No. 82-42
IN THE SUPREME COURT OF THE STATE OF MONTANA
1982
INTERMOUNTAIN TELEPHONE AND
POWE9 COMPANY,
Plaintiff/Applicant and Appellant,
MID-RIVERS TELEPHONE COOPERATIVE, INC.,
Defendant and Respondent.
Appeal from: District Court of the Thirteenth Judicial District,
In and for the County of Yellowstone
Honorable Diane G. Barz, Judge presidina.
Counsel of Record:
For Appellant:
Peterson, Schofield & Leckie, Billings, Montana
Kenneth D. Peterson argued, Billings, Montana
For Respondent:
Crowley, Haughey, Hanson, Toole & Dietrich, Billings,
Montana
T. G. Spear argued, Billinqs, Montana
Submitted: September 10, 1982
Decided: December 16, 1982
Filed: ,--,-
g t i ~ 1982
6
Mr. Justice John C. Sheehy delivered the Opinion of the
Court.
Intermountain Telephone and Power Company (Intermountain)
appeals from an order and judgment of the District Court,
Thirteenth Judicial District Court, Yellowstone County,
dismissing its complaint for a permanent injunction against
Mid-Rivers Telephone Cooperative, Inc. (Mid-Rivers).
After Intermountain had appealed from the order aforesaid
Intermountain moved in the District Court, under Rule 62(c),
l4.R.Civ.P. and Rule 7, M.R.App.Civ.P., for an injunction
against Mid-Rivers pending the appeal. This motion was
denied by the District Court. Intermountain also appeals
from a denial of its Rule 62(c) motion for injunction.
The District Court case number which is assigned to the
cause here under appeal is DV 81-1996. Earlier the same
District Court, but a different district judge, had before
it District Court case no. DV 50-2414, entitled "Intermountain
Telephone and Power Company, Petitioner, versus Department
of Public Service Regulation, Montana Public Service Commission,
Respondents." The District Court held against Intermountain
in that case, and it became the subject of an appeal to this
Court. Our opinion in that case sustaining the position of
the District Court, and against Intermountain, was handed
down October 7, 1982, as our cause no. 81-512 reported
in 651 P.2d 1015, 39 St.Rep. 1962, et seq.
The pertinent facts in this appeal are somewhat parallel
to those stated in the other appeal, where the Department of
Public Service Regulation was the respondent. We will
hereafter restate some of those facts and such additional
facts as may aid the reader in following this decision.
First, however, the issues raised in this case are
essentially two-fold:
1. Was this action, where Intermountain is seeking a
permanent injunction against Mid-Rivers, a collateral attack
against the judgment adverse to Intermountain which had been
handed down in the case involving the Department of Public
Service Regulation?
2. Should the District Court in this case have allowed
the Rule 62(c) motion and issued the requested injunction
pending the appeal of the other cause?
Intermountain provided telephone service to consumers
in the Custer-Yellowstone County, Montana area. After a
number of complaints over a period of years, the Public
Service Commission (the PSC) following a hearing determined
that Intermountain was not providing "reasonably adequate
service" to its customers. PSC concluded in its order that
because of the difficulties it had with Intermountain over
the past three years, it could not depend upon Intermountain
to provide adequate telephone service to the people of the
Custer area and by its order invited other private telephone
companies to come in to Intermountain's service area, and
indicated that a cooperative telephone system, though not
subject to regulation by the PSC would also be welcome.
Following the PSC order, Mi<-Rivers, a co-operative,
moved into the area, then being served by Intermountain, and
began the construction of telephone lines and equipment to
serve customers there.
Intermountain appealed from the PSC order to the District
Court in Yellowstone County. There the PSC order was affirmed.
Appeal was taken to this Court from that ruling of the
District Court, and that became the subject of the appeal
which we handed down on October 7, 1982, as above reported.
While the appeal from the PSC order was pending,
Intermountain filed this action in the Yellowstone County
District Court, on September 30, 1981, seeking a permanent
injunction to be issued against Mid-Rivers, alleging that
the telephone cooperative was duplicating the lines, facilities,
and systems of Intermountain, and that such actions were
unlawful because, as Intermountain alleged, Intermountain
was providing "reasonably adequate service" to the area.
Mid-Rivers moved in the District Court to dismiss the
complaint for a permanent injunction upon the grounds mainly
that the new action was a collateral attack upon a judgment
of the same issue which had been entered in the same District
Court through another presiding district judge.
On November 17, 1981, the District Court dismissed
Intermountain's action for a permanent injunction against
Mid-Rivers. In a memorandun-,explaining its action, the
District Court determined that the issue in the case was
whether Intermountain was providing "reasonably adequate
service" to the area. It held that the specific issue had
previously been decided by the PSC, affirmed by the District
Court on review, and that by its new action, Intermountain
was attempting to relitigate the central issue, thus mounting
a collateral attack upon the prior proceeding.
INTERMOUNTAIN'S ACTION IN THIS CASE IS A COLLATERAL ATTACK
Courts will reject a collateral attack in "every proceeding
in which the integrity of a judgment is challenged, except
those made in the action where the judgment is rendered or
by appeal, and except suits brought to obtain decrees
declaring judgments to be void ab initio." Phillips v.
Loberg (1980), - Mont . - 607 P.2d 561, 563, 564, 37 St.Rep.
