Kenner v. Moran ( 1995 )

No. 94-628
IN THE SUPREME COURT OF THE STATE OF MONTANA
1995
HAMILTON G. KENNER and ERNO, INC
a Delaware Corporation,
Appellant & Plaintiff,
v.
LARRY W. MORAN,
Respondent & Defendant.
WEC 19 1995
APPEAL FROM: District Court of the Fifth Judicial District,
In and for the County of Madison,
The Honorable Frank M. Davis, Judge presiding.
COUNSEL OF RECORD:
For Appellant:
Hamilton G. Kenner, The Tipler Law Offices,
Andalusia, Alabama
For Respondent:
Michael P. Sand, Sand Law Offices, Bozeman, Montana
Submitted on Briefs: July 13, 1995
Decided: December 19, 1995
Filed:
Justice William E. Hunt, Sr. delivered the Opinion of the Court.
Pursuant to Section I, Paragraph 3(c), Montana Supreme Court
1995 Internal Operating Rules, the following decision shall not be
cited as precedent and shall be published by its filing as a public
document with the Clerk of this Court and by a report of its result
to State Reporter Publishing Company and West Publishing Company.
Plaintiff and appellant, Hamilton G. Kenner, appeals the
denial of his motion for leave to file an amendment to his
complaint in the Fifth Judicial District Court of Madison County.
We affirm.
ISSUE
Did the District Court abuse its discretion in refusing to
allow the appellant to amend his complaint?
FACTS
In October 1980, Larry Moran (Moran) and Central States
Investment Company (CSI) entered an Agreement for Sale and Purchase
of property in Madison County. Hamilton G. Kenner (Kenner), signed
on as a guarantor of performance on behalf of CSI. Kenner and CSI
made payments up until November 1, 1984, at which time Kenner
defaulted. In January 1985, Moran and Kenner entered into a
modification of the agreement that would permit Kenner to cure the
default.
In June 1985, Kenner requested a release of 280 acres of
river front property in consideration of payments already made on
the contract. Kenner represented at the time that all of the
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property taxes and lease payments to the Bureau of Land Management
were current and would continue to be made in a timely fashion
along with future contract payments. On this representation, Moran
quit claimed the river front property to Kenner as a partial
release on July 2, 1985.
Again Kenner defaulted on payments. A provision in the
Modified Sale and Purchase agreement provided that releases of
acreage were conditional upon Kenner's remaining current on all
principal and interest due. Because Kenner failed to remain
current, Moran instituted an action to quiet title to the property.
In December 1986, Kenner filed a motion to dismiss. At the
time, Kenner was granted twenty days in which to plead further.
However, before the twenty days expired, Kenner requested Moran
take a default against other defendants associated to the property
to clear the title, so the parties could negotiate a settlement
agreement. In June 1987, Moran offered Kenner a settlement
agreement which would allow Kenner to reinstate their contract.
In a letter sent to Moran by Kenner's attorney, Kenner
accepted the terms of the settlement proposal contingent on the
defaults being taken against the other defendants. Relying on
Kenner's acceptance of the settlement agreement and his promise to
remain current on annual payments, Moran quieted title against the
other defendants. On August 4, 1987, Moran's counsel sent a copy
of the quiet-title decree to all of the defendants but Kenner.
In October 1987, Moran sent a letter to Kenner's attorney
requesting action on the settlement contract, and gave "informal
3
notice" that no further delay would be tolerated. This was
followed by another letter in January 1988, requesting Kenner act
on the settlement agreement within thirty days or Moran would
proceed with the quiet-title action against Kenner. In May 1988,
Moran served notice on Kenner's attorney to depose Kenner, but the
notice was ignored. On March 7, 1989, Moran sent notice that if
Kenner did not take action on the settlement agreement within ten
days, Moran would proceed with the quiet title.
Kenner's attorney then informed Moran that he had been unable
to proceed because he had been unable to communicate with Kenner.
Moran again began proceedings against Kenner to quiet title to the
property. On February 9, 1990, the Clerk of Court, at Moran's
request, entered a default judgment quieting title against Kenner
for failure to "plead or otherwise defend." No formal notice was
served on Kenner or his attorney of record prior to the application
for the default or after its entry. All of the above legal action
took place under District Court cause no. 7603.
