ECI CREDIT, LLC, a Montana limited liability company, Plaintiff and Appellant,
DIAMOND S INC., a/k/a DIAMOND S INC. CORP., a Montana corporation, Defendant, Appellee and Cross-Appellant.
Submitted on Briefs: May 23, 2018
District Court of the Fourth Judicial District, In and For
the County of Missoula, Cause No. DV 12-458 Honorable Leslie
Halligan, Presiding Judge.
Appellant: David Brian Cotner, Kyle C. Ryan, Cotner Law,
PLLC, Missoula, Montana
Appellee: Cory R. Gangle, Gangle Law Firm, PC, Missoula,
ECI Credit, LLC, (ECI) appeals from orders of the Fourth
Judicial District Court, Missoula County, dismissing its case
against Diamond S Inc., (Diamond) under M. R. Civ. P. 41(b),
and denying its motion for relief from that dismissal under
M. R. Civ. P. 60(b). Diamond cross-appeals from the District
Court's order granting partial summary judgment in
ECI's favor. We affirm the District Court's orders
dismissing ECI's case and denying ECI's motion for
relief from that dismissal. We deny Diamond's
cross-appeal as moot.
We restate the issues on appeal as follows:
1. Did the District Court abuse its discretion when it
dismissed ECI's complaint for failing to prosecute under
M. R. Civ. P. 41(b)?
2. Did the District Court abuse its discretion when it
denied ECI's motion for relief under M. R. Civ. P.
3. Did the District Court err by granting partial summary
judgment in ECI's favor on the issues of duty and
AND PROCEDURAL BACKGROUND
In 2008, ECI purchased real property from Diamond that
included several older commercial buildings, including one
known as the Watercraft building. In 2010, ECI discovered the
Watercraft building had suffered fire damage, including
compromise of the roof trusses, at some point in its history.
Although Diamond knew, and did not tell ECI, that the
Watercraft building had been damaged in a fire in 1977,
Diamond denied it had failed to disclose any known defects:
It filed an insurance claim after the fire, a contractor
repaired the damage, and Diamond believed the damage was
ECI filed suit in 2012, alleging claims including fraud,
negligent representation, and breach of contract. On May 23,
2014, the District Court granted ECI partial summary
judgment, ruling that Diamond had breached its duty to
disclose a latent defect in the Watercraft building. The
court reserved ruling on damages for trial.
On July 9, 2014, Diamond moved for relief from the summary
judgment under M. R. Civ. P. 60(b). On July 28, 2014, ECI
responded in opposition. On September 26, 2014, the District
Court denied Diamond's motion.
In December 2014, Diamond's counsel wrote to ECI's
counsel and proposed a scheduling order. Diamond's
counsel also indicated that Diamond was willing to enter into
settlement negotiations. ECI did not respond to the letter.
The parties took no further action in the District Court. On
January 19, 2017, the District Court issued an Order Closing
On February 22, 2017, ECI moved to reopen the case. ECI
offered no explanation why it had taken no action after the
summary judgment order, but argued the District Court could
not dismiss the action pursuant to § 25-1-104, MCA,
because it had not given the parties notice and allowed them
the opportunity to recommence prosecution.
Diamond opposed ECI's motion. It acknowledged that the
District Court could not dismiss the case under §
25-1-104, MCA, because the court did not give notice prior to
dismissal. Diamond then moved to dismiss the case under M. R.
Civ. P. 41(b), which does not require notice, but permits a
defendant to move to dismiss a claim for failure to
prosecute. Diamond argued ECI had taken no steps to move the
case towards the resolution of the remaining issues, having
last conducted discovery in the spring of 2013, filing only a
single response brief after that point, and taking no action
whatsoever since July 2014. Replying to Diamond's Rule
41(b) argument, ECI acknowledged that "there is no
explanation for the delay." ECI contended Diamond had
suffered no prejudice, argued dismissal was too harsh a
remedy, and suggested the District Court instead issue a
truncated scheduling order.
On May 18, 2017, the District Court issued an Order Granting
Motion to Reopen Case and Granting Motion to Dismiss. The
court vacated its earlier closure of the case, admitting it
did not provide the notice § 25-1-104, MCA, requires.
The District Court then granted Diamond's motion to
dismiss under M. R. Civ. P. 41(b).
ECI moved for relief from the Order under M. R. Civ. P.
60(b)(1), alleging the District Court made a mistake in
dismissing the case. ECI contended it diligently prosecuted
its case prior to September 26, 2014, and although it did not
file anything with the District Court afterward, its work on
the case did not cease. Counsel stated he created a
"preliminary draft" of a motion for summary
judgment regarding damages. Counsel also stated in an
accompanying affidavit that due to staffing changes at his
law firm, the case "slipped through the cracks."
ECI also alleged the lack of a scheduling order caused the
case to sit idle.
The District Court denied ECI's motion for relief. ECI
A district court has broad discretion in ruling on a M. R.
Civ. P. 41 motion to dismiss, and we will overturn its ruling
only for an abuse of discretion. Lear v.Jamrogowicz, 2013 MT 147, ¶ 16, 370 Mont. 320,
303 P.3d 790 (citation omitted). We will vacate a dismissal
if, after reviewing the record, we are left with the definite
and firm conviction that the district court committed a clear
error in weighing the relevant ...