NO. 91-146
IN THE SUPREME COURT OF THE STATE OF MONTANA
1992
RONALD and NAN1 LINDER, Husband and Wife,
Plaintiffs and Respondents,
-vs-
MISSOULA COUNTY, a governmental entity,
Defendant and Appellant,
and
6
'
MISSOULA COUNTY, a governmental entity, .L,d
CLtlil'~'
C
-J,*&h
SUPiif&~E COURT
S7'ATE OF lUONTApJA
Third-party Plaintiff and Appellant,
-vs-
STATE OF MONTANA, DEPARTMENT OF HEALTH
AND ENVIRONMENTAL SCIENCES,
Third-party Defendant and Respondent.
APPEAL FROM: District Court of the Fourth Judicial District,
In and for the county of Missoula,
The Honorable Leif B. Erickson, Judge presiding.
COUNSEL OF RECORD:
For Appellant:
Sarah M. Power; Gough, Shanahan, Johnson & Waterman,
Helena, Montana.
For Respondents:
Chris D. Tweeten; Hughes, Kellner, Sullivan & Alke,
Helena, Montana.
Heard: October 23, 1991
Submitted: November 21, 1991
Decided: January 14, 1992
Filed:
Justice John Conway Harrison delivered the Opinion of the Court.
This is an appeal from an Order of the Fourth Judicial
District Court, Missoula County, Montana wherein summary judgment
was granted to the State in a negligence claim surrounding an
outbreak of tuberculosis in Missoula County. Missoula County urges
reversal, since a previous action arising from the same outbreak
incident resulted in an opposite ruling at the district court
level. We affirm in part and reverse in part.
We address the following dispositive issues:
I. Whether the State's summary judgment motion on the
contribution and actionable duty issues is barred by the
doctrine of collateral estoppel when, in the context of
a third-party action, a dismissal with prejudice is
entered into as a result of a release and settlement
agreement that involved the same issues?
11. Does the running of the statute of limitations on an
underlying action by plaintiff bar the County's claim for
contribution against the State?
In 1979, Georgia Katie Chamberlain, a tubercular, moved to
Missoula County from out of state. An outbreak of tuberculosis was
later traced to Mrs. Chamberlain in Missoula County. The Montana
Department of Health and Environmental Sciences and Missoula City-
County Health Department monitored her condition. In 1983,
numerous individuals in Missoula County, including Nani Linder,
reacted positively to a tuberculosis test. In 1986, various
individuals filed suit against Missoula County (County) alleging
negligence in monitoring Mrs. Chamberlain's condition. These suits
can be grouped as follows:
1) Hardin v. Missoula County (Docket No. 64724)
2) Linder et al. v. Missoula County (Docket No. 64030)
(included were plaintiffs "Heavner"): and
2
3) Various unfiled claims.
The County filed a motion to dismiss in July of 1986 which was
denied. The County, in August of 1986, then filed a third-party
claim against the State of Montana (State) seeking contribution in
both the Hardin and Linder actions.
In November 1988, Judge Wheelis denied the State's motion for
summary judgment in the Hardin case and granted Missoula County's
cross-motion for partial summary judgment on the existence of a
duty of care on the part of the State. This Court denied the
State's petition for supervisory control. After Judge Wheelis'
decision in the Hardin case, all but the Linder claim settled via
a "settlement and release agreement" that specifically excepted the
Linder claim. Accordingly, appropriate dismissals with prejudice
were filed.
Later, the State filed a motion for summary judgment with
regard to the Linder case and Missoula County filed a motion for
partial summary judgment. The issues raised in the motions were
almost identical to those which the State unsuccessfully argued in
the Hardin action. On November 5, 1990, the District Court (Hon.
Leif Erickson) granted the State's motion while denying Missoula
County's and Missoula County appeals.
IsSue I. COLLATERAL ESTOPPEL
We previously stated that:
Collateral estoppel is a form of res judicata.