,
401, 404. '
As to collateral attack, this case is controlled by our
holding in Armstrong v. High Crest Oils, Inc. (1974), 164
Mont. 187, 195, 520 P.2d 1081, 1086. There the landowners
had brought an action to cancel oil and gas leases to High
Crest upon the grounds that High Crest had breached the
leases in applying for the wrongful creation of a gas field
unit, coupled with the alleged wrongful act of including the
landowner's leases within the unit. Earlier, however, the
landowners had filed a petition for review, in another
district court, of the order of the Montana Oil and Gas
Commission creating the gas unit, alleging the same grounds
for setting aside the order of the commission. This Court
held that the order of the commission 'Yo create the . . .
gas unit is res judicata except in the appropriate District
Court in Montana on judicial review as provided in [the
appeal provisions of our statutes] . . ." 164 Mont. at 195,
520 P.2d at 1086.
Armstrong involved the same parties and the same leases.
Here Mid-Rivers was not a party to the PSC action which was
under judicial review at the time this action was filed. It
makes no difference in this case that identical parties are
not involved in the two actions. The central issue in each
case is whether Intermountain was providing "reasonably
adequate service." Mid-Rivers, as a telephone cooperative,
is prohibited from duplicating lines and facilities, of
the systems of others, if the others are providing "reasonably
adequate service. " Section 35-18-106 (13)(a), MCA. The
central issue to be litigated here was whether ~ntermountain
was providing "reasonably adequate service." That had been
decided adversely to Intermountain in the case involving the
PSC. That decision was under judicial review when this case
was filed. Intermountain's action in this case was a
collateral attack seeking to relitigate the central issue
decided in the case involving the PSC.
- 5-
Nor does it make any difference here that Intermountain,
as it claims, may have improved its system following the
date of the PSC order against it. The correct procedure for
Intermountain to follow was not to file a collateral action,
but to seek to have the District Court review the PSC order
pursuant to section 2-4-703, MCA, in an attempt to have the
order modified or rescinded. Jurisdiction of that issue lay
with the courts involved with the review of the PSC order.
There is no need to discuss the other reasons advanced
by Mid-Rivers in support of the District Court dismissal. It
is abundantly evident that the action against Mid-Rivers was
a collateral attack on a prior administrative decision which
was under judicial review and the District Court properly
dismissed the collateral attack.
THE DISTRICT COURT CORRECTLY DENIED THE RULE 62 MOTION
After the judgment of dismissal was entered against it,
Intermountain moved in this cause for an injunction during
the pendency of the appeal, pursuant to Rule 62(c), 3I.R.Civ.P.
In short, that r u l ~
provides that whenever an appeal is
taken from a final judgment denying an injunction, the
District Court in its discretion may grant an injunction
during the pendency of the appeal upon such terms as it may
consider necessary.
This phase of the cause presents an unusual turn: The
district judge in the PSC case, after affirming the order of
the PSC, granted a stay of its judgment while Intermountain
appealed. While that stay of judgment was in effect, Mid-
Rivers moved into the Custer area and began supplying telephone
equipment and service to customers in that area. Intermountain
brought this separate action to procure a permanent injunction
against Mid-Rivers but ~7asdismissed in the same District
Court, but by a different presiding judge. After entering
the order of dismissal, in the new action, the District
Court refused to grant an injunction pending appeal under
Rule 62(c). Intermountain argues that to be consistent, the
District Court in the new case shculd have granted the Rule
62 injunction, which would have the sane effect as the stay
of judgment in the prior case.
Be that as it may, Intermountain laid no evidentiary or
other basis in this record for a Rule 62(c) injunction. At
the time that Intermountain noticed up its motion for such
an injunction for hearing, Intermountain came to the hearing
unprepared to present facts to the District Court upon which
to predicate the issuance of such an injunction. Mid-Rivers,
on the other hand, had many witnesses, including consumers
in the Custer area, ready to testify that the service being
provided to them by Intermountain was not "reasonably adequate."
Intermountain's counsel informed the District Court that it
was not prepared to present evidence at the hearing. On the
other hand, counsel for Mid-Rivers pointed out to the court
that it was ready to proceed with its witnesses, and asked
for permission to proceed. The following colloquy then
occurred:
"THE COURT: The court will allow you to
proceed Mr. Spear.
"MR. PETERSON: Excuse me Your Honor, T
would just prefer th? court would deny
the motion and T will take it to the
S~~premeCourt.
"THE COURT: Very well. The court
hereby denies the plaintiff's motion to
enter its order pursuant to Montana Rules
of Civil Procedure, Rule 62(c), granting
an injunction against the defendant for
the purpose of maintaining the status quo
in the Custer area during the pendency of
the appeal."
I t i s c l e a r from t h a t s t a t e o f t h e r e c o r d t h a t I n t e r -
m o u n t a i n h a s no g r o u n d s upon which t o a p p e a l from t h e d e n i a l
o f t h e Rule 6 2 ( c ) motion.
The o r d e r s o f t h e D i s t r i c t C o u r t a r e a f f i r m e d i n a l l
respects.
W e Concur:
Mr. J u s t i c e ~ a n i e l . Shea deems h i m s e l f d i s q u a l i f i e d and
J
does n o t p a r t i c i p a t e i n t h i s d e c i s i o n .