No. 82-204
IN THE SUPREME COURT OF THE STATE OF MONTANA
1982
0 A. LIEN and BLUE OX
.
CORPORATION, a Corporation,
Plaintiffs and Appellants,
MURPHY CORPORATION, a
Corporation,
Defendant and Respondent.
Appeal from: District Court of the Fifteenth Judicial District,
In and for the County of Roosevelt
Honorable M. James Sorte, Judge presiding.
Counsel of Record:
For Appellants:
Goetz, Madden & Dunn, Bozeman, Montana
James Goetz argued,~ozeiaan.,
Montana
For Respondent:
Robert J. Emmons argued, Great Falls, Montana
Submitted: November 16, 1982
Decided: December 16, 1982
Filed: El; j. 6 1982
Mr. Justice Frank B. Morrison, Jr., delivered the Opinion of
the Court.
Defendant, Murphy Corporation (Murphy) filed a Rule
41(b), M.R.Civ.P., motion for summary judgment January 11,
1952, in the Fifteenth Judicial District Court. The court
granted defendant's motion April 27, 1982. Plaintiffs (Blue
Ox) now appeal the summary judgment.
In August 1952, Murphy began hydrocarbon exploration
and production activities on land, a portion of which was
later purchased by Blue Ox for farming purposes. Pipes used
in Murphy's operations began leaking oil and other products,
thus increasing the salinity level of the ground water and
damaging Blue Ox's property. Settlements for the damage
were made in 1961 and 1963; however, the damage is alleged
to have continued.
On October 25, 1971, Blue Ox filed a complaint alleging
negligence and lease violations by Murphy, resulting in
damage to Blue Ox's land. Murphy submitted interrogatories
on January 3, 1972, which Blue Ox answered May 9, 1972.
Supplementary interrogatories of February 1, 1972, have
never been answered by Blue Ox. Interrogatories were submitted
to Murphy in April of 1973. Pursuant to an agreement between
counsel and the District Court of the Fifteenth Judicial
District, those interrogatories were not answered until July
27, 1978.
On January 20, 1978, the District Court filed an order
to show cause why the case should not be dismissed for
failure to prosecute. That order was vacated by agreement
of the parties. Then Murphy moved on December 24, 1979, to
have the cause dismissed for the same reason.
Blue Ox's original attorney and attorney of record was
Mr. Gorham Swanberg. Due to Swanberg's dissatisfaction with
his role, attempts were made to hire another attorney.
Mr. Peter Maltese retained the file from spring 1977 until
August 1978, when he declined to represent Blue Ox. Mr.
James Lucas took from August 1978 until January 1980 to
reach the same conclusion. Mr. Raymond Peete successfully
defended Blue Ox against Murphy's motion to dismiss for
failure to prosecute, but refused to further act as Blue
Ox's attorney.
On May 30, 1980, Blue Ox's new attorney and present
counsel, Mr. James Goetz, moved the court for permission to
amend the 1971 complaint to include further damage which had
occurred to the land. The motion was denied August 20,
1980, for the following reasons:
1. The new motion changed the theory of the case from
negligence and breach of lease to seven different theories
of liability: (a) breach of contract; (b) negligence; (c)
negligence alleging -- loquitor; (d) nuisance; (e)
res ipsa
trespass; (f) strict liability; and (g) breach of lease.
2. The new motion asked for punitive damages in the
amount of $100,000 and total damages of $650,000. The
original complaint asked for damages of $15,000.
3. The changes in the theories, the additional damages
prayed for and the lapse of nine years between the original
and the amended complaint were grossly inequitable to Murphy.
Blue Ox then, on September 30, 1980, filed for a writ
of supervisory control to review those orders. This Court
denied the writ November 20, 1980, stating:
"The application for supervisory control
or other appropriate writ is denied
on the grounds that there is an adequate
remedy by a p p e a l , t h a t no energency s i t u -
a t i o n i s shown, and t h a t p e t i t i o n e r s
t h e m s e l v e s have been g u i l t y of l a c h e s , a
d e l a y , and have f a i l e d t o p r o s e c u t e t h e i r
action diligently."
