NO. 94-323
IN THE SUPREME COURT OF THE STATE OF MONTANA
1995
STATE OF MONTANA, ex rel. DEPARTMENT
OF HEALTH AND ENVIRONMENTAL SCIENCES,
Plaintiff and Respondent,
-vs -
PEGASUS GOLD CORPORATION,
Defendant,
and
ZORTMAN MINING, INC.,
Defendant and Appellant,
ISLAND MOUNTAIN PROTECTORS,
Intervener and Respondent.
APPEAL FROM: District Court of the First Judicial District,
1n and for the County of Lewis & Clark,
The Honorable Jeffrey M. Sherlock, Judge presiding.
COUNSEL OF RECORD:
For Appellant:
James B. Lippert, Alan J. Joscelyn; Gough,
Shanahan, Johnson & Waterman, Helena, Montana
For Respondent:
Robert J. Thompson, Special Ass't Attorney General,
Department of Health & Environmental Sciences,
Helena, Montana
For Intervener:
Peter Michael Meloy, Attorney at Law, Helena,
Montana
Submitted on Briefs:
Filed:
Justice Karla M. Gray delivered the Opinion of the Court
Zortman Mining, Inc. (ZMI) appeals from an order of the First
Judicial District Court, Lewis and Clark County, denying its motion
to change venue to Phillips County. We affirm.
The State of Montana, through its Department of Health and
Environmental Sciences (Department), filed a complaint and
application for an injunction in the First Judicial District Court
against defendants ZMI and Pegasus Gold Corporation (Pegasus). The
Department alleged multiple violations of the Montana Water Quality
Act at the Zortman and Landusky mines located in Phillips County.
It also alleged that Pegasus owned or controlled the mines and that
both Pegasus and ZMI did business in Lewis and Clark County, making
that county a proper venue for trial.
ZMI moved for a change of venue to Phillips County, asserting
that Pegasus was not a proper defendant and, as a result, could not
be used to support the Department's choice of venue; ZMI also
contended that it was not doing business in Lewis and Clark County.
Finally, ZMI argued that venue in Phillips County would promote the
ends of justice and the convenience of witnesses because ZMI's
business is located there. ZMI filed a supporting affidavit from
Rolin Erickson, its Project Manager, stating that ZMI is the owner
of the mines; the mines are located in Phillips County; the
operation of the mines is ZMI's only business; and ZMI's offices,
and land under its control, are solely in Phillips County.
2
Pegasus filed a concurrent motion to dismiss it from the
action or, in the alternative, for summary judgment; it asserted
that the Department could not establish a genuine issue of material
fact regarding whether Pegasus owned or controlled the Zortman and
Landusky mines. Pegasus supported its motion with an affidavit of
F. Alan Fletcher, its Vice President, General Counsel and
Secretary, stating that ZMI's only business is the day-to-day
operation of the Zortman and Landusky mines and that Pegasus, which
maintains its corporate headquarters in Spokane, Washington,
maintained separate offices and mailing addresses and is, in all
respects, a corporate entity separate from ZMI.
The Department opposed both motions and filed an affidavit
from Thomas Reid, a Department Water Quality Specialist. Reid
stated that Pegasus actively corresponds and negotiates with the
Department regarding regulation of the Zortman and Landusky mines
and that he was led to believe that Pegasus represented ZMI's
interests regarding water quality at the mines.
The District Court denied ZMI's motion to change venue and
Pegasus' motion to dismiss. ZMI appeals the denial of its motion.
1. Did the District Court err in denying ZMI's § 25-2-
201(1), MCA, motion for a change of venue?
The District Court denied ZMI's 5 25-2-201(l), MCA, motion
which contended that Lewis and Clark County was not a "proper
county." It determined that Pegasus was a named defendant and,
under the facts alleged in the complaint, was located--and doing
3
business--in Lewis and Clark County; thus, the court concluded,
that county is a proper venue for the action. Because venue in
Lewis and Clark County was proper for defendant Pegasus, the court
further concluded that venue for defendant ZMI was proper in Lewis
and Clark County even though ZMI maintained offices and was located
in Phillips County. ZMI asserts error regarding both conclusions
and we will address them separately.
A determination regarding whether a county is the proper place
for trial under 5 25-2-201(l), MCA, "is not a question of fact; it
is a question of law involving the application of venue statutes to
pleaded facts." Minervino v. University of Montana (19931, 258
Mont. 493, 497, 853 P.2d 1242, 1245. We review a district court's
conclusion regarding venue to determine whether it is correct.