Quite simply, the doctrine "precludes relitigation of
issues actually litigated and determined in a prior
suit." Lawlor v. National Screen Service (1955), 349 U.S.
3
322, 75 S.Ct. 865, 99 L.Ed 1122. It differs from res
judicata, in that res judicata bars the same parties from
relitigating the same cause of action, while collateral
estoppel bars the same parties, or their privies, from
relitigating issues which have been decided with respect
to a different cause of action. Brault v. Smith (1984),
209 Mont. 21, 679 P.2d 236.
The doctrine has three elements:
1. The issue has been decided in a prior adjudication
and is identical to the one presented.
2. A final judgment on the merits was issued.
3. The party against whom the plea is asserted was a
party or privity to the party in the prior adjudication.
Smith v. Schweigert (1990), 241 Mont. 54, 58, 785 ~ . 2 d
195, 197.
To determine whether collateral estoppel is proper in the case
at bar, we focus on element number two. The term "final judgment"
has been interpreted in many and varying ways. What constitutes a
final judgment is not always clear.
Under collateral estoppel, once an issue is actually and
necessarily determined by a court of competent
jurisdiction, that determination is conclusive in
subsequent suits based on a different cause of action
involving a party to the prior litigation.
Montana v. United States (1979), 440 U.S. 147, 154, 99 S.Ct 970,
973, 59 L.Ed.2d 210, 217.
In this case all but the Linders signed a "Settlement and
Release Agreement." Such a settlement is in the family of "consent
judgments" and indicates that the parties chose to remove the
action from the court arena. We previously stated that "the
meaning of the consent judgment is to be gathered from the terms of
the contract and the judgment should not be extended beyond the
clear import of the terms." First Bank Missoula v. District Court
4
(1987), 226 Mont. 515, 523, 737 P.2d 1132, 1137. Accordingly, we
look to the agreement in this case for guidance and find that the
"Settlement and Release Agreementttspecifically and explicitly
excluded the Linder claim as follows:
7. The State and County . . .
have negotiated an
agreement settling all claims which have arisen or may
arise between the State and the County from the subject
matter described herein, with the sole and exclusive
exception of the claims arising from the claims asserted
against the County by Ronald and Nani Linder.
8. The State and County agree and finally
compromise and settle all claims available to the County
against the State arising from ... contact of any kind,
direct or indirect, with Georgia Katie Chamberlain,
saving and excepting only the claims filed in Missoula
County Docket 64030 on behalf of Ronald and Nani Linder.
...
...
11. The County acknowledges that settlement of the
claims settled herein shall not be construed, in the
context of the claims of Ronald and Nani Linder or in any
other context, as an admission of liability on the part
of the State, and that the State expressly denies
liability for the claims of Ronald and Nani Linder....
This evidence clearly indicates a lack of intent to include the
Linders in the settlement. Nor do we find intent to foster any
issue preclusion. On the contrary, looking at the settlement
document set forth above, it is evident that the parties did not
intend to create any finality with regard to the issues as they
might arise in the Linder claim. Essentially, two groups of
plaintiffs filed suit separately. All settled prior to trial save
one, Nani Linder. It is obvious that the agreement lacks any issue
preclusive intent, and none can be inferred.
This matter entails addressing the question of whether a
5
consent judgment constitutes a final judgment on the merits by a
court of competent jurisdiction. If so, it may possibly serve a
preclusive effect on the same issues. Ordinarily, a consent
judgment approving a settlement does not give rise to collateral
estoppel or issue preclusion. Avondale Shipyards, Inc. v. Insured
Lloyd's (5th Cir. 1986), 786 F.2d 1265, 1272. The intent of the
parties in the settlement agreement is a critical component of
element number two.
This accords with the view of a number of legal
scholars, who treat the question of the extent, if any,
of the finality created by a consent decree to be one of
the intention of the parties. If they have in their
compromise indicated clearly the intention that the
decree to be entered shall not only terminate the
litigation of claims but, also, determine finally certain
issues, then their intention should be effectuated.
