No. 86-190
IN THE SUPREME COURT OF THE STATE OF MONTANA
1986
STATE, ex rel., THOMAS ANC DONALD
CHISHOLM,
Relators,
-VS-
THE DISTRICT COURT OF THE SEVENTEENTH
JUDICIAL DISTRICT OF THE STATE OF
MONTANA, IN AND FOR THE COUNTY OF
VALLEY, THE HON. R.C. McDONOUGH,
THE DISTRICT JUDGE PRESIDING,
Respondents.
ORJGINAL PROCEEDING:
COUNSEL OF RECORD:
For Relators:
Erik B. Thueson argued, Great Falls, Montana
For Respondent :
Habedank, Cumrning, Best, Maltese & Savage; Robert
Savage argued, Sidney, Montana
Hon. Russell McDonough, District Judge, Glendive,
Montana
Submitted: September 9 , 1986
Decided: December 3 0 , 1986
Filed: DEC 3 0 1986
Mr. Justice John Conway Harrison delivered the Opinion of the
Court.
This case is before the Court on a petition for a writ
of mandamus pursuant to § 27-26-101, MCA, Art. VII, § 2 of
the Montana Constitution which allows a petition of
supervisory control, and Rule 17, M.R.App.Civ.P., which
allows the issuance of extraordinary writs when there is not
a speedy and adequate remedy by appeal. We decline to issu-e
the writ.
The relators (Chisholms) filed a suit against Nelson
Corscadden for conversion in the District Court of the
Seventeenth Judicial District, in and for Valley County,
Montana. Before the case came to trial, Corscadden filed for
bankruptcy. Chisholms then filed a complaint against First
National Bank of Glasgow, Montana, in the same court. Th.e
complaint alleging the Rank secretly conspired to deprive
them of their property rights in certain property which is
the subject of the action against Corscadden. Subsequently,
Chisholms petitioned the bankruptcy court to abstain from
asserting jurisdiction to allow them to proceed against
Corscadden, but the court refused.
Shortly before the trial against the Bank was scheduled
to begin, the Bank moved the District Court for partial
summary judgment as to ownership of any disputed property.
The District Court abstained from asserting jurisdiction over
the issue of ownership, but refused to grant summary judgment
unless Chisholms "diligently" refused to pursue an action in
the bankruptcy court to determine ownership.
It is from this order the petition for writ ensued,
asking us to order the District Court to withdraw its order
and reschedule the trial of Chisholm v. First National of
Glasgow.
A writ of mandamus "is an extraordinary remedy, not to
he had merely for the asking, but to be obtained only j.n
those rare cases wherein there is not any plain, speedy and
adequate remedy in the ordinary course of law; . . ." State
ex rel. Duggan v. District Court (1922), 65 Mont. 197, 199,
210 P. 1062, 1063. "[A] writ will issue only when there has
been a showing that a clear legal duty exists and there is no
speedy or adequate remedy in the ordinary course of law."
State ex rel. Intake Water Co. v. Board of Natural Resources
and Conservation (1982), 197 Mont. 482, 487, 645 P. 2d 383,
386; Cain v. Department of Health (1978), 177 Mont. 448, 451,
582 P.2d 332, 334; § 27-26-102(2), MCA.
In determining whether action by a court
or judge may be compelled by the writ of
mandate, the essential questions to be
decided are, whether the act sought to be
compelled is one "which the law specially
enjoins as a duty resulting from an
office. trust or station," . . .
and
whether there is "a speedy and
adequate remedy in the ordinary course of
law." ... A negative answer to the
first question bars the issuance of the
writ, and, irrespective of the answer to
that question, an affirmative answer to
the second, divests the court of
authority to issue it.
State ex rel. County of Musselshell v. District Court (1931.?,
89 Mont. 531, 534, 300 P.2d 235, 236. Although an
affirmative answer to the second question is dispositive, we
note the District Court has a clear legal duty not to hear a
case over which it has no jurisdiction.
More importantly, however, Chisholms have not shown
they do not have a plain, speedy and adequate remedy in the
ordinary course of the law. They were directed by the
bankruptcy court to file an adversary complaint in the
bankruptcy court, which they have failed to do.
They argue their remedy against Corscadden in
bankruptcy court is limited, since he is bankrupt and there
are several other creditors involved. A determination of
ownership of the property by the bankruptcy court, however,
does not preclude a remedy against the Bank. If it is
determined the property belongs to Chisholms, they can
proceed with their action against the Bank in state court.
If it is determined the property belongs to Corscadden,
Chisholms have the right of appeal from the bankruptcy
court's order; and may proceed in state court on allegations
of the complaint not based upon the title to the disputed
property.
