Continental Insurance v. Bottomly

NO. 88-67
IN THE SUPREME COURT OF THE STATE OF MONTANA
1988

CONTINENTAL INSURANCE COMPANY,
Plaintiff and Respondent,
-vs--
GENE BOTTOMLY and VAN BOTTOMLY,
Defendants and Appellants.

APPEAL FROM: District Court of the Eleventh Judicial District,
In and for the County of Flathed,
The Honorable Michael Keedy, Judge presiding.
COUNSEL OF RECORD:
For Appellant:
Graybill, Ostrem, Warner & Crotty; Michael G. Barer,
Great Falls, Montana
For Respondent:
Williams Law Firm; Richard Ranney, Missoula, Montana
Murphy, Robinson, Heckathorn & Phillips; Kalispell,
Montana

Submitted on Briefs: July 14, 1988
Decided: August 18, 1988

Clerk
Justice John Conway Harrison delivered the Opinion of the
Court.

Richard V. Bottomly and James Rottomly (petitioners)
appeal from an order of the District Court of the Eleventh
Judicial District in and for Flathead County denying their
petition to intervene in a suit brought by Continental
Insurance Co. (Continental) seeking subrogation from the
defendants for damages arising from a fire at the
petitioners' cabin near West Glacier, Montana.
A fire destroyed the cabin on August 4, 1982 while the
defendants, who are the brother and nephew of the
petitioners, were staying at the property, which is located
on Lake McDonald. Neither of the defendants were in the
cabin at the time of the fire. The petitioners were insured
against the loss of the cabin by Continental; this insurance
policy named the two petitioners as well as any of their
relatives, as the insured. On September 15, 1982,
Continental issued payment of $50,000 to the petitioners to
cover the loss of the cabin; on November 5, 1982, Continental
issued payment of $25,000 more to the petitioners to cover
the loss of the cabin's contents. Continental filed suit
against the defendants on July 3, 1984 claiming that their
negligence was the proximate cause of the fire. Continental
sought subrogation of $75,000 from the defendants.
The petitioners moved to intervene as the defendants in
the suit under Rule 24 (a) and (b), M.R.Civ.P., on October 5,
1987. The essence of their motion to intervene relies on the
fact that Continental would like to collect from the
defendants, who as relatives are insured and thus not subject
to subrogation. The petitioners contend that such a suit by
Continental is vexing and harassing and constitutes bad faith
in coverage. Under Rule 24 (a), they claim a right to
intervene because their ownership of the property gives them
an interest in Continental's suit. Under Rule 24 (b), they
claim they should be allowed permissive intervention since
their bad faith action against Continental has many factual
and legal questions in common with Continental's suit against
the defendants.
The parties phrase the various issues in different ways
but the dispositive question can be stated quite simply:
Does a right of appeal lie for a proposed intervenor when the
District Court had denied his motion to intervene? We answer
the question negatively and affirm the District Court.
Rule 1, M.R.App.P. defines the limits of appealable
actions. It specifically provides for appeals from final
judgments, certain probate matters, as well as:
(b)(1) ...
(2) From an order granting a new trial;
or refusing to permit an action to be
maintained as a class action; or granting
or dissolving an injunction; or refusing
to grant or dissolve an injunction; or
dissolving or refusing to dissolve an
attachment; from an order changing or
refusing to change the place of trial
when the county designated in the
complaint is not the proper county; from
an order appointing or refusing to
appoint a receiver, or giving directions
with respect to a receivership, or
refusing to vacate an order appointing or
affecting a receiver; from any special
order made after final judgment; and from
such interlocutory judgments or orders,
in actions for partition as determine the
rights and interests of the respective
parties and direct partition to be made.
In any of the cases mentioned in this
subdivision the supreme court, or a
justice thereof, may stay all proceedings
under the order appealed from, on such
conditions as may seem proper.
Note that the rule does not provide for appeals from either
the granting or denial of motions to intervene. A matter not
specifically denominated in Rule 1 is not a proper subject of
appeal. White v. Lobdel (1984), 208 Mont. 295, 302, 678 P.2d
637, 641 (denial of motion to permit joinder); citing Shields
v. Pirkle Refrigerated Freight Lines, Inc. (1979), 181 Mont.
37, 42-43, 591 P.2d 1120, 1123 (order setting aside default
judgment is not appealable as a special order made after
judgment unless its effect is to finally dispose of the
case).
The fact that the rule does not provide for appeals
from orders denying intervention is fatal in this present
action. State ex rel. Palmer v. District Court (Mont. 1980),
619 P.2d 1201, 1203, 37 St.Rep. 1876, 1877-78. The right of
review was preserved in Palmer because there the matter arose
on a writ of supervisory control. However, there too
intervention was denied since the proposed intervenor's
rights already were being represented by a party to the
action. Palmer, 619 P.2d at 1203.
Counsel for both Continental and the petitioners spend
a great deal of time arguing over whether the proposed
intervention in this matter would be by right or by
permission. For there to be intervention by right, the
petitioners contend that (1) their application must have been
made timely; (2) they must have an interest in the property
or transaction; (3) disposition of the suit might impair or
impede their protection of the interest, and (4) the existing
parties are not representing the petitioners' interest.
Using this framework it becomes apparent that the petitioners
were not entitled to intervention by right. First, their
motion to intervene, which was filed some three years after
Continental had filed suit against the defendants, was not
timely. See Archer v . LaMarch Creek Ranch (1977), 174 Mont.
429, 571 P.2d 379; Grenfell v. Duffy (1982), 198 Mont. 90,
643 P.2d 1184. Second, while it is undisputed that the
petitioners have an ownership interest in the real property
that was the subject of the insurance contract, it is equally
undisputed that they have received the benefits of that
insurance contract and that Continental's suit does not deal
with the petitioners' right to insurance. Continental's suit
deals with whether other parties are responsible to
Continental for the fire loss. Lastly, the named defendants
have retained the services of Murphy, Robinson, Heckathorn &
Phillips, whose answer and counterclaims to Continental's
suit state the very same grounds and defenses as does the
petitioners' proposed counterclaim. Many of the paragraphs
are exactly identical. The answer and counterclaim filed by
the named defendant notes and defends the interests of the
petitioners.
This discussion of the merits of the petitioners'
proposed intervention is overshadowed by the rule that
appeals do not lie from orders on such motions. However,
this discussion is relevant to show that there was reason for
the District Court to deny the motion if it chose to do so.
While the purpose of Rule 24 motions for intervention is
generally to promote efficiency and avoid delay and
multiplicity of suits, see State ex rel. Westlake v. District
Court (1946), 119 Mont. 222, 235, 173 P.2d 896, 902-03; there
are times when separate suits might work just as well. The
District Court has determined that this is such a case.
Affirmed.
 We concur: -rr-