In July of 1991, Kenner and EFWO Co. entered into a buy-sell
agreement for a portion of the property that is the subject of this
dispute. At this time Kenner discovered the default judgment
against him and filed an action to set it aside. In this action,
cause no. 8115, Kenner requested that the default be set aside and
that he be allowed to further plead and defend in cause no. 7603.
Kenner moved the court for summary judgment in January 1993,
and a hearing on the matter was set for February. On the day of
the hearing Moran filed a counterclaim in cause no. 8115, asking
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the court to compel Kenner to specifically perform the settlement
agreement. The District Court denied Kenner's motion for summary
judgment, finding he had failed to meet his burden of proof. The
order then required Kenner to specifically perform the settlement
agreement he had entered into with Moran in July 1987.
Kenner appealed this decision and we reversed. We held that
Kenner had not received appropriate notice of Moran's intent to
enter a default against him, and that he had not been provided
opportunity to defend on Moran's counterclaim regarding specific
performance. Therefore, the default judgment entered against
Kenner in the quiet-title action, cause no. 7603, was set aside.
Kenner v. Moran (19941, 263 Mont. 368, 868 P.2d 620.
After our decision the only viable issue remaining in cause
no. 8115 was Moran's counterclaim, which we remanded. Moran
subsequently dismissed his counterclaim on the ground that all of
the issues raised in it were more appropriately addressed in cause
no. 7603, which had been revived when the default judgment against
Kenner was set aside. Moran then amended his original complaint in
cause no. 7603.
Kenner answered Moran's amended complaint on August 15, 1994.
Kenner then filed a motion to permit an amendment to his original
complaint filed in cause no. 8115. The District Court heard oral
argument and denied the motion in October 1994. Kenner appeals.
ISSUE
Did the District Court abuse its discretion in refusing to
allow the appellant to amend his complaint?
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The standard of review when considering a district court
denial of a motion to amend a pleading is whether the district
court abused its discretion. Gursky v. Parkside Professional
Village (1993), 258 Mont. 148, 152, 852 P.2d 569, 571.
A party may amend his or her pleading "only by leave of the
court" or if the opposing side gives written consent. Rule 15(a)
Amendments reads as follows:
A party may amend the party's pleading once as a matter
of course at any time before a responsive pleading is
served, or if the pleading is one to which no responsive
pleading is permitted and the action has not been placed
upon the trial calendar,the party may so amend it at any
time within 20 days after it is served. Otherwise a
party may amend the party's pleading only by leave of
court or by written consent of the adverse party; and
leave shall be freely given when justice so requires. A
party shall plead in response to an amended pleading
within the time remaining for response to the original
pleading or within 10 days after service of the amended
pleading, which ever period may be the longer, unless the
court otherwise orders.
Kenner in this case wishes to amend his complaint to include
additional allegations of fraud, a request for punitive damages and
a demand for a jury trial.
The dispositive issue in this procedural quagmire is that
cause no. 8115 is closed. As the District Court found, all matters
contained in cause no. 8115 have been adjudicated. The default
judgment has been set aside pursuant to remand by this Court in
cause no. 8115 and Kenner was given the opportunity to further
plead in cause no. 7603. Accordingly, the order issued by the
District Court declared cause no. 8115 closed.
If Kenner wished to raise allegations of fraud against Moran,
he should have done so in his answer to Moran's amended complaint
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in cause no. 7603. Neither Kenner's answer on August 15, 1994, nor
his amended answer of October 3, 1994, allege fraud as a defense.
The court recognizes the importance of allowing parties the
opportunity to amend pleadings but the court must also recognize
that equal attention should be given to the proposition that there
must be an end finally to a particular litigation. Stanford v.
Rosebud County (1992), 254 Mont. 474, 476, 839 P.2d 93, 95-96.
The District Court pointed out to the parties that trial in
cause no. 7603 was imminent. Kenner filed his motion to amend his
original complaint in August 1994, with trial scheduled for October
20, 1994. Up to this point, there had been several opportunities
for Kenner to amend his answer in cause no. 7603 to conform with
fraud allegations. Instead, when Kenner did move to amend, he
sought to amend his complaint, and failed to provide the court with
any explanation or basis for the filing of his proposed amended
complaint.
We hold the District Court did not abuse its discretion when
it denied Kenner's motion to amend his complaint.
Affirmed
Justice
We Concur:
I