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Gunderson v. Liberty Mutual Insurance

Supreme Court of Montana

February 26, 2019

MERVIN GUNDERSON and PATRICIA GUNDERSON, husband and wife, and ALL SECURE, INC., Plaintiffs/Appellants,
v.
LIBERTY MUTUAL INSURANCE and THE OHIO CASUALTY INSURANCE COMPANY and CENTRAL INSURANCE AGENCY, Defendants/Appellees.

          ORDER

         Plaintiffs Mervin Gunderson, Patricia Gunderson, and All Secure, Inc. (collectively "Gundersons"), filed suit against Liberty Mutual Insurance, the Ohio Casualty Insurance Company ("OCIC"), and Central Insurance Agency ("CIA"). On December 14, 2018, the Eighteenth Judicial District Court, Gallatin County, entered its Order on Summary Judgment in favor of OCIC.[1] OCIC then filed a request for entry of judgment and, on December 19, 2018, the District Court entered Judgment in favor of OCIC. On December 20, 2018, OCIC filed and served a Notice of Entry of Final Judgment On January 22, 2019, Gundersons filed their Notice of Appeal to this Court.

         Despite also naming CIA in its Complaint, Gundersons did not serve CIA until December 20, 2018, after the District Court had entered Judgment in favor of OCIC. On January 8, 2019, CIA made its first appearance before the District Court and moved to dismiss Gundersons' claims against it. On January 19, 2019, Gundersons filed a motion in the District Court to bifurcate the claim against CIA.

         Gundersons move to stay this appeal pending the District Court's resolution on its motion to bifurcate. Gundersons argue that this appeal should be stayed, rather than dismissed, because the District Court's Judgment and OCIC's Notice of Entry of Final Judgment are premature. OCIC argues Gundersons' Motion to Stay should be denied, and that this appeal should proceed, because the District Court's Judgment was a final judgment that adjudicated all claims between all parties and did not require certification pursuant to M. R. Civ. P. 54(b)(1). Although this matter has not been squarely addressed in Montana, OCIC argues that the majority of federal appellate courts and state courts hold that unserved defendants, such as CIA, are not considered "parties" for the purposes of M. R. Civ. P. 54(b)(1). Therefore, OCIC argues that the District Court's Judgment does not lack finality for appeal merely because a claim against CIA as an unserved defendant remains.

         CIA argues that Gundersons' Motion to Stay should be denied, and that this appeal should be dismissed without prejudice, because the Gundersons failed to seek certification under M. R. Civ. P. 54(b)(1). CIA notes that it filed its Motion to Dismiss in the District Court on January 8, 2019, prior to the Gundersons' Notice of Appeal on January 22, 2019. CIA acknowledges that most federal appellate courts and state courts hold that unserved defendants are not litigants for purposes of determining the appealability of an order under the final judgment rule; however, CIA argues that this matter is different because it appeared and filed its Motion to Dismiss in the District Court before Gundersons appealed to this Court. Therefore, CIA argues it cannot be assumed that the District Court's Order on Summary Judgment or entry of judgment concluded the case. See Patchick v. Kensington Pub. Corp., 743 F.2d 675, 677 (9th Cir. 1984) ("When, however, defendants remain in the action upon whom service has been made, we cannot assume that the action is final."). Accordingly, CIA argues that the District Court's Order on Summary Judgment and entry of Judgment leave matters of litigation against CIA undetermined and, thus, neither the District Court's Order nor Judgment can be classified as an appealable final order or judgment pursuant to M. R. App. P. 4(1)(a) and M. R. App. P. 6(5)(a).

         M. R. App. P. 4(a)(1) provides that a final judgment "conclusively determines the rights of the parties and settles all claims in controversy in an action or proceeding . . . ." M. R. App. P. 6(5)(a) further provides that in cases involving multiple parties or claims for relief, an order or judgment which adjudicates fewer than all claims as to all parties and leaves matters in the litigation undetermined, which is not certified as final by the district court for the purposes of appeal, is not appealable.

         Had CIA not been served, appeared, and moved to dismiss Gundersons' claims against it before Gundersons appealed the Judgment in favor of OCIC, OCIC's argument that the District Court's Judgment was a final judgment that adjudicated all claims between all parties and did not require certification might be well taken. However, given the procedural posture of this case at the time Gundersons appealed, the District Court's Order on Summary Judgment and its entry of Judgment in favor of OCIC only decided those claims against OCIC, while claims against CIA, who had appeared, remained undetermined. Therefore, IT IS ORDERED that Gundersons' Motion to Stay is DENIED.

         IT IS FURTHER ORDERED that Gundersons' appeal is DISMISSED WITHOUT PREJUDICE as prematurely filed.

         The Clerk is directed to provide copies of this Order to all counsel of record, and to the Honorable John Brown, presiding District Court Judge.

---------

Notes:

[1] Gundersons named "Liberty Mutual Insurance" as a Defendant in this action; however, "Liberty Mutual Insurance" is a trade name, not a corporate entity, and it did not ...


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