No. 90-119
IN THE SUPREME COURT OF THE STATE OF MONTANA
DOUG JOHNS REAL ESTATE, INC., a Montana Corporation,
Plaintiff and Appellant,
-vs-
VESTER R. BANTA and THEILA C. BANTA,
Defendants and Respondents.
APPEAL FROM: District Court of the Eleventh Judicial District,
In and for the County of Flathead,
The Honorable Michael H. Keedy, Judge presiding.
COUNSEL OF RECORD:
For Appellant:
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:
3 Daniel D. Johns, Murphy, Robinson, Heckathorn &
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'-) Phillips, Kalispell, Montana
:
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' I For Respondent:
-
Linda Osorio St. Peter, Missoula, Montana
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Submitted: October 11, 1990
Decided: October 30, 1990
Filed:
Justice John C. Sheehy delivered the Opinion of the Court.
In this case we reverse the order of the District Court,
Eleventh Judicial District, Flathead County, which dismissed the
plaintiff Is complaint under Rule 41 (b), M.R. Civ.P. for lack of
prosecution.
Doug Johns Real Estate, Inc., (Johns) is a Montana corporation
doing business as a real estate broker in Kalispell, Montana. On
June 15, 1987, Vester R. Banta and Theila C. Banta executed and
delivered to Johns a standard listing contract, listing for sale
certain real property owned by them in Flathead County. On August
25, 1987, Johns received and forwarded to the defendants an
agreement signed by prospective buyers to purchase the Bantas'
property. The agreement of purchase was rejected by the Bantas.
It is apparent from the pleadings that the real estate agent
claims that the prospective buyers1 agreement to purchase met the
terms of the listing agreement. The Bantas contend that the terms
and conditions of the proposed purchase agreement did not meet the
listing agreement. Johns contends that it has performed its
broker's agreement pursuant to the terms of the listing contract
and is thereby entitled to a real estate commission equal to 10
percent of the sales price or $3,000.
Johns1 attorney made written demand for payment of the
commission on November 3, 1987, upon the Bantas who reside in
~alifornia. Thereafter William L. Feeney, an attorney practicing
in Lake Port, California, got in touch with counsel for Johns.
Negotiations between counsel apparently failed and Johns1 attorney
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1 I
filed a complaint in the District Court against the Bantas on March
30, 1988. A copy of the complaint was forwarded to the Bantas with
a request that they acknowledge service as an alternative to being
personally served by Johns.
As far as the filings in the District Court record reveal,
nothing further occurred in the matter until October 25, 1988, when
a written acknowledgement of service was filed on behalf of the
Bantas by their local counsel, Linda Osorio St. Peter of Missoula.
On November 10, 1988, Bantasg Montana counsel filed an answer and
counterclaim. The answer in general denies the allegations of the
Johnsg complaint, and counterclaims for reasonable attorneys fees
and costs.
On September 27, 1989, Montana counsel for the Bantas filed
a motion to dismiss for failure to prosecute pursuant to Rule
41 (b), M. R. Civ. P. Johns responded to the motion on October 6,
1989, objecting to the motion to dismiss, and requesting that the
court issue a scheduling order pursuant to Rule 16(b), M.R.Civ.p.
Johns filed a reply to the counterclaim on October 10, 1989.
After briefs were submitted by each counsel respecting the
motion to dismiss, the District Court ordered the complaint to be
dismissed on January 16, 1990. The principal grounds stated by the
District Court for its order follows:
In the instant case, Plaintiff did nothing after filing
his complaint. Service was not perfected on Defendants
until seven (7) months after filing the action. He
instituted no discovery, made no motion for scheduling
order, and failed to respond to the counterclaim until
the motion to dismiss was filed. Additionally, Plaintiff
has given the court no reason that the action was in a
Igholding patternggafter he filed a complaint in March,
1988. The Supreme Court, in Thomas v. Wilson, P.2d
, 46 St.Rep. 160 (1989) affirmed dismissal of a
complaint in which the appellant (plaintiff) conducted
no discovery and delayed any response to respondent's
discovery requests. The Court noted a conspicuous
absence of any reasonable excuse for the appellants1 lack
of prosecution.
The defendants filed a notice of entry of judgment based upon
the January 16, 1990, order of the District Court and Johns timely
appealed from the order. Still pending in District Court is the
motion of the defendant for summary judgment requesting the
District Court to set reasonable attorneys fees for the Bantas.
This Court has had several occasions to deal with involuntary
dismissals under Rule 41(b), M.R.Civ.P. See for example Thomas v.
