No. 14909
I N THE SUPREME COURT O F THE STATE O F MONTANA
1980
KNIGHT & COMPANY, a partnership,
P l a i n t i f f and A p p e l l a n t ,
-vs-
FORT BELKNAP I N D I A N AGENCY HOUSING AUTHORITY;
FORT BELKNAP BUILDERS, I N C . , a M o n t a n a
C o r p o r a t i o n ; FORT BELKNAP I N D I A N T R I B E :
SMITH E N T E R P R I S E S , I N C . and t h e F I R S T NATIONAL
BANK OF C I R C L E , MONTANA,
D e f e n d a n t s and R e s p o n d e n t s .
Appeal from: T h e D i s t r i c t C o u r t of t h e T w e l f t h J u d i c i a l
D i s t r i c t , I n and f o r t h e C o u n t y of B l a i n e ,
T h e H o n o r a b l e B. W. T h o m a s , Judge p r e s i d i n g .
C o u n s e l of R e c o r d :
For A p p e l l a n t :
G r a y b i l l , O s t r e m , Warner & C r o t t y , Great Falls,
Montana
For Respondent:
T o w e , B a l l , E n r i g h t and M a c k e y , B i l l i n g s , Montana
S u b m i t t e d on B r i e f s : January 1 0 , 1 9 8 0
Decided: JUN 2 0
Filed: &@tIe 19@
Mr. Justice Daniel J. Shea delivered the Opinion of the Court.
Knight & Company (herein referred to as Knight) appeals
from an order of the Blaine County District Court granting
the motion of the First National Bank of Circle (herein
referred to as Bank) for summary judgment. Several issues
are raised, but we determine that the procedural issue of
whether Knight has improperly appealed an interlocutory
order is dispositive of this appeal.
Although a full discussion of the facts is not necessary,
a limited discussion is required. Knight, an architectural
firm, prepared architectural drawings for the construction
of 20 homes in Fort Belknap, Montana. On February 20, 1974,
Knight filed suit against various parties for the recovery
of architect fees for services completed by October 22,
1971. Similar cases in two other counties were eventually
consolidated.
On May 3, 1974, the trial court entered an order
dismissing defendants Fort Belknap Indian Agency Housing
Authority and Fort Belknap Indian Tribe from the lawsuit for
lack of jurisdiction. On November 6, 1978, the trial court
entered default judgment against defendant Smith Enterprises,
Inc., which Knight asserts is a bankrupt corporation. On
January 17, 1979, defendant Bank filed a motion for summary
judgment; and on February 6, 1979, summary judgment was
entered in favor of the Bank. On February 13, 1979, Knight
filed a motion to set aside the summary judgment, which was
granted on April 13, 1979. The matter was reset for hearing,
and on May 29, 1979, the trial court again granted the
Bank's motion for summary judgment. This appeal followed.
This case involves multiple parties, more specifically
multiple party defendants. The record shows that the entry
-2-
of summary judgment adjudicated the rights and liabilities
of Knight and the Bank; however, the rights and liabilities
of all of the party defendants have not been adjudicated.
The current status of each party defendant is as follows:
"(1) Fort Belknap Indian Agency Housing Authority
dismissed for lack of jurisdiction.
"(2) Fort Belknap Indian Tribe dismissed for lack
of jurisdiction.
"(3) Default judgment entered against Smith
Enterprises, Inc.
"(4) Summary judgment entered in favor of First
National Bank of Circle, Montana.
"(5) - determination as to Fort Belknap Builders,
No
Inc. - action pending."
Fort Belknap Builders, Inc. is a party defendant in
this case; and to date, the following actions have been
taken concerning Fort Belknap Builders, Inc.:
" (1) Motion to dismiss filed on April-17, 1974.
" (2) Motion to dismiss denied on April 30, 1974.
"(3) Answer to complaint filed on May 24, 1974.
"(4) Attorney Thomas E. Towe's motion to withdraw
as counsel filed on July 13, 1978.
" (5) Notice of hearing on motion to withdraw as
counsel filed on July 13, 1978.
"(6) Order granting motion to withdraw as counsel
filed on July 25, 1978.
"(7) Certificate of service filed on August 4,
1978--Service of a copy of the Court order to
defendant.
"(8) District Court order directing plaintiff to
give defendant notice to retain new counsel or
appear in person filed on August 24, 1978."
The record clearly shows that the rights and liabilities
of Fort Belknap Builders, Inc. have not been adjudicated.
