Stevens v. Abbott , 220 Mont. 61 ( 1986 )

No. 85-362
IN THE SUPREME COURT OF THE STATE OF MONTANA
1986
GEORGE L. STEVENS and GERTRUDE L.
STEVENS,
Plaintiffs and Respondents,
MICHAEL G. ABBOT, d/b/a MICHAEL'S
ITALIAN RESTAURANT, and. JAMES
McQUADE,
Defendants and Appellants.
APPEAL FROM: District Court of the Fourth Judicial District,
In and for the County of Missoula,
The Honorable James B. Wheelis, Judge presiding.
COUNSEL OF RECORD:
For Appellant:
H.L. McChesney, Missoula, Montana
For Respondent :
William Baldassin, Missoula, Montana
Submitted on Briefs: Nov. 14, 1985
Decided: January 28, 1986
Filed: JAN 2 8 1986
Clerk
Mr. Justice Fred J. Weber delivered the Opinion of the Court.
The defendants appeal from an order of the Missoula
County District Court which, as a discovery sanction, granted
default judgment for plaintiffs on the issue of liability.
We hold that an order which grants a default judgment on the
issue of liability, reserving determination of the amount of
damages, is not appealable.
In 1981, the plaintiffs and Mr. Abbott, one of the
defendants, entered an agreement whereby 3 . Abbott would
purchase plaintiffs' restaurant business and related
property. Mr. McQuade , the other defendant, guaranteed the
obligations of Mr. Abbott. In late 1983, plaintiffs filed a
complaint against defendants Abbott and McQuade, seeking
damages for fraud and breach of contract. The defendants'
responsive pleading included a counterclaim. As part of
considerable discovery by both parties, plaintiffs ' attorney
served supplemental discovery requests upon defendants'
attorney in January, 1985. Defendants' attorney was unable
to locate his clients to advise them of the discovery
request. After the 30-day period allowed for defendants'
response had expired, the District Court issued an order
compelling discovery within an additional 14 days. During
this time, defendants ' attorney was apparently still unable
to locate Mr. Abbott, and Mr. McQuade was in Europe, with
plans to return within a month. When the 14-day period had
passed, plaintiffs filed a motion to impose sanctions. Ten
days later, at the hearing on that motion, defendants'
attorney asked for more time to respond to the discovery
requests. The court refused to extend the deadline, and
granted sanctions under Rule 37 (b) M. R.Civ. P. The sanctions
included entering default judgment against defendants on the
issue of liability, assessing two hundred eighty five dollars
against defendants for plaintiffs' attorney fees, and
striking defendants' counterclaim. The court reserved
determination of the amount of plaintiffs' damages for a
later hearing before a jury.
The defendants argue that the entry of their default is
too severe, and that the District Court abused its discretion
in imposing such a harsh sanction. Plaintiffs argue that the
sanctions imposed are well within the District Court's
discretion. Plaintiffs also raise the preliminary issue of
whether the District Court's order is appealable, at this
stage in the proceedings.
"The right of appeal exists only by statute or rule."
McClurg v. Flathead County Com'rs (1978), 179 Mont. 518, 519,
587 P.2d 415, 416. There is no statute or rule authorizing
appeal from an order granting default judgment on the issue
of liability. This is not one of the types of orders
specifically set out as appealable in Rule 1(b) and (c)
M.R.App.Civ.P., and no certification of the order under Rule
54 (b) M.R,Civ.P. has been obtained from the District Court.
Rule 1 (a) M.R.App.Civ.P. provides that an appeal may be
taken from a final judgment entered in an action commenced in
a District Court. This Court has held that an order
determining liability only, and reserving the issue of
damages, is not a final order in a summary jud.gment, Weston
v. Kuntz (1980), 187 Mont. 453, 610 P.2d 172, or after a
trial on the merits. Bostwick v. Dept. of Highways (1980),
188 Mont. 313, 613 P.2d 997. The federal appellate courts
recognize the general rule that any order which determines
liability, but not amount of damages, is not a final,
appealable order. Nat. Steel, Etc. v. D r . , Office of W.
Comp. Pro. (9th Cir. 1980), 626 F.2d 106. The Supreme Court
of Wyoming has specifically held that an order granting a
default on the issue of liability, but reserving
determination of damages, is not appealable. Dexter v.
O'Neal (Wyo. 1982), 649 P.2d 680. We adopt the reasoning of
these courts.
We hold that a default judgment entered on the issue of
liability alone is not a final, appealable order. We
therefore do not consider the issue of whether the District
Court abused. its discretion by imposing a too-severe
sanction. The appeal is dismissed.
We Concur:
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Justices