Wilson (1989), 236 Mont. 33, 767 P.2d 1343; Chisholm v. First
National Bank of Glasgow (1989), 235 Mont. 219, 766 P.2d 868;
Timber Tracts, Inc. v. Fergus Electric Co-op, Inc. (1988), 231
Mont. 40, 753 P.2d 854; Cox v. Myllymaki (1988), 231 Mont. 320, 752
P.2d 1093; Bryrnerski v. city of Great Falls (1981), 195 Mont. 428,
636 P.2d 846, among others.
The general rules that may be distilled from our cases are
that the district court's decision will not be disturbed unless the
court clearly abuses its discretion, Timber Tracts, supra; the
trial court's discretion should not be disturbed unless there is
definite and firm conviction that the district dourt committed a
clear error in weighing the relevant factors, Schackleton v. Neil
(1983), 207 Mont. 96, 101, 672 P.2d 1112, 1115; courts exist
primarily to afford a forum to settle litigable matters between
disputing parties, Brvmarski, supra; a balance must be struck
between judicial efficiency and a plaintiff's right to meaningful
access to the justice system, Cook v. Fergus Electric Co-op, Inc.
(1988), 235 Mont. 173, 176, 765 P.2d 1138, 1140; and because an
involuntary dismissal is a severe result, courts should refrain
from dismissing an action or claim unless there is no other
adequate remedy available and the facts sufficiently call for such
a result. Chisholm, supra.
The principal point of the District Courtls decision, as
appears from the paragraph we have set forth above, is that the
District Court record revealed no activity concerning the case
between the parties for seven months after filing the complaint.
It does not appear that the District Court considered, however, in
granting the motion for dismissal, copies of letters between the
parties which appear to substantiate the contention of Johns'
counsel that an attempt had been made to negotiate a settlement of
the claim during those seven months. On May 9, 1988, the
California counsel for the Bantas, Mr. Feeney, wrote a letter to
counsel for Johns, in which the California counsel indicated his
understanding from a telephone conversation that Johns1 counsel had
agreed to an extension of time for the Bantas to respond to the
complaint, and "no default will be entered pending the outcome of
our settlement negotiation^.^^ It also appears true from those
filings that counsel for Johns had forgotten that service had not
been perfected until he was reminded by Montana counsel in October,
1988. The file does reflect, however, on-going correspondence over
the several months between the filing of the complaint and the
filing of the the answer and counterclaim with at least one offer
of settlement having been made. In a letter of October 17, 1988,
Montana counsel for the Bantas acknowledged a letter from Johns1
counsel dated October 3, 1988, and stated that service would be
accepted on behalf of Mr. and Mrs. Banta. All of this seems in
accordance with an apparent understanding between the parties that
the first appearance in the lawsuit of the Bantas depended upon
the outcome of negotiations between the parties.
A further factor to consider is the effect of an attempt to
serve summons and complaint under Rule 4D(b)(i), M.R.Civ.P. That
provision allows a plaintiff to serve a defendant by mail with a
copy of the summons and complaint together with a notice of
acknowledgement to be signed by the defendants. The benefit to the
defendants by such a mode of service is that they avoid the payment
of costs for personal service which would accrue in the event of
an adverse judgment if they did not complete and return the
acknowledgement of receipt of summons. Rule 4D(b) (ii), M.R. Civ.P.
It is true, of course, following the acknowledgement of
service and the filing of the answer to a counterclaim, that
plaintiff did nothing further as far as the District Court file
reveals, until the motion for dismissal was made. Thereupon Johns
promptly filed a reply to the counterclaim, and asked that a
scheduling order be entered by the ~istrict Court. While no
discovery had been attempted by either party, it is also true that
the modest amount of damages sought perhaps did not merit discovery
beyond presenting to the District Court a pure question of law as
to whether the proffered purchase agreement met the terms of the
listing agreement so as to entitle one party or the other to
judgment. Under Chisholm, supra, there was another adequate remedy
available here, for the District Court could simply have scheduled
the case for trial under Rule 16(b)(4), M.R.Civ.P.
This Court has held that another factor to consider in
determining whether an involuntary dismissal is properly granted
is whether there has been a prior warning to the party occasioning
the delay. Cox, 752 P.2d at 1094; Becky v. Norwest Bank Dillon,
et al. (Mont. 1990), P.2d , 47 St.Rep. 1795, 1799. In the
circumstances of this case, a warning would have been appropriate.
Counsel for appellant has argued that a ten-month delay from
the acknowledgement of service to the motion for dismissal is not
a long enough delay to require an involuntary dismissal, and has
cited to us examples of longer delays appearing in the several
cases, some of which are cited above. We will not involve
ourselves with that contention in this case. At the time the
District Court made its order of dismissal, this case was at issue,
although Johns' reply was prompted by the motion to dismiss, and
an adequate remedy was available to set the cause for trial and
determine the legal issue involved. On that basis we determine
that the District Court abused its discretion and reverse the order
of involuntary dismissal. Cause is remanded to District Court for
further proceedings.
We Concur: