No. 14029
IN THE SUPREME COURT OF THE STATE OF MONTANA
1978
DARBY J. FOY and JO ANN K. GILREATH,
Plaintiffs and Respondents,
-vs-
DAVID R. ANDERSON,
Defendant and Third Party Plaintiff and
Appellant,
-vs-
FARMERS INSURANCE EXCHANGE, an insurance
corporation, BUD SMITH, THE STATE OF MONTANA
DEPARTMENT OF HIGHWAYS and KAREN EGGAN,
Third Party Defendants.
Appeal from: District Court of the First Judicial District,
Honorable Nat Allen, Judge presiding.
Counsel of Record:
For Appellant:
Smith Law Firm, Helena, Montana
Robert J. Sewell, Jr. argued, Helena, Montana
For Respondents:
Patrick F. Hooks, Townsend, Montana
Daley and Sherlock, Kalispell, Montana
Gough, Shanahan, Johnson and Waterman, Helena, Montana
Penwell and Bryan, Bozeman, Montana
Mark A. Bryan argued, Bozeman, Montana
Submitted: May 2, 1978
Decided =JUN 1. ? 1978
Filed: JUN ":. 1:3W
Mr. Justice Gene B. Daly delivered the Opinion of the Court:
This is an appeal from the dismissal of a third party
declaratory action filed in the District Court, Lewis and
Clark County.
On September 5, 1975, Karen Eggan was a passenger with
Darby Foy in a Volkswagen driven by Jo Ann K. Gilreath. The
Gilreath car was struck in the rear by David R. Anderson who was
d~iving his car in the same direction. Both Jo Ann K. Gilreath
and Darby J. FOY sustained injuries as a result of the accident.
Karen Eggan sustained only minor injuries. Subsequently Foy and
Gilreath brought separate actions against David Anderson to re-
cover for personal injuries and property damage. Karen Eggan
has never presented a claim for damages against David Anderson and
does not contemplate doing so.
David R. Anderson alleges that Karen Eggan has asserted a
claim against him for personal injuries based upon the affidavit
of Gary W. Younker an insurance agent who went to the Eggan
residence to get a statement concerning the accident. Karen
Eggan was not at home so Younker spoke with Karen's mother.
Younker alleges in his affidavit that at some point during that
conversation Mrs. Eggan stated they "were contemplating getting an
attorney and joining in the lawsuit." Younker has never spoken with
Karen Eggan. There has been no allegation by David R. Anderson
that Karen Eggan has made a statement that she has ever contem-
plated joining the lawsuit.
David Anderson purchased a policy of insurance from Farmers
Insurance Exchange on the automobile he was driving at the time
of the collision. After the collision a dispute arose between
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Anderson and Farmers Insurance Exchange whether coverage was
afforded Anderson under the policy. Farmers refused coverage
and would not defend the Gilreath and Foy actions. David Anderson
then commenced a third party declaratory judgment action pursuant
to Rule 57, M.R.Civ.P., and sections 93-8901 to 93-8916, R.C.M.
1947, on April 1, 1977, against Farmers Insurance Exchange, its
agent who sold the insurance and also against the state of Montana
Department of Highways and Karen Eggan. The basis of the third
party action for declaratory judgment against the state of
Montana and Karen Eggan is that both parties have asserted a
claim for damages against him arising from the automobile accident
and that common issues of law and fact are involved in the actions.
On April 18, 1977, Karen Eggan filed her motion to dismiss
and a supporting brief. David Anderson filed his brief in
opposition to the motion to dismiss and included the affidavit
of Gary W. Younker. Subsequently Karen Eggan filed a supplemental
brief. On April 21, 1977, Hon. Gordon R. Bennett granted David
R. Anderson's motion for consolidation, and consolidated Lewis
and Clark County District Court's Cause No. 40502 with and into
its Cause No. 40497. On April 25, 1977, Hon. Nat Allen assumed
jurisdiction of Cause No. 40497. Because Karen Eggan's motion
to dismiss was not decided by Judge Bennett before Judge Allen
assumed jurisdiction the matter was submitted to Judge Allen for
resolution. On September 7, 1977, Judge Allen entered his order
dismissing Karen Eggan as third party plaintiff and awarded her
$200 attorney fees. The order states:
"Third party defendant Karen Eggan's motion
for an order dismissing the Third Party Plaintiff's
claim having been briefed to the Court by both sides,
and the Court being fully advised in the premises;
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"IT IS ORDERED that said motion is hereby
granted and allowed, and Karen Eggan is dismissed
as a party to this suit for the reason she was not
injured and has no claim against third party plaintiff,
and to do otherwise would be forcing litigation on
the plaintiff that does not wish to sue.
"IT IS FURTHER ORDERED that she be granted an
Attorney fee of $200.00 against Defendant David R.