On December 1 4 , 1980, Blue Ox f i l e d a s e p a r a t e a c t i o n
based upon t h e d e n i e d amended c o m p l a i n t . Murphy a t t e m p t e d
t o move t h a t a c t i o n t o F e d e r a l D i s t r i c t C o u r t on March 1 8 ,
1980, b u t t h a t c o u r t remanded t h e c a u s e t o t h e Montana
D i s t r i c t C o u r t October 2 , 1981, w i t h a recommendation f o r
c o n s o l i d a t i o n o f t h e 1971 and t h e 1980 c a u s e s . Blue Ox
s u b s e q u e n t l y moved f o r s u c h a c o n s o l i d a t i o n . I t was d e n i e d
J a n u a r y 26, 1982.
On F e b r u a r y 2 4 , 1982, Blue Ox f i l e d a motion f o r recon-
s i d e r a t i o n of t h e motion t o amend t h e o r i g i n a l c o m p l a i n t .
T h a t motion c i t e d B l a s d e l v . Montana Power Co. (1982) ,
Mont. , 640 P.2d 889, 39 St.Rep. 219, a s a u t h o r i t y f o r
g r a n t i n g t h e motion t o amend. The motion was a g a i n d e n i e d
and B l u e Ox f i n e d $100.
Meanwhile, Murphy f i l e d a motion J a n u a r y 11, 1982,
f o r summary judgment b a s e d on Rule 4 1 ( b ) , M.R.Civ.P., failure
t o prosecute. T h a t motion was g r a n t e d A p r i l 27, 1982, w i t h
t h e D i s t r i c t Court s t a t i n g :
"The r e a s o n s t h e C o u r t h a s f o r g r a n t i n g
Summary Judgment a r e s e t f o r t h i n d e t a i l i n
Document Number 66, t h e B r i e f o f t h e Defendant
Murphy C o r p o r a t i o n , and t h e C o u r t w i l l n o t
prepare a separate opinion."
Document 66 s e t s f o r t h a t l e a s t f i v e r e a s o n s why summary
judgment s h o u l d b e g r a n t e d :
1. F o r a p e r i o d of e l e v e n months, from November 20,
1980, t o October 27, 1981, Blue Ox d i d a b s o l u t e l y n o t h i n g t o
advance t h e p r o g r e s s of t h e o r i g i n a l c a u s e .
2. From A p r i l 2 , 1980, u n t i l t h e p r e s e n t t i m e , Blue Ox
h a s t a k e n no a c t i o n s which would r e s u l t i n t h e t r i a l of t h e
o r i g i n a l cause. R a t h e r , a l l a c t i o n s have been of a ' l a t e r a l "
nature.
3. B l u e Ox l a s t c o n d u c t e d d i s c o v e r y i n t h i s c a u s e J u l y
27, 1978.
4. B l u e O x ' s a c t i v i t i e s h a v e been w i t h r e s p e c t t o t h e
1980 c a u s e r a t h e r t h a n t h e 1 9 7 1 c a u s e .
5. The i s s u e o f " f a i l u r e t o p r o s e c u t e " i s res j u d i c a t a .
One r e a s o n s t a t e d by t h e Supreme C o u r t f o r i t s d e n i a l o f
Blue Ox's r e q u e s t f o r t h e w r i t of supervisory c o n t r o l over
t h e m o t i o n t o amend was t h a t p l a i n t i f f s ( B l u e Ox) ". . . have
f a i l e d t o prosecute t h e i r action diligently."
I n t h i s a p p e a l o f t h e o r d e r g r a n t i n g Murphy summary
judgment, t h e f o l l o w i n g i s s u e s a r e r a i s e d by B l u e Ox:
I. Whether, on t h e f a c t s o f t h i s case, t h e D i s t r i c t
C o u r t p r o p e r l y g r a n t e d Murphy's m o t i o n f o r summary judgment
f o r Blue Ox's f a i l u r e t o p r o s e c u t e , p u r s u a n t t o Rule 4 1 ( b ) ,
M.R.Civ.P?
2. Whether t h e D i s t r i c t C o u r t p r o p e r l y r e f u s e d t o
a l l o w B l u e Ox t o amend t h e o r i g i n a l c o m p l a i n t ?
3. Whether, a f t e r d e n y i n g l e a v e t o amend t h e c o m p l a i n t ,
t h e D i s t r i c t Court p r o p e r l y denied Blue Ox's motion t o
c o n s o l i d a t e t h i s c a u s e w i t h c a u s e no. 9317, t h e 1980 a c t i o n
a g a i n s t Murphy which a d d r e s s e s t h e c o n t i n u i n g damage by
Murphy t o B l u e O x ' s p r o p e r t y ?