Chisholms' argument they will not be afforded due
process of law under the bankruptcy court's procedure is
without merit. Provision for jury trials appears in the
bankruptcy court's rules, Federal statutes, 28 U.S.C. 1480,
and case law. The dispute between Chisholms and Corscadden
arises from the alleged breach of a written contract.
[I]n actions sounding in account and
contract there is a right to a jury trial
under the seventh amendment to the
Constitution. Matter of Kakolewski, 29
B.R. 572 (Bankr.D.Mo. 1983). Actions to
establish liability on a debt require a
jury trial. In re Lamb 29 B.R. 950,
(Bankr.E.D. Tenn. 1983). In an action
for breach of contract, a defendant has
the right to have a jury determine
whether the contract has been breached.,
and, if so, what are the damages. Dairy
Queen, Inc. v. Wood, 369 U.S. 469, 82
S.Ct. 894, 8 L.Ed.2d 44, (1961). In
Dairy Queen the relief requested was
purely equitable--an injunction and an
accounting. However, because the basis
of the action was a claim for breach of
contract it was legal in nature,
warranting trial. Id., at 479, 82 S.Ct.
at 900.
In R.e Energy Resources Co., Inc. (1985)~49 B.R. 278, 282.
See also Beacon Theaters, Inc. v. Westover (1959), 359 U.S.
500, 79 S.Ct. 948, 3 L.Ed.2d 988. In any event, Chisholms
have not yet requested a jury trial in the bankruptcy court,
nor has the court ruled they are not entitled to one.
Moreover, nothing in the record indicates that once an
adversarial action is filed in bankruptcy court it will not
be handled expeditiously.
The property in question is subject to the jurisdiction
of the bankruptcy court by virtue of Corscadden's filing a
voluntary petition under Chapter 11 of the Bankruptcy Code.
After the bankruptcy court determines whether the property is
part of the bankrupt's estate, further appropriate action may
be brought.
We find there is a plain, speedy and adequate remedy
available to Chisholms and therefore the petition for writ of
mandamus is denied.
We concur:
Mr. Justice Frank B. Morrison, Jr. dissents as follows:
The majority opinion mistakenly assumes that title to
certain Corscadden property is at issue in the state district
court case. This is not true and the whole premise of the
majority opinion is fallacious.
It is true that Chisholm sued Corscadden in state dis-
trict court for conversion. In a separate action the plain-
tiff sued the bank for bad faith alleging that the bank
conspired with Corscadden to take Chisholm's property. Tn
neither event is title to the property being litigated be-
cause a conversion action recognizes title in the other
person but seeks damages for the wrongful taking of that
property. Our review here is only of the action against the
bank which is not a party to the bankruptcy action.
The bankruptcy court is charged with the responsibility
of marshal-ling assets belonging to Corscadden and should do
so. The issues to be litigated in state district court have
nothing to do with the issues in the bankruptcy court.
The case in state district court with which we are here
confronted, involves alleged actions by the bank unlawfully
interfering with Chisholm's property interests. If the
allegations are true the bank was guilty of bad faith and is
liable for punitive damages. It must be emphasized once more
that title to the property is not an issue. Recognizing
title to be in Corscadden, Chisholm alleges that the bank
wrongfully took those interests from him and is liable for
the reasonable value of the interests together with other
damages.
The bankruptcy court itself has recognized that the
issues in state district court are entirely different. By
order dated April 3, 1986, the bankruptcy court stated:
Corscadden is not a party to the state court action
[between the bank and the plaintiffs] but is merely
a potential witness ...
while the automatic state
provisions of the bankruptcy code are intended to
provide the debtor certain safeguards, the protec-
tion debtor seeks here is not within the statute.
While some parallels may attach between the pending
state court action and the debtor's bankruptcy
petition, debtor's concerns of res judicata is
unfounded due to the difference in party and prayer
for relief.
We are confronted with a situation where the bankruptcy
court itself has said the issues are different and results of
litigation between the bank and Chisholm will not affect
proceedings in the bankruptcy court. Yet the state district
court has refused jurisdiction to Chisholm so that Chisholn
can proceed on his bad faith claim against the bank.
Amazingly this Court approves.
I must express my extreme frustration with the treatment
accorded these issues. The majority opinion does not address
the issues in the case. Essential facts are not mentioned in
the opinion. The casual reader of advance sheets would
glance through the majority opinion without realizing how far
off the mark the decision is. I have tried, without success,
to intelligently debate the case in the Court conference. I
am now ].eft with being a voice in the wilderness on a case
where the majority fails to even discuss the dispositive
issues.
I dissent to the decision. I dissent to the decision
making process.