4 4 7-
,Chief Justice
Mr. Justice William E. Hunt, Sr., dissenting:

I dissent.
The majority's contention that Rule 1, M.R.App.P.
prevents appellants from appealing the order of the District
Court is untenable. Although the majority has stated that
Rule 24 is designed to promote efficiency and avoid delay by
allowing all interested parties to participate in one action,
they ignore this policy for purely technical reasons. A
better approach is that taken in Moore's Federal Practice.
Rather, a jurisdictional rule has arisen under
which an order denying intervention is appealable
if intervention was a matter of right; but if
intervention is permissive only, the order denying
intervention is appealable only if the court has
abused its discretion.
3A Moore's Federal Practice, ¶ 24.15 (1985).
The appropriate solution therefore should be to
treat all denials of intervention as final orders,
but to reverse only where there was intervention of
right or an abuse of discretion in denying
permissive intervention.
3A Moore's Federal Practice, 9 24.15, (1985).
Richard v. Bottomly and James J. Bottomly are entitled
to intervene as a matter of right under Rule 24(a),
M.R.Civ.P. The four elements necessary to this intervention
are easily met. First, the Bottomlys' application was
timely. Although the motion to intervene was not filed until
3% years after the complaint was filed nothing had occurred
in the case except the filing of an answer. No prejudice or
delay would be caused by allowing intervention at this point.
Second, the Bottomlys claim an interest relating to the
property involved in this action. The undisputed ownership
of the Lake McDonald property by the Bottomlys sufficiently
satisfies this element. Third, it is certain that the
Bottomlys' ability to protect this interest may be impeded or
impaired without their intervention. The Bottomlys plan to
sue plaintiff insurance company for bad faith for bringing
suit against defendants whom the Bottomlys maintain are
insureds under their policy. They would certainly be impeded
from claiming the insurance company had no right to sue if
this suit is allowed to proceed without them. Finally, the
existing parties cannot adequately protect the Bottomlys'
interest in their property. The defendants have no
proprietary interest in the land nor are they the policy
holder.
Given that all the elements necessary for right of
intervention are present, the Bottomlys should have been
allowed to protect their interest in the most efficient
manner. As it stands they shall have to instigate a separate
suit having only one factor to distinguish it from the
present one: the labels of plaintiff and respondent on the
parties.

Justice

Mr. Justice John C. Sheehy, concurs in the foregoing
dissent of Justice Hunt.