intend to
dismiss either the City or County. In this respect I cannot
understand the failure of this Court to consider the impact of
our recent case of Kussler v. Burlington Northern, Inc. and
State of Montana (1980), - Mont . -I - P.2d , 37 St-Rep.
240.
The essential issue involves the effect given to a
stipulation to dismiss with prejudice, entered into between
plaintiff and police officer Rex Dramstad, and an order
putting this agreement into effect by dismissing with
prejudice. The agreement to dismiss, and order to dismiss,
are silent as to whether plaintiff intended also to dismiss
the City or County as defendants. The City and County do
not seriously contend that plaintiff intended to release them,
but contend that the dismissal must have that effect, because
any liability of the City or County can only be vicarious
or derivative.
The essence of defendants' argument is that, regardless
of plaintiff's intent, his release of Officer Dramstad, had
the effect, by operation of law, of also releasing the City
and the County. As inviting as this argument may appear,
it ignores the realities of the situation. The intent of
plaintiff in releasing only Officer Dramstad, is at the
core of whether the City and County are entitled to receive
the benefits of this dismissal.
The majority relies upon a definition of "with prejudice"
in Schuster v. Northern Co. (1953), 127 Mont. 39, 257 P.2d
249; and cites DeGraff v. Smith (Ariz. 1945), 157 P.2d 342;
and Barnes v. McGee (N.C. 1974), 204 S.E.2d 203. In DeGraff
and Barnes, the courts held that the employer was dismissed
as a result of the plaintiff's dismissal of the defendant
employee who was alleged to have been the actively negligent
party. In both DeGraff and Barnes, it was the clear intent
of the plaintiff not to dismiss against the defendant employer
even though the defendant employee was dismissed.
In Schuster, supra, the plaintiff's case was dismissed
"with prejudice" by the trial court, after a three year
delay, and when, during trial, plaintiff announced he could
not proceed with his proof because of an absence of witnesses.
In affirming the dismissal, this Court simply defined the
legal effect of a dismissal "with prejudice." This case has
no bearing on the issue before this Court for plaintiff does
not contend that he can still proceed to prosecute his
action directly against Officer Dramstad.
Factually, neither DeGraff nor Barnes are similar to
the present case. These cases are not persuasive because in
each situation the court ignored the uncontradicted intent
of the plaintiff to dismiss only the defendant employee and
to proceed against the defendant employer. The effect was
that a benefit was conferred upon the defendant employer
which was clearly not intended by the plaintiff and clearly
not warranted by the facts.
Defendants contend that the dismissal of Officer
Dramstad operates exactly as though a jury had ruled in
favor of Officer Dramstad, and thus that the City and the
County, by the same verdict, because of their derivative
status, would also have been absolved of legal responsibility
for plaintiff's injuries. This analysis was effectively
rejected in Denny v. Mathiew (Mo. 1970), 452 S.W.2d 114,
where the court held that a dismissal with prejudice does
not operate in precisely the same manner as a jury verdict.
Rather, the court held that, under its own practice rule
relating to dismissals, that a "dismissal with prejudice
actually adjudicates nothing" but only "serves as a mechanism
for the termination of litigation rather than adjudication
of the issues therein involved." In so holding, the court
reasoned that it was proper to go behind the words "with
prejudice" to determine what was intended in light of the
facts of the particular case. The court ruled that the
intent of the plaintiff in agreeing to a dismissal, must be
considered. If justice is one of the objectives of the law,
this clearly is the proper rule.
In a somewhat different context, the question of intent
was discussed recently in Brackenbrough v. MacCloskey (Or.
19791, 600 P.2d 481, where the appeals court ruled that
parol evidence was admissible to establish whether the
parties to a release with an integration clause, intended
also to release a nonparty. In discussing previous Oregon
cases involving similar issues, the court ruled that parol
evidence was admissible to show the true intent of agreements
whereby a person was seeking benefits conferred by an agreement
to which he was not a party.
The issue in Brackenbrough was whether a doctor sued
for malpractice, should be able to avail himself of a release
agreement between plaintiff and a party who was the active
cause of the initial need of plaintiff to seek medical
attention. Although the issue is not precisely the same
here as it was in Brackenbrough, it is appropriate to compare
the cases in terms of the parties who are seeking the benefits
of an agreement to which they were not a party. In ~rackenbrough,
the court ruled that plaintiff could present parol evidence
to show that he did not intend to confer release benefits
upon the doctor. Here, it is effectively conceded that
plaintiff did not intend to dismiss as against the City or
the County. I can see no policy reasons why the city or the
County should receive the benefit of a dismissal to which
they were not a party, and for whom it was clearly not
intended.
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The m a j o r i t y h e r e relies upon Beedle v. C a r o l a n , Co.