Kaspar Wire Works, Inc. v. LECO Engineering & Mach. (5th Cir.
1978), 575 F.2d 530, 539.
A consent judgment is basically contractual in nature and its
preclusive effects should be measured by the intent of the parties.
A consent judgment is issue preclusive only if it is clear that the
parties intended to give it that effect. Southern Pac.
Communications Co. v. American Tel. & Tel. Co. (D.C. Cir. 1984)'
740 F.2d 1011, 1021.
Issue preclusion does not attach unless it is clearly
shown that the parties intended that the issue be
foreclosed in other litigation. .
In most .
circumstances, it is recognized that consent agreements
ordinarily are intended to preclude any further
litigation on the claim presented but are not intended to
preclude further litigation on any of the issues
presented. Thus consent iudments ordinarilv suooort
claim Kreclusion but not issue oreclusion.
Wright, Miller and Cooper, Federal Practice and Procedure:
6
Jurisdiction 9 4443, at 382-385 (1985) (emphasis added).
With respect to element number three, we also point out that
the parties in the Hardin and Linder suits are not identical. We
acknowledge the existence of the County and State as common
parties, but the plaintiffs, while having similar injuries, are not
the same, nor are they privies of one another.
Today, we enunciate a rule that, generally, consent agreements
do not have an issue preclusive effect on future litigants, unless
that is the intent of the parties. The order of dismissal in
Hardin was a consent judgment based on a settlement agreement which
specifically excluded the Linders. Since the agreement lacked
evidence of an intent to preclude future litigation on the issues,
the requisite elements of collateral estoppel are not present.
Therefore, we conclude that the application of the doctrine of
collateral estoppel is improper in the case at bar. Accordingly,
we affirm the District Court on this issue.
Issue 11. STATUTE OF LIMITATIONS
The State urges that since the statute of limitations has run
on the Linders' claim against the State under 9 27-1-703, MCA, the
State is "a party against whom recovery i s not allowed" prohibiting
the County's contribution claim. We disagree.
The State relies on our opinion of State ex rel. Deere & Co.
v. District Court (1986), 224 Mont. 384, 730 P.2d 396. Deere is
not on point and distinguishable from the case at bar in several
respects. Deere involved two defendants, Deere and Wade's Backhoe.
7
Prior to trial, Deere settled for $25,000 and Wade's Backhoe tried
to join Deere under a contribution theory which we disallowed. We
said that Wade's Backhoe could not successfully join Deere because,
under 5 27-1-703, MCA, Deere was not a party against whom recovery
was possible, due to Deere's settlement with the plaintiff.
Settlement is a way for a defendant to eliminate future liability.
In the case at bar the facts are somewhat similar as to the
involvement of a plaintiff and two potential defendants. However,
the similarity ends here even though the plaintiffs initiated suit
solely against the County and later the County sought to join the
State via contribution. In the instant case, the plaintiffs
settled with neither party; this is a stark difference from the
facts of Deere. Clearly, this difference makes the case at bar
distinguishable from Deere and the cases that follow it. (See
Sprinkle v. B.N. Railroad (1989), 236 Mont. 383, 769 P.2d 1261.)
We conclude that the instant case does not fall within the
purview of the statutory language of 3 27-1-703, MCA, and therefore
the County could conceivably have a contribution action against the
State. Accordingly, we move on to the statute of limitations issue
specifically.
The State asserts that since the statute of limitations has
run on the plaintiffs' original claim, the County is barred by the
underlying statute of limitations and cannot initiate a
contribution cause of action to join the State. This is a case of
first impression in Montana.
A statute of limitations is meant to provide a reasonable
8
period of time in whjch wronged parties can i.ni.tiate suit and
obtain redress. Such time frame also allows defendants to rest
easy after the passage of a requisite period of time, so as not to
keep causes of action forever lurking in the distance. The time
period specified by a statute of limitations seeks to balance the
interests of both parties.
