Holmes v. Steer-In

No. 86-39
IN THE SUPREME COURT OF THE STATE OF MONTANA
1986
HOLMES & TURNER, a Montana
partnership,
Plaintiff and Respondent,
STEER-IN, a Montana corporation,
Defendant and Appellant.
APPEAL FROM: District Court of the Eighteenth Judicial District,
In and for the County of Gallatin,
The Honorable Robert Boyd, Judge presiding.
COUNSEL OF RECORD:
For Appellant:
Philip P. McGimpsey, Billings, Montana
Pierre L. Bacheller, Billings, Montana
For Respondent:
Kirwan & Barrett; Stephen M. Barrett, Bozeman,
Montana
Submitted on Briefs: May 30, 1986
Decided: July 17, 1986
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Clerk
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Mr. Chief Justice J. A. Turnage delivered the Opinion of the
Court.
Respondent, Holmes & Turner, filed suit in the District
Court of the Eighteenth Judicial District, Gallatin County,
to collect from appellant, Steer-In, for services rendered.
This is an appeal from an order granting summary judgment in
favor of respondent issued after appellant failed to answer
appellant's requests for admission.
Steer-In seeks to have this Court relieve it of the
effect of Rule 36, M.R.Civ.P., which deems matters in re-
quests for admission that are not responded to as admitted
and conclusively established. Steer-In argues that it had
already denied the matter in question in its answer to the
complaint so that it should not be required to deny the
matter again.
We affirm.
Steer-In is a Montana corporation which operates a
restaurant and lounge near Three Forks, Montana. Holmes &
Turner is a Bozeman accounting firm. Steer-In hired Holmes &
Turner for services in 1980 and 1981. Steer-In did not pay
Holmes & Turner for the services.
On January 19, 1982, Holmes & Turner filed suit against
Steer-In to collect $6,335 for the accounting services. he
sole factual allegation in the complaint is as follows:
Defendants, and each of them, owe plain-
tiff SIX THOUSAND THREE HUNDRED THIRTY-
FIVE DOLLARS ($6,335.00) for accounting
services rendered by plaintiff to defen-
dants, and each of them, between July
15, 1980, and January 5, 1981, with
interest at the rate of eighteen percent
(18%) per annum.
Steer-In denied this allegation and presented the affirmative
defense of failure of consideration in its answer to the
complaint. The answer also raised three counterclaims
alleging that Holmes & Turner negligently designed, imple-
mented and maintained the Steer-In's accounting system.
Steer-In requested $210,000 in compensatory damages and
$500,000 in punitive damages. On April 16, 1984, the new
owner of Steer-in signed a stipulation of dismissal of the
counterclaims, and a court order dismissing the counterclaims
with prejudice was issued on February 26, 1985.
Discovery lasted for an extended period. Finally, on
February 6, 1985, the parties stipulated to a termination of
interrogatories by which interrogatories prior to that date
could go unanswered without penalty. Then, on February 7,
1985, Holmes & Turner made a request for admission as
follows:
Admit that the Defendant Steer-In owes
Plaintiff the sum of $6,335 plus inter-
est at the rate of 18% per annum for
accounting services rendered by Plain-
tiff to Defendant between July 15, 1980
and January 5, 1981.
Holmes & Turner also made another request contingent on
Steer-In's denial of the admission. That request was as
follows:
If the answer to the preceding request
for admission was negative please state
the basis for the denial, what elements
of the request for admission are specif-
ically denied, what fees are owed from
the Defendant to the Plaintiff for
accounting services, and what basis
exists in the form of affirmative de-
fenses, offenses, or other charges that
are alleged to reduce the accounting
services set forth in the preceding
interrogatory.
No further requests were made.
On May 16, 1985, Holmes & Turner's counsel wrote to
counsel for Steer-In requesting a response to the request for
admission and warning that a motion for summary judgment
would follow if Steer-In did not respond. Steer-In did not
respond. On July 19, 1985, Holmes & Turner moved for summary
judgment. On October 29, 1985, the District Court issued an
order that deemed Holmes and Turner's request for admission
as admitted by Steer-In's failure to respond. With the
matter in the admission deemed admitted, no issue of fact
remained, so the order also granted summary judgment.
Steer-In appeals.