Anderson."
We note that not until after the motion to dismiss and
briefs had been submitted and Karen Eggan had incurred legal
expenses was any offer tendered to her to be released from
the law suit and the offer did not include the payment of the
legal expenses she had incurred.
The issues presented on appeal for the Court's considera-
tion are:
1) Whether the District Court properly dismissed Karen
Eggan as a party in the action?
2) Whether the District Court properly awarded Karen
Eggan attorney fees?
Plaintiff Anderson is seeking to compel defendant Eggan
to bring a complaint against him for personal injuries that she
allegedly suffered as a result of the automobile collision on
September 5, 1975. Such a complaint violates both the letter
and the spirit of the law. The Montana Rules of Civil Procedure were
enacted to provide for a complete adjudication of all claims
arising out of a single occurrence; the rules were not designed
to encourage or promote litigation, as plaintiff Anderson seeks
to do, by requiring defendant Eggan to appear and bring suit.
The contention of plaintiff Anderson that Karen Eggan is a
necessary party to this suit cannot be sustained. Eggan is not
an indispensable party under Rule 19, M.R.Civ.P. The insurance
company's liability on the insurance contract can be decided
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•
without Karen Eggan. In the language of Rule 19, M.R.Civ.P.,
a person is an indispensable party if in his absence complete
relief cannot be granted. This is not the case here.
The Montana Declaratory Judgments Act contains no express
requirement that all parties with interest must be joined. There
is no language in the Act from which such a requirement can be
implied. Section 93-8911 provides:
"Parties. When declaratory relief is sought,
all persons shall be made parties who have or claim
any interest which would be affected by the declara-
tion, and no declaration shall prejudice the rights
of persons not parties to the proceeding. * * ~,
Defendant Eggan asserts no claim or interest with respect
to this insurance policy coverage or in the lawsuit. Further,
Count No. IV relating to Karen Eggan does not state a claim
for which relief can be granted under the Declaratory Judgments
Act. 22 Am Jur 2d, Declaratory Judgments §§ 10,11,18,19,23.
Plaintiff Anderson points out that the law in Montana
regarding attorney fees, in the absence of a specific contractual
or statutory grant, is that the prevailing party in an action is
not entitled to an award of attorney fees either as costs of the
action or as an element of damages. Bitney v. School District
No. 44, (1975), 167 Mont. 129, 535 P.2d 1273; McMahon v. Falls
Mobile Home Center, Inc., (1977), ____Mont. ____ , 566 P.2d 75,
34 St.Rep. 584; Nikles v. Barnes, (1969), 153 Mont. 113, 454 P.2d
608.
The cited law is correct in regard to attorney fees. However,
it must be remembered that the District Court has discretionary
power in dismissing an action as it did in this case. The court
also reserves the power to grant complete relief under its equity
power. This is meant to establish no precedent, but must be
determined on a caSe by case basis.
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"
If equity is to be done in a situation such as this, the
attorney fee must be sustained. Plaintiff Anderson sought to
bring defendant Eggan into the lawsuit when she had asserted no
claim against him and had no intention of doing so. For this
reason she submitted a motion to dismiss which was granted by the
trial court. Plaintiff Anderson forced her to secure the services
of an attorney to examine the case and submit a motion to dismiss
and through no fault on her part to incur attorney fees and costs.
If defendant Eggan is dismissed from the case and not awarded
attorney fees, she will not be made whole or returned to the same
position as before plaintiff Anderson attempted to bring her into
the lawsuit.
Judgment of the District Court is affirmed •
./
We Concur:
Chief Justice
~.~___ cg,.,«W'1
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.
Mr. Chief Justice Frank I. Haswell, dissenting
I respectfully dissent to the award of attorney fees.
The majority recognize that attorney fees cannot be
awarded to the prevailing party in the absence of statute or
contract. Here there is neither. The award is justified on the
basis of making the prevailing party whole and granting complete
relief. This justification is equally applicable to any defen-
dant who is sued, hires an attorney, and ultimately prevails.
In my view, this decision constitutes a sharp break
from existing law, the denial of precedential value by the major-
ity notwithstanding. If the prevailing defendant is to be made
whole and granted complete relief, why doesn't this case establish
a precedent?
Substantial arguments can be made for and against award-
ing attorney fees to the prevailing party in a lawsuit. In my
view this is a matter of public policy to be resolved by the legis-
lature. To date the legislature has not seen fit to grant attorney
fees to a prevailing defendant (except in certain instances not
pertinent to this case, e.g. eminent domain and reciprocal rights
statutes).
I would adhere to existing law and require statutory
authorization for an award of attorney fees in the absence of
contract.
---?~-~-g&~~-------
Chief Justice
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