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No. 01-218
IN THE SUPREME COURT OF THE STATE OF MONTANA
2001 MT 311
JAY E. LUNDQUIST and
DONNA M. LUNDQUIST
Plaintiffs, Appellants,
and Cross-Respondents,
v.
MICHAEL W. MCBETH and
MICHAEL W. MCBETH d/b/a
COLDWELL BANK KEYSTONE REALTY,
Defendants, Respondents,
and Cross-Appellants,
and
JANE and JOHN DOES, one through six,
Defendants.
APPEAL FROM: District Court of the Third Judicial District,
In and for the County of Granite,
The Honorable Ted L. Mizner, Judge presiding.
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COUNSEL OF RECORD:
For Appellants:
Jay E. Lundquist and Donna M. Lundquist (pro se), Philipsburg, Montana
For Respondents:
Joseph C. Connors, Jr., Connors Law Firm, P.L.L.P., Anaconda, Montana
Submitted on Briefs: December 28, 2001
Decided: December 31, 2001 Filed:
__________________________________________
Clerk
Justice Terry N. Trieweiler delivered the Opinion of the Court.
¶1 Plaintiffs, Jay E. Lundquist and Donna M. Lundquist, attempted to file a pro se
complaint against Defendant, Michael W. McBeth, in the District Court for the Third
Judicial District in Granite County to void an allegedly fraudulent conveyance of real
estate. The District Court ordered the complaint withdrawn pursuant to Rules 11 and 15
(a), M.R.Civ.P. Subsequently, Lundquists filed what they deemed to be an amended
complaint. McBeth filed a motion to dismiss the amended complaint as untimely, pursuant
to the statute of limitations for fraudulent transfers. Further, McBeth requested that the
District Court order Lundquists to pay McBeth's reasonable attorney fees and costs
incurred to defend the action.
¶2 Because the District Court ordered the original complaint withdrawn, the District Court
did not attribute the original complaint's filing date to the amended complaint. Therefore,
the District Court granted McBeth's motion to dismiss. The District Court denied
McBeth's request for attorney fees and costs. Lundquists appeal the District Court's order
of dismissal. McBeth cross-appeals that portion of the District Court's order which denied
recovery of attorney fees and costs. We reverse the District Court's order of dismissal.
¶3 The following issues are raised on appeal:
¶4 1. Did the District Court err when it dismissed Lundquists' complaint?
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¶5 2. Did the District Court err when it denied McBeth's request for attorney fees and
costs?
FACTUAL BACKGROUND
¶6 On June 17, 1996, John Shook and others filed a complaint, with cause number DV-96-
17, against Lundquists which sought damages for an alleged assault and battery and
several instances of trespass to property. On July 3, 1996, Lundquists filed their answer
which denied liability for the alleged damages and counterclaimed against the plaintiffs
for damages based on numerous allegations. On May 1, 1998, Lundquists filed an
amended answer and counterclaim which cited new allegations of impropriety and
(1)
counterclaimed against a newly named plaintiff Michael Hamilton, Shook's roommate.
¶7 Hamilton did not respond to Lundquists' amended counterclaim. Therefore, on July 24,
1998, the District Court entered a default judgment against Hamilton and ordered
Hamilton to pay $96,200 to Lundquists. Soon thereafter, on November 17, 1998, the
District Court entered a default judgment against Shook in favor of Lundquists for Shook's
failure to comply with discovery requests. The District Court ordered Shook to pay
$202,347 to Lundquists. The District Court also, among other things, prohibited Shook
and Hamilton from transferring any of their property prior to a hearing to review a
fraudulent transfer of property allegation raised by Lundquists as judgment creditors.
¶8 On May 23, 2000, Lundquists filed a complaint, with the same cause number as the
previous action, against Shook, Hamilton, June E. Pederson, and Pam S. Pederson. The
complaint alleged that Shook transferred a parcel of real estate to Hamilton during the
course of the above proceedings. Hamilton in turn transferred his interest in the parcel to
the Pedersons. Lundquists claimed this transfer was fraudulent and requested that the
District Court set aside the transfer to allow Lundquists to execute on the property. On
June 20, 2000, the District Court found that the conveyance was fraudulent, voided the
conveyance, and awarded the property to Lundquists.
¶9 Up to this point, Lundquists retained counsel for all of the above proceedings.
However, on August 25, 2000, Lundquists filed a pro se complaint against Shook,
Hamilton, and McBeth. The complaint alleged that Shook and Hamilton fraudulently
conveyed a parcel of real estate to McBeth on August 26, 1998. Therefore, Lundquists
filed this complaint one day prior to the expiration of the fraudulent transfer statute of
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limitations. Lundquists filed this complaint with the same cause number as the previous
action, DV-96-17. On September 21, 2000, Lundquists' attorney of record in cause number
DV-96-17 executed a notice to the District Court which indicated that he was not
representing Lundquists in the action involving McBeth. On September 21, 2000, McBeth
was served with a copy of the complaint and summons.
