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No. 00-319
IN THE SUPREME COURT OF THE STATE OF MONTANA
2001 MT 307
ALPINE BUFFALO, ELK AND LLAMA
RANCH, INC., a/k/a ALPINE BUFFALO
AND LLAMA RANCH, INC.,
Plaintiff and Respondent,
v.
LISA ANDERSEN,
Defendant and Appellant.
APPEAL FROM: District Court of the Sixth Judicial District,
In and for the County of Park,
The Honorable Nels Swandal, Judge presiding.
COUNSEL OF RECORD:
For Appellant:
Francis X. Clinch; Jardine, Stephenson, Blewett & Weaver,
Great Falls, Montana
For Respondent:
John M. Kauffman; Kastings, Combs & Kauffman, Bozeman,
Montana
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Submitted on Briefs: October 26, 2000
Decided: December 28, 2001
Filed:
__________________________________________
Clerk
Chief Justice Karla M. Gray delivered the Opinion of the Court.
¶1 Lisa Andersen (Andersen) appeals from postjudgment orders entered by the Sixth
Judicial District Court, Park County, assigning proceeds from other litigation to Alpine
Buffalo, Elk and Llama Ranch, Inc. (Alpine) and declining to consider her Rule 60(b), M.
R.Civ.P., motion pending appeal of the assignment order. We affirm.
¶2 The issues on appeal are:
¶3 1. Did the District Court err in ordering Andersen, a judgment debtor, to assign future
proceeds from another cause of action to her judgment creditor?
¶4 2. Did the District Court err in concluding that this appeal divested it of jurisdiction to
address Andersen's Rule 60(b), M.R.Civ.P., motion?
BACKGROUND
¶5 In 1995, Andersen and Dick Andersen, her husband, executed a promissory note in
favor of Alpine for $155,000 and secured it with real property. Alpine began proceedings
to enforce the terms of the note and foreclose on the real property in late December of
1997, after the Andersens failed to make any payments on the promissory note. The
District Court entered a judgment and decree of foreclosure in Alpine's favor in April of
1998, and also ordered the Andersens to pay delinquent property taxes. The next day, the
court awarded Alpine a deficiency judgment against the Andersens personally "if there is a
balance owed to [Alpine] after the proceeds of the foreclosure sale are applied to [the
Andersens'] indebtedness to [Alpine]."
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¶6 The Andersens' real property was sold at a sheriff's sale in July of 1999. Alpine made
the sole bid in the amount of $5,000, leaving a deficiency of $218,458.51, including
interest. In February of 2000, the District Court granted Alpine's motion for a deficiency
judgment in this amount against Andersen only, Dick Andersen having filed for
bankruptcy. Andersen neither appealed the deficiency judgment nor made any payment on
it.
¶7 Alpine learned that Andersen had a pending malpractice claim against her former legal
counsel and sought an assignment of the prospective proceeds from that action and a
Debtor's Examination. In two April 13, 2000 orders, the District Court granted both
requests.
¶8 Andersen filed a notice of appeal from the assignment order on April 18, 2000. On the
same day, she also moved to set aside the deficiency judgment pursuant to Rule 60(b), M.
R.Civ.P., claiming the judgment was improperly based on the value of the property from
the sheriff's sale rather than the fair market value of the property. At the Debtor's
Examination on April 19, 2000, Andersen refused to execute an assignment of her interest
in the proceeds of the malpractice litigation as ordered by the District Court because she
had appealed the assignment. She acknowledged to the hearing referee, however, that she
had assigned the same proceeds to at least three other parties. Andersen subsequently
failed to file a brief in support of her refusal to execute the assignment as suggested by the
hearing referee.
¶9 Thereafter, Alpine moved the District Court to hold Andersen in contempt for her
failure to comply with its order to assign the proceeds of her litigation. The court
determined it did not have jurisdiction to address either Alpine's contempt motion or
Andersen's Rule 60(b) motion because both were filed after Andersen appealed the
assignment order. Andersen then filed a notice of appeal from the District Court's order
declining to consider her Rule 60(b) motion pending her first appeal.
DISCUSSION
¶10 1. Did the District Court err in ordering Andersen, a judgment debtor, to assign future
proceeds from a separate cause of action to her judgment creditor?
¶11 Andersen claims the only authority cited by Alpine for the District Court's assignment
order was Rule 70, M.R.Civ.P., and that Rule 70 applies only to a contemptuous party. We
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described Rule 70 as a "civil contempt statute" in Searight v. Cimino (1988), 230 Mont.
96, 102, 748 P.2d 948, 952, and Alpine effectively concedes the inapplicability of Rule 70
on appeal.
¶12 In fact, however, Andersen is incorrect in claiming that Rule 70 was the sole basis for
Alpine's motion for assignment of proceeds. Alpine also requested the assignment order
"based on the broad equity powers of this Court[.]" In this regard, we held in Smith v. Foss
(1978), 177 Mont. 443, 446, 582 P.2d 329, 331-32 (citation omitted), that a district court
possesses jurisdiction to enter any necessary orders to enforce its judgments.
¶13 Smith also belies Andersen's secondary argument that the only method by which the
judgment against her could be enforced is by writ of execution. Nor does Montana's
execution statute support her argument. Section 25-13-201, MCA, provides "[w]hen the
judgment is for money or the possession of real or personal property, the same may be
enforced by a writ of execution[.]" The statutory language does not state that a writ of
execution is the only means by which such a judgment can be enforced. Indeed, use of the
word "may" expressly recognizes that other means of enforcement are available.
¶14 Andersen also argues, briefly, that the District Court's assignment order is contrary to
Montana law holding that tort actions are not assignable. She relies on Coty v. Cogswell
(1935), 100 Mont. 496, 501, 50 P.2d 249, 250-51, and Youngblood v. American States Ins.
Co. (1993), 262 Mont. 391, 396, 866 P.2d 203, 206, but neither case establishes error by
the District Court in ordering the assignment of litigation proceeds here.
¶15 The facts in Coty were somewhat complicated. In essence, they involved a writ of
attachment of a personal injury cause of action of Maude Adams, while that action
remained pending, by Mae Coty in her later-filed action against Adams on a promissory
note. Coty obtained the writ of attachment immediately upon the filing of her action
against Adams and prior to resolution of that action. Coty, 100 Mont. at 499, 50 P.2d at
249. The writ of attachment was obtained pursuant to a 1921 Montana statute permitting
such an attachment from persons having in their possession credits or personal property
belonging to the other party or owing any debts to the other person. Thus, if a cause of
action for personal injuries was a credit or personal property of, or debt owed to the other
party, the attachment was proper. Coty, 100 Mont. at 500-01, 50 P.2d at 250. We
ultimately held, under those facts, that Adams' pending personal injury action did not fall
within the statutory definitions and was not subject to levy by means of attachment before
judgment was rendered. Coty, 100 Mont. at 504, 50 P.2d at 251. Coty has no application
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here.
¶16 First, the assignment order at issue was not entered pursuant to the 1921 statutes at
issue in Coty or, indeed, any other statute. As discussed above, it was premised on the
District Court's equitable power to enter orders necessary to enforce its judgments.
¶17 Second, the assignment order does not even purport to assign or attach Andersen's
cause of action against her former legal counsel. The order of assignment provides, in
pertinent part, "it is hereby ordered that [Andersen] assign to [Alpine] her interest in the
proceeds of the litigation filed in the Fourth Judicial District . . . per the terms of the
Assignment attached hereto[.]" The attached assignment form provides, again in pertinent
part,
I hereby assign any and all interest I have in the Monetary Award and/or any funds I
may receive from any of the defendants in the Malpractice Action or their insurance
carriers to Alpine. This Assignment is limited to those funds necessary to satisfy, in
full, the [deficiency] Judgment Amount.
Thus, in this case, unlike in Coty, the District Court ordered the assignment of the
proceeds of Andersen's tort action to the extent necessary to satisfy Alpine's deficiency
judgment; it did not attach or assign the malpractice cause of action itself.
¶18 Andersen's reliance on Youngblood also is misplaced. That case involved an
interpretation of a subrogation clause in an automobile liability insurance policy.
Youngblood, 262 Mont. at 394, 866 P.2d at 204. We ultimately held that subrogation of
medical payment benefits under a motor vehicle insurance policy is void in Montana as
against public policy, applying public policy considerations relating specifically to
medical payment provisions in insurance policies. Youngblood, 262 Mont. at 400, 866
P.2d at 208 (citation omitted). Clearly, neither the facts nor the law in Youngblood are
applicable here.
¶19 Youngblood does include a discussion of the distinction between subrogation and
assignment of a claim, and Andersen's reliance on that case merely quotes the sentence
stating that "Montana law has long held that a property damage claim is assignable, while
a cause of action growing out of a personal right, such as a tort, is not assignable."
Youngblood, 262 Mont. at 396, 866 P.2d at 206 (citation omitted). Andersen ignores the
preceding portion of the discussion, however, which clarifies that an assignment of a claim
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transfers all legal rights and title to the claim to the assignee. Youngblood, 262 Mont. at
396, 866 P.2d at 205-06. As discussed above, the District Court's assignment order here
did not assign Andersen's legal malpractice cause of action to Alpine. Alpine did not
receive all legal rights and title to that cause of action. The assignment order merely
required Andersen to assign future proceeds from her other litigation to Alpine, limited to
the funds necessary to satisfy the deficiency judgment amount.
¶20 We hold Andersen has not established error in the District Court's order requiring her,
as a judgment debtor, to assign future proceeds from a separate cause of action to Alpine,
her judgment creditor.
¶21 2. Did the District Court err in concluding that this appeal divested it of jurisdiction to
address Andersen's Rule 60(b), M.R.Civ.P., motion?
¶22 After Andersen appealed from the assignment order, the District Court declined to
rule on the parties' pending motions, including Andersen's Rule 60(b) motion to set aside
the deficiency judgment, on the basis it had lost jurisdiction when Andersen appealed from
the assignment order. We review a district court's conclusion that it lacks jurisdiction to
determine whether the court is correct. Johansen v. State, Dept. of Natural Resources and
Conservation (1998), 288 Mont. 39, 45, 955 P.2d 653, 657 (citation omitted).
¶23 Conceding that her appeal from the assignment order divested the District Court of
jurisdiction over that order, Andersen argues it did not divest the court of jurisdiction to
address her motion to set aside the underlying deficiency judgment from which she did not
appeal. Acknowledging our conclusion in McCormick v. McCormick (1975), 168 Mont.
136, 138, 541 P.2d 765, 766, that a notice of appeal divests the trial court of jurisdiction
over the order or judgment from which the appeal is taken and "any matter embraced
therein," Andersen contends the deficiency judgment is not "embraced within" the
assignment order. She also relies on cases from other jurisdictions for the principle that a
notice of appeal does not deprive the trial court of jurisdiction over matters from which
appeal has not been taken.
¶24 The cases on which Andersen relies are readily distinguishable from the present case.
In Garnett v. Oliver (Ky. 1931), 45 S.W.2d 815, 817, the court held that, under Kentucky
statutes, a plaintiff in a suit dismissed by the trial court could obtain an order of
prejudgment attachment from that court while the case was pending in the appellate court.
The prejudgment attachment was not embraced within the appeal of the dismissal,
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pursuant to statute. In Cragin v. Lobbey (Mo. Ct. App. 1976), 537 S.W.2d 193, 195-96,
the court held that, where two separate causes of action were filed jointly, appeal of one
separable judgment did not affect the other, jurisdiction of which remained in the trial
court. In other words, one separable judgment was not embraced within the other. While a
similar result might be obtained in Montana where, for example, a trial court properly
certifies a judgment as final for purposes of appeal under Rule 54(b), M.R.Civ.P.,
retaining jurisdiction of the underlying action, that scenario is not before us in the present
case.
¶25 Finally, Andersen quotes from State ex rel. Freeman Printing Co. v. Luebke (Wis.
1967), 152 N.W.2d 861, 864, in which the court stated "[i]f the appeal is from an order,
only the subject matter of that order, i.e., only such portions of the proceedings as are
germane to the order, is transferred by the appeal." She does not present Freeman in its
entirety, however. The Freeman court went on to note that identifying the subject matter
of an appeal and what constitutes interference with that subject matter is not always free
from doubt. Under the circumstances there presented, the court held that the trial court did
not have authority to grant a motion for a nonsuit while appeal from an order overruling a
demurrer to the amended complaint was pending, because the dismissal was a direct
interference with the subject matter of the appeal. Freeman, 152 N.W.2d at 865.
Freeman's "interference" approach and application to the circumstances of that case do not
support Andersen's position here.
¶26 In the present case, the assignment order from which Andersen's appeal was taken and
her Rule 60(b) motion to set aside the deficiency judgment are inextricably intertwined.
The Rule 60(b) motion challenges the validity of the very deficiency judgment on which
the appealed order of assignment is based and which that order seeks to enforce.
Consequently, we conclude the deficiency judgment is a matter embraced within the
assignment order seeking to enforce that judgment. We hold, therefore, that the District
Court did not err in concluding that Andersen's appeal from the assignment order divested
it of jurisdiction to address her Rule 60(b), M.R.Civ.P., motion.
¶27 Affirmed.
/S/ KARLA M. GRAY
We concur:
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/S/ JAMES C. NELSON
/S/ JIM REGNIER
/S/ W. WILLIAM LEAPHART
Justice Terry N. Trieweiler dissenting.
¶28 I dissent from the majority opinion. I do not agree that district courts have unrestricted
authority to enforce their judgments. Nor do I agree that district courts are divested of
authority to decide timely filed post-judgment motions simply because a notice of appeal
was filed.
¶29 We have in the past used broad language in defining a district court's authority to
enforce its judgments. However, in the case of judgments for money, we have a specific
statutory scheme for post-judgment execution which provides procedural safeguards for
the judgment debtor. See § 25-13-201, MCA, et seq. When the legislature has seen fit to
establish an exhaustive process for the collection of district court judgments, I conclude
that the amorphous authority of district courts to enforce their judgments has been
circumscribed. Otherwise, the procedures and limitations established by the legislature are
meaningless.
¶30 The majority having produced no authority for the District Court's order of assignment
other than broad, undefined powers of courts, I would reverse the order of the District
Court that Andersen assign the proceeds from her personal action to her creditor.
¶31 Finally, the majority's treatment of Andersen's Rule 60(b), M.R.Civ.P., motion creates
an anomaly in post-judgment procedure. While it is true that notices of appeal normally
divest a district court of jurisdiction, we have made an exception for those post-trial
remedies provided in Rules 50 (motion for judgment as a matter of law), 52(b) (motion to
amend findings), and 59 (motion for new trial). In those situations our rules provide that,
A notice of appeal filed before the disposition of any of the above motions, whether
by entry of an order or deemed denial, shall be treated as filed after such order or
denial and on the day thereof.
Rule 5, M.R.App.P.
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¶32 Our rules provide that a notice of appeal filed before a timely motion for any of the
above post-judgment forms of relief does not divest the district court of authority because
parties would otherwise be able to preempt district courts and opposing parties from the
full range of relief provided for in our rules. There is no logical reason to treat motions
which have been timely filed pursuant to Rule 60(b) any differently.
¶33 For these reasons, I dissent from the majority opinion and I would reverse the orders
of the District Court which require Andersen to assign the proceeds from her malpractice
cause of action and I would reverse the District Court's refusal to consider her Rule 60(b)
motion.
/S/ TERRY N. TRIEWEILER
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