Steer-In's main argument has to do with the fact that
Holmes and Turner's request for admission matches the sole
factual allegation in its complaint. Steer-In argues that
since it already denied that allegation in its answer to the
complaint, it should not be required to answer the same
allegation in the request for admission. It would be,
Steer-In argues, an exaltation of procedure over substance to
order summary judgment where the pleadings clearly show an
issue of fact. Steer-In's brief also emphasizes the unneces-
sary increased burden and cost to clients created by proce-
dural rules which require redundant pleadings.
Rule 36, M.R.Civ.P., and precedent are such that summa-
ry judgment was appropriate. Rule 36(a) provides that a
request for admission is deemed admitted unless answered or
objected to within thirty days after service of the request.
Rule 36(a), M.R.Civ.P., provides in part:
... The matter is admitted unless,
within 30 days after service of the
request, or within such shorter or
longer time as the court may allow, the
party to whom the request is directed
serves upon the party requesting admis-
sion a written answer or objection
addressed to the matter, . ..
Then, Rule 36 (b), M. R.Civ. P., provides in pertinent part:
Any matter admitted under this rule is
conclusively established unless the
court on motion permits withdrawal or
amendment of the admission. ...
Thus, by Rule 36 (a), Steer-In had thirty days after it was
served with Holmes & Turner's request to answer or object to
the request before the request was deemed admitted. After
thirty days, Steer-In had the option of moving to withdraw or
amend the admission under Rule 36(b).
Over eight months passed between the time Steer-In was
served with the request and when the court deemed the request
admitted. In this period, Steer-In did not even attempt to
exercise any of its options under Rule 36. The court there-
fore followed the mandate in Rule 36 and deemed the request
admitted. Once the request was admitted, there could no
longer be any issues of fact, and the court ordered summary
judgment pursuant to Rule 56, M.R.Civ.P.
We have previously addressed the issue of the propriety
of summary judgment where the basis is a failure to respond
to requests for admissions. See Morast v. Auble (1974), 164
Mont. 100, 519 P.2d 157. In Morast, 519 P.2d at 160we fol-
lowed 8 Wright & Miller, Federal Practice and Procedure:
Civil § 2264, which states:
Admissions obtained by use of Rule 36
may show that there is no genuine issue
as to any material fact and justify the
entry of summary judgment under Rule 56.
This rule states precisely what happened in the case at bar.
As in Morast, we will follow that rule here. We hold that
the District Court properly issued summary judgment based on
a fact deemed established by the operation of Rule 36,
M.R.Civ.P. We will further comment that the very purpose of
Rule 36 is to lessen the time of trial and ultimately to set
the stage for summary judgment.
Steer-In argues that it should not be required to
respond to the request because its answer to the complaint
contains a denial of an identical allegation. We disagree.
Holmes & Turner made its request for admission on
February 7, 1985. Steer-In's answer to the complaint is
dated March 24, 1983. In this period of nearly two years,
Steer-In acquired a new owner and all three of its counter-
claims were dismissed with prejudice. Under these circum-
stances, Holmes & Turner could suspect that Steer-In had
changed its position on the factual allegation or the theory
of its defense. A Rule 36, M.R.Civ.P., request for admission
was the ideal and proper way for Holmes & Turner to determine
if Steer-In was holding to its original position. Steer-In
could have easily handled the matter by reaffirming its prior
positions.
We do not believe Holmes & Turner was playing a "proce-
dural chess game" with Steer-In as Steer-In alleges. More-
over, if Steer-In thought Holmes & Turner was "playing games"
with its request, it could have objected to the request. If
the prior answer did in fact answer the request for admis-
sion, the objection would have satisifed Steer-In's responsi-
bility under Rule 36. Instead, Steer-In made no response at
all.
Whether or not Steer-In agrees with the effect of Rule
36, it is bound by it. Steer-In calls the effect of Rule 36
in this case an "exaltation of procedure over substance." We
think that it is Steer-In that did the "exalting" by ignoring
the rule. If Steer-In had responded as required by Rule 36,
the substance of the case could have been preserved.
Steer-In complains about the cost and burden of redun-
dant pleadings. We can see little cost or burden to Steer-In
in responding to Holmes & Turner's request. Steer-In could
have simply referred Holmes & Turner to the denial and affir-
mative defense in the original answer, or as stated earlier,
it could have objected to the request as redundant. This
minor burden is insufficient reason for us to undermine the
operation and purpose of Rule 36.
The District Court's order granting summary judgment is
affirmed.
We concur: /'