DeJana Ex Rel. Oleson & DeJana Law Firm v. Oleson , 51 State Rptr. 147 ( 1994 )

No. 93-447
I N THE SUPREME COURT OF THE STATE OF MONTANA
1994
RICHARD DeJANA, Individually
and on behalf of OLESON and
DeJANA L A W FIRM, a partnership,
Plaintiff/Appellant,
-V-
H.JAMES OLESON and E.EUGENE
ATHERTON.
APPEAL FROM: District Court of the Eleventh Judicial District,
In and for the County of Flathead,
The Honorable Frank M. D a v i s , Judge p r e s i d i n g .
COUNSEL OF RECORD:
For Appellant:
Richard DeJana, DeJana Law Firm, Kalispell, Montana
For Respondent:
H. James Oleson, Oleson Law Firm, Kalispell, Montana
Submitted on Briefs: January 17, 1994
Decided: February 24, 1994
Filed:
Justice Fred J. Weber dalivered the Opinion of the Court.
This is an appeal from a dismissal by the Eleventh Judicial
District Court, Flathead County, of an action involving the
parties' law firm. We reverse.
The appellant has raised several questions for review. We
consider only one as determinative of the action before us:
Did the District Court err by dismissing this case without
notice to the parties after five years of inaction on the case?
Appellant and respondent were partners in a Kalispell law firm
from July of 1984 until August of 1985. During August, the
partnership dissolved with each partner agreeing to account for
respective unbilled billable hours and hours on contingency fee
cases.
A complaint was filed by DeJana on December 24, 1987, alleging
various failures on the part of Oleson to account for unbilled
billable and contingency hours, failure to account for funds that
had been diverted by Oleson, and alleging such things as theft,
conversion of funds, and breach of the covenant of good faith and
fair dealing.
During May of 1988, DeJana served various Requests for
Admission and Production. Following these requests, Oleson sought
a protective order from the court and DeJana sought an order to
compel arbitration. These matters were heard by the court which
issued an omnibus order on June 16, 1988. The order dismissed the
action as to Atherton which has not been appealed. The order
granted Oleson's motion for a protective order and further ordered
2
that both parties were to cease discovery. DeJana1s request for
appointment of an arbitrator was denied as was DeJanalsdemand for
a jury trial because the court considered this an action in equity.
The court also granted the parties thirty days to reach a
settlement.
DeJana objected to the ruling but the court did not rule on
the objection. Nothing further was done in this proceeding and
nothing was filed until, without notice, the court dismissed the
case with prejudice on July 13, 1993, due to lack of any action for
five years.
Did the District Court err by dismissing this case without
notice to the parties after five years of inaction on the case?
DeJana argues that the court abused its discretion by
dismissing the action. He points out that the District Court
orderedthat both DeJana and Oleson cease further discovery efforts
in this cause and concluded that the case is an accounting which
the court would resolve on equitable principles. Finally, the
court in its June 16, 1988 order, provided that the parties were
granted thirty days to effect a compromise and " [i]n the absence of
settlement, the Court will schedule a trial before the Court,
sitting without a jury." Oleson argues that no requirement exists
for warning prior to dismissal. We conclude that a warning was
appropriate under the facts of this case.
It is true that a district court is accorded broad discretion
in determining whether a cause of action should be dismissed for
failure to prosecute. Shackleton v. Neil (1983), 207 Mont. 96, 672
P.2d 1112. However, because dismissal for failure to prosecute is
a harsh remedy, the cobrt does not have unlimited discretion to
grant an involuntary dismissal. Becky v. Norwest Bank (1990), 245
Mont. 1, 798 P.2d 1011. Courts exist primarily to afford a forum
to settle litigable matters between disputing parties. Brymerski
v. City of Great Falls (1981), 195 Mont. 428, 636 P.2d 846.
Therefore, the district courts must balance the concerns of
judicial efficiency embodied in Rule 41(b), M.R.Civ.P., against a
party's right to meaningful access to the judicial system. Timber
Tracts, Inc. v. Fergus Elec. Co-op, Inc. (1988), 231 Mont. 40, 753
P.2d 854.
Both parties in the present case cite Becky as precedent for
the factors that we must consider when determining whether a court
abused its discretion in dismissing an action for failure to
prosecute. Those factors are: (1) the plaintiff's diligence in
prosecuting his or her claims, (2) the prejudice to the defense
caused by the plaintiff's delay, (3) the availability of alternate
sanctions; and (4) the existence of a warning to plaintiff that his
or her case is in danger of dismissal. Becky, 245 Mont. at 8, 798
P.2d at 1015. Oleson argues that a warning is not mandatory.
Becky emphasizes that the facts of each case control, stating:
There is no precise formula for determining when an
action may properly be dismissed for failure to
prosecute. Each case turns on its own particular set of
circumstances, and lapse of time in and of itself is
insufficient to justify dismissal.
Beckv, 245 Mont. at 7, 798 P.2d at 1015. Here, the court gave no
reason for its dismissal except for the time that had elapsed:
"There being no action in this cause since August 16, 1988, this
case is by the Court hereby DISMISSED with prejudice."
A review of the record indicates that no action existed
because the court, in its omnibus order of June 16, 1988, cut off
all alternatives for the parties except for "compromise and
settlement of the litigation." The court stated that if the
parties did not settle, it dould set a trial date. DeJana objected
to the court's denial of his trial by jury and failure of the court
to appoint an arbitrator. Oleson then moved the court for partial
adjudication which the court granted on August 18, 1988. The last
sentence of that order states:
This order is without prejudice to any right of the
Plaintiff on any pending issue in this cause.
The District Court effectively eliminated further action by the two
parties. Under all these circumstances we conclude that the
warning was necessary on the part of the court prior to dismissal.
We hold the District Court abused its discretion in dismissing the
case.
Reversed and remanded for further proceedings consistent with
this opinion.
We Concur:
February 24, 1994
CERTIFICATE OF SERVICE
I hereby certify that the following order was sent by United States mail, prepaid, to the following
named:
RICHARD DeJANA
DeJana Law
P.O. Box 1757
Kalispell, MT 59901
H. JAMES OLESON
Oleson Law Firm
P.O. Box 2036
Kalispell, MT 59903-2036
ED SMITH
CLERK OF THE SUPREME COURT
STATE QF MONTANA