Carter v. Nye (Mont. 1994), 879 P.2d 729, 730, 51 St.Rep. 781, 782;
citing Emery v. Federated Foods, Inc. (1993), 262 Mont. 83, 87, 863
P.2d 426, 429.
The Department's complaint named both ZMI and Pegasus as
defendants and alleged that they had violated the Montana Water
Quality Act (the Act) by discharging waste into surface water in
the area of the mines. Section 75-5-614(l), MCA, specifically
authorizes the Department to file its complaint "in the district
court of the county in which the defendant is located or resides or
is doing business . . .'I It is undisputed that Pegasus, a named
defendant in the Department's complaint, "is doing business" in
Lewis and Clark County for purposes of § 75-5-614(l), MCA.
4
If an action is filed in a county which is not designated as
a proper place of trial, a defendant may move for a change in
venue.. Section 25-2-114, MCA. The district court must grant such
a motion to change venue if the county designated in the complaint
is not a proper county. Section 25-2-201(l), MCA. It is axiomatic
"that venue will be determined by the status of the parties and
pleadings at the time of the complaint or at the time the moving
party appears in the action." Emerv, 863 P.2d at 429 (citations
omitted); see also Petersen v. Tucker (1987), 228 Mont. 393, 395,
- -
142 P.2d 483, 484. Moreover, "[tlhe averments of the complaint
will be taken as true in considering the motion . . .'I Johnson
v. Clark (1957), 131 Mont. 454, 461, 311 P.2d 772, 776.
ZMI challenges the District Court's venue determination by
focusing on Pegasus' status as a defendant in the action. ZMI
asserts that Pegasus does not own or control the mines at issue
and, therefore, the fact that Pegasus "does business" in Lewis and
Clark County by maintaining an office there is irrelevant to the
court's venue determination.
We rejected a substantially similar argument in Petersen. In
that case, the plaintiffs filed an action in Missoula County
alleging tortious conduct and civil rights violations against the
Office of the State Auditor and several individual defendants
residing in Lewis and Clark County. Petersen, 742 P.2d at 483.
The defendants moved for a change of venue and to dismiss the State
as a party asserting that, if the State were dismissed, the sole
5
proper venue for the action would be Lewis and Clark County.
Petersen, 742 P.2d at 484. We determined that the State was a
named party in the complaint and had not been dismissed. Given
that record, and the fact that the venue statute at issue allowed
a plaintiff to bring an action against the State in the county
where the plaintiff resides, we concluded that venue in Missoula
County was proper. Petersen, 742 P.2d at 484-85.
The Petersen principles regarding the status of the parties in
the action at the time of the motion apply here and dictate the
same result. Pegasus is specifically named as a defendant and has
not been dismissed from the suit. We conclude, therefore, that the
District Court was correct in considering Pegasus' status as a
named defendant in making its determination regarding venue.
ZMI contends that the District Court erred by accepting the
facts alleged in the complaint as true and not factoring the
uncontradicted affidavits of Fletcher and Erickson into its
decision. ZMI argues that proper consideration of the affidavits
by the court would have resulted in a determination that Pegasus,
a corporate entity separate from ZMI, was not a proper defendant
and, thus, that Pegasus' activities in Lewis and Clark County were
irrelevant to the venue issue.
We previously have determined that district courts may
consider affidavits relating to a motion to change venue. I.S.C.
Distributors, Inc. v. Trevor (1993), 259 Mont. 460, 464, 856 P.2d
977, 979; citing Hopkins v. Scottie Homes, Inc. (1979), 180 Mont.
6
498, 501, 591 P.2d 230, 232. We also have stated that when
affidavits submitted by one party are uncontradicted, the facts
stated therein must be taken as true. Hookins, 591 P.2d at 232
(citation omitted).
We note that ZMI supported its 5 25-2-201(l), MCA, venue
motion with Erickson's affidavit; its motion neither referred to,
nor relied upon, the statements in Fletcher's affidavit filed in
support of Pegasus' motion to dismiss. Thus, ZMI cannot rely on
the Fletcher affidavit.
Erickson's affidavit simply states that ZMI's operation and
ownership of the mines occur solely within Phillips County. While
Erickson addresses ZMI's ownership of the mines, he does not state
facts which contradict the allegation in the complaint that
Pegasus, as ZMI's parent, controls the operation of the mines.
Indeed, Erickson's affidavit relates primarily to whether ZMI is
located, or doing business, in Lewis and Clark County. Based on
this record, the District Court did not err in focusing on the
allegations in the complaint to make its determination regarding
venue based on the county in which Pegasus does business.
