*1 ROBERT C. TURTAINEN and Mari G. Turtainen, v. H. POULSEN, RANDOLPH Appellants, Plaintiffs Respondent. Defendant No. 89-507. Submitted on Briefs March 1990. May Decided *2 McCue, Poston, Helena, R. Harrison & for Loendorf Stephen and appellants. Murfitt, Helena, E. Luxan Dale & defendant and Reagor, respondent.
JUSTICE HARRISON delivered Court. Opinion a the First by This case an from appeal grant summary judgment Court, Montana, a Lewis and Clark in real County, Judicial District estate contract We affirm. dispute. raise two issues for review: Court claims barred finding
1. Did District err in rule? doctrine of res and the their counterclaims for 2. Were assert appellants of action in earlier fraud and other related causes with the action because the District Court proceeded injunction on a basis? summary action injunction 28, 1984, a in Mountain lot purchased On September appellants Tracts, Clark from who County, respondent Lewis and Heritage an lot. conveyed adjoining Respondent owned lived a number of deed which included by warranty property appellants 21, 1985, a filed lawsuit covenants. On June respondent restrictive to enforce the an injunction seeking through against appellants an sought injunction restrictive covenants. respondent Specifically, in a trailer for a from on the living premises forbidding appellants in certain of twelve months and from engaging in excess period on the activities such as leaving garbage premises nuisance-type trial, the only and down the with a At motorcycle. racing up property the court related to the trailer which the court decided in issue before by issuing injunction. favor requested over the On sued appellants September contract for sale of September property. Appellants had made false to them various alleged representations that induced them to enter into the contract. The most harmful alleged (1) were the a misrepresentations following: representation time; in a on the for an indefinite could live premises (2) that were buried not informed of the presence utility land; (3) lines on their were told that an access road did not land; their (4) encroach on that the water the land system serving (5) would be owned that the by non-profit corporation; for FHA approved financing. alleged Appellants’ complaint *3 fraud, false unfair business constituted representations fraud, constructive breach of practices, negligent misrepresentation, of and fitness for a and breach warranty habitability particular purpose of the covenant of faith and fair good dealing. implied moved for that
Respondent summary judgment arguing essentially claims, the lawsuit barred either the through previous appellants’ rule. The doctrine of res or the judicata compulsory District Court It found that the trailer issue was res agreed. in a because whether the could live on the premises Further, the District lawsuit. specifically litigated previous barred by Court ruled that other claims were appellants’ counterclaim rule those claims were logically because the basis of the related to the contract for sale of the land which formed lawsuit between previous parties. Procedure
Rule of Montana Rules of Civil governs 13(a) counterclaims. In Rule provides: pertinent part ‘ claim which at the time ‘A shall state as a counterclaim any pleading if it has against any opposing party, serving pleading pleader matter of or occurrence that is the subject arises out of the transaction claim ...” opposing party’s avoids counterclaims 13(a)’s Rule mandate regarding compulsory 358 one of suits. The rule “insures only judicial
needless multiplicity the facts or to settle all matters determinable is proceeding into a litigation.” all related claims single law and to bring logically 515, 521, 226 Mont. (1987), Fourth Judicial Dist. Court First Bank v. 1132, 1135-36, (1985), Mont. Julian v. Mattson 737 P.2d citing 707, P.2d out of the the instant action does arise contend that Appellants lawsuit because or occurrence as previous same transaction conduct after the entered lawsuit related to parties previous appellants’ action, however, of the instant into the contract sale to the contract. relates to conduct prior do not arise from the same aggregate operative assert that the claims test. See Springs facts to necessary satisfy logical relationship We (D. 1986), Cut Bank Mont. F.Supp. First Nat 'l Bank of disagree. out of the same aggregate operative both lawsuits arose
Plainly,
from
facts,
of the contract for sale of land
creation and execution
filed the initial suit
The respondent
appellants.
the first
conduct in
contract. The
timing
disputed
enforce the
the fact that the sale
property
suit does not overshadow
At
which
the dispute.
transaction
underlying
generated
constitutes
time,
claim
had
should have counterclaimed any
that led to the
made
concerning alleged misrepresentations
of the contract.
creation and execution
(1969),
Bank v. Duus
State
rely
mistakenly
Citizens
that these
as
for their contention
support
154 Mont.
transactions,
in other words that the
relate to different
two lawsuits
in relation to the
counterclaims
claims were permissive
itself
State Bank readily distinguishes
first lawsuit.
Citizens
that the counterclaim at issue
case. In ruling
from the instant
we stated:
State Bank was permissive
Citizens
‘
involved
the claim and counterclaim
‘This rendition illustrates
different
contracts,
at different dates between
entered into
the notes in the
mortgage securing
and further that the chattel
parties,
Hamilton,
located in
action covered
property
original
personal
covered real
Montana,
mortgage
whereas the real estate
*4
for
action was
non-payments
in
Montana. The
Darby,
original
located
while the
a chattel mortgage
notes and to foreclose
of promissory
The measure
action in tort.
and counterclaim was an
cross-complaint
thus,
be
different.
materially
would
damages
of computation
further,
and
or law are the same
neither the issues
fact
Obviously
the same evidence would not
or refute defendants’ claim and
support
Thus,
counterclaim.
be
counterclaim cannot
said to arise out of
transaction or occurrence
claim based on the
surrounding plaintiff’s
two
notes and chattel
promissory
mortgage.”
Bank,
State
Citizens the instant case and the claims in the lawsuit relate to the previous creation and execution of a contract to the same single relating the same involving parties.