¶10 One day prior to service of process on McBeth, the District Court entered an order
directing the Clerk of Court to withdraw Lundquists' complaint. The District Court
ordered the complaint withdrawn because the complaint was filed in the same cause of
action previously pending and Lundquists (1) did not obtain the District Court's consent to
amend prior pleadings, and (2) did not have their attorney of record, in cause number DV-
96-17, sign the August 25, 2000, complaint.
¶11 On October 9, 2000, Lundquists filed a motion which requested that the District Court
amend its order to direct the Clerk of Court to assign a new cause number to the August
25, 2000, complaint and allow Lundquists to amend that complaint, thus, retaining the
August 25, 2000, filing date. The District Court denied Lundquists' motion and stated, "If
a new complaint is to be filed by the Plaintiff acting pro se, it will be filed as a new cause
number on the date which it was presented for filing and not on the date the 'Complaint
with Jury Trial Demand' was originally attempted to be filed." Therefore, on November 8,
2000, Lundquists filed an "Amended Complaint with Jury Demand" with a new cause
number, DV-00-24.
¶12 On November 28, 2000, McBeth filed a motion to dismiss Lundquists' amended
complaint, citing the expiration of the fraudulent transfer statute of limitations. Further,
McBeth requested that the District Court order Lundquists to pay McBeth's reasonable
attorney fees and costs incurred in defending the action. On February 12, 2001, the
District Court granted McBeth's motion to dismiss but denied McBeth's request for
attorney fees and costs. Lundquists appeal the District Court's order of dismissal. McBeth
cross-appeals that portion of the District Court's order which denied McBeth's request for
attorney fees and costs.
STANDARD OF REVIEW
¶13 The issue of whether a district court properly applied the statute of limitations and
granted a Rule 12(b)(6), M.R.Civ.P., motion to dismiss presents a question of law.
Hollister v. Forsythe (1995), 270 Mont. 91, 93, 889 P.2d 1205, 1206. The standard of
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review of a district court's conclusions of law is whether the court's interpretation of the
law is correct. Carbon County v. Union Reserve Coal Co. (1995), 271 Mont. 459, 469, 898
P.2d 680, 686. We review a district court's conclusions regarding Rule 11, M.R.Civ.P.,
sanctions for an abuse of discretion. Shull v. First Interstate Bank (1994), 269 Mont. 32,
39, 887 P.2d 193, 197.
DISCUSSION
¶14 1. Did the District Court err when it dismissed Lundquists' complaint?
¶15 On September 20, 2000, the District Court ordered Lundquists' pro se complaint
withdrawn. In its order, the District Court cited two justifications for withdrawal of the
complaint: (1) Lundquists' failure to obtain leave of court to amend their original
complaint; and (2) the fact that the new pleading did not include the signature of
Lundquists' counsel of record. From what we can deduce, the District Court was referring
to Rules 11 and 15(a), M.R.Civ.P., when it ordered Lundquists' complaint withdrawn.
¶16 Lundquists' August 25, 2000, complaint named a new defendant, McBeth, and was
based on a real estate transaction independent from the transfer litigated in cause number
DV-96-17. Lundquists assert that they intended to proceed against McBeth pro se.
Therefore, they filed a notice, signed by their previous counsel of record, which informed
the District Court of that intent. In proceeding pro se, Lundquists contend that they simply
used the prior fraudulent transfer complaint as a template for the August 25, 2000,
complaint. Thus, Lundquists inadvertently included cause number DV-96-17 on the
August 25, 2000, complaint. Lundquists insist that to dismiss this case on the sheer
technicality of an incorrect cause number would frustrate the purpose of the Montana
Rules of Civil Procedure, i.e., to secure the just, speedy, and inexpensive determination of
every action. See Rule 1, M.R.Civ.P. We agree.
¶17 In Dungan v. County of Pierce (Wis. Ct. App. 1992), 486 N.W.2d 579, the Court of
Appeals of Wisconsin addressed a similar issue. In Dungan, the plaintiff, acting pro se,
filed a complaint and summons which named Pierce County as the defendant. In error, the
summons directed Pierce County to serve its answer on an attorney hired by Dungan in a
former lawsuit. Since the summons designated an agent for receipt of the answer as
someone other than the pro se plaintiff, the summons failed to comply with Wisconsin's
summons' statutes. Pierce County filed a motion to dismiss for lack of personal
jurisdiction based on the defect. The trial court found Dungan's motion "fatally defective"
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and granted Pierce County's motion.