ZMI makes additional arguments relating to whether Pegasus is
a proper party defendant in this action. ZMI cites to the Fletcher
affidavit and contends that, if the District Court had properly
considered that affidavit, it would not have felt "constrained" to
keep Pegasus as a party to the action. ZMI's argument clearly
relates to the District Court's denial of Pegasus' motion to
7
dismiss, rather than to the denial of its motion for change of
venue.
In its order, the District Court explicitly stated that it
would address ZMI’s motion for a change of venue prior to deciding
other pending motions. This was the proper approach, given the
court's obligation to determine venue by the status of the parties
and pleadings at the time of the complaint. See Emery, 863 P.2d at
429. After making its venue determination, the court went on to
separately address Pegasus' motion to dismiss.
Rule 4(c), M.R.App.P., specifically requires that (1 It1 he
notice of appeal . . . shall designate the judgment, order or part
thereof appealed from." ZMI's notice of appeal establishes that
the appeal before us is "from the order denying its motion to
change venue . . . .'I No appeal of the court's denial of Pegasus'
motion to dismiss is before us; indeed, ZMI could not appeal from
the denial of another party's motion and, in any event, the denial
of a motion to dismiss is not appealable under Rule 1, M.R.App.P.
Therefore, our discussion is limited to the venue issue which is
properly presented for review and we decline to address ZMI's
additional arguments. See Carter, 879 P.2d at 730; Petersen, 742
P.2d at 484.
As stated above, the District Court properly relied on
Pegasus' status as a named defendant and Pegasus' activities within
Lewis and Clark County in making a determination regarding venue.
We hold that the District Court did not err in concluding, based on
8
its application of the statutory venue rule to the pleaded facts,
that venue is proper in Lewis and Clark County.
ZMI makes a separate argument that venue in Lewis and Clark
County is not proper for ZMI under § 75-5-614(l), MCA, because it
is not located in Lewis and Clark County and does not do business
there. Section 25-2-117, MCA, provides that "[ilf there are two or
more defendants in an action, a county that is a proper place of
trial for any defendant is proper for all defendants. . .'I Based
on our holding that Lewis and Clark County is a proper venue for
defendant Pegasus, we need not further address this argument.
2 . Did the District Court err in not considering ZMI's
argument regarding promoting the ends of justice and
convenience of witnesses?
ZMI's final argument is that the District Court erred in not
granting, or even alluding to, its § 25-2-201(3), MCA, motion for
a change in venue to promote the ends of justice and for the
convenience of witnesses. It asserts that requiring ZMI to submit
to a court located hundreds of miles away and unfamiliar with the
mining operation would be unjust. ZMI further asserts that
requiring mine personnel to travel such distances and spend time
away from work to provide testimony would cause a significant
impact on ZMI's operation.
Rule l(b) (2), M.R.App.P., provides for an interlocutory appeal
from an order changing or refusing to change the place of trial
"when the county designated in the complaint is not the proper
county . . . .I' The quoted language of this Rule mirrors that
9
contained in § 25-2-201(l), MCA. Thus, by its plain terms, Rule
l(b) (2), M.R.App.P., permits interlocutory appeals regarding venue
only from orders denying or granting a motion to change venue which
were made pursuant to 5 25-2-201(l), MCA. ZMI's motion to change
venue on "justice" and "convenience" grounds was filed pursuant to
§ 25-2-201(3), MCA, and, therefore, is not appealable under Rule
lb) O), M.R.App.P. As a result, we do not address the merits of
this argument.
Affirmed.
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February 15, 1995
CERTIFICATE OF SERVICE
I hereby certify that the following certified order was sent by United States mail, prepaid, to the
following named:
Alan J. Joscelyn
Gough, Shanahan, Johnson & Waterman
P.O. Box 1715
Helena, MT 59624-1715
David W. Tundermann; Jim Butler; Lisa A. Kirschner
Parsons, Behle & Latimet
P.O. Box 45898
Salt Lake City, UT 84145-0898
Robert .I. Thompson
Special Assistant Attorney General
Department of Health & Environmental Sciences
Legal Division, Cogswell Building
Helena MT 59620-0902
Peter Michael Meloy
Attornev At Law
Box 1241
Helena MT 59624-1241
Donald R. Marble
Attorney At Law
Box 649
Chester MT 59522-0649
Paul Zogg
Attorney At Law
911 16th Street #6
Boulder CO 80302
Robert Golten, Jr., Esq.
University of Colorado Indian Law Clinic
Box 404 Flemina Law Building
Boulder CO 80309-0404
ED SMITH
CLERK OF THE SUPREME COURT
STATE OF MONTANA