We carefully consider the two pathways possible on the statute
of limitations issue. The State asserts that the only reasonable
choice in the case at bar is to adopt the statute of limitations o f
the underlying action, thereby barring the County's contribution
claim against the State. On the other hand, if such a position is
taken, the County accurately points out that full redress will be
denied to wronged parties especially when potential defendants are
not easily identified, or when e.xistj.ng factual circumstances later
reveal that a new unjoi.ned party may be partially at fault. Here
an existing defendant should not be prevented from obtaining
contribution from another non-settling party.
In addressing this issue, we carefully assess and balance the
interests of both parties to arrive at a workable but equitable
general rule of law. In a situation such as the case at bar, we
conclude that an emphasis must be placed on the opportunity for
full redress from appropriate parties in keeping with the spirit of
Montana's stance on comparative negligence.
Idaho previously addressed this issue in Schiess v. Bates
(Idaho 1984), 693 P.2d 440. In Schiess, a wrongful death action,
the plaintiff's spouse and one of her children died in a boating
9
incident which the defendant survived. The plaintiff filed suit on
behalf of her surviving children which alleged the defendant’s
negligence. The defendant denied negligence and claimed
contributory negligence on the part of plaintiff’s decedent spouse.
Plaintiff argued that the defendant’s contributory negligence claim
was barred by Idaho’s statute of limitations for probate. The
Idaho court disagreed and set forth a general rule.
The rule, recognized in nearly all jurisdictions,
including Idaho, is that the cause of action for
contribution or indemnity is distinct fromthe underlying
cause of action, and the time from which the statute of
limitations for such a cause of action begins to run is
when the underlying claim, judgment, or settlement is
paid or discharged.
Schiess, 693 P.2d at 442; citing May Trucking Co. v. International
Harvester Co. (Idaho 1975), 543 P.2d 1159, 1162. In Schiess, since
there was no underlying judgment, the claim for indemnity or
contribution had not yet arisen, and therefore could not yet be
barred by any statute of limitations.
While the statute of limitations addressed in Schiess is that
of probate, we see a direct analogy and conclude that the general
rule of law enunciated by the Idaho Supreme Court is appropriate
for Montana. We note that our reasoning today is in harmony with
our opinion in St. Paul Fire & Marine Co. v. Thompson (1969), 152
Mont. 396, 451 P.2d 98, even though St. Paul dealt with an
indemnity issue rather than a contribution claim. Though
contribution is controlled by statute in Montana, St. Paul is still
helpful and consistent with the position we take today. In St.
Paul
-I we stated that “the right of indemnity does not arise until
10
the obligation arises . . . the absolute right does not arise until
payment has been made." St. Paul, 152 Mont. at 403, 451 P.2d at
102.
Applying the general rule to the case at bar, the County's
contribution claim against the State is not barred by the
underlying statute of limitations. The contribution claim is a
distinct claim and does not arise until judgment or settlement is
paid or discharged. Since the cause of action has not yet arisen
it cannot be barred by the statute of limitations. Accordingly, we
reverse the District Court on this issue.
Affirmed in part and reversed in part.
We concur:
v
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January 14, 1992
CERTIFICATE OF SERVICE
I hereby certify that the following order was sent by United States mail, prepaid, to the
following named:
Sarah M. Power
GOUGH, S W A H A N , JOHNSON & WATERMAN
P.O. Box 1715
Helena, MT 59624-1715
William A. Rossbach
ROSSBACH & WHISTON
P.O. Box 8988
Missoula, MT 59807-8988
Chris Tweeten
HUGHES, KELLNER, SULLIVAN & ALKE
P.O. Box 1166
Helena, MT 59624
ED SMITH
CLERK OF THE SUPREME COURT
,
.
STATE OF MONTANA A
BY
Deputy[