A t t o r n e y ( 1 9 4 4 ) , 115 Mont. 587, 148 P.2d 559, and McClosky
v . P o r t e r ( 1 9 7 3 ) , 1 6 1 Mont. 307, 506 P.2d 845, a s a u t h o r i t y
f o r t h e p r o p o s i t i o n t h a t t h e r e l e a s e o f one j o i n t t o r t f e a s o r
releases t h e o t h e r s , u n l e s s t h e r e are clear p r o v i s i o n s i n
t h e release t o t h e c o n t r a r y . With t h e s e cases s e r v i n g a s
t h e e s s e n t i a l underpinnings f o r i t s r a t i o n a l e , t h e majority
concludes here t h a t t h e s t i p u l a t i o n f o r dismissal with
p r e j u d i c e c o n t a i n e d n o t h i n g which i n any way h i n t e d a t a
r e s e r v a t i o n of t h e r i g h t t o s u e t h e C i t y of Havre o r H i l l
County, and t h a t s u c h a r e s e r v a t i o n must a p p e a r on t h e f a c e
of t h e i n s t r u m e n t i f t h e p l a i n t i f f i s t o p r o c e e d w i t h h i s
case.
What t h e m a j o r i t y f a i l s t o c o n s i d e r i s t h a t i n K u s s l e r
( l e s s t h a n two months a g o ) w e s p e c i f i c a l l y o v e r r u l e d Beedle
and McCloskey. Indeed, Kussler overruled t h e l e g a l p r o p o s i t i o n ,
r e l i e d upon by t h e m a j o r i t y h e r e , t h a t t h e r e l e a s e of one
joint tortfeasor releases the others, unless there a r e clear
p r o v i s i o n s i n t h e release t o t h e c o n t r a r y . Kussler, supra,
3 7 St.Rep. a t 244-245.
I n K u s s l e r , w e a d o p t e d t h e approach t a k e n by t h e Arizona
Supreme C o u r t i n Adams v . Dion ( 1 9 7 3 ) , 109 A r i z . 308, 509
P.2d 201. I n Adams, t h e p l a i n t i f f was i n j u r e d i n a c a r wreck
which i n v o l v e d j o i n t t o r t f e a s o r s . One of t h e t o r t f e a s o r s was
released. The o t h e r was t h e d e f e n d a n t i n t h e c a s e . The law
i n Arizona had been t h a t a r e l e a s e of one r e l e a s e d a l l . The
c o u r t l i s t e d s e v e r a l r e a s o n s f o r r e j e c t i n g t h e common l a w
r u l e : t h e r u l e i s a t r i p f o r t h e unwary; it s t i f l e s t h e d e s i r e
o f t h e v i c t i m t o compromise; and it l e a d s t o r e s u l t s n o t i n t e n d e d
by t h e p a r t i e s . A s a r e s u l t , t h e c o u r t adopted t h e r u l e " t h a t
t h e release of one j o i n t t o r t f e a s o r i s n o t a r e l e a s e of any
o t h e r j o i n t t o r t f e a s o r u n l e s s t h e document i s i n t e n d e d t o
r e l e a s e t h e o t h e r t o r t f e a s o r s , o r t h e payment i s f u l l compensation,
-10-
o r t h e r e l e a s e expressly so provides." 509 P.2d a t 203. As
w e n o t e d i n K u s s l e r , t h i s r u l e w a s a d o p t e d from t h e R e s t a t e m e n t
(Second) o f T o r t s S885. The United S t a t e s Supreme C o u r t a l s o
adopted t h e r u l e t o apply t o a n t i t r u s t l i t i g a t i o n . Zenith
Radio Corp. v. H a z e l t i n e Research ( 1 9 7 1 ) , 401 U.S. 321, 344,
91 S.Ct. 795, 809, 28 L.Ed.2d 77, 95.
I n a c c o r d a n c e w i t h t h e s p i r i t of t h e r u l e announced i n
K u s s l e r , c o n s i d e r a t i o n s h o u l d be g i v e n t o t h e i n t e n t of t h e
p a r t i e s who e x e c u t e d t h e s t i p u l a t i o n f o r d i s m i s s a l . There
c a n be no q u e s t i o n h e r e t h a t t h e p l a i n t i f f d i d n o t i n t e n d t h a t
t h e C i t y o r County r e c e i v e t h e b e n e f i t of t h e d i s m i s s a l .
Nor d o e s t h e C i t y o r County have t h e t e m e r i t y t o make t h i s
assertion.
N e i t h e r t h e C i t y n o r t h e County w i l l i n c u r any
p r e j u d i c e b e c a u s e t h e p o l i c e o f f i c e r was d i s m i s s e d from t h e
lawsuit. P l a i n t i f f must s t i l l p r o v e h i s c a u s e of a c t i o n
a g a i n s t t h e p o l i c e o f f i c e r b e f o r e t h e C i t y o r County i s
compelled, under t h e d o c t r i n e o f r e s p o n d e a t s u p e r i o r , t o
r e s p o n d by t h e payment of damages.
The o r d e r o f t h e D i s t r i c t C o u r t p e r m i t t i n g t h e c a s e
t o p r o c e e d t o t r i a l on t h e m e r i t s s h o u l d be a f f i r m e d .
1-