Although
that the two lawsuits
appellants argue
require
identical
evidence
proof,
is not
for
compulsory
Bank,
counterclaims. First State
that a counterclaim for relief legal can not be if the compulsory relief, suit seeks plaintiff’s as did initial equitable lawsuit. most, State Bank does not that contention. At support Citizens State Bank stands for the that defendants who proposition Citizens interpose permissive relief into an legal equitable suit are entitled not trial jury on the counterclaim. Rule permissive 13, M.R.Civ.P. makes no distinction between legal equitable suits, or counterclaims but only between compulsory permissive rule counterclaims. general 13(a), mandated Rule M.R.Civ.P. is that if a defendant’s counterclaim is it be must compulsory pled of whether the regardless suit is in nature. legal equitable If not pled, counterclaim will be barred.
Next, assert that their claim FHA did appellants regarding financing suit, not at the exist time in filed their answer the initial they July 1985. did They argue they that FHA verify financing until unavailable 1986. The District Court noted that specifically appellants’ interrogatory answers revealed that had been turned they down in for FHA and June of had financing May notice their answer with FHA prior filing problems financing existed. answers reveal that were also turned Interrogatory down for FHA and in do financing not argue that the District Court determined that had erroneously knowledge with FHA their answer. problems financing prior filing Thus we reject contention. We hold that Rule M.R.Civ.P. bars appellants’ nontrailer-related claims because the claims are and should have been in the initial suit. pled
360 District Court erred in that also assert that the
Appellants finding res We claim the trailer was judicata. disagree. appellants’ regarding “The is established to stand for the doctrine res judicata firmly a should not be able to a matter that proposition relitigate party has had the the already opportunity litigate, public party omitted; end to (Citation that there must be some litigation.” policy in original.) emphasis Bank,
First P.2d at 1134. The criteria must be following four res met before the doctrine will apply: same; (2) the “(1) the or their must be privies subject parties same; same, be (3) matter action must be the issues must of the matter; (4) relate to the same of the capacities must subject matter must be the same in reference to the and to the subject persons ’’ them. issues between Bank, at First 737 P.2d to the is different in contend that issue trailer relating
Appellants case than the earlier. The first lawsuit instant issue litigated issue made decided the of whether respondent any representations covenant, a covenant No. the trailer that constituted regarding his the contract. right waiver or to enforce estoppel instant case issue is whether defrauded his to enforce covenant No. after exercising legal right appellants by to them to the sale that he would not do so. We fail representing prior two to see distinction between the “issues.” The second meaningful on statements issue another merely way focusing alleged how could made regarding long appellants sale prior lawsuit resolved that exact a trailer on the first occupy some issue in favor. If did raise particular lawsuit, in the first damages claim for regarding dispute so had an to do so cannot do now because they clearly opportunity is res at that time. We hold claim the trailer regarding judicata. to an to Rule apparently second issue relates
Appellants’ exception when the Court M.R.Civ.P. which District argue applies proceeds will on a in the initial suit. We not address this issue. basis summary District Court and we will not did not this issue before the raise Land Wyman consider the issue Dubray for the first time appeal. Realty (1988), Mont. 752 P.2d We affirm the District Court. BARZ,
CHIEF JUSTICE TURNAGE and JUSTICES WEBER and McDonough concur. SHEEHY,
JUSTICE concurring specially: When this State in 1961 its Rules of Civil Procedure to adopted Procedure, with the Federal Rules of Civil it comport adopted advances that had been made in in the federal to that procedure system time.
One of the casualties in of our Rules of Civil Procedure adoption was the change perception right counterclaim. Under statutes, former tended, a counterclaim defined as one which *6 some to diminish or way, defeat the plaintiffs See section recovery. 9138, (1935). definition, R.C.M. Because of that this Court denied a counterclaim in Cook-Reynolds Company (1923), Wilson 67 Mont. 1104, 214 P. where action to plaintiff brought enjoin defendant from with interfering plaintiffs harvesting operations, answered, defendant a share of the claiming to the crop according terms of a contract a counterclaim for the value of constituting his definition, share. Because of the counterclaim this Court held the reasons, one, counterclaim was not allowable for two the action being for an and the injunction counterclaim an affirmative seeking judgment, counterclaim did not in any matter tend to diminish or defeat two, the cause of plaintiffs recovery; action which defendant to make the basis of the counterclaim in attempted was not existence at the time of the commencement the action.
What in the Poulsen first action in got brought Lewis and Clark was an County injunction from certain restraining plaintiffs activities on the described real The claims the now plaintiffs to assert in their action would not tend to defeat or attempt independent diminish, instances, in some obtained in the first action. injunction Nevertheless, because counterclaims must now be Procedure, under our Rules of Civil even an pleaded present though involved, order injunctive is here should have counterclaimed for all then in out of causes action existence arising the same occurrence or transaction. matter,
On another I trust that the reader will not take the dicta in the (1969), State Bank v. Duus majority opinion regarding Citizens Mont. In as more than dicta. anything proper case, I am not sure that the in Citizens State Bank holding respected to a trial is now in accord the law. The right jury with state of distinction between causes of action has been legal equitable action, or is legal abolished in this State and cause any equitable, a “claim” which a against now denominated of trial counterclaim be made. may right jury permissive inviolate, and if a counterclaim under our State Constitution which would entitle formerly a cause of action comprised trial, cannot be deprived to a the counterclaimant counterclaimant jury a cause which the counterclaim is against of that because right conclude that The federal cases recognized equity. formerly trial even when a there is no waiver a jury permissive Thermo-Stitch, (5th v. Chemi-Cord Processing Corp. is filed. Inc. event, to a trial can be F.2d In 1961), any right jury Cir. Procedure, Rules of Civil 13(i) under Rule of the Montana preserved claims, cross- can order trials of any the Court whereby separate trial can be claims, right or counterclaims. jury preserved. concurrence of
JUSTICE HUNT agrees joins special JUSTICE SHEEHY.