W e f i n d i s s u e number two t o b e d i s p o s i t i v e .
R u l e 1 5 ( a ) , M.R.Civ.P., p r o v i d e s t h a t even a f t e r a
r e s p o n s i v e p l e a d i n g h a s been s e r v e d , t h e t r i a l c o u r t s h a l l
f r e e l y g r a n t p l a i n t i f f l e a v e t o amend t h e o r i g i n a l c o m p l a i n t
"when j u s t i c e s o r e q u i r e s . " T h i s r u l e h a s been c o n s t r u e d
broadly. I n Union I n t e r c h a n g e , I n c . v. P a r k e r ( 1 9 6 0 ) , 1 3 8
Mont. 348, 354, 357 P.2d 339, 342, w e s t a t e d , ". . . it i s
t h e r u l e t o a l l o w amendments and t h e e x c e p t i o n t o deny
them. I'
The Supreme Court of the United States has held that
the policy in favor of allowing amended complaints is offset
by such things as "undue delay, bad faith or dilatory motive
on the part of the movant. . .I Foman v. Davis (1962), 371
'
U.S. 178, 182, 83 S.Ct. 227, 230, 9 L.Ed.2d 222, 226. Murphy
contends undue delay exists here. Further, Murphy contends
that because of our November 20, 1980, order denying Blue
Ox's request for a writ of supervisory control, the issue of
"undue delay" is res judicata. We do not agree.
We gave as one reason for our denial of the writ, the
fact that Blue Ox had been guilty of laches and had failed
to prosecute their action diligently. Another reason was
the fact that Blue Ox had a right to appeal the District
Court's denial of their motion to amend. To hold the "laches"
finding res judicata with respect to whether Blue Ox unduly
delayed prosecution of the cause would effectively deny
their right to appeal.
Furthermore, the order denying the writ of supervisory
control was interlocutory in nature and therefore not res
judicata. State ex rel. Davis v. District Court (1977), 172
Plont. 139, 561 P.2d 912. Only final judgments and orders
intended to be final in nature are res judicata. 1B Moore's
Federal Practice §0.409[1], at 1002 (1980).
Prosecution of this case has been delayed. However,
we do not find unreasonable delay warranting denial of Blue Ox's
right to a trial upon the merits. There has been no bad
faith or dilatory motive on the part of Blue Ox. Murphy has
continuously been kept informed of the new and recurring
damages to Blue Ox's land caused by Murphy's operations.
Prejudice to defendant has been minimal due to those updates.
The new damages and theories of liability set forth in
Blue Ox's amended complaint stem from the same occurrence as
the first complaint. Though the evidence shows additional
leaks. since the first filing, the occurrence is oil pollution
of the underground water supply. New causes of action
arising out of the same transaction, occurrence or event may
be set forth in an amended pleading. 3 Moore's Federal
Practice, S15.08 [ 2 ] , at 15-70, (1978).
For these reasons, justice requires Blue Ox be allowed
to amend their original complaint to reflect the new and
recurring damages to the land, as well as the additional
theories of liability.
Our decision to allow Blue Ox to amend the original
complaint renders issue three re consolidation moot. It
also eliminates any reason for dismissing this action for
failure to prosecute.
In Brymerski v. City of Great Falls (1981), Mont.
, 636 P.2d 846, 38 St.Rep. 2001, we stated:
"We adopt the rule that a motion to dismiss
for failure to prosecute will not be granted
if the plaintiff is diligently prosecuting
his claim at the time the motion is filed,
even if at some earlier time the plaintiff may
have failed to act with due diligence."
Brymerski v. City of Great Falls, Mont. at
, 636 P.2d at 848-849, 38 St.Rep. at 2004.
Discovery was conducted by Blue Ox in the spring and
summer of 1982. Pleadings were made in an effort to place
the action in the most procedurally proper position. Appellants
were diligently prosecuting the amended complaint at the
time Murphy filed the Rule 41(b), M.R.Civ.P., motion.
The District Court's orders denying Blue Ox's leave to
amend their complaint and dismissing Blue Ox's action for
failure to prosecute are both reversed. This action is
remanded to the Fifteenth Judicial District Court for trial
on the merits of Blue Ox's ame
We Concur: