No. 04-871
IN THE SUPREME COURT OF THE STATE OF MONTANA
2005 MT 281
ROBERT W. ALLEN, et al.,
Plaintiffs and Respondents,
v.
ATLANTIC RICHFIELD COMPANY, a For Profit
Foreign Corporation; et al.,
Defendants and Appellants.
APPEAL FROM: District Court of the Eighth Judicial District,
In and for the County of Cascade, Cause No. CDV-01-615(B),
The Honorable Julie Macek, Judge presiding.
COUNSEL OF RECORD:
For Appellant:
Oliver H. Goe, G. Andrew Adamek, and Chad E. Adams, Browning,
Kaleczyc, Berry & Hoven, P.C., Helena, Montana
For Respondents:
Tom L. Lewis, Lewis, Slovak & Kovacich, P.C., Great Falls, Montana
Submitted on Briefs: August 10, 2005
Decided: November 8, 2005
Filed:
__________________________________________
Clerk
Justice Brian Morris delivered the Opinion of the Court.
¶1 Columbia Falls Aluminum Company, LLC (CFAC) appeals from an order of the
Eighth Judicial District, Cascade County, denying its motion for change of venue. We
affirm.
¶2 The sole issue on appeal is whether the District Court erred in denying CFAC’s
motion to change venue.
PROCEDURAL AND FACTUAL BACKGROUND
¶3 Respondent Robert W. Allen and forty-six other plaintiffs (hereafter collectively
“Allen”) seek damages for personal injuries and loss of consortium stemming from the
contraction of asbestos related disease by them or their spouses. Allen filed this original
complaint on July 6, 2001, and an amended complaint on July 19, 2001. Allen’s amended
complaint alleges that the unlawful and tortious conduct of Defendants/Appellants, including
CFAC, caused Allen’s exposure to asbestos and asbestos contaminated products and
proximately caused their asbestos disease. Allen alleges multiple theories of liability,
including strict products liability. Allen filed this action in the Eighth Judicial District,
Cascade County, alleging that the residence and tortious conduct of one of the fifty-three
defendants, Robinson Insulation Company (Robinson Insulation), occurred in Cascade
County.
¶4 Robinson Insulation is a defunct Montana corporation. Robinson Insulation operated
a vermiculite expansion plant in Cascade County, where it received raw asbestos
contaminated vermiculite, expanded the vermiculite, and manufactured and sold products
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containing asbestos. It manufactured, developed, marketed, packaged, labeled, distributed,
and sold its asbestos products in Cascade County. The Secretary of State involuntarily
dissolved Robinson Insulation on December 1, 1989.
¶5 CFAC filed a motion for change of venue from Cascade County to Flathead County
on September 15, 2004, arguing that Robinson Insulation did not reside in Cascade County
at the commencement of this action, and that Allen improperly had joined Robinson
Insulation so it could maintain venue in Cascade County. The District Court denied the
motion. CFAC appeals.
STANDARD OF REVIEW
¶6 Whether a county is a proper place for trial presents a question of law involving the
application of the relevant venue statutes to the pleaded facts. Wentz v. Montana Power
Company (1996), 280 Mont. 14, 17, 928 P.2d 237, 238 (citation omitted). Thus, our review
of the District Court’s denial of the motion for change of venue is plenary; we simply
determine whether the court’s ruling was legally correct. Wentz, 280 Mont. at 17, 928 P.2d
at 238.
DISCUSSION
¶7 CFAC argues that the District Court erred in denying its motion for change of venue
because Allen has not satisfied any of the statutory criteria necessary to maintain venue in
Cascade County. CFAC also alleges that Allen joined Robinson Insulation solely as a sham
defendant to manipulate venue. CFAC further contends that Allen improperly joined
Robinson Insulation and that no cause of action exists against it due to its defunct status.
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¶8 Venue may be proper in more than one county. See § 25-2-115, MCA. No motion
may be granted to change the place of a trial brought in a proper county. Section 25-2-115,
MCA. If a party brings an action in a county that is not designated as a proper venue,
however, a defendant may move for a change of venue to any proper county. Section 25-2-
115, MCA. The county in which the defendant resides generally provides the proper venue
for civil actions. Section 25-2-118, MCA; Berlin v. Boedecker (1989), 235 Mont. 443, 444,
767 P.2d 349, 350 (citation omitted). If there are two or more defendants in an action, then
a county that is the proper place of trial for one defendant is proper for all defendants.
Section 25-2-117, MCA.
¶9 Montana law provides additional venue statutes that allow for exceptions to the
general venue rules of § 25-2-118, MCA, for certain types of actions. Liang v. Lai, 2004 MT
188, ¶ 17, 322 Mont. 199, ¶ 17, 94 P.3d 759, ¶ 17. For tort actions, § 25-2-122(1), MCA,
provides that, among other proper venues, the proper place for a tort action is (a) the county
in which the defendants or any of them reside at the commencement of the action; or (b) the
county in which the tort was committed.
¶10 The Dissent argues that we also should incorporate § 25-2-116, MCA, into our
analysis in this case. Section 25-2-116, MCA, provides, in part, that for “an action involving
two or more claims for which this part designates more than one as a proper place of trial,
a party entitled to a change of place of trial on any claim is entitled to a change of place of
trial on the entire action . . . .” The legislature adopted § 25-2-116 “to prevent a plaintiff
from controlling venue by adding spurious claims that have little or no validity. . . .” Wentz,
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280 Mont. at 21-22, 928 P.2d at 241. The Dissent argues that Section 25-2-116, MCA, and
its reasoning should be extended to encompass spurious defendants. The Dissent thus urges
this Court to revise a statute despite the legislature’s failure to do so. It is not the role of this
Court to insert what has been omitted when applying statues. State v. Goebel, 2001 MT 73,
¶ 16, 305 Mont. 53, ¶ 16, 31 P.3d 335, ¶ 16. We therefore decline to apply § 25-2-116,
MCA, to this case.
¶11 We determine the proper venue based on the allegations contained in the complaint.
Petersen v. Tucker (1987), 228 Mont. 393, 395, 742 P.2d 483, 484; Johnson v. Clark (1957),
131 Mont. 454, 461, 311 P.2d 772, 776. We repeatedly have refused to address the issue of
whether a party is properly joined in an action on an appeal of a motion for change of venue.
State v. Pegasus Gold Corp. (1995), 270 Mont. 32, 36, 889 P.2d 1197, 1199-1200; Kendall
v. State (1988), 231 Mont. 316, 318, 752 P.2d 1091, 1092; Petersen, 228 Mont. at 395, 742
P.2d at 484.
¶12 In Petersen, plaintiffs, Missoula County residents, filed an action against the State and
other defendants in Missoula County, alleging civil rights violations. Petersen, 228 Mont.
at 394, 742 P.2d at 483. Plaintiffs relied on § 25-2-126(1), MCA, which allows Montana
residents to bring actions against the State in their county of residence. Petersen, 228 Mont.
at 395, 742 P.2d at 484. Defendants, residents of Lewis and Clark County, moved for a
change of venue to Lewis and Clark County, arguing that the State was not a proper party
to the action, and thus venue was not proper in Missoula County. Petersen, 228 Mont. at
395, 742 P.2d at 484. We declined to address the issue of whether the State was a proper
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party to the action, noting that the plaintiffs specifically had named the State in the complaint
and that the district court had not dismissed the State from the action. Petersen, 228 Mont.
at 395, 742 P.2d at 484; see also Pegasus Gold Corp., 270 Mont. at 36, 889 P.2d at 1199-
1200 (relying on Petersen in declining to address whether defendant was properly named
party); Kendall, 231 Mont. at 318, 752 P.2d at 1092 (citing Petersen in refusing to address
whether defendant was properly named party).
¶13 The principles of Petersen apply in this case and dictate the same result. Our case law
clearly holds that we will not go beyond the allegations contained in the complaint to
determine questions of venue, which is precisely what CFAC would have us do. Allen’s
original and amended complaints allege Robinson Insulation was a Montana corporation with
its principal place of business in Cascade County. The complaints further allege that
Robinson Insulation’s tortious and illegal conduct occurred within Cascade County and
proximately caused Allen’s injuries. Moreover, Allen specifically named Robinson
Insulation as a defendant in both the original and amended complaints and the District Court
has not dismissed it from this action. Venue in Cascade County appears proper under either
§ 25-2-118, MCA, or § 25-2-122(1), MCA, based on the allegations in the complaints.
¶14 Robinson Insulation’s status as a defunct corporation does not mandate a different
result. CFAC urges this Court to apply a repealed corporate survival statute, § 35-1-930,
MCA (1989), to conclude that Robinson Insulation is precluded from suit. Section 35-1-930,
MCA (1989), was in effect at the time of Robinson Insulation’s involuntary dissolution in
1989. This statute provided, in part, “[t]he dissolution of a corporation . . . shall not take
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away or impair any remedy available to or against such corporation . . . for any right or claim
existing or any liability incurred prior to such dissolution if action or other proceeding
thereon is commenced within 5 years after the date of such dissolution.” CFAC argues that
this five-year statute of repose bars suit against Robinson Insulation. We disagree.
¶15 The legislature repealed § 35-1-930, MCA (1989), in 1991 and replaced it with two
statutes, § 35-1-935, MCA, and § 35-1-937, MCA. These corporate survival statutes
maintain the status quo concerning corporate rights and responsibilities before and after
dissolution. Section 35-1-935, MCA, provides, in part, that “[a] dissolved corporation
continues its corporate existence but may not carry on any business except that appropriate
to wind up and liquidate its affairs including: . . . (c) discharging or making provision for
discharging its liabilities; . . . . (2) Dissolution of a corporation does not: . . . (e) prevent
commencement of a proceeding by or against the corporation in its corporate name; . . . .”
Section 35-1-937, MCA, expressly authorizes actions against defunct corporations. This
statute provides, in part, “the dissolution of a corporation, including by the expiration of its
term, does not take away or impair any remedy available to or against the corporation or its
officers, directors, or shareholders for any claim or right, whether or not the claim or right
existed or accrued prior to dissolution.”
¶16 We conclude that §§ 35-1-935, MCA, and 35-1-937, MCA, govern Allen’s ability
to maintain an action against Robinson Insulation. CFAC argues that this interpretation
would require impermissible retroactive application of these statutes. No law in Montana
can be applied retroactively unless expressly provided by the legislature. Section 1-2-109,
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MCA. “Retroactive,” for purposes of § 1-2-109, MCA, means “a statute which takes away
or impairs vested rights, acquired under existing laws, or creates a new obligation, imposes
a new duty or attaches a new disability, in respect to transactions already past . . . .”
Williams v. Wellman-Power Gas, Inc. (1977), 174 Mont. 387, 390, 571 P.2d 90, 92 (citation
omitted).
¶17 In Williams, we concluded that application of an amendment extending the statute of
limitations to claims not already barred at the time that the amendment took effect would not
constitute retroactive application, because “[n]o vested rights are taken away or impaired.
No new duties or disabilities are imposed.” Williams, 174 Mont. at 390-91, 571 P.2d at 92.
Moreover, we have determined that statutes of repose such as § 35-1-930, MCA (1989), do
not grant vested rights to be free from liability until after the running of a legislatively
determined period of time. Joyce v. Garnaas, 1999 MT 170, ¶ 14, 295 Mont. 198, ¶ 14, 983
P.2d 369, ¶ 14 (citation omitted).
¶18 As in Williams, application of §§ 35-1-935, MCA, and 35-1-937, MCA, to Robinson
Insulation does not give the statutes impermissible retroactive effect. Robinson Insulation
had no vested right to be free from liability before the running of the five-year statute of
repose of § 35-1-930, MCA (1989). The legislature’s repeal of § 35-1-930, MCA (1989),
and subsequent enactment of §§ 35-1-935, MCA, and 35-1-937, MCA, in 1991, occurred
before the expiration of the five-year statute of repose. Thus, Robinson Insulation had not
yet acquired a vested right to be free from liability, Joyce ¶ 14, and application of the new
statutes is not retroactive, Williams, 174 Mont. at 390-91, 571 P.2d at 92.
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¶19 CFAC relies on Joyce for its assertion that the right to be free from liability vested on
the date of Robinson Insulation’s dissolution. Joyce clearly states, however, that these rights
become vested only after the legislatively determined period of time has lapsed. Joyce, ¶ 14.
CFAC nevertheless attempts to circumvent this result by emphasizing the difference between
statutes of limitations and statutes of repose. CFAC points out that although statutes of
limitations are subject to equitable principles, such as tolling, statutes of repose are not.
Though not subject to equitable tolling, statutes of repose may be amended through
legislative enactments. See Hardgrove v. Transportation Ins. Co., 2004 MT 340, ¶ 10, 324
Mont. 238, ¶ 10, 103 P.3d 999, ¶ 10 (citation omitted). Here, we deal not with equitable
tolling of a statute of repose, but with a permissible legislative enactment and thus the
distinction between a statute of repose and a statute of limitations proves irrelevant for our
purposes.
¶20 We need not address either party’s arguments regarding Robinson Insulation’s status
as an affiliated entity in the W.R. Grace bankruptcy case, Cause No. 01-01139 (Bankr. D.
Del.). Neither party presented this issue to the District Court. This Court will not consider
issues raised for the first time on appeal. State v. Wetzel, 2005 MT 154, ¶ 13, 327 Mont.
413, ¶ 13, 114 P.3d 269, ¶ 13 (citation omitted).
¶21 We therefore affirm the District Court’s denial of CFAC’s motion for change of
venue.
¶22 Affirmed.
/S/ BRIAN MORRIS
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10
We Concur:
/S/ KARLA M. GRAY
/S/ PATRICIA O. COTTER
/S/ JAMES C. NELSON
/S/ W. WILLIAM LEAPHART
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Justice John Warner dissents.
¶23 I must respectfully dissent. I cannot join in a decision that ignores substantial
evidence indicating the plaintiff chose a favorable venue by simply naming a specious
defendant against whom he has no genuine intention of pursuing judgment.
¶24 The majority is correct in noting that § 25-2-116, MCA, bars plaintiff from adding
spurious claims in an effort to control venue. I do not suggest that we add to the specific
provisions of § 25-2-116, MCA. In my view, naming a sham defendant, one that a plaintiff
has no intention of securing a judgment against, is indeed the same as making a spurious
claim against that defendant.
¶25 We recognized in Wentz that § 25-2-116, MCA, was adopted “to prevent a plaintiff
from controlling venue by adding spurious claims that have little or no validity. . . .” Wentz,
280 Mont. at 21-22, 928 P.2d at 241; see also Liang, ¶ 19 (§ 25-2-116 “prevent[s] plaintiffs
from promulgating spurious claims as a means of denying a favorable venue to a
defendant.”). Thus, under § 25-2-116, MCA, we refuse to allow a plaintiff to include
specious claims for the purpose of obtaining a preferred venue. In light of this policy, I fail
to see how adding a specious defendant to obtain a preferred venue under § 25-2-117, MCA,
is different and thus permissible. Yet, this is what the majority concludes here by simply
ignoring the strong possibility that Robinson Insulation is included as a defendant for the sole
purpose of manipulating venue.
¶26 The record is replete with facts that support Atlantic Richfield’s argument that
Robinson Insulation is a sham defendant. Robinson Insulation was involuntarily dissolved
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by the State in 1989 and no longer exists. Plaintiffs have not attempted to serve Robinson
Insulation, its former directors, officers or shareholders, and the time frame for doing such
has long passed. Even more convincing, Atlantic Richfield has offered evidence that
Plaintiffs’ counsel has named Robinson Insulation in numerous other cases, presumably to
obtain venue in Cascade County, yet Plaintiffs’ counsel has never pursued a judgment
against Robinson Insulation, or its former directors, officers or shareholders.
¶27 I concede that on the face of §§ 35-1-935 and 35-1-937, MCA, Plaintiffs could
possibly have a valid claim against Robinson Insulation, and because it was a resident of
Cascade County, such county would be a “proper” venue under §§ 25-2-117 and 25-2-118,
MCA, if the claim was actually made. However, one may conclude from Wentz that the
legislature did not intend an abuse of the law by naming sham defendants for the sole
purpose of obtaining a preferred venue. See Wentz, 280 Mont. at 21-22, 928 P.2d at 241-
242.
¶28 In considering the analogous situation of naming a defendant for the purpose of
defeating diversity of citizenship, the federal courts have refused to allow plaintiffs to
manipulate the rules of civil procedure by naming sham defendants. The federal courts have
made it clear that in joining a defendant the plaintiff must have the intent to pursue a
judgment against that defendant.1 Chicago, Rock Island & Pacific Ry. Co. v. Schwyhart
(1913), 227 U.S. 184, 33 S.Ct. 250, 57 L.Ed. 473; Triggs v. John Crump Toyota, Inc. (11th
1
I recognize the distinction between an intention to pursue or obtain a judgment
versus the ability to collect on a judgment. The latter is not required of plaintiff; however,
the former clearly is. The record here presents a real possibility that Plaintiffs lacked any
intent to pursue judgment against Robinson Insulation.
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Cir. 1998), 154 F.3d 1284, 1291. When a plaintiff’s intent in joining a defendant has been
questioned, several federal circuits have resolved the issue by “piercing the pleadings” and
considering summary judgment-type evidence such as affidavits and deposition testimony.
E.g., Morris v. Princess Cruises, Inc. (9th Cir. 2001), 236 F.3d 1061, 1068; Cavallini v.
State Farm Mut. Auto Insur. (5th Cir. 1995), 44 F.3d 256, 263. This Court has previously
adopted such a practice at least by implication. As discussed above in Wentz and Liang, we
interpreted § 25-2-116, MCA, to “prevent a plaintiff from controlling venue by adding
spurious claims that have little or no validity. . . .” Wentz, 280 Mont. at 21-22, 928 P.2d at
241. In Liang, this Court reviewed the record to find any indication that the plaintiff had
added claims as a way to manipulate venue, and to see whether defendants had alleged such.
In that case we found neither, but the opposite is true here. Therefore, I would reverse and
remand for an appropriate hearing resulting in findings of fact as to whether Plaintiffs had
a genuine intent to pursue judgment against Robinson Insulation.
/S/ JOHN WARNER
Justice Jim Rice joins in the foregoing dissent.
/S/ JIM RICE
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