Under Rule 54, M.R.Civ.P., the order granting summary
judgment here is not a final judgment because not all of
the parties have been adjudicated. Additionally, the trial
court did not certify the summary judgment as final, under
Rule 54(b), M.R.Civ.P. This case is not ripe for appellate
review since the order of summary judgment is interlocutory;
therefore, this appeal must be dismissed without prejudice
under Rule 1, M.R.App.Civ.P.
As we noted in Roy v. Neibauer (1980), Mont . I
,
P.2d - 37 St.Rep. 897, 898, we have previously
dismissed appeals for failure to comply with Rule 54 (b),
M.R.Civ.P. See for example, Krusemark v. Hansen (1979),
Mont . , 597 P.2d 48, 36 St.Rep. 159; Knoepke v. South-
western Ry. Co. (1979), Mon t . , 595 P.2d 376, 36
St.Rep. 957; In Re Marriage of Adams (1979), - Mont. - I
598 P.2d 197, 36 St.Rep. 565. - thoroughly discussed
Roy
appeals involving interlocutory orders and Rule 54(b). - clearly
Roy
and specifically set forth the applicable principles, rules,
and procedural steps involved in relation to a Rule 54(b)
certification of final judgment.
Our extensive discussion in - is equally applicable
Roy
here; however, we perceive an additional problem in this
case which must be addressed. In the brief submitted to
this Court on appeal, Knight stated that "Fort Belknap
Builders, Inc. is a bankrupt corporation against which no
further proceedings have been taken." Knight also stated
".. .the only real parties left in the suit are the Plaintiff
and the First Bank of Circle, Montana.. . ." A careful
review of the record reveals that it cannot be determined
whether a voluntary or involuntary petition of bankruptcy
has been filed in Federal Court concerning Fort Belknap
Builders, Inc.; and herein lies the problem.
Recognizing that all of the rights and liabilities of
all of the parties had not been adjudicated, Knight could have
attempted to obtain an entry of default judgment against
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Fort Belknap Builders, Inc. If this had been done, there
would have been a final judgment, and consequently this case
would be ripe for appellate review. However, if a bankruptcy
petition has been filed in Federal Court, then Knight's
action against Fort Belknap Builders, Inc. in Blaine County
District Court may be stayed and Knight will not be able to
obtain an entry of default judgment or further proceed
against Fort Belknap Builders, Inc. Under federal law, the
filing of a bankruptcy petition operates so as to stay
other proceedings pending a Federal Court's determination
on the bankruptcy petition. See Collier on Bankruptcy, Vol.
lAI (14th ed.) , 811.
If a bankruptcy petition has been filed concerning Fort
Belknap Builders, Inc., then it would be proper for Knight
to petition for a Rule 54(b) certification of final judgment
in order to facilitate appellate review. This cause of
action was filed in February 1974 and is now going to be
sent back to the trial court. This case has been in the
courts for over 6 years and will probably be in the courts
for sometime to come. Under these circumstances, this case
would qualify as one of those infrequent harsh cases justifying
a discretionary departure from the normal rule as to the
time of appeal, in accordance with the principles enunciated
in -
Roy.
However, if a bankruptcy petition has not been filed
concerning Fort Belknap Builders, Inc., then Knight is free
to proceed against Fort Belknap Builders, Inc. and may not
petition the trial court for, and be granted, a Rule 54(b)
certification of final judgment in order to quickly file a
notice of renewed appeal with this Court. In Allis-Chalmers
-5-
Corp. v. Philadelphia Electric Co. (3rd Cir. 1975), 521
F.2d 360, 365, the Court discussed and distinguished between
the granting of summary judgment and Rule 54(b) certification
in the following manner:
". . .[tlhe considerations which resulted in
a grant of summary judgment are not the same
considerations relevant to an order of final
certification under Rule 54(b). Under summary
judgment procedure, the essential inquiry is
whether material facts are disputed. Under 54
(b) procedure, the essential inquiry is whether,
after balancing the competing factors, finality
of judgment should be ordered to advance the
interests of sound judicial administration and
public policy."
In the absence of a filed bankruptcy petition concerning
Fort Belknap Builders, Inc., and considering the principles,
relating to Rule 54(b) certification, the record here reveals
no danger of hardship or injustice through delay which would
be alleviated by immediate appeal. Under these circumstances
there is absolutely nothing in the record meriting a conclusion
that this is a case which qualifies as one of those infrequent
harsh cases justifying the discretionary departure from the
normal rule as to the time of appeal.
Appeal dismissed without prejudice.
1
We Concur:
#ief Justice,
Justices