¶18 The Court of Appeals of Wisconsin reversed the trial court and concluded that the
determination of whether a defect is fatal to a court's jurisdiction depends on whether the
defect is fundamental or technical. Dungan, 486 N.W.2d at 582. The Court stated:
If the defect is fundamental, the court has no jurisdiction to proceed and dismissal of
the summons and complaint is required. If the defect is technical and the plaintiff
can show that the defendant was not prejudiced by the defect, the error will not
defeat personal jurisdiction and the court may proceed with the case.
Dungan, 486 N.W.2d at 582. The burden is on the complainant to show there was no
defect, or, if there was a defect, that it was not fundamental but technical and did not
prejudice the defendant. American Family Mut. Ins. Co. v. Royal Ins. Co. of Am. (Wis.
1992), 481 N.W.2d 629, 632.
¶19 Those defects which Wisconsin treats as fundamental are typically procedural errors, i.
e., failure to file a summons and complaint which names the defendant, failure to
authenticate the copy served on the defendant, and failure to timely serve the defendant.
American Family, 481 N.W.2d at 632-33. Alternatively, those cases which allow
nonprejudicial technical defects generally involve errors in content and form. Dungan, 486
N.W.2d at 582. Defects which Wisconsin has treated as technical include naming someone
other than the pro se plaintiff as agent for receipt of the answer (Dungan, 486 N.W.2d at
582); failing to direct the defendant to answer within 20 days (Canadian Pac. Ltd. v.
Omark-Prentice Hydraulics (Wis. Ct. App. 1978), 272 N.W.2d 407, 408); errors
committed by the clerk of court (State v. Hooper (Wis. Ct. App. 1985), 364 N.W.2d 175,
177); failing to properly sign the summons and complaint (Novak v. Phillips (Wis. Ct.
App. 2001), 631 N.W.2d 635, 641); and the erroneous assignment of an incorrect case
number on a summons and complaint (American Family, 481 N.W.2d at 633).
¶20 Here, Lundquists claim that by the August 25, 2000, complaint they intended to file a
separate action against McBeth. Therefore, Lundquists were not required to obtain the
District Court's permission to file that complaint. Further, as Lundquists proceeded against
McBeth pro se, the complaint did not require an attorney's signature. Consequently, the
erroneous cause number remains the only defect on the August 25, 2000, complaint.
¶21 We hold that the erroneous cause number included in the August 25, 2000, complaint
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constituted a technical defect. Because Lundquists named McBeth as a defendant in the
complaint, filed the complaint prior to the expiration of the fraudulent transfer statute of
limitations, and served McBeth with a copy of this complaint, McBeth was not prejudiced
by the technical defect. Accordingly, the District Court erred when it ordered the August
25, 2000, complaint withdrawn. As the District Court should not have ordered the
complaint withdrawn, the District Court subsequently erred when it dismissed this cause
of action as untimely. In light of our holding on issue one, we need not address the issues
raised in McBeth's cross-appeal.
¶22 For these reasons, we reverse the judgment of the District Court and remand to allow
Lundquists to amend their August 25, 2000, complaint to include a new cause number.
McBeth's time for responding shall begin to run on the date of remittitur.
/S/ TERRY N. TRIEWEILER
We Concur:
/S/ JIM REGNIER
/S/ W. WILLIAM LEAPHART
/S/ JIM RICE
Justice James C. Nelson dissents.
¶1 The District Court determined that Lundquists' pro se complaint was actually an
unauthorized amendment to the complaint which they had filed in their on-going cause of
action, DV-96-17. I agree with the District Court's determination in that regard and,
would, accordingly, affirm the court's dismissal of Lundquists' complaint as being time-
barred for the reasons and rationale articulated by the trial judge.
¶2 As to the majority's opinion, I would note that Lundquists, of course, did not argue the
Wisconsin line of cases (which have now become the law of Montana) nor did the
Respondents have any opportunity to argue against this theory. Aside from the fact that
the majority do a splendid job of saving the Lundquists from their own ineptness, the
majority's "fundamental/technical defect" analysis has not been heretofore adopted as part
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of this State's jurisprudence--at least no Montana case law is cited in support of this
approach.
¶3 Before adopting what likely will become the Pro se Litigant's Relief Act, I would have,
at least, liked to have seen some briefing and argument on the subject. In any event, since
the District Court did not err, I would affirm.
¶4 I dissent.
/S/ JAMES C. NELSON
Justice Patricia Cotter joins in the foregoing dissent.
/S/ PATRICIA COTTER
1. The record is unclear as to how Michael Hamilton came to be a named party in the action.
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